The Senate is about to vote on a resolution introduced under the Congressional Review Act (CRA) to repeal the Federal Communications Commission’s (FCC) 2017 Restoring Internet Freedom order and resurrect the FCC’s 2015 Open Internet order. The 2015 order applied no blocking of legal content, no throttling, no paid prioritization, enhanced transparency, and no unreasonable-interference rules to the providers of broadband Internet access (ISPs). It allows the FCC to regulate the ISPs as common carriers under laws that date back to 1934. However, the order explicitly and intentionally excludes Internet edge providers from these FCC regulations.
In their May 9th press release about the resolution, Senators Markey and Schumer claim: “This vote will allow Senators to show once and for all whose side they are on: are they for protecting average consumers and middle-class families? Or are they protecting the big, corporate special interests?”
Ironically, because the 2015 order does nothing to restrain the edge giants, those who vote for the resolution will inevitably protect the special interests of the five largest corporations in this country, who all happen to be Internet edge providers: Apple ($951 B), Amazon ($780 B), Google ($753 B), Microsoft ($745 B), and Facebook ($529 B). Their collective market capitalization of $3.8 trillion as of May 15th is more than five times that of the ISPs regulated under the 2015 order.
The recent Facebook/Cambridge Analytica hearings made it abundantly clear that American consumers need protection from edge providers. Yet this resolution would ensure that edge providers continue to have the right to block and throttle Internet traffic, enjoy prioritization, avoid transparency, and interfere at will with their competitors.
Edge providers can block traffic according to bias they build into their algorithms or other means. At the hearings, many members of Congress provided instances of bias and blocking of legal content by Facebook, but Facebook is not alone. According to an April 5, 2018 Wall Street Journal (WSJ) article, many video creators have complained that Google’s YouTube controls the traffic and payments they receive. In a January 25, 2017 press release, Google itself stated that it removes ads that it considers “bad,” having removed 1.7 billion ads in 2016, at least some of which appear to have been legal. Another Google release, on February 14, 2018, announced that Google’s Chrome operating system was being updated with an ad blocker to remove ads that are “annoying.” As the Washington Post noted on February 15th, that made the Web’s largest ad company advertising’s biggest traffic cop.
Netflix provided an egregious example of both traffic-throttling and lack of transparency, even as it lobbied the FCC to enact the 2015 order that this resolution would resurrect. After T-Mobile accused it of throttling its traffic, Netflix admitted in 2016 that for several years it had been throttling video traffic on wireless carriers without the knowledge or consent of either their own subscribers or the carriers whose traffic they disrupted. When asked by reporters whether the FCC has jurisdiction over Netflix’s traffic-throttling at the March 31, 2016 FCC open meeting, Chairman Wheeler admitted that it was “outside of Open Internet.”
Perhaps the most controversial of the 2015 order’s rules is the one against paid prioritization. The argument is that small companies who cannot afford to pay their ISPs for prioritization will not be able to compete with their larger competitors because their traffic will arrive at its destination more slowly. On the contrary–for businesses that measure their value in the thousands of dollars rather than in hundreds of billions, buying prioritization as needed from ISPs offers the best hope of competing for speedy transmission on the Internet. The large edge providers can afford to construct their own networks to ensure priority for their own services, and those edge networks are protected by the 2015 order. It is only businesses too small and poor to employ networks of their own that are deprived by the 2015 order of the right to use “fast lanes” to try to compete with their well-funded large rivals.
Today, with the 2017 rules in effect, the ISPs and the edge platforms are both subject to the same set of consumer protection and antitrust rules under the jurisdiction of the Federal Trade Commission (FTC). However, the major ISPs have voluntarily committed to no blocking and no throttling of traffic, enabling the FTC to prosecute any of them if they violate that commitment. Thus, the FTC still has more of a hold over the ISPs than it has over those edge providers who have made no such commitment.
One can certainly argue that the 2017 rules should be strengthened, and that the FTC should be given more authority and should enforce its rules more vigorously. What is hard to argue—given the history of violations by edge providers– is that the same set of rules should not apply to them as applies to the ISPs.
Yet, with the exception of privacy and election interference, Congress is not addressing violations at the edge. Given the limited time and attention available in Congress, it is difficult to tackle the same issue more than once in several years. Passage of the resolution would protect the edge providers from net neutrality obligations for many more years.
Far from accomplishing the goal of net neutrality– i.e. ensuring that a legal communication initiated by an American will not be blocked, throttled, or disadvantaged to a platform’s profit until it reaches its ultimate intended recipients—the current resolution would ensure that edge providers would have the right to block, throttle, prioritize for pay, and interfere with competitors. What Americans need is a strong set of rules that apply all through the Internet, to both ISPs and edge providers, not a resolution that shelters the edge giants’ special interests indefinitely.
Americans need Congress to finally deal with the Internet as a new and complex ecosystem that presents challenging issues that cannot be solved by applying 1934 rules to a few of the relevant participants. It is time for legislation that protects all Americans throughout the Internet.
Anna-Maria Kovacs, Ph.D., CFA, is a Visiting Senior Policy Scholar at the Georgetown Center for Business and Public Policy. She has covered the communications industry for more than three decades as a financial analyst and consultant.
Filed Under: Industry regulations