The De-Competition Revolution

As an unapologetic proponent of competition over regulation, its disturbing to witness the de-facto de-competition revolution in Internet policy unfolding, where "net neutrality" and "openness" are overthrowing competition as both the central goal and primary means of implementing U.S. Internet policy.

• At core, the FCC's proposed Open Internet Order to be approved December 21st, effectively unilaterally repurposes U.S. Internet policy and the FCC -- to promoting net neutrality and openness via FCC economic regulation -- from the purpose in law, which is promoting competition via de-regulation.
  • See "The Harms of a Potential New FCC De-Competition Policy" here.

De-Competition Policy Developments

First, reports indicate that the FCC plans to use 1992 monopoly Cable Act law for ancillary legal authority to justify regulating the Internet with Net neutrality. This is wrong-headed for many reasons.

• It seeks to employ 1992 pre-Internet cable-monopoly-specific law to technology-agnostic Internet-era information services. (Sections 616 & 628)
• It seeks to bypass and ignore more recent law and specific  super-ceding policy in the 1996 Telecom Act, Section 230: "to preserve the... competitive free market... Internet... unfettered by Federal or State regulation."
• It assumes a monopoly factual predicate that is completely false for both cable and the broadband Internet.
• This force-a-square-peg-in-a-round-hole FCC thinking of jamming competitive market facts into a monopoly provision of law -- predictably would create regulatory failure that harms consumers -- like it already has in the current broken retransmission consent process.

Second, the same report from Communications Daily indicated the FCC's Open Internet Order also will rely on Section 706 for authority, a provision designed to encourage deployment of advanced telecommunications technologies.

• The big problem here is that the FCC appears to be suggesting that this provision somehow gives the FCC the authority to do the exact opposite of its legislative intent.
  • The clear intent of 706 was that if advanced technology was not being rapidly deployed, the FCC was expected to "remove barriers to infrastructure investment," or use "regulatory forbearance," -- not erect new regulatory obstacles to deployment!
• The crystal clear purpose of the 1996 Act was "to promote competition and reduce regulation... to encourage the rapid deployment of new telecommunications technologies."
  • Only an FCC bent on subverting Congress' intent to promote competition, would somehow interpret the factual result of the U.S. having the most robust facilities-based broadband competition in the world, as warranting regulating all the rapidly deployed advanced technologies that competition enabled, with heavy net neutrality Internet regulation, which is widely-considered a huge disincentive for broadband infrastructure investment.

Third, the FCC is apparently not going to overtly make the case for market failure to justify new regulation of the Internet, because they know they can't.

• It's hard to imagine how an FCC that has consistently believed in the potential for fostering competition in four different unanimous broadband information service declarations, is going to argue that once the market actually has succeeded in creating competition as the FCC envisioned, that the FCC would whipsaw everyone with a new de-competition policy and go in the opposite direction of all the FCC's previous de-regulatory broadband competition precedents.
• The FCC's unwillingness to confront the issue of proving market failure to justify new net neutrality rules is powerful evidence that the de-competition policy is not legally-grounded, data-driven or fact-based.

Fourth, if rumors prove true that the FCC's order badly deforms the "Waxman compromise," in letter, spirit and result, it will expose that that "net neutrality" and "openness" has nothing to do with providing enforcement authority to deter and address potential anti-competitive behavior, but has everything to do with mandating FreePress' radical dream of an information commons utopia via public utility economic regulation, where no one has to ask for permission or pay for the use of other's property.

• Simply, competition is the current lawful and effective purpose of U.S. Internet policy.
• The FCC does not have the power, authority, justification or rationale to unilaterally reverse the law, precedent, consensus, and market forces, to mandate net neutrality and openness as effectively the new law and policy of the land, supplanting competition law and policy.
  • Broadband competition works.
  • FCC economic regulation has failed.