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Unregulated Google Facebook Amazon Want Their Competitors Utility Regulated

Americans believe in equal accountability, that no one should be above rules or outside the law.

Then why are America’s only unaccountable network monopolies, Alphabet-Google, Facebook, and Amazon, calling for maximal accountability of utility-grade, network-neutrality regulation for their ISP competitors, but no accountability for their own apparent utility-like, monopoly distribution networks?

How can the unaccountables get away with calling for unnecessary max-accountability for others?

The only logical answer is masterful misdirection and deliberate deception.

Evidently, Google, Facebook, and Amazon understand if they keep a bell tied to the tail of this process dog, they can laugh at the dog tirelessly chasing its tail, while observers remain rapt with their attention-grabbing, digital distraction.

The con continues; and it will continue as long as unaccountable companies continue to be enabled to divert scrutiny from themselves.

Preventing a legislative net neutrality solution only serves Google, Facebook, Amazon, and the Internet Association.  

ISPs recognize network neutrality accountability is important, and fully respect it. ISPs have long supported and publicly committed to respecting net neutrality in not blocking, throttling, or discriminating against lawful content, and to being transparent about network management practices. A recent Appeals Court en banc decision affirmed the FTC’s authority to enforce ISPs’ representations made to the public and in terms of service. ISPs have repeatedly pledged to work with Congress to make net neutrality the law-of-the-land, in fair legislation that treats similar services similarly.

On the other hand, Google, Facebook, Amazon, and the Internet Association self-servingly seek max-accountability for their potential competitors, but no alike accountability for themselves.

 

That’s because they know that current law is as good as it gets for them.

Ironic how they are now the new incumbents, legislative Luddites, and biggest defenders of the status quo, resisting any modernization of pre-Internet, analog-era laws.   

As non-legacy-FCC companies, Internet companies understand the 1996 Telecom Act effectively exempts only them from: all U.S. communications law, regulation, and public responsibilities; most non-communications Federal and State regulation of companies; and civil liability for what happens on their platforms and inside their intermediary, multi-sided business models.

Internet companies have cleverly-positioned themselves as “edge” providers to be as far as metaphorically possible from the FCC-regulated “network” infrastructure center. (Never mind that their “edge” monopolizations have shifted the center of market power on the Internet to them.)

Through masterful misdirection, Google, Facebook, Amazon and the other 39 companies in the Internet Association, have self-defined Internet companies as “platforms” (not networks that have generally been regulated), despite the fact that the “Internet” is shorthand for internetworking; and U.S. law defines the Internet as a network of interoperable networks.

Moreover, the termcloud computing” is amorphous precisely to disguise that it is really networked-computing. Tellingly in 2006, the year Google and Amazon first made net neutrality a big FCC regulatory issue, Amazon effectively launched its “cloud” computing network-based service as: “Amazon Elastic Compute Cloud.”  

Tellingly, the seminal tech antitrust guide to which Internet Association members look, is “Information Rules: A Strategic Guide to the Network Economy,” [bold added] co-authored by Google’s Chief Economist Hal Varian, and economist Carl Shapiro, who coined the seminal antitrust concept of “network effects.”

Consider these prescient information network-effect warnings from Professors Varian and Shapiro in a 1998 interview with the Financial Times.

 

The economic impact of the internet and corporate computer networks is similar to that of earlier "networks" such as the railways, telephones and bank machines, the Berkeley economists maintain.

 

The common characteristic is that the value of a network is enhanced by the number of people who use it. Telephones, for example, became useful only when many people had them installed. Similarly, electronic mail and the worldwide web derive their value from their reach.

 

Rapid growth of the internet has demonstrated the self-reinforcing "positive feedback" loop of network economics, for which Prof Shapiro (with Michael Katz, also of Berkeley) coined the term "network effects" in 1985. Big networks - whether real ones such as the internet, or virtual networks comprising the users of a particular software product - tend to grow bigger, while smaller networks shrink. Eventually, the winner takes all.

 

Microsoft and Intel's domination of world markets for software and semiconductor chips respectively, demonstrates this. Whereas the industrial economy was driven by economies of scale that tended to create oligopolies, the information economy is driven by the economics of networks, which tend to create monopolies, say Profs Shapiro and Varian. [Bold added.]

 

Of course, Google, Facebook, Amazon, and the Internet Association want Congress to unproductively chase their tail with an FCC-centric, net neutrality CRA process, and a state-centric net neutrality executive/legislative process.

What they really want is to distract Congress from looking at the root cause of so many other problems that are before them, i.e. that U.S. Internet-first industrial policy in Section 230 effectively exempts Internet companies from most accountability to others and the public.  

Congress has learned in FOSTA/SESTA process that they can’t fix out-of-control child sex-trafficking by Backpage.com (and their legal defense patron Google), without amending Section 230, the 1996 provision in the Telecom Act that gives Internet companies sweeping immunity from accountability for harms to consumer welfare.

Congress will learn that most any other legislative effort to protect consumers or the public at large from Internet harms, will also have to amend Section 230, to be effective and survive court review.

That includes efforts to address: election security from foreign manipulation; consumer security from malware, ransomware, identity theft, etc.; minimal consumer control of their personal data and privacy; addiction-by-design apps and services; serial Internet monopolizations and cartelizations; unaccountable monopoly censorship of political views; fake news and unaccountable monopoly news bottlenecks of Facebook Instant articles and Google AMP; age inappropriate content, apps, and ads; fake ads, ad fraud, and brand unsafe ads; aiding and abetting terrorist recruitment; autosuggesting hate speech; refusing compliance with court-ordered smartphone decryption; etc.   

In sum, what characterizes current U.S. Internet policy is it’s 1990’s tech-utopian naivete that Internet freedom with no responsibility is the answer to the world’s problems.

What characterizes Internet companies’ behaviors after years of enjoying government-guaranteed freedom with no responsibility or accountability, is that they increasingly have become entitled and allowed to have a callous disregard for others’ privacy, safety, security, property, and welfare, because U.S. law effectively immunizes them from caring about others’ well-being.

As with any entitlement, expect Google, Facebook, Amazon, and other Internet Association members to generally oppose Congress passing legislation that holds them responsible or accountable for their actions or inactions like everyone else is.

Also expect them to create more distractions like pushing for an FCC Title II net neutrality “infinite loop” dynamic that can change with Administration, rather than a permanent legislative net neutrality solution -- that could require amending section 230 to make it stick.  

Bottom-line, expect that Congress and Internet companies’ interests are not aligned, because they uniquely have minimal statutory responsibility or accountability to others, and because Senators and Representatives work for the people, and those same people are “the product” that Internet companies sell to others.  

Forewarned is forearmed.

***

Scott Cleland served as Deputy U.S. Coordinator for International Communications & Information Policy in the George H. W. Bush Administration. He is President of Precursor LLC, an internetization consultancy for Fortune 500 companies, some of which are Google competitors, and Chairman of NetCompetition, a pro-competition e-forum supported by broadband interests. He is also author of “Search & Destroy: Why You Can’t Trust Google Inc.” Cleland has testified before both the Senate and House antitrust subcommittees on Google.

Asymmetric Regulation Harms Series:

Part 1:   The Internet Association Proves Extreme U.S. Internet Market Concentration [6-15-17]

Part 2:   Why US Antitrust Non-Enforcement Produces Online Winner-Take-All Platforms [6-22-17]

Part 3:   Why Aren’t Google Amazon & Facebook’s Winner-Take-All Networks Neutral? [7-11-17]

Part 4:   How the Google-Facebook Ad Cartel Harms Advertisers, Publishers & Consumers [7-20-17]

Part 5:   Why Amazon and Google Are Two Peas from the Same Monopolist Pod [7-25-17]

Part 6:   Google-Facebook Ad Cartel’s Collusion Crushing Competition Comprehensively [8-1-17]

Part 7:   How the Internet Cartel Won the Internet and The Internet Competition Myth [8-9-17]

Part 8:   Debunking Edge Competition Myth Predicate in FCC Title II Broadband Order [8-21-17]

Part 9:   The Power of Facebook, Google & Amazon Is an Issue for Left & Right; BuzzFeed Op-Ed[9-7-17]

Part 10: Google Amazon & Facebook’s Section 230 Immunity Destructive Double Standard [9-18-17]

Part 11: Online-Offline Asymmetric Regulation Is Winner-Take-All Government Policy [9-22-17] 

Part 12: CDA Section 230’s Asymmetric Accountability Produces Predictable Problems [10-3-17]

Part 13: Asymmetric Absurdity in Communications Law & Regulation [10-12-17]  

Part 14: Google’s Government Influence Nixed Competition for Winner-Take All Results[10-25-17]

Part 15: Google Amazon & Facebook are Standard Monopoly Distribution Networks [11-10-17]

Part 16: Net Neutrality’s Masters of Misdirection[11-28-17]

Part 17: America’s Antitrust Enforcement Credibility Crisis – White Paper [12-12-17]

Part 18: The U.S. Internet Isn’t a Free Market or Competitive It’s Industrial Policy [1-4-18]

Part 19: Remedy for the Government-Sanctioned Monopolies: Google Facebook & Amazon [1-17-18]

Part 20: America Needs a Consumer-First Internet Policy, Not Tech-First[1-24-18]

Part 21: How U.S. Internet Policy Sabotages America’s National Security [2-9-18]

Part 22: Google’s Chrome Ad Blocker Shows Why the Ungoverned Shouldn’t Govern Others [2-21-18]

Part 23: The Beginning of the End of America’s Bad “No Rules” Internet Policy [3-2-18]

Q&A One Pager Debunking Net Neutrality Myths