You are here

Internet Association Perfecting Crony Capitalism with its Title II Position

Is the new Congress watching?

America’s government-advantaged aristechracy, which enjoys the most favorable taxation, regulation, and law enforcement treatment of any American industry by far, has the hubris to lobby the FCC for billions of dollars in implicit economic subsidies from consumers via the imposition of maximal FCC Title II regulation, taxation and law enforcement of ISPs.  

Consider the Internet Association’s Title II position.

In November, the Internet Association’s President Michael Beckerman said: “Using Title II authority, along with the right set of enforceable rules… would establish the strong net neutrality protections Internet users require.”

In writing its Title II position to the FCC this month, the Internet Association (IA) supported Title II regulation of ISPs. “The Commission should not rule out any single source of authority at this time, including all uses of its authority under Section 706 and Title II.”  IA also told the FCC: “Title II reclassification is a legally sound option for protecting the Open Internet.”

IA recommended using “three sections of Title II – 201, 202, and 208.” IA also mischaracterized this as “a light touch regulatory framework,” when 201 and 202, actually represent the lion’s share of the FCC’s price regulation authority under Title II. Empowering the FCC with largely unfettered authority to price regulate Internet packet transmissions is the antithesis of the current classification of Internet service as a non-price-regulated information service.

The IA in telling the FCC that it “must ban blocking, discrimination, and paid prioritization,” is really asking for the FCC to set a permanent zero-price for all downstream Internet traffic. A permanent zero price for one side of the Internet market is a de facto economic subsidy system where consumers are forced to subsidize the Internet Association members’ dominant traffic flows downstream to American consumers.

Congress should realize the Internet Association’s naked and perverse crony capitalist position here, that it should be the only industry in America where the government imposes maximal price regulation, to force consumers to subsidize the profits of the most profitable businesses in America.

Congress should take note of the Internet Association’s obvious crony capitalist public policy positions.

Crony Capitalist Taxation: Long the least-taxed industry in America, the Internet Association currently is lobbying Congress for permanent expansion of its exceptional tax break advantages, while at the same time urging the FCC to reclassify ISPs under Title II, which the IA knows would cause a back-door, ~$15 billion tax and fee increase on ISPs and consumers per PPI.

Crony Capitalist Regulation: Long the least-regulated industry in America, the Internet Association is effectively calling for discriminatory application of Congress’ Internet policy in law (Section 230: “…to preserve… the free market that presently exists for the Internet… unfettered by Federal or State regulation”), to still protect the Internet Association’s members from regulation, but to no longer apply it to ISPs under Title II -- without any congressional involvement in this de facto FCC reversal of Congress’s national Internet policy in law.   

Crony Capitalist Law Enforcement: Tellingly, the Internet Association’s “disruptive” members routinely claim laws which apply to companies operating in the physical world, do not apply to the Internet Association’s members. More tellingly, the Internet Association, whose members cause the most consumer privacy/security risks of any in America, claim their Title II position is needed “to protect consumers,” all while doing the opposite in urging the FCC to not apply Title II’s Section 222 consumer protection of the “Privacy of Customer Information.” Most tellingly, it is Internet Association’s members that are most hostile to the rule of law and law enforcement by encrypting their communications and apps in such a way to thwart court-authorized investigations of criminal activity and national security threats.     

In sum, Congress should take note whether or not the Internet Association tries to play a constructive role in encouraging the FCC to grant the Congress, the source of all the FCC’s existing and future authority, legislative deference for a reasonable period of time to try and resolve these foundational policy issues in the newly-elected Congress, rather than by three unelected FCC commissioners.

And Congress also should take note that the Internet Association has an especially naked crony capitalist public-policy agenda in Washington that brazenly benefits Internet Association’s members at the expense of the consumer interests that they cynically claim to represent.


Internet as Oz Series

Part 1: The New Internet Association's Back Story [9-11-12]

Part 2: Top False Claims of the New Internet Association [9-20-12]

Part 3: Internet Astroturf 3.0 [10-1-12]

Part 4: Google Official Praises 'Partly Free' Regime's Privacy Law [10-30-12]

Part 5: Could Google Be the Lance Armstrong of Tech? [11-12-12]

Part 6: The Google Lobby Defines Big Internet's Policy Agenda [1-16-13]

Part 7: Big Internet's Most Special Interests [2-20-13]

Part 8: More Government Special Treatment for Big Internet Companies [4-9-13]

Part 9: "Aristechracy" Demands Consumers Subsidize Their Net Neutrality Free Lunch [5-8-14]

Part10: Open Letter to Internet Association on Broadband Utility Regulation [5-26-14]

Part 11: Silicon Valley Naïve on Broadband Regulation – 3 Min Video Commentary [6-15-14]

Part 12: Silicon Valley's 6 Biggest Net Neutrality Fantasies – Special Report [7-24-14]

Part 13: Why is Silicon Valley Rebranding/Redefining Net Neutrality?  [9-2-14]

Part 14: Silicon Valley's Biggest Internet Mistake [10-15-14]