Why proposed net neutrality bill is the most extreme yet

While the latest net neutrality bill introduced in Congress has no chance of passage as drafted, it is a bay window view into how extreme the net neutrality movement has become and into what they are seeking from the FCC via backdoor regulation.

• The proposed Markey-Eshoo bill, HR 3458, which was drafted in close coordination with FreePress and the Open Internet Coalition, is much more extreme than previous bills in 2008 and 2006.

Why is this bill the most extreme version of net neutrality yet?

First, it is a completely unworkable framework.

• It imposes a beyond-all-reason, effective absolute ban on prioritization of data traffic, essentially eliminating current essential network management flexibility to: protect networks from attack or malware; ensure quality of service; manage congestion, latency, and jitter; and handle unforeseen or emergency situations. Sections: 12(b)(5), 12(b)(6)

• For all practical purposes, it destroys most any private sector incentive or benefit from competing or investing in broadband by outlawing any pricing/business model differentiation/innovation beyond commodity end user pricing. Section 12(b)(2)

• In effect, it creates near unlimited liability for ISPs (legal, regulatory & financial), because all current broadband networks and business models are not designed to be operated without prioritization and historical reasonable network management. Few if any investors or bondholders would agree to be subject to this all risk -- no reward regime. Sections: 12(b)(2), (4), (5), (6); 12(c)(3); 12(g)(1) & (2)

• It mandates ISPs provide an open-ended, un-funded "ever-increasing level of Internet access service to end users" with no consideration of need or cost recovery. Sections: 12(c)(3); 12(g)(1) & (2)

• It torpedoes successful competition policy by ensuring it becomes unworkable; it mandates simultaneous pursuit of practically opposing goals -- maximizing facilities-based competition and resale competition at the same time. In the late 1990's, the FCC proved that maximizing resale competition destroyed incentives for facilities-based competition and investment. Section 12(g)(3)
• It essentially forces all "private transmission capacity services" to be operated largely as public Internet services. Sections 12(g)(4), (5), (6), & (7)

Second, it is much more regulatory than even the most strict monopoly regulation of the last 75 years. Section 12(b)(1)

• Even the most strict monopoly regulation (section 202 p.36) did not prohibit common carriers from discrimination, preferences or advantaging in rates and practices, only from "unjust or unreasonable discrimination" or "undue or unreasonable preferences... prejudice or disadvantage."  [bold added]
• This bill is based on absolute unrealistic strictures which totally ignore that communications law has always allowed the practical flexibility for just, reasonable and due discrimination and preferences.  

Third, it would torpedo private-sector efforts to invest in universal broadband deployment and access, and thus ultimately thrust the entire burden of ongoing broadband investment onto the American taxpayer and add to the U.S. Federal budget deficit. 

• The underlying intent of this bill is to ultimately transform broadband into a government-run utility service like roads or electricity. Section 2(2)

Fourth, it would spawn incapacitating sector-wide uncertainty (business, investment, legal, and regulatory.)

• The cumulative effect of the whole bill is to effectively replace the longstanding consumer protection and competition purposes of the FCC with net neutrality.
• By setting a new national broadband policy of net neutrality in Title I that is radically different than current law and policy, the bill would severely whipsaw and force the telecom, cable, wireless, broadcast, and DBS industries to completely retrofit their networks/business models to net neutrality.
• Moreover, none of the central concepts of the bill are defined -- "net neutrality," "open," "reasonable network management," or "private transmission capacity services" -- meaning it would take years for the FCC to define and for the courts to settle them.   

Finally, it would cast competition and property ownership as the Internet's problem (when they are, and have been, the wellspring of the Internet's success). Section 2(10)

• Inexplicably, the bill totally ignores the real, most pressing, and obvious Internet problems endangering everyday Internet users: lack of cyber-security, online safety, and privacy.  

In closing, this bill represents the most extreme iteration of net neutrality since the concept was first invented in 2002.

Click here for a one-page PDF version of this post.