AT&T

Just like the wisdom that one cannot make a silk purse from a sow’s ear; one cannot make “modern” FCC policy from obsolete communications law.

Apparently that is not stopping Former FCC Chairman Reed Hundt and Greg Rosston from trying in their new white paper: “Articulating a Modern Approach to FCC Competition Policy.”   

Their paper contrives:  “three different competition policy approaches: the classicrole of regulating terms and conditions of sale, the modernrole of using various tools to create largely deregulated, multi-firm, competitive markets, and the laissez-faire approach of believing that unregulated markets, even if monopolized, will produce the best outcome.”

If the Washington Post had fact-checked Save-the-Internet’s spin, or even sought out an alternative viewpoint for balance, they easily could have avoided the obvious fundamental factual mistakes in their article: “What Europe can teach us about keeping the Internet open and free.”

First, Mr. Fung inaccurately attributed Save-the-Internet’s extreme and highly-controversial definition of net neutrality -- “all Internet traffic, no matter where’s its going or who it came from, should be treated the same” -- as the FCC’s “concept of net neutrality,” when the FCC’s compromise net neutrality definition was much less controversial and very different than the Post’s Save-the-Internet characterization.

Expect net neutrality proponents to pressure the FCC to reclassify broadband as a Title II common carrier telephone service, if as many expect, the D.C. Appeals Court overturns much, or possibly all, of the FCC’s Open Internet Order in the coming months.

Observers of the September 9^th oral argument heard Judges Tatel and Silberman strongly question the legality of applying common carrier-like regulation to an unregulated information service.

If you want to know why it would be a legal non-starter for the FCC to then completely reverse course and try to reclassify broadband as Title II common carrier service, please listen to my video explanation, starting at 7:52. (The written version of my argument is part 5 of this post.)

Professor Susan Crawford’s Bloomberg op-ed, “New FCC Head Must Reclaim Authority over Telecom,” exposes a profound lack of substance, in being unable to identify any real market problem warranting FCC regulation.

Let’s review Professor Crawford’s litany of contrived policy problems.

First, she charges that ISPs are working “to ensure no regulator has any real authority over them.” No, ISPs are pointing out the unique excessiveness of having THREE government entities having authority over them on the same general matters. ISPs are not asking for any reduction in authority for the DOJ or the FTC. Specifically, Verizon is asking the D.C. Appeals Court to decide if the FCC exceeded its legal authority in imposing prophylactic common-carrier-like regulation on companies that have not done anything wrong.   

Economic rationality, competition, and broadband pricing freedom are the big winners, and common carrier-like net neutrality was the big loser, if the Appeals Court panel decides Verizon v. FCC as expected.

Monday’s intense tag-team grilling of the FCC’s lawyer by Judges Tatel and Silberman left most observers thinking the Court will decide it is illegal for the FCC to impose common-carrier-like regulation on broadband providers -- regardless of what else they decide.  

FOR IMMEDIATE RELEASE                                           

September 9, 2013

Contact:  Scott Cleland                                                 

703-217-2407

“A Very Good Day for Broadband Pricing Freedom”

September 9^th looks to be a challenging day for the FCC.

For many good reasons, the FCC will face a skeptical D.C. Circuit Court of Appeals panel Monday in oral arguments for Verizon vs. FCC. The FCC will be defending its Open Internet order which mandated neutrality.

Overall the court will be skeptical because the FCC largely ignored the law, Congress, the facts, and the Constitution. Essentially, the FCC made up an industry problem that does not exist in order to repurpose itself for the Internet age. Simply, the FCC is not asking for slack from the court (i.e. Chevron Deference), it’s basically asking for carte blanche to grant itself unbounded authority going forward.

Verizon enjoys the advantage in this case because it need prevail in only one of its several strong challenges to the FCC’s order, while the FCC must convince the court to completely reject all of Verizon’s arguments.

Specifically, why will this court be skeptical here?

Information may want to be free, but physical networks are costly.

Few proponents of net neutrality appreciate the trillions of dollars of investment it has taken to build and upgrade the Internet’s vast and varied infrastructure that we all enjoy today. Simply, the Internet is not free of cost.

Economical policies have made the Internet universal and have enabled users to access the content, apps, and devices of their choice – what net neutrality is supposedly all about. On the other hand, uneconomical policies that discourage economic growth, return-on-investment, or respect for property can have unintended consequences and can threaten the proverbial goose that lays the golden eggs.      

Net neutrality is in the eye of the beholder.

It’s rapidly devolved into a gotcha game -- where if someone doesn’t like something or someone, they cry “net neutrality violation!” and call for an FCC investigation -- under the FCC’s self-asserted, all-powerful Open Internet order.  

Senators and Representatives are now writing the FCC urging it to investigate CBS.com for an alleged net neutrality violation over a contract dispute over how much Time Warner Cable pays for retransmitting CBS programming. The FCC could have a role in this retransmission dispute under obsolete 1992 law, but not legitimately under the FCC’s Open Internet order.

The fact that U.S. senators and representatives imagine that a billing dispute among companies could be considered a net neutrality violation illustrates how arbitrary and capricious net neutrality politics and the FCC’s Open Internet order have become.

Apparently there is no objective, reasonable or predictable standard of what net neutrality is or what a violation of “it” is. That net neutrality has transmogrified into a political-catch-all for anything affecting consumers is powerful proof of how capriciously this issue has been abused.

Why has net neutrality become so capricious?

Please see my latest Daily Caller op-ed: “1G Government in a 4G World” – here.

• It is Part 21 of my Obsolete Communications Law  Research Series.

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Obsolete Communications Law Research Series: