Ad Hoc Neutrality Isn’t Neutral, It Is Discriminatory and Unfair


For a neutrality or non-discrimination principle to have legitimacy, it must be applied neutrally and non-discriminatorily itself, because everyone knows true neutrality means not taking sides.

Non-neutral application of a net neutrality policy takes sides and thus is discriminatory and unfair, the exact opposite of net neutrality’s purported purpose and the definition of its signature word.

Arguably, most all the controversies and conflicts over net neutrality for the last fifteen years have resulted from a supposed neutrality principle applied non-neutrally, to favor Internet intermediary distribution networks like Google, Amazon and Facebook, and cloud computing networks, like Amazon, Microsoft and Google, over legacy communications and content networks.

Today the FCC, in voting 3-2 for the Restoring Internet Freedom Order, is legitimately implementing net neutrality in a neutral fashion, i.e. treating similar information services similarly with the same light touch, under the same market transparency enforcement oversight at the FTC, and not taking sides by non-neutrally, picking winners and losers from the start.

Kudos to the Pai FCC majority for: reversing the Wheeler FCC’s 2015 unfair policy of discrimination and digital division -- treating similar services dissimilarly; restoring the FCC’s role as a neutral arbiter; and applying a neutrality principle that effectively treats similar services similarly, via the most transparent FCC rulemaking process ever.

None of the previous five FCC net neutrality decisions -- under Clinton-Kennard, Bush-Powell, Bush-Martin, Obama-Genachowski or Obama-Wheeler -- were available to the public for review for three weeks before the vote, like the Trump-Pai FCC did the past three weeks. If FCC Chairman Pai was somehow non-neutrally applying net neutrality, why would he do it plain sight, in detail, where everyone could criticize that this FCC was implementing net neutrality, non-neutrally.

The 2015 Open Internet Order’s approach to net neutrality was so controversial and conflict ridden, precisely because its premise was to perversely apply net neutrality duties non-neutrally, or to impose a non-discrimination duty discriminatorily.

Under the guise of net neutrality, the 2015 order was all about taking sides and burdening companies with legacy networks with maximal utility regulated net neutrality, to protect new Internet and cloud computing networks and platforms that inherently excel via discriminatory business models that routinely favor their own products over competitive products -- with zero net neutrality obligations -- even when these communications and information networks do the very same thing, because the Internet converged them effectively to be alike in technological function.

The non-neutral, discriminatory application of neutrality is playing out in big mergers as well.

After non-neutrally calling on the DOJ to block the proposed AT&T-Time-Warner merger because neutrality conditions would be insufficient to cure their alleged harms, Senator Blumenthal today is non-neutrally asking the DOJ Antitrust Division, i.e. to extend the FCC’s seven-year, FCC net neutrality behavioral conditions in the soon-expiring, 2011 Comcast-NBCUniversal Consent Decree, that is loaded, with many non-neutral (and unnecessary) conditions because they only applied to a merger and not generally for similarly-situated companies.

In both mergers, Senator Blumenthal apparently is non-neutrally and unfairly ignoring the obvious transformative changes in the Internet marketplace since the DOJ and the court approved the Comcast-NBCU merger in 2011.

From 2011-2017: U.S. smartphone adoption grew 141%; U.S. wireless broadband speeds grew ~160%; worldwide cloud computing revenues grew 180%; smartphone’s percent share of all Internet traffic grew 400%; Amazon Prime membership with free video privileges grew 1700 %; Netflix video-streaming customers grew 470 %; and Google-YouTube videos viewed per day grew ~150 %.

Focusing antitrust attention non-neutrally on the competitive broadband and content industries while ignoring how the intermedia -- Google, Facebook and Amazon -- acquired their way to monopoly power is not neutral; it is taking sides.

This is no surprise because America’s two-decade-long, outdated, Internet-first industrial policy is not neutral – or conducive to neutral net neutrality, because it is Internet-first. It is predicated on three very non-neutral, Internet-first industrial policy standards:

1.      Competition Double Standard, where the 1996 Telecom Act now regulates the same converged technologies oppositely, despite the full Internet convergence of communications and information technologies since 1996;

2.      Wild West Standard, that makes it U.S. policy that Internet companies be unfettered by Federal or State regulations that routinely apply to every other U.S. business; and

3.      Tech Welfare Standard, that uniquely protects “interactive computer services” with immunity from normal corporate responsibility for negligence or consumer endangerment.

And there is nothing neutral about the winner-take-all rewards of America’s non-neutral, Internet-first industrial policy. From 2012 to 2016, the revenues of Google, Facebook, Microsoft, Apple, and Amazon grew ~180 times faster than Fortune 500 companies overall; and from 2012-2017, the market value of these five companies tripled absolutely, and grew relatively three times more than the S&P 500 Index. See chart.

In sum, there is nothing neutral about net neutrality that is not applied neutrally. A discriminatory and unfair application of a net neutrality principle, perversely produces a discriminatory and unfair Non-Neutrality principle.

As Congress thinks through how to put the net neutrality principle into law, it must first start with the neutral premise that it must be applied in a neutral manner to be true net neutrality, i.e. same consumers, same rules.  


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.