Yahoo

Awkward.

EU antitrust chief Margrethe Vestager -- who formally has charged Google with abusing its search monopoly, and who also is formally investigating Google’s alleged contractual tying of its monopoly search app to create a monopoly Android operating system -- speaks Friday at the ABA antitrust spring meeting in D.C. on a panel with DOJ antitrust chief William Baer and FTC Chairwoman Edith Ramirez, at the awkward juncture when the EU is escalating its antitrust prosecution of Google while America’s DOJ and FTC apparently are ignoring the obvious antitrust case they know they have against Google.

In a nutshell, the obvious antitrust case against Google is this: the DOJ and FTC have long established Google is a monopoly demanding antitrust vigilance; U.S v. Microsoft settled that a licensed OS market definition excluding Apple is reasonable and that tying a monopoly OS to a strategic app harms consumers and innovation; Google’s contractual tying of its monopoly search to a nascent Android OS is a mirror image of what DOJ already proved monopolistic in U.S. v. Microsoft; Google apparently has monopolized mobile search and search advertising and prompted its only competitors, Yahoo and Microsoft Bing, to give up seriously competing with Google; and now the potential harms to consumers and innovation are escalating as Google is attempting to extend its Android mobile OS monopoly economy-wide to monopolize the Internet of Things.

The FCC’s just-passed, 3-2 unequal ISP privacy policy spotlights how badly the FCC has lost its way.

In prioritizing the equality rights of inanimate digital bits above the equal protection and equal opportunity rights the American people enjoy under our constitutional republic, the FCC is discriminating in favor of open cronyism over equal consumer protection and equal competitive opportunity.

Moody’s Investors Service has done everyone a service in exposing the FCC’s Title II reclassification and privacy policy for what it really is – arbitrary unequal treatment under the law.

When the FCC proposed these ISP privacy rules three weeks ago, Moody’s called the FCC’s proposal as it saw it in a Sector Comment March 14 entitled: “FCC’s broadband privacy proposal credit negative for linear TV and wireless providers – Over half a trillion in rated debt affected.” 

Looking backwards makes it hard to see what’s right in front of you.

Looking backwards at 1934-era Title II telephone utility law, the FCC concluded in its 2015 Open Internet Order that only broadband providers could be “gatekeepers” warranting net neutrality regulation to “protect and promote the “virtuous cycle” that drives innovation and investment on the Internet.”

That’s because the FCC is apparently oblivious to the very different 21^st century communications “gatekeepers” right in front of them that command dramatically more potential “gatekeeper” market power than any broadband provider.

The FCC should listen to what one 21^st century communications provider, which commands well over a billion social and communications users globally, has to say about the dominance of edge platforms.

What’s a consumer to think about what the FCC’s responsibility is for their privacy protection?

Let me try to explain to a consumer what the Federal Communications Commission (FCC) arbitrarily has done, and apparently intends to do, for consumer internet privacy protection going forward.    

By way of background, for the first decade of the Internet when consumers used dial-up technology, the FCC was responsible for protecting consumers’ private network information from commercial use without their permission.

For the second decade of the Internet when consumers came to use broadband technology, the FCC ceded its dial-up-Internet privacy protection authority to the Federal Trade Commission (FTC) which became responsible for consumer privacy protection from unfair and deceptive practices consistently across the entire American Internet ecosystem, regardless of who interacted with consumers’ private information.

Last spring, in order to assert legal authority to enforce net neutrality to protect edge providers from potential traffic discrimination in the FCC’s Open Internet Order, the FCC incidentally clawed back some privacy authority over Internet communications -- over the FTC’s strong objections.

Net neutrality absolutists are overreaching yet again in their push for a practical FCC ban of ISP zero rating offers under the FCC’s case-by-case “General Conduct Standard” review, by claiming violations of the “bright-line rules” in the FCC’s 2015 Open Internet Order against blocking, throttling and paid prioritization.

The problem here is that net neutrality absolutists, in exploiting the political pejorative power of the word ‘discrimination,’ have politically oversold their Title II net neutrality policy as “bright-line” ‘non-discrimination’ bans, implying no discrimination allowed, when Title II actually only bans “unjust and unreasonable discrimination.”

This is a distinction here with a huge difference; and it apparently is giving the net neutrality absolutists fits. They want to imagine that Title II prohibits their absolutist ‘no discrimination’ frame when it clearly does not.

They want to find a technical “gotcha” in every zero-rating or sponsored data offering, no matter how unreasonable their conclusion, so they can politically ask it be banned by the FCC under their concept of what a ‘no discrimination’ principle should be.

While the PR cover story of the FCC’s AllVid proposal may be about more consumer choice and competition to reduce the cost of cable set-top boxes, don’t be fooled.

In announcing it, the FCC Chairman admits there’s already consumer choice aplenty: “American consumers enjoy unprecedented choice in how they view entertainment, news and sports programming. You can pretty much watch what you want, where you want, when you want.”

And the AllVid proposal is not about saving consumers money.

If it were, the FCC would not be shunning the obvious, best and cheapest solution of replacing the need for a set-top box entirely, by modernly and naturally transitioning them to the sector norm of easily-downloadable, cheap/free apps.

Square peg meet round hole.

The FCC is poised to try and force-fit inherently-irreconcilable, telephone closed-ecosystem privacy rules into a broadband open-system Internet. Good luck with that.

Expect the FCC to have fits trying to successfully craft workable, non-arbitrary, and legally-sustainable Title II broadband privacy rules in the year ahead.

It is a problem of the FCC’s own making.

In arbitrarily applying Title II telecommunications rules to only the ISP half of Internet communications, while politically exempting the entire edge half of Internet communications in its Open Internet order, the FCC has ensured that information that was proprietary and controllable in the closed telephone world becomes public and uncontrollable in the open Internet world.

Horses meet open barn door.

Net neutrality activists wrongly imagined that Title II was all-purpose-regulatory-authority to impose “the strongest possible” Open Internet rules they wanted, like bans on paid prioritization, zero rating or usage based pricing, despite decades of Title II and court precedents that determine many types of economic price discrimination and pricing flexibility to be just and reasonable.

Historically accurate or not, the “Spanish Inquisition” is a well-known metaphor in literature for a group of intolerant elites that demanded orthodoxy from people, under threat of extreme consequences for heresy.

The twenty first century’s new technocratic elites, who politically made up net neutrality policy over the last fifteen years, are now sadly trying to dictate net neutrality orthodoxy on all the people of the world, whether or not they use the Internet.

These net neutrality absolutists are now accusing innovators of Internet “zero rating” plans, i.e. toll-free data plans, of net neutrality heresy, which must be punished severely with PR torture and banishment, in order to set an example for the masses of what happens to those who dare to challenge the church of net neutrality absolutism.

Recently in India, today’s modern day leaders of the Zero Rating Inquisition, Access Now activists, have demonized Facebook for the net neutrality heresy of offering a free stripped-down version of Internet access called “Free Basics” to the roughly billion Indians who can’t afford Internet access.

A rational person would say Facebook’s Free Basics offering is great and a very helpful innovation, because it’s so similar to the good of a library, school, or hospital that offers free services to the poor.

However, the net neutrality absolutists, who claim to be champions of free speech, are incensed that Facebook would empower a type of Internet free speech that is not pre-approved by them.

The world is watching and taking note of the FCC’s blatant competition double standard that totally favors America’s dominant edge platforms above most everyone and everything else.  

Consider an apt and illuminating comparison between the competition U.S. wireless broadband providers face versus the competition Silicon Valley’s edge platforms face.

The FCC’s Non-Neutral Internet Competition Policy

The FCC’s 2015 Open Internet Order has an implicit blind-eye competition premise in that it reclassified the broadband provider half of Internet access, and not the “edge” platform provider half, as subject to FCC Title II common carriage regulation.

That is because the FCC focused only on broadband and concluded its level of competition required the strongest possible net neutrality regulation, while it turned a blind-eye toward “edge” platforms in uncritically assuming that “edge” platform networks were competitive and thus did not have to be neutral, open, or transparent.

Does the FCC’s concept of a “virtuous circle of innovation” mean fostering a full and true “circle of innovation,” of not only edge provider innovation, but also ISP innovations of zero-rating pricing plans that lower users’ bandwidth costs and better fund more broadband deployment?

Please consider how the FCC’s eventual treatment of the many ISP plans for zero-rating pricing innovations could impact ultimate appellate review of the FCC’s Open Internet Order.   

The D.C. Circuit Court of Appeals in Verizon v. FCC said that the FCC’s 2010 justification -- for imposing net neutrality rules via its Section 706 authority, for the purpose of promoting broadband deployment and the “virtuous circle of innovation” that fuels Internet growth -- was reasonable and justified by the evidence.