There is a subversive plan to slow the Internet, and it must be stopped. The new plan, now being contemplated by the Federal Communications Commission, could alter the Internet forever. It could slow speeds, limit the content and applications consumers can access, and create a two-tier system that favors some companies over others. The plan even has a code name: it’s called “Title II.”
FCC Chairman Tom Wheeler’s proposal to implement “net neutrality” is the touchpoint for this controversy. After serial losses in federal court, where numerous judges admonished FCC overreach, Wheeler is now trying to thread the regulatory needle. He wants to use the tenuous authority the court has granted him — the legitimacy of which many still challenge — to impose yet a third version of net neutrality rules. But because Wheeler’s proposal leaves some room for network experimentation, the net neutrality fundamentalists have cried foul. They say Wheeler sold out to private industry. They say his proposal could result in “fast lanes” and “slow lanes” on the Internet. They insist Wheeler instead reclassify the Internet as a public utility.
The “slow lane” critique could not be more backwards. For many decades we regulated the telephone network as a public utility, with predictable results: it strangled competition, limited innovation in devices and services, and elevated political lobbying to the detriment of investment and consumer welfare. Then the Internet came along, we broke out of this public utility framework, and innovation exploded. We moved from a single slow lane to multitudinous fast lanes, from a sleepy-time utility world to an Internet-time digital economy.
The Telecom Act of 1996 was clear: the Internet should be “unfettered by Federal or State regulation.” In the most recent Verizon case, the court explicitly said the FCC cannot treat the Internet (which, since the Clinton Administration, it is has classified as an unregulated “information” network) as a heavily regulated, Title II, common carrier, “telecommunications” network. The solution according to the fundamentalists is simple: reclassify the Internet, or at least parts of it, as a Title II telecom network. Voilà. Now we can regulate it as an old style public utility.
The stated goal of a Title II reclassification is to circumscribe the behavior of broadband service providers — Comcast, AT&T, and Verizon, for example. The practical effect of such a move, however, could hardly be more devastating for the Internet. Title II reclassification would be an omni-regulatory power grab of historic consequence. Once unleashed, it would reach out and touch every node of our sprawling global networks, including Silicon Valley content firms, app makers, and cloud companies.
Title II regulates prices. It requires government permission to supply new products and services, or to terminate old products and services. It often requires approval for marketing campaigns or new technologies. It would open the door to regulation of the Internet by the 51 state public utility commissions and by every nation around the globe — imagine the fragmented confusion. Title II would blow up the existing technologies, business models, and voluntary interconnection agreements that have resulted in so much Internet success. More ominously, it would dramatically slow the pace of advance in the technologies, business models, and network and service innovations of the future.
Because Title II traditional applied to the transmission of information, as opposed to its storage or processing, any bit-moving function could be exposed to Title II’s heavy hand. Most big Web firms, many of whom signed a letter asking for stronger regulations (though, notably, not explicitly asking for Title II), perform lots of transmission. Google has its own global fiber and content delivery networks. Netflix has its own CDN. Same for Amazon and Microsoft and Facebook. And what about Xboxes and Kindles? These products contain transmission components (Xbox Live and WhisperSync). All these firms and products could be swallowed by Title II’s omnivorous reach.
The “transmission” distinction is itself thoroughly obsolete, which is why all these networks and products should be considered information services. Even within a microchip or a data center, data is transmitted. It is also stored and processed. The three fundamental acts we perform on information cannot meaningfully be distinguished — especially not by three commissioners and committees of lawyers.
For all of Title II’s potential for catastrophic harm, it offers no upside, even for its most hearty proponents. The bête noire of the neutrality fundamentalists is so called “paid priority,” where some bits (like high resolution videos that require fast and reliable delivery) are prioritized over mundane applications (like data backups or routine emails, where it doesn’t matter if the bits arrive now or a few milliseconds later). But common carrier regulation of phones or trains (of which Title II is an example) explicitly allows service discrimination (paid priority) as long as all similarly situated customers get the same offer.
Title II thus doesn’t even solve the supposed problem — but would cause new problems of its own. Far from a burden on small Web start-ups, paid priority could be an inexpensive and crucial tool. Behemoths like Google, Amazon, and Netflix have built out vast networks and content delivery systems of their own — to speed the delivery of their own bits. But small firms focusing on a first time product don’t have the wherewithal to match that physical infrastructure. They often use CDNs to deliver static content. But for other real-time services like gaming, or education, or health care, they may prefer to pay a network provider to move their bits and provide their customers with a first-rate experience. Prohibiting paid priority and other network services could thus harm start-ups and reinforce the big Web firms’ position of dominance.
Because Title II’s backers know all this by now, it is difficult to take their proposal as anything more than a play for government control of the Internet. The existing hands-off regime has been a boon for Web firms and broadband providers, for software and hardware companies, for cloud and carrier, for content and conduit. If the FCC really thinks we need extra rules to formally codify the open Internet principles that all firms across the ecosystem already support, we should rely on Section 706, which at least emphasizes investment and growth.
Title II regulation was the slow lane. Thank goodness we’ve left it in our dust.