Taking Net Neutrality to the Hill

I just got back from a [Senate](http://senate.gov/) [Commerce, Science, and Transportation Committee](http://commerce.senate.gov/public/index.cfm?FuseAction=Home.Home) [hearing](http://commerce.senate.gov/public/index.cfm?FuseAction=Hearings.Hearing&Hearing_ID=4c66f979-3001-490a-a985-5be63951adb7) on the future of the Internet. Much was said on both sides of the panelist table, so I’ll just take a moment to hit some highlights: competition and innovation, media consolidation and content, and FCC authority. One disclaimer: this summary represents (of course) how I interpreted the statements at the hearing. Where I can, I’ve included timestamps into the video; if you want more detail, [watch the hearing](rtsp://video.webcastcenter.com/srs_g2/commerce042208.rm) direct from the Senate’s web site. Also, check out our [press release](http://www.publicknowledge.org/node/1533). **Competition and Innovation:** [Dr. Robert Hahn](http://www.aei.org/scholars/scholarID.25,filter.all/scholar.asp) of the [American Enterprise Institute](http://www.aei.org/) gave the oft-repeated argument that carriers must be allowed pricing freedom, and the market will find the optimum balance between value for the consumer, application provider, and ISP. He gave an example of how the (hypothetical) company Oogle must be allowed to charge advertisers without restriction in order to get customers the benefit of free services, and we can deal with bad actors as we encounter them. *[1:41:55]* Some of the problems with this, in part as articulated by [Professor Lawrence Lessig](http://www.lessig.org/) of [Stanford Law School](http://www.law.stanford.edu/): * There is [no effective competition](http://www.freepress.net/files/bbrc2-final.pdf) in broadband. 98% of Americans get their broadband from either their phone company or their cable company. That’s called a “duopoly,” not “effective competition.” * The Oogle example misses the point that the innovation is at the application layer. That is, new ideas and the investments that power those new ideas are made by those who are at the edges of the network – both companies like Oogle and people like you and me. If innovation is to flourish, the ability of *those* entities to compete on a level playing field must be protected. * Net neutrality opponents argue that we cannot predict the future of the net, and so should allow it to evolve before regulating. But even if you are exceedingly optimistic that the DOJ will use antitrust to prevent bad behavior, allowing the network to be non-neutral will have immediate innovation-stifling effects. Why? Because while we don’t know what the net will look like in 5 years, venture capitalists are funding new ideas *now* based on what they *think* the net will look like in 5 years. *[2:03:55]* And if they think there’s the possibility that in 5 years, a cable company will give them substandard treatment if they are viewed as a competitive threat or other disfavored service, they simply will not invest, today. * Internet access is now “critical economic infrastructure” which enables competition among nearly-infinite applications. *[2:10:25]* That is – the Internet is infrastructure, like a highway, and like a highway must be neutral to the vehicles travel on it. Those that make the vehicles (i.e., the applications) can discriminate however they want. [Senator Dorgan](http://dorgan.senate.gov/) also asked Dr. Hahn how the market would respond if a carrier, displeased with the anti-monopolist messages on t-shirts sold through Dr. Hahn’s (hypothetical) online business, decided to charge Dr. Hahn a little more for access to its customers. *[2:11:55]* As far as I could tell, we never got an answer. **Media Consolidation and Content:** It was especially nice to hear the voice of content creators not just once, but twice at the hearing, both times calling for net neutrality. In an age where most of the traditional media outlets for both entertainment and information are controlled by a very small group of large conglomerates, the Internet provides a democratic medium through which everyone can have a voice – at least as long as the net is neutral. [Patric Verrone](http://en.wikipedia.org/wiki/Patric_Verrone), president of the [Writers Guild of America, West](http://www.wga.org/), talked extensively about the history of media consolidation and about how last year the guild “used the Internet to win the Internet” during the writer’s strike. *[1:46:10]* Because the corporations that employed the writers were the same that controlled traditional media, the Internet was the only real way to get the message out – and in the end, they succeeded. Actress, writer, and producer [Justine Bateman](http://www.imdb.com/name/nm0000868/) *[1:51:15]*. Like Verrone spoke about media consolidation, and about how the reduction in quality, original content is directly proportional to the consolidation of media outlets. She also talked about how the Internet is being used by [her](http://fm78.tv/) and others to make such content available without the blessing of the consolidated media companies. And while she, like all content creators, is concerned about copyright infringement on the Internet, she recognizes that it is not a new problem, and not a problem which justifies allowing ISPs to decide whose content gets better treatment and whose does not. **FCC Authority:** [Chairman Kevin Martin](http://www.fcc.gov/commissioners/martin/) of the [FCC](http://fcc.gov/) testified on his own one-man panel at the start of the hearing. One issue he got pressed on was whether the FCC had the authority to enforce the four principles embodied in the [Broadband Policy Statement](http://www.publicknowledge.org/pdf/FCC-05-151A1.pdf). Comcast has alleged that the FCC does not have that authority. *[1:05:00]* His answer: He believes they do. Is he scared of a law suit if the Commission attempts to enforce those principles? He agrees that a law suit is likely, but he’s not scared; the FCC gets sued all the time. Does he think the Commission would benefit from a statute which removes any controversy about the FCC’s authority? I don’t think we ever got a clear answer on that one. But [Kyle McSlarrow](http://www.ncta.com/Biography/Biography/KyleMcSlarrow.aspx?type=Biography) of the [NCTA](http://www.ncta.com/) did get his two cents in on behalf of the cable industry. His key point: the cable industry “supports” the Policy Statement, but does not believe it should be enforceable – whatever that means. *[2:09:40]* There is no doubt that going forward, there will be more haggling on the issue of whether and how the FCC can enforce net neutrality rules, with or without Congress’ official blessing. **Wrap-up:** This should give you a taste of what went on at the hearing. And while this post is long enough as it is, I don’t want to miss the impassioned testimony of Michele Combs of the [Christian Coalition of America](http://www.cc.org/), who talked about the importance of the Internet in reaching the public, and how a tiered Internet would be particularly damaging to public-oriented non-profits like her own, who have great value but comparatively small budgets. *[1:36:20]* If you have the time, go [watch the hearing](rtsp://video.webcastcenter.com/srs_g2/commerce042208.rm) or read [the filed testimony](http://commerce.senate.gov/public/index.cfm?FuseAction=Hearings.Hearing&Hearing_ID=4c66f979-3001-490a-a985-5be63951adb7). If you have a little less time, I especially encourage you to watch the Q&A sessions at *[1:01:15]* and *[2:06:25]*.

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