Quotes of the day

This Thursday, Feb. 26, will be a fateful day for the future of the Internet. In the nearly 40 years that I have been involved in communications law and policy, including serving as the Federal Communications Commission’s (FCC) associate general counsel, this action, without a doubt, is one of the agency’s most misguided.

The sad reality is that, without any convincing evidence of market failure and consumer harm, the FCC is poised, on a 3-2 party-line vote, to expand its control over Internet providers in ways that threaten the Internet’s future growth and vibrancy.

Here is the nub of the matter: By choosing to regulate Internet providers as old-fashioned public utilities in order to enforce “neutrality” mandates, the commission will discourage private-sector investment and innovation for many years to come, if only as a result of the litigation that will be spawned and the uncertainty that will be created. And the new government mandates inevitably will lead to even more than the usual special interest pleading at the FCC, as Internet companies try to advantage themselves and disadvantage their competitors by seeking favored regulatory treatment.


Net neutrality advocates fear if paid prioritization is allowed, deep-pocketed companies like Netflix, Google and Amazon would buy access to the fast lane while cash-strapped startups and nonprofits are relegated to the Internet’s darker, congested corners…

Yet a blanket ban on paid prioritization could also do damage. Instead of Netflix and its customers bearing the cost of the congestion they create on the Internet, all users would.

“Somebody has to pay for the infrastructure,” said Hal Singer, a consultant and scholar at the Progressive Policy Institute. If ISPs can’t charge content providers, they’ll charge consumers, who generally are more price-sensitive, and the result will be less usage.

A ban on paid prioritization could also kill off experimentation with new business models, such as letting content providers sponsor customers’ access in return for preferential delivery of their content, as Facebook does over wireless networks in many lower-income markets.


Two weeks ago, we learned that we had likely managed the first goal—the FCC is going to do the right thing and reclassify broadband as a telecommunications service, giving it the ability to make new, meaningful Open Internet rules.  But we are deeply concerned that the FCC’s new rules will include a provision that sounds like a recipe for overreach and confusion: the so-called “general conduct rule.”…

Unfortunately, if a recent report from Reuters is correct, the general conduct rule will be anything but clear. The FCC will evaluate “harm” based on consideration of seven factors: impact on competition; impact on innovation; impact on free expression; impact on broadband deployment and investments; whether the actions in question are specific to some applications and not others; whether they comply with industry best standards and practices; and whether they take place without the awareness of the end-user, the Internet subscriber.

There are several problems with this approach.  First, it suggests that the FCC believes it has broad authority to pursue any number of practices—hardly the narrow, light-touch approach we need to protect the open Internet. Second, we worry that this rule will be extremely expensive in practice, because anyone wanting to bring a complaint will be hard-pressed to predict whether they will succeed. For example, how will the Commission determine “industry best standards and practices”? As a practical matter, it is likely that only companies that can afford years of litigation to answer these questions will be able to rely on the rule at all. Third, a multi-factor test gives the FCC an awful lot of discretion, potentially giving an unfair advantage to parties with insider influence.


The U.S. government’s plan to enact strong net neutrality regulations could embolden authoritarian regimes like China and Russia to seize more power over the Internet through the United Nations, a key Senate Republican warned Wednesday.

Senate Commerce Committee Chairman John Thune of South Dakota argued that by claiming more authority over Internet access for net neutrality, the Federal Communications Commission will undermine the ability of the U.S. to push back against international plots to control the Internet and censor content.

Countries like Russia already have made it clear that they want the International Telecommunications Union or another United Nations body to have more power over the Internet, Thune said.

“It seems like reclassifying broadband, as the administration is doing, is losing a valuable argument,” Thune said at his panel’s hearing on Internet governance. “How do you prevent ITU involvement when you’re pushing to reclassify the Internet under Title II of the Communications Act, and is everyone aware of that inherent contradiction?”


Two prominent House committee chairs are “deeply disappointed” in Federal Communications Commission chairman Tom Wheeler for refusing to testify before Congress as “the future of the Internet is at stake.”

Wheeler’s refusal to go before the House Oversight Committee on Wednesday comes on the eve of the FCC’s vote on new Internet regulations pertaining to net neutrality. The committee’s chairman, Representative Jason Chaffetz (R., Utah), and Energy and Commerce Committee chairman Fred Upton (R., Mich.) criticized Wheeler and the administration for lacking transparency on the issue.

“So long as the chairman continues to insist on secrecy, we will continue calling for more transparency and accountability at the commission,” Chaffetz and Upton said in a statement. “Chairman Wheeler and the FCC are not above Congress.”


Liberal philanthropist George Soros and the Ford Foundation have lavished groups supporting the administration’s “net neutrality” agenda, donating $196 million and landing proponents on the White House staff, according to a new report.

And now, as the Federal Communications Commission nears approving a type of government control over the Internet, the groups are poised to declare victory in the years-long fight, according to the report from MRC Business, an arm of the conservative media watchdog, the Media Research Center…

“These left-wing groups not only impacted the public debate and funded top liberal think tanks from the Center for American Progress to Free Press. They also have direct ties to the White House and regulatory agencies. At least five individuals from these groups have ascended to key positions at the White House and FCC,” said the report which included funding details to pro-net neutrality advocates.


Pai: I think the most important thing that people need to know is that this is a solution that won’t work to a problem that simply doesn’t exist. Nowhere in the 332-page document that I’ve received will anyone find the FCC detailing any kind of systemic harm to consumers, and it seems to me that should be the predicate for certainly any kind of preemptive regulation—some kind of systemic problem that requires an industry-wide solution. That simply isn’t here…

reason:  Now the FCC is technically an independent agency, right?

Pai: It is and always has been.

reason:  So is it a break with past protocols of the president kind of demanding certain things?

Pai: It is a break in my experience. I’ve served under a number of different chairmen during administrations of Republican and Democratic affiliation. I’ve never seen anything as high profile as this. There have been other examples of presidents weighing in with a letter or a phone call, that kind of thing. But creating a YouTube video of a website with very specific prescriptions as to what this agency should do, followed by the agency suddenly changing course from where it was to mimic the president’s plan, I think suggests that the independence of the agency has been compromised to some extent.


[Tumblr CEO David] Karp, who was brilliant enough to build a company that he sold to Yahoo for $1.1 billion, could not answer the most basic questions about Net Neutrality.

He could not explain why the government needs to regulate the Internet’s traffic to save it from the success that has enabled him, and others like him, to become wealthy beyond their wildest dreams.

He could not explain why a company like AT&T, which has invested in the infrastructure to make the Internet much faster and more accessible, should be barred from charging prices that would allow it to recoup its investment from those willing to pay.

Amidst the incoherent verbal muddle in which he entangled himself, Karp managed to offer two somewhat intelligible arguments: one, that consumer demand for faster Internet speeds would make up somehow for the fact that established companies would no longer build the infrastructure to carry the traffic; two, that those who disagreed with him were lying.


The ever-evolving battle lines in the industry mean that a Federal Communications Commission vote on final rules Thursday won’t be the end of the debate.

Instead, it will trigger a whole range of skirmishes among the various tech factions about what should be regulated and how as each lobbies for favorable interpretations of the rules. The jostling has already begun…

Many view the fight as one between large telcoms like AT&T Inc. and Comcast Corp. But Silicon Valley is split on the issue as well. A group of tech startups, such as Etsy Inc., Kickstarter Inc., Vimeo LLC, and Tumblr, aggressively pushed for the tough rules the FCC is about to approve.

Meantime, more established Internet companies including Google and Facebook Inc. have offered vocal support for rules keeping the Internet open generally, but have largely remained on the sidelines when it comes to Mr. Obama’s proposal. Still other Silicon Valley firms such as Cisco Systems Inc. and Intel Corp. oppose the rules, which would regulate Internet providers as public utilities.


Cuban: Because the Internet of today is not where we want the Internet to become. We don’t know what amazing things could come from the net. The worst thing that could happen is that it stays the same as it is today. Does anyone want movies and social networks to be the ultimate use of the Internet?

There are going to be super high bit rate and minimal latency applications in the future that need paid prioritization, Do you want the information coming to your driverless Car buffering? Or a 8k or virtual reality stream for an operation not getting to its destination?…

And what about the legal challenges? There will be lawsuit after lawsuit that will create uncertainty and decisions from which could change the rules and landscape for the FCC completely. After all it was the Verizon decision that got us here. Does anyone believe that a future decision won’t shuffle the cards as well ?

We are introducing dramatic uncertainty.



“I would vote for net neutrality, because as I understand it, it’s Title II with a lot of changes within it, in order to avoid the worst of the utility regulation,” Hillary Clinton said.

She said President Obama was “right” on the issue.

It’s a foot in the door, it’s a value statement, I think the president is right to be upfront and out front on that.”