Is the Internet Association Serious?
The Internet Association has made the Senate an offer it has to refuse. This representative of Silicon Valley’s 40 most powerful firms has sent a letter to Senate leaders McConnell and Schumer demanding two contradictory actions.
On the one hand, the dominant players in the Internet surveillance and services industry “urge Congress to legislate a permanent solution” to the net neutrality dilemma; on the other they support a Congressional Review Act resolution nullifying the FCC’s December 14tth deregulatory ruling.
This combination of asks makes no sense.
CRA Prevents Legislation
It’s clear to everyone who follows Congress that we’re not likely to see any Congressional action on this issue following a successful CRA resolution. In the unlikely event that a CRA resolution passes both houses and is signed by the president, Tom Wheeler’s 2015 Open Internet order becomes the equivalent of an act of Congress, obviating the need for further legislative action.
The masters of the Internet liked the Wheeler order because it gave Netflix and Amazon free interconnection to ISPs while also ensuring ISPs could never become serious competitors to dominant advertising networks Google and Facebook.
It accomplished these two goals by reclassifying ISPs as Title II telecommunication carriers. Both the regulation of interconnection rates and the prohibition on the collection of browsing preferences without opt-in follow from Title II.
With Title II firmly in place, Democrats who depend on Silicon Valley’s largesse would have no incentive to deal with colleagues across the aisle for any kind of compromise.
Internet Association Arguments are Absurd
The letter regurgitates IA’s favorite talking point about Internet competition: there isn’t any. But the claim that “more than half of all Americans have no choice in their provider” of ISP service is blatantly false.
Wheeler created a competition gap by raising the bar for “broadband” from 10 Mbps to 25, a few Mbps beyond the reach of many DSL networks. But progress has caught up with this bit of regulatory sleight of hand.
The Restoring Internet Freedom order (page 73) shows that 76.5% of the US has had access to two or more fixed broadband providers exceeding the Wheeler threshold since 2016. This figure excludes the mobile networks that happen to average speeds in excess of the (arbitrary) 25 Mbps benchmark.
IA Shouldn’t Play the Competition Card
Of all the industries who might complain about lack of competition among their suppliers, IA has one of the weakest cases. The degree of market concentration in search, social networks, video streaming, online retail, and advertising is greater than for ISP services.
Four of America’s five largest companies (by market cap) are IA members; the only holdout is Apple. The market for Internet ads is dominated by two players with absolute control over new ads, Google and Facebook.
As we have said before, “markets for Internet search, social networks, video streaming, and Internet retail are all more concentrated than broadband in terms of market share. The Internet promotes concentration, but more so in edge services than in infrastructure.”
Why on earth does such a concentrated industry point fingers at others?
CRA Doesn’t Give Surveillance Giants What They Want
Most importantly, a CRA resolution reversing the Title I reclassification doesn’t do anything for the big players in surveillance-based advertising, Google and Facebook. While they benefited from the FCC privacy order that followed Wheeler’s Title II reclassification, Congress has already nullified that action.
While the current CRA will lock in the free interconnection enjoyed by Amazon and Netflix, it won’t restore the unbalanced playing field that allowed Google and Facebook to take over the market for Internet ads. This suggests that IA members generally support the current CRA for virtue signaling reasons.
The last thing IA members want is a set of uniform regulations for all big players in the Internet economy. And the last thing the firms who invest substantial sums in the Internet want is whip-saw policy that changes every four years. But the issues the Internet faces today are not going to be resolved by continuing down the current path.
Voters Have Moved On
While professional net neutrality advocates are happy to reiterate the same dubious claims they’ve made for more than a decade about monopolies, broadband falling behind, potential privacy violations, and slow lanes, voters and consumers have moved on.
We are more concerned about privacy, security, attacks, and fake news than we are about “fast lanes”, website blocking, or throttling. While IA obviously wants Congress to focus on ISPs instead of holding further hearings on election tampering, this doesn’t serve Internet powerhouses in the long run.
Consumer trust in the news and information supplied by Internet platforms is eroding, and with that trend comes lighter usage of Facebook and similar platforms. A concerted effort to address these issues with Congress can potentially reverse the erosion of trust in the Internet, but re-litigating decade-old issues about ISPs and fictitious fast lanes cannot.
The Foundation Stone of Net Neutrality is a Fake Issue
Net neutrality’s primary issue is the fear that ISPs will charge extortionate rents for access to customers at high speeds; Fight for the Future compares ISPs to the mafia.
But the speeds at which websites reach consumers are far below the levels that are possible with today’s broadband networks. This is not because of ISP throttling, it’s because of the way web pages are designed.
If your web page is in a slow lane today, that’s because it’s overloaded with ads and/or because it’s not served by a snappy Content Delivery Network. An ISP cannot speed up a website that delivers content slowly to the ISP.
A More Productive Path
This is not to say that ISPs don’t have issues or that the Internet is perfect. All technologies can be made better. But it is to say that regulatory ping-pong between Title I and Title II, between the FCC and the FTC, or between ISPs and surveillance and service providers is not going to help.
If we’ve learned nothing else from the never-ending net neutrality war, we should have learned that this particular framing of Internet policy is not productive.
We need IA, the ISPs, Congress, and the regulatory agencies to come together and draft a new section for the Communications Act addressing privacy, security, fraud and other criminal conduct, and market concentration.
Such a framework would need to apply across the entire Internet, and only Congress can do it. Anything less is a waste of time and effort.
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