Silicon Valley critics of the FCC’s permissive net neutrality framework will have their day in court tomorrow, when the DC Circuit hears oral arguments in their legal challenge. They would force the FCC to use the common carrier section of the Communications Act – designed for telephone companies – to enforce their particular vision of net neutrality. The FCC argues, correctly, for a more permissive approach that promotes competition between ISPs and web-based services where their businesses overlap.

Unwinding the spin, the case actually has more to do with the collection and use of Internet data than with neutral Internet management. When the Obama FCC classified Internet service as it did, it prevented the FTC from regulating Internet data use by ISPs. The regulation of personal data use is therefore a central issue in net neutrality law.

I filed a brief in support of the FCC because I believe the status quo corrects fundamental errors in US Internet policy: over-reliance on the FCC, under-use of the FTC, a tilted playing field, and faulty analysis of the Internet’s operational and business dynamics. The Internet has issues that only an economics-oriented agency can resolve, hence the role of the FTC is paramount.

Fiddling While Rome Blooms

Regardless of the outcome of the court case, the next Democratic FCC chair will likely recreate regulations protecting Silicon Valley advertising giants. If history is any guide, the future FCC will claim such action is good for consumers.

Internet policy largely consists of regulatory reactions to court decisions because Congress has failed to create a uniform regulatory framework for the Internet as a whole. Lawmakers have been distracted by overheated public debates over network management while an entirely new business developed around personal data and cyber attacks reached crisis proportions.

Congress only began to pay attention to the Internet data business when it impacted elections. Better late than never, but it has a lot of catching up to do with the issues of competition, trust, data protection, and free expression in this space.

Competition for Behavioral Data

The largest Internet companies – primarily Google and Facebook – have developed tracking systems that view our web page visits across the entire Internet. These trackers, installed on major web sites, see what we do even when we’re not logged into their providers.

The Obama FCC imposed strict data gathering guidelines on broadband Internet providers that made them unable to compete with tracker-driven systems. This inequity was good for the Valley and horrible for consumers. Congress wisely overturned this error, but in doing so required the FCC to revise its regulations.

The new regulations – the ones under review – apply the uniform FTC standard to all collectors of Internet data. This is as it should be pending passage of a federal Internet data law. Reverting net neutrality to Title II means no regulator will be empowered to police personal data use by ISPs, a peculiar state of affairs that can only be corrected by a data law.

Trustworthy Information Flows

The axiom that the Internet enables the free flow of information applies to both good and bad information alike. Coupling distribution with advertising-based business models ensures that engaging information is most valuable.

Unfortunately, information doesn’t have to be true to trigger the emotional reactions that make for engagement. Firms with an economic stake in engagement often feel they have little incentive to facilitate fact checking.

It doesn’t have to be this way. Every act of fact-checking can increase engagement if it’s done correctly. The new data law can couple permissions to use behavioral data with obligations to flag false, misleading, and inflammatory information.

Enabling Free Expression

Freedom of expression isn’t just the ability to speak, it’s the freedom to choose when and where to speak. The Internet succeeds on the first count but fails on the second.

Digital piracy robs artists of the ability to continue devising newer and more powerful works and impairs cultural renewal. Piracy can’t be eliminated but can be controlled.

The Internet Archive, for example, makes books available without permission. The Archive is free to transfer works in the public domain under these terms, but not those protected by copyright, so it is being sued by artists organizations on Canada and the UK. The data law must acknowledge the rights of authors to control distribution.

Bringing Internet Policy Home

I wrote an op-ed on net neutrality and Internet consolidation ten years ago that’s more relevant today that it was when the San Francisco Chronicle ran it for me. The nation failed to make progress on either issue because Congress was missing in action.

Following hearings on net neutrality bills in 2005, it punted the issue to the FCC. We don’t want personal data to follow the same trajectory nor do we want Congress to codify the Obama FCC’s misguided Title II order.

The FTC is already deeply engaged in the background work on recommendations to Capitol Hill for amendments to federal law that will enable it to be a more effective Internet regulator. This approach is more likely to benefit Americans than will replays of the net neutrality sideshow.

Next Week’s Net Neutrality Hearing

New Communications & Technology Subcommittee chair Mike Doyle (D, Pittsburgh) will hold a net neutrality hearing on Thursday, February 7th. As his YouTube announcement declares that the status quo has already had “disastrous consequences”, I don’t have high hopes for this hearing.

If history is any guide, the hearing will focus on side issues such as the FCC’s insistence on using economic, legal, and technical facts to inform the current framework rather than following the wishes of those who filed brief comments in support of the use of Title II authority. While several such comments were filed, they don’t provide the kind of rationale the agency needs for any change in its regulatory approach. The law doesn’t direct the FCC to follow the crowd, it directs it to conduct sober analysis.

Rather than appealing to popular sentiment, whatever it may be at this point, the hearing would do well to focus on the crucial issues that remain unresolved after 15 years of net neutrality discussion, such as:

• What is the legal definition of the Internet going forward? Does it include Internet-based services, or is it limited to the services offered to consumers for a fee that enable services such as Facebook, YouTube, and Amazon? Can one portion of the overall Internet function without the rest of it?
• What technical features do we want Internet policy to optimize? Should policy focus on the preservation of the technical architecture adopted more or less randomly in the ’80s and ’90s, or should it be forward looking? What impact does the technical architecture have on public interest values, innovation, personal privacy and data security? Are we happy with the status quo across the entire range of Internet issues?
• Which federal agency is best equipped to regulate the Internet as a whole, the FCC or the FTC? Is the FTC a more effective overseer of privacy and security if important parts of the Internet are cabined off from its remit, or should it be a holistic regulator?
• Is the portion of the Internet overseen by the FCC in better shape than it was two years ago? Is performance increasing at an appropriate rate? Are new network and application services emerging? Are consumers confused about the nature of the services they’re buying? Is 5G moving at the right pace?
• How has the Internet changed in the 15 years that net neutrality has been the subject of debate, and are the old arguments still relevant? Does net neutrality mean treating all information flows the same, sending bills solely to consumers, or applying Title II to ISPs? Are practices such as zero-rating and prioritization legitimate? Which sector of the Internet economy is most in need of discipline?

Keeping Our Eyes on the Ball

The net neutrality debate has distracted Congress. Rather than addressing the data-based business model while it was forming, lawmakers have spent their Internet policy time on side issues. It has debated the legitimacy of useless public comments to the FCC, argued about competing studies of investment, and blamed new regulations for causing old practices such as the confusing use of the term “unlimited” in ISP user agreements.

Paying close attention to things that don’t matter while ignoring flagrant violations is the kind of behavior we’ve come to expect from NFL referees. If Congress insists on emulating this kind of “referee on the field who can throw a flag” it will prevent the Internet from developing in a beneficial way.

The task for Congress is simple and straightforward: it needs to prioritize the issues that plague the Internet today in order to prevent them from getting worse. Any legitimate prioritization doesn’t even have net neutrality in the top 10. So let’s get serious, OK? There’s work to be done and and there is plenty of time before it’s appropriate for the parties to get back to feeding red meat to their bases.