What would happen if Washington DC regulators and lawmakers decided they absolutely had to regulate a new technology with little or no history of regulation? I hope they would begin by assembling a panel of experts to explain the technology them.

This would include a narrative about how it works, how it differs from the old way of doing what it does, and what kind of potential it has for improvement. Then we would want to learn about its social consequences, its issues, and its unresolved problems. We would also want to understand how it governs and manages itself.

Having undertaken this voyage of discovery, policy makers might discover unmet needs requiring policy intervention. This would lead to a survey of the law and economics of the issue. Then, and only then, should the regulators and policy mavens consider actions they could take to make things better.

This is Not the Story of the Internet

On Wednesday, the Senate will vote on a Congressional Resolution of Disapproval for the FCC’s December Restoring Internet Freedom order. This action moved Internet Service Providers back to their traditional Title I regulatory status. The news suggests that backers of the Resolution haven’t made it through step one, understanding the tech.

The misleading tweets show the problem:

This

is

not

a

drill

the

FCC

just

announced#NetNeutrality

ends

on

June 11

unless

we

stop

it

retweet

to

sound

the

alarmhttps://t.co/AbmIpCrMyS

— Kamala Harris (@KamalaHarris) May 14, 2018

Three Pinocchios

Sen. Harris’ tweet echoes a common refrain from February that garnered three Pinocchios from the Washington Post’s fact checker. It should have been four, but the fact checker ignored the last three years of Internet history, drastically understated the spread of high speed Internet, and overstated the power of ISPs.

But the fact checker gets the money quote right:

The debate over net neutrality is reshaping the Internet and raising big-picture questions about modern life. But we can’t help but feel that we’ve spilled a lot of pixels here analyzing something that simply hasn’t happened.

Senate Democrats, industry leaders and net neutrality activists say the FCC’s move to toss out the Obama-era rules will bog down and end the Internet as we know it. The biggest broadband providers forcefully reject this claim, saying they have no plans to block or throttle content or offer paid prioritization.

That could change in time. As the D.C. Circuit said, broadband companies could make more money from paid prioritization, and it’s “common sense” to think they might try it. These providers have the ability and the incentive to slow down or speed up Internet traffic, and they’ve engaged in these practices in the past.

For now, though, there’s scant evidence that Internet users should brace for a slowdown. Yet the Democrats’ tweet conveys the false impression that a slowdown is imminent unless net neutrality rules are restored. This transmission error merits Three Pinocchios, but we will monitor the situation and update our ruling depending on whether the fears were overstated or came true.

Indeed, some parts of the story will certainly change over time. But the partisans – as well as their friend on the bench, Judge Tatel – are making foundationless “common sense” guesses.

The Internet is All Edge and No Core

Washington’s idea of the Internet is out of date. Once upon a time, the Internet consisted of a backbone (or “core”) provided by the National Science Foundation (NSF net) and a number of sites. The sites attached to the backbone and communicated with each other. So the sites constituted a distributed system even though the core was a single network. This structure is common in networks; it describes AOL and the typical modern ISP fairly well.

Lawmakers formed mental models of the Internet that presumed it was organized like AOL. People attached to AOL over a Title II telephone network and then accessed information and chatted with each other. So that’s what the Internet – and most other networks – is all about.

But the NSF net was decommissioned in the mid-90s and no new backbone took its place. Today, ISPs connect directly to other ISPs and to hosting centers, content delivery networks and private networks owned by massive corporations like Apple and Google using networks they own or lease.

These networks are fat pipes capable of carrying several times (4 to 6) more traffic than the ISPs typically receive. Today’s Internet is all edge and no core.

Theorizing the Implausible

According to the traditional model, the core is all-powerful and the edge is vulnerable to abuse. But in modern model we can easily imagine abuse by a number of actors.

Content Delivery/DDoS protection services such as Akamai and Cloudflare are in the gatekeeping business. Companies pay them to prevent certain parties – botnets in particular – from accessing their sites. Companies also pay them for fast lane access to consumers.

So the essential elements of these companies’ business models are the very behaviors that net neutrality is supposed to prevent. You may wonder why these practices – blocking, throttling, and paid prioritization – are perfectly great when they’re offered by professional gatekeepers and nothing but evil in other hands.

The Extortion Canard

Free Press and similar groups have engaged in one of the more outrageous pieces of advocacy ever seen in Washington. They have often compared ISPs to organized crime by claiming the ISPs have plans to extort money from the rest of the Internet edge.

The evidence for these plans is thin, chiefly three remarks made in different contexts over a fifteen year period:

• Former AT&T CEO Ed Whiteacre said in 2005 that Google should not be able to “use [AT&T’s] pipes for free”;
• Former Bell South CTO Bill Smith said in 2005 that his company could help help startups reach consumers by covering consumer costs;
• The attorney for Verizon told the DC Circuit Court that his company would offer optimization to Internet services “but for the 2010 Open Internet regulations”;

This is a pretty thin factual record to support extortion claims. In most contexts, the extortion arguments made by former Free Press chairman Tim Wu would probably qualify as defamation.

It’s All About the Roles

The traditional model of the Internet defines the roles played by ISPs and rest of the Internet edge according to a defective model of the system’s organization. Certainly, ISPs have access to public rights of way that the rest of the Internet doesn’t have. This fact is the basis of the traditional telecom model that divides markets into users and facilities.

But the real essence of the traditional model isn’t really any access to ROWs as much as exclusive access. With telcos, cable companies, and wireless carriers all capable of using ROWs, most markets have six or seven ways to Internet.

They’re not all equal, but they all have significant value propositions: wireless provides pervasive access, while wires are cheaper and faster to particular locations. And we’ve seen over time that wireless networks are becoming faster and cheaper while wired networks are becoming more flexible. At some point, the differences will become insignificant.

Danger, Will Robinson

The peril of net neutrality is stagnation. If we force the Internet back to the traditional straight jackets, this fully competitive future may never arrive.

I’m not willing to take that risk when lawmakers are so blind to the reality of the Internet that they can float this “one word at a time” nonsense with a straight face.