Regulatory Balance Across Platforms
We usually focus on the tech side of tech policy here, but sometimes we have to discuss policy as well. In the midst of efforts by Facebook and other Internet platforms to escape responsibility for over-sharing personal information with political consultants, Congress is inclined to change platform regulatory status.
In response to the abuse of Section 230 loophole for user-generated content by sex trafficker Backpage, Congress has already passed – and the president has signed – the FOSTA law limiting platform immunity. Backpage collaborated with users to create unlawful ads and then claimed they were the users’ own work.
Now that Congress has shown a willingness to act, friends of the platform industry are running scared. Congress, they insist, is about to kill the goose that lays the golden eggs. If just a little accountability has this result, we have to wonder what might happen to Google and Facebook if they were regulated the way the communications platforms – ISPs – have been.
The Over-Regulated Internet
Historically, both content and communication platforms have been inappropriately regulated. Communication platforms – ISPs – struggle under regulations designed for the Bell System monopoly in 1913. While these regulations were updated in the 1934 Communications Act and the 1996 Telecommunications Act, they’re still only tangentially related to the Internet.
The infamous Title II of the Act that ruled the Internet from 2015 until the effective data of the 2017 Restoring Internet Freedom Order was intended to stimulate retail competition for local telephone service. This has nothing to do to with the way the Internet functions, of course.
One of the anomalies of ISP regulation under Title II concerns the idea that they only provide “access to the Internet” rather than membership. This trope rationalizes treating them differently from the rest of the Internet. While Internet-based services are deregulated by Section 230 of the C0mmunications Act, Title II puts Internet service in a different bucket.
Oddly, lawmakers who praise Title II claim it allowed the Internet to flourish in the dial-up era. But aren’t the ISPs that enjoyed access to dial-up lines simply accessing the Internet instead of joining it? So Title II has never had anything to do with the actual Internet, just with access to it.
The Under-Regulated Internet
All of the Internet apart from access is deregulated. This is because Section 230 relieves web sites and other Internet services of Title II telecommunications carrier obligations. Sites that take content, including comments, from users can censor as much or as little as they want.
All they have to do is take down unlawful content that’s brought to the attention of the site’s operator. Can you imagine a regulatory framework that granted such wide latitude to ISPs?
Section 230 is too permissive. The Backpage case showed that the minimal protection it provided to many injured parties – victims of IP theft, sex trafficking, and a host of other crimes – is easily circumvented. The site operator simply conspired with others to post unlawful content and played dumb when called on it.
Much to the dismay of Section 230 author Sen. Ron Wyden, the loophole was closed for one class of crimes by the FOSTA. But there’s still plenty of unlicensed entertainment and for sale on the Internet, along with other criminal conduct.
The rationale for Section 230 was to help US companies to do business over the Internet. It is often credited with helping the the US to dominate markets for Internet search, advertising, social networks, video streaming, smart phones, retail, and cloud services. So Mission Accomplished. But it’s so permissive that the US also leads the world in IP theft and Internet attacks, so it’s sensible to say Internet-based services are under-regulated.
Internet Service providers are over-regulated in the sense that any service the sell other then indiscriminate IP forwarding is suspect. ISPs are able to optimize traffic streams by application, but offering to do this for a fee was frowned up by the Obama FCC. This capability might allow new applications to bloom, but the now-powerful Internet-based services don’t want this to happen. Hence, Internet services were over-regulated before RIFO.
Between these two categories of business (Internet Services and Internet-Based Services) there exists a large gray are of edge-based infrastructure. This includes Content Delivery Networks (Akamai), web accelerators (Cloudflare), cloud services (Amazon), and real-time networks (Webex). The operation of these alternative infrastructures – let’s call them Alternative Infrastructure – is interesting.
If we buy the Obama FCC’s description of ISPs as providing “access to the Internet”, I think we have to recognize that ISPs that have direct connections to Akamai, Cloudfare, Amazon and Webex aren’t accessing the Internet when they connect users to these services. They’re actually bypassing the Internet in favor of a bespoke connection to a specialized service. And they’re deregulated.
The Worst of Both Worlds
So the Internet consists of services regulated under two radically different frameworks: ISPs are over-regulated and everything else (including Alternative Infrastructure) is under-regulated. This disparate treatment is a modern-day consequence of historical decisions made on two sets of facts that no longer exist.
The rationale for over-regulating communications networks comes from the day when there was only one networking company in the US (for practical purposes.) But now there are dozens of major companies on this segment, and most Americans use several in the course of a day.
The under-regulation of Internet-based services echoes a day when there were thousands, if not millions of them. But this segment has become radically concentrated, to the point that it’s much more concentrated than ISPs.
Here’s a Thought
Perhaps the best path to correction of our regulatory schizophrenia begins with the Alternative Infrastructure. It has some properties of ISPs and some of the Internet-Based Services.
So a regulatory framework for Akamai and Cloudflare would fit the other two types of Internet businesses fairly well. So how would you regulate the Internet alternatives?
Let’s begin be allowing them to create their own terms of service/use. They don’t all have to be “one size fits all” public accommodations, but it’s reasonable to insist that they apply terms of service in a consistent manner, especially in noncompetitive markets.
If they want to be anti-social like Reddit, that’s fine as long as they don’t promote criminal conduct. And their pricing should be fairly consistent for parties that conform to their TOUs.
What do we do about access to Rights of Way, Easements, and Conduits? This is where the fun starts, but it’s not hard either. The onus on the custodians of ROWs to make them available on public, consistent, and rational conditions.
And what level of diligence to they have to employ on customer activities? I’d prefer they do a lot. If you have a site, a network, or an infrastructure that’s used chiefly for criminal activities, you should not be in business. This condition needs a loophole for nations that ban activities we regard as lawful: each nation follows its own laws and has no obligation to cooperate with nations that have different ideas.
This notion needs work, but it’s a reasonable starting point. How would you regulate Cloudflare?