2015 February

CBIT Statement on FCC Municipal Broadband and Net Neutrality Votes

Posted by | Broadband Internet, Regulatory State, Statement | No Comments

Washington, D.C., February 26, 2015 – Fred Campbell, Director of the Center for Boundless Innovation in Technology, released the following statement with respect to the votes of the Federal Communications Commission on municipal broadband and Internet regulation:

“Today’s FCC actions imposing discriminatory, anticompetitive regulations on the Internet and preempting state competition laws trampled on the rights to free speech and freedom of the press, state rights, and fundamental principles of the free market.

The agency’s ideological pivot at the President’s command betrayed the trust of Congress and the American people in the fairness and utility of the FCC and other so-called independent agencies. It’s now up to Congress and the courts to uphold justice and protect the values that Americans hold dear.”

CBIT White Paper: Broadband Transmissions Are Not “Telecommunications”

Posted by | Broadband Internet, Net Neutrality Series, Regulatory State | 3 Comments

This paper authored by Fred Campbell was filed yesterday at the Federal Communications Commission in General Docket No. 14-28.* The complete paper can be downloaded HERE.

The FCC lacks authority to classify broadband Internet services as “telecommunications services,” because broadband transmissions are not “telecommunications.” The definition of “telecommunications” in 47 U.S.C. § 153(50) distinguishes between (1) plain old telephone services (POTS) that are interconnected with the public switched telephone network (PSTN) and (2) packet switched services that are not interconnected with the PSTN. When determining whether a particular service is subject to common carriage obligations, arguments about the ownership of the underlying network facilities, “gatekeepers,” and innovation are definitionally irrelevant. A transmission is “telecommunications” with in the meaning of 47 U.S.C. § 153(50) only if the transmission is capable of communicating with all circuit switched devices on the PSTN.[1] Read More

What position should the government take on net neutrality?

Posted by | Broadband Internet | No Comments

The following article authored by Fred Campbell was originally published in the February 2015 edition of the Illinois Business Journal.

The Federal Communications Commission is poised to break the Internet this month unless Congress intervenes. It is widely expected that the FCC will vote to regulate the dynamic, open Internet as a public utility under “Title II” of the Communications Act — a 1930s regulatory approach that would allow the FCC to set the rates, terms and conditions for broadband Internet access and regulate edge providers like Google and Apple.

Net neutrality” is the ostensible reason for imposing Title II regulation on the Internet, but it’s really a Trojan Horse intended to give public utility advocates a platform to argue for more expansive Internet regulation down the road. The principles of net neutrality were first adopted by the FCC a decade ago under its ancillary authority, and generally prohibit Internet service providers from blocking or unreasonably discriminating in the transmission of lawful Internet traffic. After a federal court overturned the FCC’s net neutrality rules last year, however, public utility advocates seized the opportunity to push full-blown public utility regulation, arguing that Title II is the only sustainable path to net neutrality.

The fact is, legislation is a simpler and shorter path to net neutrality that offers less risk and a more democratic process. If Title II advocates were motivated solely by net neutrality, they would embrace a bipartisan legislative solution. Read More

Did an FCC Spokesperson Really Say the Internet Is Not the Internet?

Posted by | Broadband Internet | 3 Comments

The current FCC’s reliance on Orwellian doublespeak to describe its plan to regulate the Internet should make you nervous. According to Re/code, the FCC is saying that “broadband providers are not the Internet: they simply provide access to it.” That’s like saying Apple iMacs aren’t computers, “they simply provide access” to computing capability. The networks operated by Internet service providers and Internet backbone operators are as much a part of the Internet as iMacs are a part of the computing experience, and nothing the FCC says can change that reality.

Congress has expressly defined the “Internet” as “the international computer network of both Federal and non-Federal interoperable packet switched data networks.” Internet service providers and backbone operators don’t just provide “access” to interoperable packet switched data networks — they are interoperable packet switched data networks.

The FCC’s attempt to exclude packet switched data networks from the definition of the Internet is presumably intended to dissuade the public from seeing the truth: That the FCC’s plan to impose Title II on Internet service providers is regulating the Internet.

It’s true that, if the FCC only regulates Internet service providers it won’t be regulating every single part of the Internet. But that fact cuts against the FCC. Discriminatory government regulation — regulating only one part of an industry ecosystem in order to benefit other parts of an industry ecosystem — is the worst type of regulation. It would be better for the FCC to apply the same nondiscrimination and pricing standards to the rest of the Internet than to pick Internet service providers as industry losers.

The reason: Consumers always lose when the government picks industry winners.

Congressional Investigation of FCC Spells Trouble for Net Neutrality

Posted by | Broadband Internet, Regulatory State | No Comments

Did the FCC chairman change his mind about Title II on his own, or did he capitulate to White House demands to avoid the disgrace of losing his chairmanship? A shocking investigative report by The Wall Street Journal suggests its the latter, and has prompted a pivotal Congressional investigation.

On Friday, the House Oversight and Government Reform Committee initiated an investigation of the Federal Communications Commission (FCC) to determine whether the views expressed by the White House potentially had an improper influence on the development of draft net neutrality rules. A letter from the Committee’s Chairman, Rep. Jason Chaffetz, to FCC Chairman Tom Wheeler raised concerns about the independence of the agency based on a shocking investigative report by The Wall Street Journal.

The report indicates that the Imperial President improperly influenced Chairman Wheeler’s decision on net neutrality. If that proves to be true, it would provide a reviewing court with grounds to overturn the FCC’s decision as arbitrary and capricious. See DCP Farms v. Neuter, 957 F.2d 1183 (5th Cir. 1992).

As an independent agency, the Federal Communications Commission (FCC) rests on a precarious constitutional precipice. Congress relies on independent agencies to oversee areas that involve substantial economic and technical expertise. Congress entrusts independent agencies with extraordinary power, because their experts are expected to act independently of the political will of the executive branch. There is nothing more dangerous to a free society than executive control of mass media communications networks.

Historically, Democratic representatives in Congress have been the most vigilant in ensuring that the White House refrains from improperly influencing decisions at the FCC. Rep. John Dingell (D-MI) launched a congressional investigation after the press reported that President Reagan had met with former FCC Chairman Mark Fowler to discuss the agency’s tentative conclusion to relax a rule governing television finance and syndication. See Merrill Brown, FCC Chief Called to Oval Office, Washington Post (Oct. 4, 1983). It was well known that Reagan opposed relaxing the rule, and after the meeting, “suddenly there were unofficial reports of some ‘reassessing’ going on over at the FCC.” Editorial Board, Film on TV–and the No. 1 Watcher, The Washington Post (Oct. 21, 1983). Read More

Government Broadband Plan Would Move US Policy to the Left of Europe

Posted by | Broadband Internet, Regulatory State | No Comments

Last year the European Union (EU) ruled that government owned broadband networks are harmful to competition and counterproductive to broadband deployment in markets with private competitors — like the market in Cedar Falls, Iowa where the President spoke.

In a speech preceding the State of the Union Address, President Obama said that preempting state laws prohibiting municipalities from owning broadband networks puts him on the side of “competition.” In reality, it would put US broadband policy somewhere to the left of Europe. Last year the European Union (EU) ruled that government owned broadband networks are harmful to competition and counterproductive to broadband deployment in markets with private competitors — like the market in Cedar Falls, Iowa where the President spoke. Based on thorough data and global economic consensus, the EU issued a regulation that presumptively prohibits municipal broadband deployments.

The new EU law requires that, “Investments in broadband networks shall be undertaken primarily by the private sector, supported by a competitive and investment-friendly regulatory framework.” (Art. 5, § 1) It authorizes local government support for broadband networks only where a detailed market analysis shows there is a market failure or sub-optimal investment situation. (Id. at Art. 5, § 1 and  ¶ (21)) Read More

CBIT Statement on FCC Chairman’s Net Neutrality Proposal

Posted by | Broadband Internet, Freedom of Speech | One Comment

Washington, D.C., February 4, 2015 – Fred Campbell, Director of the Center for Boundless Innovation in Technology, released the following statement with respect to FCC Chairman Tom Wheeler’s net neutrality plan:

“Today the FCC proposed net neutrality for some, and not for others. There is no evidence that public utility regulation is necessary to protect Internet consumers and the Chairman’s claim that it won’t harm investment or innovation is baseless. If the FCC nevertheless insists on going down the ‘Title II’ path, justice requires that it apply the law to all players in the Internet ecosystem in a fair and equitable manner. Sadly, however, the Chairman’s plan does nothing of the sort.

Chairman Wheeler’s description of his plan in Wired is disingenuous. His proposal will not ‘ensure the rights of innovators to introduce new products without asking anyone’s permission.’ Some of the biggest gatekeepers on the mobile Internet today are using their power over mobile operating systems to deny access to application developers, yet these behemoths are exempted from the FCC proposal. The fact is, application developers will still have to ask someone for permission before they can access the mobile Internet.

The Chairman’s plan is also discriminatory. He is proposing to apply privacy limitations on Internet service providers through ‘Section 222’ while exempting Internet ‘edge’ companies whose fundamental business model is to profit from collecting and selling personal information about consumers. The Chairman’s discriminatory decision to exempt the Internet’s biggest data collectors from this privacy provision appears designed to protect the Administration’s political allies in Silicon Valley, not consumer privacy. As staff at the Federal Trade Commission reported last month, a fair federal rule governing Internet privacy would protect consumer data ‘regardless of who is asking for it.’

This is an unprecedented power grab by a formerly independent agency that has become captive to Presidential prerogative. There is nothing more dangerous to a free society than Executive Branch control of our mass media communications networks. Congress should restore the Constitutional balance of power and reassert its control over the FCC and our communications laws. It should make FCC reform a priority this year.”

The Internet Economy Has Already Crossed the Data Privacy Rubicon

Posted by | Privacy | One Comment

Yesterday I gave a keynote speech about data privacy at a colloquium held by the Dialogue on Diversity. The speech as prepared for delivery is pasted below.

When Julius Caesar crossed the Rubicon, he irrevocably committed himself to waging a civil war against the Roman Republic. Caesar believed war was his only viable option. The Senate had ordered him to disband his army and return to Rome alone, where he expected to be prosecuted for insubordination and treason. Faced with this as his alternative, he crossed the river saying, “Alea iacta est” — the die is cast.

When it comes to data privacy relating to the tracking and use of consumer information for advertising, the Internet economy crossed the Rubicon long ago. Consumer data is the primary driver of the Internet economy today. According to a study commissioned by the Interactive Advertising Bureau with researchers from the Harvard Business School, at least half of the Internet’s economic value is based on the collection of individual user data and nearly all commercial content on the Internet relies on advertising to some extent. To put things in perspective, the market for digital advertising is now larger than the market for broadcast television advertising, and digital advertising is still growing. A diminished expectation for privacy is the price for accessing search, social networks, maps, email, and other online services without monetary payment. Read More