Thought Piece

[For the record, “Net Neutrality” is just another way of saying that the FCC should be micromanaging the Internet, including wired and wireless broadband. My first question for those parties, including the New York Times, who are advocating net neutrality: How can an agency regulate an industry, when it is five years or more behind in terms technology, infrastructure and human capital. The short answer is: They can’t.

Sixteen years ago, the major battle ground for Internet technology and content was “Open Access,” which was handle deftly by the FCC under Michael Powell. He took a humble, light-handed approach in 2001, for the simple reason that no one, especially a federal agency, could see into the future. Who could have guessed that wireless broadband would become the dominant force in a world of I-Phones, I-Pads, laptops, et al?

A friend of mine reminded me that there was a major panic at the beginning of the Twentieth Century, because America was running out of grassland for horses to graze. This certainly is one of those grassland moments, as more and more people break away from telephone lines, set-top boxes and cable fiber.

On the business side of the net neutrality argument, all industries have begun the transition into an Internet of Things world, with two-way connections between hundreds of billions of things. The amount of wireless broadband required for this process will be staggering, while the capital investments will be in the trillions of dollars. Then, there is matter of  new technologies that are only vaguely imagined today, and likely to be provided by a new generation of entrepreneurs and innovators.

As an observer of the federal agencies (DOE, EPA, FCC & FTC) and the private sector (Internet, telecommunications, energy and environmental) over the last 18 years, I would suggest that the separate worlds of urban and rural life will become more integrated and greatly benefit from the Internet of Things. All that all of America needs is less silo thinking and micromanagement by the federal agencies.

The role of the FCC, FTC and EPA must be to balance all of these economic/political/sociological/technological/environmental/health forces with a sense of humility and light-handedness.

From healthcare, massive real-time energy efficiency, telecommunications, electricity, transmission, energy production, environmental mitigation and beyond, the world will need this exciting–if uncertain–future, replete with plentiful broadband, big data and inter-connective-ness that only the private sector can provide. Steve]

F.C.C. Invokes Internet Freedom While Trying to Kill It


Here we go again. The Federal Communications Commission, now led by an anti-regulation ideologue appointed by President Trump, wants to gut the net neutrality rules that keep powerful broadband companies from calling the shots on the internet, at the expense of consumers.

Under the cynical guise of “restoring internet freedom,” the new F.C.C. chairman, Ajit Pai, wants to give big telecom companies carte blanche to treat the content of their subsidiaries and partners more favorably than information from other companies — a practice that AT&T, Comcast and Verizon are already starting to employ. They would also be able to demand fees from companies like Netflix and YouTube to deliver videos and other content to customers.

If the commission, which has a 2-to-1 Republican majority, approves Mr. Pai’s proposal, there will be little stopping the broadband industry from squelching competition, limiting consumer choice and raising prices. The previous F.C.C. chairman, Tom Wheeler, helped put the rules Mr. Pai is attacking in place in 2015, and the United States Court of Appeals for the District of Columbia Circuit upheld them last year.

Mr. Pai argues that existing regulations are hurting the internet. He said that the 12 largest internet service providers reduced investment by 5.6 percent between 2014 and 2016 because the net neutrality rules were too onerous. But he is cherry-picking data to make his case. Free Press, a public-interest group that supports net neutrality, found that total investment by publicly traded broadband companies increased 5.3 percent between 2013-14 and 2015-16.

Large telecommunications companies have been raking in profits in recent years. And they have been making multibillion-dollar acquisitions — not something you see from an industry that is withering from senseless regulations. Charter spent more than $65 billion last year to buy Time Warner Cable and Bright House Networks. AT&T bought DirecTV for $48.5 billion in 2015 and is trying to buy Time Warner, the media company, for $85 billion.

Not only is Mr. Pai’s lament for the broadband industry based on alternative facts, it misses the bigger point. Net neutrality is meant to benefit the internet and the economy broadly, not just the broadband industry. That means the commission ought to consider the impact the regulations have on consumers and businesses. In particular, the commission has a responsibility to protect people with few or no choices; most Americans have access to just one or two companies for residential service and just four big operators for wireless.

Mr. Pai argues that if the Wheeler rules are revoked, some safeguards will remain. For example, he says, broadband companies would refrain from blocking or slowing the content of competitors. He has not said how he would ensure that. But the F.C.C. is considering using voluntary commitments from the industry.

Under that approach, officials at the Federal Trade Commission would have the power to fine or sue companies that make pledges and then fail to uphold them. But it is hard to believe that voluntary standards would be strong enough. It also puts the onus on individuals and small businesses to complain to regulators and request investigations.

Under Mr. Pai’s proposal, broadband companies would probably use their gatekeeping position to give themselves a leg up. AT&T, for example, already encourages people to buy the streaming video service of its DirecTV subsidiary by allowing customers to watch it on AT&T’s wireless network without incurring data charges. Verizon and Comcast have similar practices. Over time, such corporate policies will make it harder for smaller companies to compete with the telecom giants.

Big internet businesses like Amazon, Facebook, Google and Netflix will probably be fine under Mr. Pai’s plans, because they are well established and have the money to cut special deals with broadband companies.

Smaller firms and start-ups — some of which may never get started — will not be as lucky.

Ultimately, though, the real losers will be all Americans, because there will be fewer choices and less innovation.

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