The Illusion of Net Neutrality

Political Alarmism, Regulatory Creep and the Real Threat to Internet Freedom

Bob Zelnick, Bob Zelnick, Eva Zelnick

• Publisher: Hoover Institution Press
• Year: 2013
• ISBN:
  9780817915964
• Edition: 1
• Topic: Politics & International Relations
• Subtopic: Public Communication Policy
• Index: Politics & International Relations

In this riveting treatise, coauthors Bob Zelnick and Eva Zelnick sound the alarm on the debilitating effect that looming regulations, rules, and powerful interests would have on today's regulation-free Internet. The authors lay out the imminent threats—from "network neutrality" to FCC regulations—that would rob this global, society-changing, communication powerhouse forever of its full potential.

Chapter One

THE NETWORK-
NEUTRALITY DEBATE

ON DECEMBER 17, 2010, a Tunisian street vendor named Mohamed Bouazizi set himself on fire outside the governor’s office in the rural Tunisian town of Sidi Bouzid. He was protesting the harassment and humiliation inflicted upon him by a municipal official and her aides. Within months, anti-establishment uprisings had swept through much of the Arab Middle East and North Africa. Fueled by resentment of widespread corruption among autocratic regimes, human rights violations, poverty, and unemployment, protestors took to the streets demanding change. Before this so-called “Arab Spring” had turned to summer, long-reigning governments in Tunisia and Egypt had toppled, a full-blown civil war had erupted in Libya, and demonstrations in Saudi Arabia, Yemen, Bahrain, Morocco, Jordan, and Iraq had resulted in bloodshed and varying degrees of government concessions. In Syria, massive protests triggered violent suppression by the government, which has repeatedly failed to deal with its people’s grievances using democratic tactics.

While it may be years before the history books lay claim to the conclusive narrative of the “Arab Spring,” one thing is already certain: the Internet played a central role for both demonstrators and regimes as a powerful weapon, and an essential political tool.1 As one Egyptian organizer put it, “We use Facebook to schedule the protests, Twitter to coordinate, and YouTube to tell the world.”2

The Internet has fundamentally and irrevocably changed the way we conduct our daily lives, do business, communicate, engage in political debate, educate our children, deliver health care, manage energy, and ensure public safety. Broadband, or high-speed Internet in particular, is understood in the United States and around the world as the foundation for future economic growth, job creation, and global competitiveness. Broadband services fulfill a national economic role, best described by President Barack Obama in his State of the Union Address: “Incomplete high-speed broadband network [sic] prevents a small business owner in rural America from selling her products all over the world.”3 Equally understood is that the Internet’s tremendous success is due in large part, if not entirely, to its having been allowed to flourish in the absence of government intrusion or meddling. It is a “sort of libertarian heaven,” current Federal Communications Commissioner Robert McDowell (Republican) remarked in a February 21, 2012, op-ed in the Wall Street Journal. The absence of regulation, he insists, has made the Internet “the greatest deregulatory success story of all time.” But keeping the Internet free of government regulation has been the goal of “free market” conservatives alone: a massive overhaul and deregulation of the entire telecommunications industry (codified in the Telecommunications Act of 1996) was the deliberately and aggressively pursued policy of the Bill Clinton administration. We will analyze the successes and failures of the construction and implementation of the act with respect to the individual telecommunications industries later in this book, but for now we stress only that deregulation was the goal.4

On July 20, 1999, at a speech before the Federal Communications Bar in San Francisco, then-FCC Chairman William Kennard (Democrat) first proposed what he called a “high-tech Hippocratic Oath” for Internet regulation: “First, do no harm.” As he explained, “The fertile fields of innovation across the communications sector and around the country are blooming because from the get-go we have taken a deregulatory, competitive approach to our communications structure—especially the Internet.” “Broadband is the future of the Internet,” he proclaimed, and promised that under his watch, regulators would exercise intentional regulatory restraint since no one in the government or industry could predict how the Internet would develop.5 Maintain-ing an environment in which the Internet can flourish is a bipartisan objective. Moreover, as evidenced by the Clinton administration’s deregulatory overhaul of the communications industry in 1996, and the comments by Chairman Kennard and Commissioner McDowell, it is agreed that unnecessary regulations generally hinder the growth and progress of the Internet and surrounding industries.6 Consequently, any means by which regulators propose governing cyberspace should be scrupulously scrutinized, and heavy-handed regulations must be regarded with the utmost suspicion.

The FCC’s 2002 ruling (under Republican Chairman Michael Powell) classifying cable Internet access as an “information service” under Title I of the Communications Act, rather than a “telecommunications service” subject to Title II common carrier obligations, complements Kennard’s approach.7 Title I common carrier obligations are a series of regulatory requirements imposed on plain-old telephone service (POTS) providers. By excluding the Internet (and cable) from telecommunications requirements, Congress apparently determined that the regulatory regimes would be a hindrance to the growth and progress of these new, less entrenched technologies.

The impact was undeniable. Internet access exploded through the 1990s and into the 2000s. By 2000 more than 44 million, or 42 percent, of Americans could connect to the Internet from their homes. This was up from 26 percent in 1998, and more than double the 18 percent of households with Internet in 1997, the first year the U.S. Census Bureau began collecting data on Internet use.8 By 2004 nearly three out of four houses with a phone line had Internet connectivity, translating into roughly 75 percent of the population or 204.3 million people.9 By 2011 that number was up to almost 350 million. Broadband access also spread like wildfire, up from 3 percent of U.S. homes in 2000 to 66 percent in 2010.10

Yet, network-neutrality proponents have heightened calls for federal regulation in the name of Internet “freedom,” and the Obama administration has capitulated. In fact, it seems determined to do what every single administration for the last sixteen years has resisted: submit the Internet to federal control. Under the leadership of the president’s old friend Julius Genachowski, in December 2010 the FCC circumvented Congress, blatantly disregarded a recent court ruling, ignored public sentiment and the vehement dissent of two of its five commissioners, and passed rules that purport to give the government authority to sink its talons deep into the inner workings of the Net. Genachowski’s “Open Internet Order” turns on its head the phenomenally successful “bottom-up” approach to the Internet, in favor of “top-down” regulation that threatens to politicize Internet governance, stifle innovation, and discourage investment.11 At the same time, by signaling to the rest of the world that the United States is abandoning its policy of leaving the Internet free from government meddling, it invites other countries to do the same, setting the stage for a global regulatory pandemic. Already, a fierce international debate is being waged over a flourish of new regulatory proposals backed by Russia, China, Brazil, and India, which would give the United Nations unprecedented regulatory power over the Net. If successful, the proposals would upend the terms of a 1988 International Telecommunications Regulations (ITRs) treaty in which delegates from 114 countries agreed to a “multi-stakeholder” bottom-up governance model that helped to facilitate the international growth of the Net and insulated it from top-down economic and technological regulation.12 Under the new proposals, the United Nations would have wide regulatory latitude over cybersecurity, data privacy, technical standards, and the Internet Protocol (IP) addressing system.13 The future looks bleak: gone will be the days where the Internet ecosystem evolved at a mind-shattering pace, fueled by billions of dollars of private investment and American innovation and bridled only by the pace of technological development and business-model creativity. Now, the government will determine both the players and the rules of the game. Innovation will wilt and die in a wasteland of bureaucratic red tape and political deal-making along the cracked banks of an empty riverbed through which a white water of investment once gushed.

How could this happen? The story has all the elements of a page-turner: a confluence of political agendas, ideologies, and even personal vendettas have brought society to crossroads between abandoning unwieldy regulations or submitting to yet another regime that has the potential to fundamentally alter the future of the Internet.

The December 2011 action by the FCC is the latest move in a long campaign, masterly crafted to mandate “network neutrality” on the Internet. In large part, the radical left-wing “media-reform” group known as Free Press, and the more temperate group Public Knowledge, spearheaded the campaign. Founded in 2002 by Josh Silver, John Nichols, and Robert McChesney, Free Press’s anti-corporate vision of government-controlled media is not surprising considering its founders’ pedigrees. Silver previously ran a successful ballot initiative in Arizona to implement publicly funded elections. Nichols is the Washington correspondent of The Nation. McChesney, a leftist media theorist and University of Illinois communications professor, is also the former editor of the Marxist Monthly Review.14 Lest there be any confusion regarding his personal ideology, McChesney once told John Fund of the Wall Street Journal that he is a socialist and “hesitant to say I’m not a Marxist.” When asked, in 2009, to explain his network-neutrality agenda to the website SocialistProject.ca, he explained, “At the moment, the battle over network neutrality is not to completely eliminate the telephone and cable companies. But the ultimate goal is to get rid of the media capitalists in the phone and cable companies and to divest them from control.”15

Throughout the course of their network-neutrality campaign, the groups have controlled both the trenches and the war room, drawing their intellectual might from the leftist prose of ivory-tower heavyweights like Harvard University’s Lawrence Lessig, and Jonathan Zittrain, Columbia University’s Tim Wu, Seton Hall’s Frank Pasquale, and Stanford’s Barbara van Schewick. They have dealt a one-two punch by leading the battle for the hearts and minds of anyone who will listen under the seemingly innocuous and sympathetic banners of “open Internet,” “neutrality,” and “Internet freedom,” while simultaneously targeting and capturing the most bumbling, inept, if not corruptib...