Is This What Net Neutrality Is Really About?

Recent congressional hearings held in the wake of the Federal Communication Commission’s (FCC) net neutrality ruling provide a glimpse into what is so deeply wrong with this regulation, and why so many activist groups were behind it.

It’s an aspect of this matter of which you were perhaps unaware while the FCC was considering its regulatory strategy. Perhaps you thought net neutrality meant what was said of it: that it was intended to prevent the blocking or throttling of websites, or of “paid prioritization.”

Silly you.  Actually, those were the interests of those companies — like Google and Netflix — that saw in governmental sway over the Internet commercial benefits for themselves.  But what about those groups and individuals who had political or ideological interests, and who played such outsized roles in the deal?

You know, groups like Free Press, Media Matters, Public Knowledge and New America’s Open Technology Institute?  Or what about the large grant-giving foundations, like Ford, MacArthur, Knight, and George Soros’s Open Society Institute that, in addition to munificently funding third-party net neutrality activists, directly lobbied the FCC themselves?

It should now be clear, even to those who weren’t paying attention earlier, that the primary interest these groups had, and have, in net neutrality is their desire to insinuate government in the regulation of speech on the Internet.  >> Read More

 

What Changed the FCC Chairman’s Mind?

On the occasion last week of the Federal Communications Commission (FCC)’s passage of “net neutrality” regulations, Tom Wheeler, chairman of the Commission, announced that it was “the proudest day of my public policy life.”  It’s not known whether that statement is a reflection of how little Wheeler feels he’s accomplished in life, or an embarrassing attempt to take credit for something that was forced on him.

What we do know is that the regulation that passed with his vote – and those of the other two Democrats on the Commission – was not the much sounder one Wheeler initially proposed, but a radical version that carries within it opportunities for mischief and much worse than that.

So what happened to change Wheeler’s mind?  The most obvious explanation is the interjection of President Obama who, a few weeks before the vote, publicly stated his view that the FCC should subject Internet service providers (ISPs) to utility-like regulation.  This is the explanation for Wheeler’s switch held by most insiders, and there’s no doubt that these FCC commissioners, their notional “independence” notwithstanding, move like earlier ones to the music of their parties and the presidents who appoint them. >> Read More

Who’s Behind the Push for Net Neutrality?

If “net neutrality” were a life form, it would be classified as a simple organism.  And that lack of complexity, as it happens, is its very appeal to certain “progressives,” garden-variety regulators, and large Internet companies, who see in government regulation of the Internet opportunities to cement and extend their franchises.

The brave and gifted Federal Communications Commission (FCC) Commissioner Ajit Pai, and former commissioner Robert McDowell, are doing all they can to point out the many already identifiable problems, as well as potential pitfalls, that line the path of this regulatory nightmare.  Among those problems are higher user fees to consumers, a slowdown in the rate of investment in broadband infrastructure, regulatory creep, and the wrong kind of example to set before foreign dictators and tyrants.

Alas, none of this is likely to deter the three Democratic FCC commissioners, as instructed by the White House, from passing this regulation.

What has not been much discussed in all of this is the role in the promotion of net neutrality played by some of the actors: activist groups like Free Press, Public Knowledge, and Media Matters; huge grant-giving foundations like the Ford, Soros, and Knight foundations; and companies like Google.   >>Read More

‘Forbearing’ the Constitution: Net Neutrality and the FCC

So the latest word is that the Federal Communications Commission (FCC), a branch of government that, amusingly, is still referred to as an “independent” agency, is about to enact so-called net neutrality regulations under Title II of the Communications Act.

This, because according to its fans at the Commission, such regulations are needed in order to ensure a “fair and open” Internet.  Because, however, even the most passionate among them understand the many problems this would otherwise cause, the majority Democratic commissioners are said to be poised to enact regulations that forbear the full imposition of Title ll rules.

Meantime, Congress is considering enacting a law that would itself aim to protect net neutrality, but would do so in such a way as to deprive the FCC of its ability to regulate Internet service providers as a utility under Title II.

If (you’ll forgive the expression) one googles the word “forbearance,” the first definition that comes up reads: “The action of refraining from exercising a legal right…. ” — and there’s the rub!

With every passing day it becomes clearer that the Internet is the future of the press, and the plain language of the First Amendment bars the government from abridging freedom of speech or of the press.  >>Read More

FCC’s Net Neutrality Plan Is Another Step in the Regulation of Speech

So the latest development on the speech regulation front is Federal Communications Commission (FCC) Chairman Tom Wheeler’s rumored plan to create a “hybrid” regulatory structure in the name of “net neutrality,” the condition which, as it happens, has already been attained.

Under Wheeler’s plan, Internet regulation would be split between a highly regulated back end, where content providers deal with Internet service providers (ISPs), and a more lightly regulated front end, where consumers get their content from ISPs.  This, so it’s said, is a way to get around the decision of a federal appeals court that invalidated an earlier FCC attempt to institute net neutrality regulations.

So it is that net neutrality has gone from what Bob Kahn, the inventor of the Transmission Control Protocol, has called a “slogan,” to what Scott Cleland derides as an industrial policy benefiting Silicon Valley at the expense of consumers.

Those who have a sense of history, and a wider angle of vision on the policy process, may be struck by something else.  The FCC’s plan, coming at the very time that the Federal Election Commission is looking for ways to regulate political speech on the Internet, the Justice Department is spying on journalists, and the National Security Agency (NSA) is intercepting citizens’ phone calls and e-mail, would add yet another way in which government could insert itself into the speech business.  >> Read More

The FCC’s Net Neutrality Vote

Not unlike the way that people present themselves as avatars in cyberspace, policymakers in Washington present themselves behind a veneer that is usually as predictable as it is tiresome. But not always!  Once or twice a decade some public official will do something that surprises, and in doing so leaves all the other players gobsmacked and reeling.

This is precisely what has happened at the FCC in recent days as the newly installed chairman, Tom Wheeler, acting in the wake of a court order, has proposed a reform of that agency’s so-called net neutrality regulations.  In a nutshell, the Wheeler proposal would allow ISPs to provide, for a fee, faster lanes to the consumer for content providers.

If you are one of those people who don’t find the idea of paying more for better things to be a deeply radical idea, your problem is that you’re unschooled in the ways of political posturing, rhetoric, and the lay of the land.  You don’t understand that, to Democrats especially, the “free and open Internet” cannot allow upgrades of the sort that would make any content provider (and that provider’s customers) happier than any other provider or its customers.  Distributive justice, you know.

In the grip of this construct, the Internet must remain a static and unchanging highway, never in need of pothole filling or additional traffic lanes.

Which is not to say that Republicans, too, don’t like Wheeler’s proposal.  Indeed, the confounding fact is that both of the Republicans on the Commission voted against the proposal while all three of the Democrats voted for it!  And in truth the Republicans are correctly concerned about the precedential effect of net neutrality on the formerly unregulated Internet.  In his statement opposing the measure, Republican Commissioner O’Rielly made this argument cogently, just as former commissioner McDowell had before him.

Still, there is the gnawing concern that, given the way the pieces are deployed on the board right now, it might have been better in the long run if the Republicans had given Wheeler some support for breaking from the Democratic ranks.

Whatever the future may hold, one thing is clear: The final resolution of this matter is nowhere in sight.

The opinions expressed above are those of the writer and not of The Media Institute, its Board, contributors, or advisory councils.

 

Net Neutrality: Fast Lanes and the Usual Suspects

You can sometimes judge the quality of a thing by those who oppose it.  In the case of FCC Chairman Wheeler’s plan to allow the sale of “fast lanes” by Internet service providers, we have the usual suspects.

There is, for instance, Rep. Bernie Sanders (I-Vt.), about whom it’s impossible to say a single flattering thing, and organizations like Public Knowledge, Common Cause, and Free Press, whose role, these days, is to be the routinely embarrassing coiners of nonsensical slogans like “Net Neutrality: The First Amendment of the Internet.”

So these, and more, have been roused to high dudgeon by a plan that would allow ISPs to give Internet content providers the opportunity to pay more for a speedier route to consumers.  (Oh no, not that!)

The Media Institute has spent a lot of time with “net neutrality,” and we were pleased that under former FCC chairman Genachowski the FCC adopted a “lite” form of it.  But we also said it was a solution in search of a problem, and that the only lasting effect of it would be to set a precedent for regulation of the theretofore unregulated Internet.

Still, judging by the negative reaction to the modest plan offered by Wheeler – a plan that was in direct response to a court order, and that reportedly keeps in place restrictions against all the kinds of dastardly things ISPs were falsely accused of planning to do – there’s a core of people who can’t get away from the “cause.”

One of the more flamboyant of the bunch is former FCC commissioner Michael Copps, who, on the subject, is reported to have relieved himself of this nugget: “If the Commission subverts the Open Internet by creating a fast lane for the 1 percent and slow lanes for the 99 percent, it would be an insult to both citizens and to the promise of the Net.”

Time will tell whether more people think it’s Wheeler’s plan, or Copps’s statement, which is the greater insult.

The opinions expressed above are those of the writer and not of The Media Institute, its Board, contributors, or advisory councils.

Net Neutrality Decision: A Welcome Development

Tuesday’s decision by the D.C. Circuit Court of Appeals, striking down the FCC’s so-called “net neutrality” regulations, is a welcome development.  As noted by many, these regulations amount to a solution in search of a problem, with the only lasting and real-world effects being the creation of the precedent of governmental oversight of the previously unregulated Internet.

Moreover, and as argued in this space a little over a year ago, there is an international dimension to net neutrality, as the existence of these regulations in the U.S.A. advances the agendas of countries like Russia and China in regulating the Internet through the International Telecommunication Union.

Writing today in the Wall Street Journal, former FCC commissioner Robert McDowell makes a convincing case that, for this reason too, the FCC should abandon any further attempts to promote net neutrality.

For the new FCC chairman, Tom Wheeler, this development threatens the very real prospect of becoming his signature activity for the duration of his term.  This, because if, at the urging of Internet companies like Google, plus the Obama Administration, Wheeler is importuned to try to resurrect the net neutrality rules, he basically has but two options.  One is to appeal the Circuit Court’s decision, and the other is to attempt to reclassify broadband provision as a “telecommunications service,” rather than an “information service,” something that would allow the imposition of net neutrality regs (and who knows what else) by the same authority that the FCC regulates telephone service.

But if Wheeler goes the reclassification route, it will set off congressional fireworks of a sort that will land him and the FCC in a protracted war with telecom companies, and Republican legislators, without any guarantee of success.

Still, one can only imagine the angst among the net neutrality crowd following yesterday’s decision. As reported in The Hill by Kate Tummarello, Internet companies have “pushed net neutrality with an almost religious fervor.”  Indeed, one of the most ardent pushers, the ludicrous organization called Free Press, coined the sophomoric slogan: “Net neutrality, the First Amendment of the Internet.”

So it’s not at all clear what the FCC’s next step will be, but suffice to say that the Circuit Court’s decision is going to make for some very interesting times there … and elsewhere.

                                               

The opinions expressed above are those of the writer and not of The Media Institute, its Board, contributors, or advisory councils.

 

Google’s Impact on Journalism

The products and services offered by Google are well known and highly regarded.  Every day, millions of consumers around the globe visit the company’s search engine or sites like Google News or YouTube.  And for this, the company’s employees and (especially) its founders have been well compensated.

But there’s another side to Google that consumers know very little about.  That is Google the corporation, and the effect its business practices are having on competitors, and most dramatically on the professional media, news and entertainment alike.

In important measure, people know little about Google the corporation because news stories and commentary about the company’s business practices are mostly confined to industry trade publications, or technology and economic journals.

Even the public policy issues that the company addresses are complex, and hard to write about in a way that wouldn’t cause most readers’ eyes to glaze over.  How, for instance, would one popularize such issues as the district and appellate court rulings in Viacom v. YouTube, or the FCC’s “network neutrality” proceedings, or the FTC’s recently concluded investigation of Google’s search and advertising policies?

So it’s easy to understand why the public at large doesn’t know much about Google’s role in these matters, but book and newspaper publishers do.  So too do movie studios and Google’s competitors in the online travel business, to name just a few.

And what all of these other companies know is that Google’s scale, business tactics, and aggressive lobbying amount to a distinct threat to their very existence.  A single datum provides a startling view of the challenge: Through the first half of 2012, Google by itself took in more ad dollars than the entire U.S. print media, magazines and newspapers, excluding only the ads on newspaper websites, which even today generate only about 25 percent as many ad dollars as print advertising.

The ways in which Google uses its dominance in search to monetize, by corralling and aggregating (without permission) the content of others, is a story that is long in telling.  But a common feature, as stated in a White Paper submitted to the FTC in 2011 by The Media Institute, is that Google’s “main search page biases Google News results over results of news organizations and other publishers.”

Nor is this the perception and complaint just of American publishers.  On June 25, a coalition of hundreds of Europe’s leading publishers urged the European Commission, which is the EU’s antitrust authority, to  reject outright some remedies that Google offered to end an investigation by the Commission of the same kind of practices the company is accused of by publishers on this side of the Atlantic.

As summarized by GigaOm, “Google is accused of surreptitiously favoring its own services in its search results, locking advertisers onto its platform and scraping content from rival, subject-specific search engines.”

In elaboration of the European publishers’ rejection of Google’s proposals, the president of AEDE, a Spanish association of daily newspapers, put it this way: “In short, Google’s proposed remedies do not address the overarching problems and fundamental harms that Google’s conduct causes in search-related markets and none of them aims at restoring effective competition….  In some ways, they might actually make matters worse by entrenching dominance and misleading consumers.”

Here, as in Europe, the principal venues of appeal for those being harmed by Google’s business practices are the antitrust authorities, which is to say quasi-political bodies.  And that’s a problem. In this country, the FTC has already dismissed an opportunity to do a full antitrust review of Google, in part, we can speculate, because there is no great public support for the news media generally.

Indeed, a Pew poll, released on July 11, found that only 28 percent of respondents believe that journalists “contribute a lot,” down from 38 percent four years ago.  And a Gallup poll, published on June 17, revealed that only 23 percent of the public have “overall confidence” in newspaper and TV news.

Given this lowly rating by their own customers, one might be tempted to dismiss the news media’s cannibalization by Google as something they had coming to them, and there’s an element of truth in that, as with the special contempt for them that the media have inculcated in conservatives and Republicans.

But there’s a much larger issue involved in Google’s anti-competitive behavior, and that is whether this (or any) country will in future have a robust and profitable news media industry, marked not by opinion but by objective news, investigative, and feature reporting.  Surely people of all political persuasions can agree that blogs and content aggregators are not going to fill that role.

At a time when the Internet is obliging mainstream news outlets to publish online, it is not yet clear whether a way can be found to make up, in that process, for the necessary advertising revenue that once came their way – a problem not confined just to the legacy media but to prospective newer entrants in the news reporting business as well.

And it is at this crossroad where Google, the company whose fraying motto is “Don’t be evil,” may prove decisive.

                                               

The opinions expressed above are those of the writer and not of The Media Institute, its Board, contributors, or advisory councils.  This piece was first published in USA Today on July 19, 2013, under the headline "Beware of Google’s Power."

Google, the FTC, and ‘Plausible’ Justifiability

Though it was surely not its intention, the Federal Trade Commission’s conclusion last week of its investigation of Google invites the question: What useful function does the FTC serve?

Not content, after two years of investigation on the taxpayers’ dime, to largely look past the mountain of evidence of marketplace harm caused by Google’s search and advertising practices, the Commission compounded that error by declining to issue a formal consent order, leaving it in the hands of Google itself, without the prospect of penalty, to change some of its business practices.

As even Commissioner J. Thomas Rosch said in his statement of concurrence and dissent, the FTC’s “settlement” with Google “creates very bad precedent and may lead to the impression that well-heeled firms such as Google will receive special treatment at the Commission.”

In elaboration of his dissent from the settlement procedure, Comm. Rosch added this:

Instead of following standard Commission procedure and entering into a binding consent agreement to resolve the majority’s concerns, Google has instead made non-binding commitments with respect to its search practices….

Our settlement with Google is not in the form of a binding consent order and, as a result, the Commission cannot enforce it by initiating contempt proceedings.  The inability to enforce Google’s commitments through contempt proceedings is particularly problematic given that the Commission has charged Google with violating a prior consent agreement.

What Comm. Rosch delicately calls “special treatment,” the more cynical of us would recognize as political influence peddling, a practice that Google has become quite adept at employing.  First it bankrolled the codification, at the Federal Communications Commission, of “net neutrality” regulations, thereby providing a solution to a nonexistent problem; then it led the successful opposition to the PIPA and SOPA copyright bills, the better to protect its investment in YouTube; now it has neutered the FTC, with the consequence being that it can continue to game its search results in ways that favor companies it controls.

So how has Google managed such political feats?  Well, would you believe that money has played a role?  In the FTC investigation alone Google reportedly spent some $25 million lobbying the matter.  To give an idea of the magnitude of this kind of spending, it equals 10 percent of the FTC’s total annual budget of $250 million.

But in addition to its FTC-specific lobbying, it’s well known that Google has cast its lot, through munificent campaign contributions and public policy support, with the current administration. Though it failed to come to pass, there was undoubtedly substance to the rumor that Google’s Eric Schmidt was being considered for a cabinet post in the Obama Administration.

Even so, there is evidence that the FTC commissioners know what they have done.  Their concluding statement about Google’s search practices, for instance, displays an almost comical defensiveness as they contend that, even if Google’s search practices favor its own companies, that is arguably okay:

In sum, we find that the evidence presented at this time does not support the allegation that Google’s display of its own vertical content at or near the top of its search results page was a product design change undertaken without a legitimate business justification.  Rather, we conclude that Google’s display of its own content could plausibly (emphases added) be viewed as an improvement in the overall quality of Google’s search product….  Although at points in time various vertical websites have experienced demotions, we find that this was a consequence of algorithm changes that also could plausibly be viewed as an improvement in the overall quality of Google’s search results….

Although our careful review of the evidence in this matter supports our decision to close this investigation, we will remain vigilant and continue to monitor Google for conduct that may harm competition and consumers.

Such limp-wristed rhetoric aside, there is a chance that Google will be brought to heel, just not by American authorities.  As it happens, the European Commission has also been investigating Google’s misdeeds, and the odds are good that, lacking the kind of political clout in Europe that it has in the USA, the company may actually receive from the Europeans something more than just a slap on the wrist.  On Dec. 18 the Commission gave the company 30 days to provide it with proposals to settle its complaints, something that could cost Google billions if it fails to do so.

Whatever the Europeans do, however, there remains the FTC’s foozled play, well put in a Bloomberg News editorial:

The FTC missed an opportunity to explore publicly one of the paramount issues of our day: Is Google abusing its role as gatekeeper to the digital economy?  Lawmakers, economists, other regulators, and consumers should all be in on this important debate over whether Google is leveraging its overwhelming dominance of search into unassailable market power in other areas. 

                                               

The opinions expressed above are those of the writer and not of The Media Institute, its Board, contributors, or advisory councils.