Stimulus: Congress rejected mandated open access/net neutrality; affirmed reasonable network management

February 13, 2009

In promoting the important goals of extending broadband to all Americans and stimulating the economy, Congress has rejected attempts by net neutrality regulation proponents to broadly impose open access or net neutrality requirements on the marketplace at large — via the economic stimulus bill. The Congress obviously understood that would not be an economic stimulus, but a wrong-headed, counter-productive depressant to necessary private broadband investment. (see stimulus bill)

  • Importantly, Congress implicitly affirmed the necessity for “reasonable network management”  and also implicitly rejected the core end-to-end network principle of the net neutrality movement — where they define/accuse any smart network management/innovation as anti-competitive discrimination or infringement of free speech. 

Important takeaways:

First, Congress rejected the House provision mandating “open access” and mandating that the FCC define “open access” in the unprecedented short time of 45 days.

  • To put this failed provision in perspective, this week, Gigi Sohn of Public Knowledge described the net neutrality movement’s definition of “open access:” it “essentially requires carriers to share their networks with competitors.” 
  • In rejecting this extreme, hyper-regulatory flavor of net neutrality, Congress re-affirmed its longstanding support for inter-modal competition policy and technology neutrality.
  • Chairman Boucher of the House Internet Subcommittee said yesterday to Congress Daily and CSPAN that he did not want NTIA to impose any “obligations on the broadband providers that would lead them to not apply for these grants.”
    • Chairman Boucher fully understands the risk that if NTIA is too regulatory in its application of the conditions on the NTIA broadband grant money, much fewer entities will apply for grants and the most important goals of promoting universal broadband and stimulating the economy — will fail.
    • Chairman Boucher apparently understands the inherent tension and danger here — that open access/net neutrality and universal broadband/economic stimulus are largely opposing goals.  

Second, in referring to the FCC’s broadband policy statement as a guide for contractual obligations for those entities applying for broadband grants from the NTIA, Congress did several things:

  • It specifically applied the conditions only to entities that choose with their free will to avail themselves of taxpayer funds — it did not create any new general or legal requirement on any other entities in the competitive free market Internet at large;
  • It implicitly affirmed the necessity and legitimacy of “reasonable network management” in rejecting the radical net neutrality view demanding the “end-to-end network design principle be legally mandated and that any smart network management or innovation be banned as de facto discriminatory or an infringement of free speech; and 
  • It also did not change the legal standing of the FCC’s broadband policy statement’s enforceability or unenforceability on a stand-alone basis — separate from conditions for NTIA broadband grants.  

Third, Congress explicitly re-endorsed the current longstanding policy of technology neutrality — i.e. the wisdom of the government not picking technology winners and losers in the marketplace.

  • This technology-neutral provision was in the section defining who is eligible for the NTIA grants: Section (e) (1) (C): “…the Assistant Secretary shall to the extent practicable promote the purposes of this section in a technologically neutral manner.”    

Fourth, Congress implicitly re-endorsed the wisdom of the longstanding policy of competitive neutrality by including the FCC broadband policy statement in the grant requirement, because it states that: “consumers are entitled to competition among network providers, application and service providers, and content providers

  • In other words, Congress has affirmed the competitively-neutral view that competition policy should be applied not only to the transmission layer of the Internet, but also to the application, service and content layers of the Internet as well. 
  • This is a critical affirmation that the government should not play technology or competitive favorites, but let consumers decide what technologies and companies succeed or fail in the marketplace. 

Bottom line:

Congress rejected the extreme demands of Net neutrality proponents for open access network sharing and mandated net neutrality. 

Congress also affirmed the critical longstanding market-based principles of competition, “reasonable network management,” technology neutrality, and competitive neutrality. 

If Congress, the NTIA, and the Agriculture Department want to succeed in encouraging universal broadband access and stimulating the economy for all Americans, the NTIA and FCC must be restrained and focused on these first purposes.

  • They must be disciplined and not succumb to the siren song of the net neutrality movement to take — Americans without broadband and the economy at large — hostage to their fringe “commons” agenda to re-open and re-litigate the 1996 Telecom Act and overturn Congress’s successful free-market Internet policy.

In sum, Congress’ explicit and implict decisions in the economic stimulus bill prove that Congress does not want to replace the consensus and essential purposes of competition, universal broadband and economic growth, with the counter-productive fringe agenda of an open Internet commons.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: