A note on Next week's vote at the FCC

[Dave Farber <dave () farber net>]

Begin forwarded message:

> From: Jonathan Aronson <aronson () usc edu>
> Date: October 15, 2009 15:43:28 PDT
> To: David Farber <dave () farber net>
> Cc: Jonathan Aronson <aronson () usc edu>
> Subject: Re: [IP] A note on Next week's vote at the FCC

> Dave and readers,
>
> Here are some additional thoughts and suggestions on the impending  
> net neutrality vote, some building directly on the submission from  
> David Gross.
>
> Jonathan Aronson
>
>
>             As the FCC vote on network neutrality approaches, it is  
> a given that regulators around the world will scrutinize and dissect  
> the pronouncement.  As in the past, no country will follow the  
> American lead precisely, but FCC efforts on network neutrality going  
> forward will influence others to act. Without question, there will  
> be a significant demonstration effect at work. David Gross is  
> certainly correct that “the FCC’s vote next week may have  
> significant unintended consequences internationally for the Internet 
> .” Therefore it is critical for the FCC to consider as they move for 
> ward how other countries will react.  If the FCC “gets it right”  
> the impact abroad could be enormously positive.  If not, the concern 
> s raised by David Gross could come back to haunt us. I am a supporte 
> r of network neutrality going forward, but to minimize unintended co 
> nsequences, I hope that the FCC will act judiciously to adopt a narr 
> ow scope for rules designed to ensure network neutrality.
>
>             Building on principles that emerged in conversations at  
> the USC Annenberg Center for Communication in 2006, I continue to  
> believe that
>
>             1.            Operators and customers both should win.  
> Thus, network infrastructure investment should be encouraged by  
> enabling operators to benefit from their investments. At the same  
> time, customers’ unrestricted access to services and content on the  
> global public Internet should be ensured.
>
>             2.            Use light touch regulation when there is  
> significant market power. Any regulation should be defined and  
> administered on a nationally uniform basis with a light touch.  
> Regulations should be aimed primarily at markets in which it has  
> been demonstrated that operators possess significant market power.  
> The emphasis should be on prompt enforcement of general principles  
> of competition policy, not on detailed regulation of conduct in  
> telecommunications markets.
>
>             3.            Guarantee “basic access broadband.”  
> Broadband network operators can avoid more intrusive regulation by p 
> roviding “basic access broadband,” a meaningful, neutral Internet  
> connectivity service. Beyond providing this level of service, operat 
> ors would be free to determine all service parameters, including per 
> formance, pricing, and the prioritization of third-party traffic. Gl 
> obal best practices can inform the discussions about the proper para 
> meters of the access service.
>
>             4.            Users should have freedom of choice of  
> terminal and software applications. The right of users to choose  
> terminals as long as they do not harm the network has been an anchor  
> of wired network policy. This right should be extended to wireless,  
> mobile, nomadic, and hybrid networks, as has already occurred in  
> many countries, and could be added to WTO commitments. The right of  
> the user to freely choose software and Web applications is more  
> difficult to formulate, because some premium services might choose  
> to “manage” acceptable services. However, if there is an adequate  
> “basic access service” (as described above) or a commitment to  
> resell network capacity on wholesale terms to others, carriers will  
> not be able to restrict access to end Web services.
>
>             5.            Provide transparency. Customers should  
> receive clear, understandable terms and conditions of service that  
> explain how any network operator, Internet service provider, or  
> Internet content provider will use their personal information and  
> how it will prioritize or otherwise control content that reaches them.
>
>             This approach treads lightly but recognizes the risks of  
> duopoly and acknowledges the fragmented politics of net neutrality.  
> If carefully implemented, globalizing the platform for net  
> neutrality might actually help reverse the policies on unbundling  
> that dominate the telecom regulatory environment outside the United  
> States. The US must craft a narrow, coherent policy at home that  
> other governments can observe in practice before the US policy can  
> become a credible basis for reforms of global governance.
>
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> On 10/15/09 11:18 AM, "David Farber" <dave () farber net> wrote:
>
>
>
> Begin forwarded message:
>
> From: "Gross, David"
> Date: October 15, 2009 8:02:06 AM PDT
> To: dave () farber net
> Subject: A New Post
>
>
> Next week the Federal Communications Commission will vote on a  
> proposal to consider establishing binding "net neutrality"  
> regulations on companies providing Internet services. Breaking with  
> the long tradition of the Clinton and Bush Administrations of  
> ensuring that governments around the world do not "Regulate the Net" 
>  – the FCC’s vote next week may have significant unintended  
> consequences internationally for the Internet.
>
> In essence, the Commission's proposed net neutrality rules would  
> result in the US government regulating the Internet (i.e., imposing  
> binding rules on how Internet networks operate) rather than leaving  
> those issues to technical bodies and those providing the  
> infrastructure.  It has long been the desire and focus of other  
> governments to play a significant role in how the Internet is  
> structured and how it operates.  Those governments include not only  
> China, Russia, Saudi Arabia, etc., but also others such as the  
> European Union and certain of its member states.  My predecessors  
> during the Clinton Administration and my colleagues in the Bush  
> Administration fought hard and successfully to ensure that the  
> Internet would not be regulated by the UN, by other international  
> organizations, or by other countries.
>
> However, if the US government creates a set of rules and regulations  
> that will govern the relationship among those providing Internet  
> facilities and services to advance US government policies – even for 
>  good purposes such as promoting the free flow of information -- the 
> n there may be virtually no basis for the United States to object to 
>  other governments also creating new rules governing the Internet.   
> Presumably this would include not only issues about Internet content 
> , but also about Internet facilities and the economic relationships  
> among Internet service providers. It is easy to understand that thes 
> e other governments will seek to design rules to help their domestic 
>  companies at the expense of international and American companies  a 
> s well as at the cost of the economically efficient design of the In 
> ternet.  Ironically they are also likely to use the establishment of 
>  new US rules regulating the Internet to impose their own restrictio 
> ns on Internet content – especially focusing on restricting the free 
>  flow of information so as to promote their own interests in enhanci 
> ng Chinese "social cohesion" or other countries that seek to "defend 
>  against religious defamation".
>
> At a recent meeting of the UN’s International Telecommunication Unio 
> n, there was great interest among ministers and regulators around th 
> e world regarding the FCC's net neutrality proposal and the $7.2 bil 
> lion stimulus package to support broadband build-out.  Based upon my 
>  conversations with many of those ministers and regulators, they see 
>  the US government’s active involvement regarding the Internet and b 
> roadband as signaling a change towards more active government interv 
> ention and regulation rather than primarily relying on competition a 
> nd market forces.  As many ministers and regulators have been long b 
> een looking to more actively regulate the sector -- both telecoms an 
> d the Internet -- the changes discussed by the FCC and others are se 
> en as a basis for a return toward the traditional interventionist ro 
> le of governments in these areas.  It seems likely that such a tradi 
> tional role would naturally include protection of domestic economic  
> interests at the expense of American and international players.
>
> Of course, with globally tight credit markets and other problems  
> associated with the economic recession -- especially in the  
> developing world -- changing significantly the rules of the game by  
> imposing new rules is also likely to have a materially adverse  
> impact on telecoms capital formation.  This would likely lead to  
> building relatively fewer high speed broadband facilities around the  
> world.  At the ITU there was discussion about major changes in  
> regulatory policies creating investment uncertainties and that,  
> other things been similar, such uncertainties decrease investments,  
> especially in difficult political and economic environments.  On the  
> other hand, such decreased private sector investments could give a  
> substantial boost to China and other economies where government  
> support is easier to get.
>
> I have no doubt but that the FCC’s proposals to create new Internet  
> regulations are being done for the best reasons – to increase the fr 
> ee flow of information to consumers. However, in this case the law o 
> f unintended consequences is likely to result in serious damage bein 
> g done internationally to the freedom of the Internet.
>
> Ambassador David A. Gross
>
>
>
>
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