The Future of Net Neutrality?

So, I hear the FCC is going to give us net neutrality:

For the stuff that matters to us most, as an online community: the order bans paid prioritization, throttling and blocking. That means that outright blocking of content, slowing of transmissions, and the creation of so-called “fast lanes” available on a pay-to-play basis are banned. Daily Kos will be delivered across the networks as easily as the New York Times’ website or Fox News’s or RedState (it still exists! Who knew?) and you and we won’t have to pay more to have it delivered to your screen.

Of course, net neutrality does nothing about what I see as the biggest problem with internet service, which is the lack of competition between local providers. In my area, unless you’re willing to put up with slow speeds, there’s only one provider. That kind of monopoly power is never good for customers. But net neutrality isn’t going to fix that.

Nevertheless, although I’m not convinced net neutrality is necessary — it’s not as if there’s a history of abuse without it — I don’t think net neutrality is a bad thing by itself.

I am, however, a little concerned about what else the FCC is going to do. Before the FCC could enact net neutrality, they first had to reclassify the internet as a Title II telecommunications service, which gives the FCC a lot more power over it than they had before. They can use that power to enact net neutrality (unless they lose in court again), but they can also use that power in other ways.

Here’s what the FCC says about that:

This includes no unbundling of last-mile facilities, no tariffing, no rate regulation, and no cost accounting rules, which results in a carefully tailored application of only those Title II provisions found to directly further the public interest in an open Internet and more, better, and open broadband. Nor will our actions result in the imposition of any new federal taxes or fees; the ability of states to impose fees on broadband is already limited by the congressional Internet tax moratorium. This is Title II tailored for the 21st century.

To which the folks at Daily Kos respond:

No tariffs. No taxes. No rate regulation—the FCC is not setting prices for internet service. Nothing that will cost ISPs more to provide the service they keep promising their users. All of those things telecoms have been screaming about are not happening.

To which I respond: Yet.

Because we’ve seen regulatory agencies get out of control before. And I have a few predictions.

Pretty much all of those things the FCC says it isn’t going to do are things it is in fact authorized to do under the Telecommunications Act. Unless this power grab is overthrown by Congress or the courts, the FCC can do any of those things whenever it wants. Or whenever the next President wants them to.

As is usually the case, they’ll probably try to hide it behind good intentions. So they won’t just impose a tax on internet service. Nobody wants that. Instead, they’ll offer a program of some kind — low-cost internet service for the urban poor and underserved rural areas, programs for the schools, something that sounds nice — all of which will happen to be financed by a small tax on the internet.

Then there’s the question of whether the FCC will try to regulate internet content. Right now, nobody’s seriously talking about that, and the internet is pretty much wide open to almost anything. But how long will that last with the FCC in charge? Remember, this is the organization that fought with CBS over Janet Jackson’s right nipple for eight fucking years.

What do you think will happen the next time there’s a moral panic over something on the web? What are the chances that some politician will see a chance to attract attention to himself by “making the internet safe for children”?

I think there are a few issues that are ripe for exploitation by some tinpot FCC commissioner:

• Content from terrorist organizations, for some surprisingly expansive definitions of “terrorist” and “organization.” Also maybe “content” and “from.”
• Human trafficking. By which I mean escort websites and forums.
• Revenge porn. This is a hot topic, and what aspiring politician wouldn’t want to be seen fighting something like that?
• Online gambling.

I wouldn’t be surprised if rather than going after infringing websites directly, they instead just strongly encouraged internet service providers to block content that they know, or should have known, was in one of the disallowed categories. This makes the ISPs do all the work and makes it harder to get a First Amendment claim going.

And then there’s always the problem of regulatory capture. The FCC’s posture right now is one of fighting to keep internet providers in line, but it’s only a matter of time until they start protecting providers from competition. They won’t call it that, of course. They’ll probably call it “protecting consumers.” They’ll impose lots of regulatory requirements, all justified in the name of consumers, and all harder on new providers than on the established giants that have Compliance departments filled with former FCC staff.

I wouldn’t be surprised if “equal opportunity” makes an appearance as well. Some new player will figure out a neat trick to provide better or cheaper service, and naturally they’ll want to pick off customers in the more lucrative markets, but the FCC will accuse them of discriminating against poor minorities and insist they serve a much larger area, which will make their business plans unworkable. The poor minorities still won’t get the new service, but neither will anyone else.

If history continues to repeat itself, eventually the FCC will directly manage the market. Before any internet service provider (new or old) can add capacity in a market, it will first have to prove to the FCC that there is a “unmet need.” Existing providers will be allowed to contest this need — they may even have seats on the committee making the decision — thus ensuring that no actual competition ever takes place. Nobody will admit that’s what they’re doing, of course. They’ll probably call it “preventing wasteful duplication” or “stabilizing the market,” or if things have gone particularly badly, “restoring public confidence in internet providers.”

So those are my predictions. Unless this gets stopped pretty soon by the courts or Congress, I expect taxes within eight years (sooner if President Elizabeth Warren gets her way), content regulation within ten years (sooner if President Jeb Bush puts Rick Santorum on the FCC commission), and regulatory capture within…well, I expect regulatory capture to start almost immediately, but it could take a few decades to drive the industry into the ground.