Tomorrow, the FCC is expected to vote on a proposal for new rules around Net Neutrality. The vote is likely to be 3-2 in favor of the rules, split along partisan lines (3 democrats, 2 republicans – shocker…). There has been an enormous amount of bombastic rhetoric in the past few months about the issue that has recently become especially politicized in the same way the debate about SOPA/PIPA unfolded.
I’ve been very public about being a supporter of net neutrality and the idea that the FCC should put down clear, legally enforceable rules around it. However, every time I write or tweet something about the topic, I get a flurry of responses telling me why I’m wrong, why this is bad, or why I’m an idiot. I find these helpful as they force me to focus on the objectionable issues, although I have to put some work in to separate the noise from the signal. And unfortunately there’s a lot of noise these days around anything our government tries to do.
I’m not a lawyer, nor do I ever plan to be one, but I spent plenty of time with them. As a result, over the past 20 years I’ve learned a lot about how the law works in the context of innovation, new products, infrastructure, and consumer protection. I’ve been involved in a number of public policy debates, especially around the Internet, innovation, and immigration. And I’ve made a bunch of friends, on all sides of the discussions, who I’ve argued with, agreed with, been frustrated by, and likely annoyed greatly with my strong opinions and continuous questions to better understand whether my opinions are valid. I learn, evolve, and change my mind based on data and compelling arguments, not on sound bites, so this can be hard work to sort through, but it’s the way my brain was trained, both through my experience at MIT and reflecting on many of the successes and failures I’ve had along with what I’ve learned from them.
A few weeks ago I wrote the post Explaining Net Neutrality to My Dad. He and I engaged in a continuous discussion about this in the past few weeks. He’s endlessly intellectually curious and deeply negative about our government as a result of their engagement with the healthcare system so he has been sending me the “anti-net neutrality” and “the government is taking over the Internet” messaging that has been floating around. I was able to directly respond to some of it, especially the real nonsense, but there were some things that I didn’t completely understand, so I talked to some of my lawyer friends about it.
A few days ago, I decided to summarize what I believe to be the truth around several of the key things I keep hearing over and over as opposition to the FCC proposal, especially around the reclassification of ISPs as Title II telecommunication services. My perspective is informed by two meetings I’ve attended with Wheeler – one a year ago where I was terrified by where he was starting from and one a month ago where I strongly endorsed where he had ended up. In the most recent meeting, I learned a lot about his own intellectual framework for what he’s proposing, which I wrote about in my post Death of Distance and the End of Time.
So – here are a few of the things that I’m regularly hearing as opposition to the new FCC proposal, along with what I’ve believe to be the facts. This comes from the premise that I have which is that strong net neutrality rules are critical to protect an Open Internet and that I’m directly aligned with companies like Twitter who recently wrote why they favor #NetNeutrality and Tim Berners Lee, who invented the World Wide Web, who recently said “YES to #NetNeutrality.”
The Government Is Taking Over The Internet: The rules will not lead to the FCC regulating the Internet. The rules around Title II only allow the FCC to regulate transmission which many refer to as the on-ramps to the Internet provided by cable and telephone companies. There used to be rules around this, but there haven’t been for over a year since the federal court struck down the prior rules.
Title II Will Make the Internet a Public Utility: Reclassifying ISPs as Title II “telecommunications services” will not make them “public utilities.” While Title II is the firmest legal ground for the net neutrality rules, the FCC is applying a light-touch version of Title II where there will be no rate regulation, no tariffs, no burdensome administrative filings, and no last-mile unbundling. Instead, there will be prohibitions on blocking, throttling, and paid prioritization.The FCC will be able to stop any practice that harms user choice or edge providers’ ability to reach users and will be able to act on complaints that ISPs are acting unreasonably when they interconnect with transit providers (e.g. Level 3) or content delivery networks (e.g. Netflix, Amazon.)
ISPs and Broadband Companies Will Invest Less In Their Networks: There is no evidence that Title II will cause ISPs to invest less in their networks. Most Wall Street analysts have said that they see no threat to investment from reclassification because there will be no rate regulation. Sprint, Google, Verizon, Charter, Comcast, Time Warner Cable and others have told Wall Street that Title II poses no threat to investment. Mobile voice is already regulated under light-touch Title II and wireless companies invested nearly $300 billion in their networks in the last 20 years.
Obama is Forcing the FCC To Do This: When I met with Wheeler about a year ago, he had a very different starting point around this issue. I had a strong negative public reaction to this during the initial public comment period and made my point of view clear on the original set of proposals along with about four million of my American friends. I’ve been told this was by far the most comments on FCC rules of any sort. The vast majority of people asked for the strongest possible net neutrality rules which align with the Title II approach. These got incorporated into the proposal as a result of this public response and Obama didn’t actually weigh in publicly until after Title II was incorporated into the proposal. When I checked on history, it turns out that it’s not unusual for the President to weigh in on FCC matters as Nixon, Reagan, Clinton, and Bush have all publicly urged the FCC to take certain actions on regulatory matters.
Everything Was Done In Secret: This is a talking point that apparently started when one of the FCC Commissions (Ajit Pai) put it out there that the upcoming final proposal (what government people call “the order”) was not made public before the FCC vote. It turns out that no FCC Chairman has ever made the full text of an order public prior to a vote. Given how the existing process works, which incorporates public comments on the draft (remember those four million comments I mentioned above), the notion around the FCC making the final proposal public before the vote seems like a cynical ploy for delay, as any comment on the proposal would have to then be considered and incorporated, leading to an endless cycle of public comment.
Ultimately, Congress can weigh in with new laws around this. Remember that the FCC can’t make new laws, they can only enforce things under current laws. There’s a clear-minded article in the New York Times this morning titled F.C.C. Net Neutrality Rules Clear Hurdle as Republicans Concede to Obama that create additional perspective on both the partisan dynamics at play along with the challenge that paralyzes Congress in general right now.
While this certainly isn’t the end of this issue, and given the dynamics around networks in general, I expect it will be one we face for the rest of time, I continue to believe strongly in the proposal the FCC is considering. And I’m proud that so many people have engaged constructively in the discussion.
I was fortunate to spend an hour with a group of about 30 people and Tom Wheeler, the chairman of the FCC yesterday morning. It was a super interesting and stimulating conversation that preceded an excellent speech that Wheeler gave on his Net Neutrality proposal. Go read it and ponder it. It’s in English (not legalese), is blunt, direct, and at times humorous. And it hits the soundbites that are being used against “the government takeover of the Internet” and “the end of the Internet as we know it” crowd quite effectively.
But in this post I want to talk about a phrase Wheeler tossed out early in the conversation that really stuck with me. He said:
“In the 1800s, in a very short period of time, we experienced two innovations that created the death of distance and the end of time.”
I’ve been very open about my belief, which I wrote about for the first time in my book Startup Communities, that the global financial crisis was the point at which networks overtook hierarchies in importance in our society. And, while I’ve read about the history of railroads and the telegraph, I never really thought about them as the starting point for the creation of networks given the death of distance and the end of time.
It’s a powerful construct. Today we are starting to see the self-actualization of networks and the path to what many refer to as the singularity. Regardless of whether you believe this, are comfortable with it (like I am), or are afraid of it (like many others are), it is inevitable that innovation, networks, machines, and AI will continue to evolve at an extremely rapid pace. If you don’t believe me or understand this, go read William Hertling’s amazing Singularity Novels.
As a species, I do not think we can control this. Nor should we. We should enable it. We should explore ways to make us a more amazing species. A more fascinating society. We should embrace our innovations and evolve with them.
The path we are on started in the middle of the 19th century. The debate over Net Neutrality is a tiny blip on this path. If we study history, at all points along this path companies behave in their self-interest. We expect that. Human behavior and economic interest always move toward the question, “How can I maximize the position I’m in?” Think about the evolution of the railroad industry. Think about the evolution of the telegraph, and then the telecommunications industry. Think about where we would be if AT&T still prevented us from putting non-AT&T manufactured things “on their network.” Or, maybe more importantly, think about where AT&T would be, which given the passage of time would likely be still promoting Picturephones. Ok – that was gratuitous and unnecessary, but I couldn’t help myself.
In our discussion yesterday, the idea of epistemological modesty came up, reminding us that we can’t predict the path of innovation even in something we know well. I live this every moment in my business as a VC and strongly believe that we should enable, not try to control, innovation.
After listening to Wheeler, reading his speech, and thinking deeply about this over the past few years, it’s clear to me that he understands this. And for those saying “he’s using 1930s monopoly-style regulation to have the government control the Internet”, you are simply wrong. Read his words:
“We will forgo sections of Title II that pose a meaningful threat to network investment. That means no rate regulation. No unbundling. No tariffs or new taxes. I would note that when applied to mobile voice service over the past two decades, the use of such light-touch Title II – which, by the way, was sought by the industry – went hand-in-hand with massive investment.”
It’s really hard to ignore the soundbites and dig into the facts. But I encourage everyone to try.