Failure to launch: Two frustrated arguments from the Title II debate

March 6, 2015

Link Hoewing

Tech Policy Daily

Last week, the FCC voted to reclassify US broadband under Title II of the 1934 Communications Act. The vote followed a long period of impassioned rhetoric from both sides of the debate, with Title II advocates ultimately winning this round of the argument. There are two points from the other side of this debate, however, that had far less impact than they should have: First, that reclassification will have negative effects on free speech, and second, that the Internet’s innovative potential is only just begun to have an impact.  To impose regulations designed in the era of the telephone after the progress we have seen in the growth of the Internet as a global medium of speech and an economic and innovation engine seems especially foolhardy.

First, free speech. Title II advocates treat this argument dismissively by saying that the US is not China or Russia. We have a habit of protecting speech after all they point out. As a result, there is no danger that the FCC would regulate what people say on the Internet. Indeed, Chairman Wheeler himself likened the Open Internet order to the First Amendment in his remarks. It seems easy to make the case that we are different from other countries and have a long history of deeply rooted First Amendment protections.

Being a child of the 70’s, I could retort that I was a passionate George Carlin fan when the FCC went to war against what Carlin dubbed the “seven words you can’t say on the radio.”

But there is a deeper point about free speech that advocates gloss over. There is a saying that “the Internet routes around troubles.” By its highly connected nature, the Internet has always done this, and that is what makes it such a powerful technology. But the Internet’s power to connect people and services is built on two technological facts: interconnection between networks and the construction of new networks with greater capacity. The Internet can route around troubles if networks can create new connections where needed and develop new forms of interconnection. They have been able to do this because there is no government agency – nor any rent seeking company trying to use regulation to force terms of interconnection – that can interfere with the unregulated negotiations and agreements that help interconnect the myriad networks of the Internet. Having the FCC in the middle of the process will inevitably mean delays and even denial – or the threat of denial – when interconnection agreements are proposed. In effect, the FCC will shut down many new forms of commercial interconnection and the Internet will slowly become less and less able to do what it does best.

China’s Internet shows what can happen when governments manage network connections. China has managed to limit and monitor interconnections which means there are fewer routes available for the Internet to use to get around the “troubles” China’s monitoring creates for speech. This is the threat the FCC really poses. It will likely slow or deter limit interconnection agreements and stifle innovative new forms of interconnection. This means fewer routes for communications, possibly more congestion, and, over time, less investment.  The phenomenal ability of the Internet to adapt to new challenges created by new forms of communication or increased traffic will be hampered by regulations that interfere with the process of creating new interconnection points. Interconnection is not just a technical and physical process – it also involves working out commercial arrangements between companies and organizations who own networks.

The second argument against traditional utility regulation – concerning the negative impacts it will have on the economic growth and innovation stimulated by the Internet – seems to have been lost sight of as the debate has led to the FCC’s rulemaking decision. Some even argue that the innovation and “creative destruction” the Internet has stimulated has resulted in less economic growth than earlier waves of technology. In a nutshell, they say that the social and economic benefits of the Internet are overstated, and that its technological advances bring with them renewed and enhanced cyber threats and vulnerabilities. So even if regulation is imposed, it won’t have that much of an economic impact they argue. But I think this is wrong for two reasons, and I believe that not enough research has been done to push back against this notion.

For one thing, these arguments assume that the Internet has “reached its peak” – that its impact has basically run its course. But the reality is that we have only begun to see how it can be used to improve our lives. We still mostly use it to monitor systems, entertain ourselves, and communicate. There is so much more that these technologies can do including, for example, helping to prevent system failures before they happen – in homes, in human bodies, and in infrastructure. The losses from preventable catastrophes and illnesses have to be staggering and the costs to our economy huge. Effective use of the Internet and automated information technologies can change this – indeed, they may have already begun to do so in areas like health care.

Or take transportation. People sometimes make fun of “self driving cars” but the information and network communications technologies involved can help make transportation far more efficient, even if “self driving” is not just around the corner. Take parking in cities as a simple example.  Today, large amounts of fuel and time are spent trying to find parking in metropolitan areas. With “networked” parking lots and sensor-equipped parking spaces, drivers will know where available parking is and won’t have to drive for minutes or longer trying to find parking.  And this is only one example of how networked cars, highways and destination points will save time and energy – and reduce greenhouse gases.

Second, the way we measure productivity is outdated and does not fully credit the many positive impacts the Internet has had on work output and efficiency. For example, when I first started doing construction work early in my career, we had very limited technology to help us do our jobs faster. Most of what we had was built for manual labor. There were no nail guns or screw guns and only a few power tools. Today, all that has changed. But here is one other thing that has made a huge difference – the Internet and mobile technology. For example, when I needed parts for a plumbing job back then, I’d show one of my workers the part I wanted and then send them to the hardware store to get it. Once they got there, if what they found was not an exact fit, they had to find a pay phone, try to describe what was there, and I’d have to make a judgment about whether to get an imperfect piece or not. If they came back with something that did not work, I’d have to send them back again.

If I was still in construction today, my worker could take a picture or send a video of a part in action. I could look at it on my smart phone, send a quick text approving or rejecting the part, and then keep working. Today, when my worker returned, he would most often have the right part. Multiply these small improvements by the millions of times that they make a difference each day in construction, real estate, medicine, and other industries. Contemporary productivity measurements may show that house construction is more productive today but I doubt they capture the contribution to those productivity figures of these mobile and Internet technologies in house construction. And I suspect this is true in a vast number of other industries.

We are only just beginning to use the Internet to its fullest extent, and there is a need to show that all of this economic growth is real and is quite likely far greater than even some of the estimates the current administration has made. The reclassification they so adamantly advocated for will not only curb growth and investment, but keep future growth and innovation from happening as rapidly as it should. And it could help stall our own economic growth just when it appears to be reaching a solid level. Moreover, the regulatory model the FCC just adopted could infringe on the free speech we pride ourselves on as a nation by setting an example that many countries in the world will now feel even more justified in copying. These arguments deserve to be revitalized as this issue inevitably heads to congress, the courts, and beyond.

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