FCC’s Genachowski Promises He’s Not Out to Regulate Net, New Media

February 10, 2010

By Berin Szoka & Adam Thierer at The Technology Liberation Front

We learned from The Wall Street Journal yesterday that “Federal Communications Commission Chairman Julius Genachowski gets a little peeved when people suggests that he wants to regulate the Internet.” He told a group of Journal reporters and editors today that: “I don’t see any circumstances where we’d take steps to regulate the Internet itself,” and “I’ve been clear repeatedly that we’re not going to regulate the Internet.”

We’re thankful to hear Chairman Julius Genachowski to make that promise. We’ll certainly hold him to it. But you will pardon us if we remain skeptical (and, in advance, if you hear a constant stream of “I told you so” from us in the months and years to come). If the Chairman is “peeved” at the suggestion that the FCC might be angling to extend its reach to include the Internet and new media platforms and content, perhaps he should start taking a closer look at what his own agency is doing—and think about the precedents he’s setting for future Chairmen who might not share his professed commitment not to regulate the ‘net. Allow us to cite just a few examples:

Net Neutrality Notice of Proposed Rulemaking

We’re certainly aware of the argument that the FCC’s proposed net neutrality regime is not tantamount to Internet regulation—but we just don’t buy it. Not for one minute.

First, Chairman Genachowski seems to believe that “the Internet” is entirely distinct from the physical infrastructure that brings “cyberspace” to our homes, offices and mobile devices. The WSJ notes, “when pressed, [Genachowski] admitted he was referring to regulating Internet content rather than regulating Internet lines.” OK, so let’s just make sure we have this straight: The FCC is going to enshrine in law the principle that “gatekeepers” that control the “bottleneck” of broadband service can only be checked by having the government enforce “neutrality” principles in the same basic model of “common carrier” regulation that once applied to canals, railroads, the telegraph and telephone. But when it comes to accusations of “gatekeeper” power at the content/services/applications “layers” of the Internet, the FCC is just going to step back and let markets sort things out? Sorry, we’re just not buying it.

Chairman Genachowski may sincerely believe that a clear, bright line can be drawn between the “infrastructure layer” (which he’s certainly going to regulate) and what he likes to think of as “the Internet” (which he promises not to regulate). But as we warned last October, the day after the FCC launched this NPRM:

The promise made yesterday by the FCC—to only apply neutrality principles to the infrastructure layer of the Net—is hollow and will ultimately prove unenforceable. The reality is that regulationalways spreads. The march of regulation can sometimes be glacial, but it is, sadly, almost inevitable: Regulatory regimes grow but almost never contract… The basic premise of neutrality regulation is already being proposed for other layers of the Internet….  whatever the FCC might say today, any large online intermediary with a popular platform potentially faces the threat of “network neutrality” mandates—because every platform is essentially a “network,” too. We’re not just talking about “search neutrality” (Google as well as Microsoft) but also about “device neutrality” (mobile handsets), “app neutrality” (Apple’s iTunes store, Facebook’s developers and Google’s Android mobile OS) and so on for social networking, email, instant messaging, online advertising, etc.

We explained how the intellectual foundations for this regulatory creep have already been laid by groups like Free Press and Public Knowledge and law professors like Columbia’s Tim Wu (father of “Net Neutrality”), Harvard’s Jonathan Zittrain (father of “API/device Neutrality”), and Seton Hall’sFrank Pasquale (father of “Search Neutrality”). Joining this intellectual vanguard of Internet regulation is George Washington law school professor Dawn Nunziato, whose new book, Virtual Freedom: Net Neutrality and Free Speech in the Internet Age, is a veritable manifesto for expansive neutrality regulation (especially of Google)—and how the First Amendment (“Congress shall make no law…”) should be twisted not just to allow such regulation of speech platforms, but to require it! Even Wu, whose work blazed a trail for these others, is pretty clear about the breadth of his original vision for “neutrality” regulation, as his popular Net Neutrality FAQ makes clear:

The promotion of network neutrality is no different than the challenge of promoting fair evolutionary competition in any privately owned environment, whether a telephone network, operating system, or even a retail store. Government regulation in such contexts invariably tries to help ensure that the short-term interests of the owner do not prevent the best products or applications becoming available to end-users.

Zittrain, Pasquale, and Nunziato don’t pull any punches either: They don’t shy away from flirting with nebulous neutrality definitions and wide-ranging government powers to regulate. So we don’t have to imagine what the “slippery slope” might look like: There are plenty of very smart and highly influential legal academics out there hard at work sketching out precisely where the path Chairman Genachowski has started us down will ultimately lead.

It’s no less clear why we’ll wind up marching down that path, no matter what the current FCC leadership intends.

  1. The current net neutrality rulemaking sets a profoundly dangerous legal precedent of essentially unlimited claims of “ancillary jurisdiction”: As our friends at the Electronic Frontier Foundation (who have a soft spot for net neutrality in theory) put it, “If ‘ancillary jurisdiction’ is enough for net neutrality regulations (something we might like) today, it could just as easily be invoked tomorrow for any other Internet regulation that the FCC dreams up (including things we won’t like).” Our PFF colleague Barbara Esbin carefully dissected this issue for the Commission in her recent filing in this proceeding.
  2. As explained above, the general regulatory principle of controlling “gatekeepers” doesn’t end with infrastructure.
  3. As EFF notes, “Experience shows that the FCC is particularly vulnerable to regulatory capture.”
  4. Now that FCC has opened the door to micro-managing online business practices in the name of “neutrality,” the companies that have made America the leader in the Digital Revolution are already turning on each other in a dangerous game of brinksmanship, escalating demands for regulation and playing right into the hands of those who want to bring the entire high-tech sector under the thumb of government—under an Orwellian conception of “Internet Freedom” that makes corporations the real “Big Brother,” and government, our savior.

This strategy of political escalation will thus quickly steamroll over whatever promises made today to narrowly cabin the principle of neutrality regulation—and end in “Mutually Assured Destruction.” That’s why we referred to the day the FCC started down this path back in September as “The Day Internet Freedom Died.”

If that title sounds melodramatic, take a step back and consider that, back in 1996, Congress decided to enshrine in law the principle that the Internet is different from traditional media: Apart from an ill-considered effort to censor online indecency and obscenity (which was quickly struck down by the Supreme Court as unconstitutional) and the enforcement of intellectual property and criminal laws, Congress decided to take a purely laissez-faire approach to the Internet.  As Barbarareminded the Commission in her net neutrality filing, “Section 230(b)(2) flatly declares that it is the policy of the United States ― to preserve the vibrant competitive free market that presently exits for the Internet and other interactive computer services, unfettered by Federal or State regulation.”

So Chairman Genachowski’s decision to revert to the common carrier model of the railroad era marks a fundamental break with the approach Congress decided we would take to the Internet. The DC Circuit will likely soon rule that the FCC has vastly overstepped its authority in trying to set Internet policy without any clear grant of authority from Congress to do so.

Wireless Innovation & Investment Notice of Inquiry

In fact, the same kind of thinking is already being extended by this FCC in a number of other arenas using a flurry of innocuous-seeming “Notices of Inquiry.” While these notices purport only to ask questions, they either:

  1. Foreshadow where the Commission intends to go in proposing new regulations based on its nearly limitless conception of its own regulatory authority;
  2. Are intended to pressure Congress to give the agency more statutory authority; or
  3. Are intended to intimidate industry into “playing ball” so the FCC won’t actually have to stick its neck out by trying to write rules to regulate Internet activities that are clearly beyond its existing authority and might well be unconstitutional even if Congress ever did expand that authority.

Exhibit A is the language in the Commission’s August 2009Wireless Innovation and Investment Notice of Inquiry, (paragraph 60, pg. 21) that suggests the FCC is angling to become the Federal Cloud Commission:

As other approaches, such as cloud computing, evolve, will established standards or de facto standards become more important to the applications development process? For example, can a dominant cloud computing position raise the same competitive issues that are now being discussed in the context of network neutrality? Will it be necessary to modify the existing balance between regulatory and market forces to promote further innovation in the development and deployment of new applications and services?

Good morning, Google!  Hello, Facebook! Is anyone out there in the cloud listening to the rumbling thunder of federal regulation? What began as academic theory in a law school ivory tower is coming soon to a regulatory agency near you! But wait… there’s more!

National Broadband Plan Public Notice #21 (Cloud Computing)

Last November, as part of the Commission’s ongoing effort to develop a National Broadband Plan, the FCC released a request for information “on data portability and its relationship to broadband.”  (NBP Public Notice #21) “The Commission seeks tailored comment on broadband and portability of data and their relation to cloud computing, transparency, identity, and privacy,” the notice says.  Here was the second item on the list of things the Commission said it was investigating (p. 2):

When considering the portability of data, we also consider the processes through which data are moved. In this context, we seek comment on how to identify and understand cloud computing as a model for technology provisioning…. What types of cloud computing exist (e.g., public, hybrid, and internal) and what are the legal and regulatory implications of their use? …To what extent are consumers protected by industry self-regulation (e.g., the Cloud Computing Manifesto), and to what extent might additional protections be needed? …What specific privacy concerns are there with user data and cloud computing? What precautions should government agencies take to prevent disclosure of personal information when providing data? Is the use of cloud computing a net positive to the environment? Are there specific studies that quantify the environmental impact of cloud computing?

We suppose some might claim there’s nothing wrong with the FCC looking into these issues, and that the agency’s interest in cloud computing is entirely benign. (Never mind the fact that the Federal Trade Commission already enforces the privacy policies of cloud computing providers and islooking hard at online privacy.)  Seeing all these open-ended questions about something so obviously beyond the scope of the FCC’s authority just makes the potential for—and perhaps even inevitability of—regulatory creep hard to miss.  Eventually, when a regulatory agency asks enough questions, especially the sort of questions highlighted above… well, to paraphrase Master Yoda:

Again, we’re not just inventing bogeymen here. It’s quite clear that regulatory advocates want to take neutrality regulation into “the Cloud.” As Jason Lanier, author of the popular book You Are Not a Gadget summarizes one of his key themes:

While there is a lot of talk about networks and emergence from the top American technologists, in truth, most of them are hoping to thrive by controlling the network that everyone else is forced to pass through. Everyone wants to be a “Lord of a Computing Cloud.”

In Lanier’s dystopia of techno-feudalism, the Lords oppressing the poor digital “peasants” certainly aren’t just those running broadband service providers. It’s the Google, Facebooks, and Twitters of the world. It’s similar to the “sharecropper” concern raised by Nick Carr in his book The Big Switch.Complaints like those will only grow in the years to come, and few will buy—or even pause to remember—the distinction Chairman Genachowski seems to stand on now between infrastructure and “the Internet.”

National Broadband Plan Public Notice #29 (Privacy)

The “Recovery Act” passed in January 2009 tasked the FCC with formulating “a detailed strategy for achieving affordability of such service and maximum utilization of broadband infrastructure and service by the public.” The FCC seized this as an opportunity to solicit suggestions as to how regulate the use and collection of data by the private sector on the grounds that concerns about privacy might somehow be slowing broadband adoption.

Chairman Genachowski’s flurry of open-ended inquiries about new regulation are clearly intended to give a bully pulpit to regulatory advocates to demand that the FCC issue the very sort of Internet regulations the Chairman purports to abhor (or that Congress give the agency authority to do so). But most of these notices at least appear to be objective requests for comments written independently of the groups the Commission seems so eager to hear beg for Internet regulation. But in this case, the Commission dispensed with that tedious formality and just outsourced the writing of the inquiry itself to one of the outside groups clamoring the loudest for data regulation in the name of “privacy”: our friends at the Center for Democracy & Technology, with whom PFF has worked closely on many free speech issues in the past.

CDT is on to something when they write that “Consumers will not embrace broadband if they have a sense that everything they do online will be watched by government officials.” We’ll join with them in the fight to protect consumers’ privacy from the Real Big Brother—government!—but once again, as with net neutrality, advocates of regulation see government as the protector of our digital liberties (if only we can forever make sure noble civil-libertarians are in charge of the regulatory apparatus of the state!). So CDT has it exactly backwards when they say: “Consumer privacy concerns encompass not only what companies do with their data, but also the extent to which the government accesses it.” And instead of just suggesting that the FCC’s National Broadband Plan include a recommendation that Congress clean up the antiquated laws intended to limit government surveillance, CDT pushes for sweeping regulations that would affect the ability of most online services and sites to collect and use the data they need to improve their services, innovate, and maybe even try to make some money on advertising to support all the free content and services they give away.

Thus, instead of focusing on the clear harm from government, the FCC’s outsourced inquiry goes after online operators as “privacy proxies” for concerns about government action. At least Congress actually asked for the FCC’s recommendations in this case, unlike all the other inquiries the agency has launched sua sponte. But as Berin noted in his comments on this inquiry, the Recovery Act allowed the FCC to “recommend only those policies that it concludes will, on net, help achieve “affordability” and ‘maximum utilization’ of broadband.” That means the Commission would actually have to consider the many trade-offs inherent in the private sector use of data beforerecommending regulation: If the Internet ecosystem is impoverished by government intervention, however well-intentioned it may be, users will have that much less reason to adopt and “utilize broadband.” So the FCC would have a lot of cost-benefit analysis to do before it could actually make the kinds of regulatory recommendations CDT wants. And we suspect that, on the whole, that analysis wouldn’t turn out the way CDT thinks it would.

Child Safe Viewing Act Notice of Inquiry

In a somewhat similar vein, Congress last year asked the agency to examine how well parental control technologies work to allow parents to filter objectionable content online. So while the FCC may have had, for once, the authority to ask broad questions, it’s startling just how broad those questions were. The Commission obviously has no authority over video games or virtual worlds, online video distribution networks or video hosting sites, mobile web content, MP3 players or iPods, P2P networks, VCRs or DVD players, PVRs or TiVo, Internet filters, safe search tools, laptops, and so on. And yet, all these things (and much more) were mentioned in the Commission’s Child Safe Viewing Act Notice of Inquiry.

The proceeding raises the prospect of what Adam has called “convergence era content regulation” since it opens the doors to FCC meddling on a number of new fronts in the name of “protecting children.” Although the Commission’s final report to Congress stopped short of calling for an substantive expansion of the agency’s content regulatory regime, it teed up another proceeding, discussed next. (And if Congress hasn’t moved more quickly to grant the FCC new power in this area, it’s probably because they’re busy trying to figure out how to get around a line of First Amendment cases that consistently require government regulation to yield to “less restrictive” alternatives like parental control tools and education.)

Empowering Parents & Protecting Children Notice of Inquiry

This wide-ranging inquiry reads like the ultimate “fishing expedition” by a regulatory agency—fishing for new jurisdictional authority to regulate, that is!  The questions asked are too broad, far-flung and various to catalog here (we’ll have a big filing coming in the matter soon), but the Commission asks about extending to Internet media the model of the 1990 Children’s Television Act, which imposes “public interest” obligations on broadcasters and cable operators to offer “education” content while also strictly limiting how much advertising may be shown during children’s TV. The Commission also alludes, ominously, to the V-chip model for requiring universal ratings for television and hints that it would really like for “current laws [to] be updated to reflect this convergence and to keep pace with changes in technology” (¶ 41).

The Commission mentions only in passing at the very end of the Inquiry that it “has varying degrees of statutory authority with respect to different media. We ask commenters, in proposing any action, to discuss the source and extent of the Commission’s authority to take the action, or whether new legislation would be needed to authorize such action” (¶ 58). Translation: “Uh, yeah… so… we know we don’t have a statutory leg to stand on here, but we think it’d be really cool if we did, so let’s just all, you know, kinda brainstorm about what kind of regulation we could be imposing here and what kind of law we’d need get Congress to pass to make it all legal. Or if you have any creative ideas on how we could get away with just making up the jurisdiction thing on our own, that’d be even better!”

YouTube, you’re first on the list of targets for the kind of online video regulation the FCC is hinting at here—and none too subtly. But why stop there? The FCC’s laundry list of complaints aren’t limited just to video, but could apply to essentially all online media. But this is all in the name of “protecting the children,” and Chairman Genachowski doesn’t want to regulate the Internet, so we really don’t need to worry—right?

Future of Media Notice of Inquiry

Most recently, in late January, the Commission launched the ambitiously-named “Examination of the Future of Media and Information Needs of Communities in a Digital Age.” The FCC asks a number of good questions about how government could get out of the way of media struggling to reinvent themselves in the digital era by scrapping outdated regulations. The inquiry also tips its hat to the vital importance of advertising in supporting media. But it’s otherwise pretty bad news as a harbinger of a “Chill Wind” for the future of a free press in this country, as Ken Ferree, PFF’s former president and current board member noted.

In particular, the Commission comes right out with a “trial balloon” about imposing public interest obligations on online operators—the very thing it hinted at slightly more delicately in the “Empowering Parents” inquiry mentioned above:

Broadcasters have certain public interest obligations, including that they provide programming responsive to the needs and issues of their communities and comply with the Commission’s children’s programming requirements. Cable and satellite operators have their own responsibilities…  Should such obligations be applied to a broader range of media or technology companies, or be limited in scope?

OK, so we’re not going to “regulate” online content operators; we’re just going to impose “public interest” obligations on them to provide certain kinds of content preferred by politicians. Right… and if Google News or YouTube don’t do enough to “serve the public interest,” what then? Will the Federal Search Commission take away Google’s search license or cloud computing license?

Of course, we don’t mean to suggest that even the “Federal Cloud Commission” would ever be so unsubtle as to create a formal licensing system when they can probably achieve the same ends with far less obvious regulation. But how is this all going to work, exactly? Again, this is exactly the kind of hopelessly vague regulatory morass Congress had in mind when it declared that the federal government would avoid “fettering” the “vibrant competitive free market … for the Internet and other interactive computer services” with regulation.

The FCC goes on to revive the kinds of broad net neutrality ideas discussed above in asking:

How would policies related to “open Internet” or “universal broadband” or other FCC policies about communications infrastructure affect the likelihood that the Internet will meet the information needs of communities? Are there search engine practices that might positively or negatively affect web-based efforts to provide news or information?

In other words, “Tell us why and precisely how we should start regulating search engines in order to help ’save  news.’” Google, here’s looking at you, kid! You want to keep your search license, dontcha? Well, just do what the nice men from Washington want and there won’t be any trouble.

Finally, the Commission opens the door to the noxious proposal for a “public option” for media, which Adam has lambasted. Here’s what the Commission says:

In general, what categories of journalism are most in jeopardy in the digital era? What categories are likely to flourish? While much is still to be determined as media companies test various business models and payment approaches in the coming years, based on what is known now, are there news and information needs that commercial market mechanisms alone are unlikely to serve adequately?

Don’t worry, it’s not as if government will exercise control over the media companies it funds if themedia-socialist fantasies of the neo-Marxist Robert McChesney and his ironically-named “Free Press” group actually come true. Nope, government’s just here to help!

We’d all do well to remember that subsidies always come with strings attached—namely, regulation. That’s the Golden Rule: “He who has the gold, makes the rules!”

Conclusion

Chairman Genachowski, with all due respect, if you don’t like people suggesting that the FCC may be positioning itself to regulate the Internet and digital media platforms, then you might want to take a careful look at what your agency has been doing. You should think hard both about the precedents that will be set by “neutrality” regulation for online content and services, and also about the quasi-regulatory effect that your agency’s flurry of open-ended inquiries will have on the operators you claim not to want to regulate.

What will future Chairmen do with these precedents? What will emerge from every “Pandora’s Box” you’ve opened with each new sweeping inquiry? The answer, we fear, is an endless parade of new Internet regulations—and the death by a thousand cuts of real Internet freedom.

By Berin Szoka & Adam Thierer at The Technology Liberation Front

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