Wednesday, September 18, 2013

FSF Seminar Panelists Weigh How Next FCC Chairman Should Respond to Verizon v. FCC

On September 9, oral arguments were held in the legal challenge to the FCC's network neutrality regulations. How the D.C. Circuit might rule in Verizon v. FCC has been a hot topic for discussion in legal circles. 

The public policy question of what the next FCC Chairman should do in response to the D.C. Circuit's future legal ruling was raised at FSF's June 2013 "If I Were the FCC Chairman..." lunch seminar. The seminar panel featured Gail MacKinnon, Executive VP and Chief Government Relations Officer for Time Warner Cable; Craig Silliman, Sr. VP for Public Policy & Government Affairs at Verizon Communications, and Gigi B. Sohn, President & CEO of Public Knowledge. FSF President Randolph May moderated the seminar's discussion and posed that question to the panelists. 

What follows is an excerpt from the edited transcript from the seminar containing the panelist's responses:

Look at both sides of this scenario, if the FCC wins or if the FCC loses Verizon v. FCC.  Even assume that it's going up to the Supreme Court.  We're going to go right down the line.  Just explain succinctly what you think the Commission should do in that event and why you think it should do it.  That involves both assessing where we are now, what the effect of the rules has been since they've been in place, the potential harm.  Let's really sharpen that, because, ultimately, it's going to be decided one way or the other.  And you're going to have to know what to do as the FCC chair.

The question for the new FCC chair is, if Verizon prevails, what does he do?  He can either say, "Look, we've tried under the jurisdiction we thought," or "It's up to Congress now to pass legislation to give us clear authority."  The thing that worries us about the Title II proceeding just hanging out there is it does create an overhang.  That's why we'd like to see it closed.  We think if the FCC goes down the path to Title II, it would be pretty destructive for us.  Again, that's why Title II is such an issue for us…[I]f people are worried about having a cop on the beat look at this, whether it's anti-consumer or anticompetitive, there is the FTC.  It has authority to look at these things.  I'd also point out that BITAG gets together and talks about industry best practices.  There are a lot of other options out there.  If the new FCC chair were to say, "Look, Congress has to do this," I think there would be an attempt.  But given the divided Congress, I really don't see realistically that legislation making its way through Congress is actually a viable outcome.

Win or lose the appeal of the Open Internet Order, the question for the FCC, to some degree, is this larger future decision and future policy direction, which asks, "Where are we going to try to assert our jurisdiction?"  At its core, this question is about where the FCC's jurisdiction ends and the FTC's jurisdiction begins.  If the order and the FCC's jurisdiction is upheld on appeal, the question for the FCC then is: how aggressive are you going to be in asserting that jurisdiction in the broader Internet ecosystem and the broadband Internet ecosystem?  As you look at the evolving technology, you look at Microsoft and Skype.  You look at Google.  You look at some of the services that are going on out there.  You say, "This now gives me a clear path to assert jurisdiction over that broader Internet ecosystem."  If, on the other hand, the Court does not uphold the FCC's jurisdiction over this, then the question becomes: do you keep trying to fit this square peg into a round hole?  Do you say, "Listen, this is where the technology's going, and so I'm going to find my way by hook and by crook to find the jurisdictional hook there"?  Or, do you say, "Listen, the courts have spoken. Congress, if this is where you want the jurisdiction to be, then change the law to put jurisdiction over the Internet ecosystem with the FCC."  If jurisdiction should stay with the FTC, I would recommend people look at a very thoughtful speech that FTC Commissioner Wright gave a month or two ago in which he laid out the consumer protection angle on net neutrality, and asserted the competition law in consumer protection.  Those are the FTC's fortes and the FTC has the easy ability to handle these issues.  From a larger government policymaking perspective, the federal government would be saying we have the ability to protect consumers in this space.  This question is whether that happens in the FTC or the FCC.  And the FCC has to decide how far they want to fight that jurisdictional fight.

It's really important to note that Verizon's challenge is not just about the open Internet rules.  It's about the FCC's ability to set rules of the road with regard to predatory billing practices and with regard to public safety.  It's about whether companies like Verizon had to have back-up battery power if there is a natural disaster… The question, in front of the court, at least in my opinion, is whether the FCC has any ancillary authority at all to regulate broadband Internet access.  It's not just about open Internet.  It's about pricing.  It's about competition.  It's about public safety.  The question is not that narrow.  There's a second question, about whether the rules themselves are arbitrary and capricious.  But it's really about FCC authority writ-large with regard to broadband Internet access.  FTC has some powers, but they don't reach a lot of things that organizations like mine are concerned with.  They reach unfair, deceptive trade practices.  That is actually quite narrow.  And they reach some anti- competitive practices.  Some of the things that we're talking about, really are anti-consumer, but not anti-competitive.  And I can see the little shell game going on.  Get the FCC out of it.  Let the FTC do it.  And then when we bring complaints to the FCC, we're told, "Well, Section 5 only really goes to unfair, deceptive trade practices."  There is an area, beyond what the FTC does, that is needed to protect consumers.  As far as the BITAG is concerned, I'm very proud of my participation.  It's the Broadband Internet Technology Advisory Group.  The purpose of that group is to determine what a reasonable network management practice is when it comes to provides managing their networks.  I'm very proud of that.  But it's a very, very narrow scope, and it's a technology group.  It's a bunch of engineers.  We're not allowed to meddle in their engineering decisions; it is not a policy organization.  Frankly, I hope it stays that way.

Will the FCC's network neutrality regulations ultimately survive Verizon's legal challenge? That question was the subject of an episode of C-SPAN's The Communicators, featuring FSF President Randolph May.