Forget the FCC — Should the FTC Enforce Net Neutrality?

Republicans argue existing antitrust laws can prevent abuse.

"Man Controlling Trade," by Michael Lantz, 1942; outside the Federal Trade Commission Building.
National Journal
Brendan Sasso
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Brendan Sasso
June 20, 2014, 10:50 a.m.

The whole de­bate over net neut­ral­ity is fo­cus­ing on the wrong agency, ac­cord­ing to con­gres­sion­al Re­pub­lic­ans.

The Fed­er­al Trade Com­mis­sion — not the Fed­er­al Com­mu­nic­a­tions Com­mis­sion — should po­lice ab­uses by In­ter­net ser­vice pro­viders, the law­makers ar­gued dur­ing a House Ju­di­ciary Com­mit­tee hear­ing Fri­day.

While the FCC has broad power to reg­u­late com­mu­nic­a­tions net­works, the FTC fo­cuses on ab­us­ive busi­ness prac­tices that harm com­pet­i­tion and con­sumers in all sec­tors.

Net neut­ral­ity is the prin­ciple that In­ter­net ser­vice pro­viders shouldn’t ma­nip­u­late what con­sumers can ac­cess on­line. Ad­voc­ates fear that without gov­ern­ment rules, pro­viders like Com­cast could lim­it ac­cess to in­form­a­tion or cre­ate a two-tiered In­ter­net that be­ne­fits the largest cor­por­a­tions.

House Ju­di­ciary Com­mit­tee Chair­man Bob Good­latte, a Vir­gin­ia Re­pub­lic­an, said the gov­ern­ment shouldn’t stand by and al­low broad­band pro­viders to en­gage in an­ti­com­pet­it­ive be­ha­vi­or, but he warned that ri­gid net-neut­ral­ity reg­u­la­tions could stifle in­nov­a­tion.

“I be­lieve that vig­or­ous ap­plic­a­tion of the an­ti­trust laws can pre­vent dom­in­ant In­ter­net ser­vice pro­viders from dis­crim­in­at­ing against com­pet­it­ors’ con­tent or en­ga­ging in an­ti­com­pet­it­ive pri­cing prac­tices,” Good­latte said dur­ing the hear­ing of the Sub­com­mit­tee on Reg­u­lat­ory Re­form, Com­mer­cial and An­ti­trust Law.

He ac­know­ledged that the an­ti­trust laws — which pro­hib­it busi­nesses from re­strain­ing com­pet­i­tion — may have to be up­dated so they can be “promptly and ef­fect­ively” ap­plied to the In­ter­net mar­ket­place.

Re­pub­lic­an FTC Com­mis­sion­er Joshua Wright agreed that his agency is up to the task. He ar­gued that an­ti­trust is a “su­per­i­or ana­lyt­ic­al frame­work” be­cause it re­lies on eco­nom­ic ana­lys­is to pro­tect con­sumer wel­fare.

But Demo­crats warned that an­ti­trust en­force­ment by the FTC is too nar­row to pre­vent the range of po­ten­tial ab­uses by In­ter­net ser­vice pro­viders.

Rep. John Con­yers, the top Demo­crat on the Ju­di­ciary Com­mit­tee, said an­ti­trust can’t ad­dress noneco­nom­ic harms, such as re­stric­tions on free speech and polit­ic­al de­bate on the In­ter­net. He sug­ges­ted he could be open to the FTC tak­ing a lead­ing role on net neut­ral­ity if the agency re­lied on a broad in­ter­pret­a­tion of its power to com­bat “un­fair” busi­ness prac­tices — but he noted that Re­pub­lic­ans wouldn’t sup­port that ap­proach.

Tim Wu, a Columbia Uni­versity law pro­fess­or who coined the term “net neut­ral­ity,” also ar­gued that the FCC should con­tin­ue to take the lead on net-neut­ral­ity reg­u­la­tions.

“I have the highest ad­mir­a­tion for the an­ti­trust laws,” Wu test­i­fied. “But I simply don’t think they’re equipped to handle the broad range of val­ues and policies that are im­plic­ated by net neut­ral­ity and the open In­ter­net.”

He ar­gued that the gov­ern­ment must not only pro­tect com­pet­i­tion but also en­sure that In­ter­net pro­viders don’t block polit­ic­ally con­tro­ver­sial web­sites, loc­al news sources, or small blogs. Those val­ues wouldn’t be in­cluded in a tra­di­tion­al an­ti­trust ana­lys­is, he said.

But Rep. Dar­rell Issa, a Cali­for­nia Re­pub­lic­an, laid in­to Wu, claim­ing the law pro­fess­or was ad­voc­at­ing gov­ern­ment con­trol of on­line speech. Issa noted that the FCC already reg­u­lates of­fens­ive speech on broad­cast TV.

“This is the FCC’s role. They’re a reg­u­lat­ory policy en­tity that ac­tu­ally does lim­it free speech,” Issa said. Wu countered that net neut­ral­ity is the “ex­act op­pos­ite” be­cause it en­sures In­ter­net pro­viders don’t con­trol on­line speech.

The FCC en­acted net-neut­ral­ity reg­u­la­tions in 2010 that barred In­ter­net pro­viders from block­ing web­sites or “un­reas­on­ably” dis­crim­in­at­ing against any traffic. But Ve­r­i­zon sued, and the D.C. Cir­cuit Court of Ap­peals struck the rules down earli­er this year.

FCC Chair­man Tom Wheel­er is now try­ing to re­write the reg­u­la­tions in a way that can sur­vive fu­ture court chal­lenges. His pro­pos­al would still bar In­ter­net pro­viders from block­ing web­sites, but would al­low them to charge web­sites for faster ser­vice as long as the agree­ments are “com­mer­cially reas­on­able.” That change has promp­ted a massive blow­back from lib­er­als, who fear it could dis­tort the In­ter­net in fa­vor of com­pan­ies that can pay for the spe­cial “fast lanes.”

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