Ajit Pai will return pro-consumer focus at FCC
© Greg Nash

Unlike the Federal Communications Commission’s previous head, new FCC Chairman Ajit Pai is putting consumers first, not net neutrality.

That reality has been upsetting to some. In a Saturday column titled “Anti-Consumer Agenda at the FCC,” the New York Times’ editorial board attacked Pai for his opposition to opening the cable box market to edge providers such as Google, Facebook, Amazon netopolies, and Netflix, the Internet’s top bandwidth hog.

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The sad reality is that the previous FCC did the bidding of the biggest edge providers, both on the issue of net neutrality and opening up the cable box market, as I will explain.

 

The FCC justified retrograde Title II net neutrality regulations to prevent broadband providers from creating Internet “fast and slow lanes” for edge providers via a rule called “no paid prioritization.”

Translation: the FCC fixed a permanent price of zero for all downstream traffic flowing from edge providers, which means the previous FCC forced consumers to subsidize the outsized bandwidth usage costs of the most profitable companies in America. 

If the FCC’s Title II net neutrality regulation really was pro-consumer, why are edge providers exempt from paying for the extra costs of their outsized bandwidth usage, when the FCC expects consumers to pay for their bandwidth usage?

Why is it unacceptable for edge providers to pay more for a “fast lane,” when consumers routinely have the choice to pay more for a faster Internet access speed if they want to?

How can the previous FCC claim its Title II net neutrality policy is pro-consumer, when the previous FCC issued a net neutrality enforcement reporting that opposed free data usage for consumers on the basis of Title II?

You can’t make this stuff up.

The previous FCC believed that allowing edge providers the voluntary opportunity, and competitive freedom, to compete for consumers’ business by sponsoring or paying for a consumer’s data usage was not “neutral,” and therefore not good for consumers.

To be pro-consumer, the FCC’s net neutrality policy would help and protect consumers, not effectively force consumers to pay more to subsidize Google, Facebook, Amazon, and Netflix’ bandwidth when Title II subsidy policies historically always ensured businesses subsidized consumers, not the other way around.

The other regulation the New York Times falsely touted as pro-consumer, the FCC’s set-top-box proceeding, was perversely anti-consumer as well in looking out only for the interests of Google, Facebook, and Amazon, and not for the interests of consumers.

In claiming that it wanted consumers to have competitive alternatives to existing cable set-top boxes by mandating that Pay TV providers had to make their proprietary video streams and associated guide information available to Google, Facebook, Amazon, etc., for free – the previous FCC threatened the ongoing viability of a vibrantly competitive industry that serves consumers well and consequently produces $200b in annual revenues.

If the previous FCC were truly looking out for consumers’ interests first, and not Google, Facebook and Amazon’s interests first, the previous FCC would have accepted the Pay TV industry’s counterproposal of offering consumers a free and secure, modern app that could totally replace the 1970s technology of a set-top box, and save consumers billions of dollars a year.

The edge providers pressured the previous FCC to reject the secure app proposal because they wanted to use and monetize their competitors’ copyright-licensed content for free, and a secure app replacement of a set-top box would only be free to the consumer who pays for the service, and not free to edge providers unwilling to pay a market price for the commercial use of the proprietary content.

In sum, the previous FCC did net neutrality a disservice.

Net neutrality began as a bipartisan, unanimous FCC policy statement in 2005 that ensured consumers could competitively access and use the legal content, apps, and devices of their choice, subject to reasonable network management.

In 2009, net neutrality ceased being about consumers, and all about edge providers, when Professor Wu, the one who coined the term “net neutrality,” redefined it to become about consumers economically subsidizing edge providers.

By replacing Title II net neutrality price regulation with free market competition that naturally puts customers in charge, Chairman Pai can reverse mistakes made during the Obama administration, and bring a truly pro-consumer focus back to his agency.

Scott Cleland served as deputy U.S. coordinator for international communications and information policy in the George H. W. Bush administration. He is president of Precursor LLC, an internetization consultancy for Fortune 500 companies, and chairman of NetCompetition, a pro-competition e-forum supported by broadband interests.


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