Unlike FCC, FTC cannot protect net neutrality
© Greg Nash

To distract you while they smother net neutrality, Federal Communications Commission (FCC) Chairman Ajit Pai and acting Federal Trade Commission (FTC) Chair Maureen Ohlhausen have offered confident assurances that the FTC can step into the role abdicated by the FCC and protect net neutrality with its antitrust and consumer protection enforcement authority.

It sounds plausible (plus most people aren’t entirely sure what the FTC does), so you nod along, but don’t fall for it; it’s a ruse. The FTC would be far more limited in how it can protect net neutrality, because:

  • The FTC is prohibited from enforcing its laws against common carriers, like telephone companies;

  • the U.S. Court of Appeals for the 9th Circuit has broadly interpreted that law to mean that the FTC can’t act against even the non-telephonic services of telephone companies, like broadband;

  • even if the 9th Circuit decision gets reversed, the FTC can’t use antitrust law to protect individual websites and content providers and

  • it’s doubtful whether net neutrality could be enforced through the FTC’s other enforcement tool, consumer protection laws.

Let's examine why:

The common carrier exemption

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Section 5 of the FTC Act exempts “common carriers” such as your telephone company from FTC enforcement. Where it gets complicated is when telephone companies offer non-telephonic services, such as broadband.

 

In a straightforward 2015 case brought by the FTC against AT&T for promising “unlimited” mobile data plans and secretly capping and throttling them, the 9th Circuit surprisingly ruled that basically any service, even non-telephonic, offered by a common carrier was covered by the exemption. That horrendous decision is under review, but the law remains unsettled, leaving the FTC’s ability to police broadband services offered by any company affiliated with a telephone service (e.g., Verizon’s FiOS) in doubt.

The limits of antitrust

But even if the 9th Circuit decides that the FTC has enforcement authority over internet services providers, how it enforces the antitrust laws against them will result in a very different internet experience than what we enjoy today. One of the core principles of net neutrality is non-discrimination — websites and online service providers must be treated equally by the pipe that carries them to their end user. But non-discrimination is not required by the antitrust laws.

Paid prioritization (i.e., “internet fast lanes,” by which a web service or website, like a sports news site, pays broadband providers for faster treatment) may be perfectly legal under the antitrust laws because antitrust protects competition, not individual competitors.

Here, the antitrust enforcers would look at the overall market for sports news, including other websites and sources of sports news like cable and print media, and likely conclude that consumers have enough options in aggregate that it doesn’t matter if the broadband provider harms a number of them by relegating them to the slower tier.

That may be okay for the market-dominant websites and services with oodles of cash to pay for prioritization, but it’s a huge disadvantage for the entrepreneur coding the next killer app who can’t afford to pay into this protection racket.

The limits of consumer protection

In rolling back current net neutrality protections, Chairman Pai has floated the idea of replacing the nondiscrimination requirements on broadband providers with voluntary commitments, which is a little like replacing a fence with solemn promises from the foxes to leave the chickens alone. Honestly, why would they even bother?

The FTC has consumer protection authority to punish deceptive acts or practices, so why would these companies create any liability for themselves when they could instead sidestep claims of deception by just making vague assurances saddled with plenty of loopholes and outs or no promises at all?

Moreover, any of these cases would have to be brought one at a time, which favors the broadband providers, as opposed to the consumer-friendly way it works now, when the blanket prohibition prevents the activity from occurring in the first place. Eliminating net neutrality’s bright-line rules would shift the burden of enforcement against multi-billion dollar corporations onto beleaguered consumers.

Although ambitious future FTC leadership could certainly try to use the tools they have to enforce the core principles of net neutrality, it would necessarily be more limited and more ad hoc than the protections that exist now. This is no knock against the FTC; as a former FTC staff member, it is, in my biased opinion, the nation’s premier civil law enforcement agency, which is why I don’t want to see it turned into a patsy for watering down consumer protection.

Anant Raut is the former counsel to the assistant attorney general of the DOJ’s Antitrust Division, as well as a former FTC attorney. He is currently a visiting fellow at Public Knowledge, which promotes an open internet and wide access to affordable communications tools and creative works.


The views expressed by contributors are their own and not the views of The Hill.