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The business reasons why the FCC — not FTC — should enforce Open Internet rules


The Internet—and all businesses that rely on it—faces a critical decision point in December. The FCC is expected to vote along party lines to stop enforcing rules that have prevented Internet service providers from discriminating against different kinds of Internet traffic and services.

For Internet users, Open Internet rules have meant they are equally likely to find newer companies and services when browsing the web—and for startups this has meant survival.

{mosads}Open Internet rules give new start ups the same ability to reach consumers on the Internet as bigger, established companies. When the FCC votes to give up its role enforcing so-called net neutrality rules, bigger companies can make deals with companies like AT&T and Comcast to have faster Internet speeds than their competitors to attract consumers — a feature that’s not likely in the budget of the next Facebook or YouTube.

At a congressional hearing Wednesday, we will no doubt hear that it’s fine for the FCC to give up its net neutrality enforcement powers—that the Federal Trade Commission can handle complaints of digital discrimination. But there are several big legal problems with that, and that’s why the biggest ISPs favor this idea.

First, the FTC doesn’t have the authority to effectively enforce nondiscrimination rules for broadband and ISPs. Pursuant to existing Federal Appeals Court decisions, the Federal Trade Commission Act is deemed to exempt common carriers from FTC jurisdiction, which means that because most major ISPs provide common carrier telephony services (think your home landline) in addition to Internet access, they will remain outside of FTC jurisdiction.

Second, the FTC’s regulatory and enforcement capabilities do not map well to managing network traffic, like the Internet. Congress actually created the FCC to do that as the regulator of communications networks. The FTC has authority over unfair methods of competition and deceptive trade practices, so it has the expertise to jump in on privacy problems—after they’ve happened. But that expertise is no substitute for the FCC’s rules when it comes to preventing blocking, throttling, and discrimination online before they harm innovative startups and Internet users—authority that was upheld just one year ago by a Federal Appeals Court.

So once the FCC rescinds its non-discrimination rules, which it plans to do in December, an ISP could theoretically promise in its service terms to treat similar Internet traffic equally; however, because there will be no legal requirement to do so, Internet users will have no guarantees.

Third, what little enforcement jurisdiction the FTC does have, would not happen until after a problem has been reported. As FTC Commissioner Terrell McSweeny has pointed out, this after the fact enforcement cannot adequately detect and prevent instances of anticompetitive harm in networks. Just as important, identifying instances of ISPs blocking or interfering with users’ expression after it occurs does not change the fact that the users have been harmed.

As FTC Commissioner McSweeney pointed out before the Judiciary Committee on this same issue in 2015, trying to enforce discrimination against Internet traffic using antitrust rules after the problem has happened requires multiple steps and a longer time table. “Antitrust enforcement, on the other hand, would require detection, investigation, and a potentially lengthy ‘rule of reason’ analysis,” Sweeney said. As investors calculate risk for smaller businesses and start-ups, they will now have to guess whether a company reliant on Internet traffic will still be in business after an FTC investigation is complete.

This is a very different business climate for start-ups when compared to one with an FCC setting out enforceable open Internet rules to provide notice of acceptable conduct in advance. This helps smaller businesses and startups take advantage of Internet access to be confident that their services will reach a wide, diverse audience of users. This climate is predictable and allows them to attract investors.

The public interest reasons to maintain non-discrimination on the Internet are hopefully well understood after years of debate, not to mention the comments from over 22 million people who weighed in on the importance of the FCC’s current open Internet rules. Despite widespread public support of the existing rules, this FCC has already declared its plans to favor the business models of a couple incumbent ISPs—rather than the needs of Internet users and the hundreds or thousands of businesses that use the Internet.

As Congress holds this hearing on the open Internet, we hope two things are clear. One, small businesses and start-ups rely on the open Internet to reach customers with innovative new services and to create jobs. Two, the FTC just can’t protect consumers, businesses and the open Internet like the FCC can.

Ed Black is president and CEO of the Computer & Communications Industry Association.


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