Since the DC Circuit Court’s recent decision, which threw out the Federal Communication Commission’s network neutrality rules but agreed that the FCC had regulatory authority over broadband networks, the ballgame has become anticipating what FCC Chairman Wheeler is going to do. And he hasn’t been quiet about his intentions to act.
Rather than implementing anticipatory regulations that would discourage innovation in new business models and probably have other unintended consequences, we’ve urged Chairman Wheeler to wait to see if there is any actual evidence of harm to consumers. Others, predictably, want him to execute the nuclear option and reclassify broadband networks under Title 2, and thus subject broadband networks to inappropriate and outdated regulations—an action that would almost certainly provoke justifiable congressional outrage and an unnecessary battle with Congress.
Putting innovation at risk should be reason enough to stay the FCC’s hand, but there’s a more basic reason why the FCC should forebear from setting network neutrality policy for the nation: The FCC was never charged with setting broad policy goals—those come from Congress in the form of legislation, and there is no network neutrality directive from Congress.
The FCC was designed to be an administrative and technical agency that manages public spectrum and distributes licenses. It was never intended to specialize in consumer protection—we already have the Federal Trade Commission (FTC) for that. And the FCC was never intended to specialize in antitrust—we have the Justice Department Antitrust Division for that.
Over time, mission creep at the FCC has resulted in needlessly duplicative consumer protection and antitrust functions that overlap those of other specialist agencies, which means communications companies planning a merger must get approval from not one but two federal agencies. And it means that two different federal agencies have spent the last several years nosing around in the network neutrality issue.
If any network provider were to act in a way that is anti-competitive, do we doubt for a moment that the Justice Department would hesitate to act? With its $160 million budget, hundreds of staff, and an activist director, the Antitrust Division is more than up to the task.
And if there are allegations of consumer harm over broadband networks, the FTC specializes in protecting consumers and has a $300 million-plus budget to do the job.
The best defense against bad actors, of course, is the marketplace itself, which will quickly expose practices that harm competition and consumer access. After all, companies are in the business of pleasing rather than abusing their customers, although much of the self-appointed consumer protection activist community works from the opposite assumption.
Between the marketplace itself, the FTC and the Justice Department, there is simply no need for the FCC to pursue a misguided and duplicative network neutrality campaign and thus distract itself from its pressing duty to release more spectrum. For the FCC to yield to pressure from a handful of interest groups on network neutrality and thus fail to make the wireless economy its top priority would be an incredible mistake.
February 6, 2014