Opinion L.A.

Observations and provocations
from The Times' Opinion staff

« Previous Post | Opinion L.A. Home | Next Post »

Technology: Regulating the Internet. Or not.

April 8, 2011 | 12:52 pm

Genachowski It's been a big week for debating who gets to regulate the Internet.

On Thursday the Federal Communications Commission adopted a new requirement that companies operating wireless networks carry their competitors' data traffic -- e.g., the emails, Facebook updates and Web searches done on mobile phones -- at "fair and reasonable rates." The commission's two Republicans dissented, arguing that the commission had no authority to dictate terms for mobile data services. Such services are "information services," which are largely unregulated, not "communications services," over which the commission has broad rule-making power.

The next day, the House approved a Republican proposal to block the FCC's new Net neutrality rules on a largely party-line vote. (The Times' editorial board weighed in last month against the House resolution of disapproval, as well as a related provision in the omnibus spending bill for fiscal 2011 that would deny funding for the rules.) Among other things, opponents of those rules contend that broadband is an information service, and the FCC doesn't have the authority to judge whether a broadband provider's traffic-management techniques are unfairly discriminatory.

During Friday's debate, Republicans focused on the big picture. As Rep. Greg Walden (R-Ore.) said of the neutrality rules on the House floor Friday, "Congress has not authorized the Federal Communications Commission to regulate the Internet."

That's not really what's going on here, either on the neutrality rules or the data-roaming order. What's at issue is whether the FCC can stop broadband providers from picking winners and losers in the Internet economy and assure that consumers, not telecommunications companies, determine the fate of competing sources of content and services.

Despite the famous words of the late Sen. Ted Stevens (R-Alaska), the Internet is not a series of tubes. It is content (text, images, audio and video) and services that are delivered to growing ranks of devices in an increasing number of ways. The neutrality rules don't dictate what people can create or distribute online. Instead, they try to assure that legal content and services will continue to be able to compete for an audience online. In other words, they regulate the operation of the tubes, not the Net.

Similarly, the data roaming rules address the infrastructure used by consumers to access Web-based content and services when they're on the road. The FCC's order came in response to complaints from some smaller wireless carriers that they couldn't obtain reasonable data-roaming rates from rivals in communities where they didn't have coverage.

These sorts of rules shouldn't be necessary in a competitive market. Residential broadband, however, is typically a duopoly. Most homes have access to only two sources of affordable high-speed Internet service: the local cable operator and the local phone company. Broadband providers have the potential to act as gatekeepers, controlling online sites' and services' access to the public. Without neutrality rules, nothing would prevent a Time Warner Cable or an AT&T from creating a high-priority lane for its own video-on-demand service while slowing the transmissions from Netflix, Amazon and Apple.

There is more competition among wireless networks, so the case for the data-roaming rules doesn't seem as strong. The fear is that the two carriers that dominate the market -- Verizon Wireless and AT&T -- could try to undermine smaller competitors by refusing to carry their customers' data traffic, or charging prohibitively high prices to do so. On the other hand, mandating carriage may reduce the incentive that companies have to increase the capacity of their own networks, because any such investment would also serve their rivals' needs.

The debate is familiar -- the phone companies also fought the government over the mandate in the 1996 Telecommunications Act that they lease their wired networks to competitors. That mandate was based on Congress' assumption that voice services would be an important competitive battleground. But data is gradually supplanting voice as the medium for communications; the traffic from texts, emails and mobile data in general eclipsed conventional call volume at the end of 2009, and the gap between them is rapidly widening.

That's why the data-roaming order seems like a natural extension of the FCC's orders in 1981, 1996 and 2007 that required wireless networks to carry their competitors' voice calls on reasonable terms. The GOP dissenters may be right that laws written in a different era don't give the FCC the authority to treat data traffic the same way as voice calls. But as a policy matter, it's a distinction without a real difference.

-- Jon Healey

Photo: FCC Chairman Julius Genachowski, speaking at a wireless industry conference in March. Credit: Reuters / Scott A. Miller

Comments ()