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Tastes Great? Less Filling? Title II ‘Lite’ Is Anything But | Commentary

In the Miller Lite ads of the 1980s, famous shortstops and linebackers argued whether the pilsner’s chief virtue was its surprising flavor or its low calorie count. “Tastes great,” insisted some. “Less filling,” the others replied.

The new “lite” coming out of Washington, D.C., is neither. The recipe, irresistibly branded as Title II Lite, is being offered as part of the Federal Communications Commission’s Open Internet rule-making, also known as the net neutrality proceeding. Title II is the old set of monopoly telephone regulations that some are now hoping to apply to the heretofore unregulated Internet. In an attempt to make the heaviness of Title II more palatable, however, the branders have affixed the lite suffix to a menu of regulatory proposals.

Already on the market were lite recipes from Mozilla, AOL, Netflix and Columbia professor Tim Wu. Then, we got Waxman Lite — a sure crowd pleaser offered by Rep. Henry A. Waxman, D-Calif. The basic idea is to impose Title II on the Internet to constrain the behavior of broadband service providers — and at the same time forbear from or otherwise lighten its most pungent and off-putting rules that could sweep across the entire digital economy. The fact that Title II advocates feel the need to offer a lite version shows they understand the threat that monopoly utility regulation poses to the Internet ecosystem.

But is lite really light? Is any flavor of Title II legal? Is it workable in a complex environment like the Internet? And why would we attempt such a risky change when the Internet is flourishing?

The Waxman proposal combines reclassification of the Internet under Title II with prohibitions of network management tools and business models under Section 706 of Title I. It is less a scaled-back lite offering than a potent, fattening Double Bock. And probably illegal, to boot. Title I and II services are statutorily distinct — the FCC cannot apply both to the same network elements and services.

Mozilla has offered its own complex brew, including a brand new ingredient it calls “remote delivery service.” It would apply Title II regulation to downstream transmissions from edge providers, thus, it says, protecting content providers from both ISPs and from Title II regulation. But on the Internet, everyone is a potential edge provider, and your upstream is my downstream. So Mozilla’s attempt to shield content providers on the Web from the evils of Title II also falls short.

FCC Chairman Tom Wheeler is also considering the application of Net Neutrality rules to wireless, which was previously (and smartly) excluded from the Open Internet rules because of its technical trickiness and bandwidth constraints. Now, however, firms such as Google and Facebook, through the Internet Association, are oddly urging regulation of mobile networks, too. Odd because Google and Facebook sponsor “zero rating” (or “sponsored data”) wireless plans, which prioritize their data over other apps or Web content and are especially helpful to low-income subscribers. In a zero rating plan, a consumer who chooses a low-cost wireless plan with a modest data allowance might get access to, say, Facebook content for free — Facebook data wouldn’t count against its data cap. Such “paid priority” arrangements, however, would likely violate open Internet rules, should the FCC apply them to wireless.

As each recipe fails, the improbability of retrofitting Title II onto the wired and wireless Internet becomes more apparent.

In a new legal analysis, in fact, the Phoenix Center says “Title II Lite” is an impossibility. Any imposition of Title II on broadband, Phoenix argues, will bring tariffing and thus price controls to the entire net. It will convert all edge providers, by definition, into customers of the broadband service providers. And the FCC will not, contra the “lite” advocates’ assertions, be able to forbear from the numerous and weighty rules of Title II.

Law allows for forbearance — itself a long and convoluted process — if there is competition. The FCC, however, has defined the BSPs as “terminating monopolies” — Comcast, in other words, has a monopoly on Comcast customers. Competition is thus impossible and therefore, argues Phoenix, is forbearance. Because of the complex, interconnected nature of the net, where software and content firms are also network firms, and vice versa, where consumers are also content providers, the inability to forbear would mean Title II spreading across every node and layer of the net and likely affecting the entire ecosystem.

The impetus for Title II, say its advocates, is the crucial need ban paid prioritization and quality of service. Yet even a Title II backer like Mark Cooper of the Consumer Federation last week acknowledged that in the Title II telephone world there were at least nine types of legal prioritized service. It is now abundantly clear that Title II does not even achieve its advocates’ fundamental goal.

True, the FCC could simply dismiss these formidable legal obstacles and, with brute force or slight-of-hand, construct some new rationale for its new policy. Perhaps the commission even has a stronger case than Phoenix thinks. But the FCC has tried novel legal recipes before, and on at least four occasions over the past 15 years appeals courts have struck down major FCC policies in this and related cases (Open Access, Brand-X, Comcast, Open Internet Order). The failure of the 2010 Order to pass legal muster led us to today’s policy precipice. The commission simply has a poor appeals record, in large part because communications law does not give the FCC much, if any, authority to regulate the Internet. It is a fundamental problem for its case, something the obnoxious Title II stew would only make worse.

Bret Swanson is president of the technology research firm Entropy Economics LLC and a visiting fellow at the American Enterprise Institute’s Center for Internet, Communications, and Technology Policy.

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