Matthew Berry, chief of staff to FCC commissioner Ajit Pai, says the FCC should think long and hard about whether "flyspecking network management practices" is good for consumers.
In a speech to the Broadband Cable Association of Pennsylvania's Cable Academy in Harrisburg, Pa., Berry talked about the FCC's third attempt to regulate network management practices. The FCC is currently coming up with new anti-discrimination and anti-blocking rules per a court remand.
He said that rather than take inspiration from the proverb, "when at first you don't succeed, try, try again," the FCC should take its cue from a quote attributed to W.C. Fields: "When at first you don't succeed, try, try again. And then quit. There's no use being a damn fool about it."
Berry was FCC general counsel when the commission failed the first time—the court threw out its findings against Comcast in the BitTorrent case—so he was speaking from experience.
He said that advocates for government intervention have "moved the goalposts," once agreeing that an open Internet was about consumer freedom, and now focused on "flyspecking" network management.
Berry says the private sector has "overwhelmingly respected Internet freedom, and the reason why is simple: It’s what consumers want." He suggested that even if ISPs did block content, there is a market mechanism for that.
"Let’s say, with a tip of the hat to Billy Joel, that you’re living in Allentown, you’re a Service Electric broadband customer, and the company decides to shut down your access to lawful content. You might switch to Verizon. Or, suppose that you’re a Frontier customer in Breezewood, and the company prevents you from running applications of your choice. There’s a good chance that you’ll switch to Comcast."
As to network management and discrimination and the FCC's effort to define it for the purposes of regulating it, Berry said that the analogy of broadband as a dumb pipe where all bits are equal and should be treated that way doesn't hold water. He said the goal should not be to lay dumb pipe but to connect smart networks that can discriminate between bits carrying vital healthcare info and "a YouTube video of John Travolta mangling Idina Menzel’s name at the Oscars."
"A smart, dynamic network that can prioritize traffic and otherwise respond to the needs of all participants in the Internet ecosystem will inevitably create more opportunities for innovation at the edge than will a dumb pipe," he told his audience.
Berry said some advocates have conceded that not all prioritization is "nefarious," and wants the FCC to permit good prioritization and prohibit bad. But he says the FCC is ill-suited to the task, and no one has been able to come up with a bright line test.
"In other words, this is not an area conducive to government micromanagement," he says. "We should want network operators to be focused on innovating and providing the best service possible to their customers rather than guessing how the FCC might respond to a particular network management practice. A rule based on amorphous and subjective value judgments will inevitably breed caution and chill progress."
Berry also said the reason the government should stay its Internet regulation hand is that a two-sided market could develop in which consumer and content providers help pay for building and upgrading broadband networks.
"[M]oney doesn’t grow on trees. In a one-sided market, consumers will pay. But why is that fair? Why should the paper salesman from Scranton, the pub owner from Philadelphia, and the piano teacher from Punxsutawney bear the entire burden of expanding our nation’s broadband capacity? How is the government mandating such an outcome 'pro-consumer'?"
"In a two-sided market, by contrast, funding can come from both consumers and content providers. For consumers, that could mean lower prices and more competition, as payments from content providers displace consumer payments and draw competitive providers into further deployment. And if a content provider pays for a better connection and helps to fund network upgrades, that’s all to the consumer’s benefit."
He cited the Netlfix peering deal with Comcast as an example. "Netflix, for instance, accounts for about 30% of all Internet traffic in the United States today. It’s in Netflix’s interest to make sure their consumers have the best user experience, so it’s no surprise that Netflix has been working directly with Internet service providers to improve that experience. Although some call these direct-interconnection agreements a violation of net neutrality, I see no reason why the government should stifle these two-sided business models rather than allow the market (and the network) to develop organically."
He cited the current FCC chairman, who is leading the effort to restore network neutrality rules, as backup on that point. "As FCC Chairman Tom Wheeler put it: '[W]e’re … going to see a two-sided market where Netflix might say, ‘well, I’ll pay in order to make sure that you might receive, my subscriber receives, the best possible transmission of this movie.’ I think we want to let those kinds of things evolve.' He’s right."