Before the
FEDERAL COMMUNICATIONS COMMISSION
Washington, DC 20554
______________________________
)
)
)
Preserving the Open Internet )
)
Broadband Industry Practices )
______________________________)
In the Matter of
GN Docket No. 09-191
WC Docket No. 07-52
COMMENTS OF PROFESSOR TIM WU
COLUMBIA LAW SCHOOL
Columbia Law School
435 West 116th Street
New York, NY 10027
January 14th, 2010
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Before the
FEDERAL COMMUNICATIONS COMMISSION
Washington, DC 20554
______________________________
)
)
)
Preserving the Open Internet )
)
Broadband Industry Practices )
______________________________)
In the Matter of
GN Docket No. 09-191
WC Docket No. 07-52
COMMENTS OF PROFESSOR TIM WU†
COLUMBIA LAW SCHOOL
I offer these comments to make three points. First, there have been
suggestions in the media and elsewhere that the FCC’s proposed Net
Neutrality rules represent a radical departure in American federal
communications policy. I’d suggest, from a historic perspective, that the
FCC’s Net Neutrality rule is rather mild. In particular, it is far less
aggressive than the anti-discrimination laws imposed on carriers under the
Cleveland or Taft Administrations.
Second, many critics of the Proposed Rules have blurred the crucial
distinction between regulation of the Internet and the regulation of those
that carry Internet traffic. I point out only that the latter, carriers, have
always been subject to regulation, as we shall, historically much stricter
regulation than that found in the Proposed Rules.
Third, I write to suggest that the FCC’s stated goal of protecting the
Internet as a platform for free speech will depend on how rigorously it
implements a ban on not only the blocking of content, but also on demands
for “Internet Payola.”
Part I:
Discrimination Rules
There has been some suggestion that the proposed Net Neutrality rule
is in some sense radical, unprecedented or beyond anything the Federal
Government has done before. Such claims are found in both rather nuanced1
Statement of Interest: I have not received any compensation for these comments or
been retained by any party with a financial interest in these proceedings.
1 Thomas B. Nachbar, The Public Network, 17 CommLaw Conspectus 67, 127 (2008)
†
2
and far less nuanced forms, including at least public claim that Net
Neutrality rules represent the work product of “Marxists.”2
These claims are misleading. For in reality the Proposed Rule is
similar to rules that have governed communications since 1910. And far from
being more radical, the Proposed Rule, on closer inspection, is far milder than
its ancestors.
***
The Mann Elkins Act – the first real Communications Act in American
history – is a good place to start, for it is the ancestor of every antidiscrimination rule in communications policy. That Act subjected all of the
wireline and wireless networks in existence to the rules created to control
discrimination problems in the railroad industry. It did so by expanding the
scope of the Interstate Commerce Act of 1887 to include communications – at
the time, the telegraph, telephone and radio.3 Congress, in other words,
made the strong rules created to fight abuse in the railroad business
applicable to the telegraph, telephone and radio. And it is clear that the Net
Neutrality rules, far from unprecedented, follow directly in the tradition
established during the Taft Administration.
The adoption of railroad regulation for communications in 1910 hints
that the underlying problems were similar. While there are obvious
differences between the railroads of 1887, the communications networks of
1910, and the broadband networks of 2010, there are plenty of similarities as
well. The railways were, of course, networks that delivered various forms of
traffic, not unlike the Internet. As a matter of structure, there was no single
railroad monopoly, but more and less powerful railroads. The customer
market was extremely diverse, ranging from monopolists to individual
passengers.
No one questions that the Federal Government was reacting to what
was then called the “evil” of discrimination.4 As a 1937 commentator, Clyde
Aitchison, describes the Senate’s concerns at the time, “the paramount evil
chargeable against the operation of the transportation system of the United
States as then conducted was unjust discrimination between persons, places,
commodities, or particular descriptions of traffic.” Or, as the Supreme Court
(“Consequently, net neutrality proposals call for a degree of regulatory involvement in the
definition of network and technology markets that is unprecedented in the post-mercantilist
history of nondiscriminatory access.”).
2 Fox News Channel television broadcast Oct. 20, 2009.
3 Mann-Elkins Act, 36 Stat. 539 (1910).
4 See, e.g., Paul Leland Haworth, The United States in our own Times 1865-1920 170
(1920).
3
later descried this ban, “it is apparent from the legislative history of the
[Interstate Commerce] Act that not only was the evil of discrimination the
principal thing aimed at, but that there is no basis for the contention that
Congress intended to exempt any discriminatory action . . . which it had
authority to reach.”5
Generally, the most powerful customers of the railroads– most
famously, John Rockefeller’s Standard Oil – demanded and received special
and secret prices (called “rebates”) and services unavailable to their
competitors.6 Consequently a company like Standard Oil might ship its
products both faster and at lower prices than any of its competitors.7 In
consequence, as Aitchison writes, “the railways became the means which
made monopoly possible, and in turn were used by monopolies as
instruments for crushing all competition.”8
During the same time period, telegraph networks had discrimination
issues structurally similar to the issues raised in both railroad and
broadband discrimination. Western Union, the telegraph monopolist from
1866 onward, used discrimination to the advantage of itself and its partners
and to the disadvantage of the nation. Most notably, when it came to use of
the telegraph for carrying news, Western Union effectively blocked anyone,
other than its partner, Associated Press, from using the telegraph network
for that purpose.9 In today’s lingo, Western Union can be understood as
having blocked the use of the telegraph network for an application called the
newswire.
The problem of discrimination on transport and communications
networks is not a new problem, but an eternal problem. In that respect, it is
instructive to compare the responses then and now. The Interstate
Commerce Act of 1887 (as amended over the years) dealt with similar issues
with some similar measures, but also some far stronger medicine. Section
three of the Act, applicable to both railroads and communications networks,
provided that:
[I]t shall be unlawful . . . [for any carrier] to make or give any undue or
Mitchell v. United States, 313 U.S. 80, 94 (1941).
See Ron Chernow, Titan 174 (“no other firm received so many rebates so
consistently over so many years”) (2d. ed. 2004).
7See Herbert Hovenkamp, Regulatory Conflict in the Gilded Age: Federalism and the
Railroad Problem, 97 Yale L.J. 1017, 1046-1049 (1988).
8 Clyde B. Aitchison, Evolution of the Interstate Commerce Act: 1887—1937, 5 Geo.
Wash. L. Rev. 289 (1936-1937).
9 It did so by raising prices on Western Union’s competitors to unfeasible levels. See,
e.g., Tim Wu, Why Have a Telecommunications Law? Anti-Discrimination Norms in
Communications, 5 J. On Telecomm. & High Tech. L. 15 (2006).
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unreasonable preference or advantage to any particular person,
company, firm, corporation, or locality, or any particular description of
traffic, in any respect whatsoever, or to subject any particular person,
company, firm, corporation, or locality, or any particular description of
traffic, to any undue or unreasonable prejudice or disadvantage in any
respect whatsoever.10
In comparison, the 2010 proposed Net Neutrality antidiscrimination rule
reads:
Subject to reasonable network management, a provider of
broadband Internet access service must treat lawful content,
applications, and services in a nondiscriminatory manner.
This is a similar, though somewhat milder standard (perhaps too mild,
though that’s not my point here). The Interstate Commerce Act barred
“undue or unreasonable” discrimination both as between customers,
“localities” and forms of traffic, “in any respect whatsoever.” The 2010
proposed rule, meanwhile, suggests that content, applications, and services
must be treated in a non-discriminatory manner. The point is that the two
rules are similar responses to the problem of discrimination.
If the non-discrimination rule was somewhat similar, however, it is in
other respects that the Interstate Commerce Act went further. Unlike the
proposed rules, it imposed rate regulations and transparency requirements
as well:
All charges for any services rendered . . . in the transmission of
intelligence by wire or wireless shall be just and reasonable . . . and
any unjust or unreasonable charge for such service or any part thereof
is prohibited and declared to be unlawful.11
In theory, any price charged by a carrier was liable to challenge before
the Interstate Commerce Commission, and in this respect the 1910 Act went
far beyond anything contemplated in the Proposed Rule. The 1910 Act, in
fact, began a long history of rate regulation that is notably absent in the
current effort. And the successors to the 1910 Act, like the 1934 Act,
generally speaking, imposed stricter regulations, on the carriers and
broadcast industries.
The point, again, is that the present Net Neutrality rules, while
Interstate Commerce Act (1910). The “traffic” discrimination language contradicts
the claim made by Professor Thomas Nachbar that barring “use” discrimination is original to
the proposed rule; it was in the first Federal act regulating communications.
11 Public Law 49-41, February 4, 1887.
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slightly different in approach, are rather similar to the 1910 Act. And the
1887 and 1910 Acts were hardly the work of “Marxists” or extremists. They
were, rather, the product of Congresses concerned with excessive private
power and the growing power of monopolies in American society. More than
anything they realized the dangers of close cooperation between America’s
most powerful firms and its most powerful information and transportation
networks.
Part II:
Carriers versus the Internet
Many critics of the Net Neutrality rules make the mistake of confusing
regulation of the Internet with regulation of the firms that carry Internet
traffic. This distinction is critical. For while the Internet has been generally
unregulated since its beginnings, its carriers, in contrast, have always been
regulated entities (or at least since 1910). In that sense the Proposed Rules
are in the tradition of preserving a non-discriminatory transport layer that
supports multiple, unregulated uses on top of it.
In the history of FCC regulation this approach is most obvious in the
Computer Inquiries.12 These rules sought to create an open platform on top
of the telephone network usable for multiple purposes, including computer
networking. They must be given credit for the birth of the mass internet in
the 1990s.13
The Proposed Rule is broadly similar to the approach taken in the
Computer Inquiries. Both seek to protect or establish an open platform for
multiple uses. Yet the Computer Inquires are notable for going far beyond
the Net Neutrality rules in terms of scope and in their specification of
Network Design.
The Computer Inquiries went beyond a mere bar to discrimination.
Going beyond anything proposed in the Proposed Rule, they specifically
regulated the design of the telephone networks so as to better allow a range
of uses (later known as “enhanced services” in Computer Inquiries II).
Importantly, the Computer Inquiries specifically barred the carriers from
designing their networks as integrated voice and communications networks.14
The Inquiries are complex, but I think it is worth trying to understand
the totality of the Computer Inquiries I along with existing carrier
Robert Cannon, The Legacy of the Federal Communications Commission’s
Computer Inquires, 55 Fed. Comm. L.J. 167 (2003).
13 The Commission discussed the Computer Inquiries in paras. 24-27 of the Notice of
Proposed Rulemaking.
14 Reg. and Policy Problems presented by the Interdependence of Computer and
Commc’ns. Servs. & Facilities, 28 F.C.C.2d 267, 276-282 (1971).
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regulations in a contemporary setting. They would be akin to a rule that
required the carriers not only not to discriminate in their carriage, but also to
offer unbundled, layer 1-2 bandwidth to any market entrant at regulated
prices, combined with a bar on offering both Internet and application services
themselves, other than through a “maximally” separate subsidiary. In
addition, the Computer Inquiries approach, in today’s context, would bar the
telephone or cable companies from using any of their existing network
equipment (routers, etc.) to help a subsidiary offer Internet or applications
services. The result, in other words, would be what is now sometimes called
full “structural separation.”15
For this reason it should be stressed that the Computer Inquiries took
a far more aggressive approach than today’s Net Neutrality rules do. For one
thing, the Computer Inquiries assumed rate regulation and common carriage
requirements would be imposed on the underlying transport networks. For
another, the Net Neutrality rules do not propose any limits on the carriers,
themselves, offering either Internet services or applications. They allow the
cable companies, for example, to integrate their cable television networking
equipment with the provision of Internet services. By comparison, there is to
my mind little question that the Net Neutrality rules are “light touch”
regulations.
The approach of the Computer Inquiries can be described more
generally as an effort to create an open platform by imposing positive duties.
The Net Neutrality rules are more similar to the 1910 Act, and depend on
negative bans on discrimination. While reasonable people may disagree, I
regard the negative, prohibitive approach as easier to administrate.
Enforcing a negative prohibition, a “thou shall not” puts the government in
its familiar and less burdensome position of forbidding bad behavior as
opposed to trying to compel good behavior. As Charles Fried memorably put
the point in another context:
Discrimination ... should be stamped out whenever it occurs. This, like
all the most stringent injunctions of morality, is a negative—not a
positive—duty. ‘Thou shall not kill’ is an injunction at once more
absolute, more definite, and more readily enforced than ‘Love your
neighbor as yourself.’16
“One step we believe we can take to abate this fear is to require wireline carriers to
establish a separate subsidiary to offer cellular service . . . [t]his [is] structural separation.”
In the Matter of An Inquiry Into the Use of the Bands 825-845 MHz and 870-890 MHz for
Cellular Commc’ns Sys., 86 F.C.C.2d 469, 493-494 (1981) (emphasis added). “The purpose of
the structural separation rule was to prevent cross-subsidization of Cellular systems and
assure non-discriminatory interconnection for telecommunications service providers.”
Cincinnati Bell Tel. Co. v. FCC, 69 F.3d 752, 766 (6th Cir. 1995) (emphasis added).
16 Charles Fried, Order & Law: Arguing the Reagan Revolution 130 (Simon &
15
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In any event, the similarity in intent can be seen best from some of the
language in the Computer Inquires. As the Commission stated in Computer
Inquiries II, the goal of the proceeding was to “insure the availability of
transparent common carrier transmission facilities to all on an equal basis.”17
While the means employed in the 1970s were slightly different, and indeed
far more invasive, it seems clear that what the Commission is trying to do in
these rules finds a close parallel in the Computer Inquires.
Part III: Speech and the Net Neutrality Rules
A Net Neutrality rule is are also a free speech rule. The Commission
has requested comment on whether its Proposed Rule might promote “free
speech, civic participation, and democratic engagement.” I write to describe
more precisely the link between Net Neutrality rules and the encouragement
of diverse speech in the United States. While the ban on blocking is the most
obvious, I suggest that a far more realistic and subtle threat to speech comes
from demands for “Internet Payola.”
The link between a Net Neutrality rule and speech has both more and
less obvious aspects. Its most obvious aspect is the ban on blocking of
content. The rule makes it illegal for AT&T, for example, to block the website
of the Christian Coalition or NARAL.
That ban is important, for it prevents carriers from functioning as the
nation’s de facto private censors. It prevents the American Internet from
becoming the Chinese, where most of the blocking censorship is, in fact,
practiced by private companies.18
Nonetheless, I would like to suggest that the more subtle threat to
Schuster 1991). Professor Thomas Nachbar, in his filed Comments, argues that the Proposed
Rule’s ban on “use” discrimination will require intensive agency oversight, and is a “level of
involvement . . . far beyond anything contemplated by the Computer Inquires, the Carterfone
decision, or any other previous form of Commission regulation of telecommunications.” I
respectfully disagree. While indeed different in form, the Computer Inquiries approach
required intensive and extensive FCC oversight. For the FCC, as we’ve described, barred the
integration of transportation and computing facilities and required the unbundling of the
former. For example, under the Computer Inquiries, the FCC was asked to determine
whether AT&T’s frame relay “Interspan” service was a basic or enhanced service, and then to
specify how it would be unbundled. Independent Data Comm. Mfrs. Ass’n, Inc.,
Memorandum Opinion and Order, 10 F.C.C.R. 13717 (1995). As I’ve suggested here, and as
the Comcast hearing suggests, by putting more reliance on negative discrimination rules –
and less on sharing rules and structural intervention – the proposed rule will likely require a
less invasive approach than the Computer Inquiries.
17 Second Computer Inquiry, 72 F.C.C.2d 358, 395 (FCC 1979).
18 See Jack Goldsmith & Tim Wu, Who Controls the Internet ch. 6 (2006).
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speech on the Internet will come from Internet Payola schemes – carrier
demands for payment to reach listeners.
It goes without saying that the Internet is a platform for free speech;
an “engine of free expression.”19 Some of the critics of Net Neutrality tend to
nonetheless praise the diversity of speech that the Internet has made
possible. For example, commentator Glenn Beck, a critic, praises the
diversity of the Internet’s content. “You read different news, alternative
news sites. I mean, they're the ones, really, the Internet – YouTube, blogs,
just being able to share ideas. It's the place where we are more free than
probably we've ever been before.”20 That’s true, yet as we shall see it is the
design of the network that makes it this way.
To be more specific, what makes possible such diverse speech on the
Internet is the relative cheapness of being an Internet speaker; the platform
reduces the barriers to entry, we might say, to the marketplace of ideas. But
why exactly is it less expensive to be an Internet speaker? One crucial reason
is the absence of Internet Payola, also known as termination fees. It is the
absence of additional fees paid to the carrier in order for a speaker to reach
listeners that makes it easy to be an Internet speaker.
Since the founding of the Internet, by design and tradition, Internet
speakers have never paid extra fees to reach listeners. Once you are “on” the
Internet, every user can, generally, reach every other without paying
another, extra fee.21 It is underappreciated how important that fact is to the
Internet as a speech platform. Blogs could not exist in a world of payola. A
non-profit website like Wikipedia, which reaches billions, could never afford
to reach its audiences if it had to pay a fee to reach, say, AT&T, Verizon and
Comcast users.
The upshot is this: a Net Neutrality rule promotes free speech to the
extent that it continues to ban termination fees and payola.22 It is the
absence of the fee paid to reach others that is the defining feature of the
Internet as an open speech platform, and as a kind of subsidy to non-profit or
low-income speakers. That means a Net Neutrality rule may succeed in its
speech goals to the extent it preserves the traditional ban on payola,
whatever form such demands may take. Critically, payola schemes can be
framed as fees for “prioritized” service, which is what makes this area
Harper & Row, Publrs., Inc. v. Nation Enters., 471 U.S. 539, 558 (1985).
Glenn Beck (Fox News Channel television broadcast Oct. 20, 2009).
21 See Robin S. Lee & Tim Wu, Subsidizing Creativity Through Network Design: Zero
Pricing and Net Neutrality, 23 J. Econ. Perspectives, Summer 2009, at 61.
22 See Lee & Wu, Subsidizing Creativity Through Network Design: Zero Pricing and
Net Neutrality, supra; see also C. Scott Hemphill, Network Neutrality and the False Promise
of Zero-Price Regulation, 25 Yale J. on Reg. 135 (2008).
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challenging.
As it stands, the Proposed Rule remains somewhat ambiguous on the
issue of payola or termination fees. I suggest the Commission, when it
considers the relationship between Net Neutrality and speech make it clear
that the Rules are meant to bar clear instances of Internet Payola. For, in
the long run, achieving the Commission’s speech goals depend on both
blocking and payola.
If the Commissioners have any questions about the preceding
comments, please do not hesitate to contact the author.
Respectfully Submitted,
______/s/_____________
January 14th, 2010
Tim Wu
[email protected]
Columbia Law School
435 West 116th Street
New York, NY 10027
212-854-2322
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