Platform Dominance, Privacy, Antitrust, 5G Dominate SOTN Industry Assessment as Internet Infrastructure Fades

Aside from a promise that net neutrality will be the focus of the House Communications Subcommittee's first hearing this year, nary another word was spoken at Tuesday's State of the Net conference about the controversial access issue. 

Indeed, federal and local policy-makers and industry advocates shunned traditional concerns about network infrastructure and telecommunications policy, which had been dominant issues at the 15th annual event of the Internet Education Foundation, with the cooperation of the Congressional Internet Caucus.

FCC commissioner Brendan Carr

FCC commissioner Brendan Carr

Rather, the focus was on the platforms — especially Google and Facebook — which have become gatekeepers for the expanding range of online services and transactions. 

Along with the concerns over platform dominance came an array of calls for strong policies to protect privacy and to quash anticompetitive maneuvers. FCC commissioner Brendan Carr offered predictable cheerleading for 5G (Fifth Generation) wireless services, and demands for tight cybersecurity in the evolving digital ecosystem were woven through the conference. 

House Antitrust chairman David Cicilline (D-R.I.) opened the program with strong words about Google's perceived anti-competitive behavior, both as a gatekeeper and for its buying splurge in which it has gobbled up smaller firms. This "concentration of power" creates "pernicious impacts on a free and diverse press," Cicilline said, especially "in the absence of a competitive marketplace." He cited reports on Google's ability to manipulate traffic on its ad networks as well as with its readers and users. All of this affects "legacy news companies and digital publishers alike," Cicilline said. "The free and open internet ... is incompatible with this trend toward centralization online."

"It's vital that the House Antitrust Subcommittee takes up these matters in a top-to-bottom investigation [to determine] whether use of market power harms the competitive process online," he said. "We cannot have a democracy without a free and diverse press" that gives publishers "a level playing field to negotiate with dominant platforms."

Cicilline used the attack on Google as prelude to announcing that he is reintroducing the “Journalism Competition and Preservation Act," which he had submitted last year. The bill would create safe harbor for news publishers to negotiate business arrangements collectively with Google, Facebook and other platforms. Cicilline said his subcommittee's hearings will "build a record to document anti-competitive behavior to develop a deep understanding of these markets in exploring every tool for preventing" abuses by platform operators.

The News Media Alliance (formerly known as the Newspaper Association of America, and prior to that as the American Newspaper Publishers Association) quickly commended Cicilline's plan, calling it an effort toward assuring "fair compensation for use of news content" from publications.

FCC Preps for 5G, FTC Ready to Take on Vertical Integration

Carr opened his presentation praising 5G by noting that, "Some carriers are telling us we already have it" -- a line that drew a bemused, knowing chuckle from the audience. Carr said, "We're now beginning to see" the long-promised convergence of services "in practical ways." He predicted that 5G "will waves of innovation."

Much of Carr's speech focused on the "real challenge" from China, which he said has deployed 5G at five times the pace of the U.S., a timely comment in the midst of the Huawei controversy. He stopped short of promising special consideration for U.S. 5G projects, but he cautioned against establishing policy barriers.

"I want to let the private sector compete" without restraints from local government agencies, on topics such as tower deployment, he said. Carr stressed that, "2019 will be the year of 5G," which will trigger "massive infrastructure" construction and "lots of new jobs."

FTC commissioner Rebecca Kelly Slaughter used her time in the spotlight to refute the "prevailing belief" of recent years that vertical mergers are good.

"We have to look skeptically at all the claimed benefits of vertical mergers," she said. Federal review of merger plans should make "parties substantiate the benefits... and we should bring enforcement actions if we believe" actual performance does not match the promises.

Assistant Attorney General Makan Delrahim, who heads the Justice Department's antitrust activities, also acknowledged the need for new ways to evaluate mergers. He cited recent Google acquisitions, especially those involving advertising programs. Delrahim sought to align it with the current Department of Justice evaluation of broadcasting mergers, and how they may affect advertising operations.

Delrahim indicated that future examinations could assess online and broadcast advertising within a local market as direct competitors, despite the platform differences. He said, "New entrants are important" and emphasized that "light regulation" is vital, although, "We have to be very careful" about each. In response to a question about "How did tech get so big?" the antitrust chief replied, "Big isn't necessarily bad" — especially if it creates a product that consumers want, he said.

Delrahim also opened the discussion of privacy, cautioning that his "biggest concern" about privacy legislation is that the legacy companies will be able to shape the discussion and eventual policy-making. Based on his experience with their skills, they could create barriers that will impede start-ups and maintain privacy regulations from which the existing companies will benefit.

Data Privacy: National or State Protections?

Rep. Suzan DelBene

Rep. Suzan DelBene

Rep. Suzan DelBene (D-Washington), a member of the House Ways and Means Committee and the Internet of Things Caucus and co-chair of the Women's High Tech Caucus, said Congress "has a responsibility" to assure that consumers have a clear understanding of what happens to their data.

Her remarks followed a series of SOTN presentations about the fragmentation of privacy policies, with very strict ones emerging at the state level, such as the California Consumer Privacy Act. Panelists could not agree on whether such rules will put excessive burdens on companies and whether the standardized measures can be enforced. Several speakers urged Federal action lest conflicting state privacy rules create a diametric dilemma for companies that operate in multiple jurisdictions.   

As for the allied matter of cybersecurity, Rep. Jim Langevin (D-R.I.) called for a national framework for assuring the safety of all segments of the network infrastructure, from artificial intelligence to weapons security. Langevin, a member of the House Armed Services Committee, the Cybersecurity, Infrastructure Protection and Innovation Subcommittee and co-chair of the Congressional Cybersecurity Caucus, emphasized the need for training and expanding the cybersecurity work force and for coordinating government/private sector activities.

Eighty different committees and subcommittees on Capitol Hill now have some jurisdiction over cybersecurity, he explained. "As Congress, we will have to move with greater agility, including oversight and reform" to stave off the growing potential attacks.

Gary Arlen

Contributor Gary Arlen is known for his insights into the convergence of media, telecom, content and technology. Gary was founder/editor/publisher of Interactivity Report, TeleServices Report and other influential newsletters; he was the longtime “curmudgeon” columnist for Multichannel News as well as a regular contributor to AdMap, Washington Technology and Telecommunications Reports. He writes regularly about trends and media/marketing for the Consumer Technology Association's i3 magazine plus several blogs. Gary has taught media-focused courses on the adjunct faculties at George Mason University and American University and has guest-lectured at MIT, Harvard, UCLA, University of Southern California and Northwestern University and at countless media, marketing and technology industry events. As President of Arlen Communications LLC, he has provided analyses about the development of applications and services for entertainment, marketing and e-commerce.