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ITIF Proposes Net Neutrality 'Grand Bargain'

The Information Technology and Innovation Foundation, whose board members include some major computer companies and edge providers, is proposing a "Grand Bargain" bill that would provide a legislative underpinning for most of the FCC's new Open Internet rules, while allowing for some paid prioritization and funding broadband deployment programs.

The council is a tech think tank whose board members include a bipartisan quartet of top legislators (honorary chairs), academics and tech execs (Cisco, HP, Amazon, Google, Oracle, Intel, IBM, Qualcomm and Microsoft).

In a report being released Thursday, ITIF argues that Title II will be a drag on investment and innovation, and that the better solution to preventing blocking and throttling is to pass targeted legislation that provides that authority without the blunderbuss approach of Title II that leaves open the possibility of rate regulation or network unbundling by a future commission or court fiat.

A number of members of Congress have been talking lately about coming up with a bipartisan bill to clarify the FCC's net neutrality authority without using Title II reclassification and in an effort to preempt what could be a years-long legal challenge to the current rules.

ITIF thinks it has the right legislative recipe.

The proposed legislation would:

1. "Clarify that broadband Internet access service is not a 'telecommunications service' under Title II of the Communications Act," either by adding a new title or use tailored Title II.

2. "Put widely agreed-upon open Internet protections, including no-blocking, no-throttling, and transparency, on firm ground...Specifically, a new broadband title of the Communications Act should find a compromise on the scope of jurisdiction to give the FCC, but focus narrowly on open Internet rules and bridging the digital divide, while leaving a broader update to the Communications Act for another day."

3 "'Allow pro-competitive traffic differentiation for applications that require it' [paid prioritization], while preventing anticompetitive abuses of prioritization." There is a flat ban under the FCC's new rules that ITIF says is too broad.

4. "Expand the scope and funding of existing digital literacy and broadband adoption programs," including the National Telecommunications and Information Administration's Broadband Adoption Toolkit, the Obama Administration’s ConnectHome initiative, and the FCC Lifeline subsidy program, as well boosting funds for rural broadband deployment in un-served areas. The bill would also "establish a national clearinghouse to support local digital literacy and adoption initiatives."

The report argues that Title II depresses innovation and investment, and argues that not all prioritization is bad. "The real issue should not be prioritization versus no prioritization, but what kind of traffic can be prioritized under what business arrangements," the ITIF report says.

"One-sided net neutrality regimes, like that imposed by the FCC, try to protect only innovations at the upper layers of the Internet that are relatively immune to fluctuations in packet loss and delay from some hypothetical risks in the future," it argues. "Such a model represents a cynically narrow view of what types of services a network of networks can enable in the future. Prioritization mechanisms provide the stable environment needed to develop higher-order systems on top of broadband platforms."

It cites high-frequency online trading and gaming as two examples of where prioritization is either helpful or beneficial.

"When it comes to competing on network performance," the report says, "a small start-up gaming company will not be able to blanket the world with servers all connected with a private, optimized fiber network. Similarly a small video company will not have the resources to duplicate the extensive content delivery networks (CDNs) used by a YouTube or a Netflix. Not that these CDNs are in any way unfair—the point is that large companies will always have an advantage in this space. After all they are large."

The current FCC rules say that "broadband providers may not favor some lawful Internet traffic over other lawful traffic in exchange for consideration of any kind—in other words, no 'fast lanes.'"

The report suggests that the "some prioritization is beneficial" point gets lost "when the discussion sinks to the level of catch phrases such as 'fast lanes' and 'slow lanes.'"

The FCC rules also provide for network management of traffic to optimize performance. The report was written by Doug Brake, a telecommunications policy analyst with ITIF, and ITIF founder and president Robert D. Atkinson.

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.