The FCC's looming Aug. 16 comment deadline for the proposal to roll back Title II classification of internet access and rethink the 2015 Open Internet order's rules against blocking, throttling and paid prioritization is generating some thoughtful approaches to a thorny issue—paid prioritization—from a pair of senior fellows.
In an article for the American Bar Association's bi-monthly The Antitrust Source, Hal Singer, principal of Economists Inc. and Senior Fellow, George Washington Institute of Public Policy, suggested antitrust law isn't sufficient to address internet discrimination.
Singer also says prescriptive FCC ex ante (before the fact) regs—no blocking, throttling, paid prioritization—don’t fill the bill either.
Related: ISP, Edge Groups Talk Net Neutrality Legislation
"Although ex ante rules function as a sharper Damoclean sword, as with any blanket ban involving vertical restraints," he writes, "there is a risk that nondiscriminatory, procompetitive arrangements would be banned as well. When conduct can be motivated for both procompetitive and anticompetitive reasons, economists (and antitrust law) tend to favor ex post rules so as to avoid those types of error costs."
Singer recommends a case-by-case approach, with a neutral fact-finding tribunal presiding over a complaint-driven process, though Congress might need to grant the FCC the authority to create such a tribunal.
He also suggests the tribunal could be used to resolve complaints about edge providers, saying it could as easily adjudicate complaints that "a search provider gave preferable ranking to an affiliated web property," as that an ISP had engaged in anticompetitive paid prioritization. He does concede that raises the issue of regulatory authority and whether the tribunal should be housed at the FCC, or the FTC or perhaps independently.
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In a Free State Foundation blog post, senior fellow Theodore Bolema addresses arguably the thorniest of the issues, paid prioritization. While both sides can pretty much agree about no blocking or throttling, paying for priority treatment is a grayer area.
Bolema argues that whatever the policy the FCC adopts, it should not include an outright ban on paid prioritization, which can have health, safety and economic benefits.
In fact, the legislative starting point congressional Republicans are using to collect input on possible legislation to clarify the FCC's network neutrality regulatory authority talks about only disallowing "anticompetitive" or "discriminatory" prioritization, which could leave room for pro-consumer models.
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Bolema signals that is the way to go. "The government actually authorizes priority arrangements, and recognizes their value, in various emergency, public safety and related contexts. It should not adopt a blanket ban on such arrangements that would prevent their development in other contexts that would prove valuable to consumers," he writes.
ISPs have signaled they can live with prohibitions on blocking and degrading, but are less definitive about paid prioritization. They would also generally prefer a case-by-case approach to prescriptive regs, though they had major issues with what they argued was the vague “conduct standard” case-by-case approach the 2015 Open Internet order applied to whatever did not fall under the bright-line rules but might impede the virtuous cycle of edge content to web surfers via their internet connections.
(Photo via Rock1997. Image taken on Jan. 18, 2017 and used per Creative Commons 2.0 license. The photo was cropped to fit 16x9 aspect ratio.)
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.
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