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Stop this crazy crusade! Google, Facebook, Microsoft, Amazon scold FCC over net neutrality

Lengthy filing by Internet Association highlights value of today's rules

By Kieren McCarthy, 17 Jul 2017

The world's largest internet companies lambasted the FCC in a formal filing today, telling America's telecom regulator to kill its plans to ditch net neutrality rules.

In a lengthy 38‑page response [PDF], accompanied by a 45‑page economic analysis [PDF], the Internet Association – which represents Google, Facebook, Microsoft, Amazon, Twitter and 35 others – argues that the current effort underway to get rid of the Open Internet Order would "create significant uncertainty" and "harm consumers and innovators alike."

"Undoing the Commission's 2015 Order, and even continuing to discuss reopening the settled open internet debate, will create significant uncertainty in the market and upset the careful balance that has led to the current virtuous circle of innovation in the broadband ecosystem," says the filing.

The response and paper comes the week after the same companies held a "day of protest" against the FCC's plans (formally a "notice of proposed rulemaking" or NPRM), warning consumers that if the current rules are changed, they risk facing a slower and more expensive internet. Users were encouraged to contact the FCC to register their concern, and over 1.5 million apparently did.

The Internet Association's response, however, takes a deeper look at the issue and goes to some lengths to highlight the value of the current rules, while also taking critical aim at the arguments made for upending them.

The section headings alone tell the story:

The NPRM fails to account for the virtuous circle of broadband innovation under which the cloud economy has flourished

In that, the association criticizes the ISP-only focus of the FCC's proposal, which focuses "solely on investments made by ISPs" and ignores "investments being made by edge providers in the cloud that are reshaping the US economy."

It also questions the claims at the heart of the NPRM: that ISPs are investing less because of the rules. Not true, says the filing. "There is no evidence that ISP investment has been harmed following the 2015 Open Internet Order and, in fact, plenty of evidence that ISPs have increased their investments."

Then:

The 2015 Open Internet rules are working; there is no need to revisit them and introduce uncertainty into the internet ecosystem

This section digs into the claims that broadband investment has been hurt by the net neutrality rules and argues that they are "unsupported by evidence."

It then references its accompanying economic study – done by the Internet Association's chief economist – which tears into the various papers and blog posts that have been used by the FCC to explain its decision to move forward.

"First, much of the research dates back between several years to over one decade," warns the paper, noting that many of them were written before the new rules were even in place. Second – and more pressing – is "the void of empirical evidence on NN [net neutrality] impacts."

The paper argues that, counter to what ISPs are saying, broadband investment is actually up over time and there is "no decline as a result of the Commission's 2015 Order." The claims otherwise "don't mesh with reality."

Paper by paper

It then name-checks and body-slams the analyses used by the FCC to argue for getting rid of the current rules:

  • Nurski's working paper from 2012 only focuses on the UK and is "not directly relevant."
  • Hazlett and Wright's 2016 paper questioning the economic benefits of net neutrality is "not exclusively concerned with infrastructure investment."
  • Hal Singer's work that argues there has been a reduction in investment is "anecdotal" and "relies on simple year-on-year 6‑month period comparisons and only for a small set of companies." The result is not statistically significant.
  • George Ford's 2017 paper is "theoretically incoherent" and uses an "inappropriate control group" of too few companies in the wrong industries.
  • The Free State Foundation blog post "is a chart with no author, no data sources, no statistical analysis."
  • And the recent paper from Faulhaber, Singer and Urschel that complains about the "lack of economic analysis" around net neutrality has itself been heavily critiqued by another paper as "biased analysis" – a claim that the paper was funded by the ISP industry.

In short, the Internet Association argues, "there is no credible evidence of network operator industry harm."

Legal foundation

It then goes on to argue the point that the FCC should not scrap rules that took years to arrive at, and which have been upheld in the law courts, without having a solid legal basis on which to base new rules.

In other words, the FCC should stick with its current "Type II" classification of broadband providers – which effectively makes them utilities – until there is a new law or a different legal foundation.

Currently ISPs are claiming that they are willing to abide by all the concepts in the Open Internet Order:

  • No blocking, throttling or paid prioritization of internet traffic by ISPs.
  • No unreasonable interference or disadvantaging of lawful internet traffic.
  • Enhanced transparency.

But they just don't like the outdated Type II classification.

Of course, no one honestly believes this, but the Internet Association decides to take them at their word and argues that it is a mistake to undercut the legal authority to enforce those rules until there is an effective replacement.

It notes that it is "open to alternative legal bases for the rules, either via legislative action codifying the existing net neutrality rules or via sound legal theories offered by the commission."

It also slams the FCC's plans – pushed heavily by new FCC chair Ajit Pai – as containing "no clear alternatives" to the issue identified.

It concludes: "We urge the Commission to maintain strong and enforceable net neutrality rules so that the US internet economy may continue its unparalleled success story and deliver competition and consumer choice to US consumers in the years to come."

In other words: Put an end to this ridiculous charade, Pai. ®

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