FCC’s net neutrality enforcement policy should be rated zero

Apparently, no good deed goes unpunished for the outgoing Federal Communications Commission.

A week before the transition to the new administration, the FCC’s Wireless Bureau issued a report about mobile “zero-rating” plans, which provide consumers the option of free data usage paid by advertising.

The report posited that AT&T’s Sponsored Data and Verizon Wireless’ FreeBee Data offerings could be net neutrality violations.

How can providing consumers the freedom of choice to pay less for more content in trade for seeing ads be a problem for consumers?

Net neutrality started out as pro-consumer. 

This zero-rating kerfuffle exposes that net neutrality has transmogrified from the FCC’s original net neutrality purpose of protecting consumers’ freedom to competitively access and use the legal content, apps, and devices of their choice, to potentially taking away consumer’s freedom to access cost-saving content and apps of their choice on the device of their choice. 

How can the FCC claim to be pro-consumer, and then tell consumers that more consumer choice, control, and savings are a net neutrality violation?

Mobile phones have become indispensable for low income households and people of color as an affordable digital connection to the future, because they tend to have higher than average demand for broadband usage. 

How does the FCC discouraging innovation, competition, and consumer choice to lower consumers’ bandwidth bill via advertising narrow the digital divide or get more Americans online?  

Has the FCC forgotten that Internet content has been predominantly funded by advertising?

Has the FCC forgotten that Google Fiber originally offered a lower speed of internet access for free effectively paid for by Google search advertising?

Is the FCC unaware that Fox is innovatively offering the Super Bowl for free online to laptops, tablets, and desktops paid by its local affiliates’ advertising?   

What’s going on with the outgoing FCC?

Net neutrality lost its consumer-protection purpose when it became the FCC’s rationale for reclassifying broadband as a Title II telephone utility. 

Net neutrality ceased being about consumers when Tim Wu, who coined the term “net neutrality” as a non-discrimination principle, reimagined it to justify Title II utility regulation of broadband to facilitate the subsidization of edge providers and innovation, in his white paper entitled: “Subsidizing Creativity through Network Design: Zero-Pricing and Net Neutrality.” 

This rethinking transformed net neutrality from being about consumer choice, control, and benefit, to being more about subsidizing the bandwidth costs of corporate interests like Google, Facebook, Amazon and Netflix. 

How can Title II net neutrality supporters demand a permanent price of zero for the downstream bandwidth of the Internet’s biggest bandwidth hogs, Netflix, Google-YouTube, Amazon, and Facebook, while opposing a consumer’s choice to enjoy a partial zero-price for mobile users’ bandwidth usage — paid by advertising sponsors?   

The only way to make sense of this stark contradiction is that Title II regulation supporters don’t want a precedent where any edge provider competes for consumers’ business by competing for lowering the consumer’s bandwidth bill.

If the FCC were to allow an edge provider and a consumer to voluntarily negotiate a market arrangement of mutual benefit – i.e. paying less for more content via advertising — that would expose and blow up the FCC’s Title II net neutrality presumption that consumers must always subsidize corporate bandwidth usage, and corporations must never subsidize a consumer’s bandwidth usage.  

The dirty little secret that the FCC does not want people to know is that Title II net neutrality is implicit FCC price regulation that by design forces consumers to subsidize corporations, the exact opposite of how the FCC implemented Title II historically before competition, where corporations’ communications bills always subsidized consumers’ communications bills.  

It has long been Google and Amazon’s policy position that because users request content they are the “cost-causers” and thus they should be the only party that pays for the downstream traffic to them, and not the handful of behemoths that generate most U.S. downstream Internet traffic, Netflix, Google-YouTube, Facebook, and Amazon.   

In sum, follow the money to understand how the FCC could imagine it is a bad idea for consumers to enjoy the freedom of choice to pay less for more content in trade for seeing ads. 

Real net neutrality would put consumers first. 

Scott Cleland served as deputy U.S. coordinator for international communications and information policy in the George H. W. Bush administration. He is president of Precursor LLC, an internetization consultancy for Fortune 500 companies, and chairman of NetCompetition, a pro-competition e-forum supported by broadband interests.

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