Ensuring an Open Internet while Fostering Innovation and Investment

Today, AT&T filed reply comments on the FCC’s proposal to restore the longstanding, bipartisan consensus that internet access service is an information service, a status that it enjoyed for all but two of the past 20 years. Opponents of returning internet access service to that status make no attempt to balance the costs and benefits of the overbroad and intrusive regulation that they favor, and assume that the alternative to Title II is no oversight at all. That is not the case. Virtually all internet service providers (ISPs) have made clear they do not oppose rules on blocking, throttling and transparency.

Some of the groups that oppose the FCC’s proposal have badly misled the public about what is at stake in this proceeding. They claim, nonsensically, that if the Commission reclassified internet services, ISPs will “block websites and content,” “shut down blogs,” or take away access to “email, banking, social media, music, or anything that requires the internet.”

Not surprisingly, those claims have garnered significant attention in the media and interest among portions of the public. But the concerns they have evoked are wholly misplaced. Nothing in the history of broadband remotely suggests that Title II regulation is necessary to ensure an open internet.   While Title II proponents argue otherwise by pointing to a tiny number of alleged “incidents” during the past decade, most of these incidents are described in a misleading fashion and all of them were fully addressed without Title II. Other practices cited by the proponents of Title II, such as zero-rating, are unambiguously beneficial to consumers. Thus, far from demonstrating a need for Title II, the only conclusion that can be drawn from two decades of experience is that a light touch approach is more than sufficient to ensure an open internet. Indeed, the internet has flourished during this time in part because of the absence of Title II for all but the past two years.

There is good reason why that is so. As we explain today, broadband competition is more than adequate to protect consumers. Proponents of Title II claim otherwise, but they base their claim on a rhetorical sleight of hand that understates competition for fixed broadband by arbitrarily excluding any service below 25 Mbps, while ignoring the growing impact of mobile broadband services. In fact, they don’t even address mobile broadband competition when arguing that mobile services, as well as fixed, should be subject to Title II. They further rely on the analytically unsupported and economically incoherent “gatekeeper” theory from the FCC’s 2015 order, according to which every ISP, no matter how small, has monopoly power.

According to its supporters, Title II is necessary to support a flat ban on the never-observed practice of “paid prioritization.” Such a categorical ban is at best premature, given that there are literally no examples of this practice. But to the extent that prioritization services ever do develop, they may provide substantial consumer benefits and pose no risk to the open internet. Indeed, as we stand on the threshold of vast advancements in internet-driven health, prosperity and education innovation, a flat ban could undercut these initiatives or stop them dead in their tracks.

We also explain that there is no need for government intervention in internet interconnection arrangements that could justify Title II. Free market dynamics have operated for decades in this area to bring about efficient interconnection. Most importantly, there is no rational explanation for the peculiar approach taken by the Wheeler FCC, under which one party to an interconnection arrangement may be subject to Title II, while the other party is not.

Our reply comments conclude with an examination of the costs of Title II regulation. Economic theory as well as a growing body of empirical studies indicate that Title II has likely depressed broadband investment. The contrary “studies” done by Free Press and the Internet Association are riddled with empirical and logical flaws, as we demonstrate today.

One final note on the millions of mass-produced comments filed with the FCC and touted by opponents of the Commission’s proposal. Most of those appear to us to be fraudulent. Millions of comments were generated using phony email addresses. Millions of others were generated using duplicative email or physical addresses. And still others originated overseas. Consider this: nearly 450,000 comments were filed using Russian addresses, all but four in support of Title II regulation of internet services. While Title II proponents may claim that millions of consumers representing the large majority of commenters support Title II, in fact, most of these comments were not legitimate. And when only legitimate comments are considered, the large majority of commenters oppose Title II regulation of internet access.

The FCC should restore the information service classification that has applied to internet access for all but the past two years. It will foster innovation and investment in broadband infrastructure without creating any threat to internet freedoms.

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