There was something almost surreal in this week’s Senate Commerce subcommittee hearing on FTC reauthorization.

These hearings are usually like a kabuki dance but without all the spontaneity. This year, though, with subprime and other financial scams harming millions, it was dismaying to see a couple of well-known consumer advocates testifying about… net neutrality?

Leave aside the obvious question of how shifting broadband deployment costs from corporations to consumers would benefit consumers. The undeniable fact is that scammers are getting more sophisticated and, as the

Last week the U.S. Federal Trade Commission (FTC) issued a report (pdf) urging caution on the issue of net neutrality and asserting what we here at the Hands Off blog have been saying all along: net neutrality is a non-issue, competition in the broadband market is increasing, and the completely hypothetical concerns raised by neutrality supporters could be more than adequately addressed by existing laws.

On the prospect of net neutrality legislation, FTC Chairwoman Deborah Majoras noted in her statement that without evidence of “market failure or demonstrated consumer harm, policy makers should be particularly hesitant to enact new regulation in this area.” We don’t think we could have said it any better ourselves.

As everybody knows by now, Andrew McLaughlin from Google said recently,

Cutting the FCC out the picture would probably be a smart move. It is much better to think of this as an FTC or unfair competition type of problem.

As others have said, this is an important and encouraging shift, and we’ll be watching Google as the conversation moves forward. But this brings strident net neutrality advocate David Isenberg to dust off a ditty he penned last year:

Google and Yahoo and Microsoft and Skype,
They’re already successful, they can make deals for those pipes.
But when I want to publish stuff in my blog
It will not be OK for you to once again pay.
We already pay for our Internet connection.
We don’t need to subsidize a dying industry’s obsession!
If looking at my blog cost you an extra dime
You’d probably find another way to spend your time.

Well, sure, if that was the issue. Isenberg looks a little silly compared to his usual ally, Kevin Werbach, who writes:

What Google’s global policy counsel (and in full disclosure, my friend and law school classmate) Andrew McLaughlin said to kick of the firestorm was that differentiated quality of service (QOS) is OK, as long as it’s available to anyone who will pay. This is no different than the current situation, where all major websites pay a content delivery network (CDN) such as Akamai, or pay to self-provision a CDN, in order to deliver popular content quickly and efficiently to their users. Those who don’t pay for CDNs are disadvantaged, just like those who don’t buy enough bandwidth for their network connections, but that’s their economic choice. … So, put aside all the conspiracy theories. If supporters of network neutrality don’t have room in their big tent for the view Andrew expressed, they are really in trouble.

Not a bad point. The argument over net neutrality has developed a lot over the past year, and anybody still afraid that an Internet provider is going to cut you off from your favorite blog is unable to keep up with the times.

One thing this means is that Dorgan-Snowe, the Senate bill kicked around since last year, is itself out-of-step with the current landscape. Will net neutrality supporters ask that it be withdrawn? Maybe not – but it would be in their best interest to do so.

We were surprised to see TechDirt’s over-the-top reaction to one of our posts this week, “Hands Off the Wireless Spectrum.” If our characterization of their position as “reluctant” was wrong, we apologize. But we have nothing to apologize for in terms of our legitimate and substantive role in this important public policy debate.

Our focus is on the nation’s broadband needs and on the facts. Facts are neither honest nor dishonest — they are the facts — and people can reach their own conclusions over what the facts mean in terms of whether we need new laws on net neutrality. We happen to think we don’t need new laws, because the facts we have been pointing out for some time are these:

• There is no problem to solve. Nobody has shown that there have been any meaningful breaches of basic neutrality on the web. Pro-regulation activists have tried to make case studies out of AOL, Cox and a Canadian telecom firm, and none of those bore out. (This may have something to do with why you never hear about those situations anymore). Broadband providers are committed to a robust, uncensored Internet and also aware of the consumer outcry if they provide anything less.

• Nobody has effectively argued that current laws are insufficient to deal with any possible market abuses that could potentially arise in the future.

• More fathers of the Internet, including Dave Farber and Robert Kahn, have come forward to express their reservations about imposing net neutrality laws than have come forward to support such laws. That is because regulation has the real potential of adverse unintended consequences.

• It is probable and even likely that in the not-too-distant-future, worldwide demand for broadband will exceed existing capacity. A massive new build-out to handle that capacity is needed, and net neutrality would effectively require broadband providers to pass the cost of that build-out on to consumers exclusively.

• The Internet has never been “neutral” in the way that net neutrality activists claim. There is no utopia to return to; the Net has always been a mishmash of “best effort delivery” networks and loose agreements. Having smart networks, which net neutrality regulation would prohibit, will help to rationalize and improve the existing situation.

• In Canada, where a similar debate is occurring, their CTC bureaucracy is so mired in red tape they can’t even remove online death threats against human rights attorney Richard Warman.

• Dorgan-Snowe’s first effect would be to freeze the broadband marketplace exactly where it is, disallowing not just theoretical abuses but new innovations, too.

• The United States ranks 16th worldwide in access to broadband Internet.

• Hands Off the Internet has always endorsed the four principles of net neutrality: Consumers are entitled to access the lawful Internet content of their choice; Consumers are entitled to run applications and use services of their choice, subject to the needs of law enforcement; Consumers are entitled to connect their choice of legal devices that do not harm the network; Consumers are entitled to competition among network providers, application and service providers, and content providers.” We even took out a print ad last year to say so.

TechDirt, maybe we’re not so different. If we agree that the basic ideas of net neutrality are inoffensive but mandating them into law could be a disastrous move, then there’s more to agree on than disagree

Hands Off the Internet campaign co-chair Chris Wolf participated in an FTC workshop on broadband issues, including the debate over “net neutrality” and what to do about the onrush of rapidly developing web services now threatening our already-outdated broadband networks. Well worth reading:

Prepared Remarks of Christopher Wolf
Co-Chair, Hands Off the Internet
Federal Trade Commission Public Workshop
“Broadband Connectivity Competition Policy”
February 14, 2007
Session on “What Framework Best Promotes
Competition and Consumer Welfare”

Good afternoon. My name is Christopher Wolf. I chair the Internet law practice group at the law firm of Proskauer Rose LLP and I co-chair the public policy advocacy group Hands Off the Internet. Hands Off the Internet is a nationwide coalition of Internet users and companies united in the belief that a regulatory hands-off policy has allowed the Internet to flourish thus far. We also believe that unnecessary regulation in the future will adversely affect the build-out of the Internet infrastructure that is vital to the coming demands for broadband capacity.So our answer to the question of today’s session “What Framework Best Promotes Competition and Consumer Welfare” is that the existing framework, the one that encourages and promotes innovation and progress, is the best one for the future of the Internet and for consumers using the Internet.In particular, the members of my coalition believe that adoption of so-called net neutrality regulation will have adverse consequences for innovation and competition in the market for broadband access by, among other things, making it more difficult for ISPs and other network operators to recoup their needed investments in broadband networks. There is zero evidence of harm to competition or consumers to warrant such regulation. Moreover, competitive conditions in the market for broadband access will protect consumers from the hypothetical harm theorized by net neutrality proponents. Beyond that, the antitrust and consumer protection laws, as well as current regulatory oversight, are sufficient to address any harms that may arise.As much as we might disagree over the need for new regulation, we agree completely with those on the other side of the regulatory question that no legal website or content should be blocked by a broadband provider. And we also share the belief that it is and should remain improper for service to be intentionally degraded. In addition, we fully support the use of existing law to pursue anti-competitive conduct if and when it occurs. The FCC, FTC, Department of Justice and state Attorneys General, as well as the private bar, all have tools at their disposal that may be used if anti-competitive or unfair tactics are engaged in by broadband providers. Existing law provides sufficient oversight, in our view, especially in light of the adverse unanticipated consequences of proposed new regulation.

For the rest of Wolf’s remarks, click the link below:

(more…)

If technology writer Sonia Arrison didn’t exist, we might have to invent her. Luckily, she most certainly exists and recently she penned a concise explanation of what’s behind the debate over so called “net neutrality.” Here’s one salient passage:

[FTC chair Deborah Platt Majoras is] right that market forces work incredibly well in discouraging online censorship and malevolent business practices. What critics need to remember is that consumers drive the marketplace, and companies, not the government, should be allowed to choose the business model that works best. Public demand has already driven the vast speed, openness and accessibility on the Internet, and will continue to do so without bureaucratic aid.

Now, as consumption of rich online multimedia grows, the next-generation Internet will require billions of dollars in investments to expand bandwidth capacity. With network providers taking significant risks in response to this demand, it would be a mistake for Congress to intervene and regulate in anticipation of problems. Politicians and public figures alike should realize the absurdity of advocating more red tape to keep the Internet free. …

If the loss of net neutrality principles was really a problem, advocates wouldn’t need to scare Americans in order to win their support. Using government regulation preemptively to shortchange business partners is a reckless abuse of the public policy process. New laws should be based on facts and reality, not fear and hypothetical situations.

The advocates of more regulation would have you think the Internet was not already free (as in speech, not as in beer). Their focus on hyping unrealistic scenarios has only made them less effective, and by now they’re overcommitted, and can’t change course — lucky for Internet users.

Yes, it was a few weeks ago now, but humor us: We just can’t get enough of that speech by FTC chair Deborah Platt Majoras, where she offered her considered opinion on whether new Internet regulations are necessary. (In sum: Not now.) Here’s one of her best bits:

“While I am sounding cautionary notes about new legislation, let me make clear that if broadband providers engage in anticompetitive conduct, we will not hesitate to act using our existing authority. … But I have to say, thus far, proponents of Net neutrality regulation have not come to us to explain where the market is failing or what anticompetitive conduct we should challenge.”

Got that? There are already government officials that Google, Amazon, Yahoo and their Internet allies could complain to if the telecom industry was acting unfairly.

More proof that they don’t have any serious complaint, they just want a handout. We hope that the Senate, when it reconvenes, takes Ms. Majoras’ thoughts into consideration.