August 21, 2006 2:44 PM PDT
FTC chief critiques Net neutrality
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Deborah Platt Majoras, the FTC's Republican chairman, said extensive Net neutrality legislation currently pending in the U.S. Senate is unnecessary because there has been no demonstrated harm to consumers, that normal market forces would likely prevent any problems, and that new laws would cause more problems than they solve.
"I ask myself whether consumers will stand for an Internet that suddenly imposes restrictions on their ability to freely explore the Internet or does not provide for the choices they want," Majoras told a luncheon audience at the Progress and Freedom Foundation's annual conference here.
Majoras' comments come as the Senate is considering a massive legislative proposal to rewrite telecommunications laws. In June, a Senate panel narrowly rejected an amendment that would have slapped strict regulations on broadband providers. Sen. Ron Wyden, an Oregon Democrat, has said he'll try to block a floor vote on the measure unless that amendment is adopted.
The concept of network neutrality, which generally means that all Internet sites must be treated equally, has drawn a list of high-profile backers, from actress Alyssa Milano to Vint Cerf, one of the technical pioneers of the Internet.
It has also led to a political rift between big Internet companies--such as Google and Yahoo that back it--and telecom companies that oppose what they view as onerous new federal regulations. In the last few months, it has become a partisan issue, with Republicans siding with broadband providers. (All the Democrats on the Senate Commerce Committee voted for the unsuccessful amendment in June).
Because the FTC shares enforcement authority with the Federal Communications Commission over certain types of deceptive practices by broadband providers, Majoras' remarks could nudge some senators who have been cautious supporters of Net neutrality to a more laissez-faire position.
Majoras also took a swipe at Google and other Internet companies that support extensive FCC regulation, saying she was surprised "at how quickly so many of our nation's successful firms have jumped in to urge the government to regulate." Business executives, she said, tend to talk a lot about the "free market" but then "turn to government to seek protection" when they're afraid of a marketplace disadvantage.
A new Internet Access Task Force at the FTC will evaluate Net neutrality proposals in detail, Majoras said, and present a report with its conclusions.
Comcast, which has opposed extensive Net neutrality regulations, welcomed Majoras's remarks, calling them "a major constructive contribution to the debate on network neutrality" that "properly places the burden of proof on those who believe government regulation is needed in this area."
The Public Knowledge advocacy group, which often supports additional regulation of large telecommunications companies, took issue with Majoras's comments, saying 98 percent of broadband customers receive their service from either the telephone company or the cable company. "There are no market forces at work here, much as Chairman Majoras wishes there to be," the group said in a statement.
Even if the Senate bill is never enacted (a version has been approved by the House of Representatives), federal agencies appear to have substantial power to punish broadband providers that block Web sites or engage in anticompetitive business practices. One small group of broadband providers, for instance, blocked voice over Internet Protocol (VoIP) calls but then quickly backed down in March 2005 when the FCC became involved.
Feds' existing Net neutrality enforcement
While the FCC subsequently changed how it treats broadband providers, it appears to retain authority to police similar wrongdoing.
In the Brand X case, U.S. Supreme Court Justice Clarence Thomas wrote that the FCC "remains free to impose special regulatory duties on facilities-based ISPs." FCC Commissioner Michael Copps said in May that the FCC has the power to ensure "there's not discrimination against (sites) that are not affiliated with the network owners."
Also, as the FTC told Congress in June, it has the power to regulate "anticompetitive, deceptive, or unfair" practices by practically any kind of broadband provider.
FTC Chairman Majoras said on Monday that her agency would use its existing power to police Net neutrality violations. "We will not hesitate to act," she said.
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