Following up on its February workshop, the FTC recently released its report on Broadband Connectivity Competition Policy. CDT believes the report provides a generally balanced and comprehensive view of the Internet neutrality debate. We agree with the Commission that proceeding with caution and developing an in-depth understanding of the broadband marketplace are both essential to developing the appropriate policy in this area. However, as FTC Commissioner Jon Leibowitz noted in his concurring statement, the FTC’s conclusions about the adequacy of current law in addressing neutrality concerns are somewhat off-target.

The report explains the FTC’s view that the FTC’s authority to pursue both consumer protection and antitrust enforcement, together with existing FCC and DoJ jurisdiction, can sufficiently address current neutrality concerns. While this may be true in the consumer protection arena — where the FTC has authority over such issues as disclosure of prioritization practices to broadband Internet customers and the potential privacy issues raised by Internet packet inspection – it is less apparent with regards to antitrust. Moreover, in any event, it is not clear that consumer protection and antitrust principles taken together would address all potential neutrality concerns.

As CDT has pointed out in recent comments to the FCC, ISPs may engage in a wide range of packet management practices. While competition law may well be a useful tool in dealing with certain behaviors, such as outright blocking of competing services, it is not clear that other forms of discrimination, such as prioritizing affiliates’ traffic or degrading entire categories of traffic, can be adequately addressed by antitrust regulation. Indeed, as CDT has previously noted to the FTC, it would be more useful for the Internet neutrality debate to focus on the affirmative goal of preserving the Internet’s extraordinary ability to facilitate independent innovation and speech, rather than being limited to an analysis of anticompetitive practices. Some ISP practices may ultimately harm innovation without necessarily being “anticompetitive” in a legalistic sense.

We understand that the FTC may view these kinds of issues to be outside of its current authority, but that is exactly the point – some considerations that are fundamental to the Internet neutrality discussion may not be fully addressed by current law. In the FCC’s current net neutrality inquiry, several ISPs have stressed that the option of generating revenue and managing Internet traffic by charging content providers for prioritized routing should remain open to ISPs. We continue to question whether such behaviors will further the Internet as an open platform for speech and innovation. Whether the behaviors would rise to the level of an antitrust violation — even when their aggregate effect would be to undermine the Internet’s key characteristics of no gatekeepers and low barriers to entry – is debatable at best.

Furthermore, the FTC report fails to address the fact that lengthy antitrust litigation may have a particularly adverse effect on innovation in the Internet’s fast-paced environment. Because of the extended and burdensome nature of antitrust enforcement, CDT favors including an expedited procedure for handling complaints in any neutrality legislation that Congress may enact.

Another theme that runs through the FTC’s report is the need for more information about broadband practices and markets. CDT agrees that ongoing monitoring is essential. Agencies with jurisdiction over broadband may need to pose targeted questions to specific market players in order to elicit key information. This information gathering should not merely be a one-time effort, because broadband markets will continue to evolve. As we have said from the beginning of the Internet neutrality debate, monitoring the level of Internet bandwidth available, the prioritization and pricing practices in use, and the amount of ISP competition will be vital to ensuring that the Internet continues to thrive as new technologies and business models are implemented.

This entry was posted on Thursday, July 12th, 2007 at 3:11 pm and is filed under Internet Neutrality. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.