We Can't Rely on the FTC to Defend Net Neutrality

[Len]

The agency doesn’t have the same kind of teeth for defending an open internet.

Ajit Pai doesn’t want Cher to scare you; the chairman of the the Federal Communications Commission swears everything will be okay even if his agency repeals net neutrality rules next month. Speaking out against net neutrality supporters, including Cher who has tweeted about the issue, Pai says the Federal Trade Commission is well-placed to preserve net neutrality. It’s a comforting thought, but don’t get too comfortable just yet.

Ever since the FCC first proposed scrapping its net neutrality rules earlier this year, proponents of the move have tried to quell fears by insisting that a free and open internet will prevail. Pai and his supporters have said net neutrality will be upheld through a competitive market and the watchful eye of the FTC, which will be tasked with regulating ISPs if the FCC ditches its current rules.

But along with many other arguments from Pai’s camp—like the frequently disproven assertion that net neutrality rules have stifled telecom investment—this belief that the FTC will be able to fill in for the FCC doesn’t hold much water. When it comes to net neutrality, the FTC is ill-equipped to regulate the industry in a number of ways, and all we have to do is look at the the way ISPs used to act.

“Before we had rules, we did see ISPs blocking things like VoIP, blocking tethering applications so they could extract more from consumers in monthly fees, blocking peer-to-peer sharing applications,” Laura Moy, the deputy director of the Georgetown Law Center on Privacy and Technology, told the House Committee on Energy and Commerce Wednesday during a hearing on consumer privacy. “We certainly have seen examples in the past of ISPs using their power as gatekeepers to prevent users from using services that they may well want to use.”

There was the time AT&T tried to block its subscribers with iPhones from using Facetime unless they paid an additional fee. Or the time Comcast used covert technology to limit users from accessing peer-to-peer sharing networks, including BitTorrent. Or when Verizon blocked texts from a pro-choice organization to supporters. There are multiple examples of ISPs sidestepping or ignoring net neutrality prior to the regulations, which is what we would return to if the FCC scraps the rules.

Supporters claim these examples only bolster their argument, because in each case the FTC or another entity stepped in to correct the company, which is true, but a far departure from having established, enforceable rules upholding the most basic ideals of net neutrality: no throttling, no censoring, and no fast lanes.

One would hope that the federal agency tasked with policing net neutrality would be able to create new regulations in response to new indiscretions. But unlike the FCC, the FTC has little to no ability to create its own regulations. It also, by design, only acts after the fact, which hardly protects consumers, particularly if the shady behavior isn’t noticed right away by the powers that be. And in almost all cases, the FTC only cracks down when a company has deceived its customers, which won’t always apply in net neutrality cases.

“As a practical matter, the FTC almost never enforces unless it determines that there is deception that has occurred,” Moy said. “There’s very little in the way of teeth when it comes to the FTC’s authority.”

If that’s not convincing enough, there’s also the tricky matter of the fact that nobody's even sure if the FTC is allowed to regulate ISPs at all. A pending case in the Ninth Circuit Court of Appeals between the FTC and AT&T will determine if common carriers—which currently includes ISPs—should be regulated under the FTC or the FCC.

Pai’s main argument is that the net neutrality rules aren’t needed, and that they only serve to stifle innovation, saying the costs outweigh any benefits.

“The approach we’ve been living under for the last couple of years is a preemptive, mother-knows-best, heavy set of regulations across the entire industry,” Pai told TechFreedom, a group backed by the National Cable and Telecommunications Association. “For me, at least, those unintended consequences of heavy-handed regulations are quite severe.”

But without a preemptive approach, we’ll be left with only reactionary measures that fail to define net neutrality and are dolled out by an agency with little means to provide real change.

“After-the-fact enforcement can be helpful, but an enforcement-only regime does not always create clarity,” Moy told the committee. “And because it comes only after a problem has occurred, it does not necessarily protect consumers from the problem in the first place.”