CTIA Makes Economic Argument Against Net Neutrality Rules

A major theme of the FCC under Chairman Julius Genachowski, voiced again Thursday (CD Nov 5 p2), is that broadband is important for the economy and job growth. Imposing net neutrality rules would work against wireless deployment, which “brings incredible benefit to the United States economy,” CTIA said.

CTIA quoted directly from two Democrats in its reply comments. “As Senator Evan Bayh [D-Ind.] said in a letter to the New York Times this week, ‘every policy must be viewed through a single prism: does it help the economy grow?'” the group noted. “For a market and ecosystem such as the wireless that is driving investment, innovation and growth, the application of stifling new rules fails that test.” CTIA also cited recent comments by former FCC Chairman Reed Hundt, Genachowski’s old boss. Hundt said in a recent appearance on C-SPAN’s The Communicators, “Because wireless is robustly competitive, it is the least regulated of all communications media in the U.S. That is not a coincidence."

T-Mobile made a similar economic argument against imposing net neutrality rules on wireless. “T-Mobile urges the Commission to tread lightly in this area and recognize that any decisions shifting away from long-standing deregulatory policies could also have a significant impact on the global Internet marketplace,” it said. Wireless carriers need to be allowed to manage their networks for a “host of … legitimate reasons” beyond avoiding congestion, the company said. These include “protecting against network security threats and unforeseen vulnerabilities; network integrity, ‘noise’ concerns, and other technical challenges; consumer privacy concerns; and unexpected usage patterns that degrade service irrespective of the bandwidth used."

AT&T said the ability to offer specialized services provides incentives for carriers to continue to invest in their networks. “Only by preserving those incentives can the Commission hope to generate the $350 billion in private risk capital it projects will be necessary to fulfill its ambitious broadband agenda,” the company said. “And only by preserving those incentives can the Commission maintain the broadband sector as an outperforming source of jobs and innovation in a still-struggling American economy.”

"Although the same chorus of special interests continues to seek regulation of any and all broadband services, these commenters present no actual evidence of a problem that would justify such regulation,” Verizon and Verizon Wireless said. They said it would make sense to hold that wireline and wireless should face the same rules, if they were not so different. “The constraints wireless broadband providers face … are unique to wireless,” the companies said. “Wireline providers do not confront the challenges brought on by mobility, the same form of capacity constraints, or radiofrequency interference issues."

The FCC’s premise in seeking further comment on rules for wireless and specialized services was questioned by Public Knowledge, the Benton Foundation, Center for Media Justice, Consumers Union, Media Access Project, New America Foundation. “Rather, as this record has shown, parties have well developed but conflicting recommendations which the Commission must act swiftly to resolve,” they said. “The Public Notice posits that differences among parties have narrowed with respect to the other issues raised in these dockets, implying that further rounds of comments on these two issues could lead to a consensus. However, rather than waiting for consensus, the Public Interest Commenters urge the Commission to move swiftly ahead in completing this proceeding based on the current record.”

Free Press asked that wireless not be exempt from net neutrality rules. The group noted that the public notice sought real-world guidance on the “proper scope” of possible exemptions from net neutrality rules. “Unfortunately, many of the filings in this proceeding offer no such elaborations, only misdirection and empty rhetoric,” Free Press said. “These filers oppose any oversight in this space altogether, and consequently seek unlimited and open-ended exemptions with the intention of undermining the Commission’s purpose of protecting consumers, promoting competition, and facilitating innovation on the open Internet.” Free Press agreed with the other non-profit groups that consensus is unlikely: “If this proceeding has demonstrated anything conclusively, it is that further proceedings will offer little, if any, additional clarity."

The FCC shouldn’t be taken in by public interest groups’ arguments that tough net neutrality mandates are critical to a robust Internet, the NCTA said. “When the Commission chose to classify the provision of broadband Internet access service as an information service outside the scope of Title II regulation, many of the same parties wrung their hands and predicted ’the end of the Internet’ as we then knew it.” Almost all parties to the net neutrality dialogue in the past year have “come to realize that prioritizing certain services is not only necessary for the Internet to function efficiently, but also is beneficial to consumers of broadband services,” MPAA said. “Indeed, a consensus has emerged that some level of prioritization is needed as part of any Internet service -- even within the ‘best-efforts’ Internet."

NCTA criticized the position of AT&T, Verizon and other carriers that the FCC lacks authority to impose net neutrality rules on them, tied its rebuttal in part to the economic harm it said the rules would cause. The association agreed that there are “numerous legal infirmities to the Commission’s proposal” to impose net neutrality. Wireless broadband is an information service like any other high-speed Internet service, and “if anything, wireless providers are more at risk of being made subject to such requirements than are wireline providers,” it said, citing current Title III rules on wireless broadband. “To the extent that previous decisions not to impose net neutrality regulations created investment-backed expectations that would be impermissibly undermined and devalued by a reversal of course, such constraints would apply at least as strongly, if not more so, to regulation of wireline ISPs as to wireless ISPs."

MPAA highlighted what it called a spectrum crunch faced by wireless providers, asking the commission to keep in mind that their networks confront “unique challenges.” That makes it especially hard to provide the bit rates needed for mobile video, the association said. “To ensure a high-quality viewing experience, therefore, wireless providers must be extra vigilant when managing their networks, especially when particular devices or applications result in excessive bandwidth consumption.” MPAA said the agency shouldn’t adopt “cumbersome regulations that could restrict the ability of wireless providers to detect or deter copyright violations or could prevent them from taking reasonable steps to address claims that copyrighted content is being transferred unlawfully.”