In late April, FCC chairman Ajit Pai announced at a press conference at the Newseum that his agency would revisit its 2015 determination that Title II of the Communications Act of 1934 gave it broad authority to regulate the Internet, including the ability to scrutinize online content, routine negotiations between firms, and cutting-edge services. The American public will hear howling all summer from D.C., New York, and San Francisco, as tech bloggers, lobbyists, late-night talk-show hosts, and leading newspapers attempt to spin the decision as some kind of corporate giveaway. They would be wise to ignore it, because Chairman Pai’s announcement is welcome news for Congress and anyone who believes that new Internet services and speech online should not require the approval of the nation’s media regulator.
The leading Internet-regulation advocates are outraged that President Trump’s FCC is loosening its grip on the web and restoring oversight to the country’s primary competition and consumer-protection agency, the Federal Trade Commission. They decry the loss of “net neutrality,” a tremendously fuzzy and misunderstood concept. When self-anointed “net neutrality” proponents use the term, they mean far-reaching Internet regulation by the FCC, the so-called Open Internet rules created when broadband service was determined to fall under Title II in 2015.
The period during which the Fairness Doctrine reigned offers an important lesson about agency overreach. Many advocates tried to abuse the use of these modest-sounding rules, but the DNC and the progressive press successfully coordinated to use them as a weapon against conservative and religious broadcasters. Complaints to the FCC rose from about 400 in 1966 to over 60,000 by 1970. Bill Ruder, former assistant secretary of commerce under President Kennedy, frankly noted that:
Our massive strategy was to use the Fairness Doctrine to challenge and harass right-wing broadcasters and hope that the challenges would be so costly to them that they would be inhibited and decide it was too expensive to continue.
Congress learned long ago that the FCC interprets silence about a new technology as an invitation to regulate. The FCC, for instance, nearly crushed the budding cable-TV industry with regulation in the 1960s because cable threatened to disrupt the FCC’s carefully planned national system of over-the-air broadcast TV. It took 20 years before Congress could bring itself to repeal much of the FCC’s anti-competitive cable regulations.
What happened to leaving the Internet ‘unfettered from Federal or State regulation’?
To prevent history from repeating itself, in 1996 a Republican Congress and President Bill Clinton amended the Communications Act of 1934 and announced a new U.S. policy, loud enough for the FCC and state public-utility commissioners to hear: The Internet — including “specifically a service or system that provides access to the Internet” — should be “unfettered from Federal or State regulation.”
That declaration hasn’t stopped FCC officials and pro-regulation advocates in the years since. The agency’s areas of regulation — telegraph, telephone, broadcast-TV, and cable-TV providers — are dead, dying, or using Internet technology to reinvent themselves. With the AT&T monopoly broken up, the Clinton administration welcomed the prospect of a diminished future role for the FCC, and even progressive scholars such as Professor Lawrence Lessig called on Congress to “demolish” the agency and replace its antiquated laws with something more modern.
FCC defenders inside and outside the agency realized that they needed new problems to “solve.” The Internet, that powerful incubator for new media, music, videos, and TV shows, presented an obvious target. Media-regulation advocates, while appreciating the Internet’s democratic possibilities, have long regarded the prevailing Internet culture, like early TV and radio, as too libertarian, too disruptive, and too trollish to leave to market forces. “Net neutrality,” invented and coined by Professor Tim Wu in a 2003 technology-law journal, offered media advocates and regulators the technical-sounding justification needed to bring the Internet’s major firms to heel.
Around 2005, when it was clear the FCC had little interest in regulating the Internet and Internet providers, the “net neutrality” movement leapt into action. Small disputes between broadband and Web companies, incidental and expected in any young, fast-moving industry, suddenly became national scandals, and D.C.-area activists started inviting the FCC to intervene, even after the tech companies had resolved their disputes.
After courts struck down the FCC’s previous two attempts to regulate Internet providers, the reticent FCC, pushed by President Obama after the brutal 2014 midterms, decided to regulate Internet providers under Title II of the Communications Act of 1934. Classification as a Title II “telecommunications service” means that Internet providers become subject to reams of federal and state telecom laws, the same laws regulating telephone and telegraph companies, many of them dating back 80 years.
Perhaps more alarming is the extreme, and widespread, deference of courts to the administrative state. In a 2–1 decision last year, the D.C. Circuit upheld the classification of “broadband Internet access service” as a telecommunications service. Title II laws and regulations, largely drawn up to restrain the government-blessed AT&T long-distance monopoly, constitute one of the most restrictive regulatory regimes in the country. The substance of the new rules is almost immaterial, save one, the “general conduct” rule, which with vague language swallows all the others and allows the agency to investigate and prohibit any online service, app, or business practice that it determines is “unreasonable.” When asked which activities the Internet-conduct standard could regulate, the FCC’s then-Democratic chairman replied that “we don’t really know.”
What happened to leaving the Internet “unfettered from Federal or State regulation”? Is there any combination of words Congress could string together that would prevent a determined regulator from using Title II against an Internet provider?
Any student of FCC history knows roughly how this story will end if the rules are not repealed. The dominant Web and Internet providers will muddle through, perhaps more profitable but also more sclerotic and risk-averse. Their armies of attorneys, many of whom used to work at the FCC, will closely read the thousands of pages of orders, declaratory rulings, and press releases to anticipate shifting legal winds. Smaller providers and mom-and-pop tech startups, focused on customers and services rather than compliance, will be left in the dark.
At the Newseum press conference in April, one of these imperiled innovators told his story before introducing Chairman Pai to the microphone. Garrett Johnson and two friends created an enterprise-communications app in Florida and managed to gain funding for it from Ycombinator. His former company was compelled to register as a common carrier with the FCC, complete some 50 hours of paperwork annually, and pay fees and respond to inquiries from state public-utility commissions. Internet services and apps offer an open frontier where anyone with a good idea and persistence can find success. No startup or broadband provider should spend precious time and capital navigating the Title II labyrinth. Hopefully, the FCC will ignore the noise and restore the Internet, free of federal regulation and special interests.
— Brent Skorup is an attorney and a research fellow at the Mercatus Center at George Mason University.