The Net Neutrality Boomerang Comes Full Circle

Last week, Sen. Al Franken (D-MN) fulfilled a prophecy of net neutrality critics. Be careful what you wish for, many of us warned, when much of Silicon Valley urged regulation of internet service providers (ISPs). It would be technically, legally, and politically infeasible to regulate just one slice of the internet. Writing in The Wall Street Journal in 2009, for example, I said that if net neutrality followed its logical path, the policy “could expand bureaucratic oversight to every bit, switch and business plan on the Internet.”

Sen. Al Franken (D-MN), REUTERS.

Now, writing in The Guardian, Sen. Franken has called for regulators to expand new “Title II” rules, written in 2015 for ISPs, and apply them to Silicon Valley tech firms as well:

As tech giants become a new kind of internet gatekeeper, I believe the same basic principles of net neutrality should apply here: no one company should have the power to pick and choose which content reaches consumers and which doesn’t. And Facebook, Google, and Amazon — like ISPs — should be “neutral” in their treatment of the flow of lawful information and commerce on their platforms.

At least the senator is consistent. From the start, one of net neutrality’s big conceptual problems was that it was not neutral — legally, technically, or economically. Its advocates insisted it should apply only to one portion of the internet and only one type of firm: those that delivered broadband connectivity in the “last mile.” But the very nature of a sprawling, dynamic, hyperconnected internet made the possibility of neatly segregating these firms unlikely.

In a 2013 report called Digital Dynamism, I attempted to describe the deeply interconnected industry:

The dynamism of the Internet ecosystem is its chief virtue. Infrastructure, services, and content are produced by an ever wider array of firms and platforms in overlapping and constantly shifting markets. . . .

Google, Amazon, Apple, Microsoft, Facebook, and Netflix are today major Internet infrastructure companies. We used to think of them as, respectively, search, ecommerce, computer, software, social, and motion-picture-delivery firms. But today they build and operate vast data farms and fiber networks. Several build mobile devices. Several build operating systems and browsers. All are competing to be the hub — or at least a hub — of the consumer’s digital life. Each, however, approaches the converged digital world from a different angle and with a distinct business model.

This is possible in large part because the network — the Internet — supplies a standard infrastructure that supports multifaceted content, services, and devices.

The traditional telecom companies are of course a central factor in the digital equation. Here, too, the field is shifting. Cable disrupted telecom through broadband cable modem services, but now cable is being disrupted by free content from YouTube and subscription services like Netflix. Mobile is a massively successful new business, yet it is cannibalizing wireline services, with further disruptions from Skype and other IP communications apps. Mobile service providers, moreover, used to control the handset market, but today handsets have become mobile computers that wield their own substantial power with consumers. The iPhone, in other words, reorganized the whole mobile industry. The bottom line is that the competitive and cooperative relationships among all these companies are complex and dynamic.

Several points: (1) All this innovation happened without any net neutrality regulation; (2) digital technologies tend to swiftly merge together, or integrate, and then break apart just as fast, or modularize; (3) applying intrusive rules to only certain technologies, firms, services, or links of the network but not to others, who may have even more “gate keeping” power, would be not only unfair and ineffective but also difficult to administer technically; and (4) yet applying these rules neutrally across the entire system would be even worse. The internet is one industry that has actually produced explosive growth and innovation, without Washington’s help.

In his intellectual consistency, Franken has shown why the extreme net neutrality agenda, embodied in Title II, is such a bad idea.