Obama Tech Plans at Risk From FCC and GOP Congress

President Obama's State of the Union speech certainly hit quite a few high notes for the tech community. There were a half dozen mentions of the internet, shout-outs to Facebook and Google and a mention of better use of wireless technology.

He certainly set an ambitious goal: "Within the next five years, we'll make it possible for businesses to deploy the next generation of high-speed wireless coverage to 98 percent of all Americans." What he didn't say was that his Federal Communications Commission (FCC) chairman, Julius Genachowski, has sentenced all of those wireless users to a second-class Internet experience by leaving them out of the already vague Net Neutrality order the FCC issued in December.

By taking the short cut to Net Neutrality, Genachowski bought off AT&T, but put into legal jeopardy not only Obama's National Wireless Initiative. He also the president's vision of a broadband-charged American economy. There are considerable questions whether the FCC has jurisdiction over high-speed broadband, wired or wireless, and it would need that authority to implement any new programs. Had the Commission simply reclaimed its authority over broadband, the FCC would have been on firm legal ground.

Obama's vision will be difficult to achieve given the FCC's reticence and the vehement, if ill-informed criticism of the agency from Capitol Hill that could stifle progress toward achieving the president's goals.

In a couple of weeks, the new Republican majority in the House will start hearings on the FCC Net Neutrality policy with an eye toward passing legislation to nullify the rules, with the blowback also sabotaging Obama's high-tech vision if the GOP succeeds in keeping the FCC away from authority over broadband. The House majority already officially opened its campaign against a free and open Internet, with the two leading lights, Rep. Marsha Blackburn (Tenn.) and Mary Bono Mack (Cal.) out in front with speeches and petitions.

GOP Commissioners Back Net Neutrality

But before we get to them, let's share a little secret. Don't tell Blackburn or Bono Mack, but two Republicans have already voted for Net Neutrality. They can fudge it all they want, but the two Republicans on the FCC, Commissioners Robert McDowell and Meredith Atwell Baker, cast their votes for the Comcast takeover of NBC. And in that takeover order was a merger condition, enforceable by the FCC, for Comcast to run a non-discriminatory, neutral network according to the relatively nebulous FCC rules for seven years, even if those rules are overturned in court.

McDowell and Baker tried to qualify away their support in their brief, five-paragraph, one-page statement, calling the merger conditions generally "excessively coercive and lengthy," among other adjectives. (Note: Commissioner Michael Copps' dissent was three pages long.) They even "concurred" rather than actually voting "yes" for the merger.

The FCC, attentive to the GOP sensitivities, didn't even mention the Net Neutrality condition in its news release on the merger. No matter. The bottom line is that the Republican commissioners voted to require the country's largest Internet Service Provider to follow Net Neutrality rules for seven years in order to allow the largest media takeover in history to go through. OMG.

And how did Wall Street, the bastion of capitalism, take to the news that Comcast's broadband access service, worth $8 billion, would be subject to Net Neutrality rules for the next seven years? Comcast stock went up all last week after the approvals of the merger, with investors apparently not worried about a "government takeover of the Internet."

Hill Republicans Oppose Net Neutrality

Unfortunately, Blackburn and Bono Mack, along with their other House colleagues, are not persuaded by either the Republican FCC votes, Comcast's acceptance of conditions that failed to cause the end of the world as we know it in past telecom mergers, nor by the collective Wall Street yawn. Instead, they declare war.

Bono Mack has on her campaign website a "Petition to Stop the Government Takeover of the Internet." All the stock phrasing is there. Let's take inventory. "Unaccountable boards, commissions and bureaucrats." Check. "Regulate the Internet." Check. "Government overreach and intrusion." Check. Threats to free markets, innovation and technology. Check, check, check. Regulations "forced on the private sector." Check. None of it bears any relation to reality, but it sounds good to a certain audience.

The most fundamental misunderstanding, of course, is that the FCC wants to take over the Internet. It doesn't. The talking point, while appropriately inflammatory for the target audience, is simply wrong. There is no "takeover" of the Internet. A "takeover" raises the spectre of government control of content, directing which companies, sites and services can operate and which can't. Nothing like that is even remotely happening, and it is irresponsible to suggest that it is. It's just the opposite. The future of innovation and technology and personal freedom have been fostered by an open Internet -- the kind that Bono Mack doesn't want to have protections.

The "government takeover of the Internet" nonsense only helps the incumbent Internet Service Providers (ISPs) take control of the Internet, but few in Congress seem concerned about that. Obama was right on target when he pointed out: "Our infrastructure used to be the best, but our lead has slipped.  South Korean homes now have greater Internet access than we do."

The incumbent protectors in Congress are doing a great job helping us slip further behind, but are doing nothing to help the U.S. get ahead. According to the latest "State of the Internet" quarterly report from Akamai, the U.S. ranks 12th in broadband speeds, with South Korea leading the way. Of the top cities with highest broadband speeds, South Korea claimed 12 (including the top 11), Japan 8, and the best U.S. city was 57th. The picture isn't pretty, and it gets uglier when one realizes that the slippage comes when the broadband carriers are totally deregulated. There is no excuse for the regulatory structure holding them back. There are no regulatory incentives not to invest, thus proving the point that crimping the FCC, as the Congressional opponents want to do, has nothing to do with broadband performance.

Blackburn, on the other hand, was a keynote speaker at the prestigious State of the Net conference, and delivered a seven-page speech. She took the same rhetorical path, and added a few twists of her own, while accidentally touching on the reality of what the FCC does. Her speech is filled with inaccuracies, contradictions, and misunderstandings.

Congress Unclear on Its Role

The most fundamental contradiction is that government should stay out of the Internet -- unless we (Congress) say it's important. At the same time that Blackburn calls for "small government," etc., she also wants government protection for intellectual property. In the past, she has chastised the FCC for not including more protections in the National Broadband Plan. The FCC has absolutely no jurisdiction over intellectual property, and yet here comes Blackburn to expand that jurisdiction.

She touches on one of the great contradictions when it comes to what Congress wants the FCC to do. Not long ago, 90-some members of Congress signed a letter to the FCC saying the Commission shouldn't act to protect Internet consumers in an area clearly under the agency's jurisdiction. Not long ago, 90-some members of Congress signed a letter to the FCC saying the Commission should hurry up and approve $30 billion Comcast takeover of NBC. Why should the FCC not do one and not the other? No rational reason, except perhaps for the money and power behind both appeals.

To be fair, she is inadvertently clear about what the FCC does and is supposed to do. In her speech, Blackburn recognized that the FCC regulates the "means of transmission," which she incorrectly calls the "least important part" of electronic commerce. It's good that she accepts what the FCC can do. It's not good to see transmission as the "least important" part. It's the most important. If one company, say Verizon, can wedge itself between customer and the customer's transaction, then true commerce, and Internet freedom, is at risk.

If she concedes the FCC regulates transmission, then what's the problem with the Commission setting rules for transmission that protect consumer rights? That's why FCC jurisdiction over transmission is important. The Commission isn't assuming it regulates "online commerce," as Blackburn suggests. It is sticking to what it can do under the law. No one has said the FCC wants to take jurisdiction over online commerce, nor to the platforms where commerce takes place. That's simply a false argument trotted out time and time again.

None of these fake arguments would be important, except to the extent that Blackburn, Bono and others are going to try to write legislation to keep the FCC from protecting consumers who use high-speed Internet access services. They want to nullify the FCC's authority over broadband. If that happens, then the good things that FCC opponents say they want to happen -- the maximum freedom for online commerce, innovation -- will constantly be under threat with no remedy in sight. And any FCC plans to expand broadband deployment will be jeopardized.

A neutral Internet was good enough for the two Republicans on the FCC to swallow. It was good enough for Comcast and AT&T to agree to. It should be enough for their colleagues on Congressional forces would let it go forward. Capitol Hill as well. A broadband-charged economy is good for everyone. If only those same