Net Neutrality: Who Should Control the Internet?

Ideas in Action with Jim Glassman is a new half-hour weekly series on ideas and their consequences.
Over the past decade, the Internet has expanded enormously, changing the lives of Americans. Unlike 
other forms of communication, like telephones and television, the Internet has expanded largely without 
regulation. But that may be changing. As the use of videos increase, the companies that provide the 
pipelines for Internet access may be running out of space. Many people and businesses worry that 
these companies will begin to limit their access to the Internet in a way it's never been limited before. 
How to resolve this issue is a high-stakes Washington question, with billions of dollars and some very 
important principles - like free speech and free enterprise - at stake.

Transcript

JIM GLASSMAN:

Welcome to Ideas in Action a television series about ideas and their consequences, I'm Jim Glassman. This week: Net Neutrality. Who should control the Internet? Unlike telephones, television and other forms of communication, the Internet has expanded largely without regulation. But that maybe changing. Joining me to explore that topic are Mike McCurry, he's co-chair of Arts+Labs a coalition of technology and communications companies; Craig Aaron, he's the managing director of Free Press where he leads their program's advocacy and public education war; and Cecilia Kang, she is the national technology reporter for the Washington Post. The topic this week: Net Neutrality, can the net really be neutral? This is Ideas in Action. 

ANNOUNCER:

Funding for Ideas in Action is provided by Investor's Business Daily. Every stock market cycle is led by America's never ending stream of innovative new companies and inventions. Investor's Business Daily helps investors find these new leaders as they emerge. More information is available at Investors.com

JIM GLASSMAN:

Over the past decade the Internet has grown enormously. Changing the lives of Americans. Companies that provide the pipelines for Internet access maybe running out of space and bandwidth on their networks as the use of Internet video increases. Many people and businesses now worry that these companies will limit their access to the Internet in a way that it's never been limited before. How to resolve this issue is a high stakes Washington question with billions of dollars and some very important principles like free speech and free enterprise at stake. Craig what's a brief definition of "net neutrality?"

CRAIG AARON

Well, net neutrality is the fundamental principle that's been part of the Internet since it's inception and basically it says when you go online you can go wherever you want, do whatever you want, download whatever you want, and it's not up to your phone or cable company to decide which websites work and which don't. Very simply, net neutrality means no discrimination. 

JIM GLASSMAN

So Mike, so what's wrong with that?

MIKE MCCURRY

Nothing. I think that most people would agree that's the principle --

JIM GLASSMAN

-- We can all go home?

MIKE MCCURRY

-- We can all go home now. The question is how do you enforce those principles. And I think that's where the debate begins - it's what's the role of government, what's the role of the private sector, what do companies need to do to have in place so that they can get some return on the investment they make to make all these wonderful things happen that we want to see happen on the Internet? That's where the debate gets a little more tricky. 

JIM GLASSMAN 

So Cecilia, what is the argument that's going on in Washington now from kind of a regulatory point of view?

CECILIA KANG

Sure. Well on net neutrality things have become more complicated particularly as the Internet has become available on more platforms. So more questions emerge. Should net neutrality and the idea of a federal regulatory body imposing rules also apply to your cell phone and what applications you can download. What is the role of the federal government at all in enforcing rules or creating rules on how the next big communications medium for our generation going forward, which is the Internet, what should the role of the federal government be? And there's -- these are really tricky questions. The details can mean a lot. Not only for the consumer but also for businesses, they have a lot of money at stake. 

JIM GLASSMAN

Craig, you would agree that there's more and more use of bandwidth, the stuff on which the Internet travels, and at some point -- it becomes quite limited -- it's a scarce commodity. It's not like everybody can use it for whatever they want. So somebody's got to make a decision about how this scarce commodity is allocated and what about the notion that the companies who actually own it should be able to have a say in making those decisions? 

CRAIG AARON

Well I think the problem is companies abusing their role. We have companies that bring that Internet pipe into your home and certainly bandwidth maybe at certain times is scarce but we're seeing, you know, every few years a lot more bandwidth and a lot more usage but so far our bandwidth has been able to meet that usage. So what I'd like to see encouraged is investment in that bandwidth.

 That does -- we don't want to see companies trying to profit from that scarcity. So Verizon can't decide, 'Well I'm going to block Internet phone calls, I've decided that that's too much bandwidth,' and Comcast can't say, 'Well here comes a new independent video service well we've decided we're going to block that because, well, it's too much traffic and it just happens to compete with what we're doing,' So --

JIM GLASSMAN

-- And are they doing that now?

CRAIG AARON

Well there are --certainly have been examples. For example, Comcast was caught interfering with lawful file sharing traffic called Bit Torrent. They were actually caught blocking those transmissions, actually impersonating their own customers to disconnect people who were trying to share things in the public domain. 

JIM GLASSMAN

And -- but what happened in that case? 

MIKE MCCURRY

Well you're --you're going to be hard pressed to find other instances. Now Bit Torrent is also the source of a lot of illegal trafficking, which is one of the things clogging the Internet. But I want to go back to that fundamental point. Is there really any harm being done here? Is there any real problem that requires the federal government to step in in an unprecedented way to begin to regulate traffic? So the question is, if we're going to shape traffic you know, who should be in charge of running that? Can the federal government really make those kinds of decisions? I don't think it's capable of doing that. 

CRAIG AARON

What the federal government can do is they can ensure that consumers are in charge of those decisions and that consumers can decide if they think certain kinds of things should be prioritized or others shouldn't and that's where that should rest. 

MIKE MCCURRY

I fully agree.

CRAIG AARON

-- But we need the watchdog on the beat to hold these companies accountable.

MIKE MCCURRY

I fully agree, but shouldn't a consumer be willing to sort of say, 'Look I want to pay for a better quality of service. I care about what kind of videos I get or I do a lot of gaming and I do that kind of work on the Internet. I don't just use it to go to websites and send email. So why shouldn't I be allowed as a consumer to pay a premium to get a better quality of service like that?' What's wrong with that?

CRAIG AARON

I think you can already do that as a consumer and you will continue to be able to do it --

MIKE MCCURRY

-- Well actually

CRAIG ARRON

-- The problem becomes

MIKE MCCURRY

-- That would not be legal [OVERTALK]

CRAIG AARON

--That's not true.

JIM GLASSMAN

I want to bring Cecilia into this just let me add one thing to what --to what Mike was saying. What about the providers themselves? In other words, if you are a company like let's say Netflix, and you're using gigantic amounts of bandwidth, doesn't it make sense that you might have to pay more for that?

CRAIG AARON

Right. It does and you do. Google's monthly Internet bill, or Netflix's monthly Internet bill isn't sixty dollars a month. You know they've got huge servers and they're paying a lot of money to the broadband providers to get their things online. And we also have to keep in mind why do we go online? We go online because of all of the great content that's out there, all of the amazing choices. Because once you're online you can go wherever you want. 

That's what we're trying to preserve. And I think why we need the FCC, why we need the government to be involved, is because every CEO of all of the major internet service providers have been very clear that given the opportunity they will start building a fast lane for their own products and services and leaving the rest of us on that cyber equivalent of a winding dirt road.

JIM GLASSMAN

Ok but before we get too deeply into the weeds I'm going to turn to Cecilia to describe for us who the stakeholders are here, we've talked about providers and consumers and the FCC. What's going on here and what's the argument about?

CECILIA KANG

I think you've named actually --you touched on the big ones. This is --the argument actually touches --is at the intersection of consumer use and issues, it's at the intersection of --communications and internet content providers so publishers like The Washington Post, like others, who are online they all have a stake in it. Those who are most actively involved in Washington I would probably outline them as the carriers, the ones that are providing --that you provide your --you pay your monthly service fee to, that would be cable provider, a telecomm provider --

JIM GLASSMAN

--Comcast

CECILIA KANG

A Comcast, an AT&T, a Verizon, a satellite provider, wireless provider. So they by and large, most of those providers say that they do not think that the federal government should impose or enforce principles -- that are already at play. Then there are some of the content companies. Those who are applications, those who rise above, who ride on the network. We call these the edge companies. That would include Google, and Skype, and Facebook, and Amazon. Some of the brand name websites that you visit and the applications you download onto your phones. They --most of those companies believe that there is a role for the federal government. The role for the FCC to really be a watch dog in this category. Then there are consumer groups like Craig's who are speaking for the public who believe that if they weren't actually involved and part of the dialogue then --an example like Comcast and the blocking of Bit Torrent would never come to light.

JIM GLASSMAN

And in the Bit Torrent case of course that went to court and Comcast won that case. The FCC wants, it appears anyway, wants more authority to regulate, some people would say regulate the Internet, certainly regulate the Internet carriers. Isn't that correct? And they want to be able to regulate them the way that they regulate the phone companies as though they were so called common carriers. 

CECILIA KANG

That's right. So what's happening is that particular decision --it all comes back to Comcast and Bit Torrent often times when this argument right now in that last March a federal appeals court decided that the FCC, in sanctioning Comcast they took up this case, a complaint, that in sanctioning they faced --the federal appeals court said that the FCC overstepped its authority. 

It made a decision on broadband Internet service and it had questionable authority to do so. Which then presented the bigger problem that this current FCC chairman who wants to be the chairman of broadband services, the next big medium of communications, all of his plans were sort of thrown into question. Not all, but most of those plans.

JIM GLASSMAN

Right and so he wants to regulate --

CECILIA KANG

Yes

JIM GLASSMAN

--The Internet. Which has basically never been regulated in the way that phone companies have --

CECILIA KANG

Well --

JIM GLASSMAN

--Have been. To some extent, maybe I'm simplifying. And there's a question about whether he can do --there's a legal question about whether he can do it and meanwhile congress has stepped in, they're --Henry Waxman has a bill that would kind of try to resolve this issue.

CECILIA KANG

Right. Well the Internet's a big thing so I would be careful to say that he wants to regulate the Internet. I think he wants to regulate the communications services.   The Federal Communications Service wants to --Commission, wants to regulate the communications medium, which is broadband Internet services. So as to --they don't want to regulate Google that resides on these networks, nor do they want to regulate Facebook --

JIM GLASSMAN

But they want to tell, just quickly, and then I want to get to Mike, they want to tell the carriers essentially what they can charge, right? Or how --how they can prioritize the people who use their networks. Is that correct?

CECILIA KANG

They want to -- they definitely want to regulate how traffic is managed on networks, not --as to whether they actually said explicitly --they don't want to regulate prices and they don't want regulate rates and --

JIM GLASSMAN

But how traffic is managed. Ok so what's wrong with that?

MIKE MCCURRY

These companies that want to offer services that they need to get some return on in order to satisfy their investors, you know they're sitting there trying to make very complicated decisions about what the future of the internet is going to look like, and having the specter of the federal government playing an extraordinary role here is a real problem. 

JIM GLASSMAN

And you mentioned, Craig you mentioned early on, investment. I mean isn't that really a key to all this? How do you encou --you know maybe we haven't run out of bandwidth yet but we're probably gonna. And so these networks need to be continually renewed, who's going to do that? 

CRAIG AARON

Well, first of all, let's not cry too much over how much money the phone and cable companies are making, they're doing quite well for themselves. Second of all, if your concern is investment then I think what you would want is an even playing field for everyone where we're actually encouraging competition and new players to enter the field. That's what net neutrality has enabled. 

Net neutrality is not a new thing. Net neutrality has been the rules of the road since the Internet started and it's what ensures all that innovation gets pushed out to the edges. So if you're a guy out there in a garage and you've got a good idea you have the opportunity to be that next Google because thanks to net neutrality when you can get online if you've got the best idea, if you've got the best product, you can find your audience. I think the other thing to keep in mind, a little historical lesson in terms of what's going on in the FCC is that they gave up their own authority.

 Broadband Internet had always been regulated under title II of the communications act. During the Bush Administration they decided to change the way that the Internet was going to be regulated. They changed how it was treated under the law. That was a case that made it all the way to the Supreme Court. The Supreme Court ruled, 'hey it's up to the FCC to decide.'

MIKE MCCURRY

Just one point here. I think this is a really important part of the debate because Craig said something interesting. He says the innovation, the creativity, you know the economic dynamism of the Internet is out there on the edge. He used that phrase. The companies that I work with which are the AT&Ts, and the Verizons, and the companies that carry that data, they want to create that innovation and creativity inside the pipes. I think part of the question here is do you want big fat dumb pipes that carry all this data or do you want sophistication, technology, smart people designing things that will help shape this traffic that gives the consumer a better experience. 

If you want smart pipes then someone's going to have to have paid for that kind of investment. That's where the companies then enter the equation and they want to develop new services, they want to develop products that they can sell to their consumers. And I think the standard, maybe what we need to look for here, is no one should be harmed. The idea that someone gets relegated to some dirt road on the internet is not a fair characterization because what these companies would say is, 'look we're going to provide you a better experience, we'll maybe offer a premium to people who want a guaranteed quality of service, but we're not going to harm anyone in that process.' So if there's no harm to the consumer why not let these companies make those kinds of investments, you know make those kinds of products available.    

JIM GLASSMAN

You do that in --there are many other industries obviously where there's an example of that. You can either take a nonstop flight or a flight that stops somewhere. As long as you don't degrade the service as Mike says, what's wrong with that? They offer a special service for companies that need super fast, so Google says, 'ok I'll pay that,' --it's kind of the deal they made with Verizon -- [OVERTALK] recently, right?  

CRAIG AARON

That is exactly the problem. Is that --

JIM GLASSMAN

--Why is that a problem?

CRAIG AARON

The only people who are going to be able to take advantage of these exclusive deals are the biggest companies right now. And if you're somebody who happens to be a direct competitor with a Comcast or an AT&T or a Verizon, they're never going to offer you that spot in the fast lane. They have no interest in doing so and therefore they're taking advantage of their control of the pipes --

JIM GLASSMAN

--I'm not sure why they wouldn't have that interest --

CRAIG AARON

--To disadvantage these future competitors.

JIM GLASSMAN

--Why wouldn't they have their interest? I mean, it's just like a consumer right now can get either get fast broadband or regular broadband.

CRAIG AARON

But the difference is that the consumer is making those decisions and there's no discrimination.

JIM GLASSMAN

But there is --I want to get to Cecilia --But there is competition among these companies. Right? So one of them says, 'well you know' --

CRAIG AARON

Well no there isn't --That's another big problem, which is that for %96 --

JIM GLASSMAN

[OVERTALK] Well there is in my neighborhood I can choose--

CRAIG AARON

You have two choices. The phone company or the cable company and that's true for %96 of Americans for broadband. If you don't like those choices they both said, 'If the FCC doesn't stop us we're going to discriminate, we're going to interfere.' So that leaves consumers no where else to turn which is exactly why they need the FCC to provide these very light rules of the road to protect all consumers, to protect all the competitors, and make sure the internet continues to prosper and continues to develop in the way that it has.    

MIKE MCCURRY

Well, first of all, putting the Internet under Title II, I don't want to get technical here but that is not a light touch regulation. That is really kind of the thermo nuclear bomb of regulation. It is exactly the kind of thing that would allow some future FCC to come in and regulate prices and regulate aspects of the Internet that are not broken. 

The other real problem is here; what is the problem that we're trying to solve using the tool of government here? Because there really isn't a problem. You're projecting that maybe some things are going to happen in the future-- I'm a democrat I believe in using the tool of government wisely and prudently, but your handing a job to the government here that the government's never going to be able to do. The FCC couldn't possibly keep pace with the change in technology that's going to happen.

JIM GLASSMAN

Cecilia, what are other stakeholders here? What are they saying?

CECILIA KANG

Stakeholders at this point have really, you hear this quite a bit, come a little bit closer. You see Google, for example, as one of those Internet content companies I described, those edge providers, come closer with agreement with Verizon to narrow down rules where they can both make some compromises. Google and Verizon both got a lot of heat for this agreement that they made in that they excluded any sort of rules or regulation over or-- the ability of a watchdog to enforce rules over your cell phone, for example. 

That's a big deal because everything is heading towards wireless as this point. The idea of that Google could perhaps, and they say they won't but Google could perhaps cut a deal with Verizon to you know be on this fast lane that Craig and Mike are describing, doesn't sit well for maybe other competitors of Google's. So I think the parties of constituents are sort of coming closer. But in honesty and I'd love to hear your point of this-- your thoughts on this, it's difficult to see the FCC today enforcing rules, creating rules-- it's difficult to see congress doing that, given the house turning-- and it's difficult for the FCC because they would probably have to reclassify what Mike just described which is something that's faced a lot of resistance so--

JIM GLASSMAN

Just really quickly, what is reclassifying? Just so everyone knows. 

CECILIA KANG

Reclassifying is, just as you described actually, making broadband a telecommunication service, a common carrier service and what frightens Mike and his clients and his constituents is the idea that ok you may promise to classify us as a common carrier telecommunication service, and have lots of different rules under us, and you may promise to repeal a lot of those rules, but who's to say that some of those rules will actually get repealed or won't be put back into place or, you know, what have you. So that's what frightens-- it feels like it's straight under the FCC's jurisdiction and in this field that's becoming-- it's fast moving and changing. Though folks like Craig and other constituents will say that's precisely why, because the broadband Internet's become so important-- why it should be classified.  

JIM GLASSMAN

So let me-- there's another thing that's changing here as well. President Obama got elected with I think a certain amount of obligation to people like you toward net neutrality. And yet there's a big problem with the economy right now. And, I don't know, the people in the administration are saying this but certainly there's a lot of concern that investment in fact will slow down or will stop. It'll hurt jobs. Isn't that one of the reasons that, it appears anyway, the FCC and maybe even the administration is going slow on this.

CRAIG AARON

Well President Obama did promise to take a back seat to no one on net neutrality. Over a year ago, chairman Janokowski gave a big speech at the Brookings Institution promising to deliver on the President's pledge and it hasn't happened yet. But I think all of these concerns about how net neutrality is going to impact the economy and jobs have been drummed up by folks like Mike who are trying to sew fear and uncertainty into this debate. What we've seen is-- I can't think of a better economic engine than the Internet. An Internet that has largely operated under net neutrality protections since its start, or the principle of net neutrality. We want to make sure that that continues. So if your concern is investment, your concern is new jobs, your concern is new businesses, net neutrality is what we should be doing right now. 

JIM GLASSMAN

Mike, what would you accept? Or what would the carriers accept as far as the kinds of rules or agreements that could be made about access. 

MIKE MCCURRY

Well, look, I can't-- obviously I can't negotiate on their behalf here but I think as a matter of principle they would take a lot of what you've said about the principles of net neutrality that have been in place. You know, there shouldn't be active degrading of someone's experience on the Internet, that everyone ought to have access to the content that they want to get to, they ought to be able to use devices that they want to use on the Internet. 

I think the question is how do you enforce that and how do you regulate that? And I think you were right that common sense was moving this in the direction where people were going to basically agree to a compromise. There are some outliers in the debate in which I would frankly put Craig's group in that outlier group that are being adamant and saying, 'No, the chairman has to go ahead and pull the trigger on this really heavy handed approach to using the tool of government.'

JIM GLASSMAN

What about the issue that Craig raised early on as far as discrimination is concerned? Say Verizon is in the business of selling movie downloads and they put their own service in a superior position to-- a competitor like Netflix? Is that fair?

MIKE MCCURRY

I think--

JIM GLASSMAN

I mean should that be prohibited by law?

MIKE MCCURRY

I think that has to be part of the conversation. What is the nature of exclusivity? I think this is the real question. Can you exclusively put services on your network and deny other people access. I think there is probably a place where people would agree that-- no that should not be allowed. That's something that the FCC ought to be vigilant about and ought to regulate. And I'm not speaking; believe me, not speaking for large parts of the industry that would have an issue with that. But I think there is a common sense place that you could get to.

JIM GLASSMAN

So let me ask Craig. There are problems with reclassification-- it could be a lawsuit, it's, you know, it's maybe difficult to do politically, what about this idea that Henry Waxman has where he's brought the parties together, I think anyway, and come up with some kind of a bill, and may not be his bill, but can this be settled by law? Rather than by a regulatory fiat? 

CRAIG AARON

Well I think that congress definitely has a role to play here. I mean Henry Waxman has not introduced any legislation. There were a lot of discussions of a bill that was apparently circulating in the House of Representatives. I think the question becomes what's in that bill and, you know, for now Internet users are unprotected. So the FCC I think has the responsibility to protect the public, to establish the rules of road, the certainly have the power. 

If congress wants to take a more deliberative approach, if they want to go back and look at the laws, I think there's a place for congress as well. But the responsibility right now rests with the FCC and if in the next congress or the congress after that they want to get serious about looking at updating the laws or Telecommunications Act, I think they absolutely should. What I don't think they should be trying to do is rushing a sort of last minute forced compromise that potentially leaves the Internet in worse shape, leaves wireless Internet unprotected, and really strips the FCC of their rule making authority. I think that would be a grave mistake by the congress and really a mis--something they shouldn't do. 

JIM GLASSMAN

Let's go around the table and just-- I'd like to hear what you think about how this is going to be resolved. 

CECILIA KANG

It really rests back to the FCC-- it goes back to the FCC, like Craig was just saying. So if--

JIM GLASSMAN

So will the chairman of the FCC push for reclassification?

CECEILIA KANG

If you take him by his word then I guess so. As to when it is or whether he, you know, can do it in the near months or maybe in his term, is another question.

MIKE MCCURRY

You know the President has to start looking ahead to 2012 when he's going to run for reelection. Part of the criticism, part of the danger he faces, particularly among independents in the electorate, is that the government seems to be overreaching, trying to do too much. You know I think the admonition of my President that I worked for, Bill Clinton, at the era of big government is over is a useful one. But I think it would be far better for congress to act, for congress to give the authority to the FCC to do what it should and should not do and make that clear and then move on so we can deal with some of the real issues-- which the real issues are how do we get more broadband out to the people who don't currently have it and how do we make this great content more accessible to the American people. 

JIM GLASSMAN

Craig.

CRAIG AARON

Well I'm not quite so hopeful that congress can get together and put together legislation that would pass or that would protect consumers. I think the ball very clearly rests with the chairman of the FCC. He's been looking at this for almost the entire length of his term. There are literally thousands and thousands of pages of comments. What we need is a decision. What we need is action and leadership from the chairman of the FCC. It's really up to him to bring this to a close and make sure that the free and open Internet stays that way. 

JIM GLASSMAN

But then that itself might not end things because--

CRAIG AARON

Well you never know.    

JIM GLASSMAN

 It could then head to the courts--

CRAIG AARON

If he does it I won't sue if Mike doesn't sue. 

JIM GLASSMAN

Ok on that note--

CECILIA KANG

You head it hear.

JIM GLASSMAN

Thank you Craig, and thank you Cecilia, and thank you Mike. Before we go I want to remind viewers that you can catch Ideas in Action whenever and wherever you choose. To watch complete shows just go to our website, ideasinactiontv.com or download a podcast from the iTunes store. That's it for this week's Ideas in Action. I'm Jim Glassman, thanks for watching.   

ANNOUNCER:

For more information visit us at ideasinactiontv.com. Funding for Ideas in Action is provided by Investor's Business Daily. Every stock market cycle is led by America's never ending stream of innovative new companies and inventions. Investor's Business Daily helps investors find these new leaders as they emerge. More information is available at Investors.com. This program is a production of Grace Creek Media and the George W. Bush Institute, which are solely responsible for its content. 


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Featured Guests

Cecilia Kang

Technology Policy reporter for the Washington Post

Cecilia Kang is the national technology reporter for the Washington Post. She focuses on technology policy. Mrs. Kang previously worked for the San Jose Mercury News where she covered technology and demographics, and reported on financial markets for Dow Jones and the Associated Press in New York and Korea.

Craig Aaron

Managing Director of Free Press

Craig Aaron is the Managing Director of Free Press where he leads their programs, advocacy and public education work. He edited and co-authored Changing Media: Public Interest Policies for the Digital Age. He previously worked as an investigative journalist for Public Citizen’s Congress Watch and the managing editor of In These Times Magazine.

Mike McCurry

Clinton Press Secretary and consultant for Arts and Labs

Mike McCurry has been a fixture in Washington DC since 1976 when he started working for a string of Senators including Daniel Patrick Moynihan, Lloyd Bentsen and John Glenn. Since then he has served in high profile positions including Press Secretary for the Democratic National Committee, and White House Press Secretary under President Bill Clinton. He is currently a communications consultant for Arts and Labs, a coalition of technology and communication companies.

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