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NTIA § 230 FCC Petition: A Poor Solution to an Ill-Defined Problem

TL;DR While there are possible useful reforms to be made to Section 230, forcing major changes to an important law on the basis of a political quarrel would let petty politics reshape one of the most important laws that governs the Internet.

The Debate…

President Trump recently demanded the National Telecommunications and Information Administration (NTIA) request that the FCC undertake a major reinterpretation of CDA Section 230 to make it more difficult for digital platforms to receive liability immunity for the content of third parties and for their own content moderation decisions. The FCC has granted the petition and is seeking public comment.

But…

The petition is driven by a political dispute between the Administration and the platforms. What’s more, the Administration is evading constitutional restrictions in order to cajole the FCC into serving its ends.

While there are possible useful reforms to be made to Section 230, forcing major changes to an important law on the basis of a political quarrel would let petty politics reshape one of the most important laws that governs the Internet.

Read the full explainer here. 

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Telecommunications & Regulated Utilities

Comments on Refreshing the Record in Restoring Internet Freedom and Lifeline Proceedings in Light of the D.C. Circuit’s Mozilla Decision

Regulatory Comments In order to maximize the benefits of broadband to society, including through the provision of public safety communications and services, public policy must promote the . . .

In order to maximize the benefits of broadband to society, including through the provision of public safety communications and services, public policy must promote the proper incentives for broadband buildout. Both the 2015 Title II Open Internet Order (the “OIO”) and the 2017 Restoring Internet Freedom Order (the “RIFO”) were premised on this. But each adopted a different approach to accomplishing this objective.

The OIO premised its rules on the theory that ISPs are “gatekeepers,” poised to kill the golden goose of demand for broadband by adopting business practices that could reduce edge innovation.

The key insight of the virtuous cycle is that broadband providers have both the incentive and the ability to act as gatekeepers standing between edge providers and consumers. As gatekeepers, they can block access altogether; they can target competitors, including competitors to their own video services; and they can extract unfair tolls. Such conductwould, as the Commission concluded in 2010, “reduce the rate of innovation at the edge and, in turn, the likely rate of improvements to network infrastructure.” In other words, when a broadband provider acts as a gatekeeper, it actually chokes consumer demand for the very broadband product it can supply.

The RIFO, on the other hand, properly conceives of ISPs as intermediaries in a two-sided market that aim to maximize the value of the market by adopting practices, like pricing structures and infrastructure investment, that increase the value for both sides of the market.

We find it essential to take a holistic view of the market(s) supplied by ISPs. ISPs, as well as edge providers, are important drivers of the virtuous cycle, and regulation must be evaluated accounting for its impact on ISPs’ capacity to drive that cycle, as well as that of edge providers. The underlying economic model of the virtuous cycle is that of a two- sided market. In a two-sided market, intermediaries—ISPs in our case—act as platforms facilitating interactions between two different customer groups, or sides of the market— edge providers and end users. . . . The key characteristic of a two-sided market, however, is that participants on each side of the market value a platform service more as the number and/or quality of participants on the platform’s other side increases. (The benefits subscribers on one side of the market bring to the subscribers on the other, and vice versa, are called positive externalities.) Thus, rather than a single side driving the market, both sides generate network externalities, and the platform provider profits by inducing both sides of the market to use its platform. In maximizing profit, a platform provider sets prices and invests in network extension and innovation, subject to costs and competitive conditions, to maximize the gain both sides of the market obtain from interacting across the platform. The more competitive the market, the larger the net gains to subscribers and edge providers. Any analysis of such a market must account for each side of the market and the platform provider.

In other words, the fundamental difference of approach between the two Orders turns on whether it is edge innovation, pushing against ISP incentives to expropriate value from edge providers, that primarily drives network demand and thus encourages investment, or whether optimization decisions by both ISPs and the edge are drivers of network value. The RIFO rightly understands that ISPs have sharp incentives both to innovate as platforms (and thus continue to attract and retain end users), as well as to continue to make their services useful to edge providers (and, by extension, the consumers of those edge providers’ services).

The D.C. Circuit upheld RIFO’s fundamental rationale as a supportable basis for the FCC’s rules in Mozilla v. FCC. But it also accepted that three specific concerns were insufficiently examined in the RIFO, and remanded the case to the FCC to address them. Among these was the question of the RIFO’s implications for public safety. In its Public Notice seeking to refresh the record on the remanded issues, the Wireline Competition Bureau asks (among other things):

  1. “Could the network improvements made possible by prioritization arrangements benefit public safety applications. . . ?”;
  2. “Do the Commission and other governmental authorities have other tools at their disposal that are better suited to addressing potential public safety concerns than classification of broadband as a Title II service?”; and
  3. “[H]ow do any potential public safety considerations bear on the Commission’s underlying decision to classify broadband as a Title I information service?”

These are the questions to which this comment is primarily addressed.

In Part I, we discuss how the RIFO fosters investment in broadband buildout, in particular by enabling prioritization and by reducing the effects of policy uncertainty. In Part II, we describe how that network investment benefits public safety both in both direct and indirect ways. In Part III, we highlight the benefits to public safety from prioritization, in particular, which is facilitated by the RIFO.

Read the full comments here.

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Telecommunications & Regulated Utilities

The Snobbery of Bashing Big Tech

TOTM This guest post is by Corbin K. Barthold, Senior Litigation Counsel at Washington Legal Foundation.

In the spring of 1669 a “flying coach” transported six passengers from Oxford to London in a single day. Within a few years similar carriage services connected many major towns to the capital.

Read the full piece here.

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Telecommunications & Regulated Utilities

Any Way You Measure It, Warren Is Wrong to Claim “Facebook and Google Account for 70% of All Internet Traffic”

TOTM Seeing internet traffic is not the same thing as “account[ing] for” — or controlling or even directly influencing — internet traffic.

When she rolled out her plan to break up Big Tech, Elizabeth Warren paid for ads (like the one shown above) claiming that “Facebook and Google account for 70% of all internet traffic.” This statistic has since been repeated in various forms by Rolling StoneVoxNational Review, and Washingtonian. In my last post, I fact checked this claim and found it wanting.

Read the full piece here.

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Antitrust & Consumer Protection

Debunking Elizabeth Warren’s Claim That “More Than 70% of All Internet Traffic Goes through Google or Facebook”

TOTM Less than 20 percent of all Internet traffic goes through sites owned or operated by Google or Facebook. While this statistic may be less eye-popping than the one trumpeted by Warren and other antitrust activists, it does have the virtue of being true.

In March of this year, Elizabeth Warren announced her proposal to break up Big Tech in a blog post on Medium. She tried to paint the tech giants as dominant players crushing their smaller competitors and strangling the open internet. This line in particular stood out: “More than 70% of all Internet traffic goes through sites owned or operated by Google or Facebook.

Read the full piece here.

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Antitrust & Consumer Protection

What’s the Harm of Targeted Ads on Children’s Content Anyway?

TOTM The shift in oversight responsibility from parents to the FTC will likely lead to less-effective oversight, more difficult user interfaces, less children’s programming, and higher costs for everyone — all without obviously mitigating any harm in the first place.

The FTC’s recent YouTube settlement and $170 million fine related to charges that YouTube violated the Children’s Online Privacy Protection Act (COPPA) has the issue of targeted advertising back in the news. With an upcoming FTC workshop and COPPA Rule Review looming, it’s worth looking at this case in more detail and reconsidering COPPA’s 2013 amendment to the definition of personal information.

Read the full piece here.

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Municipal Revenue Extraction Should Not Stand in the Way of Next Generation Broadband

TOTM Advanced broadband networks are hot topics, but little attention is paid to the critical investments in infrastructure necessary to make these networks a reality. The FCC’s proposed 621 Order is an important measure to help providers deploy high speed broadband across a fragmented municipal regulatory environment.

Advanced broadband networks, including 5G, fiber, and high speed cable, are hot topics, but little attention is paid to the critical investments in infrastructure necessary to make these networks a reality. Each type of network has its own unique set of challenges to solve, both technically and legally. Advanced broadband delivered over cable systems, for example, not only has to incorporate support and upgrades for the physical infrastructure that facilitates modern high-definition television signals and high-speed Internet service, but also needs to be deployed within a regulatory environment that is fragmented across the many thousands of municipalities in the US. Oftentimes, the complexity of managing such a regulatory environment can be just as difficult as managing the actual provision of service.

Read the full piece here.

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Telecommunications & Regulated Utilities

There’s Nothing “Conservative” About Trump’s Views on Free Speech and the Regulation of Social Media

TOTM Despite the simplistic narrative tying President Trump’s vision of the world to conservatism, there is nothing conservative about his views on the First Amendment and how it applies to social media companies.

Yesterday was President Trump’s big “Social Media Summit” where he got together with a number of right-wing firebrands to decry the power of Big Tech to censor conservatives online. According to the Wall Street Journal

Read the full piece here.

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Data Security & Privacy

Section 230 Principles for Lawmakers and a Note of Caution as Trump Convenes his “Social Media Summit”

TOTM This morning a diverse group of more than 75 academics, scholars, and civil society organizations — including ICLE and several of its academic affiliates — published a set of seven “Principles for Lawmakers” on liability for user-generated content online, aimed at guiding discussions around potential amendments to Section 230 of the Communications Decency Act of 1996.

This morning a diverse group of more than 75 academics, scholars, and civil society organizations — including ICLE and several of its academic affiliates — published a set of seven “Principles for Lawmakers” on liability for user-generated content online, aimed at guiding discussions around potential amendments to Section 230 of the Communications Decency Act of 1996.

Read the full piece here.

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Data Security & Privacy