We’re Not So Different, You and I: The Consensus Underpinnings of an Open Internet Framework

Second in a Digital Progress Institute Series

May 2, 2022

by Kate Forscey, Contributing Fellow at The Digital Progress Institute and Principal of KRF Strategies

Welcome back to “what’s the deal with net neutrality?”

To review, net neutrality is something of a shorthand for the rights users need in order to preserve a free and open Internet as a catalyst for innovation, information access, economic growth, and free speech. As discussed previously, the two complementary pillars of an open Internet are really (1) competition in a functioning market and (2) nondiscrimination against competitors on a company’s conduit or platform. Where competition does not naturally incentivize nondiscrimination, it is incumbent upon regulators to step in with rules of the road to compensate for the evident market failure.

1. Freedom to Access Content. Consumers should have access to their choice of legal content.
2. Freedom to Use Applications. Consumers should be able to run applications of their choice.
3. Freedom to Attach Personal Devices. Consumers should be permitted to attach any devices they choose to the connection in their homes.
4. Freedom to Obtain Service Plan Information. Consumers should receive meaningful information regarding their service plans.

When articulating these Four Internet Freedoms, Chairman Powell recognized the inherent importance to the success of the Internet, which has helped pave the way for bipartisan understanding and users’ experience of the Internet throughout its evolution over the last couple of decades.

His successor, former FCC Chairman Kevin Martin, embraced these same principles. In September 2005, the FCC issued an Internet Policy Statement officially codifying the Four Internet Freedoms at the agency with one significant twist—rather than just service plan information, the FCC codified a policy that “consumers are entitled to competition among network providers, application and service providers, and content providers.” Chairman Martin cited the need for such principles to fulfill the FCC’s duty to “encourage broadband deployment and preserve and promote the open and interconnected nature of the public Internet.”  The Commission under Chairman Tom Wheeler subsequently helped develop these into a rulemaking that has helped inform the debate since then.

These four principles are not only bipartisan but they make sense—if the Internet is going to serve as a platform for innovation, information access, economic growth, and free speech, consumers need and deserve basic protections give the opportunity for corporate mischief.

So why has net neutrality been controversial?  Reasonable minds continue to differ over what authority the FCC would use to enact and enforce them, not the principles themselves.  The legal proceedings and court battles have mostly been legal authority, not substance, and the FCC, once fully complemented, is able to proceed within those legal confines.

Another way to proceed on the controversy could be legislation:  There is nothing theoretically stopping Congress from codifying these principles. That said, given the evolution of the Internet and services provided over it, Congress should examine applying these principles of competition and nondiscrimination not just to ISPs, but all the way up the Internet stack when crafting new legislation.

With the recent surge in interest in regulating Big Tech on both sides of the aisle, now is the time to take former FCC Chairman Wheeler words to heart:  Regulation is like a seesaw—where competition exists and the market is functioning, the agencies can back off; but when the market fails and consolidation creates conditions for abuse of power by the biggest companies, the government must step in.

To be clear, none of the Four Internet Freedoms directly apply to online platforms yet as a legal matter. However, the conversation about “reining in” Big Tech increasingly lends itself to applying these long-acknowledged concepts to online platforms in a real sense, as opposed to in theory only. The competition bills moving in the Senate and the House right now have specific sections on nondiscrimination for large Internet platforms. Meanwhile, President Biden’s Federal Trade Commission and Department of Justice have demonstrated an appetite to pursue competition more vigilantly and are currently updating the merger review guidelines for the modern era.

If Congress were to legislate, it could draw inspiration from the original speeches and statements of net neutrality proponents to ensure they capture the spirit of the open Internet. Even a cursory review of the early pioneers of net neutrality indicates that the concept of the open Internet is and always has been tech neutral and not arbitrarily sequestered to one part of the network. For instance, the official Internet Policy Statement of the FCC, still in effect today, doesn’t narrowly focus on one corner of the Internet ecosystem but instead demands competition among “network providers, application and service providers, and content providers.”  Given the outsize ability of many platforms, applications, services, and device manufacturers to mold users’ experience at their whim, Congress would do well to take that broad formulation to heart.

Now let’s turn to applying the Four Internet Freedoms to the modern Internet economy.  We start by noting that net neutrality fights have historically focused on solely the First Freedom—the right to access lawful content—and specifically the behavior of Internet service providers given the agency’s perceived regulatory authority and what it felt was more of an immediate threat to Internet freedom.  With ongoing debates on online content regulation (proposed by Democrats and Republicans), the scope of that debate is well laid out. So instead I’ll focus on the remaining freedoms.

With respect to the Second Freedom, Congress should recognize the consumer’s broad right to access the apps they want.  And one of the emerging threats to that right today is app stores.  Two app stores—Apple’s App Store and Google’s Play—dominate the market with over 99% market share.  Apple in particular has wielded this market power to its own benefit, prohibiting some apps but not others from accessing its store, charging fees of up to 30% to its digital rivals, and repeatedly highlighting its own products above its competitors.  Many feel Apple wields too much market power and uses this power to diminish consumer choice of apps on their platform. Indeed, the giant has faced legal challenges but has so far been largely successful in preserving its business model.

The right to access applications of a consumer’s choice may be undermined by the market power wielded by Apple and Google, in which case regulators need to step in to protect competition and ensure nondiscrimination. That means taking a close look at app store practices like boxing apps out, charging exorbitant prices to third-party competitor apps that get passed on to consumers, and incentivizing consumers to choose apps affiliated with the app store for a lower price rather than the third-party competitors, i.e., traditional favoritism. This is the kind of case where we need rules of the road or enforcement actions.

For the Third Internet Freedom of device choice, the market in its current state provides a more evenly distributed variety of options for consumers. The smartphone market is relatively competitive with Samsung and Google products now rivaling Apple in popularity and adoption. However, the market is not without its challenges. A lack of data interoperability between and among operating systems creates a barrier to consumer choice.  For instance, if you were on an Android device, Apple does not allow you to import your contacts, passwords, and even some apps over to my new device. That may preclude me from wanting to switch.

Congress may want to evaluate how to make device more interoperable or, at the very least, give consumers the ability to take their app credentials and contacts with them more easily between operating systems. The bipartisan the Open App Markets Act introduced by Senator Richard Blumenthal and Senator Marsha Blackburn seeks to address this issue in a meaningful way by providing the market with a set of principles that encourages, but not mandates, interoperable systems.  Passing it would be a good first step.

As for other connected devices, the market for smart TVs and streaming devices like the Roku box or Amazon’s Firestick continues to grow, and nothing so far precludes a consumer from using one or the other or as many of those devices as they want if a given device isn’t providing the desired experience. Competition in that market enables the right to device choice on its own as consumers vote with their pocketbooks, placing pressure on the companies to be the best product for the consumer. In other words, the need for regulation here is minimal.

As for the Fourth Freedom—to understand one’s service plan—FCC rules currently require transparency about service plans by ISPs. And the FCC, pursuant to the bipartisan Infrastructure Investment and Jobs Act, is taking it one step further by looking at broadband “nutrition labels” like those found in grocery stores.  The goal is to ensure that consumers can understand what to expect from their plans more easily at a glance.  In other words, good progress is being made on promoting consumer transparency.  Comparatively, Congress also passed the TRUE Fees Act to prevent below-the-line fees and other nontransparent fees and practices by the cable and satellite television service providers before the consumer subscribes to those services.

It’s clear that we agree on the underlying principles of net neutrality, but still need agreement on when and to whom they should apply and the legal basis for doing so.  To this day, Democrats and Republicans disagree on what the specific conditions are that may trigger a need for rules of the road versus voluntary agreement by companies to act in ways that preserve the freedoms (predictably, with Democrats preferring more specific, enforceable regulations and Republicans preferring more general, guiding principles). So how exactly to write rules of the road to protect these generally agreed-upon principles continues to be the subject of hottest contention. And as we will see in our next installment, how do we reach a consensus?

On the next blog: Who’s the Boss? (Or Easier Said Than Done)