First Amendment Issues Triggered by a Non- Neutral and Tiered Web First Amendment Issues Triggered by a Non- Neutral and Tiered Web Rob Frieden, Pioneers Chair and Professor of Telecommunications and Law Penn State University web site: blog site: A Presentation at the University of North Carolina College of Law February 20, 2009

2 Explaining the Concepts— Network Neutrality As the Internet evolves, Internet Service Providers (“ISPs”) want to diversify and engage in price and quality of service discrimination. As the Internet evolves, Internet Service Providers (“ISPs”) want to diversify and engage in price and quality of service discrimination. Advocates for network neutrality want a non-discrimination mandate, but the Communications Act limits explicit common carrier regulation for telecommunications services and not the Internet. Advocates for network neutrality want a non-discrimination mandate, but the Communications Act limits explicit common carrier regulation for telecommunications services and not the Internet. Advocates for net neutrality claim ISPs have the incentive and ability to block, delay, or otherwise thwart the delivery of specific content. Advocates for net neutrality claim ISPs have the incentive and ability to block, delay, or otherwise thwart the delivery of specific content. How this debate plays out will have a major impact on the scope of lawful Internet regulation as well as the accessibility and affordability of Internet- delivered content. How this debate plays out will have a major impact on the scope of lawful Internet regulation as well as the accessibility and affordability of Internet- delivered content.

3 Stakes and Mistakes The debate shows great polarization about how to respond to technological and market convergence, and to what extent competition and self- regulation can work. The debate shows great polarization about how to respond to technological and market convergence, and to what extent competition and self- regulation can work. Congress and the FCC cannot compartmentalize technology, yet mutually exclusive definitions trigger different regulatory treatment. Congress and the FCC cannot compartmentalize technology, yet mutually exclusive definitions trigger different regulatory treatment. The FCC seems unable to apply more than one model to a single venture even when convergence supports multi-faceted devices and services, e.g., the “third screen” wireless handset. The FCC seems unable to apply more than one model to a single venture even when convergence supports multi-faceted devices and services, e.g., the “third screen” wireless handset. Everyone seems to support the concept of an unregulated Internet “marketplace of ideas,” but the FCC has intervened on several occasions. Everyone seems to support the concept of an unregulated Internet “marketplace of ideas,” but the FCC has intervened on several occasions. The FCC stretches its Title I jurisdiction, and Chevron The FCC stretches its Title I jurisdiction, and Chevron policy deference by courts.

4 First Amendment Implications Internet Service Providers (“ISPs”) combine conduit and content. Internet Service Providers (“ISPs”) combine conduit and content. ISPs have speaker rights, but the First Amendment does not cleave solely between ISPs and their subscribers. ISPs may gladly abandon editorial control to qualify for “safe harbor” exemption from tort and copyright infringement liability, but they might also use such control to create “walled gardens” of content. ISPs have speaker rights, but the First Amendment does not cleave solely between ISPs and their subscribers. ISPs may gladly abandon editorial control to qualify for “safe harbor” exemption from tort and copyright infringement liability, but they might also use such control to create “walled gardens” of content. Current media models, such as newspaper, cable television and telephony, do not fully work for the Internet. Current media models, such as newspaper, cable television and telephony, do not fully work for the Internet. As providers of largely unregulated information services, ISPs qualify for significant First Amendment protection as offset by a compelling governmental interest in promoting access. As providers of largely unregulated information services, ISPs qualify for significant First Amendment protection as offset by a compelling governmental interest in promoting access. Unlike the Turner cable television “must carry” cases, the governmental interest extends beyond the economic stakes in carriage of one type of content—broadcast television. Unlike the Turner cable television “must carry” cases, the governmental interest extends beyond the economic stakes in carriage of one type of content—broadcast television. The FCC may have jurisdiction to impose content neutral regulations, subject to intermediate scrutiny, based on the extrapolation of ancillary jurisdiction, cable/video regulation, and a general mandate in the Communications Act to promote ubiquitous access to “advanced telecommunications capability.” The FCC may have jurisdiction to impose content neutral regulations, subject to intermediate scrutiny, based on the extrapolation of ancillary jurisdiction, cable/video regulation, and a general mandate in the Communications Act to promote ubiquitous access to “advanced telecommunications capability.” However, absent explicit statutory authority, the FCC may overstep as it may have done procedurally and substantively, in identifying sanctions for Comcast’s non-compliance with aspects of a 2005 Policy Statement on Internet “freedoms.” However, absent explicit statutory authority, the FCC may overstep as it may have done procedurally and substantively, in identifying sanctions for Comcast’s non-compliance with aspects of a 2005 Policy Statement on Internet “freedoms.”

5 The FCC’s Four Network Freedoms In a 2005 Policy Statement The FCC articulated four Internet “principles”: In a 2005 Policy Statement The FCC articulated four Internet “principles”: (1) consumers are entitled to access the lawful Internet content of their choice; (1) consumers are entitled to access the lawful Internet content of their choice; (2) consumers are entitled to run applications and services of their choice, subject to the needs of law enforcement; (2) consumers are entitled to run applications and services of their choice, subject to the needs of law enforcement; (3) consumers are entitled to connect their choice of legal devices that do not harm the network; and (3) consumers are entitled to connect their choice of legal devices that do not harm the network; and (4) consumers are entitled to competition among network providers, application and service providers, and content providers. (4) consumers are entitled to competition among network providers, application and service providers, and content providers.

6 Can the FCC Regulate Internet Service? The FCC must apply service definitions that create a dichotomy regulated telephone services and largely unregulated information services. The FCC must apply service definitions that create a dichotomy regulated telephone services and largely unregulated information services. Despite a regulatory safe harbor for information services, the FCC has invoked “ancillary jurisdiction” to impose burdens on ISPs. For example, providers of Internet-delivered telephone calls must contribute to universal service funding and comply with several telephone company regulations. The FCC recently rejected Comcast’s claim of a right to thwart, delay and degrade service as legitimate “network management” even when congestion did not exist. The Commission invoked its 2005 Internet Policy Statement, ancillary jurisdiction under Title I of the Communications Act as well as several specific sections specified as applying to telecommunications, or cable service providers.

7 Can the FCC Mandate Network Neutrality? The FCC will have to explain how any network neutrality requirement fits within the lawful scope of information service regulation. The FCC will have to explain how any network neutrality requirement fits within the lawful scope of information service regulation. The Commission will try to claim it has engaged in rational decision making based on the clear meaning of several statutory sections, or alternatively reasonable statutory interpretations worthy of deference on Chevron grounds. Claims of explicit authority: Congressional delegation to establish national Internet policy as endorsed by the Supreme Court in the Brand X decision. Claims of ancillary authority: the Communications Act authorizes the FCC to promote rapid and efficient communications, especially advanced telecommunications capabilities, which arguably includes Internet access.

8 Impact of Net Neutrality on Content Providers Positive Impact Positive Impact A nondiscrimination requirement attempts to maintain a level competitive playing field in the marketplace for content against the incentive and ability of ISPs to favor affiliates. If Enron employees could create artificial bottlenecks and congestion in the switching and routing of electrons, then ISPs can achieve similar outcomes for Internet packets. Net neutrality could prevent “dirty tricks.” “Walled Gardens” of easy access content not likely to support struggling new artists. Negative Impact Both users and content providers might want (and be willing to pay for) “better than best efforts” routing, e.g., March Madness basketball games delivered to computer desktop monitors; faster delivery of “mission critical” bits. Likely to trigger regulatory uncertainty and litigation. Exclusive access arrangements serve lawful promotion and marketing goals, e.g., DirecTV’s NFL Ticket.

11 Net Bias Versus Reasonable Price and Service Discrimination Impermissible Net Bias Deliberate Packet Loss Creating Artificial Congestion Targeting Large Volume Content Generators for Punishment or Extortion Most Types of Port Blocking (but not to control spam and denial of service attacks) Unilaterally Imposing Upstream and Downstream Rules That Violate Existing Service Level Agreements Affiliate Favoritism That Violates SLAs, Fair Trade and Antitrust Laws Fees for Overriding Firewalls and Filters Permissible Network Bias Variable Bandwidth and Throughput Bandwidth Partitioning Metered Service Better Than Best Efforts Routing Akamai-type Enhanced Traffic Routing and Management Special or Exclusive Content Deals

12 Conclusions and Recommendations The next generation Internet will not offer a plain vanilla, one size fits all “network of networks.” Flexibility in pricing, service provisioning and quality of service options can make economic sense. The next generation Internet will not offer a plain vanilla, one size fits all “network of networks.” Flexibility in pricing, service provisioning and quality of service options can make economic sense. However deliberate blocking or degrading traffic does not. However deliberate blocking or degrading traffic does not. Better than best efforts is not a contradiction, but existing interconnection and SLAs may restrict this option as might competition laws and commitments made to secure merger approval (AT&T-BellSouth). Better than best efforts is not a contradiction, but existing interconnection and SLAs may restrict this option as might competition laws and commitments made to secure merger approval (AT&T-BellSouth). ISPs should fully disclose terms and conditions as well as report on network usage. Requiring transparency does not foreclose net flexibility, but it can prevent Enron- type gaming and induced congestion. ISPs should fully disclose terms and conditions as well as report on network usage. Requiring transparency does not foreclose net flexibility, but it can prevent Enron- type gaming and induced congestion.

13 Additional Research Questions Is Net Neutrality a solution in search of a problem? What potential exists for anticompetitive practices in switching and routing content? Does a bottleneck exist in first or last mile access to the Internet? Is Net Neutrality a solution in search of a problem? What potential exists for anticompetitive practices in switching and routing content? Does a bottleneck exist in first or last mile access to the Internet? Would Google have any problems finding alternative ISPs to carry its traffic if AT&T refused? Would start-up ventures have the same opportunities? Do end users have sufficient broadband access alternatives ? Would Google have any problems finding alternative ISPs to carry its traffic if AT&T refused? Would start-up ventures have the same opportunities? Do end users have sufficient broadband access alternatives ? Would net neutrality rules create disincentives for investment in next generation networks? Would net neutrality rules create disincentives for investment in next generation networks? Can non-sector specific regulators, e.g., FTC and Justice Department, and the courts remedy any actual abuses in lieu of the FCC? Can non-sector specific regulators, e.g., FTC and Justice Department, and the courts remedy any actual abuses in lieu of the FCC? What is the scope of Title I responsibilities the FCC can impose on ISPs? What is the scope of Title I responsibilities the FCC can impose on ISPs?