Cleland served as Deputy United States Coordinator for Communications and Information Policy in the George H. W. Bush Administration. Eight Congressional subcommittees have sought Cleland’s expert testimony and Institutional Investor twice ranked him the #1 independent analyst in his field. Scott Cleland has been profiled in Fortune, National Journal, Barrons, WSJ’s Smart Money, and Investors Business Daily. Ten publications have featured his op-eds. For a full bio see: www.ScottCleland.com.
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If Silicon Valley folks are indeed the smartest of the smart, how could they be so easily fooled on net neutrality?
Normally smarts distinguish between what’s testable and real versus what is the pixie-dust of dreams.
So where’s the real data and sound scientific thinking behind Silicon Valley’s grandiose net neutrality presumptions?
Why isn’t Silicon Valley adhering to its own data-driven, scientific decision-making principles?
Summary of Silicon Valley’s 6 Biggest Net Neutrality Fantasies:
1. The law and courts don’t matter.
2. Congress doesn’t matter.
3. Calling for maximal regulation of ISPs poses no regulatory risk to Silicon Valley.
4. “Separations” of the transmission component of telecommunications from the computer processing component is easy.
5. Having to make the case for Title II forbearance isn’t acknowledging that Title II would broadly.
6. The FCC’s forbearance tool is precise, controllable, and predictable.
Silicon Valley’s 6 Biggest Net Neutrality Fantasies:
Fantasy #1: The law and courts don’t matter.
Silicon Valley interests are effectively urging the FCC to ignore two obvious and core data points everyone knows, i.e. the FCC’s claimed authority on net neutrality has been overturned twice in Comcast v. FCC and Verizon v. FCC.
On top of that they want the FCC to effectively ignore the obvious main thrust of the D.C. Court of Appeals decision in Verizon v. FCC that it is illegal for the FCC to compel an information service provider to furnish service to others at no cost (p. 53).
That’s exactly what Silicon Valley interests are calling for in asking the FCC to regulate Internet peering for the first time to ban “fast lanes” and to compel ISPs to carry all downstream traffic at no cost, i.e. “zero pricing” (p. 60).
In effect, Silicon Valley is saying we don’t care what the law or court says, or what authority the FCC may have or not have, we want what we want and three FCC commissioners should give us what we demand.
Why is no one in Silicon Valley objectively looking at this available court “data” like a scientist would?
Fantasy #2: Congress doesn’t matter.
Another data point that’s central to this equation is that the FCC is a creature of Congress. Translation: the FCC works for and is funded by the Congress under the Constitution.
Consider how Silicon Valley interests are ignoring this obvious Congressional data relevant to their net neutrality regulatory algorithm.
The last study with data relevant to this test was Congress’s reaction to the FCC’s 2010 Open Internet Order. Then in letters to the FCC, Members of Congress opposed Title II reclassification by a 6-1 margin; 56% (299 of 535 members) wrote in opposition; see: House Democrat letter, House Republican letter, & Senate letter. A small minority of Congress 9% (49 of 535 members) wrote in support.
In the 2010 mid-term elections, >950 candidates ran for Senate or House seats, and only 95 or 10% took the PCCC/FreePress net neutrality pledge. All 95 lost. Simply the data on FreePress’ form of “real” net neutrality was 95-0 against.
In 2011, the House also passed a rare Resolution of Disapproval of the FCC’s 2010 Open Internet Order 240-179.
The House also passed a bill 244-181 to defund any FCC implementation of the FCC Open Internet Order.
In July of 2014, consider new data on how Congress reacts when the FCC seeks to ignore the law and Constitution and overreach its statutory authority.
The House voted this month 223-200 to prevent the FCC Chairman’s stated goal of over-riding state legislatures on the issue of municipal broadband networks.
In addition, Congress is seriously preparing to update the Communications Act for the 21st century which would put all of the FCC’s obsolescing legal authority up in the air. Overstepping their authority and ignoring court rulings for a third time on net neutrality, could put the FCC’s authority to enforce net neutrality long-term seriously at risk.
How is it smart scientific decision-making for Silicon Valley interests to wholesale exclude all of this “real” and relevant congressional data from their net neutrality advocacy algorithm?
Fantasy #3: Calling for maximal regulation of ISPs poses no regulatory risk to Silicon Valley.
Influential progressive and U.S. Senator Elizabeth Warren just spoke last week at NetRoots Nation, a convention for liberal bloggers and activists and laid out her vision for the 11 tenets of progressivism.
Her #3 was on net neutrality: “We believe that the Internet shouldn’t be rigged to benefit big corporations, and that means real net neutrality.” Note that she said “big corporations,” not big ISPs or big cable or telecom companies.
Consider the data that “big corporation” members of CCIA are calling for the “nuclear option” of Title II reclassification of broadband; and they are Google with a valuation of $400 billion making it is the third biggest corporation in America, Facebook with a very big valuation of $180 billion, eBay with a big valuation of $64 billion, and Yahoo with a big valuation of $34 billion.
Consider the data that Silicon Valley’s Big Corporations are the least taxed, least regulated, most protected, most immunized from liability, and least diverse of America’s big corporations, and that at the same time they are officially calling for maximal permanent price regulation of another industry in a way that conveniently would enrich them with the corporate welfare of crony capitalism, i.e. multi-billion dollar government price subsidies paid entirely by average consumer internet users.
In what tested Silicon Valley algorithm does the simple equation of tinder + spark not = combustion?
What engineer logically would think of building on top of such an unstable foundation?
Fantasy #4: “Separations” of the transmission component of telecommunications from the computer processing component is easy.
Reclassifying the transmission component of broadband access as a telecommunications service separate from the computer processing component may appear to be a binary sort to computer engineers, but to regulators whose operative definitions are not scientific definitions, but legal-regulatory definitions, it would be like trying to unscramble eggs all over the country all the time.
No one knows better than computer engineers and scientists that continuous, analog, circuit-switched, networks represent radically different engineering and science from discontinuous, digital, packet-switched networks.
They understand the inherent “transmission” predictability of traditional “telecommunications” is by design the antithesis of the inherent “transmission” un-predictability of today’s Internet packet “information services.”
If they think about this in the regulatory context, computer engineers and scientists will grasp the folly and fantasy of a non-engineering, non scientific FCC trying to look at today’s packet-switched Internet transmissions as if they were still the traditional circuit-switched “telecommunications” transmissions of yesteryear.
For example, is a best-efforts Internet transmission that can re-route or resend dropped packets via multiple routing points around the country and world, as easy to hive off, isolate, and track as continuous, circuit transmission “telecommunications” between two well-known points?
Classifying the “transmission” of data packets, as analog “telecommunications” also would destroy the purposeful distinction of regulated vs. unregulated services first established in the 1956 AT&T consent decree between telecommunications and data services. Treating today’s data transmissions like the voice “telecommunications” transmissions of yesteryear also would eviscerate the very important practical separation of legacy common-carrier-regulated voice service and today’s unregulated Internet information services.
Speaking of “separations” policy, most in Silicon Valley are joyfully ignorant about the FCC’s “jurisdictional separations” policy to apportion the inter-state versus intra-state costs of telecommunications to determine appropriate telecommunication subsidies.
FCC “separations” activities are arguably the most arcane, complex and difficult activities the FCC has been responsible for administering, and that is when the transmission paths at issue are well-known, highly-predictable and measurable.
Imagine the mind-boggling new FCC “separations” effort required for the FCC to separate the pure transmission of packets from the computer processing of packets when all sorts of reasonable network management computer processing is embedded throughout the Internet network of networks to prevent denial of service attacks, viruses, spam etc.
If geographic separations of telecommunications involved mind-numbing micro-monitoring of transmission flows, imagine then how beyond-mind-numbing, nano-monitoring of separations of “pure” transmissions from “processed” transmissions would be?
Devising rules to do this, putting them out for comment, and reply comments, then passing a rule to implement them, and then designing and testing the technology and human oversight processes to implement and monitor them would take many years, and likely encounter complexity management problems like the Obamacare website suffered through last year.
What computer engineer and scientist would want to wish that amount of abject inefficiency on anyone?
Fantasy #5: Having to make the case for Title II forbearance isn’t acknowledging that Title II would broadly.
Once again, CCIA, of which Big Internet corporations Google, Facebook, eBay, and Yahoo are members, formally acknowledges that reclassification of broadband as a Title II service demands forbearance to ensure that it is not more broadly applied than Silicon Valley wants.
If Silicon Valley acknowledges that Title II would apply more broadly than just to ISP services, on what objective data or basis, does Silicon Valley believe they would be perfectly exempt or immune?
If the FCC truly cared about preventing those with market power from discriminating, why wouldn’t the FCC consider applying potential Title II regulation to companies in addition to ISPs which exhibit market power on the edge and also have a commercial incentive to discriminate?
What data is there that only ISPs discriminate and no edge company discriminates?
What data is there that market power only exists around broadband access and not in other parts of the Internet ecosystem involving Internet transmissions?
What data is there that shows that the type of private information that the FCC protects under Title II privacy regulations is not like the private information that edge providers use for commercial purposes without a consumer’s reasonable consent?
Simply, what data gives Silicon Valley confidence no Title II regulation could affect them?
Fantasy #6: The FCC’s forbearance tool is precise, controllable, and predictable.
Washington is not the predictable mathematical world of engineering or computer programming.
Washington is the much more uncertain and shifting world of public policy, arcane legal interpretation, politics, and public relations.
Those that assume the FCC could easily and surgically apply Title II regulation to specific companies in specific services, in specific ways, in a specific certain process, and in a specific timeframe are in a fantasy world, not a data-driven, scientific one.
All the data available at the FCC — which chronicles every time the FCC has tried to officially apply forbearance — shows the process to be inherently slow; easily-contested, and unpredictable.
What data or scientific method is Silicon Valley relying on to presume that forbearance for net neutrality would be easy?
What engineer would imagine that they and their partner contractor (the FCC) would be the only one to determine if the forbearance structure was sound and legal, and not a building inspector (the courts)?
The data above indicate that the smartest of the smart people of Silicon Valley, have been fooled by their net neutrality movement allies. Much of what they have been assured is true, is in fact not, when one takes the time and effort to examine the actual available data.
Somehow Silicon Valley leaders have let themselves collectively go out on a franchise-endangering limb without any of the data-driven or scientific rigor that they normally require to make important strategic business decisions.
Maybe the Silicon Valley mono-culture and group-think assumed that someone in Silicon Valley must have checked the data or tested the many fundamental assumptions undergirding Silicon Valley’s net neutrality position, so they did not have to worry about it.
Silicon Valley has been conned into thinking that pressuring the FCC to consider maximal regulation of a key part of the Internet ecosystem is safe to do, and also is in their self-interest, when ultimately it is not.
As the old poker adage says, if you look around the table and can’t identify the sucker, it’s you.