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2014-05-15

Debate: As FCC Votes on Internet’s Future, What’s the Best Way to Protect Net Neutrality?

Guests

Timothy Karr, senior director of strategy at Free Press, a media reform organization.

Joshua Steimle, the CEO of MWI, an online marketing firm with offices in the United States and Hong Kong, where he is based. He is a contributor to Forbes; his recent article is "Am I the Only Techie Against Net Neutrality?"

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The Federal Communications Commission is voting today on new rules that may effectively abandon net neutrality, the concept of a free and open Internet. The FCC proposal would let Internet providers charge media companies extra fees to receive preferential treatment, such as faster speeds for their products and content. Under previous regulations struck down earlier this year, providers were forced to provide all content at equal speeds. Just steps from the vote, demonstrators have set up an "Occupy the FCC" encampment calling for federal regulators to reclassify broadband service as a public utility, which would allow for the requirement of net neutrality rules. The CEOs of 28 U.S. broadband providers and trade groups have asked the FCC not to classify broadband as a utility, arguing that regulating broadband would "impose great costs, allowing unprecedented government micromanagement of all aspects of the Internet economy." We host a debate on net neutrality with two guests: Timothy Karr of the media reform group Free Press, who backs greater regulation, and Joshua Steimle, a tech entrepreneur who argues the government should not be entrusted with regulating the Internet.

Transcript

This is a rush transcript. Copy may not be in its final form.

AMY GOODMAN: We turn now to the future of the Internet. The Federal Communications Commission, or FCC, is scheduled to vote today on new rules that may effectively abandon net neutrality, the concept of a free and open Internet. The FCC announced plans last month to let Internet providers charge media companies extra fees to receive preferential treatment, such as faster speeds for their products and content. Under previous regulations struck down earlier this year, providers were forced to provide all content at equal speeds.

Just steps from the FCC, demonstrators have set up tents and banners reading "Save the Internet." Protesters with the "Occupy the FCC" encampment are calling for federal regulators to reclassify broadband service as a public utility, which would allow for the requirement of net neutrality rules. Since last Friday, three of the FCC’s five members have talked with the protesters. The commission’s chair, Tom Wheeler, stopped by and reiterated his commitment to an open Internet. Listen closely because there’s a lot of background noise.

COMMISSIONER TOM WHEELER: We are for, and I am for, open Internet, a robust Internet, a fast Internet, and that there is only one Internet. There’s not this Internet for these folks and this Internet for these folks.

AMY GOODMAN: That was FCC Chair Tom Wheeler speaking to protesters at the Occupy the FCC encampment.

On Wednesday, 36 Democratic members of the House of Representatives sent a letter urging Wheeler to use the agency’s authority under Title II of the Communications Act to protect the open Internet. Meanwhile, the CEOs of 28 U.S. broadband providers and trade groups also wrote a letter to the FCC asking it not to classify broadband as a utility. The CEOs of AT&T, Comcast, Verizon Communications and Time Warner Cable were among the executives who argued that regulating broadband would, quote, "impose great costs, allowing unprecedented government micromanagement of all aspects of the Internet economy."

Well, for more, we host a debate now on net neutrality. Here in New York, we’re joined by Timothy Karr, the senior director of strategy at Free Press, a media reform organization. And joining us from Hong Kong is Joshua Steimle, the CEO of MWI, an online marketing firm. He’s a contributor to Forbes who just wrote a piece called "Am I the Only Techie Against Net Neutrality?"

Well, Tim Karr and Joshua Steimle, welcome to Democracy Now! Tim Karr, can you lay out what’s at stake now before the FCC today?

TIMOTHY KARR: Sure. The FCC is in the process of making a new ruling to protect net neutrality. There have been a number of efforts in the past that were thrown out by the courts. The most recent one was in January. The FCC, under its new chairman, Tom Wheeler, has pledged to protect the open Internet. But according to reports that came out in the media about three weeks ago, he’s actually proposing what’s called a "pay for prioritization" plan, which is the opposite of net neutrality. It’s a way that companies can pay to get into a fast lane on the Internet, while relegating the rest of us to a slow lane.

So what’s happening today is the FCC is having a meeting to decide whether to put this proposal forward. It’s likely that that will happen today. And then there will be a process over several months where the public can comment and let them know, let the FCC know, what they think about Chairman Wheeler’s plan.

AMY GOODMAN: Why is it called net neutrality?

TIMOTHY KARR: It’s called net neutrality because it is—it is the way that the Internet was supposed to work, this idea that when you go online—doesn’t matter whoever you are—you can connect to anyone else who’s on the network. You simply have to pay whatever your monthly rate is to your Internet service provider, and they get out of your way. And that underlying principle of openness there is what has made the Internet such a great engine for free speech and diversity, economic innovation.

AMY GOODMAN: Joshua Steimle, why are you against net neutrality?

JOSHUA STEIMLE: So, to clarify my position, I’m not against net neutrality as a principle; I’m against net neutrality as legislation. And my primary motivation there is I’m against further government intrusion on the Internet. So I see the U.S. government as not being a trustworthy steward to take care of the Internet and ensure an open Internet. I don’t like the telecoms; I’m definitely not on their side. But I see the telecoms as bad, the U.S. government as worse, and I don’t see how we add up bad plus worse and end up with better.

AMY GOODMAN: Your response to that, Tim Karr?

TIMOTHY KARR: Well, this isn’t really about protecting the rights of telecom companies or protecting the rights of the U.S. government; it’s about protecting the rights of Internet users. And we have had a long tradition of regulation of Internet providers. There’s a misunderstanding here—that is, that net neutrality is a regulation of the Internet. It is not a regulation of the Internet. It is a regulation of Internet service providers, companies like Comcast, Time Warner Cable, Verizon and AT&T.

And they—there’s a long history in communications law of regulations that protect the public interest. These are companies that, when they come into your community, have to lay their lines. They have to dig ditches or lay lines over telephone poles. And they strike franchise agreements with cities. That is a basic regulation of Internet service providers. Net neutrality prevents them from blocking our content, censoring our speech, and allows us to connect to anyone else online without this kind of discrimination.

AMY GOODMAN: Your response to that, Joshua Steimle?

JOSHUA STEIMLE: Well, my concern is that if we have net neutrality legislation, we can’t trust the telecoms to police themselves. They’re not going to say, "Oh, yes, we’re handling the traffic the way it’s supposed to be handled." So the government’s going to step in and say, "We need to ensure that this traffic’s being handled correctly. That means we need to install hardware, we need to install software, to verify that this traffic’s being handled correctly."

This is the same organization that one year ago we discovered has been spying on American citizens. This is the same organization that executes U.S. citizens in violation of their Fifth Amendment rights. This is the same organization that has proven that it’s fairly incompetent at providing any sort of product or service. We have bridges falling down. We have issues with every industry that the government touches. I don’t trust that entity, that organization, to provide oversight for the Internet or for these Internet telecoms.

TIMOTHY KARR: Well, one of the—one of the things here in the United States is that we actually do have—we do have a First Amendment, we have a Second—a Fourth Amendment that protects our right to free speech. Those are government rules. Those are rules to prohibit government from censoring free speech and from invading our privacy. The problem that we’re seeing these days is that the—a lot of free speech is taking place via private platforms. You have billions of people—more than a billion people on Facebook. You have people using Twitter. You have people using social media to speak. And these are private entities that actually can censor free speech at will. If you read the fine print of their terms and conditions, they say that they can block their customers for any—almost any reason. So, we have faith that because in the United States we have a structure of law that protects free speech, that the government does have a role in making sure that free speech is protected. And so, it’s more important for us to have a regulatory structure that prohibits these private entities from blocking free speech than it is to just let them decide what they’re going to do with our communications at will.

AMY GOODMAN: Joshua Steimle? There’s just a little delay, for folks to understand. He’s in Hong Kong.

JOSHUA STEIMLE: Yeah, I think, when it comes down to it, Tim and I and everyone else, we agree on the ends that we want to accomplish. We all want a more open Internet. We want a more free Internet. Really, what we want is we want cheap, fast Internet. That’s what everybody wants. And I want that, too. It’s the means to get there. I see the government as essentially the enemy of the open Internet. I don’t trust this organization. I don’t trust the telecoms, either, but I see the telecoms as being limited by the marketplace, by individuals. The government doesn’t have those limitations. It has the force of law. And we’ve seen that the government is content to violate our freedoms and violate our constitutional rights. So when it comes to who’s the best steward over providing this cheap, fast Internet, I look at the government as being the least trustworthy steward there. I don’t trust the telecoms, either, but I have great faith in entrepreneurs and technology. We’ve seen innovation over the past 10 years that’s been miraculous. And 15 years ago if we were having this debate, everybody would be saying AOL was the enemy. Where is AOL today? They’re pretty much irrelevant. Ten years from now, Comcast will likely be irrelevant, as well, and it will be somebody else providing the service. I’m not worried about Internet getting slower or being restricted. I’m more worried about the government intrusions.

AMY GOODMAN: Tim Karr?

TIMOTHY KARR: Well, the issue is, I agree, this is about protecting free speech on the Internet. And it’s about the government serving a role to protect Internet users and not protect its own interests. So what we’re looking at at the FCC is a very simple regulatory solution, which is for them to treat Internet service providers—not the Internet—as common carriers. And as common carriers, they simply have to let our communications flow freely over their pipes as a neutral conduit, and so that what we’re asking for, in asking the FCC to reclassify them as common carriers, it’s not this idea that they are going to become a public utility or that the government is going to take over the Internet; it is still very much a free market environment in which the Internet service providers are profiting handsomely in providing us with the connection. We just ask for a baseline rule that prevents them, after they provide us with the connection, from blocking our communications in any way.

AMY GOODMAN: I want to turn to Michael Powell, the former chair the Federal Communications Commission who is now CEO of the National Cable and Telecommunications Association. Late last month, Powell spoke at the Cable Show 2014. He said net neutrality could prove disastrous for the future of the Internet. Powell argued that true public utilities suffer from chronic underinvestment and that the Internet thrived precisely because it’s not treated as a utility.

MICHAEL POWELL: Because the Internet is not regulated as a public utility, it grows and thrives, watered by private capital and a light regulatory touch. It does not depend on the political process for its growth, or the extended droughts of public funding. This is why broadband is the fastest-deploying technology in world history, reaching nearly every citizen in our expansive country. Broadband speeds have increased 1,500 percent in the last decade. America’s Internet providers have invested $1.3 trillion since 1996 to make America’s Internet world-class. Our country has 4 percent of the world’s population, but it attracts 25 percent of all global investment. Regulators overseas have begun to envy this level of investment.

AMY GOODMAN: So that’s the former FCC chair, now represents major industry, Michael Powell, son of, yes, General Colin Powell. Your response to what he had to say? You certainly had run-ins with him as head of the FCC.

TIMOTHY KARR: Yeah.

AMY GOODMAN: In fact, it was under Michael Powell that the broadband business was labelled as an information service by the FCC, not as a utility.

TIMOTHY KARR: Yes, the irony, of course, is now that he is the chief lobbyist for the cable industry that he was once in place to regulate. In 2002, he made the decision to classify them not as telecommunications services, which are held to a common carrier rule, but as information services. And so, what we’re trying to do is fix those mistakes. And that has been the central challenge at the FCC, in many respects, of the last 12 years.

So when he says that to reclassify broadband carriers as common carriers would basically close up shop for a lot of these businesses, he’s ignoring the immense profit margins that they record. And the gross profit margins for Internet service providers are in the order of 80 percent. In addition, we’ve also looked at their claim that reclassification, calling them common carriers, would dry up investment in build-out of networks so that more people can get connected. And we actually went back to the period when they were common carriers and looked at their capital investment as a percentage of their overall revenues, and it was much larger than it is today. So there is no evidence in data that would suggest that treating broadband Internet service providers as common carriers would affect the investment climate in any substantial way.

AMY GOODMAN: I want to get Joshua Steimle’s comment, but first I want Joshua to also respond to the FCC chair, Tom Wheeler, who spoke at the Cable Show 2014, where Michael Powell spoke, the cable’s largest industry conference and trade show. He denied claims the FCC is abandoning net neutrality.

COMMISSIONER TOM WHEELER: Those who oppose the idea of net neutrality might feel like a celebration is in order. Reports that we’re gutting the open Internet are incorrect. I’m here to say to you, wait a minute, put away the party hats. The open Internet rules will be tough, will be enforceable, and, with the concurrence of my colleagues, will be in effect with dispatch.

AMY GOODMAN: That’s FCC chair, today, Tom Wheeler, who actually was head of the NCTA, the largest lobbying arm of the cable industry, earlier. So he and Michael Powell, who was formerly FCC chair, have just traded places. Joshua Steimle, your response to both?

JOSHUA STEIMLE: Well, that’s exactly the problem that I see here. We’ve got lobbyists who are now running the FCC. We have a former FCC chairman who’s now a lobbyist. And we’re asking this organization to police the telecom industry. How can we trust any regulation that comes out of this organization to be impartial or to be beneficial for consumers rather than the industry? There’s a long history in the United States of large companies collaborating with politicians in government to write regulations that favor large companies and hold back smaller companies. Net neutrality, as legislation, might hold back and might restrict these larger companies and control them, in a way, but ultimately it’s going to hurt smaller providers more. Smaller providers are less able to deal with these regulations, and so it prevents competition. When you prevent competition, you don’t get the increases in price and quality. So that’s another fear I have about the impact of not just net neutrality, but other legislation that might follow.

AMY GOODMAN: But, Joshua Steimle, are you concerned that in fact what will happen is less competition? If these large companies are able to offer this faster lane, it’s going to wipe out innovative, smaller, you know, start-in-your-garage companies?

JOSHUA STEIMLE: Well, what I’m concerned about is, any time the government gets in and regulates an industry, it makes it harder for small entrepreneurs to do business in that industry. Regardless of what the regulation is, it provides red tape and keeps the smaller ones out, and it becomes a favor or a handout to the larger industry. I see net neutrality legislation as more red tape. I see that as a handout to the larger companies. Even though they’re fighting it, ultimately it hurts their competitors, the small competitors, worse than it hurts them, and therefore it’s a benefit for them. They win either way.

AMY GOODMAN: Timothy Karr, respond to Joshua Steimle.

TIMOTHY KARR: I have troubles understanding that argument, because what net neutrality really is is about protecting the level playing field of the Internet that allows small entrepreneurs and startups to engage in the space. When you have a pay-for-prioritization scheme, like the scheme that Chairman Wheeler is proposing, that locks in the power of the larger companies. It lets them dictate who wins and who loses on the Internet, whereas startups, like Google was less than 10 years ago, cannot get into that space because they simply can’t afford the payola scheme that is being forced upon them by ISPs.

AMY GOODMAN: I want to play a clip of what President Obama said about net neutrality when he was running for president. This was back in 2007.

SEN. BARACK OBAMA: I will take a backseat to no one in my commitment to network neutrality, because once providers start to privilege some applications or websites over others, then the smaller voices get squeezed out, and we all lose. The Internet is perhaps the most open network in history, and we have to keep it that way.

AMY GOODMAN: So that is President—that was President Obama before he was president. Tim Karr, if you could respond to his record here? Of course, he appointed—he appointed Tom Wheeler, who was the cable industry lobbyist, chief one.

TIMOTHY KARR: Yes, and that was the first of many statements. He had, since becoming president, reiterated his support for net neutrality. And even as Tom Wheeler came into office, he stated that, indeed, his appointee will share his views in protecting net neutrality. What we’re facing today is a chairman who has issued a proposal that does the opposite of what President Obama has proposed. So we’re in a situation where the FCC is taking action that’s contrary to the president. Now, after he is appointed, the chair—the president can’t really influence what goes on at the FCC. So what he’s doing right now is actually acting against the will of President Obama. And we’re hopeful at Free Press that the president will make another statement to make clear that he does support net neutrality and not the scheme that Chairman Wheeler is proposing at the moment.

AMY GOODMAN: Now, I went down to the FCC, the People’s Firewall, yesterday afternoon and talked to some of the folks who were there holding their signs to preserve network neutrality. They were pleased that Tom Wheeler had come out to talk to them. But just explain, Tim, before we go, what is the process that’s going to happen today. There was the hope that this would be delayed, this vote?

TIMOTHY KARR: Yes, there’s a hope that it will be delayed, and there are a number of commissioners who have suggested that Wheeler delay the vote today. So we have a rally that’s happening at 9:00 a.m. this morning. There are going to be a lot of people outside of the FCC headquarters. I would encourage people to go down and participate in that. And then at 10:30, the meeting begins. And during that, the five commissioners of the FCC will vote on this proposal that Chairman Wheeler is putting forward. After that, there will be a process whereby the public can get more involved. I should say that three million people have already written to the FCC. They’ve already engaged in this issue since January, so there is a very large public clamoring for—to do something about this. So, after today’s meeting, there will be a process that could take several months for public comment, that will help, we hope, guide the FCC’s ultimate decision.

AMY GOODMAN: Well, I want to thank you both for being with us, Timothy Karr of Free Press and Joshua Steimle, contributor to Forbes, recently wrote a piece headlined "Am I the Only Techie Against Net Neutrality?" Joshua Steimle was speaking to us from Hong Kong, Tim here in New York. And we’ll cover what happens at the protest today. I mean, it was tricky, the People’s Firewall, because the FCC—I think it’s at Main and 12th—when we got there, finally, it’s right next to the highway, and they’ve got all their tents. They have been camped out, so the FCC commissioners, it was very hard for them to avoid talking to the protesters over the last few days.

This is Democracy Now! When we come back, we’re going to talk about the fast-food protest today and President Obama going to Wal-Mart to speak. Stay with us.

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