Obama gets it right on net neutrality

US President Barack Obama speaks at the White House in Washington, D.C. on Sept 26, 2014. (Photo by Nicholas Kamm/AFP/Getty)
US President Barack Obama speaks at the White House in Washington, D.C. on Sept 26, 2014.

In a week dominated by headlines proclaiming Republican's epic electoral victory last week, President Obama proved—from the other side of the world—that his relevance should not be called into doubt. Moreover, and perhaps intentionally, he did so with a touch of irony.

The president is in China this week for the Asia-Pacific Economic Cooperation forum. The meetings are supposed to produce headlines on a range of challenging issues including trade, a resurgent Russia, the evolving China-Japan relationship, and recent unrest in Hong Kong. No doubt it will do so.

But this week, thousands of miles from Washington and Silicon Valley, the president fully injected himself into the ongoing debate at home over “net neutrality.” And the fact that he did so in a country noted for repression of Internet openness should be lost on no one.

"At its most basic level, net neutrality means that consumers ... should get what they pay for."'

For all of the complexity surrounding the net neutrality discussion, the proposition is quite simple. At its most basic level, net neutrality means that consumers who are marketed and pay for access to all lawful Internet content should get what they pay for. In practical terms, that means that last-mile Internet service providers (ISPs) that provide residential broadband access—typically, telephone or cable companies—should not be able to limit the web content and applications that their customers access.

[Editor's note: Comcast, a cable company and Internet service provider, is the parent company of msnbc.]

In theory, one would expect ISPs to embrace this concept. After all, it is in their economic interest to encourage consumers to buy faster and more expensive levels of broadband Internet service to access the ever-increasing array of bandwidth-intensive content that is available online. That theory, however, must be considered in light of two countervailing circumstances that can alter an ISP’s cost-benefit analysis.

First, as is well-recognized, last-mile broadband ISPs—such as Comcast or Verizon—often face little or no competition in the provision of high-speed Internet access. Even where such competition exists, the obstacles and costs associated with switching ISP providers often deter consumers from doing so as one would expect them to do in a fully competitive market.

"Today’s Internet, while global in its reach, is a quintessential American creation."'

Second, the largest ISPs are vertically integrated communications and entertainment conglomerates. As a result, these firms have strong incentives to favor content or services that they own or with which they have economic affiliations at the expense of unaffiliated content or services. This is particularly true when online competitors, like streaming video services, provide a direct competitive substitute for elements of the lucrative “bundles” that the ISPs sell to consumers.

These incentives, coupled with the ability of ISPs to interfere with consumers’ ability to access certain types of Internet content, underscore the need for an effective and enforceable net neutrality regulatory regime. Indeed, even in overturning the Federal Communications Commission’s last attempt to implement such rules, the United States Court of Appeals for the District of Columbia Circuit recognized these risks and the threat they pose to a truly open Internet. At the same time, the court told the FCC that it had to go back to the drawing board to articulate a different legal rationale for promulgating such rules.

That process is well underway, and has drawn the attention of millions of concerned Americans. The president understands that, and in his statement today laid out the core principles that must form the foundation of a new net neutrality framework—no blocking, no throttling, increased transparency, and no paid prioritization. The last of these is especially critical. As the president said, “No service should be stuck in a ‘slow lane’ because it does not pay a fee. That kind of gatekeeping would undermine the level playing field essential to the Internet’s growth.”

There are a number of options—and combination of options—the FCC can use to reach these goals. The one the president articulated—reclassifying consumer broadband service under Title II of the Communications Act, coupled with the limited application of the regulatory oversight such reclassification entails—is an effective means to address the problem.

Precisely how the FCC gets there, as long as it does so in a manner consistent with applicable law, is not of paramount importance. What really matters is that the FCC ensures that the Internet remain an open platform for innovation and economic growth.

Today’s Internet, while global in its reach, is a quintessential American creation. The Internet that we know and rely upon could not have developed in a country like China that limits the freedom of expression and entrepreneurial creativity that has catalyzed the Internet economy. Perhaps motivated by his brief time in China, President Obama took the opportunity to urge the FCC to protect America’s digital bequest to the world. The FCC should embrace the president’s call to action. 

Robert M. Cooper is a partner at Boies, Schiller & Flexner LLP in Washington, D.C, and an expert in telecommunications litigation. His client relationships include advising Cogent Communications Group, a multinational Internet service provider, on regulatory and policy issues.