Net Neutrality

The FCC’s 218 page “brief” defending its Open Internet Order begs a big question.

How many times is it “reasonable” for any agency to assert that their core legal arguments are “reasonable” before they sound unreasonable? A few? Several? A dozen?

Of the 19 core statutory arguments in the summary defense of the FCC’s Open Internet order, TWELVE defend the order by declaring the FCC’s legal judgment was “reasonable.”

When arguing in court that the FCC has the statutory authority to common-carrier-regulate the Internet for the first time, shouldn’t the FCC be able to declare at least once in their summary defense: “the law says,” “precedent supports,” or at least “Congress intended?”  

The FCC’s latest legal brief defending its Open Internet Order, will represent the FCC’s “strongest possible” legal arguments for its Title II net neutrality case – a vainglorious legal fortress.

In reality, the FCC’s legal case is closer to a magnificent beach sandcastle.

Its downfall will be that its case is sand, on top of a sand foundation -- that won’t be able to weather the elements intact.

Consider some of the elements the FCC’s sandcastle legal case must withstand.

The term “net neutrality,” or direct Congressional authority to mandate the FCC’s concept of “net neutrality,” is not found in law.

Please don’t miss my latest Daily Caller op-ed:” Presidential Candidate Lawrence Lessig’s Far Left Net Neutrality Agenda.”

• It explains the central part net neutrality plays in his Presidential candidacy and it also poses two relevant accountability questions about whether or not Mr. Lessig’s net neutrality movement has respected his call for getting big moneyed interests out of America’s political process.  

Please don’t miss my latest Daily Caller op-ed entitled “America’s Upside Down Cyber-Priorities.”

• It spotlights the national travesty of the government prioritizing net neutrality openness to the detriment of cybersecurity and a more secure Internet.

Google Fiber’s motto is “Think big with a gig,” as in gigabit fiber broadband speeds.

However, if one is open to considering non-Google data, there is substantial evidence that Google Fiber’s de facto motto may be more like “Think vig for the pig,” as in the non-transparent, corporate-welfare vigorish that Google Fiber takes to feed Google Inc.’s porcineappetite for 1) Local government subsidies and special government treatment; 2) immunity from state and local law enforcement; and 3) FCC price subsidies and use of consumers’ private-information without consent. 

Everyone should have the freedom to innovate and compete in America, the land of opportunity.

There should be no innovation or competition double standard where government politically picks winners and losers by rigging competition via denying some companies the freedom to innovate and compete spectrally while granting it to their competitors.

With radio spectrum, America has created different but symbiotic spectrum models. One is licensed spectrum where spectrum for exclusive use is auctioned to the highest bidder. The other is unlicensed spectrum where anyone is free to share the same spectrum if they play nice and do not interfere with other spectrum sharers’ use. These models have never been either/or; they have always been free and open to use separately or together to maximize innovative, commercial, and competitive opportunity.    

I.  Summary

Google’s market capitalization has approached a half trillion dollars as its stock hit an all time high, because of a positive quarterly profit surprise and because Google’s new CFO signaled that “Google cost discipline” may no longer be an investment oxymoron.

The market appears to be ignoring that Google’s legal status as a corporation changed in 2Q15 to an FCC Title II regulated common carrier that is subject to very strict and preemptive behavioral non-discrimination requirements to mitigate potential abuse of market power on Google’s network -- per the FCC’s new Open Internet Order which reclassified Internet infrastructure as Title II common carriage regulated to enforce strict net neutrality.

This analysis of Google’s many new common carrier liabilities has four parts: I) the investment and regulatory relevance of Google being a common carrier; II) the evidence of Google being a major Internet access player via the surprising size of its Internet infrastructure, communications, traffic carriage, and market power; III) a listing and explanation of Google’s many new FCC common carrier liabilities, including nine potential net neutrality violations, three privacy, and three transparency; and IV) a conclusion about what this could mean for Google and its valuation going forward.

Please don't miss my latest Daily Caller op-ed -- "For Smartphone Users, Spectrum is Speed."

• It spotlights how the Administration/FCC strong bias for wireline Internet over wireless Internet conflicts with what consumers want.

Imagine if one company out of the Fortune 500, #474 with ~$6b in revenues, and 2,000 employees, representing about .03% of U.S. GDP, and .06% of the population, comprised 36% of all the vehicle traffic going in one direction on our interstate highway system on any given day.

Now imagine that one company’s lobbying was instrumental in convincing the government to grant that company’s business model the right to commercially use the highway system forever for free, by not ever having to pay a standard gas tax or private highway tolls, like other businesses or people do to pay for the relative wear and tear that their usage causes on the highway systems.

Imagine further that the government justified this special one-way highway traffic treatment, by saying it would be better and fairer for everyone if the companies that use and profit most from using the most one direction of the highway system never had to pay for that delivery benefit – that consumers should subsidize their commercial use and profits in “perpetuity.”

The company’s situation you just imagined is Netflix’. The government agency is the FCC. And the perverse government arrangement is the FCC’s mandate of a permanent zero price for all Internet downstream traffic.  

We will learn quickly and unequivocally at the FCC’s August 6th meeting, if the FCC is true to its word -- that there will be no “utility-style rate regulation” of broadband.

While the FCC’s Open Internet Order fact sheet stated: “the Order makes clear that broadband providers shall not be subject to tariffs or other form of rate approval, unbundling, or other forms of utility regulation,” will the FCC majority -- in its first post-Open-Internet-order ruling -- cynically do the exact opposite by imposing de facto “utility-style rate regulation” to the IP transition from copper to fiber networks?