FCC

We all have been played.

One of Google, Facebook, and Amazon’s greatest innovations to date may have been deceiving the U.S. government and voters with the narrative that their core Internet business models and practices were only good, innovative, pro-consumer, and worthy of no regulation, when they knew it was untrue, while at the same time lobbying that if an ISP pursued their same Internet business models and practices, that it would be anti-innovation, anti-privacy, and worthy of maximal telephone utility regulation, including a permanent, user-subsidized, price-of-zero for Google, Facebook, and Amazon’s outsized, pure profit,  commercial downstream Internet traffic usage.

Can you say: “winner take all” industrial policy?

Can you say: “regulatory arbitrage” game?

Can you say: “unlevel playing field?”

After this year’s revelations of Google, Facebook, and Amazon’s many bad, unfair, and deceptive practices, it warrants revisiting if their past forceful policy positions that only ISPs are a risk to consumers, privacy, and competition, and only ISPs warrant utility-grade net neutrality, non-discrimination, and maximal privacy regulation, were self-serving, anticompetitive, and deceptive distractions from their own anti-privacy, discriminatory, paid-prioritization practices?

We have all been played like a fiddle.

What is the simple key to passing bipartisan net neutrality and online privacy legislation?

Put consumer interests first with a new Federal consumer-centric law, not last like today, where technology interests come first, in technology-centric law which minimizes responsibility to safeguard consumers’ choices, privacy, and security.

The tell for whether someone supports bipartisan Internet legislation to protect consumers and level the playing field or not, is whether they are focused on what is best overall for the online consumer or focused on special treatment for one technology over another. It is that simple.

Only people vote, bleed, or care. Technologies do not.

The Bipartisan Case

The origin of the term “Internet” is “inter-networking” per Robert Khan, co-inventor of TCP/IP, the Internet protocol that essentially enables and thus defines which networks are interoperable parts of the Internet’s overall network of networks, which now effectively encompasses ISPs, Internet services, Intenet platforms, cloud providers, apps, and others.  

In this post-mid-term election sea of partisanship, expect a political safe harbor for bipartisanship in the next Congress to protect consumers and level the playing field, by bringing more accountability and transparency to the Internet’s unchecked, winner-take-all, biased-brokers, of online supply and demand: Google, Facebook, and Amazon.

This is timely and relevant because conventional wisdom appears to dismiss bipartisanship in this area as a phase and not lasting to conclude that no Internet-related legislation passes next Congress.

This analysis considers the political reasons why a Republican-controlled Senate and Democrat-controlled House could cooperate and pass bipartisan legislation that brings much more accountability and transparency to the unaccountable Internet triad of Google, Facebook and Amazon.

The Reasons Efforts for More Google Facebook Amazon Accountability Will Remain Bipartisan 

First, there are evident high-level lasting concerns from both the right and left about the Internet triad’s unaccountable power.

What is non-neutral, neutrality nonsense?

When the world’s dominant biased-broker Internet platforms, Google, Facebook, and Amazon, are the biggest funders of network neutrality and utility common carrier regulation for competitive ISPs, and their dominant, increasingly utility-like, network-effect-driven, business models, regularly treat other businesses non-neutrally while misrepresenting to the public that they are neutral platforms.

Google, Facebook, and Amazon demand maximal ISP regulation for network neutrality, transparency, and accountability, when ISPs operate their networks neutrally, transparently and accountably without it, but Google, Facebook, and Amazon fiercely oppose operating their much larger, global, encrypted-networks, with network neutrality, transparency, or accountability.

The “techlash” has exposed Google, Facebook, and Amazon, as the most dominant companies in the U.S. warranting antitrust scrutiny, as inherently biased-broker non-neutral networks, and as privileged platforms who abuse Section 230 immunity from civil liability to operate non-neutral, non-transparent, unaccountable, and anticompetitive Internet platforms.  

This is the non-neutral, neutrality nonsense of Google, Facebook, and Amazon – i.e. their asymmetric regulatory recipe for a winner-take-all, unlevel playing field.

A core question for the FTC to answer in its hearings on “Competition and Consumer Protection in the 21st Century,” is what are the FTC’s underlying competition expectations?

Why have telecom, cable, and wireless network communications’ convergence with information technology turned out to be pro-competitive, but the Internet platforms’ reverse convergence of information technology with communications networks turned out to be anti-competitive, i.e. naturally winner-take-all?

Asymmetric governmental competitive expectations are why.

Congress’ stated purpose in passing the 1996 Telecommunications Act was “to promote competition and reduce regulation…” [bold added] and Congress’ antitrust savings clause clearly did not change the applicability of antitrust laws to communications networks.

In stark contrast, as an unregulated information service, information technology companies’ networks operated outside of the FCC’s pro-competition mandate, despite the well-known monopolistic behavior of consumer/business software provider Microsoft at that time.

Evidently antitrust non-enforcement can have big consequences.

It can cause big un-ignorable problems that get the attention of the President, all of Congress, and both political parties. That rare feat of collective attention-grabbing can point them collectively in the same rough direction – back to antitrust authorities that could have, or should have, prevented many of the messy Internet platform unaccountability problems that they collectively are wrestling with resolving now.   

Before the FTC has its first retrospective review hearing on its own institutional performance this fall, it has been getting an implicit earful from its governmental superiors that it actions and inactions have apparently created broad and serious negative consequences for competition.

Just like there is a strong inevitability case that it is a matter of when and not if U.S. online privacy/data protection legislation will pass, there is also a compelling common-sense case why U.S. Federal privacy and data protection legislation should and will effectively preempt or supersede state Internet-related privacy laws.   

California’s June passage of an EU “GDPR-light” privacy bill, has teed up the reality that states can and will fill the vacuum left by Congress’ long inaction in addressing consumer privacy protection in the 21^st century – until Congress legislates.  

The fact that California is taking the lead in filling a Federal vacuum, does not mean that pending state Internet-related privacy laws will survive or be determinative long term when Congress ultimately fills the gaping vacuum.

As the FTC prepares for their public hearings on “competition and consumer protection in the 21^st century” this fall, it would be reasonable and instructive for the FTC to seek to better understand the root cause of the need for these once-in-a-generation FTC hearings and to confront some of the most evident serious effects of this root cause problem.

First this analysis asks and answers “what most stunts the FTC’s antitrust and consumer protection law enforcement mission?

Second it asks a dozen of the most important questions the FTC should be asking to zero in on what problems are evidently happening with competition and consumer protection in the marketplace that the FTC’s mission and efforts evidently have been unable to deter, address or resolve since the Pitofsky hearings in 1995.

Submission for: U.S. FTC  Fall 2018 Hearings on “Competition and Consumer Protection in the 21^st Century” Topic #2: “Competition and Consumer Protection in Communication, Information, and Media Technology Networks” FTC Project # P181201 (PDF of this filing is here.)

The Unfair and Deceptive Online-Offline Playing Field of Divergent U.S. Competition and Consumer Protection Policy
Internet policy* has been the determinative dynamic of U.S. competition and consumer protection in the 21^st Century. Government exemptions/immunities evidently heavily favor regulatory arbitrage over free market competition, and drive the evident divergent reality where most of U.S. competition and consumer protection problems occur online not offline.

What business trade-offs must Alphabet-Google make to continue to grow revenues at its 25% annual rate -- i.e. +$27b in new revenues in 2018, +$35b more in 2019, and +$45b more in 2020 -- to become another company worth a trillion dollars?

Alphabet-Google has decided apparently, whatever it takes.    

Maybe no single Google action tells us more about where Alphabet-Google stands in its twentieth year as a company and what it believes it must do to succeed as it wants in the next twenty years, than “Google Plans to Launch a Censored Search Engine in China” – the main driver of Google’s apparent new China-first growth strategy revealed in The Intercept’s scoop this week.