In 1979, cspan was created as a Public Service by americas Cable Television companies and is brought to you today by your cable or satellite provider. Host and on this weeks communicators, a discussion on the fccs upcoming debate and vote on repealing the Net Neutrality regulations. A couple of weeks ago previn can carr brendan carr was a guest on this program. Heres what he had to say about Net Neutrality. In a nutshell, what this document proposes to do and ill be voting for it december 14th is return the internet to the exact same Regulatory Framework that governed the internet starting from 2015 all the way back from 20 years that preceded it. And under that environment we saw mass investment, we saw consumers protected and free and open internet. Most fundamentally, we all believe in a prix and open internet free and open internet, but whats the right Regulatory Framework to support that. Host gigi sohn, you were at the fcc with democratic chair tom wheeler during the time that Net Neutrality was debated. What did you think of what commissioner carr had to say . Guest i think commissioner carr was engaging in a little bit of revisionist history. Number one, it deregulates broadband, okay . It basically takes broadband oversight out of the fcc entirely and gives it to the federal trade commission which does not have strong tools. Thats number one. Number two, it eliminates the rules against Internet Service providers like comcast and at t blocking, throttling internet traffic and allowing for whats called fast lanes. So in other words, charging online providers to get to the consumer faster with better quality of service. And thirdly, and this is really important, it preempts or prohibits the states from protecting consumers and protecting competition with similar rules. So this is very, very radical departure from 20 years of both republican and democratic fcc chairs saying, number one, we think the fcc has the authority to protect consumers and competition, and we think that we should actually do something about it. So i disagree with commissioner carrs telling of the history. Host why did your, during your tenure at the fcc, did it feel necessary to have title ii . For the internet . Guest so in january of 2014 the d. C. Circuit court of appeals, thats the federal court of appeals here in washington, d. C. , overturned chairman genachowskis rules. He had Net Neutrality rules that were grounded in a different part of the communications act, okay . Title i. And they were pretty strong rules. I didnt agree with all of them, i thought they could have been stronger. In fact, when i was at a nonprofit, we supported the fcc in court. But the court said, im sorry, you cannot have these strong rules under title i of the communications act. So news of the world to have strong so news of the world to have strong in order to have strong rules, it had to be grouped in title ii. Even more importantly and i think this is critical, we did not apply all of title ii to Broadband Internet access. In fact, we didnt apply 30 of 47 provisions of title ii because we didnt think it would be in the Public Interest to overregulate broadband. Host well, robert mcdowell, former republican commissioner on the fcc, youve herald a little built of this discussion. Whats your view . Guest first of all, thanks for having me back, peter. Its great to be on, and happy holidays to everyone. Hopefully, at the end of the segment we can say the same thing. [laughter] i think its important to talk about history, and, you know, theres a lot being written about this debate, and so thank you for having opportunity for us to kind of go into what are the facts and what is the history, and what does it actually mean for consumers and entrepreneurs. There are a lot of articles that are purely click bait. So commissioner carr has a good point, that was a good clip to play. We are going to define Net Neutralitys maximum Internet Freedom for consumers and entrepreneurs and everybody in this space, really the debate is over which federal statute that already exists is the best to do that to protect consumers. If you look at how the internet started when it was privatized in the mid 90s up until february 2015, you saw about 1. 4 trillion invested in broadband infrastructure alone during that period of time. So there are three acts, at least three federal statutes that protect consumers and entrepreneurs and theyre very powerful. And they do have teeth, and theyre the sherman act, the clayton act and the federal trade Commission Act. There are also state protectionings. Yes, the order says it preempts the statements from being miniature fccs and trying to regulate the economics of broadband, but what it doesnt do does not prevent state attorneys general, for instance, from suing Internet Service providers if they harm consumers. Consumer Protection Laws at the state level. Plus theyre the plaintiffs lawyers, trial lawyers who can bring class action lawsuits if Internet Service providers breach their contracts with consumers. So those three powerful federal statutes at least plus a bunch of state actions have provided since the begin of course the internet a strong and powerful disincentive to act in an anticompetitive way that harms consumers. On top of that, you have a more competitive and robust broadband market. The internet market, broadband has been going mobile for many, many years. Over about 90 of u. S. Consumers have a choice of four mobile broadband providers. And that is a key element here. Mobile broadband has faster speeds today than cable did ten years ago when this debate was starting to ramp up. And that is becoming a competitive threat to cable. Were seeing more over the top, fragmented content and apps. I look at my kids, age ls 16, 18 and 10, theyre looking at the mobile scream. Theyre looking at over the top, on demand type video. And that were seeing the marketplace trying to adjust to that. Youre seeing more attempts at vertical integration, verizon buying aol and yahoo , comcasts purchase of Nbc Universal which was blessed by the obama fcc. All of those are defifns because the internet marketplace is disrupting these incup bents incumbents. You saw last monday, cyber monday, really become mobile monday with about half of all the purchases maden on cyber monday over mobile devices. More than half of all u. S. Households are wireless only. So this is actually a very good news for consumers. And what the order will do at the fcc, it will preserve Consumer Protection and protection for entrepreneurs, and it will allow more certainty for the investment of over 300 billion thats going to be needed in the next ten years to build out fifth Generation Wireless Networks which will have one gigahertz of speed or six times faster than what you enjoy now with 4g and three million jobs and the 500 billion in Economic Activity that should come from that. So you can have a winwinwin environment like you had until the title ii order injected a certain amount of certainty. We can debate whether or not theres been a downturn in Capital Expenditures to fund these new broadband networks. Theres a lot of data out there, im sure gigi will try to refute it, and thatll be good. [laughter] the last thing ill say is, you know, im glad im here with gigi, weve lost nuance and facts, and so im delighted we have this chance on guest so if i could shed some light and shed some facts. Lets talk about the federal trade commission because, as i said before and as rob has confirmed, what chairman pai is trying to do is give over all oversight to broadband, Broadband Internet access over to the federal trade commission. First of all, i find that remarkable. The fcc started in 1934, and it was told by congress that your job is to oversee networks, right . Whether they be broadcast networks or Cable Networks or the telephone network. So this fcc is saying we dont want to have oversight to access to the most Important Network of our lifetime, and i just find that remarkable. We want to give it to the federal trade commission. Well, why does the federal trade Commission Fall short . It falls short for a number of reasons. Number one, it has no rulemaking authority. Rules are important. They prevent harm before it happens, okay . Harm to consumers and harm to competition, thats number one. Number two, the ftc sees its authority as very narrow over unfair and deceptive trade practices meaning that if an Internet Service provider lies and says im not going to block, im not going to throttle, im not going to have fast lanes and goes ahead and does that, then it will go after the Internet Service provider. Its not going to do anything if, for example, lets say comcast decides to double its prices one day. The ftc can do nothing about it. What if an isp blocks speech it doesnt like . The ftc can do nothing about it. Even more importantly, and this is something that really gets lost, there is a case right now pending in california in the ninth Circuit Court of appeals that would strip the fcc of all oversight over broadband even if chairman pai and the fcc reclassifies. This case is out there, it was brought by at t interestingly enough. So even if chairman pai and his colleagues reclassify the ftc would not have horse over Broadband Authority over broadband if at t wins this case, and its still pending in the courts. Let me talk a little bit about competition, if i might. Chairman pai put out his own numbers about who has Broadband Internet access at the speeds that the fcc considers Broadband Internet access. And his numbers look like this 58 of all census blocks have a choice of zero or one Broadband Internet access provider, 87 have a choice of two or less. And let me just say, when you measure by census block the way the fcc measures, if one person in a census block has broadband, then they all have broadband. So those numbers are even worse. Nobody knows what it is on a household basis because the Internet Service providers are not required to give that information over to the government. That is not competition. And mobile is great and maybe one day 5g will provide speeds that the fcc considers broadband, but today it doesnt do that. Guest theres a lot there. Where to begin. First of all, the ftc can intervene if speech is being blocked or the department of justice can. So youve got sherman act, sections one and two, clayton act, Section Three, you have section five of the federal trade Commission Act is actually broad and flexible and nimble. And you dont have to fund a lawsuit, you dont have the hire expensive lawyers. The federal trade commission itself is a 313 Million Agency with 640 lawyers and 70 ph. D. Economists, and what they do in part is look for trends, look for bottlenecks, and they are giant Public Interest law firms, essentially. So the horrors, the parade of horribles that come out from the title ii proponents can all be cured by antitrust law. And its interesting, you know, the first six years of the Obama Administration we didnt see a Net Neutrality complaint brought to fruition or an antitrust complaint brought to fruition. So this begs the question, what was broken that you were trying to fix with title ii, right . Thats because these ore competitive Market Forces as well as those three federal statutes i mentioned plus all the state law acts as a very powerful deterrent. And, yes, there are a couple of handfuls of incidents that she might cite, all of which, by the way, were resolved before the title ii order and were never really brought to a head even after the december 2010 other innocent neutrality or open Net Neutrality or open Internet Order was voted on by the fcc. Guest an antitrust order takes years to come to fruition, and its harder for the public to bring these kind of cases. So guest the [inaudible] guest antitrust gets into competition. So lets say youre a startup, okay, and you cant afford to go in the fast lane, and your investors are saying were not going to invest in you unless you can get in the fast lane somehow, unless people can see you, you dont have time for an antitrust case to wedged us way wend its way through the courts. And this is why rules are so important p. Rules moderate bad behavior, they let consumers know what their rights are, and they protect consumers and competition before theyre harmed. And ftc and antitrust law cant to that. Guest so actually it can, but lets go to our [inaudible conversations] guest it is nimble and flexible. Section three of the clayton act would prevent, its against Section Three of the clayton act exactly what you just said, youre lessening competition. So the ftc and department of justice can act and act quickly, didnt because they did not have systemic market failure here, and thats one thing that was lack anything the 2015 fcc order under title ii, a market study saying theres systemic market failure. Lets go the point of regulation before the fact, some like myself would call it, mother, may i. Do you have to go to the commission, the fcc, in order to present your case to say can i do this, can the marketplace experiment in such a way. One example is zero ratings. Tmobile had a product which is certain video would not count against your data cap, can we do it. At first the fcc gave a green light to it, and then it gave a yellow light and said, wait a minute, were not sure we want this. This was very popular with the public, and tmobile was saying, look, all were doing is if you meet these parameters, technical parameters, it wont count against consumers data caps. This was very popular. But in the meantime, because it was the mother may i get permission from the government, there was an interruption for months and months and months it wasnt just a day or two or a couple weeks. Would popular zero rating be able to happen. This was also caught internationally when free Internet Service was india, were not india, but you cant offer free Internet Service to mother teresas poorest of the poor because that could violate these tenets. And thats when it starts becoming unworkable. And markets and analysts and the folks who have to fund 300 billion to build out 5g start saying, well, were going to deploy that slowly if at all, and theres lots of evidence in the record from these mom and pop, one or twoperson operations that Service Rural areas, evidence in the record saying 80 of their members have been told by their lenders, their local banks, they wouldnt get the money or as much as they needed in order to build out their networks. Thats really the main reason chairman pais doing what hes doing. Guest ill get to the investment in a second, but i need to talk about mother may i. No blocking, no throttling, no fast lanes or [inaudible conversations] guest that is, that is prohibited, okay . [inaudible conversations] guest no, its not prohibited by antilaw. You can you can realize antitrust law. You can read your guest you have notes too. Guest youre right. Thats number one. Nurple two, we left zero rating open. Im not sure it was the best beyond all doubt. Zero rating is not about free data, okay . Its about favoring Certain Applications and saying they do not apply to the data cap. Now, we didnt have a problem with [inaudible] what we had a problem with was at t favoring its directv content and saying the data cap does not apply. I want to ask as a general question if video does not get applied to the data cap, if that is zero rating, why do you have a data cap in the first place . The reason is to create scarcity so you can fave your own content. So we did not bar zero rating. There were a lot of calls to do so, but we did not do it just so we could make sure that that we would allow new zero rating models to happen. And some, like tmobiles, was fine. At t we were about to say and then ran out of time was not fine because it favored its own content. Let me talk about investment, because i think thats really, really important. People have to see and listen to what the isps say to wall street and not what they say to washington d. C. Okay . Not one publiclytraded isp told its investors or told the securities and Exchange Commission that title ii harmed its investment. In fact, it said the exact opposite. The ceo of charter, the ceo of comcast has said title ii, were afraid, but title ii which is the stronger regulation, the more utilitylike regulation would not harm us. If you would just give me a minute, peter, i have to read something from charters blog post from just last week. Two sentencings. While customers may experience speed upgrades as if a switch had been flipped, they were made possible by charters ongoing investments in infrastructure and technology. These investments allow us to better serve our customers every day in ways big and small. Since 2014 charter has invested more than 21 billion in these critical areas. So they are investing, and thats what they tell wall street. Guest loss there. So, first of all, its demonstrable in wireless in the past two years capex has fallen about 18 , some