Host it was in 2010 the federal Communications Commission issued and approved the open Internet Order prohibiting broadband providers from discriminating against internet content. Here is former chairman of the fcc Julius Genachowski talking about that. Today we are adopting a set of highlevel rules of the road that strikes the right balance between these imperatives. We are adopting a framework that will increase certainty for businesses investors and entrepreneurs. The inky respects the interests of edge innovators, the entrepreneurs creating Internet Services and applications they they are addressed and the interest of broadband providers and that American Consumers are aligned. Innovation at the edge catalyzes consumer demand for broadband. Consumer demand spurs private investment and innovation faster than Broadband Networks and sparks ever cooler innovation at the edge. I believe our action today will foster an ongoing cycle of massive investment, innovation and consumer demand, both at the edge and in the core of Broadband Networks. Our action will strengthen the internet job creation engine. Our action will let fans are goal of having americas Broadband Networks be the freest and the fastest in the world. Host and that open Internet Order was the topic of the court case heard this week in d. C. Verizon versus the fcc. Former republican commissioner Robert Mcdowell who is the Top Republican on the commission in 2010 joins us by phone. Commissioner mcdowell, what was the argument that was heard at the commission about this open Internet Forum . First of all peter thank you for having me and this is a very important topic and you are covering it at a very good time. So, the Court Arguments earlier this week went on for two hours even though the original schedule i think was about 45 minutes. So that shows you just tell interested the judges were in the subject matter at hand. And its complex. Its complex legally and its complex factually. One of my concerns is that here we have a roomful of lawyers. I am a lawyer so i can say that, that will determine the fate of how the internet internet should you it fall than that could be a little disheartening. We have had the internet grow and prosper in blossom because of engineers and academics and the free market. So what is really at the heart of the court case is whether or not the fcc has the Legal Authority to do what it did and there are lots of different legal theories there for, different layers of contentions. An essential question for me back in 2010 is what is broken in the marketplace that the fcc was trying to six . The fcc did not do a bona fide peer review of market study of the broadband market before leaping and i think that was a mistake. First of all nothing was broken to be fixed and second of all i didnt think the fcc had the Legal Authority to do what it did. Having said all that i will conclude this part i saying there are plenty of other laws on the books that will protect consumers. There is that the internet should be open and freedom enhancing and a place for all of us to improve our lives. In an unfettered way. But there are antitrust laws and Consumer Protection laws and the potential for classaction lawsuits should Internet Service providers ever discriminate in an anticompetitive way that harms consumers. So i think there are plenty of laws on the books but Congress Needs to address this in the fcc cant do what it tried to do. Host commissioner mcdowell how did how long did the fcc grapple with this issue of Net Neutrality . Even going back to the early days of the Bush Administration when fcc chairman of the time Michael Powell came out with his Internet Freedom statement. Because academicaacademica lly or in theory people could see or contemplate whether or not there would be an economic incentive for Internet Service providers to discriminate in an anticompetitive way against applications. I think as you have seen in broadband in the higher use in wireless rock band the fastestgrowing segment of the broadband market and the multiple screen is quickly becoming the screen for consumer , i think that we have the new market and a new era here and those concerns really hold up the way they did 10 years ago. Host that was Robert Mcdowell former republican commissioner on the fcc. Thanks for joining us on the mitigators and now joining us at our table here at cspan is randolph may who is president of the free States Foundation and gigi sohn president and ceo of a group called Public Knowledge. Ms. Sohn back first of all what is Public Knowledges involvement in position with regard to the verizon versus fcc case . Guest Public Knowledge is a nonprofit Advocacy Organization that represents the rights of Internet Users and the desire of Internet Users to have an open unfettered internet that is not controlled by gatekeepers like the cable and Telephone Companies that provide Internet Access to the world of the internet that we have come to love, the one that drives Economic Growth freespeech democracy innovation and creativity. We were interveners on the side of the federal communicacommunica tions commission in this case so we were supporting the fccs determination that there was a concern with these bottlenecked companies controlling who are the winners and losers on the internet and that they have the right both the Legal Authority and the authority of the First Amendment and elsewhere in the Communications Act to protect consumers and protect competition by prohibiting these gatekeepers from favoring certain content services and applications over others. Host and randy made the same position the states involvement. Guest peter thanks for having me peter thanks for having me first of all peter thanks for having me first of all n. Gigi and i are longtime friends even though we disagree a lot we always enjoy discussing these issues. The Free State Foundation is a nonprofit educational and Research Institution as well. We are bipartisan. We are freemarket oriented organization. We primarily focus on Communications Policy and internet issues. We do a few other issues as well but that is our primary focus. I have been involved at the Net Neutrality issue since the very beginning as commissioner mcdowell said. That goes back a long way so our position has been to oppose the adoption of Net Neutrality rules on both policy and legal grounds. I think as commissioner mcdowell said, and this is a very important points just in terms of the policy issue, there was really no evidence and the commission itself didnt make any findings that the internet providers actually have market power. Gigi already several times has referred to the bottleneck but that is really inconsistent with the missions own findings were lack of findings regarding their market powers. I really start from a proposition as well, if there is not a market failure and if consumers arent being harmed competition theres no demonstrable evidence of consumer harm then there is no reason for the commission to regulate in an anticipatory fashion. Now as to the legal question i think the commission lacks Legal Authority. I think we also were interveners in this case and we argued that the commissions rule even violates the First Amendment that aside from that i think the court will hold in our position all along that the fcc doesnt have the authority to regulate internet providers essentially as common carriers. That is what the commissions rule actually does. I think the courts decision will turn largely on the fact that what the fcc has done is say we are going to regulate you just as we regulated common carriers back in the old monopoly telephone era. Guest theres good news and bad news about what happened on monday. Lets talk about the good news. To the extent that the telephone telephone verizon in this case and people like randy and commissioner mcdowell said that Congress Never gave the federal Communications Commission, that the fcc, the power to regulate rock band Internet Access. There didnt seem to be much question that they did have that authority and they did have that power. That is good news because if they were to rule otherwise and i just want to make the caveat that you can never tell 100 from an oral argument in the court with the ultimate outcome is going to these. And i will agree with that right up front. Guest i was in the courtroom and it appeared that the judges basically stick is a given that the fcc had the authority to adopt these rules under a particular provision of the Communications Act. So that is the good news because that question doesnt just go to whether they can adopt Net Neutrality rules. It also goes to whether the fcc can protect the privacy of consumers of broadband, whether they can promote universal access to broadband among all americans so it really was a core question of was the fcc relevant at all when it comes to the Education System in the 21st century. That argument foreshadows what is to come. What is not so good is what randy is talking about, that two of the judges judge tatel and judge silberman seemed to be very concerned and they were very concerned that the fcc by prohibiting this discrimination against edge providers was treating Internet Access providers like Telephone Companies, like common carriers. So under the law, and carriers have to serve everybody indiscriminately. They cannot discriminate in their rates and their conditions and their terms and the judges felt that this is exactly what the Net Neutrality rules did and the Communications Act says pointblank, you cannot treat noncommon carriers like common carriers. The fcc has classified broadband Internet Access for common carriers. Let me tell you i think the judges shouldnt go with their concerns and why they should allow it. Let me just finish this one point. Why they should not find that these regulations are common carriers. For two reasons. Number one the common carrier relationship is formed when an Internet Access provider has a customer, all right . I under the Net Neutrality rules lets say im verizon and you you are for raising customer. I can refuse to serve you. I can absolutely just say peter i dont want to serve you or im going to charge you more than i charge randy but that is not what the Net Neutrality rules do. There is no Customer Relationship between the edge provider and my Internet Access provider. With the Net Neutrality rules do is say Internet Access provider of gigis you cannot charge the edge provider twice. There is no relationship between the edge provider and the Internet Access provider. That was very complicated so let me make an easier point. Easier point and in fact judge tatel has set himself when it comes to determining what is a common carrier and what is not the Expert Agency should get difference from the court. That is what was so shocking about the oral argument. When two judges are telling the fcc general counsel no, know this is not how common carriage works. This is how it works. That is in flat contradiction to its precedent and a flat contradiction to common sense. You have to let the agency determine what common carriage is and what it isnt. Guest theres a lot to unpack there. Im happy that gigi found some good news in this oral argument because most people walked away from the oral argument myself included, thinking and again just the caveat that you never can be sure for thinking that the fcc is going to suffer probably an important defeat here and here heres the reason why. Gigi asserts that it seems like there is not a question that the court will save the fcc has some authority over Broadband Internet providers. That is probably true. I think they might well do that but i think the more important point is that this Net Neutrality regulation that the Commission Adopted under chairman genachowski was really the fccs central effort to exercise that Regulatory Authority over broadband providers. Sure there are some other things that made to like enforce transparency rules with regard to internet providers but the whole thrust of this regulation as gigi alluded to us to prevent discrimination. That is really at the heart of it. But the reality is that its that discrimination prohibition that in effect converts the internet providers and the common carriers i think as gigi recognized or at least she recognizes the court seems to believe and as i believe, so with the court writes a decision which strikes the antidiscrimination part of the rule which most of us took to be the central part of the commissions rule compact its really eviscerated and as a practical matter apart from source if parsing theoretically what might remain as a legal matter. It has eviscerated a good part of the commissions authority. Its one pink to say the commission has some authority but if the most important thing the commission is trying to do is held unlawful from my point of view that is the good news really. Let me just say and i think this will introduce another part of the conversation. A good part of the argument during the Court Argument had to do with whether the fccs rule which the fcc said prohibited internet providers from charging what are referred to as edge providers, the content providers in and the googles and the facebooks, charging them a price for reaching their customers or sending traffic to the broadband provider, whether in fact that was illegal. The court you know, go with it the fcc camber habitat. I think its pretty clear that the court is going to say that part of the rule is unlawful and strike that down. I think from the point of view of the internet providers, what they say they want to do and what verizon said it wanted to do in the oral argument, you know that rule against socalled twosided pricing is probably at the heart of what this whole battle is really about. I think gigi may well agree with that. Guest i definitely do agree with that and i also agree with randy to the extent that it would be somewhat of a pyrrhic victory if the fcc lands in the authority but it cant actually exercise that authority in the most meaningful way possible. Verizon admitted, verizons counsel who is fantastic and a friend of mine helgi walker basically said for eyes and wants to force edge providers to pay a second poll in order to get Priority Service or better quality of service. So that is what they want to do and that fundamentally changes with the internet looks like. If i could address what commissioner mcdowell talked about. Antitrust can solve all because because its not such a new name at the new name of the telephone and cable companies. The Washington Post had a story about it today. We dont need the fcc to deal with broadband. Let the ftc do it and let the antitrust abilities do it. Let me make a couple of points in that regard. Number one when it comes antitrust consumer sent unfortunately your Supreme Court precedent they dont have a lot of rights to bring antitrust pieces. Its all about the competition so maybe google which way by the way could pay for the priority could ring an antitrust lawsuit that consumers are very constrained. An antitrust law is very constrained. It doesnt get to basic consumer harm and let me give you the ideal example of where antitrust law would not apply. In the kevin martin era the george bush fcc air of his fcc found that, was locking bittorrent peertopeer traffic for no good reason. And they founded illegal and that led to a court case where the fcc was not found to have authority. That kind of case would not be one where antitrust would reach it because it was not a competitive issue. It was just an issue where they felt that bittorrent was full of pirated movies, was a bandwidth hog