Meeting . Guest well, the fcc proposed a set of rules to adopt open internet principles. The fcc tried in 2010 to put rules into place, but most of those rules were overturned in court. So the fcc tried to in a pragmatic way put into place rules that insure theres not blocking of traffic, theres not degradation of traffic on the internet and so forth. But they also sought comment on a variety of other different approaches. So i think given the complexity of the situation, given all of the politics involved and all of the questions involved in this, i think they did a pretty good job. I think they asked the right questions, and its absolutely appropriate that so many people are writing in and commenting. This is a tremendously important issue. Host matt wood is with free press, hes their policy director. Mr. Wood, what do you think . Guest well, we think that the fcc did ask some of the right questions, but the path their proposing to do preventing blocking, degrading of traffic is just not going to do anything for the rest of us and will not work. The frc chairman has said he wants to use a particular Legal Authority to reinstate the rule section 706 of the telecom act with apologies for diving straight into the numbers and codes, and the court case that was issued in the d. C. Circuit in january basically said, okay, if you want to use section 706, you will have to allow substantial room for individualized bargaining and discrimination right there in the text of the court case saying that the fcc has some authority under this statute, but not the authority to prevent discrimination or blocking. So thats why we agree with chairman wheeler when he says we need to have these protections in place. We appreciate the fact that hes asking these questions. We just think the answers hes providing thus far with his preferred path will not actually get us to the place where the fcc can prevent this kind of discrimination and blocking by isps. Host and randolph may of the free state foundation, whats your Opening Statement . Guest well, of course, peter, thank you for having me here, and im glad to be here with my friends matt and ken as well. I have a different perspective, and the bottom line is that my preference would be that at this time the commission not move forward to adopt any new regulations. Now, at this time they just proposed rules. And what i prefer to see is for the commission to watch the marketplace, see how it continues to develop. Remember, the internet space is a dynamic space. Its changing very rapidly. And this is the key point. In its notice and even in its previous attempt to adopt rules the commission really hasnt identified a market failure. In other words, its not saying this market has completely failed and consumers are being harmed at this time. There are an awful lot of coulds and mights in the notice about things that might happen and could happen to consumers. And i agree that if they did happen, then the commission in that case should take some action. But the commission itself says quite explicitly that it doesnt, that in its view the need to adopt these regulations is not dependent upon whether theres really a market failure. In other words, whether theres a lack of competition or whatever. And so right from the beginning from our perspective thats the wrong approach to take. Now, im sure what were going to get into will be lets assume the commission is going to adopt rules in one form or another. Its not just going to, as i would prefer it to do, to watch and wait and defer to congress. Then theres a very big question and i think kevin alluded to this and matt as to what course of action the commission should take. There are basically two different proposals. One that i think matt prefers is for the commission to classify the internet providers as common carriers, thats referred to as the title ii approach. And another, the other approach would be to adopt a commercial reasonableness standard under which their practices would be judged to see whether or not theyre lawful or not. And ill just say at this point and then i think well get into, i think, a lively discussion about these two different approaches, the title ii approach and i think matt will agree with this thats, essentially, the same common carrier model that was first adopted actually back in 1887 when congress adopted, passed the interstate commerce act to regulate railroads which were thought to have monopolistic power. It was incorporated, is essentially, for all practical purposes word for word into the Communications Act when it was adopted in 1934 to regulate what was thought to be the monopolistic telephone system, what we called ma bell at that time. And if we put these two acts together, the interstate commerce act on one side and the Communications Act on another side, title ii, i am absolutely certain finish because ive studied them that theyre, essentially, the same. And what they do, and it was their purpose to do, was to establish really strict regulatory controls on these entities to prevent the abuse of market power. And i would submit that now at time in this digital age we have a very different situation, and we dont want to apply railroadtype regulation to telephone companies. Host well, now, matt wood, did randy may assess your position correctly . Guest well, in some ways. I think the question, the way he states it is actually true in some ways. These arent, in fact, new rules the commission is proposing. It is continuing to have the same principles weve always had in place for our communication system. And so the notion that somehow we can do without them now because theres no market failure, i think, ignores the fact that we still need an open and nondiscriminatory Communications Platform even as the technology changes. Yes, common carrier regulations can apply to monopolies and utilities. They can apply in other situations as well where you do have more than one choice. Nobody would really think its okay for Verizon Wireless not to pick on verizon, but they were the plaintiff in this case for Verizon Wireless to block my phone calls to a certain number or Certain Group of numbers just because i could always switch to at t or sprint or tmobile or some other regional carrier. These principles are just as valid today as theyve ever been. We want the same basic, Core Principles in place which say the person who provides my connection doesnt get to decide how i use it or who i call. They set the charges and the rates, but it should be fair and reasonable for me, and i should be able to use it however i wish once ive paid my bill. Host if you had your curt es, would druthers, would the internet be in title ii . Guest theres Internet Access which is the wires and spectrum that we use to get online. The internet content, i think we would all agree, should remain free from regulation. But as Susan Crawford has said, its like confusing the conversation for the sidewalk, you know in of course we want the conversation to be free and unregulated, and the fcc has no place regulating content online. They have always made sure that the Communications Pathways stay open. So today we have a regulated phone system, or at least we have the vest vestiges of a regulated phone system. The fcc makes sure that Communications Pathway is open, nondiscriminatory and there for everybody to use, not just those few the phone Company Might favor. Host kevin werbach, youve been listening to this conversation . Guest yeah. I wanted to jump in and say, first of all, lets make sure we understand what this debate is all about. Were getting into the details which are really important, but whats at issue here is the openness of the internet. And the internet is the most extraordinary engine of opportunity, innovation, economic growth, freedom that we have ever seen. And, basically, the broadband platforms and systems that were talking about are the information infrastructure of the 21st century. They are the ways that we are going to communicate with each other and also the ways that were going to do business. So its crucial to think about whether those platforms remain open the way they have historically. The internet has grown up as a network where anyone can communicate, anyone can get online. A teeny Little Company can get access to the network and become in some cases like google or facebook, a huge business. And its vital that that not change as the internet evolves. Were moving more into a broadband world, and randys right saying the internet is evolving, and we shouldnt fix it in place. But i think everyone at this point in this debate agrees that these values are important. And thats, its important to say, a Significant Development in this debate. Weve been fighting about Net Neutrality or open internet rules for more than a decade now in the u. S. And in that time theres been a real shift. So when we started out, you had seem like ed whitacre who was then the ceo of at t saying things like no one can touch my pipes. We paid to build our network, and we should decide what happens on it even if that means discrimination, essentially. Now you have Companies Like comcast, david cohn of comcast has said we think were more committed to Net Neutrality than anyone. At t just put out a blog post saying we completely agree we shouldnt discriminate en bloc, and were putting some of that into our terms of service. So i think theres an emerging consensus that these values are important. And then we get down into the weeds about how to do it, and theres legitimate disagreements about whats going to happen, but that has to be the starting point. And i think while i share some of randys views on this, i think the starting point of saying, well, we dont think anything bad has happened so, therefore, we shouldnt adopt anything is problematic. Because once we lose the openness of the internet, if we move into an environment where its closed, where it doesnt have that competition, where investors, venture capitalists dont fund startups because they say, well, im not sure youre going to be able to get be access to the network, that has a, essentially, a vicious cycle it creates that prevents that kind of innovation. So we have to avoid that happening. And in order to avoid that happening, we have to have a cop on the beat. And thats the role that the fcc has historically played in these communications markets, as matt says, and its the role it should continue to play here. So we have this debate about the best way to do it. And, quite frankly, i dont think in practice it would matter all that much between title ii and the 706 process that chairman wheelers proposing. Again, were talking here about hypotheticals. And there are some forms of differentiation of traffic that are perfectly legitimate. For example, every isp blocks spam and can be of denial of service attacks, and no one is saying they shouldnt be able to do that. Everyone allows companies and individuals to pay more for higher catty. So i may have a capacity. So i may have a better broadband connection that be my neighbor because i may more. As these new Business Models develop, as these new services get tried, whats the scope that the fcc should take off the table . And there is a debate going on about whether the fcc should totally preclude whats called paid prioritization or not. That actually doesnt go to the title ii issue. So whichever set of rules the fcc picks there can be with some limits. As matt said, the fcc is more constrained under 706 on totally prohibiting these kind of prioritization deals, but it can allow for some degree of prioritization even under the common carrier rules as long as theyre offered on the same terms to start with everyone. So were going to get very quickly into the weeds no matter what happens here, but i think we need to start with a regular in addition that we need to move recognition that we need to move forward, we need to get something adopted thats in place that gets through the courts, and then were going to have to fight inevitably about lots of these details. Guest i agree with, again, quite a bit of what kevin said particularly about the values that he articulateed, and openness is important. So is innovation, by the way. And not only innovation at the edge, the content providers and application providers, but also in the network because innovation can take place there. But i want to to move this forward, im going to, i want to assume that the commission be is going to adopt some new rules because i differ with kevin, i think, in this sense, that he minimizes the difference between the two different approaches, the title ii approach and the lets call it the section 706 commercial reasonableness approach. And he said that it may not make much difference. I think there is a significant difference, and im not, you know, entirely sympathetic to the section 706 approach, although i did say the day that it leaked that chairman wheeler might propose that, that it did have certain merits. So i wanted to try and hopefully move this debate in that direction. Heres what the difference is and why its important. I was actually at the commission from 1978 to 81. That was during the hey today of title ii heydey of title ii regulation of at t. I was in the general counsels office, associate general counsel, and i understand whats in title ii and where it comes from. And there are a lot of, theres a lot of regulatory baggage that comes with it. Now, i know under one theory theres and, truly, im not going to get too deep into the weeds, but theres a theory that the commission could adopt this title ii regime and then forbear from applying all of these different requirements that come with it. But those requirements have to do with things like allocating cost among different services, valuing property, getting the fccs permission before you extend that works or discontinue networks, getting the fccs permission for when you have a director that is in common with a director of another company and things like that. By the way, also interconnection with networks in a traditional public utilitystyle proceeding. So theres a lot of baggage, and it would, in my view, it would not necessarily legally be easy for the commission to get rid of those, all of these various requirements, nor could it be done in a short time. So, you know, aside from the rigidity of title ii, theres the practical problems. But let me just focus on the commercial reasonableness standard because, to me, if theres going to be some action, thats far preferable. Because if its implemented properly, and it would have to be implemented in this way if its going to pass be judicial muster because i think as matt said, the court said that the commission cannot, in effect assuming it doesnt reclassify it cant impose a regulation as a practical matter is just like common carrier regulation. So the key would be to interpret commercial reasonableness so that theres sufficient flexibility for the internet providers to be able to experiment with some new models. And i guess from my perspective to just presume that absent some showing of consumer harm or, again, market failure and possibly there could be that, but at least go in with the presumption that the practices are going to be reasonable unless theres evidence presented to show that theyre not reasonable. And to place the burden on the complaining party to show the unreasonableness. And then you would have a regime, i think, that, you know, that perhaps in order the get past this issue that to get past this issue thats been with us for over a decade that we could with live with and just see whether that works that way. Guest well, randy says that innovation can occur in the middle of the network, and thats true to a point, its just im always skeptical of claims that my innovation is blocking your innovation, which is often the way these innovations by the phone companies, the Cable Companies are phrased. So when at t or comcast says allow us to phrase traffic this a way we find suitable, we just take those claims with a grain of salt, especially when we look for consumer harm. Its not always easy to prove what were missing out on. Guest its not your innovation that may be blocking my innovation, the regulators review and potential misjudgments in having to make priority judgments in advance about whats permissible. Guest right. Guest so, and im not attributing any ill intent to the regulators at all or even incompetence, but thats just the nature of regulation, that there can be those types of misjudgments. So i would rather wait and see whether theres an actual guest right. Guest can marketplace rob and consumer harm before problem and consumer harm before trying to stop something in advance. Guest right. And im not necessarily attributing ill will to at t and comcast. I think that the reason weve seen at t and comcast and verizon as well although somewhat quieter than those other two Companies Embrace the chairmans proposal and say theyre fine with section 706 is because, randy, you and i probably agree more than i do with ken on this point, i do think there is a meaningful difference between 706 and title ii and under title ii the fcc, could, in fact, keep the network open, prevent the monetizing of their network that i think these Big Companies want to do. Of course, they should be be be allowed to monetize in certain ways, by selling different amounts of capacity to different people, but not by two things. Not by saying were going to charge you more based on how you use that capacity meaning if you want to go to netflix, it costs one thing, but if you want to go to amazon, it costs another. And the problem of putting the burden of proof on the Internet User is that these companies are quite literally saying everybody on the internet is now a customer of the isp. So if i come to cspan. Org and i visit cspan using my broadband connection, suddenly cspan is not just a comcast of its own internet provider, it is now a customer of my Internet Service provider and can be charged for the privilege of reaching me. And thats really the kind of discrimination and differentiation and prioritization that we see as out of bounds here, as harming innovation, as something that will be difficult to measure the consumer harms because we wont know what were losing out on once the Interne