The ‘clicktivist’ in chief

Earlier this week, President Obama took his eyes off wars in the Middle East and the Ebola virus crisis to weigh in on net neutrality, issuing a statement (accompanied by a short video) where he asked (because he cannot order) the Federal Communications Commission (FCC) to reclassify “consumer broadband access” as a Title II common carrier telecommunications service. In so doing, Obama advised the FCC to reverse nearly 20 years of bipartisan policy to apply a “light touch” to the Internet.

Rather than lead, Obama’s statement firmly places the president in the role of follower. The president’s arguments are boilerplate net neutrality advocacy, calling for the commission to reclassify broadband as a Title II common carrier telecommunications service and then adopt “bright line rules” that would prohibit blocking, throttling and paid prioritization. As is standard with the reclassification argument, Obama also suggests that the FCC use its authority under Section 10 of the Telecommunications Act to forbear “from rate regulation and other provisions less relevant to broadband services” in order to create some sort of “Title II lite” to ease the sting of applying regulations designed for a monopoly telephone world onto the Internet.

{mosads}Given such platitudes, it is clear the president’s advisers have failed to do their job, much as the Secret Service has failed to do theirs. Obama’s talking points offer nothing new to the debate other than an endorsement of regulations his team plainly does not understand.

For example, the debate is not about “consumer broadband services” (i.e., the retail market) as the president states. Quite to the contrary, as the D.C. Circuit in Verizon v. FCC, the commission and FCC Chairman Tom Wheeler himself have repeatedly recognized, the relevant market at issue is terminating access (i.e., the other side of the two-sided broadband market).

Obama’s desire for Title II is also puzzling. While the ignorance of the millions of “clicktivists” claims otherwise, anyone with experience in telecommunications regulation knows that paid prioritization and reasonable discrimination are perfectly lawful under Title II jurisprudence, if not mandated by it. Despite the law, if the FCC’s solution does not involve some form of Title II, then Obama’s political base would consider it to be a political loss. With the shellacking of the recent midterm elections, however, I can only conclude that if the president believes that it is appropriate to ignore the law in order to get a political “win,” then so be it.

Moreover, the president’s claim that he wants to eliminate “rate regulation” is disingenuous. As the D.C. Circuit recognized in Verizon, implementing a “no blocking” rule is nothing more than price regulation (albeit “zero price” regulation) under another name. (For those following the debate, the president’s claim is similar to one made by Rep. Henry Waxman [D-Calif.], whose proposal had just as many substantive flaws.)

Finally, Obama’s assertion that the FCC can exercise its authority under Section 10 to forbear as it pleases just doesn’t hold water. In particular, the commission has defined the relevant market as terminating access and determined that each individual Broadband Service Provider (BSP) is a monopoly (i.e. “dominant”) in that market. Historically, the agency has not granted forbearance from price regulation in the presence of dominance. Reversing course would require a most specious legal argument and establish some odd precedent. Namely, if the commission grants forbearance in the face of monopoly, then such precedent would force the FCC to grant forbearance from residual unbundling obligations and special access price regulation (things this administration has steadfastly refused to do). If monopoly doesn’t matter, then it doesn’t matter. You can’t have it both ways.

Like it or not, the case law, statute and commission precedent all indicate reclassification will be far from benign; to the contrary, under standard procedures, reclassification will force all content providers — whether Netflix or a church website (or its host company) — to pay every telephone, cable and wireless BSP a positive tariffed termination fee for Internet access. Moreover, if the market is really about “consumer broadband services” (i.e., the retail market as Obama claims), then we are probably looking at price regulation of retail broadband access as well. Avoiding these outcomes will require the agency to present some awkward legal arguments to a reviewing court that has, thus far, been skeptical of the agency’s legal maneuverings related to net neutrality. Title II is a trap set for the administration by those largely ignorant of communications law. If the FCC really wants to write enforceable net neutrality rules without engaging in legal gymnastics, then its original proposed approach to proceed under Section 706 remains its best option.

That said, if Obama really wants Wheeler to proceed under his hybrid approach, here is my challenge to the administration: Rather than continue to engage in political sophistry and encourage yet more “clicktivism” (and, by extension, create an environment where progressive activists believe it acceptable to stalk Wheeler at his home), the administration should lead and inject a little substance into the debate. In particular, the White House should have an agency of the executive branch (e.g., the Department of Justice, the National Telecommunications and Information Administration or the Office of Science and Technology Policy) file a detailed legal brief in the commission’s Open Internet docket which not only spells out the exact particulars of the president’s hybrid proposal, but also outlines the legal basis (complete with footnotes to relevant statutes, case law and FCC precedent, please) supporting it.

Although this administration’s campaign slogan was “Yes We Can,” my guess is that when it comes to President Obama’s net neutrality proposal, the case law (and ultimately a reviewing court) will say “No You Can’t.”

Spiwak is the president of the Phoenix Center for Advanced Legal & Economic Public Policy Studies, a nonprofit 501(c)(3) research organization that studies broad public-policy issues related to governance, social and economic conditions, with a particular emphasis on the law and economics of the digital age.