Antitrust Lawyer Blog Commentary on Current Developments

President Obama Chimes in on the Net Neutrality Debate

On November 10, 2014, President Obama forcefully stated his position on net neutrality.  While acknowledging that the FCC is the agency that has the authority to create new rules protecting net neutrality, President Obama stated that the FCC should create “the strongest possible rules” to stop “paid prioritization” and other actions that favor the transmission of certain content.  President Obama believes all content providers should be treated equally.  Therefore, he is not in favor of the deals that Netflix cut with Comcast, Verizon, AT&T and Time Warner Cable earlier this year.  Indeed, President Obama does not believe that the cable company or phone company should act as a gatekeeper.

President Obama lists four bright-line rules:

  • No blocking. If a consumer requests access to a website or service, and the content is legal, your ISP should not be permitted to block it. That way, every player — not just those commercially affiliated with an ISP — gets a fair shot at your business.
  • No throttling. Nor should ISPs be able to intentionally slow down some content or speed up others — through a process often called “throttling” — based on the type of service or your ISP’s preferences.
  • Increased transparency. The connection between consumers and ISPs — the so-called “last mile” — is not the only place some sites might get special treatment. So, I am also asking the FCC to make full use of the transparency authorities the court recently upheld, and if necessary to apply net neutrality rules to points of interconnection between the ISP and the rest of the Internet.
  • No paid prioritization. Simply put: No service should be stuck in a “slow lane” because it does not pay a fee. That kind of gatekeeping would undermine the level playing field essential to the Internet’s growth… I am asking for an explicit ban on paid prioritization.

President Obama also stated that he believes the FCC should take strong steps to protect net neutrality by reclassifying consumer broadband services under Title II of the Telecommunications Act, and then forbearing from applying certain burdensome regulation available under that Title.

Obviously, the cable and phone companies will have a lot to say about this if Chairman Wheeler pushes through rules that require more regulation over the internet.  President Obama appears to be sending a message to Chairman Wheeler, but at the same time, acknowledges that it is the FCC’s decision on how to handle net neutrality.  While Chairman Wheeler’s more balanced middle of the road plan leaked a couple of weeks ago indicated that he does not mind if Comcast, AT&T or Verizon charge Netflix for using more bandwidth, President Obama’s plan would go further because he wants everyone on the internet treated equally.  President Obama’s call to ban internet fast lanes and block service providers’ ability to charge content providers for faster content delivery will certainly meet heavy resistance.  Indeed, Verizon warns that intense regulation of the internet would threaten harm to an open internet, competition, and innovation.  As the net neutrality regulation debate heats up, the Antitrust Division and the FCC are currently reviewing three of the big four gatekeepers that are involved in acquisitions:  Comcast’s acquisition of Time Warner Cable and AT&T’s acquisition of DirecTV. President Obama’s statements are direct at net neutrality and do not mention the transactions.  No matter whether Chairman Wheeler implements his proposed plan or President Obama’s plan, the FCC will likely be challenged in court.  Chairman Wheeler is in a difficult position, but he has to figure out a way to resolve the net neutrality regulation debate in a fair and balanced manner to avoid a court challenge.  Is more regulation the answer or should we rely on the antitrust laws to protect us?

To see President Obama’s statement: WH.gov/Net-Neutrality

Andre Barlow
(202) 589-1838
abarlow@dbmlawgroup.com