Two weeks before voting to rollback the net neutrality rules, FCC Commissioner Brendan Carr wrote an op-ed for the Washington Post in which he laid out his case for killing off the policy that ensured a free and open internet. In it, he offered up one widely-disputed argument for doing so: that blocking, throttling, and the use of so-called “fast lanes” by internet service providers would violate antitrust laws. The Federal Trade Commission (FTC), Carr wrote, would handle it. This week, the Chairman of the FTC said that’s not necessarily true.
“Reversing the FCC’s Title II decision will return the FTC to its role as a steady cop on the beat and empower it to take enforcement action against any ISP that engages in unfair or deceptive practices,” Carr wrote. “Federal antitrust laws will apply.” Carr added that if ISPs “reached agreements to act in a non-neutral manner by unfairly blocking, throttling, or discriminating against traffic, those agreements would be per se unlawful.” (Emphasis ours.)
Three days ago, however, FTC Chairman Joseph Simons—a Republican, like Carr, appointed by President Trump—publicly debunked Carr’s claim. “Blocking, throttling, or paid prioritization would not be per se antitrust violations,” he said, in a speech at the National Press Club.
Simons expanded on his view of the matter, comparing the idea of paid prioritization to that of grocery store “coupons” and “Happy Hour discounts.”
Paid prioritization is a type of price discrimination, which is ubiquitous in the economy. For example, think about when you walk into grocery store. Some customers get lower prices because they cut out coupons. Others might get a seniors discount. Others might get 2% off with their credit card. Yet others get discounts because they have a loyalty card with that supermarket. Those of us who go to the afternoon movie matinees will generally pay less, and those of us willing to show up at a restaurant before 6 pm might get the benefit of a lower priced menu. And of course, let’s not forget Happy Hour discounts.
Added Simons: “For those of you who live locally, think about the express toll lanes on interstates 95 and 66. Or think about Amtrak’s Acela service to New York, which is faster and more expensive than the local trains. Clearly, our transportation authorities think that allowing people to pay more for faster service is at least sometimes beneficial.”
Simons’ argument that the FTC can’t (or won’t) penalize ISPs for such schemes isn’t news. Carr’s claim that the FTC would step in and shield consumers from ISPs attempting to manipulate internet speeds for profit—a talking point parroted by the industry itself—was widely refuted by legal experts prior to the vote.
A month before Carr’s op-ed, Ferras Vinh, a policy counsel for the Center for Democracy & Technology, told a House subcommittee that the FTC lacked “the rulemaking ability and the deep subject matter expertise of the FCC to protect consumer rights.”
“Without the authority to make rules, the FTC can only pursue violations of net neutrality and consumer privacy after the fact,” added Vinh.
As FCC Commissioner Jessica Rosenworcel explained in her dissent on the day the net neutrality rules were repealed, the scope of FTC enforcement is largely limited to what the law considers unfair and deceptive practices. “But to evade FTC review,” she said, “all any broadband provider will need to do is add new provisions to the fine print in its terms of service.”
Nevermind the fact that average consumers are unlikely to be well versed on what constitutes an antitrust violation, fewer still ever read the terms and conditions of a broadband service agreement. (It’s been repeatedly proven that very few Americans read service agreements, much less comprehend the implications. It has also been found that due to a large number of contracts that internet users must “agree” to, doing so would consume an absurd amount of time. One study found that privacy policies alone would take 76 work days to consume.)
With a member of his own party now debunking his argument for repealing net neutrality—a key agency official, no less, whom Carr assured us would safeguard internet users in his place—Carr’s op-ed for the Post can finally be seen by everyone for what it always was: propaganda aimed at helping ISPs engage in discriminatory practices absent the fear of regulatory reprisal.
The FCC did not respond to a request for comment.