Think-tank scholars and members of academia wrote to the Federal Trade Commission (FTC) on Monday, urging the agency to warn the FCC against adoption of a blanket prohibition on paid prioritization or the imposition of Title II common carrier rules on broadband providers as part of ongoing proceedings to re-craft the FCC’s open Internet rules.
Included among the 32 signatories of Monday’s letter are Robert Crandall and Robert Litan, both non-resident senior fellows at the Brookings Institution; University of Pennsylvania law professor Christopher Yoo; Hal Singer, adjunct business professor at Georgetown University; and Gerald Faulhaber, professor emeritus at the University of Pennsylvania Wharton School. Asserting that a blanket ban on paid prioritization agreements would “[truncate] the factual analysis needed to condemn such agreements,” the signatories advised that the FTC “should caution the FCC by warning the agency of the adverse effects of adopting per se restrictions on potentially pro-competitive conduct.” In support of that argument, the signatories highlighted the potential economic benefits of paid prioritization for edge providers that “would likely jump at the chance to have their traffic de-prioritized (at lower cost) because their services are time-insensitive.” Asserting that “slower delivery of these bits wouldn’t matter much to . . . users,” the academics told the FTC that “the cost of delivering those bits would be lower than if they were in a ‘faster lane’ of Internet traffic.”
Maintaining that neither the FCC’s record nor “basic economics” support a blanket ban, the academics said the FCC should instead consider restricting paid prioritization on a case-by-case basis. Under that approach the edge provider or the FCC would bear the burden of proving that a particular agreement violates the FCC’s open Internet policy. With respect to Title II, the letter further contends that Title II reclassification “would create a host of additional problems” that include “dampening the incentives of ISPs to continue investing in the core of the network, chilling new entry into the broadband market, and potentially expanding common carrier regulation to interconnection, peering and even some ‘edge’ services.” Pointing to a 2006 FTC staff report on broadband competition that recommends “proceeding with caution before enacting broad, ex ante restrictions in an unsettled, dynamic environment,” the letter claims that an FTC advisory to the FCC is warranted as “the net neutrality debate has shifted dramatically.”