March 2016

With Netflix apparently having discriminated in its delivery of Internet video to wireless carriers AT&T and Verizon, after those carriers had been accused of doing the video degrading, there was plenty of input from industry players.

The pushback was particularly strong given Netflix's push for network neutrality rules that prevent Internet service providers from discriminating and requiring them to tell customers how they are managing their networks. There have long been rumblings, sometimes not so quietly in the case of Comcast, alleging Netflix intentionally congested traffic to wired ISPs in peering disputes. Netflix has denied it. The reaction started with AT&T not long after Netflix's conduct was reported in the Wall Street Journal but that reaction did not include FCC chairman Tom Wheeler, who declined to comment. The FCC has been investigating ISP zero rating plans, which critics say is a form of discrimination by favoring one form of content over another. AT&T top D.C. executive James Cicconi was not reticent: "We're outraged to learn that Netflix is apparently throttling video for their AT&T customers without their knowledge or consent," he said in a statement. "When Netflix pointed the finger at AT&T and Verizon, it had three fingers pointing back at itself," said Adonis Hoffman, chairman of Business in the Public Interest and former chief of staff to FCC commissioner Mignon Clyburn. "Throttling traffic without notifying the customer is a violation of the principles of net neutrality 101, and they failed. Even though edge providers are technically not covered, transparency is a best practice."

[Commentary] News broke that Netflix has been throttling video streams for its own customers when they’re watching on mobile devices and networks. Netflix responded with its own post, staying away from the term “throttling” but revealing that its “default bitrate for viewing over mobile networks has been capped globally at 600 kilobits per second.” Is that a good thing for Netflix users? Maybe, maybe not. But whatever it is, it’s not a Net Neutrality violation. Plain and simple. Anyone who tells you that it is — or that this practice undermines the case for Net Neutrality rules — is either in the business of misleading you, woefully ignorant of the law, or both.

Netflix suggests it was doing this to spare wireless users from burning through their carrier-imposed data caps. That’s not a bad idea, but it’s still off-putting. If Netflix was limiting transmission speeds and picture quality for its users without telling them, as appears all too likely, that’s a bad thing. Period, full stop. Companies should be transparent with their customers and empower them to make their own choices. But here’s what Net Neutrality detractors and the shills paid to attack the whole idea of an open Internet never seem to grasp: Something might be bad for Internet users, or for consumers more generally, without being a Net Neutrality issue. Net Neutrality is a hugely important concept, but there are other consumer-protection laws on the books at the Federal Communications Commission and elsewhere.

On March 25, I circulated to my fellow Commissioners a draft of the Federal Communications Commission’s latest report to Congress on entrepreneurs and small businesses. Among the many pro-competitive provisions Congress adopted in the Telecommunications Act of 1996, section 257 directed the FCC to pay more attention to small business, a sector that had played little or no role in the communications industry during the decades of monopoly local telephone service. Eager to inject more competition into the industry, the authors of the 1996 Act wisely looked to the fast-moving, risk-taking culture of entrepreneurial small businesses for help and inspiration.

Opening up the telecommunications networks to new and small players, they hoped, would bring disruptive innovation and new choices for consumers. One of the biggest challenges I have confronted in my time at the Commission is facing down the false choice between investment and openness. I believe our Open Internet Order took the right approach, by protecting entrepreneurs and small businesses’ free and open access to the Internet, while also forbearing from sections of Title II like rate regulation and unbundling that might reduce network owners’ incentives to continue building out their networks and investing in new technologies like 5G. As we continue to carry out the 1996 Act’s command to promote competition and diversity, we should stay focused on how entrepreneurs and small businesses, especially businesses owned by women and minorities, can harness the power of our digital networks to disrupt, create, innovate, and ultimately drive economic growth in our country.