August 2016

[Commentary] The Ninth Circuit issued a fairly important decision limiting the authority of the Federal Trade Commission (FTC). Unfortunately, certain articles, combined with some overwrought commentary, have generated a lot of confusion. To summarize:
1) This has nothing to do with the Federal Communications Commission’s determination to reclassify broadband as Title II. The court was extremely explicit on this point.
2) There is no “gap in consumer protection” for broadband services – unless Congress or a future FCC reverses the Title II determination. As long as broadband remains a Title II service, the FCC can protect consumers from bad behavior by broadband service providers.
3) Beyond the broadband world, the case has fairly broad and uncertain applications. Arguably, Google could escape FTC jurisdiction by owning Google Fiber, and Amazon could escape FTC jurisdiction by registering its truck fleet as a common carrier freight company regulated by the FMCSA.

Ultimately, however, this case creates real problems for consumer protection by creating significant concerns about the FTC’s authority in a world where large corporations often engage in multiple lines of business – some of which may have “exempt status” under Section 5(a)(2). Hopefully, the FTC will seek review by the full Ninth Circuit, which would be wise to overturn this unfortunate case.

[Commentary] The Internet is celebrating some important milestones. The week of Aug 22 marked both the 40th anniversary of the first mobile connection and the 25th anniversary of the World Wide Web. Millennials can’t even remember what life was like without it and, even for us baby boomers, the changes to everyday activities have been at once profound and subtle. But the information revolution is far from finished. Indeed, for many living in the developing world, and even for some Americans, the Internet still hasn’t arrived.

Over the past 25 years, the Internet has steadily absorbed every network and every technology imaginable — or, more to the point, unimaginable. Once-separate radio, TV, voice and data all travel over the same systems, a virtual Postal Service now delivering a sextillion bytes a year. For the remaining digital holdouts, however, availability and cost are no longer the main obstacles. While the rest of us find ourselves unable to look away from our screens even for a few minutes, the unconnected — primarily older, rural, or less educated — consistently tell researchers that their principal reason not to go online is that there’s nothing there for them. Given the Web’s growing importance for education, health care and jobs, non-adopters are wrong about relevance. So the focus now needs to be on persuading them to join us. And join us they must. The Internet’s gravity is such that the more users who join the network, the faster each added connection increases its value, exhibiting what economists call network effects. That means the communities absent from the Internet’s global village are as valuable to us as we are to them, if not more.

[Larry Downes is a project director at the Georgetown Center for Business and Public Policy]