A year ago last February, the FCC gave itself the role of Internet cop-on-the beat via its net neutrality law. When that law was passed, FCC Chairman Tom Wheeler proclaimed, “The American people reasonably expect and deserve an Internet that is fast, fair and open. Today they get what they deserve: strong, enforceable rules that will ensure the Internet remains open, now and in the future.”
A core piece of that law bans so-called gatekeeping practices — like throttling of service speeds — because, as the FCC explained, they can choke consumer demand for broadband, thus harming development of a healthy and vibrant open Internet.
You didn’t have to read too far into the fine print, however, to see that the FCC was actually only playing Internet’s half-cop. You see, the agency’s net neutrality law applies only to network providers, not edge companies like Google or Netflix.
Apparently the FCC believes Internet consumers need not worry about the edge because, well, it would never act to harm the open Internet.
Really?
The Wall Street Journal revealed in March that as the net neutrality debate swirled here in Washington, for five years Netflix had intentionally throttled the video quality of AT&T and Verizon customers, while favoring T-Mobile and Sprint customers under its discriminatory policy.
As WSJ’s Holman Jenkins, Jr. puts it:
“The Company … never told users [about its throttling] at a time when Netflix was claiming carriers generally were deliberately slowing its service to protect their own TV businesses — a big lie, it turned out.”
Ironically, Netflix played a central role in decrying the potential for ISP throttling as the net neutrality rules were being crafted. The company was all about protecting the open Internet, barking before the FCC with a holier-than-thou air that “through an open Internet, the consumer, not the ISP or the edge provider, picks the winners and the losers.” (Emphasis added)
We know now that Netflix was saying one thing in public but doing something quite different in private, actively picking winners (T-Mobile and Sprint) and losers (AT&T and Verizon) in an intentional and anti-competitive effort to skew the wireless marketplace to its liking, while appearing above it all to bend and pervert the commission’s record to support and pass net neutrality.
There’s no crime in hypocrisy. Throttling, among other practices, can even be a good thing for consumers when openly noticed and reasonably applied.
But Netflix actively interfered with the growth of the open Internet — choking consumer demand by working to damage the reputation of rivals in the marketplace.
It is inconceivable that Netflix’s malfeasance, including its fallacious pro-net Neutrality advocacy, should be allowed to stand. Consumers will suffer. Openness will cease. “Competition, competition, competition,” to use the chairman’s own words, will flounder, being easily perverted by edge gatekeepers like Netflix to their selfish ends with little fear of retribution for whatever anti-competitive scheme they can dream up in the future.
Though the agency claims it lacks the authority, the FCC has the tools to crack the whip on this repugnant behavior — actions which have limited end-user control, corrupted competitive markets and bilked AT&T and Verizon customers. The FCC can properly address these transgressions by employing the same express power to promote development of the open Internet that it used to create net neutrality. The only thing stopping the commission is not the law itself, but rather Google, Netflix and Silicon Valley.
But Tom Wheeler has yet to say or do anything about this scandal. This silence says that Netflix and the edge remain free to undermine consumers and competition as they see fit.
The bottom line is this: The public interest demands that the FCC deny a windfall to Netflix for its bad faith, gatekeeper-narrative fraud, one which was spun openly in FCC-sponsored fora, academic “research,” think-tank advocacy, industry association and direct congressional lobbying, “consumer rights” and partisan group activism, and traditional media and social media communications. It was practiced, calculated behavior by Netflix to distort a market and the commission’s record in order to achieve a tactical win and reap a regulatory subsidy.
To that end, the commission must send a powerful message to others in the ecosystem — especially FCC-issued, get-out-of-jail card-holding edge companies — that this type of anti-consumer, market-disabling misconduct will not be tolerated.
Though the chairman and his two other majority commissioners have invited edge companies to do as they want in this regulatory milieu, they owe it to consumers and “competition, competition, competition” to rectify the debilitating signal they have sent through their net neutrality order — rules that clearly encourage and promote such reprehensible activity.
If, as we’re told by Netflix, there has to be an Internet cop to ensure the Internet remains open, Americans deserve one that’s a straight shooter to protect the entire Internet ecosystem, not one who acts like he’s in the bag for Silicon Valley.
Mike Wendy is president of Media Freedom. Thinking of submitting an op-ed to the Washington Examiner? Be sure to read our guidelines on submissions.
