Wyden to FCC: ‘Step Up’ and Write Clear Neutrality Rules

Businesses should create jobs in “every nook and cranny of this country, and not just for the fortunate few” who are blessed by a network “middleman,” Wyden said. A developer of Internet-based health record management systems, which could create “new tributaries of industries” around the business, could be stymied by a network provider, for example, he said: Venture capitalists will shy away from startups at risk of getting relegated to a provider’s “slow lane.” The FCC did an “elaborate dance” around neutrality in its notice of inquiry for network management practices, and though Congress mentioned the FCC’s four freedoms in the recovery bill, the principles are “so inexact they have fostered more legal wrangling than innovation and investment,” Wyden said. The FCC needs to “step up” and write neutrality rules.

Asked how Congress can help the FCC with the authority that critics say it lacked to punish Comcast for its peer-to- peer throttling practices, Wyden said “the regulatory structure is clearly outdated.” Policymakers still “think inside the box” through a wireline-focused view of broadband expansion, when they should recognize that wireless is “viable,” he said. A representative of T-Mobile, who warned about the heightened bandwidth considerations of wireless, prompted Wyden to note his hands-off approach to Internet access taxation. “I have treaded pretty carefully” on tech regulation, but the U.S. is moving in a “dangerous direction” without strong neutrality rules, he said. “I keep trying to picture the small guys out with the venture [capital] people” without network nondiscrimination guarantees.

One of a handful of Democrats to vote for the Central American Free Trade Agreement, Wyden warned executives “the American people clearly have changed their view” on the benefits of free trade. Telecom executives and others called Wyden to thank him for his vote, but invariably there was a “long pause on the other end of the phone” when Wyden suggested they give some money from their new tariff reductions to employees. “Expanding the winners’ circle” should be executives’ top talking point when they address local residents on trade, Wyden said.

Another industry that should “go on the offensive” is social networking, Wyden told Tim Sparapani, a longtime ACLU lawyer who recently took over Facebook’s public policy operation. Sparapani asked how to press the feds on the importance of cybersecurity “without inviting them to sit on our network.” Facebook has to counter “horror stories” about users getting killed for actions they take on the site, Wyden said, apparently referring to a U.K. man found guilty in January of killing his wife after she changed her Facebook status to “single.” Such incidents can create “overreaction” on the Hill, he said. The energy and financial services sectors are more obvious immediate targets for cybersecurity regulation, Wyden said, and he'll work with Facebook to draw the distinction.

President Barack Obama is “being cautious” as discussions rage over the future of ICANN, Wyden told Phil Corwin, counsel to the domain-name industry’s Internet Commerce Association. Corwin said he’s concerned the White House and Congress aren’t paying attention to the proposal by EU Information Society and Media Commissioner Viviane Reding to create a “G12 for Internet Governance” (WID May 5 p1). ICANN’s contract with the Commerce Department is up for renewal in September. Wyden and former Communications Subcommittee Chairman Conrad Burns, R-Mont., had “extensive, time-consuming discussions” about ICANN’s structure during Congress’s first scrutiny of the body several years ago, he said. But “much of the old framework … is going to have to be rethought” to better address other countries’ concerns. -- Greg Piper

CCIA Caucus Notebook …

House Communications Subcommittee Chairman Rick Boucher, D-Va., is moving forward with work on a privacy bill, he told the Computer and Communications Association meeting Wednesday. Boucher said he hopes to hold a joint hearing with the Consumer Protection Subcommittee, which is working on separate data breach legislation (WID May 6 p2). Boucher said the two bills would advance separately for now, but he didn’t rule out a possible combined effort. “I think the key on data breach is to address the controversies” that caused the bill to stall last Congress, Boucher said. He hasn’t had a chance yet to consult with Consumer Protection Subcommittee Chairman Bobby Rush, D-Ill., on the legislation. “For the moment we do not have a merger planned.” Rush may move his bill before the two subcommittees’ joint hearing on privacy, Boucher said. “I have not discouraged that,” he said, saying he thinks there may be ways to resolve some of the controversies in the breach bill. -- AV

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Rep. Zoe Lofgren, D-Calif., and Sen. Ron Wyden, D-Ore., have the best records on technology issues, as seen by an annual survey by the Computer and Communications Industry Association released Wednesday. House Commerce Committee Chairman Henry Waxman, D-Calif., got an 84 percent rating from the group, which bases its score on members’ votes on technology issues. House Communications Subcommittee Chairman Rick Boucher of Virginia also received an 84 percent rating. Senate Commerce Chairman Jay Rockefeller, D-W.Va., did not make the top tier rankings but Communications Subcommittee Chairman John Kerry of Massachusetts had an 80 percent rating.

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There’s a “qualitative difference” between the threats from the Internet to newspapers now and travel agents years ago, FTC Chairman Jon Leibowitz told the association. “You just really have to worry about the future of democracy” if local newspapers fall, leaving in their wake a few big national papers and blogs of “unknown and uneven quality,” he said. Yet the Justice Department went on record recently opposing any new antitrust exemptions for newspapers despite the Internet-fueled woe (WID April 22 p7), and “that may be where we end up at the Federal Trade Commission, too.” The Senate Communications Subcommittee considered the plight of newspapers at a hearing late Wednesday. (See separate report in this issue.) The FTC will consider in a few weeks “if we have anything useful to say” about net neutrality as the issue is considered in the context of broadband expansion funding under the stimulus law, he said. A “dystopian future of misery and wretchedness,” predicted by both sides after the FTC completed its broadband competition report years ago, hasn’t materialized, he said, but the FTC will “continue to be aggressive in enforcing consumer rights” on such violations as not telling consumers how their Internet traffic may be managed, or even antitrust violations against VoIP providers. Behavioral targeting, if left unchecked, could turn out like the housing crisis -- a “consumer wake- up” to an unregulated Internet advertising climate. “Self- regulation, if it works, can be the fastest … way to change the status quo,” but the industry must disclose what it’s collecting before consumers consent to hand off their data, Leibowitz said. If not, the agency may support congressional intervention, he said. The FTC indeed is considering whether to make distinctions between ISP-level targeting and traditional advertising networks, due to the difficulty of switching ISPs, Leibowitz told a questioner. Though the FTC still strongly supports the scrapping of the common-carrier exemption, Leibowitz said he anticipates a “collegial” relationship with the FCC under Julius Genachowski’s chairmanship. The two play basketball together on weekends, he said. The FTC is “known for being very fair and very transparent, and I think the FCC is going in that direction,” Leibowitz quipped to laughter. Leibowitz also predicted fewer “philosophical” differences with DoJ’s antitrust division under new chief Christine Varney, a former FTC commissioner and Internet law specialist. Don’t expect the FTC to soon take on antitrust matters relating to copyright, he said. The recording industry’s alleged collusion has been cited in several P2P defendants’ counterclaims. “We might come to that somewhere down the road … but we are a tiny agency by Washington standards.”