Democracy & Technology Blog Eric Schmidt and Laurence Tribe on common carriage and net neutrality regulation

Over at Huffington Post, Timothy Karr claims that “One attendee — a member of the Darwin-challenged Discovery Institute — sought to argue that the Internet be completely free of regulation” during the question and answers following Google Chairman and CEO Eric Schmidt’s address to the Progress & Freedom Foundation’s Aspen Summit. That would be me. Actually, I make no such argument. There is a place for antitrust enforcement (provided it aims to protect competition, not competitors) and consumer protection. I draw the line at economic regulation, or competition policy, which tries to ensure that everyone who can afford to hire a lobbyist profits and no one who can afford to hire a lobbyist fails in the marketplace.

I asked Schmidt how he would feel if Google were unable to cut deals with broadband providers, for example, to feature the Google search bar as the default search bar for all of the broadband provider’s customers because a future Congress or FCC applies common carrier requirements which prevent broadband providers from differentiating between content in any way? He responded that if indeed there were a common carrier structure he would hope it would be defined “pretty narrowly,” focusing on bit rates. He said he hopes carriers wouldn’t be prevented from monetizing their services in any way they chose. Schmidt said he thinks common carriage — which would regulate “how carriers make their money” — is a mistake, adding that “you’re much better off regulating — if you have to regulate — at a level of equal access, equal treatment.”
In my opinion, there is little, if any, difference between common carriage and “equal access, equal treatment.” A common carrier serves all comers at a standard, published rate; it doesn’t discriminate at all. Many people frequently think of common carriers as heavily-regulated entities. For example, the rates that telephone companies can charge for basic service are set by regulators, who aim to keep the rates as low as possible while still allowing carriers to earn a “reasonable profit.” But airlines are also common carriers. Although airlines appear to be the antithesis of common carriers because they charge vastly different prices for the same seats, in fact what they have done is create separate products (low fares with high restrictions and high fares with low restrictions) in an effort to offer lower fares to leisure travelers while maximizing profit. But each product is offered to all comers, while supplies last, at a standard, published fare. Many people also tend to think of common carriers as government-protected monopolies who are not allowed to compete in adjacent markets (I believe one of the primary goals of net neutrality regulation, in fact, is to interfere with the ability of broadband providers to sell advertising). Even when we talk about common carriers, therefore, it is not always clear what we are talking about.
What I was attempting to get at with my question is the difference between common carriers and private carriers — such as newspapers, television and cable. None of these entities are treated as mere conduits for the views of others; they all get to exercise some degree of editorial control.
Anyway, also attending the summit was Harvard Law Professor Laurence H. Tribe (hardly a Reaganite, to borrow the description Karr applied to others). Professor Tribe was asked by another participant whether he thought broadband providers should be allowed to censor music lyrics critical of the President of the United States, for example. Tribe rephrased the question: Can broadband providers be forced to act as common carriers? and answered in the negative,citing Tribe cited Hurley v. Irish-American Gay, Lesbian & Bisexual Group of Boston, 515 U.S. 557 (1995) as the decision that “would probably apply here.” In that case, the organizers of a parade did not want to include among the marchers a group espousing a view with which the organizers did not agree. The Supreme Court ruled that the parade was not merely a conduit for the speech of participants. The Court contrasted the parade organizers with cable operators who were the subject of Turner Broadcasting System, Inc. v. FCC, 512 U.S. 622 (1994) by noting that cable, unlike a parade permit, confers a “monopolistic opportunity to shut out some speakers.” But guess what? Like it or not, cable doesn’t confer a monopolistic opportunity anymore.
Don’t get me wrong (as Adam Thierer would say): I don’t want anyone to be able to limit what I can do on the Web; no one does. But I am more confident, apparently, than some that broadband providers will seek to satisfy consumer expectations. I suspect that broadband providers will experiment with advertising, since companies like Google are making a fortune from online advertising. But if their efforts annoy consumers, advertisers will balk and the efforts will fail. My guess is that the broadband providers will ultimately be forced to collaborate as partners with Google, Yahoo, Microsoft and others.
Schmidt stated, optimistically, that if we did end up with common carriage then “there would be other ways in which we would work with the operators and carriers to help monetize their services. There’s a lot of money to be spread around here.” Schmidt makes a good and often overlooked point here that is worth repeating: Content and conduit providers are reliant on each others’ success. One would think these people could get together and do a deal. Considering their relative strengths and weaknesses, they probably have much less to fear from each other than they realize. For example, the conduit providers are not imaginative risk-takers, and the content providers are not cautious and deliberate. But obviously no one wants to be a junior partner.
Schmidt’s remarks overall were very thoughful and contributed to better understanding in what has become a frustrating debate. I wish, if the format of the question and answer period and the late hour permitted, I could have prefaced my question — which sounded more confrontational than I would have liked — with a brief statement of appreciation for Google’s enormous contributions to the popularity of the Web and to learning, among other things (for example, I consider Google Book Search to be one of the greatest contributions to humankind in my lifetime).

Hance Haney

Director and Senior Fellow of the Technology & Democracy Project
Hance Haney served as Director and Senior Fellow of the Technology & Democracy Project at the Discovery Institute, in Washington, D.C. Haney spent ten years as an aide to former Senator Bob Packwood (OR), and advised him in his capacity as chairman of the Senate Communications Subcommittee during the deliberations leading to the Telecommunications Act of 1996. He subsequently held various positions with the United States Telecom Association and Qwest Communications. He earned a B.A. in history from Willamette University and a J.D. from Lewis and Clark Law School in Portland, Oregon.