Crafting a Grand Bargain Alternative to Title II: Net Neutrality With Net Adoption

Net neutrality advocates hailed the Federal Communications Commission’s decision to classify broadband Internet access as a “telecommunications service” that it can regulate under Title II of the Communications Act as the most important Internet policy development since the National Science Foundation privatized the Internet. In reality, the “victory” not only hurts network innovation and investment, but could very well prove pyrrhic if the courts or the next administration overthrow the decision. Meanwhile, there has been meager progress on a truly pressing broadband policy issue: the severe digital divide in which a large number of Americans are not yet online. These circumstances create a unique political opportunity to simultaneously rebound from the Title II misadventure, put widely agreed-upon open Internet protections on firm ground, and commit real resources to bridging the digital divide.

This report argues that both political parties and the various camps involved in the net neutrality and digital divide debates should seize the moment by coming together to support legislation that does several things:

• Clarifies that broadband Internet access service is not a “telecommunications service” under Title II of the Communications Act;
• Puts widely agreed-upon open Internet protections, including no-blocking, no-throttling, and transparency, on firmer legal ground;
• Allows pro-competitive traffic differentiation for applications that require it, while preventing anticompetitive abuses of prioritization;
• Gives the FCC reasonable, but bounded, jurisdiction to enforce open Internet rules and accelerate deployment of advanced telecommunications capabilities; and
• Significantly expands the scope and funding of digital literacy and broadband adoption programs such as the National Telecommunications and Information Administration’s Broadband Adoption Toolkit, the administration’s ConnectHome initiative, a broadband-focused Lifeline program contemplated by the FCC, and initiatives to build out broadband in rural areas with no wired infrastructure.

As the Information Technology and Innovation Foundation (ITIF) has argued previously, Title II classification is a poor long-term solution to preserving the open Internet, not the unalloyed win some proponents claim. It does nothing to change the competitive dynamic driving broadband deployment; if anything, it will have a moderately negative effect on existing providers’ investment levels and raise the risks for new entrants. Title II was written assuming a static system that did one thing—switch telephone calls. As such, it will likely chill innovation and experimentation in new networking technologies designed to support a dizzying variety of services, consigning us to the broadband of today, not tomorrow.

Moreover, while the FCC’s classification of broadband as a “telecommunications service” under Title II attempts to lock in the “strongest possible” net neutrality protections, those protections could very well prove ephemeral, if the U.S. Court of Appeals for the D.C. Circuit overthrows them next year or if a Republican president is elected in 2016.

Yet for all the noise and uncertainty around the FCC’s decision, one thing is clear: It significantly changed the political economy of telecommunications policy. So it should be seen as an opportunity to discover newly opened areas of broad agreement or available avenues of negotiation. The legislative alternatives to Title II discussed to date have been too narrow in their focus, looking only at specific net neutrality rules and the jurisdiction needed to enact them.

The “grand bargain” that ITIF proposes here represents a new path forward. The real question is whether both sides of the aisle will be able to move beyond ideological and political rigidities to embrace a truly win-win solution.

For Democrats, the challenge will be going against the net neutrality advocates who place Title II ahead of less onerous, but equally effective and more certain net neutrality protections. But there should be a great deal of appeal among Democrats for using this issue as leverage to finally get real funding for digital literacy and broadband adoption programs. For Republicans, who rightly want legislation that sheds the weighty baggage of Title II while providing some reasonable FCC jurisdiction over protections against net neutrality abuses, this bargain represents a way to get legislation enacted and signed by the president. If both parties can overcome their reservations, then the winners will be all current and potential broadband users across America.

After first examining the potential impact of Title II on network investment and innovation—and explaining why alternative jurisdiction for open Internet rules would be beneficial—this report then discusses the very real uncertainty over existing Title II net neutrality rules. The report then focuses on the need for and potential shape of federal digital divide initiatives. Finally, it outlines ITIF’s recommendations in detail and discusses the political realities involved in achieving such a grand bargain.