New FCC Internet Rules Will Be Good for Business (Guest Column)

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William F. Baker, Ph.D., is a former commercial and public television executive, professor at IESE Business School in Barcelona, and director of the Bernard L. Schwartz Center for Media, Public Policy, & Education at Fordham University. He offers his thoughts on the FCC’s proposed new rules in this guest column.

The Federal Communications Commission has proposed new rules for the Web that will treat Internet service like a public utility, rather than a private service.

This is a tightening up of their previous proposed rules, which would have allowed “commercially reasonable” fast lanes to be created by Internet service providers like Comcast and Verizon, and sold to the likes of Amazon or Netflix, ensuring a faster-than-normal speed of delivery for service. In addition to preventing fast lanes, the FCC’s new rules will make sure that no content on the Web is blocked or put into a lane of data traffic so slow that it is effectively prevented from being disseminated.

The new rules are in line with what President Obama and the Democrats, millions of Americans, and even an increasing number of Republicans have called for.

One way to describe the proposed rules that will govern ISPs is as “common carrier light.” In regulatory parlance, a common carrier provides a service so essential to the rest of the economy or to society at large that how it chooses to operate has wide-ranging effects.

Net neutrality guru Tim Wu uses the example of a ferryman who controls the only service across the river into town. For the good of the rest of the local economy, the ferryman is regulated as a common carrier, and isn’t allowed to deny service to any business or charge ruinous rates. He is also not allowed to deliver the mail only for one political party, for example, or for one segment of the town that pays a premium rate.

The Internet has unquestionably become the river upon which a vital and ever increasing amount of information, personal communications, educational resources, entertainment, products, and services flow to the rest of our economy. Regulating ISPs as common carriers is a no-brainer. It’s the right choice for business, education, and democracy.

The FCC has pledged not to deploy the full set of common carrier regulations against the ISPs. It will not meddle in what the ISPs charge for service, for example, hence “common carrier light.”

Yet the ISPs have balked against the new rules, citing a vague concern that being regulated will deter them from building out their infrastructure or from getting the maximum benefit from the infrastructure they have already built.

We have even heard the FCC’s new rules referred to as a “government takeover” of the Internet. Not only are the new rules not a government takeover, they are well in keeping with how communications have been successfully fostered and regulated in America in the past.

For decades, I worked in television and radio, both commercial and public, all licensed and regulated by the FCC. I was a board member of the highly profitable Westinghouse Broadcasting Co. (headed by the public-service-oriented Don McGannon and Dan Ritchie), which held the license for America’s first commercial radio station, KDKA, and later for countless radio and television stations. After Westinghouse, I transitioned to public television, where I headed up WNET, New York’s public broadcasting station and, at the time, America’s largest producer of PBS content.

At Westinghouse, having the license obligation never put a dent in our profitability. Some of our stations had better than a 50% profit margin. And in over 50 years of broadcasting experience, I never had a regulator tell me what to do about content or do anything that restricted our commercial viability.

But just the threat of having our license taken away kept my eye and that of my colleagues on the ball of public service. Whenever we had to decide between public service or higher profits, the obligation and privilege of having a license provided that crucial nudge toward choosing what was best for the public. It also made us feel, rightly, that as a station with a broadcast license we wore a badge of honor and privilege.

The ISPs can only benefit from this kind of regulation. There is little reason to believe that the FCC’s new rules will restrict their already astronomical profits.

The ISPs should reflect on how a similar “common carrier light” regulatory environment in the 1990s led to the flourishing of the cellular telephony business. They would also do well to remember that terrestrial telephony in the 20th century, which voluntarily chose to be fully regulated as a common carrier, made countless fortunes, wired all of America with a telephone system that was the envy of the world and a powerful engine for business, and also gave us technological wonders like the transistor, satellite communications and mobile phones.

It is time to remember that having a higher public calling can unite doing well with doing good. The FCC’s new rules are anything but a meddlesome set of restrictions. They are a relatively gentle reminder to the ISPs of how our communications technologies can help us prosper while inspiring our whole civilization to become greater.

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  1. David Brugger says:

    Dr. Baker is correct on all points. Any opposition will come from corporations that never have enough profits because “enough” does not exist when they can make money. The other opposition will be the last six years of the usual, that is the political opposition (read “GOP”) to anything that favors the general public that is proposed by the current administration (read “OBAMA”). So keep moving on, nothing to see here.

    • jtmacc99 says:

      Ah.. But but SUPPORT also comes from corporations that never have enough profits because ‘enough’ does not exist when they can make money.

      Google and Neflix, the former is well on its way to running a business model that would make Standard Oil jealous, flat out stated that they need this regulation to protect their business models.

      This fight is not about censoring the internet or preventing people from seeing content and information. The ENTIRE fight is over which company gets to send us the bill. When the company who owns the fiber between Netflix and Time Warner says it wants to be paid more to route the traffic more efficiently, which company should pick up the tab and pass it along to its customers?

      That’s it. It is no more complicated than that.

      Netfix and Google (Youtube) want this regulation to say that their business model relies on free delivery, and that the ISPs should pick up the bill. The ISPs say that Netflix and Google are responsible for 55% of the total traffic, and it’s not unreasonable for them to pick up some of the transport costs and let them bill their customers.

      Again, that’s the whole fight here. It is giant corporation vs. giant corporation attempting to get the government to put in or remove regulations that will determine which one of them gets to send us the bill.

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