Title II: How the FCC Can Save Net Neutrality and Still Ruin the Internet

Prolonged discussions of Federal Communications Commission regulations are typically about as stimulating as a fistful of Ambien — except when it comes to net neutrality.

With the FCC poised to issue new rules governing how Internet service providers manage and price the traffic that flows through their networks, Americans woke up and spoke up so loudly that they crashed the agency’s website last month. The million-plus comments from concerned citizens were the most the FCC has ever received during a proposed rule’s public comment period — and just a few hundred thousand shy of the number of complaints that poured in after Janet Jackson’s infamous “wardrobe malfunction.” When we’re comparing tech regulations to Super Bowl nipple slips, you know we’re in a different kind of debate.

You probably haven’t had a chance to read all 1,067,779 comments. Neither have I. But most support an outcome preserving the wide-open Internet that birthed our current era of innovation, transformation and disruption. The question now is how to achieve this.

The debate so far has been oversimplified: Are you for net neutrality or against it? That reductive framing may lead us to embrace a solution that doesn’t solve the problem.

From where I sit at CALinnovates, representing tech companies dependent on the open Internet to survive, this debate is incredibly important. Disruptors like ride-share platform Sidecar and conference-call service Speek shouldn’t be forced to bid against deep-pocketed giants — or anyone, for that matter — for their share of bandwidth. Nor should they be forced to adapt to regulations that would suppress new ideas or hamstring the entrepreneurs who hatch them.

They, along with countless other startups and aspiring innovators, agree: We need an outcome that preserves the openness of the Internet.

Unfortunately, it’s not so simple. Let me explain. The leading proposal in Washington to achieve that goal is to reclassify broadband providers as “telecommunications services.” This would allow the FCC to regulate providers using authority granted it under Title II of the Communications Act of 1934.

As you have undoubtedly noticed, the Communications Act of 1934 was passed in 1934. That means the FCC is gathering input as it considers adopting the same legislative framework for the Internet that existed back when “wireless” meant the hand crank on your grandparents’ AM radio.

Title II turned our nation’s telephone system — a single network operated by a single company, Ma Bell — into a highly regulated utility, just like water and electric companies. While they helped protect consumers from the excesses of a corporate monopoly, Title II’s restraints hardly made that phone network an innovative one.

Ask your parents: Under Title II, innovation in telecom meant being able to buy a different color of the same phone chosen by the monopoly at a price set by the government. This same law can’t accommodate today’s sprawling, bustling, magically fragmented Internet, a miracle of technology unimaginable in 1934 — or even in 1996, when the act was updated for the “modern” era.

By turning the Internet into a utility, we’ll bleed tech innovation with a thousand paper cuts. Would we even know what an iPhone is if Steve Jobs had to run his pricing models past the FCC? Would Twitter be fomenting revolution if Jack Dorsey needed to check with regulators about what kind of data can be shared online and by whom?

It sounds far-fetched, but that’s how it would work. Under Section 214 of Title II, common carriers have to ask for approval before discontinuing nonperforming platforms or launching new ones.

Shoehorning Internet companies into Title II won’t just slow Silicon Valley down to Beltway-at-rush-hour speed; it will also render impossible a great many things that have become part of our daily routines, like using on-demand services from location-based smartphone apps.

Under Section 222 of Title II, companies have a duty to protect the confidentiality of customers’ proprietary network information. Sounds benign, right? Well, it means wireless location data could no longer be shared with Internet companies for mapping or advertising. Location-based companies would be limited by, in the regulators’ lyrical stylings, the “use or disclosure” of “call location information concerning the user of a commercial mobile service.” In plain English, that means companies like dating service Tinder, car navigation service Waze and ride-sharer Uber could soon become relics of the past. At the least, they would have far higher hurdles and costs in launching and attracting investment capital.

The big losers in all this would very likely be startups and the consumers they seek to serve. For large, established digital companies, these new regulations would probably just be an inconvenience. For startups that don’t have the resources to fight Title II classification, or the in-house legal teams to interpret the new requirements, the rule changes would be a death knell.

Before we trade the devil we know for the devil our grandparents knew, we should pause to ask ourselves whether legally defining the Internet as a utility will keep it both open and innovative — or act as a drag on creativity and growth.

I’m pro-net neutrality, but anti-1934-style strangulation. Where does that leave me? According to the approaches under consideration, I may soon be a man without a country. Good thing the Internet, at least for now, doesn’t require a passport.

 

Mike Montgomery is the executive director of CALinnovates, a San Francisco-based non-profit advocacy concern whose members include high-tech companies, political and thought leaders, and entrepreneurs.

This piece originally ran in The Huffington Post

Talking Disruption

 

By Mike Montgomery

I recently moderated a sold-out panel on disruptive tech at Runway, a San Francisco-based accelerator. Runway occupies a massive space next to Twitter on Market Street, home to more than 60 startups focused on, as you would expect, disruptive tech.

My panel consisted of three heavy hitters: Andy Grignon, Will Pryor, and Larry Downes.

Andy Grignon was a member of the team behind the first iPhone. He’s a great storyteller — one story involved the decidedly NSFW nickname Steve Jobs gave him, a nickname Grignon embraced. (If you’re curious what that nickname was, CLICK HERE. Post-Apple, Grignon founded Quake Labs, a startup focused on making simple programming available to the masses.

1st iPHONE

Will Pryor, a senior engineer at Skycatch, was sitting in for CEO Christian Sanz, who was mining — literally and figuratively — for more biz offsite with a new customer in the mining business. Why the mining business? Because Skycatch makes drones, or unmanned aerial vehicles (UAVs), which can offer construction managers a safer, and less expensive, way to map, explore and monitor progress. It can also — as attendees of last year’s TechCrunch Disrupt can attest — deliver tacos a la the 2012 hoax you may remember called Tacocopter.

Tacocopter

Larry Downes, my third esteemed panelist, is an ahead-of-the-curve thinker on important tech issues. That description isn’t hyperbole. Downes wrote a book called Unleashing the Killer App, and he wrote it in 1998 — nearly a decade before the iPhone revolutionized our lives with its App Store. His new book, Big Bang Disruption, focuses on strategies for surviving and thriving in the digital era, whether you’re a startup or an incumbent.

Larry Downes

During the panel, Downes shared some of the pearls of his book, including how video games like Pong disrupted the pinball industry much like smartphones led to the downfall of the GPS and camera industries.

Via William Hunter
Via William Hunter

Some brief takeaways from the panel:

Downes told the audience that there are three defining characteristics of disruptive technologies — better, cheaper, more intimate — and how in the past, only two of those characteristics needed to be true. Today, however, all three boxes must be checked. The product, in other words, can’t just be better. It also has to be cheaper (read: free) and connect with consumers in a personal way.

Grignon killed it on the panel. But then, he has a built in advantage — having Apple on his resumé. Given the ongoing fascination with Steve Jobs and anything or anyone he touched along the way, Grignon’s tales of the iPhone development process left everyone yearning for more.

Apple

Looking ahead toward the future, I asked the panel what we’d be talking about 10 years from now if we reconvened to again talk about disruptive tech.  Pryor named embedded tech without hesitation. And he wasn’t just talking about clothing and contact lenses — he instead meant implants within our bodies. That certainly got the audience’s attention.

Also getting the audience’s attention was the question of who would own Uber in the future.  While Grignon thought an IPO was the most likely, Pryor and an audience member both thought Amazon wasn’t out of the realm of possibility.

Downes’ response to the Uber question was more thousand-foot, as he pointed out that the beauty of disruptive technology requires taking the “anything can happen” point of view. It was a fitting viewpoint for a panel focused on the constant earthquakes disruptive technology can have on long-established industries.

All in all, the panel discussion was enlightening, challenging, and often hilarious. My thanks to Grignon, Pryor, and Downes for disrupting (sorry, I had to) their busy lives to join me. Oh, and if you’d like to have a drone deliver a copy of Downes’ latest book, CLICK HERE to purchase it.

If you want to sign up for the cool stuff Grignon is making, CLICK HERE.

And if you want a better way to manage a massive construction process (or a taco), CLICK HERE.

 

Mike Montgomery is executive director of CALinnovates.