>> this week on "the communicators," a discussion with interest groups on the

fcc's efforts to adopt formal rules regarding net neutrality. joining us are representatives from net competition.org and open internet coalition. >> host: this week on "the communicators," a discussion of network management, network neutrality and the federal communications commission and what it's proposed to do with that issue. joining us are mark hamm ericson and scott cleland with net competition.org, ann veigle of communications daily is also joining in the questioning. gentlemen, if you would, just start -- give us a basic 101 on your organization, why it was formed and who are the members of it? mr. erickson? >> guest: sure. well, i'm a washington lawyer who has been asked to assemble a coalition of leading technology companies, internet companies like amazon, google, other

stakeholders of consumer groups, civil rights organizations, people that use the internet, small businesses to help advocate before the federal communications commission and other policymakers policies that preserve an open internet. >> guest: yes. and net competition.org was formed about three and a half years ago. it is a pro-competition, more free market-oriented approach, and it is, it represents broadband interests, literally the entire broadband sector, so that would include all the large broadband companies that people know, the two cable associations, the two wireless associations and the telecom association. so that's where we come from. >> host: and what is your position on network management or network neutrality just a basic 101? mr. collieland? -- cleland? >> we believe what's occurring right now is working. we have a very vibrant and

competitive free market internet as the u.s. policy said in 1996 and it exists, it's working well. and it doesn't require the fcc or congress to either regulate or legislate right now. >> host: mr. erickson? >> well, our view is if you like the way the internet currently works, then you should support some basic rules to preserve that internet that scott's talking about that has been the most successful communications tool ever invented since the movable type press. it's an essential communications platform today, it's essential for businesses, for innovation, it's essential for jobs, it's essential for participation in the democratic process. and so what our coalition is asking the federal communications commission to do is to establish some very lightweight, simple rules that would preserve the fundamental concepts behind the architecture of the internet so that the

internet doesn't change into something that would look more like cable television, for example, where the people that provide you the conduits that provide you the content also get to have a say over what type of content users will have access to. >> host: and, gentlemen, we'll get into why you feel that way and, ann veigle, we'll get to you in just a second, but just a few weeks ago we had fcc chair julius genachowski on "the communicators", and here's what he had to say about network neutrality. >> there's no question that the internet will remain free and open and, also, that companies that are managing networks can engage in reasonable network management practices so that together we can create a climate and a set of incentives for ongoing investment in the network to make it robust and smarter, and that also generates investment and innovation on the edge of the network so that any

entrepreneur can come up with an idea and put it out on the internet and have a chance to compete and to make a business. this is a real issue, for example, for small businesses who in the internet have the opportunity to either grow existing small businesses or to start new ones. it's a real opportunity, also, for speakers, content creators of all sorts because the internet is a platform where you can develop an idea and reach a very broad audience. that's the internet that everyone understands. >> host: mr. erickson, what's your reaction to that? >> guest: we agree whole heartedly, that's exactly right, what this whole policy debate is about is preserving the kind of internet that has enabled this amazing proliferation of innovation, speech, commerce, you know, in an otherwise to have economy today, the internet sector and the technology sector are doing relatively well.

and we don't want to see that kind of innovation threatened by the people that provide the pipes from the internet to people's homes. we want users and small businesses in the same sort of unfettered. it's been a hallmark in telecommunications policy for almost a century that essential communications platforms ought to be taken that way, so i actually think it's not that controversial a topic, and i actually believe in the internet ecosystem including in the broadband community, there's agreement on about 90% on what we think the world should look like, so i think this process that chairman genachowski and the fcc have done will be a fruitful, illuminating process where stakeholders of all stripes will be able to make the

case for why they think either the internet should remain the kind of open platform for innovation that it's been, or whether there ought to be some changes and modifications that broadband providers may think either help them or may help innovation in some other way. it'll be an open docket that'll be on the public record, and i think we're all looking forward to participating in that. >> host: mr. cleland. >> guest: well, i think we do free that right now there is net neutrality in place where consumers can get the says to the content and application and services of their choice. the issue is whether or not the government formally regulates that. so i would have to most respectfully disagree most strongly with you in the sense that discussing that this is just preserving the status quo. you know, you don't need legislation or regulation to maintain the status status quo, and the fcc proposal by chairman

general caw sky is -- genachowski is it would change the internet from a voluntary system to a mandated regulatory environment. it would add two new principles that are not consensus principles to the four that operate right now at the fcc. it would add the strictest nondiscrimination principle in 75 years. even at the height of monopoly, we didn't regulate that strenuously where it's an absolute term where there's no term for just, reasonable or due. and then you have -- it's expanding it for the first time to wireless and satellite. that's an enormous change and challenge for wireless companies who have to manage their network. and lastly, it takes an environment right now where, basically, companies can run the internet, they can encounter problems and fix them on the go, they can keep the internet running well because right now they don't have to go to the fcc and say, mother, may i?

may i block this spam or this virus? i don't want to be, you know, nonneutral. we can't go from the current internet we have right now where all broadband providers anything they do they have to run to the fcc and say, is this okay or not? and so this is not about preserving the internet, this is about changing it and changing it in a very big way. >> host: ann veigle. >> host: i wanted to ask both of you about the proposed comcast/npcu merger that was announced yesterday. there have been sporadic instances of what would be termed violations of net neutrality, and this large merger presents a lot of questions about whether there might be more or the model might be not conducive to the principles that chairman genachowski has outlined. and i know there was quite a bit of concern among members on the hill, mostly all democrats, but

still that this needs to be looked at closely and, therefore, even though things might be working well, possibly this large merger could change the dynamics. what do both of you have to say about that? >> guest: well, you know, we haven't taken a position on the merger. it will be statute niced heavily by antitrust regulators, i'm certain of that. it does highlight, though, which may have an impact on the rulemaking the potential danger of having the largest cable company in the nation conduit integrated with a major content producer. and, you know, there's a natural inclination and certainly economic incentive to favor your own programming, your own content over a competitor's content. the net neutrality rules which i would disagree with scott don't apply to the internet, they only apply to the says from users' homes to the internet, so it's not a change in the internet.

and i think the comcast/nbc merger at least highlights the potential danger there of the integration of the pipes and the content. and so some basic rules that say you can't discriminate one type of content over another person's content is even more important in this, in this rule process. >> guest: i just have to go back to quoting what the fcc's fourth principle is, and that is consumers are entitled to competition among service providers, content providers and application providers. it's very clear that the net neutrality does apply to the companies he says it does not like google and amazon and ebay. so, i mean, just the plain reading. getting to your question about the comcast/nbcu. i think that merger will get approved. there's competition at every level, there's plenty of competition with cable to its high-speed service, there is plenty of competition for

programming, for theme parks and for online. and the issue about net neutrality in this merger, i think, is kind of a silly linkage because hulu of nbc which is the online video has 2.6% share per com score. now, google's youtube has 41% share. fox has about 3% share, and everybody else is smaller. so to think that comcast/nbcu with 2% share of the online market is somehow going to be an anticompetitive problem, i think it's a huge stretch and basically it's politics. >> host: one more question. scott, i think you raised concern that the fcc actually doesn't have authority to do the rulemaking and that congress needs to weigh in. what do you think about that, mr. erickson? >> guest: i think the fcc does have the authority to engage in this rule-making process. and certainly it's a question

that they've asked in the rulemaking to ask stakeholders to provide their views on the scope of their authority, and we'll see different stakeholders weigh in in that regard. if they don't have the authority at some point, it's likely these rules are challenged no matter what happens, and that'll be before the courts. but i think it's pretty clear they have authority to engage in the rule-making process. and, in fact, i should say that in the comcast debate which happened two years ago where comcast was held to have illegally blocked lawful content, one of the arguments from many in the broadband community was that the fcc should have engaged in a rulemaking first before penalizing comcast. so i think this is the right way to go to create some rules that provide some certainty to the marketplace, that allow for a healthy ecosystem. i think the broadband providers are going to benefit from that certainty as well as the application providers and

consumers. >> guest: well, i think it's ironic that mr. erickson's coalition has been pushing for net neutrality legislation for three years and now is saying that legislation isn't needed, that the fcc can do it. i think, you know, the fcc does not have unlimited jurisdiction, it can't do whatever it wants. the d.c. circuit has said that repeatedly, most recently in the last couple of months, and so they have some ancillary jurisdiction, but whether or not they can drive a mack truck through that mouse hole of ancillary jurisdiction, i don't think they can. and so, you know, what they're ro posing to do is -- proposing to do is so different from what precedent is and what the intent of the original legislation was that i don't see them being able to go real far and have it be upheld by the court. and then there's also constitutional concerns with what the fcc's doing on

limitations of free speech and takings, two of the big constitutional problems i think this'll encounter. >> guest: i just think it's wrong to characterize these rules as driving a mack truck through anything. the rules themselves fit on one page. these are very narrowly-tailored rules. four of the rules are already part of the internet policy statement that scott's organization supports and his members support. it adds two more rule to those. and even among his organization's supporters they've expressed support for the fcc's jurisdiction to enforce those principles. so i think there is clear authority for the fcc to do what it's doing, but i also think it's important to keep in mind this instant about regulating the interminute, and it's not -- internet, and it's not driving a mack truck anywhere. it's a light weight rule that

preserves people's says -- access to the internet and doesn't allow a, at&t or verizoo use your line and to make decisions and to discriminate and favor certain content over other content. and that's all we're talking about, and contrary to what mr. cleland says, that's not a radical concept. that's been the norm in telecommunications policy for decades and decades. it started most recently in the early 1970s when there was only one phone company, and someone wanted to, someone invented a mickey mouse phone, and they wanted to attach that to the end of the at&t line, and at&t challenged that and said, no, you can't do anything like that. you have to have one seamless network that we control. and the fcc said, no, of course -- as long as it's a lawful device, you can attach any sort of device to the end of

the network. and that really results in the flurry of innovation we have today. it resulted in fax machines and modems and the things we know today and in the kind of internet that we have today because it allowed for modems and many, many isps to run over those same lines. >> host: well, mr. cleland, a lot of the talk on your side of the issue is this will stifle technology, the and how do you respond to that? because mr. erickson was just talking about technology. >> guest: well, let me answer your question. i think basically what the roles would say, it's okay for applications and content providers to innovate, but broadband providers can't innovate on their own, they have to then seek permission of the fcc before they introduce new services or before they can manage their network in a new way in order to encounter maybe a new threat or a new opportunity. so i'd also like to go back to correct the record on a couple of things.

mr. erickson said it was only one page. well, i was just reading the regulations this morning, they're over 100 pages, and talking about how long they are is irrelevant. everybody in washington knows you can change one word in a law, and it can create enormous regulatory concerns and years and years of litigation and regulation. so these rules are long, they're very complex. fcc chairman kinard didn't do net neutrality in '99 because he said it would be enormously regulatory and take a long time. now, another thing that mr. erickson said that just doesn't fit with the facts is this isn't the way it's always been. dial-up internet had these nondiscrimination requirements on them. cable did not, '92 act if you look at it, cable has never had common carrier nondiscrimination requirements. wireless since 1993 has had none of them, and satellite's never

had them from the ip sense. and -- inception. and then the fcc decided dsl did not need to have it after the supreme court gave them the ability to do it. so there's a lot of misinformation here where people are rewriting internet history, and anybody that wants to can go back and look at the law and look at the regulations and see it for themselves. >> host: mr. erickson? >> guest: well, the rules themselves fit on a page. to explain the rules, they've had to -- you have to include more information because at some point you have to justify why you have the rules themselves. the rules are very simple, and rather than require network operators to go to the fcc and get preapproval for things that they want to do, they actually proposed in the rules to give network operators the broadband access providers a lot of flexibility to manage their networks and, in fact, have a system where there would be an

after-the-fact complaint system if it turned out one of the network operators was violating one of the simple rules. so i think the notion that anyone should have to get prior permission from the fcc to innovate is wrong, and we wouldn't support that either. we had over 30 of the leading ceos in the technology and internet space support the rules including, by the way, network operators, not just the edge-based companies. we had new companies like twitter and facebook support those rules, and we had 30 of the leading venture capitalists in the united states write a letter supporting these rules. the reason that venture capitalists are supporting these rules and venture capitalists support and invest not only in the edge-based companies that many of my compliants are, but in many different technologies including technologies that are part of the network operator system, is they all believe that certainty and simple rules will

provide for a more certain investment landscape. and i think in today's economy, having that kind of certainty benefits not only those venture capitalists, but it benefits increased jobs, and it results in increased innovation. no one's talking about not having network operators not innovate. we're totally supportive of that. we want them to be able to innovate. we just don't want them to discriminate against certain types of applications or content that are lawful. they shouldn't be able to do that. >> host: this is "the communicators" program on c-span, we are talking about network management, network neutrality and the fcc's proposals. they're in the middle of the hearing portion of their proposed network neutrality changes. our guests are markham erickson and scott cleland with

netcompetition.org, ann veigle of "communications daily. ". >> host: i wanted to turn the question back to the public. i think that if anybody on the street was asked about this, they would have a little bit of confusion, but they could very readily identify with open internet, and that term seems to, now, be used perhaps by both sides. but can you talk a little bit about how you think the average person understands this, and further, what role is played by social networking reaching out to consumers, average people, internet users and how that result of the policy changes might be? >> guest: well, the way that i would explain it to someone on the street that's not steep in telecommunications law is do you like the way the internet works? do you like the fact that you can log on and go anywhere you want on the internet, download any application that you want?

and buy any sort of computer you want and hook into the internet and have it work? we just simply want to preserve that kind of ecosystem. that's the reason that, by far, and we have had fife years and -- five years and ten different proceedings at the fcc that are all related to this rulemaking that's happening right now. and there have been hundreds of thousands of consumer filings that support an open internet. and that's because they want the internet to work the way the internet has been designed to work. folks on the other side, essentially, argue two things. one, we agree with you, but trust us, we won't do those things, we don't discriminate against the kind of content and applications that you say we'll do. but we've seen a couple of high-profile examples where that hasn't happened, where network operators have discriminated against content. when that happens, it stifles innovation, and i know of two or three companies that i've worked with that have been hurt because

of that kind of behavior that stifles innovation, stifles the marketplace, it chills the venture capitalists from investing in technologies because they wonder whether that kind of discrimination is going to be tolerated and will continue to happen. almost universeally, comcast was thought to be doing the wrong thing even by many of mr. cleland's members, the u.s. telecom members and the telephone companies. and yet that proceeding took eight months to get to resolution. in a venture capital world, eight months is an eternity. so having some rules that just say, you can't do that, will provide a lot of certainty, and most of mr. cleland's members agree with that. but the debate will come down to over a couple of the definitions, and we'll have an open proceeding about how we, how we define those terms, but we want to define those terms in a way that provide the network operators with the ability to manage the networks and have

flexibility. but for the average consumer, what this is really about is if you like the way your internet works, you don't want to see it turn into something over time that looks more like cable television, then you should support the rulemaking that's happening at the fcc. >> guest: and if you're a consumer, you don't know about this issue, it isn't a problem, so why is there needed legislation and regulation if nothing's going wrong? so most consumers have no idea about this issue, and, you know, it is largely a made-up political issue. and in 2006, you know, one of the people, george laycoff basically framed this politically. he said the villains are the broadband service providers who own the lines and control says. their crime is the threat to freedom and equality for the sake of profit. the victims are the citizens of using the internet. the heros are companies like google and famous spokespeople.

that ease how this has been framed, it's been a demonization campaign, and it's simply not true. so, for example, on comcast, you know, comcast was trying to manage network congestion on the internet. it ended up doing it in a way that when the fcc looked at it, decided it didn't like the way it was doing it. but it was trying to satisfy and meet the quality needs of a vast majority, 90% of its clients, because a few bandwidth hogs were shutting down the internet in neighborhoods, you know, by downloading illegal movies. and so, you know, comcast was demonized for doing something where they were trying to serve and fulfill their contract to provide quality service. now, let's go back to, you know, if you don't want -- if you want to preserve the internet, leave it alone. don't regulate it. don't pass legislation. what i'm concerned about is that this is the a big change. net neutrality, if you formalize

it, it'll morph, it'll change, and what you're going to have is you're going to switch from a user-driven internet to an fcc-driven or fcc-centric internet. you will go from a privately-run internet to a more government-run internet. you're going to run from a, leave a voluntary bottoms-up internet, and it'll become more of an fcc governmental top-down, and you'll go to the inefficiency of government, of bureaucrats and their processes. so this is a horrible precedent, and it also sends a horrible precedent around the world. can you imagine, you know, we say we're just preserving the internet to preserve free speech. and chinese, the cubans, the iranians say, whoa, we can have an open season on our people as long as we use the code word, open internet or net neutrality,

we can block and degrade and cut off whatever free speech we have. >> host: just very quickly, mr. cleland, what would be the disadvantages to a verizon, say, if this passed? >> guest: well, verizon would go from being able to innovate and provide quality services to their consumers to basically having to go to the fcc to ask for permission for new managed services or new ways to deal with a network congestion or security threats that haven't been forseen before. see, the assumption here is that regulators know all, that everything is static and nothing new will come up. and, therefore, anything that the regulations don't anticipate today you have to go to the fcc and say, well, this is different than what you told us. you know, can we do x or y? >> host: markham erickson, what would be the advantages for google if this passes?

>> guest: first, i want to say that many of the network operators have lived under the net neutrality rules and have done just fine, so the fought that something new might happen here that may harm them in the future isn't borne out impairically. at&t when they merged agreed to abide by network neutrality rules for two years, and, in fact, during that two-year period at&t invested more in their network than any other network operator, so it's just not true that these are somehow radically new contracts that will hurt network operators. in term thes of what it will do, the rules will do to the edge-based companies like google, like small companies like twitter, like facebook, it preserves an innovation without permission ecosystem that allows for new start-ups to, with very few barriers to entry, with just a few dollars and a garage and a computer to come up with a product, plugn