Forget the FCC — Should the FTC Enforce Net Neutrality?

Republicans argue existing antitrust laws can prevent abuse.

"Man Controlling Trade," by Michael Lantz, 1942; outside the Federal Trade Commission Building. (National Journal)

The whole debate over net neutrality is focusing on the wrong agency, according to congressional Republicans.

The Federal Trade Commission — not the Federal Communications Commission — should police abuses by Internet service providers, the lawmakers argued during a House Judiciary Committee hearing Friday.

While the FCC has broad power to regulate communications networks, the FTC focuses on abusive business practices that harm competition and consumers in all sectors.

Net neutrality is the principle that Internet service providers shouldn't manipulate what consumers can access online. Advocates fear that without government rules, providers like Comcast could limit access to information or create a two-tiered Internet that benefits the largest corporations.

House Judiciary Committee Chairman Bob Goodlatte, a Virginia Republican, said the government shouldn't stand by and allow broadband providers to engage in anticompetitive behavior, but he warned that rigid net-neutrality regulations could stifle innovation.

"I believe that vigorous application of the antitrust laws can prevent dominant Internet service providers from discriminating against competitors' content or engaging in anticompetitive pricing practices," Goodlatte said during the hearing of the Subcommittee on Regulatory Reform, Commercial and Antitrust Law.

He acknowledged that the antitrust laws — which prohibit businesses from restraining competition — may have to be updated so they can be "promptly and effectively" applied to the Internet marketplace.

Republican FTC Commissioner Joshua Wright agreed that his agency is up to the task. He argued that antitrust is a "superior analytical framework" because it relies on economic analysis to protect consumer welfare.

But Democrats warned that antitrust enforcement by the FTC is too narrow to prevent the range of potential abuses by Internet service providers.

Rep. John Conyers, the top Democrat on the Judiciary Committee, said antitrust can't address noneconomic harms, such as restrictions on free speech and political debate on the Internet. He suggested he could be open to the FTC taking a leading role on net neutrality if the agency relied on a broad interpretation of its power to combat "unfair" business practices — but he noted that Republicans wouldn't support that approach.

Tim Wu, a Columbia University law professor who coined the term "net neutrality," also argued that the FCC should continue to take the lead on net-neutrality regulations.

"I have the highest admiration for the antitrust laws," Wu testified. "But I simply don't think they're equipped to handle the broad range of values and policies that are implicated by net neutrality and the open Internet."

He argued that the government must not only protect competition but also ensure that Internet providers don't block politically controversial websites, local news sources, or small blogs. Those values wouldn't be included in a traditional antitrust analysis, he said.

But Rep. Darrell Issa, a California Republican, laid into Wu, claiming the law professor was advocating government control of online speech. Issa noted that the FCC already regulates offensive speech on broadcast TV.

"This is the FCC's role. They're a regulatory policy entity that actually does limit free speech," Issa said. Wu countered that net neutrality is the "exact opposite" because it ensures Internet providers don't control online speech.

The FCC enacted net-neutrality regulations in 2010 that barred Internet providers from blocking websites or "unreasonably" discriminating against any traffic. But Verizon sued, and the D.C. Circuit Court of Appeals struck the rules down earlier this year.

FCC Chairman Tom Wheeler is now trying to rewrite the regulations in a way that can survive future court challenges. His proposal would still bar Internet providers from blocking websites, but would allow them to charge websites for faster service as long as the agreements are "commercially reasonable." That change has prompted a massive blowback from liberals, who fear it could distort the Internet in favor of companies that can pay for the special "fast lanes."