Frontiers of Net Neutrality: Recognizing the Bottlenecks

The front-page WSJ article on Google’s alleged backsliding on net neutrality has spawned a lot of controversy on the web. Google has articulately defended the practices at issue in the article. But the piece does focus internet policymakers on some basic truths: there are many potential bottlenecks on the internet, and antitrust law alone cannot adequately regulate the power they confer.

To set the stage for my case, here is some background from the article:

In August 2005, amid a deregulatory environment, the FCC weakened network neutrality to a set of four “guiding principles.” The step had the effect of making the FCC’s power to enforce network neutrality subject to interpretation, emboldening those looking for ways around it. Stirring the waters further, major phone companies including AT&T and Verizon announced they intended to create new fast lanes on the Internet — and would charge content companies a toll to use it. They claimed Internet companies had been getting a free ride.

[Alarmed, a] diverse group including Internet companies Google, Microsoft and Amazon [fought] to “save the Internet” [from this type of discrimination.] The coalition claimed such steps could endanger freedom of speech. . . . [But more recently, these] Internet companies have formed partnerships with phone and cable companies, making them more dependent on one another.

I warned about this trend earlier this year and in 2007. In a very rough draft I recently presented at the Wharton Colloquium on Media and Communications Law (CMCL), I noted some ways in which search as an application will begin to inform the workings of both carriers and other bottlenecks on the net, making all the concerns I’ve previously raised about it relevant to many other layers of the internet:

The old net neutrality narrative of “carrier vs. search engine” may give way to new forms of cooperation that magnify the effects of bias by the collaborating entities. For example, Google has recently co”invested with Comcast and handset manufacturers to develop a new “Clearwire” network. In return for its participation, “Google’s search engine [will] get[] its own button on the phones.” It is hard to imagine a more effective “fast tracking” of one application provider’s site past other competitors’ offerings. Another deal in the works would “make Google the default search provider on Verizon devices and give it a share of ad revenue.” As the landscape of internet competition rapidly shifts, dominant search engines like Google may become less a countervailing force keeping carriers accountable, and more a beneficiary of the very discriminatory tactics they once decried. As Paul Ohm notes, the privacy concerns that have dogged Google may burden carriers as they strive to become more “Googly” in their network management and surveillance.

The bottom line here is that there are many “layers” on the net, ranging from the physical to the application to the content to the social. At any of these layers, one entity can grow very powerful without resorting to any of the illicit tactics that traditionally attract antitrust scrutiny. Moreover, its negative political or cultural impacts can dwarf its threats to “consumer welfare”–the god-term of contemporary antitrust. Only sectoral regulation or common law can remedy abuses of dominant positions here.

How should we start thinking about such regulation–which Walter Olson apparently finds “scary?” Let’s just concentrate on some concrete cases for now. Should Google be able to:

Tier access to Google Books? For example, imagine Ivy League schools get access to everything for an undisclosed sum, and other schools bid for a relatively “disabled version.” Would this alarm anyone? Should a settlement with the force of law promote this possibility?

Manually change rankings? Downrank sites that sue it? or that criticize Google executives? Should Google be able to eliminate sites from its index, either as a punishment or a reward? Should it be able to prioritize sites of business partners?

Even if you think it has a right to do any or all of those things, shoudn’t it have to disclose that that’s what it’s doing? If you even oppose disclosure here, that upends a lot of traditional principles of separation of paid from editorial content. That prohibition on stealth marketing only survives if we have some verifiable method of determining why certain sites were ranked the way they were. The whole world doesn’t have to know–but some qualified transparency for some judging party is necessary lest the promise of “objective, nonbiased content” on Google or other intermediaries be unverifiable.

Reporters Vishesh Kumar and Christopher Rhoads have done us a service in highlighting the carriers’ growing savvy at co-opting one-time opponents. I predict they will be even savvier in using Google’s classic regulation-deflection tactics for their own networks. Google has used trade secrecy to keep its search algorithm private, and that in turn frustrates most plans to keep tabs on how its rankings actually work. As spam and viruses multiply, the carriers are going to increasingly claim that management of their own networks needs to be kept secret as well. Google says that secrecy keeps search engine optimizers from manipulating their results; the carriers will say that only private cunning can carry the day in the war for online security.

I can’t pass judgment on the merits of these claims. If large cadres of bad users can remain utterly anonymous, they may be right; if anonymity eroded they might be wrong. But the bottom line from a legal strategy standpoint is simple: Google and the other internet companies mentioned in the article realized how difficult net neutrality rules would be to implement. Google in particular has recognized that the job it’s doing is in some ways structurally similar to that of the carriers’–and that any regulation of the telcos and cable companies could boomerang back upon them. Rather than continue to conflict, the companies will increasingly cooperate.

As that happens, we’ll face two futures. In one, we’ll frankly recognize the overwhelming power of the cooperating bottleneck entities, recognize the concrete threats to free speech, equality, and cultural diversity they represent, and regulate accordingly. In another, we’ll blithely assume that some garage inventor can come up with the tens or hundreds of millions of dollars necessary to index the entire internet, or lay last-mile connections to every home, and thereby provide a benign alternative to the incumbent behemoths. And the climate of opinion subtly shaped by that intermediary environment will be as blind to its bias as today’s is to that of the corporate media.