Obama Remarks Seen as a Strong Signal Against Internet Prioritization Deals

"One of the issues around net neutrality is whether you are creating different rates or charges for different content providers,” Obama said Tuesday at the U.S.-Africa Business Forum in Washington. “That’s the big controversy here. You have big, wealthy media companies who might be willing to pay more but then also charge more for more spectrum, more bandwidth on the Internet so they can stream movies faster or what have you. And I personally -- the position of my administration, as well as I think a lot of companies here is you don’t want to start getting a differentiation in how accessible the Internet is to various users. You want to leave it open so that the next Google or the next Facebook can succeed.”

"I like to think this is a signal to the agency,” Demand Progress Executive Director David Segal told us, suggesting the remarks were “calculated” and “incredibly conspicuous,” not any slip of the tongue: “This is Barack Obama, not Joe Biden.” Segal dismissed the notion that the FCC is simply asking questions in its net neutrality NPRM, saying Wheeler has “made clear” his preferred path forward is rules crafted under Section 706: “Wheeler’s consistently obfuscated, he’s prevaricated, he’s not being honest with people in the tech community about what his plan really does."

"Wheeler’s current approach would do the opposite of what the president says he wants: It would encourage individualized negotiations and allow new kinds of discrimination,” said Free Press President Craig Aaron in a statement. “It would strand the next Google or Facebook in the slow lane.” Wheeler has backing from “the president, from Senate leadership, and from millions and millions of Americans” to drop his proposal, Aaron said. Senate Majority Leader Harry Reid, D-Nev., recently outlined his backing for “any Open Internet Rules” that ban “priority arrangements that harm consumers” (CD July 31 p11).

Obama recognizes “the threat paid prioritization deals pose,” said Rep. Doris Matsui, D-Calif., in a statement Wednesday. “Our country cannot afford so-called Internet fast lanes or special paid prioritization agreements. It is a virtual innovation tax on the Internet ecosystem. I strongly encourage Chairman Wheeler to follow the President’s lead by using the FCC’s authority to ban paid prioritization agreements and enact strong net neutrality protections for consumers and innovators.” Matsui introduced legislation earlier this year to ban paid prioritization deals.

"I don’t think there’s a direct contradiction,” Computer & Communications Industry Association Vice President-Government Relations Cathy Sloan told us, saying the FCC’s NPRM simply asks myriad questions. But it’s a clear “signal” that Obama is very engaged on the issue and that he does not like paid prioritization, despite not prescribing specific actions for the independent agency, she said.

"It’s hard to make complete sense of the president’s quoted comments, which were given in response to a question rather than a prepared statement,” said Larry Downes of the Georgetown University Center for Business and Public Policy. “But if you line it up with Wheeler’s own statements, including his recent blog posts and his statement attached to the NPRM, it’s hard to see any difference in policy. If anything, Wheeler has made stronger statements."

"What it really shows is that President Obama has a really strong, intuitive understanding of why net neutrality is important and what it is,” said Public Knowledge Vice President Michael Weinberg. He called the remarks “really encouraging” and agreed they directly speak to paid prioritization deals. “I hope it’s setting the tone for how the White House is handling it.” Weinberg argued that Title II, while not requiring the prohibition of prioritization deals by any means, would allow for the stronger net neutrality rules that could withstand scrutiny and ban them, unlike Section 706 authority.

One reality check is that the FCC is an independent agency and, “technically,” the position of the Obama administration on telecom issues is expressed by the NTIA, said Kevin Werbach, professor at the University of Pennsylvania’s Wharton School and a former member of the Obama administration’s FCC transition team. Obama “didn’t actually oppose paid prioritization or make any reference to reclassification,” Werbach said. “He just said there’s a ‘big controversy’ about different rates for different content providers. And then he said the administration’s view is there shouldn’t be ‘differentiation in how accessible the Internet is to different users’ or limits on openness for new innovators. That’s exactly what Chairman Wheeler has said in his public statements on net neutrality. The whole debate is whether the FCC’s proposed rules would lead to those results."

Free Press ‘Fantasy Land'

"As usual, Free Press is living in a fantasy land,” said Berin Szoka, president of TechFreedom. Free Press insists that the FCC needs to reclassify broadband to ban Internet “fast lanes,” he said. “Even under Title II, the FCC can’t ban paid prioritization. Indeed, the very essence of common carriage regulation is that common carriers may prioritize traffic; the prioritization just has to be just and reasonable. So either way, under Title II or Section 706, the question is how to govern these arrangements, not whether they happen.” Free Press doesn’t care about the legal details, Szoka said. “Their objective has never been net neutrality,” he said. “It has always been subjecting the Internet to Title II public utility regulation.”

Geoffrey Manne, executive director of the International Center for Law and Economics, said Obama’s comments may well have been aimed at the FCC. “I think given the political realities here, if you're the Obama administration you don’t say something like this without meaning it as a rebuke to Wheeler,” Manne said. Obama’s words “parrot the Free Press line against Wheeler,” he said. “That can’t be an accident."

There’s “zero contradiction” between Obama and Wheeler, said Information Technology and Innovation Foundation telecom analyst Doug Brake, slamming “these latest tactics from the Title II crowd” as “pretty ridiculous.” Certain advocates have appropriated the words of Obama and lawmakers like Reid to fit their narratives, he said: “I'd like to think the Title II supporters ignore these realities because they are blinded by their passion to turn broadband into a regulated utility, but these latest tactics strike me as disingenuous spin.”

The FCC declined comment on Obama’s remarks. “FACT CHECK: Currently there are no rules in place to protect an #OpenInternet,” the agency tweeted Wednesday, saying Wheeler “would like the FCC to adopt new rules ASAP.” (jhendel@warren-news.com),