Comcast’s FCC filing pits pet economists against net neutrality rules


Comcast has filed its official commentary on the FCC’s proposal
to roll back 2015’s Open Internet Order, and it’s about what
you’d expect: a selectively thorough takedown that relies
heavily on analysis by friendly economists to support the ISP’s
view.

Many of the arguments in the comment, which you can read in its
entirety here, are already addressed in this collection of such
things
— so we won’t retread them here.

The main new work is done by a report commissioned by Comcast
from the National Economic Research Associates. NERA you may
remember from its arguments in defense of “clean coal,” and if
you don’t remember, that’s a good place to start.

The report (included in the comment linked above) and Comcast’s
main argument drawn from it, is that the new rules create
regulatory uncertainty, and regulatory uncertainty reduces
investment.

The problem, as with the rest of the multiplicity of analyses
that have sprung up in the last year or so, is that the data is
extremely ambiguous because there just isn’t enough of it.
Would you trust an economic analysis of an enormous, quickly
evolving industry that uses less than two years of data? Me
neither.

Comcast also seems to want to have its cake and eat it too.

For example, on one hand, Comcast crows about how much
investment and related industries grew between 2010 and 2015.
But then it cites a report saying that those incredible gains
were well below what they should have been — because investors
were spooked by the “threat” of rules like those we have now.

(That study, by the way, was written by
George Ford, formerly of MCI-Worldcom and Z-Tel, and one of two
people who seem to comprise the Phoenix Center for Advanced
Legal and Economic Public Policy Studies. The nonprofit, funded
by anonymous donors, pays him hundreds of thousands. I’ve asked
if Comcast is a donor.)

Which is it? Was growth unprecedented or was it sluggish? The
way Comcast structures it, there’s no way to lose: anything
good that happened was because of the old rules, and anything
bad was because of the new ones — even from before they were
enacted.

Regulatory uncertainty is said to cause lower investment
levels, and I don’t really question that. But what Comcast
leaves out is the meat of the sandwich: What are companies
uncertain about? Growth is great, bandwidth is in huge demand,
people are spending tons of money, etc. What are the industries
afraid will be prevented by these rules? The usual “innovative
services,” none of which are ever described except some
zero-rating practices that were never prohibited (though
still a bad idea).

Why not include a few examples of these innovative services
that the FCC has smothered in the cradle? The simplest, and
likely the correct, answer is that no such services exist or
ever existed; just as the ISPs claim that there were never any
practices that ran afoul of the present rules, they claim they
have all kinds of ideas that won’t work under them. Both
claims, I suspect, are bunk.

One thing we can all agree on is that new legislation is
needed, although we may have different ideas what that would
look like. Title II of the 1934 Communications Act is the only
reasonable authority on which to base rules like the 2015 Open
Internet Order, but the two aren’t a match made in heaven, even
with the 1996 upgrades. Congressional action, however, is not
immediately forthcoming.

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