Cell Phone Gag Rule

gag.jpgThere is big news on the net neutrality front today: Verizon Wireless has decided to block one group’s political speech from its text-message program:

Saying it had the right to block “controversial or unsavory” text messages, Verizon Wireless has rejected a request from Naral Pro-Choice America, the abortion rights group, to make Verizon’s mobile network available for a text-message program.

Note that this is not a pro-life policy, but one of blandless and depoliticization. As the Catholic Church realizes, it could well be the next to be censored or suffer degraded quality of service:

With no safeguards for net neutrality, religious groups, including the U.S. Conference of Catholic Bishops, fear that Internet service providers will discriminate against them and charge them if they want to get the same level and speed of service they now receive for their online sites when someone types in their Web address.

This latest development should put net neutrality opponents on the defensive, at least in academic circles. Brett Frischmann and Barbara von Schewick have already called into question the economic foundations of the most sophisticated defense of a laissez-faire position on the matter. But Verizon Wireless’s new policy shows that the cultural consequences of untrammeled carrier control over content may be far worse than its potential to stifle the types of efficiency and innovation economists usually measure.

Many fear that powerful carriers will bend culture to money by auctioning off a “fast-track” and degrading the quality of service of those who cannot afford it. Imagine a world where HBO shows are delivered ten times as fast as Univision ones, or where wealthy churches’ sermons come through with crystalline clarity and poorer ones are consigned to grainy obsolescence. Imagine being stuck with video sharing platforms as crippled as American cell phones, and finding your connection to YouTube suddenly lost whenever you try to watch something that has not been approved by a consortium of content owners. Verizon Wireless’s decision today adds a new wrinkle to the problem: imagine future communications platforms stripped of anything controversial or “unsavory.”

Of course, I can see why many proponents of network neutrality don’t want to stray into the “cultural;” it seems so contestable, while the economic case for net neutrality can appear compelling on its face. Consider Robert Frieden’s take on the DOJ’s ex parte comments opposing net neutrality (which I’ve reprinted, with his permission, from a list-serv):

[The DOJ’s comments] are incredibly simplistic and offer further proof of how sponsored research and questionable statistics become the basis for policy, regulations and law. In a nutshell the Justice Department buys the laissez faire view that the marketplace can resolve all potential problems and no real problem has arisen.

The Justice Department can make its case only by ignoring unsponsored research, that point to real potential for problems, statistical compilations that show the broadband marketplace in the U.S. as comparatively inferior to best practices both in terms of price and quality, and the practical consequence of a cable/telco duopoly in Internet access.

By the Justice Department’s reasoning it should follow that because of deregulation and commensurate marketplace competition in the wheeling of electricity and packets there could be no potential market manipulation by any single player or group in either industry. We know that in the electricity marketplace Enron traders managed to create bottlenecks, run up the spot market price and generate false congestion.

I am willing to speculate that Enron-type tactics can occur in the wheeling of packets. The fact that a Title II regulated common carrier, telephone company (Madison River Communications, LLC) could not get away with absolute blocking of packets ­without detection and punishment­ says nothing about the ability of unregulated or lightly regulated Title I information service providers to engage in harmful and unlawful bit discrimination.

I have stood midway in the debate on network neutrality and have identified plenty of instances where price and QOS [quality of service] discrimination make economic sense and do not violate applicable laws. See http://papers.ssrn.com/sol3/papers.cfm?abstract_id=893649; http://papers.ssrn.com/sol3/papers.cfm?abstract_id=962181. But I cannot buy the Justice Department’s preoccupation with the virtue of discrimination, having absolutely no regard for the real potential for undetected or unremediable discrimination.

I hate to think­ . . . ­that “the fix is in” and this nation’s Justice Department files paper[s] on behalf of specific stakeholders such as AT&T. But as the Network Neutrality debate plays out I increasingly believe that “Bellhead” investment recovery, pricing and billing mindsets will reshape the Internet to become a hybrid of the Public Switched Telephone Network, an outcome I predicted in 2001; see http://papers.ssrn.com/sol3/papers.cfm?abstract_id=29012.

Verizon Wireless’s decision suggests matters may be even worse; imagine a telephone network that wouldn’t let you talk about abortion over its lines! Ony the most determined optimists think *that* could be cured by “the market:”

“Instead of having the government get in the game of regulating who can carry what, I would get in the game of promoting as many options as possible,” said Christopher S. Yoo, a law professor at the University of Pennsylvania. “You might find text-messaging companies competing on their openness policies.”

I think precisely the reverse is more likely to happen: big lobbies will compete to shut up their opponents. Imagine the boycotts. Perhaps “patriotic” organizations will call for a boycott of companies that allow anti-war messages on their networks.

As I head to the Telecommunications Policy Research Conference this weekend, I look forward to sessions on net neutrality. I have faith that creative engineers and comparative law scholars can devise sensible rules to assure nondiscrimination in the delivery of bits. It may be the only way to avoid the “race to the bottom” of corporate censorship that laissez-faire threatens here.

Photo Credit: Mickal.

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