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Public Statements

Disapproving the Rule Submitted by the Federal Communications Commission with Respect to Regulating the Internet and Broadband Industry Practices

Floor Speech

By:
Date:
Location: Washington, DC

BREAK IN TRANSCRIPT

Mr. KERRY. Mr. President, this is one of those times when, on the floor of the Senate, we hear a proposal that people characterize as one thing, but it is, in fact, anything but what they are characterizing it as.

What I just heard the good Senator from Mississippi talking about: We don't want to slam the brakes on development, he said. We don't want to have the SEC intrusion.

So they are trying to say to the American people that they want to liberate the Internet, when, in fact, what they want to do is imprison the Internet within the hands of the most powerful communications entities today to act as the gatekeepers who will control the ability of the Internet to do the very kind of development that brought us here. What they are talking about, their concept, this CRA challenge is that wolf in sheep's clothing. It is that simple. So I think colleagues need to step back and think about how the Internet got to be what it is today when it was developed.

I know the Senator from West Virginia, the chairman of the committee, and I were members of the Commerce Committee back in the 1990s when we wrote the Telecommunications Act of 1996, and we thought we were pretty clever and we wrote a good act. Within 6 months of writing that act, it was obsolete because all our conversation was about telephony at a moment where, because of the Internet, the entire discussion was about to become about data transmission and the movement of information over the Internet. That has never been fully revisited. But the reason we have a Google today, the reason we have had this incredible development of Internet retail business, of all these Web sites, of Facebook, and so many more is because of the open architecture of access to that Internet--which, I would remind everybody in America, was created by government money in government research. It came out of an effort to develop a communications system for our country in the case of nuclear war. So we created, through DARPA, ARPA, research that produced this communications network. Then the private sector saw the opportunity, and a whole bunch of very creative people rushed in and made the Internet what it is today.

Overturning the rules, as the CRA proposes to do, would put the very open architecture that has created this extraordinary agent of communication, of commerce, and family communication, and all these things it has done for business, it would put it at risk and discourage investment in companies at the edge of the Internet that could be the next Google or the next Amazon. Overturning these rules would actually hurt our competitiveness and economic growth and they would diffuse the creative energy that has driven the Internet to be what it is today. Because if we overturn what they are doing today, we take the reality of the Internet and we put it in the hands of the gatekeepers.

Everything that goes over the Internet today goes either through our telephone at home or television or whatever, through cable, out of our house or the airwaves. But if we are not having an open architecture on the Internet, then

the people who control those access points can start discriminating about who gets access at what speed; and if they control who gets access at what speed and begin to charge more for that, you begin to have a profound impact on the ability of any business to develop and a profound impact on the access that consumers have come to anticipate with respect to the Internet.

Think about this. We are talking about neutrality. We are standing here trying to defend neutrality. The other side is coming in here trying to create a new structure where the process will be gamed once again in favor of the most powerful. This is part of the whole debate that is going on in America today, about the 99 percent who feel like everything is gamed against them and the system is geared by the people who have the money and the people who have the power who get what they want. That is what this debate is about.

The network neutrality rules the FCC has promulgated are based on the principles that everybody should support of promoting transparency of broadband service operations, preventing the blocking of legal content and Web sites, and prohibiting discrimination of individuals, applications, and other Web sites. That is what we are for. This CRA is an effort to undo the FCC's ability to protect those principles.

Establishing those principles has actually brought about certainty and predictability to the broadband economy. It ensures that anyone can create a Web site, anyone can deliver an Internet-enabled service with the certainty that is going to be made available to everybody else on the Internet. Innovators now know they are not going to have to go ask a big telephone company: Hey, Verizon, hey AT&T, will you guys please let us have access so we can go do this thing? Oh, well, maybe we will do that, but we are going to charge you in order to do that. They completely destroy the openness that is provided, this ability for anybody in America to sit in their home or school or somewhere and come up with an idea and innovate. That freedom to innovate, the freedom to innovate is what has made the Internet the platform for economic and social development it is today, and a vote for the CRA is a vote to stifle that.

On the side of those favoring the FCC's action are venture capitalists and the companies that have made the Internet what it is today, civil rights groups, civil liberties advocates, academics, scholars who have studied and testified to the virtues of open networks. Let me quote a few of them.

John Doerr is somebody whom many of us have come to know by virtue of his business acumen and the legendary venture capitalist efforts he was engaged in. He was an early backer of Amazon, an early backer of Google, Electronic Arts, Netscape, and a number of other innovators whose creations have driven the growth of the Internet. Here is what he says:

Maintaining an open Internet is critical to our economy's growth ..... and this effort is a pragmatic balance of innovation, economic growth, and crucial investment in the Internet.

Ray Ramsey, the president and CEO of TechNet, a national bipartisan network of more than 400 technology sector CEOs, said of the vote at the Commission in favor of the network neutrality rules:

The vote by the FCC is a pragmatic recognition of the need for codifying principles for protecting nondiscrimination and openness for the Internet.

Charlie Ergen, the president and CEO of Dish Network, said:

The Commission's order is a solid framework for protecting the open Internet. The new rules give companies, including Dish Network, the framework to invest capital and manpower in Internet-related technologies without fear that our investment will be undermined by carriers' discriminatory practices.

Others supporting the order include the Communications Workers of America, civil rights organizations, consumer advocates. In sum, those who support the rules include those who fund the development of Internet companies, those who use the Internet, and advocates who favor open discourse and debate. I think we in the Senate ought to listen to the people who created it, the people who developed it, the people who are taking it to the next generation, and the people who use it.

The Los Angeles Times editorialized on Sunday in favor of the rules of the FCC, saying:

The agency's net neutrality rules are a reasonable attempt to protect the innovative nature of the Internet and should not be overturned.

Despite all of what I just said, some have made what I have called the ``wolf in sheep's clothing'' argument, the false argument that network neutrality rules regulate the Internet--that they actually regulate it--and this is an opportunity to keep it open and impose a condition on innovators.

I don't know how asking innovators to get permission from somebody else to be able to go do what they have already done since the 1990s is going to improve things. The truth is, network neutrality rules govern not the Internet but they govern the behavior of the firms that own and operate the gateways to the Internet. That is what is at stake. When the airwaves that carry the information that connects us to everyone else in the Internet is in the hands of a few and subject to their control, we are in trouble.

The rules we are debating today state that those gateways should not be used to favor some voices over others or some firms over others on the Internet. That is what is at stake. That is what this fight is about. The truth is, if the rules are overturned, every innovator on the Internet will be exposed to the risk that, before they innovate, before they create a new product, they are going to have to go to somebody and say: Mother, may I do this? Then there will be a price attached to it.

Beyond the false argument that network neutrality constitutes regulation of the Internet rather than anticompetitive behavior, opponents to the rule predicted the FCC action was going to have negative economic repercussions. Yet even in an economy that has struggled, that prediction has proven to be wrong.

In the time since the FCC voted on the rule to preserve the open Internet, investment in networks that support wired and wireless broadbrand grew by more than 10 percent compared to the same period the year before. Venture capital investments in Internet-specific companies surged, with $2.3 billion going into 275 companies in the second quarter of 2011. It may well be that 2011 is going to be the biggest year for tech IPOs in more than 10 years. That seems to indicate strong investor confidence in the companies that rely on the open Internet already exists, and we should not disrupt that.

Having lost the argument that network neutrality hurts innovation or the economy, they therefore want to create a new argument; that is, the FCC acted outside its legal authority in protecting the free flow of communication on the Internet.

A court, the right place for that decision to be made, is going to make that decision. But, again, the argument actually challenges common sense. It challenges the basic understanding of reasonableness. To argue that the FCC, the agency that Congress created in order to regulate communications by wire and radio, somehow has no jurisdiction in this very space is to argue that communications over the Internet are not, in fact, conducted over a wire or over the airwaves. It is completely lacking in any foundation in common sense and certainly in the law.

The law we created grants the FCC the authority in the Telecommunications Act to ``make such rules and regulations, and issue such orders, not inconsistent with this Act, as may be necessary for its functions.''

That is the power we gave to them. Under title II, title III, title VI of that act, it encourages the FCC to protect the public interest and encourage just and reasonable rates through competition. That is precisely what net neutrality achieves. It is precisely what we achieve under the rules of the FCC.

Under title VII, the FCC is mandated to take immediate action to remove barriers to infrastructure investment and promote competition in the telecommunications market if advanced telecommunications is not being deployed in a reasonable and timely fashion. That can be determined on a case-by-case basis, and we obviously can continue as we have since the early 1990s to do this. So there is no good reason for this debate to fall along party lines.

I hope it will not be just Democrats who vote to preserve this rule. I hope we will maintain an open Internet technology and support the open Internet order.

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