Issue link: https://digital.copcomm.com/i/957795
DGA QUARTERLY 51 Downes. "And though the net neutrality lobby isn't especially transparent about their finances, groups like Free Press and Public Knowledge appear instead to get the bulk of their funding from the Ford Foundation and George Soros' Open Society Foundations." "Things are coming to a head with the platform guys," one D.C.-based senior telco executive confirms about the increasing nervousness of edge companies over the unavoidability of new regulations. "They are coming to realize that regulation is coming and that they have to cut a deal to survive in a new regulatory envi- ronment." The FANGs' shift reflects their own ambivalence about the gov- ernment's role in the regulation of the digital economy, particu- larly data, the so-called "new oil" of that digital economy. They 're increasingly concerned over the possibility of regulation of data p r i v a c y— a d e v e l o p m e n t t h a t could threaten the very core of Silicon Valley's lucrative business model of giving away their prod- ucts for free in exchange for users' data. What the FANGs most fear is the kind of comprehensive bill of online consumer privacy rights that has just appeared in Europe in the form of the General Data Protection Regulation. This fear is reasonable. As one entertainment executive confides, "An American version of GDPR is inevitable." This fear of data privacy regula- tion has also become entangled in the net neutrality morass. Shortly before the end of the Obama ad- ministration, the Federal Trade Commission imposed a load of privacy requirements (rumored to have been written by Facebook and Google lawyers), which held ISPs to a much higher standard than the edge companies. Yes, it's complicated. And just as the FANGs have become quite uncomfortable about Title II reg- ulation, so the ISPs have edged closer to actually being in favor of net neutrality. What's really bemusing about today's net neutrality debate is that fewer and fewer people, it seems, are actually against it. Even some of the ISPs are willing to accept its basic premise, as long as they aren't reclassified as Title II companies, which would give the FCC regulatory power over their business and pricing models. Robert Quinn, senior executive VP of external and legisla- tive affairs at AT&T, recently said as much, telling me that he isn't opposed to rules outlawing blocking and throttling on the Internet as long as AT&T isn't reclassified as a Title II company, and it applies to the broader Internet ecosystem. I n a Ja n u a r y b l o g p o s t t h i s y e a r, AT&T C E O R a n d a l l Stephenson called for what he terms an "Internet Bill of Rights" to be established by Congress. While this remains an inchoate idea, it appears to represent a kind of grand bargain bringing together all the players in the digital economy—covering every- thing from net neutrality regulation to new privacy rights for Internet consumers. The manifesto, Stephenson blogged, should be applied to "all Internet companies" and should guarantee "neutrality, transpar- ency, openness, non-discrimina- tion, and privacy protection for all Internet users… Legislation would not only ensure consum- ers' rights are protected, but it would provide consistent rules of the road for all Internet compa- nies across all websites, content, devices, and applications." Is Stephenson offering a deal, a quid pro quo, to the FANGs with this call for a comprehensive regulatory digital deal? Might he be swapping a compromise on the regulation of data privacy in exchange for a similar regulatory compromise on neutrality? While the FANGs haven't for- mally responded to Stephenson's proposal, it certainly suggests a more flexible approach to this whole issue from AT&T. And it's not unrealistic to presume that the edge companies would be at least willing to come to the table to help construct a grand digital compromise on consumer rights. After all, in a world in which Silicon Valley is increasingly seen as the new Wall Street, there is also a growing political chorus in and out of Congress calling for the regulation of Big Tech. And the noise isn't just about data regulation. Anti-trust is squarely on the congressional radar as well. There are also calls to rescind so-called safe harbor regula- tion to force the online platforms to be more accountable for their content. The issue is whether the FANGs recognize that the times are changing and that they need to change with them. Stephenson's trial balloon of a grand bargain is echoed in the thinking of the Directors Guild of America about the need for a more comprehensive and long-term solution to the regulation of the Internet. While the DGA is opposed to Pai's repeal of net neutrality rules, it sees it as an opportunity to cobble together a CONTINUED ON PAGE 75 "We are deeply disappointed with the FCC's decision to repeal net neutrality rules. All lawful Internet traffic should be treated equally. The FCC's ruling is a blow to the creative community and threatens the ability of our members, and other creators, to make their works available to Internet users without interference. "While we share Chairman Ajit Pai's con- cern that there should be a level playing field between Internet Service Providers and edge providers such as the major Silicon Valley platforms, we believe—as expressed in our filings—that the best way to achieve that objective is to extend net neutrality rules to apply to all of the on- line gatekeepers, including the dominant platforms that control the flow of content to viewers' screens. The FCC's decision to repeal net neutrality takes us in the wrong direction." —December 14, 2017 DGA Statement on the FCC's Repeal of Net Neutrality Rules