FTC NN1

• See FTC Workshop transcript for index

Feb 13

Opening Remarks

>>CHAIRMAN MAJORAS
Well, thank you very much, Maureen, and many thanks to all of you for being here live. It's good to see that some of us still value being live in the audience. But we do have many -- I also want to thank who are watching us on line today, so thanks to everybody. I particularly want to thank our distinguished panelists. We have what I consider to be a dream team line-up of panelists on this issue. And I think this is a great opportunity for all of us to hear from some of the most knowledgeable and I could probably say passionate people who are involved in this very significant debate over so-called network neutrality. In a short time the Internet has fundamentally changed our lives. It's made the world bigger in the sense that it expands our reach in offering and acquiring knowledge, opinions, and goods and services, and it's also made the world smaller in the sense that it makes communicating and transacting around the world a cinch. For our children, geographical and spatial limitations are quickly diminishing as they can play games with friends who are sitting across town, communicate with a classroom halfway around the globe. Their circles of friends and influences increasingly come less from geographic neighborhoods and more from social networking neighborhoods. Whereas we have grafted the Internet onto our lives, they are growing up in it and have never known otherwise and they will shape it ultimately into something that we can't fathom. Our job in the meantime is to not screw it up. Beyond providing a means to communicate and get news and Internet, the Internet has fostered and in some cases created competition in countless markets. The FTC's job is to protect that competition on line and off line and we use a lot of different tools in this effort. For over a decade now the FTC has investigated and brought enforcement actions using both consumer protection and the antitrust laws in matters involving Internet access, from combating spam and malicious spyware and deceptive online claims to investigating mergers involving broadband and other Internet access services, the FTC has devoted and will continue to devote significant enforcement resources to this very crucial part of our economy. While the Internet environment presents new challenges, the fact is what we often find in our cases is that tried and true principles of competition, truthful and complete disclosures and securing sensitive consumer information still apply, both in the offline and online environment. So we often find that our existing legal authority is sufficiently flexible to allow us to address new competition and consumer protection challenges as they arise. In addition to law enforcement, the agency actively engages in competition advocacy, to inform policymakers of the competitive and consumer implications of the -- their proposed legislation or policies. And this is actually an extremely important compliment to our private enforcement work because from the market's perspective, government imposed restrictions on competition or barriers to entry may be more harmful than even private exclusion can be. So increasingly we see our advocacy efforts targeting proposed restrictions on electronic commerce. Just within the past year, for example, we responded to invitations to analyze proposed legislation involving online auctions, online wine sales, legal matching services, I said legal matching service, not dating matching services, as well as a do not email registry. A recurring theme in many of these advocacies in the areas of E-commerce and elsewhere is that policymakers need to be wary of regulations that are clothed in terms of protecting consumers, because that's what groups always say, that they want to do, that in practice would hamper competition or raise barriers while benefiting only particular vested interests. And this is particularly a concern of ours when we are not seeing evidence of consumer harm. Another potent tool that we have that we use at the FTC is innovative and timely consumer education. Now, people sometimes look at me when I say this like, okay, like, so, that's sort of the soft side of what we do, much to the contrary. Education is what empowers consumers to protect themselves in the marketplace, and nowhere is that more critical than in the online environment. Foremost among our education efforts is onguardonline.gov which is a multimedia website designed to educate consumers about computer issues such as phishing, spyware, issues raised in online shopping and wireless security. Our latest effort in the area of consumer education is a Home Page that just went live on our website this morning titled "Competition in the technology marketplace." And there consumers can learn about the FTC's actions to promote and protect competition in technology markets. So the final tool that we use is our -- is robust research and information gathering which in turn then informs our enforcement, our advocacy efforts and our education, and this research can take the form of studies. You may be familiar with our municipal WiFi report that was issued last October which provides an analytical framework for policymakers for considering whether and how municipalities should provide wireless Internet service. But we also increase our knowledge by holding public workshops such as the one that you are attending today. Last August I announced the formation of our Internet access task force. My rationale was simple. I wanted us to gather more facts and less rhetoric. After being asked increasingly about our views, on network neutrality from both the competition and consumer protection perspectives, I began doing more reading on the issue and talking to folks to try to learn a little bit more, and frankly I was a little surprised by the lack of constructive public debate. What I found were too many sound bytes, too much talking past one another and not enough acknowledgement that this is a tough issue that poses risks on all sides. So when I announced the formation of the task force I suggested a set of questions that I thought we ought to explore before going down the road of regulating the Internet. Following my open invitation to interested parties to come in and talk to us about the issue the task force has met with representatives from dozens of organizations including content and applications providers, Internet backbone operators, broadband service providers, equipment manufacturers, computer scientists, advocacy groups on every conceivable side of the issue, consumer rights organizations, and academics. And through these discussions we've been exploring market conditions and incentives and opinions about likely short and long-term effects of network neutrality regulation. Because the discussions were so valuable we decided that airing them in a public forum would contribute to furthering a public understanding and analysis in the area. So we will have two panels this morning to help set the stage for the discussions over the next two days because we are not all electrical engineers, our first panel this morning is going to provide us with some technical background on the workings of the Internet to make sure that we are all speaking the same language over the next two days. The second panel will attempt to define the parameters of the debate over network neutrality, one of the things that we have found is that the terms that we're using in this debate sometimes mean one thing to one person and another to someone else, and people have different concerns. So we're going to review the regulatory changes at the FTC and in the courts that have sparked the debate, and air the core concerns of proponents and opponents of regulation, and we'll attempt to try to identify the potential and actual harm to consumers that we are most concerned about. In the afternoon sessions later today we'll have two panels devoted to the two main areas of the debate, data discrimination and prioritization. In the first of these we'll have five economists addressing the incentives of ISPs to discriminate against box or content applications provided by unaffiliated parties as well as the risks and benefits of vertical integration by ISPs into content and applications. The second of the panels will address the many issues associated with ISPs and other network operators charging content and applications providers for prioritized delivery of data. Tomorrow morning our first panel, hopefully we will have a tomorrow morning, well, we will have a tomorrow morning. Hopefully we'll have a tomorrow morning here. We will address the current and future state of broadband competition in the United States. Our task force frankly has heard many divergent views on that subject, with some characterizing the broadband market as a duopoly at best and others touting existing or eminent alternatives to DSL and cable modem such as wireless, broadband over power line and others. The competition panel will offer views on the competitive significant of these alternatives and debate whether robust competition in the market for broadband or Internet access is the best way to address the potential harms envisioned by proponents of regulation. Our second panel tomorrow morning will explore consumer protection issues in this area including the disclosure of material terms in Internet access agreements. These are providing more differentiated services, consumers will need to pay closer attention to what they are actually buying. At the same time ISPs may need to provide more information to consumers to allow them to make truly informed decisions regarding their Internet access, particularly if the ISP is affecting consumers' access to certain content or applications. And then our final two panels tomorrow will address what framework best promotes competition and consumer welfare in the area of broadband Internet access with industry views explored in one panel and academic and policy views explored in the others. Wouldn't want to mix those two. Just teasing. Among the topics to be addressed there are whether enforcement of existing antitrust consumer protection and communication laws is sufficient to address concerns, and if regulations is the answer, then what form should it take? The purpose of the workshop is to further the discourse on these important issues arising in this area. In addition, I expect that the Internet access task force will at the conclusion, as quickly as we can, produce a report that conveys our learning and hopefully provides some guidance on a wayful word. Again, I want to thank each of our moderators and panelists for being with us today and for all your efforts you've put into this. We frankly had more volunteers that we could accommodate as far as speakers go, and we're sorry about that, although we were delighted by the response. But there is still time for filing written comments up until the end of the month. So please keep that in mind. I hope that all of us will benefit from listening to the differing views offered, emphasis on listening. So it is now my pleasure to turn things over to Charles Goldfarb of the Congressional Research Service who has graciously agreed to moderate our first panel. Thank you very much.

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