Pulver Blasts Title II Reclassification, Possibility of Forbearance

"I stand here today saying that forbearance sucks,” said Jeff Pulver, who helped create Vonage and the Voice on the Net Coalition, referring to the possibility of reclassifying broadband and forbearing many burdensome aspects of Title II regulation. “It’s a horrible idea. … The needs of the many outweigh the needs of the few or the one.” Companies would be “disrupted” if this old authority is used on them, “a stranglehold on innovation,” he said. “You'll see a downward economic cycle reflected in the stock market, reflected in the investor community.” Companies would worry about parts of any forbearance being revoked, he said: “It will be the day of death to communications as we know it.”

Pulver, now chairman of Zula, a company that markets an app for work team communications, emphasized his role in investing in startups and how that broader part of the market would be affected. He said he believes “in believing” and played up his role as a dreamer. “Trust me, if the kids who created Snapchat had to worry about being regulated like a phone company, they would do something else with their time."

Several net neutrality advocates, including several members of Congress, have urged the FCC to reclassify broadband as a Title II telecom service. Some say Title II is the only way for any new net neutrality rules to ban paid prioritization deals, though others disagree, saying Title II allows for prioritization.

Title II reclassification would be “the equivalent of burning down your house to smoke your cigarette, when you shouldn’t be smoking in the first place,” said Larry Downes, who directs the Evolution of Regulation and Innovation Project at the Georgetown Center for Business and Public Policy. He called Title II “probably the worst regulatory tool set to protect the open Internet” and lamented the “hopelessly obsolete” public switched telephone network that Title II has regulated. Downes called paid prioritization a “straw man” and is dubious of forbearance, he said: “Public utility treatment, from a historic standpoint, from an economic standpoint, this is the regulation of last resort."

Consumers “don’t want a big corporation getting between them and their Internet” and “Title II has somehow become a shorthand for that, but they're not connected,” argued Debbie Goldman, who directs telecom policy for the Communications Workers of America. Title II “would permit specialized negotiations or contracts, as it has in the voice world,” she said. The real solution to Internet openness is making fast, high-speed broadband networks available to everyone, she said. The FCC’s 2010 net neutrality rules “got it right” in its “balancing act,” she said, citing industry investment from recent years.

"You can forbear, you can say this is what I'm regulating,” countered Mark Cooper, research director at the Consumer Federation of America. “People who say you can’t segment [Title II regulation], this is the other side of Larry’s rhetoric.” Cooper urged the FCC to focus on crafting rules under Communications Act Section 706, but said the FCC may need “at least some of” Title II and that Title II “maybe should not have been abandoned so soon” as the agency evolved. “Do 706, do well, maximize your power under 706,” he said, stressing the need for that section to withstand court scrutiny. But “a dollop” of Title II regulation won’t “pollute everything,” Cooper said. “The notion that utility regulation is going to work in this space is inflammatory rhetoric,” he said, pointing to the complications of Title II, such as allowing for private lines. “If it solves it with a sledge hammer, we're doomed."

Gerry Faulhaber, professor emeritus from the University of Pennsylvania’s Wharton School, cited the lack of economist input in the net neutrality debate. Net neutrality regulation seems inevitable now, a process akin to “rearranging deck chairs on the Titanic,” he said, dismissing debate over authority. “In my view, it doesn’t make much difference at all.” He worries about a future that’s “a hundred times slower” and features “much less innovation,” what he called “a field day for rent-seeking,” he said. “What we're seeing from the [content delivery networks] right now is, in fact, rent-seeking.”

Others such as Russell Hanser, a partner at Wilkinson Barker, and International Center for Law and Economics Executive Director Geoff Manne said wireless service differs from wired service and asked whether different net neutrality rules are appropriate. Minority Media and Telecommunications Council Chief Research and Policy Officer Nicol Turner-Lee compared “the imposition of common carrier” regulation on wireless services to a fence, cautioning against “stringent” regulation that could stifle a sphere where much has thrived. “It’s different, and wireless is nothing like wired from a network perspective,” Turner-Lee said.