The Master of the Internet

Federal Communications Commission Chairman Julius Genachowski is a political hack, a personification of statist mendacity. He’s a danger to individual liberties and free markets — not because of any clear intention to do wrong, but because he’s a man of gilded academic credentials yet little evident wisdom or insight.

Like the president he serves, Genachowski was educated and has spent his adult life in an echo chamber of small-minded conformists. And, like the president, Genachowski struggles to describe grand ambitions with the vocabulary of a clerk.

During the 2008 presidential campaign, Barack Obama made a big deal about “net neutrality” — a term that meant different things to different people. To traditional left-wing partisans, it meant government-funded high-speed internet service for the usual laundry list of aggrieved minority groups. To Silicon Valley tech firms, it meant cracking down on big internet service providers (ISPs) who wanted to charge heavy users of bandwidth more than light users.

“Net neutrality” was (and is) poorly-defined and is therefore likely to disappoint some or all interested parties whenever it is implemented. As public policy, it is an inherently cynical proposition. The Federal Communications Commission is the regulatory agency best positioned to give shape and force to the vague term; so Obama needed someone to run the agency who wouldn’t mind facing the inevitable disappointment that would come from fulfilling a cynically-made promise. He needed someone with enough career ambition to want the job — but not enough insight to recognize what a bad hand it would be.

Genachowski’s curriculum vitae reads much like the president’s: Columbia undergraduate, Harvard Law School. Of course, a lesser Ivy, followed by Harvard Law, doesn’t mean so much — a few geniuses and many middling mediocrities have followed that path.

According to his official biography, the FCC Chairman has spent his whole career “active at the intersection of social responsibility and the marketplace.” But what does that mean? “Social responsibility” — like “social justice” and “public interest” — is a code word that careerist tools use to camouflage their unmerited self-regard.

After Harvard, Genachowski clerked for Supreme Court Justices David Souter and William Brennan. A promising start. Later, he clerked for Abner Mikva on the D.C. Circuit Court of Appeals. This might seem like a step backward to the uninitiated; but Mikva is a lion among the establishment Left. The step, however, did establish Genachowski as more a politico than a great legal mind. It was followed by stints working for Charles Schumer and a couple of House committees — which confirmed Genachowski's drift into the ranks of partisan political hacks.

When the Democrats lost control of the House in 1994, Schumer found Genachowski a spot working for FCC Chairman Reed Hundt. Hundt did some good during his time at the FCC. He continued his predecessor’s efforts to lower regulatory barriers and, therefore, costs related to international telephone service; and he didn’t stand in the way of ownership consolidation that was going on at the time in the terrestrial radio business. But generally he did the statist bidding of the Clinton administration.

In a 2010 talk at Columbia University, Hundt admitted that “his” FCC had used its oversight powers to pick winners in the telecommunications market. It crafted regulations to “favor the Internet over broadcast” as the common medium of the country because right-wing talk radio “had become a threat to democracy.” And he bragged that he’d made policies “to allow the computers to use the telephone network to connect to the Internet . . . and to do it for free. In other words we stole the value of the telephone network . . . and gave it to society.” According to the Los Angeles Times, he called the highlight of his FCC tenure “state-sanctioned theft.”

Hundt seems to have been an inspiration to the careerist Genachowski — proof that a man with Ivy League credentials but no particular qualities could rise to levels of high esteem in the nation’s capital. The elite among these hacks parlay this esteem into lucrative post-government employment with rent seekers such as McKinsey and Co. and the Blackstone Group. In 1997, Genachowski left the FCC and went to work as a sort of bar-admitted personal valet to Barry Diller at IAC/InterActiveCorp, a New York-based conglomerate of internet commerce companies whose crown jewel is the widely-reviled Ticketmaster. This episode is Genachowski’s main claim to business experience. His resume entries while at IAC — “Chief of Business Operations” and “General Counsel” — sound impressive, until you realize that Diller runs the firm as a sort of personality cult and doesn’t suffer strong (or, some say, even competent) subordinates.

Genachowski’s resume also includes short stops at a couple of minor venture capital funds. But his track record doesn’t suggest any particular vision for technology or business. He seems to have been an access-peddler brought in to provide political contacts. And he didn’t last long in any of those gigs. He was just biding his time until he could pass back through the revolving political door.

Genachowski unintentionally highlights the moral emptiness of the administration he serves. And the moral emptiness of the American “progressive” movement in general. Two speeches that he gave December 2010 set a framework for examining his circular logic, slipshod ethics, and tired rhetoric.

On December 1, 2010, he gave a talk with the Orwellian title, “Remarks on Preserving Internet Freedom and Openness” to FCC staffers. As we’ll see, his definition of “openness” is perverse — and it may be the key to understanding the Obama brand of knee-jerk statism.

“After months of hard work at the FCC,” he said, “and after receiving more than 100,000 comments from citizens across America, we have reached an important milestone in our effort to protect Internet freedom and openness.”

This theme of “hard work” recurs in Genachowski’s rhetoric. It’s not clear exactly what he thinks is “hard” about the work of dictating how internet service providers can operate. The approach of his FCC has been to meet separately with various “stakeholders” in telecommunications regulatory policy — and then to issue edicts influenced, if not drafted, by a handful of leftwing thinktanks.

In any event, congratulating himself and his staff for doing “hard work” is reminiscent of government bureaucrats who call their offices “shops.” They’re contemptuous of real shops and actual hard work.

“Yesterday, I circulated to my colleagues draft rules of the road to preserve the freedom and openness of the Internet.”

This is almost too easy. Who but a hard-charging statist, blind to simple logic or common sense, would believe that such “rules” preserve “freedom and openness?”

“This framework . . . would advance a set of core goals: It would ensure that the Internet remains a powerful platform for innovation and job creation; it would empower consumers and entrepreneurs; it would protect free expression; it would increase certainty in the marketplace, and spur investment both at the edge and in the core of our broadband networks. . . . The proposed rules of the road are rooted in ideas first articulated by Republican Chairmen Michael Powell and Kevin Martin, and endorsed in a unanimous FCC policy statement in 2005. Similar proposals have been supported in Congress on a bipartisan basis. And they are consistent with President Obama’s commitment to ‘keep the Internet as it should be — open and free.’ ”

There are two points worth noting in the section above.

One, Genachowski often presses the point that his edicts are consistent with those of the GOP appointees who’ve preceded him. In his worldview, that which is “bipartisan” is inherently good. He doesn’t seem to understand that both parties are deluded in believing that their central planning will make the market for communications services operate more efficiently.

Two, Obama and his minions are being cagey when they claim “openness” as a goal of their market rules. “Openness” is a term of little fixed definition in economics circles — or almost anywhere else. It sounds like a free-market value — but statists can use it as a Trojan horse for bringing central-planning policies into effect. The main policy hiding in this horse is “net neutrality,” a regulatory concept that means . . . whatever the Feds want it to mean.

“This openness is a quality — a generative power — that must be preserved and protected. And . . . there are real risks to the Internet’s continued freedom and openness. Broadband providers have natural business incentives to leverage their position as gatekeepers to the Internet. Even after the Commission announced open Internet principles in 2005, we have seen clear deviations from the Internet’s openness — instances when broadband providers have prevented consumers from using the applications of their choice without disclosing what they [the providers] were doing.”

In this opaque discussion of “openness,” Genachowki seems to be referring to the 2010 federal appeals court decision in Comcast Corp. v.FCC. It came as the result of a legal dispute between the FCC and the telecom giant that dates back several years. Comcast — one of the biggest ISPs in the United States — has made a practice of slowing some customers’ internet connections when they use BitTorrent, a bandwidth-hogging file-sharing service used primarily to trade digital versions of TV shows and films. (Many film and TV studios also complain that BitTorrent encourages piracy of copyrighted content.)

The FCC has maintained that this selective tightening of specific uses of the internet pipeline violates its policies of “openness” and “net neutrality,” providing an opportunity for the Feds to dictate corporate action to the likes of Comcast. Comcast has maintained that the FCC’s statements about internet openness are just industry guidelines, not legally enforceable.

The two sides have spent a lot of time in federal court, debating these points. In 2008, a trial judge ruled for the FCC and said it could wrap just about any edict it wished within the policy cloaks of “openness” and “net neutrality.” But in April 2010, a federal appeals court overruled the trial court and found that the FCC does not have the authority to sanction Comcast for restricting access to BitTorrent.

During oral arguments, D.C. Circuit Judge Raymond Randolph told the FCC’s lawyers, “You can’t get an unbridled, roving commission to go about doing good.” In his written decision a few months later, Randolph wrote: “Policy statements are just that — statements of policy. They are not delegations of regulatory authority.”

Randolph’s ruling is a big win for liberty — and the prevention of regulatory creep. But it’s a big problem for Genachowski. Playing bureaucratic games with the “net neutrality rulemaking process” accomplishes nothing; it’s all just talk, without any statutory basis. Until Congress passes a law codifying net neutrality, Comcast can tell the FCC to sod off. And keep tightening the pipe for BitTorrent.

Back to Genachowski’s hackery:

“Protecting Internet freedom will drive the Internet job creation engine. . . . [C]onsumers and innovators have a right to know basic information about broadband service, like how networks are being managed. The proposed framework therefore starts with a meaningful transparency obligation, so that consumers and innovators have the information they need to make smart choices about subscribing to or using a broadband network. . . . [C]onsumers and innovators have a right to send and receive lawful Internet traffic — to go where they want and say what they want online, and to use the devices of their choice. Thus, the proposed framework would prohibit the blocking of lawful content, apps, services, and the connection of non-harmful devices to the network. . . . [C]onsumers and innovators have a right to a level playing field. No central authority, public or private, should have the power to pick which ideas or companies win or lose on the Internet; that’s the role of the market and the marketplace of ideas. And so the proposed framework includes a bar on unreasonable discrimination in transmitting lawful network traffic.”

Genachowski must have had trouble in Constitutional Law — even at Harvard. And introductory logic at Columbia — if he ever took it. Reread that last paragraph. The man conflates a “right to a level playing field” with eyewash about a free “marketplace of ideas.” Those two things are mutually exclusive. If government agencies get to define and dictate (or, sometimes, dictate first and define later) things like the levelness of playing fields and the unreasonableness of “discrimination,” there will be no free market of ideas. Or anything else.

Another point: Genachowski’s broad strokes, pitting “consumers and innovators” against evil ISPs, are so crude as to be meaningless. In many cases, the ISPs are the innovators and content-owners on the internet. And, as he proceeds to explain, his notion of “consumer” less resembles any person than it does a grievance mechanism concocted by some leftwing think tank.

“Universal high-speed Internet access is a vital national goal that will require very substantial private sector investment in our 21st century digital infrastructure. For our global competitiveness, and to harness the opportunities of broadband for all Americans, we want world-leading broadband networks in the United States that are both the freest and the fastest in the world.”

The grubby materialism of statist political philosophy usually leads to farcical conclusions. Thus, Genachowski’s talk of “vital national goals” includes the right to a “level playing field” in terms of high-speed internet access. But why stop there? Why not add a right to a level playing field in terms of high-speed cars? High-definition TVs? Brushed-aluminum appliances?

Internet access is not a right; it’s a consumer service. High-speed internet access is a luxury service, and even less a right.

“. . . Accordingly, the [FCC’s current] proposal takes important but measured steps in this area — including transparency and a basic no blocking rule. Under the framework, the FCC would closely monitor the development of the mobile broadband market and be prepared to step in to further address anti-competitive or anti-consumer conduct as appropriate. . . . The Commission itself has a duty and an obligation to fulfill — a duty to address important open proceedings based on the record, and an obligation to be a cop on the beat to protect broadband consumers and foster innovation, investment, and competition.”

This last bit is very important. There’s little foundation in either statute or legal precedent for the FCC to have regulatory authority over the “mobile broadband market.” But mobile devices are the fastest-growing segment of the consumer electronics marketplace, and the Feds want control of what appears and how it appears on all those smartphones and tablets.

And beware: any Beltway bureaucrat who doesn’t carry a gun but talks about being a “cop on the beat” should be summarily thrown in the Anacostia River, especially if he thinks that a “cop on the beat” is supposed to go around fostering things. Genachowski uses the phrase repeatedly — so he’ll require multiple immersions.

On December 15, Officer Genachowski gave another speech — this one at the National Press Club in Washington, entitled “Response to Communications Workers of America’s ‘Speed Matters’ Report.” It finished the work that his earlier comments had begun:

“CWA was one of the very first organizations to question whether America’s broadband networks are where they need to be if we hope to realize the full potential of this transformational technology. . . . Slowly but surely, others have come to recognize the strategic importance of having world-leading broadband networks, but, as today’s report makes clear, we still have a lot of work to do. The FCC has been working hard to address the key challenges CWA has spotlighted in this report.”

This is a typical approach for Obama Administration apparatchiks: they allow labor unions to define regulatory policy. CWA leaders encourage partisan “activism” and compare political opponents to Nazis (need proof? Google “Christopher Sheldon,” vice president of a New Jersey CWA local). That an obsequious FCC chairman allows the leaders of this union to set policy priorities is just bad.

“The economy and jobs are at the core of our work. We’re focused on seizing the opportunities of communications technologies to catalyze private investment, foster job creation, compete globally, and create broad opportunity in the United States. . . .

"I agree with CWA that the great infrastructure challenge of our generation is high-speed broadband Internet. Robust broadband networks create all kinds of jobs, all across the country &‐ everything from construction jobs, to urban planners and architects, engineers and scientists, sales people and IT professionals.”

Here’s another example of the Obama administration’s folly. A central plank of its political philosophy is that the purpose of business is to create jobs. Of course, that is false. Jobs are a side-effect of business, the purpose of which is to make profits. But high-speed internet access as an engine of job creation is something of fetish for Genachowski. In a separate speech, he said:

“[E]very billion dollars spent on infrastructure will create 20,000 to 40,000 jobs — jobs that can’t be outsourced. . . . These includes all kinds of jobs — construction jobs, urban planners and architects, engineers and scientists, sales people and IT professionals.”

In yet another speech — to Jesse Jackson’s corporate shakedown organization, the Rainbow PUSH Coalition — Genachowski blathered: “If we want the United States to be the world’s leading market for the innovative new products and services that drive economic growth and job creation, we need all Americans to be online. . . . [Question: Even convicts? Even four-year-olds?] Broadband is essential to economic opportunity. Job listings are moving exclusively online. Increasingly, if you’re not connected you can’t find a job.”

This is a classic example of a dull-witted statist confusing correlation with causality. Internet access doesn’t make people employable. Employable people tend to be early adapters of technology.

But back to his National Press Club screed:

“[I]f we want the job-creating Internet services and applications of the future developed in America, we are going to have to do better. That’s why our National Broadband Plan sets a goal of 100 megabits per second broadband to 100 million homes. This would make the U.S. the world’s largest market for very high-speed broadband services and applications — unleashing American ingenuity and ensuring that businesses and jobs are created here, and stay here. . . . Because speed matters, we set a goal of at least 1 gigabit-per-second service to at least one anchor institution in every community in the country. These ultra-fast testbeds will help ensure that America has the infrastructure to host the boldest innovations that can be imagined.”

This is old-fashioned, institutionally-decadent pork. And it has the same rotten smell as the various high-speed rail projects Obama likes mentioning. There’s no evidence that Americans want or need the “testbeds” (what a word) that Genachowski describes. But, using nothing more than circular logic, he promises big-government boondoggles designed . . . to generate the CWA dues that allow people like Christopher Sheldon to avoid honest work.

“In September, the Commission approved an order giving schools and libraries the flexibility to buy low-cost fiber through our Universal Service Fund, moving us one step closer to achieving this goal. And, as the National Broadband Plan recommends, we’re also working with the military to make military bases one-gig centers.”

You have to give Genachowski credit for unearthing old bureaucratic technology. The United Service Fund is an obsolete program, originally intended to encourage telephone service to poor rural areas. There’s no objective evidence that it needs to remodeled into some sort of open-ended subsidy for “schools and libraries” (as if libraries, of all things, were cutting-edge, job-creating agents of innovation). The fact that the FCC is trying to do this is yet another example of how government programs never go away.

As far as military tech goes, the whole Bradley Manning-Wikileaks episode suggests that generals need to get better control of the carbon-based links in their computer chain before asking for screaming fast internet connections.

“As CWA’s report states, to spur innovation, the Internet must not only be fast, it must remain open. That’s why the FCC is also moving to preserve the freedom and openness of the Internet. . . . It’s a vital part of what we need to do unleash innovation and protect free speech, to foster broadband investment and promote a vibrant economy — to create jobs in the United States. And that’s why it’s essential that we move forward next week with our strong and balanced proposal to adopt the first enforceable rules of the road to protect Internet freedom.”

Again, there’s cognitive dissonance among these hacks. Nothing the FCC or any other government agency does creates jobs. Even if the FCC’s budget were increased fivefold and its offices crammed with more bureaucratic inmates, the sovereign debt or tax revenue required to fund such folly would quash actual jobs in the private sector, by removing the money to pay for them.

“As the Speed Matters report emphasizes, two key challenges facing the U.S. are broadband availability and adoption. . . . Up to 24 million Americans couldn’t even get broadband if they wanted it. And even where broadband is available, too many Americans are not adopting. Roughly 1 in 3 Americans has not adopted broadband, nearly 100 million people. The adoption rate is even lower among certain communities — low-income Americans, rural areas, minorities, people with disabilities.”

You can hear the echoes of Obamacare’s coverage mandate. If “too many Americans” don't have something, or don't even want something, then the government should enable them to have it — or force them to have it.

“We’ve got out work cut out for us, but with the help of the organizations here, I’m confident we’ll get the job done.”

What job? Forcing high-speed internet access on people who haven’t asked for it . . . and may not be able to afford it, or want to afford it, instead of other things? Arranging big-ticket boondoggles that will make work for self-interested groups like the CWA? Flouting the appeals court decision and dictating terms of operation to ISPs — while hiding behind anodyne jargon such as “rules of the road”?

Whatever the answer, Genachowksi’s “job” seems to make a mockery of his statement in a February 2010 interview with The Wall Street Journal, in which he said, for once in plain language, “We’re not going to regulate the Internet.” Maybe, behind all the bullshit, he doesn’t even understand what “regulate” means.

The most difficult part of reading through the scores of speeches and press releases of Chairman Genachowski is enduring the constant repetition of the same tired rhetoric, the same meaningless cliches. It’s easy to see why statists — and all politicians — become cynical. Repeating the same stupid phrases over and over again must rob any promise, even any concept, of meaning. And this is “work.” This is a "job."

A quick bit of history. The FCC was created in 1934 to allocate and regulate the use of the radio spectrum — which was a scarce commodity at the time, though essential to a cutting-edge technology — and broadcast signals. That was, arguably, a defensible regulatory role. But, since those early days, FCC bureaucrats (including most of the agency’s chairmen) have been pushing at every edge to expand their role. And they have usually been itchy to regulate the content that broadcasters send across the airwaves. This constant urge to regulate content negates the more humble, technology-focused purpose that the FCC is supposed to serve.

Just a few days after dishing out gross flattery to the CWA, Genachowksi did his master’s bidding and vomited up an Executive Order establishing “basic rules of the road to preserve the open Internet as a platform for innovation, investment, competition, and free expression.”

When he first took the FCC Chair, he had described “net neutrality” as a set of rules that would prohibit ISPs from tightening access for applications — such as BitTorrent — that they found undesirable. And his scheme seemed to apply to both wired and wireless networks. But the Comcast decision threw a wrench into those grand plans, so Genachowski claimed unconvincingly to have reconsidered his position and become a moderate dealmaker with a light regulatory touch.

His story isn’t supported by reality. The FCC’s December 2010 Order prohibits ISPs from blocking content, requires them to disclose how they filter traffic, and bans them from “unreasonable” discrimination against applications and web sites. And the FCC gets to make up what’s reasonable and unreasonable as it goes along. (Wireless Internet service providers are completely exempt from the Order.)

So ISPs may own the hardware of the Internet, but the FCC controls how that hardware is used. And the present FCC Chairman favors application suppliers — such as BitTorrent. And Google. And the sites run by IAC/InterActiveCorp. This couldn't give the FCC any power to control free expression or free innovation, could it?

The Order — which, like agency policies before it, does not have the weight of law — passed on a 3-to-2 vote among the FCC commissioners. It was a party-line vote, with the two commissioners appointed by Republican presidents voting against and the three appointed by Democrats for. Commissioner Robert McDowell, who voted against the Order, predicted that it would result in an “era of regulatory arbitrage.”

Other critics said that Genachowski’s Order gives the FCC a tool to regulate content and, echoing the Comcast decision, pointed out that the agency has no legal authority over the internet in the first place. One critic aptly compared Genachowski’s Order to a rule forcing FedEx and UPS to treat all packages in the same way the Postal Service does.

In response to these criticisms, the FCC organized faint praise from leftwing thinktanks that had supplied Genachowski with many of his talking points. Harold Feld, a talking head from a thinktank called Public Knowledge said:

“[The Order is] hardly more than an incremental step beyond the Internet Policy Statement adopted by the previous Republican FCC. After such an enormous build up and tumultuous process, it is unsurprising that supporters of an open Internet are bitterly disappointed — particularly given the uncertainty over how the rules will be enforced.”

Comments like this were supposed to support Genachowski’s claim that he was acting as an honest broker trying to work out a compromise — just as Obama had tried to position himself regarding the Patient Protection and Affordable Care Act. In both cases, the claims were false; the “compromises” split trivial differences between similar visions of corporate welfare. In the case of net neutrality, Democrats said that Republicans were protecting the interests of the cable and phone companies that are the main providers of broadband internet service to American households. Republicans said that Democrats were protecting application companies such as Google, Netflix, and BitTorrent, which have become successful in an era of unregulated internet and want to raise barriers against potential competitors.

Genachowski’s Order drew the attention of Congress. And not in a good way. In April 2011, the House of Representatives approved House Joint Measure 37 — which prohibits the FCC from regulating how internet service providers manage their broadband networks. This action was aimed squarely at thwarting Genachowski’s power grab. Rep. Greg Walden — Measure 37’s author — told theNew York Times:

“Congress has not authorized the Federal Communications Commission to regulate the Internet. [Genachowski’s Order] could open the Internet to regulation from all 50 states.”

Walden went on to say that, in his opinion, the Order was an Obama administration attempt to use the regulatory process “to make an end run around” the Court of Appeals ruling in Comcast.

At about the same time, a separate congressional i‐nquiry forced Genachowski to answer questions about whether White House officials had improperly influenced the net neutrality rules. Rep. Darrell Issa — chairman of the House Oversight Committee — pointed to media reports that suggested “Obama administration officials had knowledge of and potentially contributed to [the] crafting of” the FCC’s rules in this area. Issa also noted that Genachowski and Obama had made suspiciously similar remarks about the rules in separate speeches made during the fall of 2009. And he asked pointedly whether former White House economic adviser Larry Summers had been the conduit with the FCC, planning Genachowski’s net neutrality Order.

Genachowski took a sleazy, legalistic tone in evading Issa’s questions. He whined that the Communications Act of 1934 “does not prohibit communications between commissioners and commission staff and members of the administration.” He said that the FCC’s rules requiring disclosure of such communications did not take effect until the release of a “Notice of Proposed Rulemaking.” Since the Notice of Proposed Rulemaking on net neutrality was issued in October 2009, he claimed that he didn’t have to explain any meetings that had taken place before that date. And finally — sounding like a minor-league version of Bill Clinton playing games with verb tenses — Genachowski said that the FCC’s “Office of General Counsel is not aware of any potential violations of the ex parte rules in connection with the subject matter.”

According to committee staffers, Issa didn’t expect candid or complete answers from Genachowski. The purpose of his questions was to show the FCC that Congress was aware of its attempted power-grab. But Genachowski ignored that message. He’s still grasping at more regulatory power.

Free Press, a leftwing thinktank that has an extremely close and influential relationship with Genachowski’s FCC, has suggested that the agency should try to move broadband service into the same regulatory category as telephone lines. Rather than regulating broadband providers as information services under Title I of the Communications Act, Free Press says the FCC should regulate them under Title II as telecommunications infrastructure.

If the FCC does this, the internet would become in effect a public utility. This is a troubling — and exhausting — proposition. The United States doesn’t need yet another whole category of consumer services wrapped in the obscuring cloak of “public utility.” Public utilities are bad for many reasons, not least the fact that bureaucrats like Julius Genachowski consider them tools of social engineering.

Of course, Genachowski is neither wise enough nor honest enough to acknowledge any of this. And that shouldn’t come as a surprise. His grasping careerism is the reason he was chosen for the job.