Confidential Strategy Memorandum: Layer-Neutral Net Neutrality And The Private Censorship Problem

Social media (Facebook, Twitter) and search (Google) companies with dominant market position represent themselves as politically neutral while systematically promoting liberal views and limiting or even banning conservatives. They do so while enjoying blanket liability protection and with the full approval of liberal elites. Far too many conservative media and intellectuals defend the politically biased practices of these companies on the basis that viewpoint discrimination by private entities is beyond the reach of government.

That view ignores the reality that basic network economics create a high bar to competition – a problem that's been with us since the railroads – and that incumbents with market power therefore pose a serious threat to free speech.

Worse, that view incorrectly assumes the political bias of these companies is a free-market phenomenon, when it is largely result of federal law that insulates these companies from a natural market constraint on being an active political player: legal liability for publishing false and malicious claims.

Section 230 of the Communications Decency Act includes a finding by Congress that "The Internet and other interactive computer services offer a forum for a true diversity of political discourse," but has enabled precisely the opposite by allowing sites to exercise editorial control without becoming legally responsible for user-generated content.

CDA 230's provision for "Good Samaritan blocking and screening of offensive material" is so broad, allowing sites to filter or block content that is "harassing, or otherwise objectionable," that it effectively gives carte blanche to promote an aggressive political agenda without any risk of legal consequence.

Moreover, the very companies that are now exploiting these liability protections and their enormous incumbent market power were the principal corporate proponents of imposing draconian regulation on ISPs via the FCC in the context of net neutrality, which morphed into Title II public utility regulation. The arguments they made in that context apply in every respect to themselves, as both critics and supporters of net neutrality regulation have long observed.

The Title II order is ticketed for imminent revocation under Republican FCC Chairman Ajit Pai, and deservedly so. It has had a profound negative impact on broadband investment and represents a dangerous precedent of a federal regulatory agency dramatically expanding its own power without authorization by Congress.

At the same time, however, the Internet ecosystem is not likely to be satisfied with going back to the old, unenforceable broadband statement given the battle-scars on all sides of the net neutrality fight. Stakeholders will seek bright line rules requiring transparency and prohibiting blocking and throttling from the place the debate always should have taken place: Congress.

The legislative process is likely to be led by the Senate Commerce Committee and its chairman, John Thune of South Dakota, who unfortunately may fear taking on powerful edge companies after receiving unexpected criticism from the right when he held important hearings on the systematic political manipulation of the "Trending News" feature by Facebook.

The Trump administration should urge Thune to think bigger than just the ISPs and make clear that they will provide robust cover from the right if he takes on the challenge of political bias from the edge.

Social media and search companies, and possibly others, should be subject to the same neutrality rules because they possess the same benefits of market power that come from enormous fixed costs as well as, in the case of social network platforms, the network lock-in effects of having a large user-base.

Putting everyone in the same boat has enormous advantages, ensuring the exercise is genuinely pro-consumer rather than devolving into the familiar attempt by the edge to seek regulatory predation of the core.

The most likely approach would be a supercharged transparency rule requiring clear disclosure of how traffic is treated, and clear specification of the standards used for limiting speech, including any possible viewpoint discrimination.

Platforms that represent themselves to the public as neutral would be subject to enforcement actions if they violate those representations through a consumer-protection framework.

Platforms that elect not to be neutral would be free to exercise editorial control, but would have to prominently disclose they are doing so – and would no longer be eligible for a section 230 safe harbor to shield them from the legal consequences of the material they choose to publish.

Critics will raise First Amendment objections, but their arguments will smack of hypocrisy if they supported the FCC neutrality rules for ISPs, which also provide a legal template.

In USTA v. FCC the DC Circuit upheld so-called net neutrality regulation of broadband providers and laid out a roadmap for neutrality regulation without running afoul of the First Amendment:

If a broadband provider nonetheless were to choose to exercise editorial discretion—for instance, by picking a limited set of websites to carry and offering that service as a curated internet experience—it might then qualify as a First Amendment speaker. But the Order itself excludes such providers from the rules. The Order defines broadband internet access service as a "mass-market retail service"—i.e., a service that is "marketed and sold on a standardized basis"—that "provides the capability to transmit data to and receive data from all or substantially all Internet endpoints." That definition, by its terms, includes only those broadband providers that hold themselves out as neutral, indiscriminate conduits.

Search and social can, by the same logic, be required to enforceably identify themselves as neutral or non-neutral platforms.

Jack Dorsey of Twitter has said: "We think of it as an information utility and a communications network," making it functionally identical to the ISPs Twitter lobbied the FCC to regulate.

If Twitter is in fact an advocate for liberal views – as it appears to be – then it should be forced to say so clearly, as should Facebook and Google. And if they choose to be First Amendment speakers rather than neutral conduits, then they should be willing and able to defend the material they label as "fact checked" in court.

By simply proposing this framework, the Trump administration would make clear that the asymmetry of companies identified with conservative causes risking regulatory retaliation while companies identified with liberals are given a free pass is over.

Moreover, while the initial response will be indignation from the left as well as search and social companies – possibly including mass mobilization of site users, which is a potent political weapon – the focus on transparency, a core value of younger voters, as well as the hypocrisy of these companies supporting for ISPs precisely what they oppose for themselves puts these companies in an untenable position.

They are therefore likely to rely principally on the argument that regulation is unnecessary, to issue even stronger statements of political neutrality, and to actually improve their behavior to prevent regulation.

Rather than fighting a standalone rearguard action to defend rollback at the FCC, this approach puts us on offense on the net neutrality issue and assures a positive outcome whether or not the bill passes.