 I'm going to ask Professor Katz, is broadband a utility? If you mean the sense that it provides basic infrastructure for the view. Should it be regulated as utility? I'm not going to say. And then I think the answer to that is no, if what you mean is. Well, then it's going to depend on what you mean. But if you mean traditional Title II rate regulation and all the parts in it, I think no. I think the history has been that it hasn't worked very well. I think there are ways in which it should be regulated. But I think that that's the wrong regime. And I think it would be better for Congress to act rather than have the FCC sort of do this thing of alternating every time. We have a Democratic or a Republican administration flip-flopping back and forth. And they end up having to use the tool of is it Title II or not. But again, I think that's why Congress needs to step in and develop a regime that's appropriate for the internet and not try to use what was developed for the plain old telephone system and which turned out not to be that successful for it. I should also say in my little lesson that because Congress is the one that has the power to write the laws, if they're not happy with what the FCC does, they can always go back and write their own law. So that's kind of when I was saying there's been some pressure on Congress to do it themselves. And Professor Katz is pointing to that. The Congress is always going to win out there. Like if the FCC says, here's what we think. But Congress is like, no, that's not what we meant by this law. Or that's not what we want the law to say. Congress can clarify it. Well, could I ask you actually one footnote to what you're saying, though, about that? A lot of people consider the FCC actually to be an unconstitutional fourth branch of government. And there actually have been big fights about whether it's part of the executive or not. And in fact, that was part of the whole thing about whether Obama telling then Chairman Wheeler what to do and whether, in fact, that was appropriate. I'm just saying sort of just like the objective where they're classified. But I see, and just before getting to you, I'm going to say that I will start with somebody for each question. But I'm encouraging all the panelists to jump in. So I'm not sure which one of you is first, Ernesto. How about I go first? I'm going to burst the bubble here. The idea that Congress will write a law and things will be fixed is fiction. I'll give you the exact example of what that means. The idea that the communications act since it's ambiguous, since an FCC can kind of change their mind, that's the problem. And Congress can fix it. Do people think that Scott Pruitt, the EPA administrator, is doing a good job with the Clean Air Act, Clean Water Act, and the environmental laws that we have, which are unambiguous based on what the Supreme Court has said, the problem is not what the law is now. The problem is we have a regulator that has abandoned their job. We have regulatory capture. We have an industry that has successfully influenced the federal government to abandon the role of consumer protection here. And you're seeing it in all the other executive branch agencies right now. So I really don't think this is a situation where we just need a new law and things will just work themselves out. I think we actually have a much deeper problem in terms of the political system and what's given us the result of the restoring it in a freedom order. Yes, Conor? So also, I do want to add, just in general, the concept of utility here, taking us outside of the law. And I definitely respect the paradigm that it's a legally defined term. But when we call something a utility, policymakers are making a decision that that resource is so vital to the community and so central and fundamental to modern life that it should be accessible to everyone. And examples of that are rate making where you're making sure that there aren't any opportunities for price gouging because we care about this resource. Another example is making sure that folks who are lower income get subsidized access to the resource. A third very important component in what we're up here to talk about is consumer protection measures and net neutrality to make sure that everyone's getting the same product that they're signing up for an open and fair internet service. But in San Francisco, when our city talks about treating the internet as a utility, there's an additional component of that that I do want to make sure that we don't lose. And it's really important that this is a net neutrality conversation. There's a broader and adjacent set of concerns, which is that San Francisco is a sanctuary city as well. So when you treat the internet as a utility in a sanctuary city, a sanctuary city is a city that makes sure that social amenities and social services are extended to everyone regardless of documented status. I'm talking about immigration. There's going to be a question at the end of the day. Is the internet accessible to everyone if we don't have control over our data? Is the internet accessible to everyone if we aren't making sure that everyone who gets access to it can control their data and control what information about them gets out there when we are concerned at a moment when the Trump administration is sort of conducting raids and sweeps and in an era when the press is quite rightly asking questions about what is a digital sanctuary city, telling cities that care about these important components that the internet and new technologies are forcing them to set new rules to protect their existing social policies. So I do want to sort of put into this entire conversation the fact that treating the internet as a utility also triggers important questions about privacy. Great. Thank you. Abby, I had a comment on this because obviously we're a carrier that has philosophies that run counter to the majority of the carriers in our nation. And your question about whether or not the internet should be regulated as a utility or is a utility, I think as we think about key values like privacy and neutrality, I think we have a failure of the free market. If consumers in households across America want more than 50 megabits of internet, the majority, the vast majority of them have precisely one choice. If consumers could choose from 15 different internet providers and those providers could comply with the FTC's rules of disclose but do what you want, then consumers would vote with their wallets. People who cared about privacy would buy from the carrier that had privacy. People who cared about neutrality would buy from the provider who has neutrality. But you have this constrained last mile access problem. The consumers are captive to a monopoly or an oligopoly of very, very limited choice. And so in the failure of that, I think it's important to have regulation to protect consumers, to protect innovative new sites and services, which might be a threat to the business models of video service providers, cable TV companies, and owners of television content. And the history of bad acts from a neutrality perspective really speaks to that protectionism and monopolization, where mobile carriers disallow voice over IP delivered to an app. Or they disallow apps that replicate their messaging services or internet providers disadvantage streaming content from services like Netflix to the benefit of their own affiliated business entities. And until we have truly open competitive choice, even as a carrier, I believe that regulation, having a ref on the field, will remain important. So I actually wanted to ask you a question about what people should worry about if there were only one ISP. And I think maybe if you could give some examples as an ISP. So when I said ISPs in general, I think Dane Jasper, the CEO of Sonic, his point is we are an ISP, but we feel differently than the big companies that you may think of when you think of ISP. So as an ISP, I would be really interested to know what kinds of practices specifically you could engage in, given your position, controlling the way broadband comes down the pipe. What are the bad things that we should be worried about that you could actually do if you wanted to? I published an article some years ago it's called The Five Levels of ISP Evil. And it was a compendium of the things that people have suggested that we do to customers over some period of time. And just yesterday I was approached by a company that does advertising and advertising anti-fraud. And they want to buy access to all of our DHCP logs, our logs of IP addresses that we give to consumers. And they say they have a relationship. So the number of carriers who are sharing this information with them, and would we like to join these carriers in doing so? And so some of the things that I've seen, this was just yesterday, so it's a fresh example. But we've also seen scenarios where internet service providers would partner with entities that swap out the advertisements as you browse. And so say that you go to Ford's website. Well, and then you go somewhere that's just showing display ads. You go to Time Magazine. They're showing a display ad. Well, time is getting money from an advertiser. Well, this entity sits in the middle in partnership with the ISP, rips out the ad for a Prius or whatever, and sticks in an ad for a competing vehicle with the browser, the website you were just at. The point is your click stream, where you've been five minutes ago or yesterday, and the fact that you have a demographic profile, the service provider knows where you live. They know your zip plus four. They know your address. They might know how many Wi-Fi devices you have in your house, and what those devices are. So service providers know a lot about consumers. And in partnering with advertisers and doing sort of sneaky things with ads, that was an example that we saw that ended up being quashed by the FTC during the Obama era. And a number of service providers were penalized. We've also seen service providers who use DNS hijacking to abuse referral programs. So Amazon, for example, has a referral program. If you run a website and your website's about cooking, maybe you talk about a tool and you refer people to Amazon to go buy a blender or whatever. And Amazon will pay a little spiff for that. And that's a relationship between that maker of content about cooking and Amazon selling the widget. And that's how they support their website. Well, service providers can take, when you type in amazon.com, they can send that not to amazon.com, but to a third party website that then injects a referral tracking. Like, it looks like it came from a content site. Now, Amazon disgorges a payment for that, although you were trying to go directly there. It was not a legitimate path, and that entity in the middle splits the money with the service provider. So there's a lot of really interesting things that service providers can do with DNS, with your browsing habits, your clickstream, where you went from, and the decisions you made as you browsed across the internet holistically, and the information about who you are and where you live. As you start thinking about the possibilities, they're pretty disturbing. Can I just say, so far we've said essentially nothing about net neutrality. Right? I mean, I'm not here to defend ISPs, and they may well have done those bad things. What you cited with the first one is that the FTC quashed it. It wasn't because of net neutrality. It's because the FTC has authority for consumer protection. Nothing that's been mentioned, and privacy is not covered by, if you look at blocking, throttling, and paid prioritization, so far we haven't talked about those and what those do. I agree privacy is a really important issue, but net neutrality I think has essentially nothing to do with that. I think access for everyone is a really important issue. There are arguments that, in fact, net neutrality is an obstacle to access, at least as much as it might be a benefit. So I mean, I think part of the problem with the net neutrality debate is it tends to break down. Do you like your ISP or not? The answer is no. And the only one I hate more is the cable company, and oh, actually ISP is my cable company, so I really hate them. But that doesn't change the fact of whether or not these particular rules are good rules or not. Now I happen to think actually that no blocking and no throttling, if those mean you can't discriminate based on content, and we don't want ISPs exercising control over speech. I think those are good rules. But I think the paid prioritization ban is not a good rule whether or not you think there's competition. I mean, there's plenty of research that shows even if there are monopolies, you're still better off having a monopoly that can do paid prioritization than a monopoly that's not. And I'm not saying it's because there are nice guys who are trying to do the right thing, but there can be incentives, for example, to discriminate in favor of entrance. So I think what, anyway, I would just recommend that we actually focus on what net neutrality itself is about, although I agree that you want to talk about the open internet order. It had the whole thing of opening Title II and the door to all sorts of regulation, although I also will note that the FCC, when they passed it, promised not to exercise those parts. And they said, oh, no, no, this isn't about rate regulation. So if we're talking about the virtues of rate regulation, we're not talking about what the FCC said it was doing. Yes, Ernesto. Well, there is an interconnection between, it's funny I use that word, but there is a intersection between net neutrality and privacy in the sense of what the FCC did. Common carrier authority, which is what the FCC did, it's not utility regulations, common carrier authority, non-discrimination obligations of ISPs, is also a requirement for them to protect your personal information. The FCC abandoned not just net neutrality, but they also abandoned privacy obligations of your broadband, your cable and telephone companies. So there is an interconnection between the two, not necessarily on the rules of net neutrality, but in terms of the authority that was surrendered by this FCC at the end of this last year. Let's talk about pay prioritization a bit. The idea that your monopoly can charge certain websites to make them work better than others. And does anyone really think that will not default to whoever can pay the ISP more, right? I think the EFS position on this is the reality is what's gonna happen when the ISP will be legally allowed to strike some sort of exclusives over arrangements where the more you pay them, the better your service works is that the Netflix, Googles and Facebooks of the world will be perfectly fine in that. They have billions of dollars to spend. But your new entrant, your startup, your party vets, depending on kind of venture capital money to strike virility and become the next best thing, they can't compete there. They don't have money, they don't have the extra funds to pay any sort of fee to just at least keep up with established players. And so I worry a lot about pay prioritization and I'm glad we have had a ban for many years and the ban is still in place today. It's gonna be lifted fairly soon. But I think it is the thing that has prevented the internet from stagnating and becoming a static marketplace where your established giants will be your giants today, tomorrow, into the future. We are used to an internet where new things come up every couple years. A new product comes in and it's hot and your friends know about it and you tell your friends and everyone starts adopting it and you have a new service. That type of innovative spirit of the internet is what I worry the most about losing when ISP is effectively can kind of decide who gets priority treatment based on payments. But first off, the big guys do already pay more and they do get better access. I mean, first of all, they have private backbones they're putting in. Netflix has negotiated preferential interconnection agreements with ISPs. It's true that net neutrality covers the very last part of the connection but on vast parts of the internet they already are buying superior service. The other thing is, so this notion of protecting an entrance because they shouldn't have to pay for speed. I mean, we see this in everything else. I mean, one question is, I guess then, should Amazon be banned from providing overnight shipping for free? Because that's not fair because I want to start selling something, maybe I'll sell autographed copies of my economics papers. And there's gonna be, I can't afford though to pay for everybody to have overnight shipping. Does that mean it's unfair? It's keeping me out? Michael, if the consumer is buying the service, say they're buying from their local cable company, 50 megabits of internet and a terabyte of consumption each month, why should that care be able to squish down Netflix if they don't pay or some new entrant if they don't pay? It distorts and hides the economics of the product that you're buying. No, by squishing down, if you mean that I paid to get 50 megabits per second, then it turns out when Netflix goes to me, I get less than that. First of all, then that should be illegal and I believe it is illegal and it's not net neutrality, that would be something that would come under the FTC rules because it's fraud. So the question really is, if I'm paying for 50 megabits per second and Netflix wants to say, look, I'll cut a deal with the ISP so that when people watch Netflix, they get it at 100 megabits per second, right? That's, I think what net neutrality is really about. And I think that's called competition because you may well have an entrant that wants to come in and say, look, we're gonna jump ahead of Netflix and we wanna offer higher speeds. I mean, history is that what entrants wanna do is do something different than what the incumbents do and net neutrality, the no-paid prioritization, in a sense, is demanding one size fits all. I agree with you the part about, look, I think also transparency is important and again, I'm not here to defend the ISPs, I'm here to trash the rule. And as I look at the historic context, you know, our nation's largest cable operator and our nation's second largest telephone company both had congested interconnection with Netflix until Netflix paid a fee and then performance went up. And so they were able to hold hostage a source of content whose business model made it essential to reach consumers, consumers who were paying for 50 megabits of internet. But despite Netflix being on the internet, there was intentional congestion, they were held captive and that is a neutrality violation. Actually, no, the interconnection is not covered by net and that's one of the things people criticized the FCC over in 2015, but it generally punted on interconnection. So the point is that the paths that were used to reach Netflix were intentionally congested and Netflix had to pay a fee to the cable operators and telcos to gather additional capacity. While that consumer could go to another arbitrary site anywhere on the internet and get their full speed. Yeah, my point is that the net neutrality regulation didn't cover that. The net neutrality rules did not cover that but the FCC did explicitly say in its 2015 order that it will begin to oversee the market of interconnection in light of things like Comcast, Netflix and other disputes with cable industry. So it's worth making that distinction but at the same time what's changed now is the current FCC has said we're no longer going to even look at what's happening in that marketplace. We're just kind of putting our blinders up and hoping the regional monopolies will just act well. I mean the go back to your point, like you're saying if Netflix wants to pay extra and operate at 100 megabits and there are other companies operating at 50, I mean that's the problem. I mean Netflix, I just looked up real quick, $11 billion of revenue in 2017, that's Netflix. What startup starts with anywhere close to the kind of money and their infancy, right? I mean none of them. The normal way a startup enters the market in terms of the internet space is they get venture capital money or some sort of financing to get started, they're bare bones operations, right? They're 12 staff in an apartment building here in San Francisco trying to make it work and if they catch fire suddenly they scale up to 50 people and then there are 100 people by next year but that has all depended on the fact that Netflix couldn't get this advantageous position by paying more upfront. If I was a strategist servicing a few of Netflix and I was stuck at 50 megabits and Netflix operated at 100, double my speed, plenty of polling has shown people prefer things that work faster and more efficiently and they're not gonna, the user's not gonna understand why this new startup doesn't work as quickly or load as fast as their original programming, they're just gonna stick with what they know and that's the danger. You also think then it's unfair though that Netflix is spending whatever billions of dollars a year on content whereas I try to have a startup to offer video programming, I can't afford to spend as much? Well that's a different issue in terms of licensing and copyrights, right? I mean we were talking about the- No, let's do original content. So they can outbid almost everybody for original content so do you think we should say that's not fair to other people but they didn't start that way, right? They had to become the big player, right? They had to gain the customer base, they had to depend on net neutrality to get access to the sufficient number of millions of customers to actually make the money and now they're developing original content but they didn't start as a company developing original content, they started purchasing kind of a portfolio of old Disney movies and shows and started their streaming service. I don't think you can compare the Netflix of today with where they were nine, 10 years ago. I mean there were DVDs- I'm not comparing them. I'm saying where Netflix is today is they can outbid other companies for content and by your principle of protecting entrance, that's not fair because Netflix is gonna outbid them. We should have it that Steven Spielberg or somebody has to say to anybody, oh well you can't afford a lot so I'm gonna provide the content to you at a cheap price because otherwise it would be stifling entry. So I'm saying take the principle of net neutrality, start applying it to every input. Why do we single out just the internet as the place where we say it's not fair that firms with money can outbid firms without money because it stops entry? Why not do that on everything? Do people need Netflix as much as they need open access to the internet? No, no the whole point is to protect other videos, other video operators who wanna come in, it's not about somebody else who's gonna offer the thing, it's saying, what we're saying is we've gotta protect internet access so that incumbents, or we gotta do this thing so incumbents don't have an advantage with respect to internet access over other things but incumbents have lots of advantages in all sorts of areas. Right and what Victor's responding is that there's a reason why we treat internet services special and I certainly don't think the internet service is the only regulated industry or vertical, right? We are at a historical moment where we need to decide what to do about the internet. It's true that there's certain models out there. We're certainly not restrained by the fact that if we don't treat every single vertical in the consumer market in a capitalist country with the exact same rule set that we can't regulate the internet. The question is what's the defining principle? So the defining principle. I think the defining principle is common carriage. You have a constrained last mile. If you have a bridge across, the only bridge across the river, the only rail line to town or the only cable line that goes to the house, it is appropriate and it is a tenant that dates back to common law in England hundreds of years ago that whether you are carrying wheat or coal, you should pay the same because you have this constrained last mile. Actually, that's not accurate. I mean, common carriage, you can look at the Communications Act. A common carrier is allowed to engage in reasonable discrimination. There's a lot of discussion about what reasonable means, but there's no doubt the principle that you can do that. I mean, common carriers negotiate at different contracts with different companies. You can look both at railroads as common carriers and as plain old telephone and they have always discriminated. Well, but the fundamental point would be more like if you're the internet user, you say I wanna go to X website or X service. The common carrier rule is I am charging you a fee to transfer your information or transfer your request. I'm not allowed to interfere with your request just like taxis can say you wanna go to this destination while I'm gonna take you to this different place first and charge you an extra fee on the way. Just like an airplane can't just land you at a different place when your destination you paid your ticket for. The ISP under common carrier rules is not allowed to just choose where you go when you are making that choice as the person who paid for that service. That's the premise of common carriage in this instance in terms of when we talk about ISPs. In terms of like reasonable discrimination there's always been some flexibility for ISPs to engage in what's called network management which is essentially just managing the provisioning of their service in order to make it function. What we're ensuring that common carrier rules protect is when they just start discriminating for purposes of self gain, right? For purposes of self dealing. Take Comcast and MBCU, right? We had Comcast as a movie studio, it's a broadcaster, it owns media. There is always a persistent danger of them deciding MBC content gets preferential treatment because they own it versus their competitors. That's the whole source of the antitrust lawsuit by the Trump administration right now against AT&T and Time Warner. They believe AT&T will weaponize the owning HBO and Time Warner content as a way to disadvantage competitors they will face in the online video market because they will own that content and they will use it as a source of leverage. There's a competitive context in Last Mile Access that is of interest to me in particular as you think about the opportunity that oligopoly internet access providers have to monetize the way that they deliver content. That distorts the market for a new market last mile access entrance. So if you're gonna hope for 5G wireless or a wireless ISP or a fiber overbuilder, Google fiber or somebody like that to build a network, if consumers are buying 50 megabits of internet and a certain amount of capacity each month, the idea that then that cable provider can then hold out their hand to all of the sources of content and collect some additional funds distorts the competitive market and harms that new market entrance prospects to provide Last Mile Access to consumers as well. And for cities that distortion and that harm could be in a city that both prides itself as a tech hub but also a place where the internet is really supposed to be the great equalizer if it lives up to its origin. That's very disruptive and that's why cities have been so deeply involved from 2014 on in advocating for keeping nationwide rules that align with net neutrality in place. Now, we're at a moment where cities are actually starting to take even bolder action. And in San Francisco, the Fiber for SF project aims to create a municipal fiber optic network across the entire city. Now, every home and business, now when that project started before 2016, the idea was based on the digital divide. You know, the haves and the have, not to the fact that 12% of San Franciscans lack affordable home access to the internet. That's 15% of public school youth. And if you isolate by demographics, that gets up to near 30% of African American and Latino public school students. Those numbers were galling to policy makers here, including the late mayor, including Supervisor Farrell when he was on the board and is now mayor. And that's why the city is so eager to push this specific project forward. Now, after 2016, after the Restoring Internet Freedom Order came down and both gutted the existing net neutrality and privacy rules under title. That's the new order, though it may not sound, it may not be clear what that means, but that's, yeah. Very Fox News title, Restoring Internet Freedom Order. The, you know, in that specific order, the FCC not only took away those rules, but then banned states from imposing their own net neutrality rules or tried to and banned cities from doing the same. As it turns out, municipal broadband that's owned by a locality, you know, the democratically controlled municipality can build its own municipal fiber network and enforce net neutrality and privacy rules on its own based on its own local needs and its own local considerations. And, you know, to address the, you know, the last mile component of all this, and this is, you know, putting in a plug for my project, but also I think addressing the, you know, the topic at hand, the idea of Fiber for SF is not just to create one network that engages in direct customer service to all of our small businesses, to all of our residents. It's to create a big open access network that's just fiber that third party providers can come on top of and compete with one another to serve all of our residents, to serve all of our businesses. And they can compete with one another on price, they can compete with one another on the service, they can compete with one another on privacy protections. And in many ways, what's going on at the federal level is, you know, a real forcing functions for cities to make these difficult decisions on their own and to have to go their own way because, you know, it feels like somebody's asleep but the switch otherwise. So I wanted to, I really appreciate the nice back and forth, but I wanted to sort of shift a little bit to the state level and ask Victor a bit to talk about Senator Wiener's bill and how the state level action fits in, how you think, you know, and to take a step back when I was talking about the FCC and Congress at FTC, there's sort of, there's a bit of a chronology there and the FTC being like the very end if things don't go, you know, if there's no law and something bad happens, they come in, but what I'm asking about now is more on the proactive side. If we're trying to create those rules in advance, we're looking at the state of California with the strongest net neutrality bill out there. And I'm wondering for your perspective, if you talk a little bit about it and how you think the state level action fits into that picture. Sure. Yeah, I think a lot of the issues that have been raised right now are some of the debates that are taking place around our Neutrality Law 822 and it's specifically around the third point which was mentioned because ISPs don't see it as, don't see it as fair, right? If you don't apply these rules to every single type of company, every single sector, why should you apply it to ISPs? Which is the argument we heard here again. And we can talk about why that creates a monopolistic culture within ISPs. We, they will push back ISPs and say that this has never happened before, that they have never been, there's been no cases where they have been tried and found to be entering into this monopolistic culture. And yet it's because the FCC regulates them, it doesn't necessarily stop them from engaging in that. So when Netflix, after 2015, laws were passed had to pay that additional money so that their speeds could be faster than other, the FCC didn't really have the power to stop that at that point. And so the ISPs will continue to come in and say that this is unfair to them, even if the law passes and it's fully intact as it is currently, which has lots of options or opportunities to fall apart along the way. They will threaten lawsuits against this. And it's because they don't want a patchwork of that neutrality rules that they have to follow throughout different states and depending on what's different states set up, that it's protecting against some future unheard of, unknown infraction. Because again, they say that this has never happened before. And yet I think when we look at the coalition that we have supporting these rules, we have small businesses from all throughout California. We have health centers. We have some like an alarm company has written in because as you can see, some ISPs are getting into the business of providing safety alarm systems. And we'll have the opportunity then to slow down the service of a competitor. If you have an alarm system where you can watch video from your home or which calls the police at a certain, after your home is broken into, an ISP that enters the alarm system space will be able to slow down competitors there as well. You have very progressive organizations that look out for communities of color. And when we talk about Netflix being able to monopolize content creation, I think what we've been able to see with an open internet is that content creation has not stopped. We have seen our small businesses be able to continue to compete with our larger businesses, both our technology sector and our startups and our small businesses, mom and pop shop that provides whatever needs to, you have it at a local city level and is able to do that because of the 2015 net neutrality rules. And of course it was missing the last portion which is the paying the premiums for faster speeds but it's the FCC then got themselves involved to be able to stop that from continuing to take place. So I think the state is trying, it passed Senator Kevin De Leon's bill which I don't remember the bill number four. Four or 60 I think. Yeah, but it was missing this last mile portion. The issues of zero rating and kind of oversight over the interconnection market. Yeah, I mean I think the, if I'm... We've been working really closely with our NESTO on this. I mean, EFF's fully supportive of Senator Wiener's work in this space and the reality is there's a bit of irony in the major ISPs, namely like AT&T, Comcast Verizon saying, oh, we shouldn't have states pass these protections, it should just be handled at the federal level which just about six months ago they got the federal system to disband all the protections. There is a reason why I say the FCC is a captured agency right now. 86% of the American public supports net neutrality. How does 80% of the public be on one position and yet the executive branch and agency that's supposed to represent the public's interests come to the opposite conclusion, right? There's a reason why more than 20 states are right now going through net neutrality bills. Washington and Oregon already have laws on the books. Montana, New York, New Jersey, Hawaii and Vermont and their governors issued executive orders to protect net neutrality through the extent the governors can do it. There's a nationwide response because you go to all walks of life in this country and a vast majority of conservatives, liberals and moderates support net neutrality are wary of the power of ISPs to manipulate the internet experience and would rather have the law ensure that doesn't happen. Ernesto, the Federal Communications Commission, broadly speaking has authority over interstate, telecommunications and information services. We've been a supporter of the bill, but I have concerns about its viability. Can states truly regulate something red to the internet which by its nature is not only interstate but international? How do you see this bill surviving that or threading that needle? So eventually this will go to the courts and the things that are new to the judicial system in the space of telecom is we've never historically had an FCC abandon its job as regulator of the industry. So what you have in the background is federal abandonment and no longer federal laws really applying to the ISPs in terms of what their obligations are. And when that happens, then it becomes a question of whether the state's requirements or laws that are being passed, if the state's interests are sufficiently high enough for them to pass their own laws in the absence of federal law. That's what's called a balancing test for all your lawyers out there, but it's essentially judges will have to weigh the interests of the state of California against the burdens on interstate commercial activity. And there's times where the states prevail on that and there's times where they don't. It's an open question where I don't think anyone really knows how this will end. But we've never really, I've tried to find parallels historically where you've had a federal regulator essentially say we're no longer gonna do our job and no longer apply the law to an industry, an entire giant industry, but it's a nationwide industry. And what does that mean towards state power? What about environmental? I mean, California has really put vehicle efficiency standards into place that then have kind of rolled across the country. But the Environmental Protection Agency is actually in charge of environmental regulation. So is there a model there that was in part because of that balancing act. So when the federal government allowed the state of California to regulate its own vehicle emissions, it was in response to LA, it was having this huge smog crisis at the time. And so the balancing was the federal government can't do its job sufficiently well enough to provide the people of Los Angeles County with healthy breathable air. And so the federal government punted to the state and said you can create your own, which is something again, to Ernesto's point, it's creating, is there enough, can there be a big enough need shown by your state's constituency to require for the state to be able to enact its own regulations on an absent department? And I do wanna add that there's a reason that San Francisco, a number of other big cities in California have backed SB 822 as well. We're definitely behind the policy. I do wanna add though that there is sometimes a hesitance on behalf of policy makers when they hear about the possibility of lawsuits. I think it's actually kind of important for cities and states to challenge certain things in the courts like this. I mean, it's important to recognize that when we built the Golden Gate Bridge, there were hundreds of lawsuits and now it's part of the cultural heritage of our city. And I think that net neutrality and privacy are actually the 21st century equivalent to that sort of an infrastructure movement. Yeah, and we see it happen with the, I mean, the federal government's threatening a lawsuit against California for its vehicle emission standards. So it's something that the courts are not necessarily unused to seeing these state versus federal. Yeah, actually think, I'm not a lawyer, but I think the notion that I, first of all, I can predict with certainty that the FCC is not gonna go into court and say we've abandoned regulation, whether or not we think they've actually done that. They're gonna say- The lawsuits would be by the ISPs. The lawsuits would be by the ISPs. No, but this point about, look, what's gonna happen to the state- The FCC is just not accurate. The FCC won't go into court. But anyway, there's gonna be a claim about federal preemption. The court is not gonna conclude that the FCC is abandoning it because the FCC has gone back from Title II to Title I, as you heard at the introduction. So there is a regulatory regime in place. And look, I'm not debating whether the FCC is actually exercising oversight and doing a good job. I just wanna make a point about the legal strategies. They will point out they're doing Title I, they're a strong federal preemption, particularly I think in telecom, and they'll make the argument about patchwork. And I think there's very little reason actually to think this will work. I think there's actually more reason to think, and I'm not saying it's a good idea, but let's just talk about good work, is the states exercising their power as buyers of telecommunications services. Because my understanding is there, there isn't federal preemption, that the states can say, look, we can buy what we want. And if California and enough other states try to decide to impose neutrality requirements that way, they may be able to get up to a critical mass that de facto they can create a new national policy. As I understand it, that legally is a more promising route. And a number of the states that have issued executive orders or that are pursuing legislation are limiting it to their procurement. They're saying if an agency is receiving state funds, it needs to buy its telecommunication services from a carrier who has committed to principles of neutrality in policy and in practice. And I think San Francisco's effort is that writ large, a community can do the same, engaging in its procurement to set values. And just like a city can say, we're gonna equip our fleet with electric buses instead of diesel buses, they can apply values to the way that they spend and procure at a state and local level. And that is probably more defensible and an easier lift. Yeah, I mean, I'll agree to that. The idea of what's called, in the legal terms market participant theory, where the state acts as a buyer, that's a different thing than the state doing direct regulation or using state power to regulate. But that doesn't mean the state can't do one versus the other. It's just a matter of your thresholds of victory, what are your percentages and what are your chances of success? It's gonna be a hotly debated topic in the courts. I have no dispute about that. But similar to kind of the, I think the environmental laws is a great example. The state has an interest in protecting public health. Those are the kind of things courts weigh as favorable to the states to actually get involved in and create laws. To respond to an earlier thing about, why do I keep saying that FCC abandoned overseeing the ISP industry? No, no, no, I was saying I wasn't arguing about whether they did or not. I'm just saying they will point to title one. Yeah, well, and, but like, let me, yeah. And what I just wanna mean, what I wanna explain is what does title one mean in terms of regulatory power of the agency specifically? It doesn't mean net neutrality. It doesn't mean privacy. As far as I know, the FCC can only ask ISPs to disclose their practices. And that's it. There is not a single other thing the FCC can tell the cable or telephone industry to do no matter what they do. And that to me feels when you go from a legal system that says you have to operate in a non-discriminatory manner, you can't have unjust business practices, you have to promote competition as the job of the agency to, you just have to tell people what you do. That's pretty much an abandonment of applying the law. It's a pretty much an abandonment of the field of overseeing the market. And at the end of the day, having jurisdiction, as a legal matter, having jurisdiction doesn't mean you're a full-fledged regular in this space. There are differences between the two. And a free market purist would say, you know, let them build a network if they want to control the network. And, you know, the premise would be to have more and more networks going everywhere. I don't know that from a construction cost and practical matter that you're gonna get more than two or three or four options. And, you know, that's where I see the breakdown and the need for regulation is that you can't realistically have 15 different companies build fiber down every street in order to allow the free market to correct the problems that would occur. I mean, at the end of the day, the market we have is a choice in terms of policy. Right now we're seeing Sprint and T-Mobile announced they're gonna merge. It's a choice. In terms of the federal regulator to decide is that a good outcome? Is it better to have three wireless choices at the end of the day versus four? There's gonna be plenty of people that say it's better for everyone and for the consumer to have three choices for wireless, not four. I would argue it's better to have four, if not more. I would argue that our federal policies should be thinking about how do we use something that's an infinite resource spectrum, our wireless airwaves, in a way that you can invite more companies to launch rather than fewer. I was gonna ask you, Michael. Do you agree that in an oligopoly that there are some unnatural outcomes with regards to competitive behaviors or behaviors around content? And do you have, like you've said, you're kind of here to argue against the rule with regards to the classification. And I understand the concerns about rate regulation and this could go down a rabbit hole that I don't know that any of us are arguing for. But do you agree that there's a problem and do you have another solution? I certainly agree there can be problems and I think the main solutions are the Federal Trade Commission in terms of consumer protection and then the Federal Trade Commission and the US Department of Justice as well as some cases the state attorneys general to deal with these things. So things such as ISPs doing things to disadvantage direct rivals and cut them off. My view is that that should be addressed through antitrust policy. The other thing is let me just say in terms of my own view, I think that the no blocking and no throttling again is when that means you can't do it based on the identity of the provider. You might, I think you actually might do things based on the nature of the stream itself but it has to be neutral to who the actual company is. I think those are good rules. I just, my concern really is with the paid prioritization because I just think there are things where there are benefits of it and as I say it's under general title two regulation it would even, some forms of it would certainly be allowed. I would wanna, oh go ahead Victor. Right, what's the general benefit of that? Well, so take one example, well first of all, I mean another way of putting it was saying well should we have paid prioritization and say should we allow for variety? I mean as it is now certainly people, I'm guessing people in this room have very different speeds that they purchase. We let consumers purchase different speeds of access and the question is why not let content providers or edge providers purchase different speeds because different ones will have different needs and as they say it's today the case they already do. I mean like Google and Yahoo and Microsoft and all of those are spending billions of dollars to have preferential internet access. It's not the last mile, it's the rest but in fact we do do it and so part of it is we're stifling the benefits of variety. I think actually you can hurt entry and the other thing that I think coming back to access, this question of and again this is not relying on the ISP being nice guys, it's relying on there being profit maximizing entities. If they can charge edge providers to get access to their customers that gives them a greater incentive to have end user customers and that actually gives them an incentive to lower their prices. I mean like Google is not giving you, take an example of related industry, they're not giving you search for free because they're interested in helping the world, they're doing it because they make money selling advertising. Well it's the same thing, if your ISP could sell access to you to content providers that gives them an incentive to charge you less and so I actually think it's a way, potentially you could see business models where people have got very low cost access in return for the content providers paying for it and in fact you've seen this with Facebook while they're proponent in net neutrality in the US and the rest of the world, right, they've moved a different way to try to have limited access but at very low cost and have been criticized for it. I'm not here to defend the specifics of what they've done but I think it's an example of how you charge the content providers, some of that can rationally be used to help the end user. So thinking about the federal regulation overlay here, right, just sort of rewind, the FCC kind of pulling out of the space regardless of it's title two or title one and the FTC taking a more prominent role in talking about Facebook. I assume that you're aware that Facebook's been under a consent order to not violate privacy and to regulate data since 2012 and I think that what we've just seen in Congress two full days of folks on Capitol Hill grilling Facebook CEO Mark Zuckerberg about all the ways that didn't work. Does that give you any pause about whether the FTC is currently constituted to do the work that you're saying it will do? Well, I was on the staff at the FCC and if you're doing any of this, putting your faith in that agency to do this stuff we're doomed. No, there are definitely problems with this and in fact I think those congressional hearings also showed a problem because as I understand it, most of the congressmen and women asking questions had no clue what they were asking about and they just completely misunderstood and that's a problem but actually I have more faith in the FTC than I do in the FCC which pains me having been on the staff at the FCC. I didn't want to deviate your question. But you said it would have a benefit for the end user of the internet. So me using the internet at home because it would decrease my price point of being able to access the internet. However, wouldn't it then really have me who's paying a smaller fee have a different internet than someone else, right? There's an internet that is more into this content provider makes it easier for me to go a certain way as opposed to this internet that we all know, right? This is the same internet that we're all having, the same content, the same stuff we can surf it as we'd like as opposed to a more curated version of the internet that benefits this content provider and the one who pays more. So then we are really, for lower income people or people who can't pay as much for their internet, they have access to an internet, it's just not the same internet. It's just like separate but equal but it's obviously not equal. Well, you know what, I completely agree it would be worse but then the price is worse than having full access for a very low price. But if that's not an option, right? If we don't either have municipal or we don't have some sort of explicit public subsidies, those people's choice may be to get nothing. And that's the concern. I agree that it's not the ideal but the question is what's practical and maybe for some people that's what's practical. I think in the environment of monopoly or near monopoly, I mean there's risks here. And I remember in the dial-up era there was a company NetZero and if you use NetZero, your bill was zero and you had this ad using up a quarter of your screen constantly and you were trading, viewing ads for getting access to the internet. But you could hang up and a moment later dial-up Earthlink and hang up and a moment later dial-up AOL and you could subscribe to 50 different service riders because it was dial-up modems and there was common carriage of phone lines and you had a lot of choice and so business models that did things that we wouldn't consider to be neutral or private, I wouldn't argue against because consumers can avoid those business models if that's not what they wanna engage in. But in an environment where the only last mile that delivers more than 25 megabits to over 70% of households is the cable line and the only choice is the cable company, there is a real incentive there to engage in rent seeking behavior and violate whether it's neutrality or privacy to the detriment of not only consumers but also competitive new market entrance would be disadvantage. And I'd like to, I think in our highly politicized like 2016 world to think about the role of our government having access to this very content driven internet. What happens with a world of fake news when providers who can provide content that is not necessarily as accurate as our whole internet would allow when that's your first choice, when you first come up or what you're more able to watch is your Fox News versus your, you know, read the New York Times. What does that do in our currency here? Yeah, though on that I would say do we really wanna give with what net neutrality is doing, the regulation is giving the government more control over the internet and you really wanna protect free speech by giving Donald Trump more control over the internet. So I think we're getting to the, yeah, go ahead. If you don't mind just, I mean, I think that's that selling net neutrality is something that actually promotes speech online not necessarily restrained speech and that this the First Amendment debate has been litigated by the ISPs and they've lost. They don't have a First Amendment right in terms of opposing net neutrality. But I wanted to go back to two things that I think Dane and what was said on pay prioritization and lowering people's bills. The only thing that's gonna lower your bill is competition, right? It's not, ISPs engaging in a market where they charge extra fees to services and applications is not gonna result in people's bills going down because they are, as has been said repeatedly they are profit seeking entities. Their job is to maximize their profits. That's their legal duty and that's perfectly fine. And policy's job is to weigh against the public's interest in what's an appropriate amount of profit in terms of the protections that we need. If I'm a monopoly or if I'm your one choice in high-speed market and I'm charging you a certain fee and I'm charging the other end a certain fee, I'm not gonna give you a back of penny. Why would I have to? You're not going anywhere. I just have to say as an economics professor that's just wrong. I'm sorry, I just wanted to sort of jump in quick because I think we're getting close to the end of the time and I apologize for not making this clarification in the beginning, but I didn't only wanna focus on the no blocking, no throttling, paid prioritization. Necessarily, I wanted to make that clear that that's what the 2015 order is about and a lot of the discussion is about that but I think, do I have time for one more question to the panel? You do and then we will turn it over to the audience. My panel question was going to be that I'm curious to know your perspective regardless of what happens with the current FCC order or anything that could happen in Congress, what else can we do to achieve the principles that we're trying to achieve through net neutrality? I know Connor has already talked a bit about the great work you're doing in the city so maybe that's a good point of entry but I do wanna hear if anybody else has ideas too. That's a great, thank you for setting me up there. Yeah, I do think that what San Francisco has done both during Mayor Lee's term and during Mayor Farrell's term is to establish a playbook for cities that wanna go their own way in this space and go and upgrade the internet for everyone and in doing so, enforce net neutrality, enforce privacy and serve every home and business, treat the internet like a utility at the local level like a social amenity and the beauty of this project is if we are successful, you're gonna create a replicable model across the country for cities who are quite frankly scared about the destabilizing effects of the internet not being what they hope it will be to go their own way and to upgrade the internet to move us from a business model of scarcity where ISPs have the opportunity to treat the internet as a luxury service and instead treat it more akin to a right where everybody in the city gets access to it as a social amenity. So my actual hope is that we'll find some way for the folks around the table here to reach a consensus position on a nationwide rule but absent that cities might have to take things into their own hands and that's where I imagine things might go over the next few years. Does anyone else have any other things to add there? Yeah. I mean I think these things will resolve those cells because we're in a democratically elected country. I mean I think as a democracy, so when I think of things from a lobbying perspective, the worst position to be as a lobbyist would be defending a position where only 17% of the American public agree with you, right? Like that's a terrible position in terms of convincing people who have to go back to voters on a consistent basis to justify the position or inaction. So I think that the American people resolve this issue for both for Congress and for the executive branch in future elections. I think right now things are in a very turbulent time but I have a lot of hope just based on the consistency of the breadth and variety of people I see come out and favor it in any neutrality. Yeah, I have some skepticism. You know, we're in a climate of deregulation right now whether it's environmental or education, the internet policy, telecommunications policy and I wonder, you know, the public care about jobs, they care about the economy, they care about education, they care about social issues and this is sort of a policy wonk issue and I do wonder if voters care enough to make the kinds of changes that would need to be made to sustain a rule of regulation over internet access in a near monopoly environment that would truly protect consumers. Great, well I'd like to open it up to questions Sharon in the front row here.