Half a loaf: the FCC's Weak Rule on Net Neutrality

Graphic from the Florida non-profit journalism site, Flaglerlive, on its September 12, 2010 post," Net Neutrality: The First Amenment Issue of Our Time."  The following is a draft my next piece commissioned by The Guardian.

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Net neutrality is the First Amendment issue of our time. Today, a blog can load as fast as the Wall Street Journal — and, if the blog is good, it can get more traffic than any media conglomerate.

But if bigger companies can pay for faster, priority Internet access, that blogger no longer has a shot. And these big companies know that when they pay for access, they win. They want preferred treatment on the Internet like the preferred treatment they get in the rest of their lives. --Al Franken on August 19, 2010

I wasn't surprised  December 21 to learn the Federal Communications Commission (FCC) had passed its rule governing net neutrality 3-2 along party lines.  The topic's been a source of partisan wrangling for years.  Advocates of net neutrality argue users should control content viewed and applications used--that a level playing field promotes democratic participation and free speech. Broadband providers and telephone companies want freedom to boost profits by deciding which content gets to whom first and fastest. Both sides argue theirs is the course encouraging economic innovation. 

My take: the new rule is another example of the Democrats' "half-a-loaf" thinking and falls short of pledges by President Obama and his administration to protect the Internet against phone and cable gatekeepers. The order's text wasn't available immediately, only FCC news releases and statements by its members--Chair Julius Genachowski, joined by Democrats Mignon Clyburn and Michael Copps, who voted to approve, and Republicans Meredith Attwell Baker and Robert McDowell, who voted nay.  Based on those, the rule

• leaves wireless networks unregulated, anointing Verizon, AT&T, et. al. as gatekeepers to the rapidly expanding world of mobile Internet access;
• fails to explicitly prohibit internet service providers from turning  the "information highway"  into a toll road favoring corporate partners, while  detouring the rest of us onto the cyber-equivalent of a pothole-ridden dirt road; and
  
• continues to ground its rationale in legal arguments rejected by the DC Federal Court of Appeals April 6, by defining the Internet as an information service, rather than reclassifying broadband and wireless as a public utility under the Communications Act.  As an information service, the court allowed broadband provider Comcast to block or slow specific sites and charge video sites like YouTube to deliver their content faster to users.  The suit came after Comcast attracted attention in 2008 for secretly using a program called Sandvine to hamper peer-to-peer file sharing applications.

Republicans hate the measure. Senate Minority Leader Mitch McConnell (KY) criticized the FCC for taking "what could be a first step in controlling how Americans use the Internet by establishing federal regulations on its use."  He promised to "push back against new rules and regulations” once Republicans take the majority in the House of Representatives in January.  Senator Kay Bailey Hutchison (TX), the Commerce Committee's ranking member, called the vote an “unprecedented power grab by the [FCC's] unelected members” and promised a resolution condemning the rule. She had offered an amendment to block the agency from using any omnibus budget funds to implement net neutrality. Last September, Republicans already had beaten back House Energy and Commerce Committee Chairman Henry Waxman (D-CA) net neutrality bill.

Public interest groups also are up in arms.  Free Press calls it a squandered opportunity. Public Knowledge says it falls short.  Media Access project finds it  riddled with loopholes.  Center for Media Justice  criticizes its minimal protections.
 
I expected a weak rule after Genachowski held closed-door meetings with industry lobbyists opposing net neutrality and with the industry's Open Internet Coalition, but locked out public-interest and consumer groups.  And, as Greg Sargeant noted in the Washington Post:
 

The problem is...that Dems...don't think they're capable of winning a protracted political standoff, even on an issue where the public is on their side, once Republicans start going on the attack....As a result, they tend to telegraph weakness at the outset...that they'll essentially give Republicans what they want as long as they can figure out a way to call it a compromise.

According to Bloomberg, AT&T, in its attempts to influence policy, met more frequently with the Commission in recent days than any other provider.  Verizon, on the other hand, wanted  the FCC out of the picture. Industry sources told The Hill that given Congressional gridlock, Verizon's call for  legislation suggests the company might not want any resolution at all.  These approaches seemed borne out when AT&T praised the FCC for ending its "hamstrung [status preventing] needed action on...real problems " while Verizon, called for "statutory underpinnings."

Copps, a strong consumer advocate, issued a statement prior to voting, saying he’d battled  since his 2001 appointment "to make sure the Internet doesn't travel down the same road of special-interest consolidation and gatekeeper control that other media and telecommunications industries—radio, television, film and cable—have traveled."  While not the proposal he would have crafted, the rule “could represent an important milestone…[i]f vigilantly and vigorously implemented by the Commission—and if upheld by the courts.”

Those, Mr. Copps, are pretty big ifs.

The FCC and Internet Broadband

Verizon and other broadband providers have bankrolled astroturf campaigns in which pr firms and think tanks organize fake grass roots support for the corporate agenda against regulation, reminding me of this illustration from Zaius Nation, which actually refers to Fox News coverage of lobbyist-run think tanks funding the Tea Party Movement.


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Do we really want broadband providers to slow down, block or censor our email, news and financial transactions at will? In an April 6 ruling, 1994 Clinton appointee David S. Tatel changed the landscape for net neutrality, the idea that service providers shouldn't play favorites with regard to what content gets to whom when.

Historically, the Federal Communications Commission (FCC) had treated internet service providers as content managers, rather than communications carriers. As such, the FCC had only "ancillary" powers, more limited its regulation of telephone companies and radio and television broadcasters.

Comcast's peer-to-peer traffic management practices optimized profits, but degraded service (explained here). When the FCC stepped in to enforce the public interest, the company sued. Tatel decided in in Comcast v. FCC that the FCC had failed to tie its claimed authority to any statutory delegation by Congress.

The FCC announces it plans to address Tatel's ruling

Yesterday, the FCC Chairman Julius Genachowski outlined his plan to regain authority by partially reclassifying internet service providers as carriers, contrary to speculation that the FCC would let broadband go unregulated. The WaPo's Cecilia Kang reported on the plan, as did NYT's Edward Wyatt, WSJ's Amy Schatz, Gigaom's Stacey Higgenbotham and Endagadget's Nilay Patel.

Kang writes that sources requesting anonymity advised her that Representative Henry Waxman (D-CA) and Senator Jay Rockefeller (D-WV) had provided

political support for the agency to shift Internet lines to a more regulatory framework.

Although she doesn't mention it, the letter is public, indicating the both chairmen of committees overseeing the FCC that they could support defining broadband as a telecommunications

provided that doing so entails a light regulatory touch, with appropriate use of forbearance authority [the technical term for the FCC accepting companies' petitions to avoid some forms of regulation if its judges there is sufficient competition.]

In another piece, Kang informs us of the effects of MoveOn and Free Press to get Genachowski to take action.

A source at the FCC said the agency has been bombarded with calls. Free Press, a media reform public interest group, called for its 500,000 members to call and e-mail Genachowski to tell him to “protect the Internet” by reclassifying broadband. Some 200,000 of its supporters signed an online petition on the topic. Twitter was flooded with tweets to @fcc and @whitehouse calling for reclassification.

Interestingly, she adds,

The grass-roots efforts come amid a stark quiet from companies that have been supportive of net neutrality rules. Companies on both sides of the debate have told me they are waiting for a final decision by the agency before commenting publicly.

What the FCC says about the ruling

In his statement, Genachowski seems to me either to be putting on a brave face or or spinning, claiming Tatel's decision doesn't

challenge the longstanding consensus about the FCC’s important...role in protecting consumers, promoting competition, and ensuring that all Americans can benefit from broadband communications. Nor does it challenge the commonsense policies we have been pursuing.

The chairman argues that the opinion merely casts doubt

on the particular legal theory the Commission used for the past few years to justify its backstop role with respect to broadband Internet communications

That may be optimistic, as indicated by the protests from broadband providers compiled and rebutted by public interest group Free Press and by the prediction of more law suits to come by CNET's Maguerite Reardon.

What the FCC proposes

Genachowski says he will neither use “ancillary” authority to

anchor actions like reforming universal service and preserving an open Internet

nor treat broadband entirely

as a “telecommunications service,” restoring the FCC’s direct authority over broadband communications networks but also imposing on providers of broadband access services dozens of new regulatory requirements.

Instead he calls for the Commission to follow the approach outlined by FCC Counsel Austin Schlick to

• Recognize the transmission component of broadband access service—and only this component—as a telecommunications service;
• Apply only a handful of provisions...[which] were widely believed to be within the Commission’s purview for broadband [prior to the Comcast decision]; and
  
• Put in place up-front...boundaries to guard against regulatory overreach.

Is this enough to protect net neutrality?

While NOI fellow Jason Rosenbaum applauds the plan as the "only logical way forward to protect internet neutrality, " Rob Frieden (webpage, email), Chair and Professor of Telecommunications and Law at Penn State calls on the FCC to go further:

The FCC has to confront the messy reality that when ventures offer...services that combine conduit and content and when these ventures vertically and horizontally integrate throughout many market segments, the Commission cannot rely on absolute either/or service dichotomies...

It’s time to recognize that layered and convergent services defy compartmentalization into convenient, single regulatory classifications and regimes.

I'm with Professor Friendan on this. What I'm not sure of is whether a more complex classification requires Congressional action, something which may prove difficult, as we've seen in the case of the deracinated health insurance "reform."

Expect a broadband astroturf campaign

Here's a prediction: watch for "citizen" astroturf to oppose the Federal Communications Commission to regulate broadband, telling us that the Commission will infringe on the public opportunities to use the internet. As Phillip Dampier, of Stop the Cap, pointed out April 8,

Verizon has a track record of signing up non-profit groups to support its telecommunications causes. In addition to providing corporate executives for board positions of various community service groups, Verizon financially supports a wide range of not for profit groups, many of which later turn up writing letters of support in favor of Verizon’s policy positions.

Reporting on previous telecom astroturf campaigns

Dampier's contention is supported by Chang's recent reporting on ATT and Verizon funding of think tanks such as the Technology Policy Institute.

This is nothing new. For instance, Sourcewatch indicates that telecoms have long employed Issue Dynamics, Inc. (IDI),

a Washington-based consulting firm that organizes PR campaigns... [utilizing ] NGOs ...[such as] the Gray Panthers and the New York Public Interest Research Group....[S]ome consumer activists...say IDI often does not disclose whom it is working for and argue that IDI's work amounts to astroturf PR.

Fred Goldstein (email), who consults with telecommunication start-ups, wrote in 2004 of how many a charity is

willing to sell its name...especially if it's in a subject area that's outside of its area of interest. So IDI can leaven its home-grown astroturf like TRAC with the signatures of some third parties....

The press, of course, rarely gets it. They love to hear from charities. They eat this up, frequently quoting TRAC and other astroturf as if they were real consumer organizations. Competitors should ...point out who is behind these supposedly pro-consumer, but really pro-monopoly, positions.

And back in 2005, Dan Gilmor alerted us to Issue Dynamics "blogger relations" (via archive.org--the page is not available after 2008) as well as a campaign at the end of an in eWEEK article on Philly's municipal broadband by Wayne Rash(email), who had learned learned in the course of researching the story that

NMRC [New Millennium Research Council] is actually owned and sponsored by Washington lobbying firm Issue Dynamics Inc., whose clients include most of the major telecommunications companies in the United States. Those companies have been active in opposing municipal wireless and broadband efforts. The company claimed that its reports were nevertheless completely independent.

The response from supposedly independent entities has already begun

For instance Kang reports that Bruce Mehlman, co-chairman of the Internet Innovation Alliance weighed in, saying according to Chang:

If the goal is maximizing broadband deployment and adoption . . . new regulations such as these will not help...This sounds more like a political solution likely to imperil investment than a policy initiative that tackles actual challenges in the marketplace.

The high-minded sounding name and mission mask its purpose to mold public opinion in the direction of its corporate sponsors. While the alliance claims to be

a broad-based coalition of business and non-profit organizations that aim to ensure every American, regardless of race, income or geography, has access to the critical tool that is broadband Internet

a look at the non-profit members yields the usual C-PAC suspects such as Americans for Tax Reform. The only surprise is the National Education Association, which has received money from the BellSouth Foundation. Kind of reminds you of the Gray Panthers. I'm skeptical about the Alliance's promotion of

public policies that support equal opportunity for universal broadband availability and adoption so that everyone, everywhere can seize the benefits of the Internet - from education to health care, employment to community building, civic engagement and beyond.

It's time for the rest of us to weigh in

While the FCC hasn't announced its public comment process yet, you will be able to find it here and and press secretary Jen Howard (email) has promised me she'll keep me informed of the timetable.

It's hard to make time to weigh in, but it's necessary. We can't just leave this to the broadband operators, such as AT&T, Comcast and Verizon. They hardly qualify as disinterested purveyors of the public good: their internet access business represent a major source of revenue which they want to optimize. As such, I expect they will continue to lobby, as documented by Public Eye at the links I've provided in this paragraph and to fund pr firms and think tanks in their efforts to influence policy.

As New Yorker journalist A. J. Leibling (1904-1963) observed

Freedom of the press is guaranteed only to those who own one.

The internet provides us all with the potential to own a press, but the broadbands, if unregulated, have the capacity, in chasing their profits, to shut down not only their competitors but any of us little guys who might question unbridled corporate power.

Comcast, The FCC and Net Neutrality

Network neutrality is the principle that Internet users should control the content they view and the applications they use. Broadband providers don't like this notion much, as they would like to optimize their profit by deciding what what content gets to whom first and fastest.

So far they have suceeded with Congress. The House passed its telecommunications bill, H.R. 5252 , 321 tto 101 on June 8, without adequate net neutrality protections after a motion to recommit garnered 165 votes including Bernie Sanders (I-VT) and two Republicans (Jones of TN and of Wilson of NM). On June 28, the Senate Commerce Committee passed its own telecom bill, S. 2686, after an amendment to add net neutrality safeguards failed 11-11, in Committee.

But at least one broadband company, Comcast, was not content to wait for legislation. Robb Topolski (pictured above, blog, email) who edits the D-Links forum on Broadband Reports posted on that site May 12, 2007 that Comcast secretly was using a program called Sandvine to hamper the peer-to-peer file sharing applications on its broadband service. The AP's Peter Svensons confirmed that Comcast was degrading BitTorrent performance in an investigation published on on October 19. Farhad Manjoo, the technology writer for Salon explained in layman's terms what this meant.

Three groups that advocate net neutrality-- Free Press, Public Knowledge and The Media Access Project--filed a formal complaint with the FCC November 1, 2007. They also filed a Petition for Declaratory Ruling asking the FCC to rule service providers, in general, violated the Commission’s policy statement they degraded a targeted application, and that intentionally degrading service without informing Internet users constitutes a deceptive trade practice.

Then, last night at the Consumer Electronics Show in Nevada, FCC Chairman, Kenneth Martin finally promised the commission would investigate, as reported by Svensson.

Sure, we're going to investigate and make sure that no consumer is going to be blocked.

Writing on the Public Knowledge blog, Harold Feld, senior vice president of the Media Access Project expressed his doubts:

We all need to recognize that a lot remains unclear, we need to get more details, and who knows how it will actually play out on release.

More later. The library is closing.