By What Authority
Friday, October 23, 2020
By What Authority
You’re reading the Benton Institute for Broadband & Society’s Weekly Digest, a recap of the biggest (or most overlooked) broadband stories of the week. The digest is delivered via e-mail each Friday.
Round-Up for the Week of October 19-23, 2020
Can the Federal Communications Commission regulate the internet? Can it offer consumer protections for broadband subscribers? Can it regulate the content found on social media sites? These questions, some of which are decades-old and some more recent, have taken new twists of late as the FCC concurrently considers 1) the impact of its 2017 decision to repeal net neutrality rules and 2) its oversight role over digital platforms like Facebook and Twitter.
Title I vs Title II
Prior to 2002, broadband internet access service was provided mainly by traditional telephone companies over a digital subscriber line (DSL) and was regulated as a telecommunication service -- like telephone service -- under Title II of the Communications Act of 1934. A “telecommunications service” is defined as “the transmission, between or among points specified by the user, of information of the user’s choosing, without change in the form or content of the information as sent and received.” In a 2002 decision, however, the FCC explicitly ruled that high-speed internet access is not a “telecommunications service.” Instead, the FCC classified cable modem service as an interstate information service. An “information service,” which, according to Title I of the Communications Act of 1934, is defined as “the offering of a capability for generating, acquiring, storing, transforming, processing, retrieving, utilizing, or making available information via telecommunications, and includes electronic publishing.” (For the sake of regulatory parity, the FCC would later regulate DSL, wireless broadband, and broadband over power lines as information services as well.)
Since that 2002 decision, the FCC, with changing party leadership, has considered and reconsidered 1) how it can protect broadband internet access service customers under Title I of the Communications Act and 2) if Title I is insufficient, should broadband internet access service be classified as a Title II service. After a series of attempts to protect consumers and a court of appeals finding that Title I was not sufficient, the FCC, with a Democrat majority, classified broadband internet access service as a Title II service and adopted net neutrality rules in its Open Internet Order in 2015.
Net Neutrality Remand Order
In 2017, the FCC, with a new Republican majority, reversed the 2015 decision by a 3-2 vote. Even though the net neutrality rules and Title II classification had survived court challenges, the new FCC majority reclassified broadband internet access service as a Title I information service and repealed nearly all the net neutrality consumer protections through its Restoring Internet Freedom Order. In doing so, the FCC abdicated authority to regulate broadband internet access service -- and attempted to block states from doing so as well. Various groups (including the Benton Institute for Broadband & Society) then challenged the FCC’s decision to repeal in court.
In 2019, the U.S. Court of Appeals for the District of Columbia Circuit largely affirmed the 2017 decision but instructed the FCC to reconsider how the repeal and reclassification of broadband impact the FCC's role regarding three specific issues: public safety, the regulation of pole attachments, and universal service support for low-income consumers through the FCC's own Lifeline program. On October 6, 2020, FCC Chairman Ajit Pai released a draft order that the Republican majority is expected to adopt at the FCC's monthly open meeting on October 27. (The two Democratic Commissioners are likely to dissent.)
It is clear from the draft order that the current FCC majority believes that broadband internet access service is a Title I service and that the Federal Trade Commission, not the FCC, should protect consumers from any uncompetitive practices of broadband service providers. Current FCC rules only aim to make broadband providers disclose some of their practices to customers so they can assess whether the providers are doing what they promise.
In the draft order responding to the court now under consideration, the FCC says there is no ground to alter the conclusions it reached in 2017 -- mainly because the light-touch regulation under Title I has encouraged companies to invest in their broadband networks, facilitating further deployment of those networks.
Further, the FCC concludes that any potential negative effects that the reclassification may have on the three remanded issues are limited and would not change its classification decision even if such negative effects were substantiated because the “overwhelming benefits of Title I classification and restoration of light-touch regulation outweigh any adverse effects.”
The Impact on the Lifeline Program
With respect to the FCC’s Lifeline service for low-income consumers as applied to broadband, the draft decision essentially reiterates the same rationale that the D.C. Circuit had found wanting. Thus, one possible "adverse effect" of a judicial rejection of that argument is that Lifeline funds would no longer be available to subsidize the broadband-only service of low-income consumers participating in the Lifeline program. That would mean that the legal authority to provide Lifeline support to eligible telecommunications carriers (ETCs) would be limited to subsidizing use only on broadband-capable networks that also support voice service.
ETCs are required to be common carriers, regulated under Title II. And the FCC believes it has the authority to direct universal service support through the Lifeline program to both voice services and broadband internet access service in accordance with its longstanding principle that “universal service support should be directed where possible to networks that provide advanced services, as well as voice services.”
The FCC's argument is that while broadband internet access service itself is not a common carrier service, many broadband providers are ETCs and thus are common carriers by virtue of offering voice service (and voice service is and will remain a supported service). Thus, it is the common-carrier status of the provider, not the service, that governs whether the provider is eligible to receive Lifeline support for services provided over its network. If a broadband service provider does not offer common carrier voice service and thus cannot become an ETC, the Lifeline program cannot support its provision of broadband service. The FCC, therefore, rejects arguments that it cannot support broadband internet access service in the Lifeline program if it is not classified as a telecommunications service.
For broadband-only service offerings, the FCC clarifies that the Lifeline program can continue to provide support by ETCs to qualifying low-income households. In order to receive reimbursement for providing a Lifeline service, ETCs must identify if the service meets the mandatory minimum standards for voice or broadband to determine the amount of support they can claim from the Lifeline program. But the ETCs still must be common carriers. This common carrier requirement limits the type of entities that may be designated as ETCs, but it does not prohibit an ETC from providing a broadband only-service to a qualifying low income-household and also receiving Lifeline support for that service to that household. Broadband-only providers that do not offer any voice service cannot participate in the Lifeline program because they are not common carriers and thus do not satisfy program requirements.
The FCC says it would still reach the same conclusion on the classification of broadband internet access service even if a court were to conclude that the Lifeline program could not support broadband service because a Title I classification better facilitates critical broadband investment through the removal of regulatory uncertainty and lower compliance burdens and brings greater regulatory certainty to the market, increasing innovation. Therefore, if the FCC were found not to have the statutory authority it relies on here, it still believes that the benefits of reclassification outweigh the removal of broadband from the Lifeline program.
Recent Broadband Investment
Last week, we explored how AT&T's decision to discontinue DSL service counters the FCC's findings. The Institute for Local Self-Reliance estimates that AT&T's decision could leave 207,000 American households without broadband service. Public Knowledge, Communications Workers of America, National Digital Inclusion Alliance, Next Century Cities, Common Cause, and Greenlining Institute warned the FCC that its deregulatory agenda leaves consumers vulnerable to losing broadband service during the pandemic.
In meetings with FCC staffers this week, AT&T said it is grandfathering DSL service for current customers, not withdrawing copper-based DSL, which means that existing DSL customers can continue receiving their DSL services, but will not be able to resubscribe if they ever cancel. Moreover, AT&T argues that the FCC's repealed net neutrality rules, rooted in Title II authority, did not prevent broadband providers’ withdrawal of services as AT&T is doing now because those rules waived requirements that providers gain approval for discontinuance.
The AT&T decision may be the most public example of evidence that the FCC's claims of increased broadband investment have been debunked, as Free Press noted in a filing this week. Broadband investment has not in fact increased as a result of the 2017 repeal, yet the FCC "bizarrely insists that assessing the veracity of its own investment assertions is 'outside the scope' of the remand, all while using these very same assertions and its own now-stale 'predictive judgment[s]' to justify its abdication on public safety, competition, and Lifeline."
Can the FCC Regulate Social Media?
Back in July, the National Telecommunications and Information Administration, the President’s principal adviser on domestic and international telecommunications and information policy, petitioned the FCC to initiate a rulemaking to clarify the provisions of Section 230 of the Communications Act. As Section 230 has always been interpreted, internet platforms generally are immune from liability for third-party content on their platforms and for their moderation efforts of those postings. They also are largely free of direct content regulation by the federal government. If NTIA's proposed rules are adopted and if the judiciary gives weight to the new FCC interpretations, they would impose sweeping changes in how Section 230 operates that would affect any company that uses third-party content on the internet and also would subject many internet platforms to new regulatory requirements that could affect their businesses.
NTIA's proposed rules could open internet platforms to potential liability for third-party content on their sites and for their efforts to moderate third-party content. In addition to social media giants like Facebook and Twitter, the new rules could impact a wide range of companies that depend on the internet for their businesses, including review sites, gaming sites, media publications, and companies that rely on product descriptions provided by their suppliers.
But does the FCC even have authority to wade into Section 230 waters? Section 230(b)(2) reads that it is the policy of the United States "to preserve the vibrant and competitive free market that presently exists for the Internet and other interactive computer services, unfettered by Federal or State regulation." That very language is now used by some -- including FCC Chairman Ajit Pai -- to justify the repeal of net neutrality protections.
The NTIA believes the FCC does have authority, citing Section 201(b) of the Communications Act which empowers the FCC to “prescribe such rules and regulations as may be necessary in the public interest to carry out" the law. The Supreme Court, the NTIA notes, has confirmed that “the grant in section 201(b) means what it says: The FCC has rulemaking authority to carry out the ‘provisions of this Act.’” Basically, the logic here is: since Congress put the provisions of Section 230 in the Communications Act, it gave the FCC rulemaking authority to interpret any ambiguities in Section 230.
On October 15, Chairman Pai announced that he intended to move forward with a rulemaking to clarify Section 230's meaning. This week, FCC General Counsel Thomas Johnson, Jr. released an explanation of how he came to his conclusion that the FCC has the necessary authority to regulate online content. "By expressly directing that Section 230 be placed into the Communications Act, Congress made clear that the FCC’s rulemaking authority extended to the provisions of that section," Johnson said, echoing the NTIA's petition.
Reactions to Pai's decision were mixed at best. Many critics contend that the FCC has no authority in the area because the commission is never mentioned in Section 230. Moreover, the authors of Section 230 also have submitted comments to the FCC stating that it did not provide for Commission involvement. If the FCC adopts rules, Benton Senior Fellow and Public Advocate Gigi Sohn predicted, they are "going to be tied up in litigation forever and a day."
A Temporary Marker
We may not be the first to mention that an election is underway. The results of the Presidential and Congressional elections will determine the majority of the next FCC, which, at a minimum, will have at least one new member no matter which party controls the White House and/or Congress. (President Trump has nominated Nathan Simington, and while his confirmation hearing is scheduled a week after the election, it is not clear that he will be confirmed before this Congress recesses.)
The FCC in a Biden administration would likely reverse the 2017 net neutrality repeal and reclassify broadband internet access service as a Title II telecommunications service. Indeed, the remand order the FCC is about to adopt could be a vehicle for a reversal of the reclassification through a petition for reconsideration. Moreover, if Democrats win both chambers of Congress and the White House, we could see federal legislation enshrining net neutrality protections and FCC authority over broadband internet access service once and for all. Similarly, a Biden FCC might not adopt any rules around Section 230, deferring to Congress to update the law if it deems necessary. (Biden has indicated his support for repealing Section 230 altogether.) A recent report from House Democrats indicates they are open to reforming antitrust rules and reigning in large technology companies.
But this month's decisions by the FCC show how the Republican majority views its authority over the internet -- passing on its traditional role to ensure that consumers have access to broadband networks and to protect network subscribers, but ready to regulate online content providers.
The FCC’s number one job is to ensure that all Americans have access to the communications networks and the lawful content of their choosing over those networks. But the current FCC majority has chosen not to use its authority to ensure it can deliver on that job. Rather, it is going to inject itself into online content moderation debates.
All to say, the results of the 2020 election will drastically affect how internet access and social media are regulated. As if there wasn’t enough at stake already.
- Justice Department Sues Monopolist Google For Violating Antitrust Laws (Department of Justice)
- What has Internet infrastructure done for us lately? (Internet Infrastructure Coalition)
- Administration officials alarmed by White House push to fast track lucrative 5G spectrum contract, sources say (CNN)
Weekend Reads (resist tl;dr)
- Digital inclusion and parity: Implications for community development (Roberto Gallardo, Lionel Bo Beaulieu, Cheyanne Geideman)
- Broadband from the Bottom Up: How Community Organizations Can Shape the Broadband Future (HR&A Advisors)
ICYMI from Benton
- Public Infrastructure/Private Service: A Shared-Risk Partnership Model for 21st Century Broadband Infrastructure (Joanne Hovis, Jim Baller, David Talbot, Cat Blake)
- Legal Issues in Broadband Public-Private Partnerships: Finding a Private Partner (Jim Baller)
- In the midst of pandemic, Alabama connects 100,000—and counting—low-income students to distance learning (Kenneth Boswell, Alabama Department of Economic and Community Affairs)
- AT&T, FCC Abandon Rural Broadband Customers (Kevin Taglang)
Oct 27 -- October 2020 Open Commission Hearing (FCC)
Oct 28 -- Does Section 230’s Sweeping Immunity Enable Big Tech Bad Behavior? (Senate Commerce Committee)
Oct 28 -- Who’s at the table, who is convening, and how are strategic decisions made? (National Digital Inclusion Alliance)
Oct 29 -- Smart Regions Innovation, Recovery, & Resilience Virtual Workshop (NTIA)
Oct 29-30 -- Broadband Deployment Advisory Committee (FCC)
Oct 30 -- Successful Strategies for Obtaining Category Two Support (SHLB Coalition)
The Benton Institute for Broadband & Society is a non-profit organization dedicated to ensuring that all people in the U.S. have access to competitive, High-Performance Broadband regardless of where they live or who they are. We believe communication policy - rooted in the values of access, equity, and diversity - has the power to deliver new opportunities and strengthen communities.
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