What's the Rush to End Net Neutrality?


You’re reading the Benton Foundation’s Weekly Round-up, a recap of the biggest (or most overlooked) telecommunications stories of the week. The round-up is delivered via e-mail each Friday.

Round-Up for the Week of December 4-8, 2017

The Federal Communications Commission will vote to repeal its 2015 network neutrality rules during its December 14 meeting. But some FCC Commissioners, lawmakers, and public interest groups are urging FCC Chairman Ajit Pai to delay the vote on his proposal. If these people are unconvincing, Chairman Pai might listen to his younger self. In May 2014 when the FCC last looked at its net neutrality rules, then-Commissioner Pai said

We have seen over the past month what happens when the American people feel excluded from the Commission’s deliberations. Indeed, on several recent issues, many say that the Commission has spent too much time speaking at the American people and not enough time listening to them. Going forward, we need to give the American people a full and fair opportunity to participate in this process. And we must ensure that our decisions are based on a robust record.

I. The  FCC’s Broken Process

At the start of the week, FCC Commissioner Jessica Rosenworcel held a press conference with New York Attorney General Eric Schneiderman to urge the FCC to delay its vote, saying that widespread irregularities have tainted the commission’s public comment process. “It is clear that our process for serving the public interest is broken,” Commissioner Rosenworcel said. “The integrity of our public record is at stake, and the future of the Internet depends on it.”

Schneiderman's office has found that at least 1 million submissions may have impersonated Americans, including as many as 50,000 New York residents — a potential violation of state law. Still, according to Attorney General Schneiderman, the FCC has refused to provide help to determine who may be responsible for the fake comments. “They just have to stop this vote,” said AG Schneiderman. “You cannot conduct a legitimate vote on a rulemaking proceeding if you have a record that is in shambles, as this one is.”

“[T]he FCC has been unwilling to assist a law enforcement investigation into some of these problems. That’s unacceptable. The FCC needs to correct this course immediately," said Commissioner Rosenworcel. "Until we get to the bottom of this, no vote should take place until a responsible investigation—like that in New York—is complete.”

Twenty-eight U.S. senators, led by Senator Maggie Hassan (D-NH), echoed Rosenworcel’s sentiments in a letter to Chairman Pai this week:

Without additional information about the alleged anomalies surrounding the public record, the FCC cannot conduct a thorough and fair evaluation of the public’s views on this topic, and should not move forward with a vote on December 14, 2017. The FCC must invest its time and resources into obtaining a more accurate picture of the record as understanding that record is essential to reaching a defensible resolution to this proceeding.

“Reports that bots may have filed hundreds of thousands of fraudulent comments during the FCC’s net neutrality policymaking process underscore a threat not only to the future of net neutrality, but also to the integrity of our democracy,” Senator Hassan said.

Tina Pelkey, a spokeswoman for the FCC, responded:

At today’s news conference, they didn’t identify a single comment relied upon in the draft order as being questionable. This is an attempt by people who want to keep the Obama Administration’s heavy-handed Internet regulations to delay the vote because they realize that their effort to defeat the plan to restore Internet freedom has stalled.

House Commerce Committee Chairman Greg Walden (R-OR) said, “There is no reason” for a delay. “[It] is a false issue, and I am deeply disappointed in the role that Commissioner Rosenworcel has decided to play in this matter. It is disingenuous, it is disappointing, and it is completely unnecessary.”

II. FTC Authority 

Chairman Pai’s Restoring Internet Freedom proposal calls for the Federal Trade Commission to be the enforcer of consumer protections for broadband subscribers. But a current court case throws the FTC’s authority into question. As Brian Fung wrote in the Washington Post:

The FTC has the power to sue misbehaving companies that mislead or lie to the public. But that power comes with an exception: It doesn't extend to a special class of businesses that are known as ‘common carriers.’ Thus far, the common carrier exemption has applied to a specific slice of the economy. But the case before the U.S. Court of Appeals for the 9th Circuit, FTC v. AT&T Mobility, could vastly expand the number of companies that qualify for the exemption.

“Companies whose common carrier activities represent only a minuscule portion of their business could bootstrap that status into an exemption from FTC oversight of even non-common carrier activities,” said Robert Cooper, an antitrust lawyer at the firm Boies Schiller Flexner. 

Chairman Pai's Draft Order says that there is no need to wait for the final decision from the Ninth Circuit:

Consistent with the Commission's request, the Ninth Circuit granted rehearing en banc of the panel decision, and, in doing so, it set aside the earlier panel opinion. In light of these considerations and the benefits of reclassification, we find objections based on FTC v. AT&T Mobility insufficient to warrant a different outcome.

This week, the Benton Foundation joined Public Knowledge and over 40 other public interest groups calling for a delay because of the potential ramifications of FTC vs AT&T Mobility:

Astoundingly, after committing the entire future of consumer protection from broadband access providers to the FTC, the draft Order cavalierly dismisses the ongoing litigation that deprived the FTC of any jurisdiction to carry out the job the Draft Order thrust upon it. To the contrary, the cavalier way in which the Draft Order dismisses this concern raises the question as to whether the proposal takes even its own fig leaf of consumer protection seriously.

If the court rules against the FTC, neither the FTC nor the FCC would be protecting broadband access consumers.

In response to the letter, Chairman Pai’s office issued a statement: “This is just evidence that supporters of heavy-handed Internet regulations are becoming more desperate by the day as their effort to defeat Chairman Pai's plan to restore Internet freedom has stalled. The vote will proceed as scheduled on December 14.”

Public Knowledge Senior VP Harold Feld said, "Forty organizations ask the Federal Communications Commission why, if they are relying on the FTC to protect consumers, they do not do the prudent thing and wait until the cloud over FTC jurisdiction is resolved. The FCC's official response is name calling. This tells anyone interested who is 'fear mongering' and who really has the interests of consumers at heart."

But even if the court rules in favor of the FTC, is the FTC equipped to protect broadband consumers? FTC Commissioner Terrell Mcsweeny says 'No.' “If anyone expects the FTC singlehandedly to be able to provide the net neutrality protections that Americans overwhelmingly support, let me disabuse them of that notion. We lack the tools, the expertise, and the resources to carry out such a charge on our own.” 

There is a key difference between the FCC and the FTC. The FCC sets rules designed to prevent bad behavior, while the FTC acts after the wrongdoing has occurred. Furthermore, there is nothing the FTC can do if one day your broadband provider decides to jack up its prices. As FTC Commissioner Terrell McSweeny testified in November, “[i]t is wrong to assume that a framework that relies solely on backward-looking consumer protection and antitrust enforcement can provide the same assurances to innovators and consumers as the forward-looking rules contained in the FCC’s Open Internet Order.”

[For more on the FTC's unclear legal authority, see former FCC Chairman Tom Wheeler's article this week for Brookings.]

III. Dismissing Public Input

On December 7, demonstrations were held nationwide at Verizon stores to protest the upcoming FCC vote. Net neutrality is certainly a topic of interest for the general public. But Chairman Pai and fellow FCC Commissioner Michael O’Rielly have indicated they have no interest in public sentiment. [I noted this in FCC Reopens Net Neutrality Debate, Seeking “Substantive” Public Comment when the comment period opened in May.]

“Commission outcomes are not and cannot be decided by poll numbers or letter counts,” Commissioner O’Rielly said in April. "Thankfully, our rulemaking proceeding is not decided like a Dancing With The Stars contest, since counts of comments submitted have only so much value. Instead of operating in economics-free zone where the benefits of the rules are assumed to outweigh any cost, commenters will need to provide evidence to support their arguments that the rules are or are not needed."

“[Pai] seems to be under the thrall of very powerful business interests in Washington to the extent that he is dismissive of all other arguments,” said Timothy Karr, campaign director at Free Press, “any input that would in any way upset his entrenched views about helping these powerful cable companies.” Karr added, “He’s really dismissing a very important component of rule-making, which is democratic engagement.”  

“He’s certainly not acting in the interest of the public,” said Jay Stanley, a senior policy analyst at the American Civil Liberties Union.

Benton’s Adrianne Furniss spoke to this in Transparency Isn’t the End, We Need Responsive Leadership:

Some decry the public's participation in these proceedings as emotional and/or superficial. FCC staff say the comments submitted by the public are not usually very deep or analytical or, you know, substantiated by evidence, documentary or otherwise. They're expressions of opinion. And, considered thus, they are discounted if not discarded entirely as suspect, unverifiable, unsophisticated. The only people who can have their concerns heard at the FCC, then, are lawyers, economists, or researchers—or the monied interests that can pay for them. If net neutrality's own jargon can be used as metaphor here ... lobbyists, lawyers, and economists—who mainly represent the companies and industries that are being regulated—get paid prioritization for their comments ... while the public's comments get a zero rating.

IV. Call for Public Hearings

Many people are calling on the FCC to hold public hearings. Commissioner Rosenworcel said

If you want to make changes this big that affect every person in this country who accesses the internet, we shouldn’t be shy about reaching out to Americans and asking them what they think about these policies. Rushing them through with a bureaucratic process and at a speed so that they occur before anyone knows what happens is just at odds with basic transparency.

FCC Commissioner Mignon Clyburn said,

My fellow Commissioners would benefit from hosting their own public forums and listening to the concerns raised by consumers and small businesses. Doing so would allow them to hear first-hand on what it means to access the internet without fear that their broadband provider will slow down or block their favorite online applications and services. My colleagues would benefit from hearing concerns about broadband providers’ poor service, surprise price hikes, and inadequate customer support, so, why won’t they?

The FCC has held public hearings under both Republican and Democratic leadership. In 2008, Chairman Kevin Martin, a Republican appointed by President Bush, held two hearings about how internet providers treat traffic that travels over their networks. And Chairmen Julius Genachowski and Tom Wheeler, who were both appointed by President Obama, held multiple public events on network neutrality.

V. Pai Privately Building Support, Publicly Stoking the Flames

Chairman Pai has been making the rounds to rally conservative supporters behind his plan. He stopped by Verizon’s Washington office on December 5 to give a speech at The International Institute Of Communications Telecommunications And Media Forum.. His efforts have also included a visit with Senate Republicans December 6 and a huddle with Republican Representatives December 7. A spokeswoman confirmed Pai spoke privately with the Senate Republican Policy Committee on Wednesday.

Publicly, Chairman Pai criticized large tech platforms for their lack of transparency and for threatening a free and open internet in an op-ed this week:  

[L]arge Silicon Valley platforms today pose a far greater threat to a free and open internet than do internet service providers. If these companies are truly committed to an open internet where Americans can freely access the content of their choice, like I am, it’s curious that they focus on unnecessary and harmful regulation of other parts of the internet ecosystem with little history of engaging in this kind of behavior.

He also derided “Hollywood celebrities, whose large online followings give them out-sized influence in shaping the public debate.” His targets, sometimes via Twitter, have included Mark Ruffalo, Alyssa Milano, and Cher.

Describing this tactic, Joshua Brustein wrote for Bloomberg:

Hollywood is always a good scapegoat, of course, and Republicans looking to stir up anger in 2017 do well to frame their issues as a response to the unchecked power of Silicon Valley…. [S]toking the fire is an end in itself. Pai has the votes to upend the way the federal government treats competition on the internet. His chosen plan has made many people very angry. So he’s taken the default strategy of anyone involved in American politics circa 2017 – whip up some anger of his own.

VI. Conclusion

Despite calls for a vote delay, Chairman Pai appears determined to return "to the legal framework for Internet regulation that was in place” in 2014 (even if this plan breaks with 50 years of history). Here's some of the things broadband internet access service providers were doing ‘back in the day’ that the FCC seems content to allow now:

  • Blocking peer-to-peer technologies
  • Blocking “over-the-top” voice services
  • Blocking streaming video
  • Redirecting search queries
  • Blocking mobile-payment systems
  • Blocking tethering applications
  • Disabling Apple FaceTime
  • Favoring preferred services, content, or sites over others

[For more, visit Free Press' Net Neutrality Violations: A Brief History]

And although Chairman Pai claims he is restoring the authority of the FTC “to police the practices of Internet service providers”, did the FTC ever act on one of these practices before 2015? 

December 14 is the day of the vote, but there’s much more news to come before, during, and after the FCC’s meeting. Be sure to subscribe to Headlines to receive daily updates along the way...

Benton provides a free daily calendar of communications policy-related events.

Quick Bits

Weekend Reads (resist tl;dr)

ICYMI from Benton

By Robbie McBeath.