Where Are We In The Net Neutrality Debate?

Easily, network neutrality won the week in telecommunications wonkland. September 15 was the latest deadline for public comment at the Federal Communications Commission as it tries again to recraft what it calls Open Internet rules which, in the simplest terms, means treating all Internet traffic equally. The Senate Judiciary Committee held a hearing called Why Net Neutrality Matters: Protecting Consumers and Competition Through Meaningful Open Internet Rules, and the FCC held four forums on the topic [On Sept 16 Policy Approaches to Ensure an Open Internet and Mobile Broadband and the Open Internet; on Sept 19 Effective Enforcement of Open Internet Requirements and Technological Aspects of an Open Internet]. With so much activity, it is wise to take a breath and figure out where we are.

Elise Hu of National Public Radio did just that in a short article on Sept 17. She cast the debate as the strength of public opinion vs the lobbying might of Internet service providers who are opposing stronger net neutrality rules. San Francisco-based data firm Quid found that Verizon alone spent $100 million to lobby Congress on net neutrality since 2009.

The FCC said this week that it had received over 3.7 million comments on its proposed rules. To put that in perspective, a real world analogy might be, say, 111 million people pausing on a Sunday evening to watch 22 men try to push a leather, air-filled oval down a 100 yard field. Roughly. This is, by far, the most commented upon docket in the history of U.S. telecommunications regulation. No other subject comes anywhere near it.

So what is the public saying about net neutrality? A study by the Sunlight Foundation, which advocates for government transparency, found that at least 60 percent of a set of 800,000 net neutrality comments released in bulk by the FCC were form letters written by organized campaigns. The foundation said that was “actually a lower percentage than is common for high-volume regulatory dockets.” In highly debated federal rule-making processes like those involving the Keystone pipeline or the Affordable Care Act, often more than 80 percent of comments come in form-letter format.

“Typically we see a rule-making dominated by a few organized letter-writing campaigns,” said Andrew Pendleton, who co-wrote the Sunlight study with Bob Lannon. “A lot of people in this instance wrote a comment for themselves,” he said, probably spurred by the debate’s seeping into mass media, as net neutrality did with a segment on HBO’s “Last Week Tonight With John Oliver.”

The Sunlight study was released on Aug 5, two weeks after the initial deadline for comments, so perhaps it is not wise to extrapolate numbers to include the second filing deadline. But if the 60 percent form letter number holds true, that would mean 2.22 million of the 3.7 million comments. Of note, the Republican advocacy group called "American Commitment" said that 772,000 Americans signed its petition asking the FCC to avoid "regulating the Internet." That could account for roughly 35% of the form letter filings right there.

The FCC’s chief information officer, Dr David Bray, released some stats when all these comments came in. Earlier this summer, there were reports of problems with FCC servers when, as noted above, HBO’s John Oliver encouraged his viewers to voice their support for net neutrality. Then, on Sept 10, net neutrality advocates organized Internet Slowdown Day. More than 10,000 websites displayed a spinning-wheel image with messages explaining that “slow lanes” were about to be imposed on parts of the Internet. Visitors were encouraged to take action by clicking, which brought them to a site where they could read all about these slow lanes and send messages to the FCC, members of Congress, and the White House. Organizers believe the call for action generated 722,364 network neutrality comments to the FCC. The campaign also generated over 2 million e-mails to Congress and almost 300,000 phone calls. But the Washington Post’s Nancy Scola notes that the biggest drive in FCC comments was not Oliver or Internet Slowdown Day, but the FCC’s own deadline for comments. On July 15, the deadline for the first round of comments, some 18,740 comments were added. And on the next day, after the comment deadline was extended, a full 52,353 poured in. The day the FCC closed the final round of comments, 169,847 comments were filed.

Sunlight found that less than 1 percent of the 800,000 comments it studied were clearly opposed to net neutrality. And about 5 percent had anti-regulation messages, although those included seemingly contradictory camps, one calling for consumer freedom and another advocating freedom for Internet Service Providers.

FCC Chairman Tom Wheeler testified before the House Committee on Small Business on Sept 17. Although the hearing focused on the telecommunication needs of small businesses and rural America, Chairman Wheeler was asked about the Open Internet proceeding and whether the FCC will rely on Section 706 of the Telecommunications Act of 1996 for net neutrality authority or whether it will reclassify broadband service as a telecommunications service under Title II of the Communications Act. Supporters of strong rules have told the FCC that the stronger legal backing of Title II is the best way to prevent companies from slowing users’ service or blocking their access to particular websites.

Title II is very much on the table,” said Chairman Wheeler. “I will assure you that Title II is very much a topic of conversation and on the table and something that we’ve specially asked for comment on,” he added.

In fairness, we need to disclose that the Benton Foundation joined Public Knowledge in comments filed at the FCC this week. The two organizations demonstrated how the initial comments in the proceeding supported the position that the FCC needs to reclassify internet as a Title II telecommunications service in order to protect the open internet. Here are the highlights of our filing:

  1. The American public is deeply engaged with this issue, and views the preservation of the open internet as tied to fundamental American values.
  2. Commenters highlighted privacy concerns that can only be addressed by reclassifying the Internet as a Title II service.
  3. Contrary to what some industry commenters claim, existing antitrust and consumer protection laws are clearly insufficient to protect the open internet.

In another development, the debate on how to treat mobile service providers has been changing of late, too. Earlier this month while addressing the annual convention of CTIA - the Wireless Association, the mobile-phone industry’s largest trade group, Chairman Wheeler highlighted some provocative statistics. “There have been significant changes in the mobile marketplace since 2010,” he said, referring to the year the FCC first passed net neutrality rules, with mobile networks excluded. In 2010, 200,000 Americans subscribed to the fastest mobile broadband technology, known as LTE. Now 120 million of them subscribe to it, and 300 million have access to high-speed mobile networks. “The basic issue that is raised is whether the old assumptions upon which the 2010 rules were based match new realities.”

Gene Kimmelman, President and Chief Executive of Public Knowledge, said he viewed Wheeler’s comments to the wireless industry group as “a shot across the bow." "We’ve sensed for a while the FCC is looking to beef it up on the wireless side,” he added. “There’s less of a difference between wireless and wireline than there was five years ago.”

Meredith Attwell Baker, a former FCC commissioner who is now CTIA’s chief executive, responded to Wheeler’s remarks by noting that mobile broadband depends on the public airwaves known as spectrum, which is a finite commodity with limited capacity. “The growth of smartphones and LTE — and the constant change in our ecosystem — is the clearest evidence we should retain a mobile-specific approach, because it has worked so well for consumers,” Ms. Baker said. “We were already open, always have been, always will be.” At least a couple of times in recent years, however, the wireless providers have appeared less than fully open:

  • In July 2012, Verizon Wireless agreed to pay $1.25 million to settle an FCC investigation into whether it was blocking its customers from connecting to an application that allows consumers to use a wireless phone as a modem to connect another device to the Internet, a practice known as tethering.
  • In August 2012, AT&T said it would not allow customers with unlimited data plans to use Apple’s FaceTime application on its cellular data network.

Whether to apply net neutrality to mobile networks was central to a roundtable discussion on Internet rules at the FCC Tuesday, with advocates of doing so arguing that sponsored-data plans give some apps a leg up over others and thus give wireless carriers the power to decide which apps succeed and which fail.

Michael Weinberg, Vice President of the advocacy group Public Knowledge, argued that the plans allow wireless carriers to "monetize the artificial scarcity they have created" with their monthly caps on data use. "What this does ultimately is it sort of corrupts the growth of online services," Weinberg said. Mobile providers are likely to protest any attempt to apply such rules to their networks.

Past the FCC, The Hill reported this week that lawmakers are sharpening their knives for a fight over new regulations on Internet service companies. Public reaction to the Federal Communications Commission’s proposed rules for network neutrality has been louder than anything the agency has experienced in the past. But the battle has only just begun. On Capitol Hill, deep partisan divides over the issue virtually guarantee that whatever decision the FCC makes will be met with steep opposition. That could presage a vicious and drawn-out battle that spills into the months after the FCC finalizes its rules, too.

Democrats have pushed for the FCC to ban “fast lanes” on the Internet, which critics have said could emerge under Wheeler’s plan if Internet service companies charge Netflix, YouTube or other websites for speedier service. Some Democrats have pushed the FCC to reclassify broadband Internet service as a “telecommunications service” instead of as an “information service.” That move would give the FCC more power over companies by drawing from the same legal authority that the agency uses to regulate traditional wired phone lines.

Republicans, meanwhile, have struck back, warning that tough rules would allow the heavy hand of the FCC to stifle the Internet. And they’ve pushed back on the suggestion that the FCC should dust off old regulations to assert authority over Internet providers.

The Senate Judiciary Committee heard from both sides of the network neutrality debate Sept 17 in a hearing on the implications of the FCC's efforts to restore network neutrality rules. Democrats pushed for Internet rules of the road, while Republicans argued the virtuous cycle of investment and innovation would be threatened. Republicans in Congress have tried to pass legislation preventing the FCC from taking action, but a bill is unlikely to pass in the Senate, where Democrats hold a majority.

The Verge’s TC Sottek wrote after the Senate hearing:

People who understand the history of the Internet and the value it now provides to everyone accept the obvious conclusion that the internet is a utility, just like water and electricity. Right now advocates are trying to convince the FCC to just say that obvious fact, and do what it should have done years ago but lacked the courage to accomplish: to declare that ISPs are common carriers, subject to restrictions on how they handle the speech that travels through their cables. But internet providers don't want to be treated like common carriers, because it would, in short, stifle profits. So what's their response? To cast reclassification as "heavy handed" regulation from Big Government. And Republicans are buying it.

He point to two major themes to the GOP's objection: "if it ain't broke, don't fix it," and "big government is bad." But Sottek points out that the Internet is “free precisely because of net neutrality principles it has always enjoyed. And the idea that the internet isn't broken and thus requires no care is like standing on the beach as a tsunami approaches, claiming that everything is fine simply because it hasn't reached shore.” The reality is that ISPs are actively trying to mess with net neutrality and have been for years. And what’s prevented the FCC from addressing it? Republican opposition. “Republican politicians are famous for saying that the government shouldn't pick winners and losers in the marketplace, but their alternative for the internet is actually much worse: they want companies like Comcast, Verizon, and AT&T to be in charge of the Internet.”

What's most confounding about Republican support for monopolistic ISPs is that they are exemplars of a broken market, long overdue for intervention. ISPs are insular, lumbering Goliaths whose incentives often directly oppose the interests of consumers. Republicans ought to know that unregulated monopolies are far worse than government takeovers.

But ars technica reported this week that senators who have vocalized their opposition to net neutrality are taking in, on average, 40 percent more campaign cash from the broadband-delivery industry than those who support it. Daniel G. Newman, the President of Maplight, the nonprofit that tracks campaign financing, boiled down the issue to one about "who the government will listen to. The hundreds of thousands of citizens who expressed their support for net neutrality and the many millions who will be affected by this government decision, or a handful of corporations who have invested vast amounts of money in politicians?"

In this environment then, it may surprise readers that there was also news this week of a possible compromise on net neutrality. ISPs and net neutrality activists appear increasingly interested in a proposal that would give consumers more control over their Internet service. Speaking at an FCC roundtable, Stanford University’s Barbara van Schewick said that, under certain conditions, letting Internet users individually control which Web sites were delivered at a faster or slower speed by their ISP would not violate the principle of net neutrality.

Van Schewick's idea is similar to a proposal that AT&T outlined this summer that would ban Internet providers from manipulating Web content -- which is the FCC's goal -- unless users specifically requested it. Under these approaches, known as "user-directed prioritization," consumers could ask their ISP to give streaming video priority over cloud storage traffic, or to give streaming music preferential treatment over online video games. Broadly, the practice could shift economic power for potentially determining the rise and fall of Internet businesses from ISPs to consumers; if implemented under the right conditions, user-directed or user-controlled prioritization could prevent ISPs from abusing their potential role as a gatekeeper.

"The rules we propose would allow for user-controlled prioritization," van Schewick confirmed. She warned that for user-directed prioritization to work, however, it would have to give consumers the leverage. Broadband providers should not be able to discriminate among specific applications — Hulu versus Netflix, for example. Instead, discrimination would need to be "application-agnostic." Customers should be able to choose whether to enable prioritization, said van Schewick. And only consumers who opt in, not content companies, should have to pay for that extra layer of service, she said.

AT&T's senior vice president for regulatory policy laid out the company’s plan that would allow individual consumers to ask that some applications, such as Netflix, receive priority treatment over other services, such as e-mail or online video games. That's different from the FCC's current proposal, which tacitly allows Internet providers to charge content companies for priority access to consumers but doesn't give the consumers a choice in the matter. AT&T's idea would still allow for commercial deals between companies. But they would have to be arranged as the result of one or more subscriber requests; the ISPs couldn't offer fee-based prioritization just because they wanted to.

van Schewick and net neutrality lawyer Marvin Ammori pointed out substantial remaining differences between their proposal and AT&T's and there are still questions about the idea's legal viability. How would it be implemented. Would Internet companies pay broadband providers on a per-subscriber basis depending on who asked for priority access? Or would companies such as Netflix pay one single rate for all users on a company's network? Also ambiguous is whether AT&T's proposal, if adopted, would stand up to a court challenge from opponents. Some believe the idea may be too clever by half. When the FCC's original net neutrality rules were struck down by a three-judge panel in January, the court's opinion said that there would be no way for the FCC to completely ban Internet fast lanes while still regulating Internet providers under Title I of the Communications Act. What AT&T is suggesting is that Wheeler could ban fee-based prioritization of Internet traffic under certain conditions -- namely, in cases where customers hadn't asked for it. Presumably under the AT&T proposal, ISPs would advertise heavily to consumers encouraging them to ask for paid prioritization of certain services.

But a close read of the DC Circuit court's opinion on net neutrality suggests that even if the FCC says that users can tell ISPs to favor some traffic over others, that might still amount to the FCC overstepping its authority to regulate ISPs under Title I. The FCC isn't allowed to impose "common carrier" obligations on ISPs because they're regulated differently from phone companies. So AT&T's proposal might face some trouble there.

FCC Chairman Wheeler has said that he hopes the FCC will approve a proposal before the end of 2014, which gives the FCC a few more months to sift through the comments, meet with stakeholders and reconvene on this issue. In the meantime, there's plenty of reading the tea leaves of public comments and moves. Of course, we’ll be tracking every step of the way – and we’ll see you in the Headlines.

By Kevin Taglang.