Common carrier rules for broadband service are on the way out. As expected, the Federal Communications Commission voted along party lines to begin a rulemaking process that, in theory, is a neutral, technocratic assessment of current regulations that might lead to any outcome. But there’s never been any pretence that the result will be anything but a repeal of the FCC’s 2015 decision to bring broadband – wired and wireless – under the common carrier umbrella.
The agency’s official press release laid out the goals for the proceeding that was launched by yesterday’s approval of a notice of proposed rulemaking…
First, the Notice proposes to reverse the FCC’s 2015 decision to impose heavy-handed Title II utility-style government regulation on Internet service providers (ISPs) and return to the longstanding, successful light- touch framework under Title I of the Communications Act.
Second, the Notice proposes to return to the Commission’s original classification of mobile broadband Internet access service as a private mobile service…
Third, the Notice proposes to eliminate the catch-all Internet conduct standard created by the Title II Order.
The Notice also seeks comment on whether the Commission should keep, modify, or eliminate the bright-line rules established by the Title II Order.
Title II is the section of telecommunications law that governs what companies that are classified as common carriers can do.
You’re likely to be disappointed if you’re hoping that the common carrier regime, and particularly the net neutrality rule, will be saved by another wave of public protest, as it was in 2014 when the democratic FCC chairman initially floated a plan that wasn’t all that much different from what’s on the table now. Republican commissioner Michael O’Rielly blew off the flood of comments that have already come in, saying “thankfully, our rulemaking process is not decided like a Dancing with the Stars contest, since counts of comments submitted have only so much value”.
Buried within a half million comments about common carrier regulation of broadband service, in the midst of a system crash brought about, or not, by a John Oliver rant, is a letter from 19 municipal (to one degree or another) Internet service providers supporting the Federal Communications Commission’s current effort to roll those rules back.
In what must have been an epic, nay, herculean, speed reading session, FCC chair Ajit Pai came across those comments and felt compelled to issue a press release trumpeting the blindingly obvious conclusion that, hey, these guys agree with me so they must be pretty smart. I hope he lets his sidekick, Michael “what I am unwilling to do and will never support is allowing government-sponsored networks” O’Rielly, in on his eureka moment.
The muni ISPs make a couple of points in their letter: imposed service standards are a burden for small providers and munis don’t really need regulation since they’re directly answerable to elected officials.
Our customers have choices and can opt for another provider if we degrade their Internet experience. Moreover, because we are effectively owned by our customers and responsive to them politically, we make sure their interests are the primary drivers of our businesses. We always provide our customers with unfettered access to legal content on the Internet. We never block, throttle, or impair our customers’ traffic nor engage in paid prioritization. We have always said we would adhere to any such principles adopted by the Commission, as we have been doing since the Commission first articulated its Internet Policy principles in 2005. Yet, the Commission ignored the evidence, and imposed the straight-jacket of utility regulation, subjecting us to the constant threat that the Commission or some other party may bring an enforcement action based on the “unknown and unknowable” general conduct standard.
There is truth in their arguments. But there’s also a generous helping of disingenuousness. For example, several of the ISPs are affiliated with muni electric utilities. Being small or governed by a city council does not exempt electric utilities from Federal Energy Regulatory Commission standards or from complying with California Public Utilities Commission safety rules regarding jointly owned utility poles. And they know it.
Munis properly have latitude that privately owned utilities do not enjoy. City councils are rightly reckoned to be at least as good as the CPUC at setting electric rates and protecting consumer interests. But it isn’t a total exemption from oversight. Nor is simply being small. The federal and state rules for small rural telcos are different than those for AT&T and Frontier, but there are rules they must follow nevertheless.
Common carriers and other public utilities are subject to a complicated web of federal, state and local regulation. Dealing with it is just part of the job.
After another classic net neutrality rant, John Oliver is getting credit in some quarters for inspiring a flood of online comments that brought the Federal Communications Commission’s website to a grinding halt. 150,000 comments were filed in the first 36 hours after the broadcast, three times the number over the same period three years ago when Oliver issued his first net neutrality call-to-arms.
It didn’t long for the FCC’s comment system to crash, or for the agency to claim it was someone else’s fault…
Beginning on Sunday night at midnight, our analysis reveals that the FCC was subject to multiple distributed denial-of-service attacks (DDos). These were deliberate attempts by external actors to bombard the FCC’s comment system with a high amount of traffic to our commercial cloud host. These actors were not attempting to file comments themselves; rather they made it difficult for legitimate commenters to access and file with the FCC.
Both random netizens and Washington, DC politicians questioned the FCC’s claim, and asked for some kind of proof.
The truth might lie somewhere in between. It now appears that a botnet was used to file tens of thousands of anti-net neutrality comments – the exact opposite of what Oliver was advocating. According to Gizmodo…
Thousands of identical anti-net neutrality comments came flooding in. First noticed on Reddit and later reported by ZDNet and the Verge, more than 58,000 identical comments supporting Pai’s effort to repeal the net neutrality rules have been filed since the proceeding was opened…
Even more concerning, however, is that the names and addresses attached to those comments may not belong to whoever filed them. Both the Verge and ZDNet managed to reach a few of the supposed commenters, and found that they had no knowledge of their alleged comments.
Oliver’s campaign is on temporary hold now. Citing its procedures and rules, the FCC says it won’t formally accept comments until after it meets next week and, presumably, votes to begin the process of undoing its net neutrality decision, which defined broadband as a common carrier service
People in the U.S. love big shopping, food and consumer electronics brands, but are not high on utility, telecommunications and food delivery companies and banks. That’s one take-away from the spring 2017 edition of the list of “America’s most loved brands” by Morning Consult. What was published was only a partial list – intended to draw you in and sign you up for their service – but even so it offers some interesting insights into the way consumers view the companies and industries that compete for their affections.
Data from Morning Consult
, Spring 2017 brand study.
Looking at the industry by industry data that Morning Consult published, the average “net favorability” score for telecoms companies was only 21%, ranking 25th out of 28 industry segments assessed. There was an interesting split between telephone and cable companies. Verizon and AT&T came out on top in the category, at 29% and 28% respectively, while Time Warner Cable and Charter Communications (soon to be unified under the single, Spectrum brand) managed only half that, scoring 14% and 12%. Comcast’s Xfinity brand fell in the middle, at 21%. I assume other telecoms companies were included in the survey, but that’s the extent of Morning Consult’s data freeview.
By contrast, online services companies did well. Amazon (76%) and Google (75%) were the highest rated brands of all, and YouTube, also an Alphabet (née Google) brand also made the top ten list at 71%. On the consumer electronics side, Sony also made the top ten, hitting 70% net favorability, with Microsoft coming in second – as a hardware company – at 66%. Apple’s rating wasn’t disclosed, which leads me to suspect that the published list was selected on the basis of teaser value rather than on objective league table standings. Apple is routinely one of the most highly rated brands in the world, and it would be a banner headline for Morning Consult if its data said anything different.
The affection gap between the companies that provide services over and for the Internet and the ones that connect us to it is striking. As many people hate cable and telcos as love online services and consumer electronics companies. It’s another way of saying we do not trust monopoly broadband companies, but we do have faith in the competitive product and service providers we access via those networks. That’s a gap that federal and state policy makers should heed as they weigh subsidy choices, common carrier rules and other major telecoms industry decisions.
Who’s controlling whom?
This week’s decision by the federal appeals court in Washington, DC to stand by an earlier ruling that okayed the Federal Communications Commission’s reclassification of broadband as a common carrier service contains an interesting warning to the Trump administration and current FCC chair Ajit Pai. Judge Janice Brown, who dissented and argued that the FCC order was illegal, lambasted off the record interference by the white house in regulatory processes…
If the means by which the President seeks to shape the agency’s deliberations transgress legal procedures designed to ensure public accountability — like notice-and-comment requirements and rules regarding ex parte communications — he undermines the accountability rationale for confining executive Power to the President…Acting with concern for public accountability seems especially salient when the President “and his White House staff” seek to exert influence over the direction of an ostensibly-independent agency…
This Order shows signs of a government having grown beyond the consent of the governed: the collapsing respect for Bicameralism and Presentment; the administrative state shoehorning major questions into long-extant statutory provisions without congressional authorization; a preference for rent-seeking over liberty. This Court had an opportunity to see the wisdom of the “Man Controlling Trade” statue on Constitution Avenue, but we are no longer on the Constitution’s path. Hopefully, there is a clearer view of the road back to a government of limited, enumerated power from [the supreme court building] in our Capital City. In that hope, I respectfully dissent from the Court’s denial of rehearing en banc.
Of course, the white house that Brown is blasting belonged to Barack Obama and the FCC was led by former chair Tom Wheeler at the time. But the same reasoning applies to the current occupants.
There’s been no particular suggestion that Donald Trump is pulling Pai’s strings. In fact, everything Pai has done to date as chairman is completely consistent with views he’s strongly expressed since before Trump was even a candidate. But the still murky role of the swamp creatures in the transition landing team that parachuted into the FCC late last year leaves the question open. Pai and Trump should take Brown’s advice to heart and keep their relationship at distance arm’s length.
The Federal Communications Commission started down the road to roll back its previous decision to regulate broadband as a common carrier service last week. A draft decision to open up a process to reverse its 2015 decision to reclassify Internet access (yes, it’s incredibly bureaucratic) from being an information service to a telecommunications service will be taken up by commissioners next month.
Information services are value added services. Facebook adds value to the your bits by processing that data and connecting it every which way with what your friends send them. With your consent, of course. Telecommunications services, on the other hand, are pure pipelines: you push the send button on an email and it lands in your friend’s in box just the way you sent it.
So, let’s say you buy Internet access from Comcast. You plug your computer into a spigot on your cable box, compose an email and fire it off. The content – what you intended to say – ends up at its destination with zero alterations. Comcast doesn’t shuffle it around to all of your other friends to see if they like it or not, as Facebook might. Nor does it push it out for all to see, as Twitter does. All Comcast does is take the bytes – the information you have digitally crafted – and transmit it unchanged to the destination you’ve designated.
That’s a telecommunications service. A transportation service. In other words, a common carrier service.
The FCC’s proposed re-definition runs completely counter to that simple truth. The draft claims that “Internet service providers do not appear to offer ‘telecommunications,’ i.e., ‘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,’ to their users”.
That’s nonsense. And the draft decision’s arguments used to support it – for example, that “routing decisions are based on the architecture of the network, not on consumers’ instructions” – are equally irrelevant.
The weed whacker was whirling at full tilt yesterday as the Federal Communications Commission decided to take on local limits on cell sites and utility poles, and roll back regulation of wholesale broadband services. The voting was largely bipartisan. Democrat Mignon Clyburn concurred with republicans Ajit Pai and Michael O’Rielly on opening two major enquiries, one on whether wireless permit shot clocks should be given deemed granted teeth when they expire and the other on a range of wireline issues, including limits on how long local governments can take to review construction permits and how much they can charge. Pole attachment procedures and rules regarding replacing legacy analog voice service with Internet protocol technology are also open for comment.
Clyburn dissented, though, on backing away from common carrier-style regulation of middle mile and other wholesale broadband service. She particularly objected to the word games the decision plays with its definition of effective competition…
In the rush to deregulate, the leadership, providing as much notice as a run-away train, opts to adopt a framework that relies on faulty data and lackadaisical market analysis to come up with an ineffectual competitive market test, calibrated to deregulate as broadly as possible. The order upends decades of competition analysis, by defining a particular market as competitive when there is only one provider in a market and the mere possibility of a second entrant. Unfortunately, this is not a “typo.” The mere presence of a second nearby potential business data service provider that is located a half a mile away is deemed a competitor whether they plan to serve an area or not.
The wholesale service decision was in fact a decision – that’s done and dusted. The wireless and wireline infrastructure items, on the other hand, were just opening shots. Draft versions were published, and there’s no indication of major changes. Once the final texts are published, there will be ample opportunity to comment. Whether anyone will hear you over the whine of the weed whacker is another question altogether.
Network neutrality rules that prohibit Internet service providers from speeding up or slowing down subscriber’s traffic based on what it is or whether or not it’s profitable appear to be on the way out. Federal Communications Commission chairman Ajit Pai reportedly met with lobbyists last week and floated the idea of a voluntary system that would have ISPs write net neutrality commitments into their terms of service, which in turn would be overseen by the Federal Trade Commission, and not the FCC.
According to a Reuters story by David Shepardson, under Pai’s plan broadband would no longer be considered a common carrier service…
The rules approved by the FCC under Democratic President Barack Obama in early 2015 prohibited broadband providers from giving or selling access to speedy internet, essentially a “fast lane”, to certain internet services over others. As part of that change, the FCC reclassified internet service providers much like utilities.
Pai wants to overturn that reclassification, but wants internet providers to voluntarily agree to not obstruct or slow consumer access to web content, two officials said late Tuesday…
Three sources said Pai plans to unveil his proposal to overturn the rules as early as late April and it could face an initial vote in May or June.
Politico.com reports that Pai’s closed door meeting included lobbyists from trade groups that front for wireline telcos, mobile carriers, cable companies and fixed wireless operators.
A completely voluntary system would be meaningless. Without the common carrier classification, there would be no direct regulatory oversight of broadband service practices and individual providers could change their terms at will. A possible middle ground could be to have companies agree contractually to common standards, perhaps through their respective trade associations, but that could trigger anti-trust problems. And in any event, there’s nothing to prevent them from adopting symbolic but ineffective standards or from reversing course later on.
Looked at one way, the draft decision to lighten regulation of wholesale broadband services that’s been floated by the new chair of the Federal Communications Commission isn’t a lot different from the one proposed by the old chairman. Both versions backed away from regulating prices or terms for higher speed, dedicated industrial-grade connections – those faster than 45 Mbps – while keeping some controls on slower services based on legacy copper technology.
Current chairman Ajit Pai wants to back further away than Tom Wheeler, the guy he replaced, did. That’s consistent with Pai’s ambition to be weed whacker in chief. Not surprising.
The big difference is the way that Pai’s draft starts to chip away at the common carrier designation that Wheeler’s FCC applied to broadband service. In a bit of circular logic that would be hilarious as a stand up comedy routine but profoundly disturbing coming from a regulator, Pai’s draft declares that wholesale broadband services offered by cable companies don’t fall under common carrier rules because, well, they don’t follow common carrier rules…
With respect to its wholesale cellular backhaul service and E-Access service, Comcast explains that it makes individualized decisions whether it will, in fact, offer such services in a given instance or to a given customer. Comcast describes its offering of retail Ethernet Dedicated Internet Access Service (EDI) and Ethernet transport similarly, explaining that it does not hold out such services to all interested buyers. For its part, Charter explains that particularly in the case of business data services provided to enterprise customers, it makes individualized decisions whether to offer service to given customers. The case-by-case decisions about whether to offer these services to a given customer described by Comcast and Charter stand in contrast to the “quasi-public character” that is a “critical” premise of common carrier classification—and the associated heightened duties—identified by the D.C. Circuit [appeals court].
Absent common carrier obligations, Comcast, Charter and other cable companies can decide who they’ll offer services to and how much they’ll charge based on how deals will impact their business models. They can use their monopoly control of wholesale bandwidth to choke off last mile, retail competitors. Pai wants to let them do it.
It’s one thing to whack away regulatory weeds. It’s quite another to carve out exceptions and use that regulatory power to protect monopolies by mowing down competitors.
Master of disguise.
Proving the adage that it’s an ill wind that blows no good, Charter Communications is taking shelter behind the Federal Communications Commission’s decision to regulate broadband as a common carrier service. In a request submitted to a federal court in New York (h/t to the Hollywood Reporter), Charter argued that the New York attorney general shouldn’t be allowed to sue it in state court over consumer fraud allegations, because the FCC has preempted such matters when it issued its network neutrality order in 2015. The accusations mostly involve Time Warner Cable’s practices before Charter bought it last year.
It’s a legal question that turns on whether the New York attorney general is pursuing a garden variety consumer fraud case that just happens to involve Internet service or trying to regulate the broadband industry. In its filing, Charter has very kind words for common carrier rules…
Pursuant to the [federal communications act], all common carriers (including [Internet service] providers) “engaged in interstate or foreign communication by wire or radio” must employ “just and reasonable” “practices . . . in connection with [their] communication service,” and the FCC is statutorily charged with “prescrib[ing] such rules and regulations as may be necessary” to implement this requirement…
To implement “th[is] carefully tailored regulatory scheme,” the FCC “announce[d] [its] intention to exercise [its] preemption authority to preclude states from imposing obligations on [Internet service] that are inconsistent” with the FCC’s…(“[T]he [FCC’s] jurisdiction is paramount and conflicting state regulations must necessarily yield to the federal regulatory scheme.”).
Like Comcast, Cox and (formerly) Time Warner Cable, Charter isn’t one of the formal plaintiffs that are fighting the FCC’s decision in federal court, but it’s a member of the National Cable and Telecommunications Association, which is. Vehemently. Among other things, it accused the FCC of having improperly “arrogated to itself breathtaking authority”. Charter opposed the reclassification of broadband as a common carrier service, calling it “unnecessary and harmful”, among other things.
Charter, like other cable companies, frequently uses lobbying fronts, such as the NCTA, to fight its corner in regulatory and legal battles. It agreed to more or less abide by the FCC’s common carrier rules as a condition of its purchase of Time Warner Cable last year, but that shouldn’t be confused with agreeing with the FCC decision or, indeed, accepting its jurisdiction over broadband service at all.
Nor should its bald faced pleading before the federal court.