Tag Archives: netneutrality

California senate considers expanded net neutrality rights and enforcement tools


A second, more detailed network neutrality revival bill is on the table at the California capitol. Senator Scott Wiener (D – San Francisco) introduced senate bill 822 earlier this year, but it was little more than a statement of intent to jump into the Internet regulation void left by the Federal Communications Commission when it repealed network neutrality rules and stripped broadband of its common carrier status. He amended it on Tuesday, adding in a long list of outlawed practices and ways to enforce the ban.

Like senate bill 460, which was approved by the senate and sent on to the assembly in January, Weiner’s bill bakes net neutrality into California’s consumer protection laws and requires state and local governments to buy broadband service from companies that follow those rules.

His definition of net neutrality is more expansive, though, adding zero rating to the list. That’s the practice of giving particular Internet traffic – an Internet service provider’s own video streams, for example – a competitive advantage by not counting it toward a customer’s data caps. ISPs wouldn’t be allowed to put up a toll gate and charge content companies for the privilege of reaching subscribers, or to charge customers different prices for the bandwidth used by different applications, or squeeze other services – think, cable channels – onto a consumer broadband connection. The FCC’s three bright line rules would also be revived: no blocking, throttling or paid prioritisation.

Proposed enforcement mechanisms include:

  • Lawsuits by consumers or the California attorney general.
  • Requiring state and local governments to buy broadband service from ISPs that follow the rules, unless there’s only one service provider available in a given area.
  • Allowing government agencies to claw back past payments if their ISP changes its mind.
  • Limiting state broadband subsidies – for infrastructure or universal service – to companies that follow net neutrality rules.
  • Specifically requiring cable and other video service companies that have a statewide franchise to comply with net neutrality requirements.
  • Taking net neutrality benefits into account when planning the state’s smart energy grid.
  • Give the some of the job of sorting out what’s allowed or not to the California Public Utilities Commission.

Weiner included a couple of big exceptions. Public safety communications could be prioritised or otherwise given a fast lane, and individual subscribers could choose to pay for restricted service, so long as “basic default service” was available and the restrictions were generic. In other words, an ISP could sell a service plan that speeds up all video traffic, but not one that only gives priority to, say, Netflix. The details of those kinds of plans – and any other service terms – would have to be fully disclosed to consumers and reviewed by the CPUC.

Some, if not all, of the bill is on thin legal ice, as a senate judiciary committee staff analysis concluded. The FCC tried to categorically preempt state law of this sort in its net neutrality repeal decision – it’ll be up to the courts to decided if it succeeded. Adding broadband obligations to statewide video franchises crosses another red line – up until now, at least, there’s been a regulatory firewall between the two kinds of services. Adding blanket broadband conditions to universal telephone service programs poses the same issues.

But those become problems only after lawmakers approve the bill and the governor signs it. There’s a long and uncertain legislative road to travel before that happens.

FCC will have to defend net neutrality repeal in San Francisco


The luck of the draw means the future of network neutrality and broadband’s status as a common carrier service will be argued in San Francisco. Credit for that is split between the California Public Utilities Commission and Santa Clara County, who filed separate challenges to the Federal Communications Commission’s decision to eliminate net neutrality rules and scrap common carrier obligations for broadband service with the ninth circuit federal appeals court.

Several other organisations filed their appeals in Washington, D.C., and a federal judicial panel randomly gave the job of consolidating and deciding the cases to the San Francisco-based ninth circuit.

Both the CPUC and Santa Clara County call the FCC’s decision “arbitrary, capricious, and an abuse of discretion” and claim that it violates both the federal constitution and federal communications law. In other words, they’re challenging the way the decision was made rather than its substance. That’s an easier – which is not to say easy – case to make. Republican commissioners rushed the decision through, and might not have dotted all the i’s and crossed all the t’s. To put it mildly, democratic commissioner Jessica Rosenworcel certainly thinks so – she called the FCC’s action a “rash decision” resulting from a “corrupt process”…

This decision and the process that brought us to this point is ugly. It’s ugly in the cavalier disregard this agency has demonstrated to the public, the contempt it has shown for citizens who speak up, and the disdain it has for popular opinion. Unlike its predecessors this FCC has not held a single public hearing on net neutrality.

There’s no shortage of Californians involved in the challenges to the FCC’s decision. California attorney general Xavier Becerra joined the appeal filed by his New York counterpart. Mozilla filed its own challenge. The Open Technology Institute and the Coalition for Internet Openness did too. Both list several Silicon Valley companies as major backers. OTI counts Google and Apple among its contributors (as well as Comcast and Charter, although I doubt this is what they signed up for).

CPUC vs. FCC, petition for review of order of agency, board, commission, or officer, 22 February 2018
County of Santa Clara vs. FCC, petition for review, 22 February 2018
Coalition for Internet Openess, petition for review, 5 March 2018
U.S. judicial panel on multidistrict litigation, in the matter of restoring internet freedom, consolidation order, 8 March 2018

State lawmakers can do stupid things to the Internet too


State legislatures and governors are stepping into the void left by the Federal Communications Commission when it rolled back network neutrality last year. Laws reinstating net neutrality requirements of one kind or another passed or are pending in California, Washington, Oregon and elsewhere. In Montana, governor Steve Bullock did it by executive order.

That’s a trend that cheers up net neutrality advocates, but there’s another side to it that’s not so pleasant and offers a solid argument for keeping states out of the business of regulating the Internet. In at least two states – California and Rhode Island – legislators introduced bills that regulate Internet services on the basis on content.

Two democratic state senators in Rhode Island want ISPs to block pornography, although users would be able to pay a $20 fee to unblock it.

In California, it’s politics that has assemblyman James Gallagher (R – Chico) all hot and bothered. He thinks “social media Internet web sites” and search engines should be politically neutral. At least as he understands the concept. So he introduced assembly bill 3169, which would make it illegal for a social media platform or search engine to remove or manipulate content “on the basis of the political affiliation or political viewpoint of that content”.

Gallagher defines social media broadly. It includes, but isn’t necessarily limited to, “videos, still photographs, blogs, video blogs, podcasts, instant and text messages, email, online services or accounts, or Internet Web site profiles or locations”.

Both his bill and the Rhode Island measure are on a collision course with the First Amendment, which exists to prevent politicians from using the coercive power of government to control what content is published. Or not.

It doesn’t look like he’s done any deep thinking on the subject. It’s possible – likely, I’d guess – Gallagher knows his bill has zero chance of becoming law and just wants to score some cheap points with his political base. It’s a particularly noxious way to do it, though.

The State of Washington takes on Washington, DC with its own net neutrality law


The State of Washington is the first to enact a network neutrality law. Washington governor Jay Inslee, a democrat, signed the bill on Monday. Both republicans and democrats voted in favor, with the bill winning lopsided majorities in the Washington house and senate.

The core language tracks with the former FCC’s three bright line rules, as well as similar legislation introduced in California. Internet service providers would not be allowed to…

(a) Block lawful content, applications, services, or nonharmful devices, subject to reasonable network management;
(b) Impair or degrade lawful internet traffic on the basis of internet content, application, or service, or use of a nonharmful device, subject to reasonable network management; or
(c) Engage in paid prioritization.

There is an exemption allowing ISPs “to address the needs of emergency communications or law enforcement, public safety, or national security authorities”, and to enforce copyright laws or block illegal activity. It also requires ISPs to disclose network management practices on “a publicly available, easily accessible web site”.

Assuming it’s not blocked by a federal judge – not a particularly good assumption – Washington’s law will take effect on 6 June 2018, but only if the FCC’s decision to roll back federal net neutrality rules is also in effect by then.

At that point, state and federal law will collide head on. The FCC’s decision nominally preempts any end runs by state legislatures. On the other hand, it gives the broadband cop job to the Federal Trade Commission and observes “that all states have laws proscribing deceptive trade practices”. Washington’s law takes advantage of that opening and defines blocking, throttling or paid prioritisation as “an unfair or deceptive act in trade or commerce and an unfair method of competition”.

It’s hard to imagine that’ll be enough to put states in the business of regulating broadband service, but who knows? The only sure bet is that the next chapter of this story will be written in court.

FTC is everyone’s broadband cop, but don’t expect a fast response


The Federal Trade Commission can apply consumer protection laws to broadband service, even when a telephone company is delivering it. A federal appeals court in San Francisco made that clear on Monday when it rejected AT&T’s argument that the FTC’s authority doesn’t extend to telephone companies or other providers that have “common carrier” status.

An earlier ruling, made last year, would have barred the FTC from any oversight role regarding companies with common carrier status, even when the business line involved wasn’t a common carrier service. At the time, it seemed like a nonsensical decision, and the appellate judges agreed

The FTC is the leading federal consumer protection agency and, for many decades, has been the chief federal agency on privacy policy and enforcement. Permitting the FTC to oversee unfair and deceptive non-common-carriage practices of telecommunications companies has practical ramifications. New technologies have spawned new regulatory challenges. A phone company is no longer just a phone company. The transformation of information services and the ubiquity of digital technology mean that telecommunications operators have expanded into website operation, video distribution, news and entertainment production, interactive entertainment services and devices, home security and more. Reaffirming FTC jurisdiction over activities that fall outside of common-carrier services avoids regulatory gaps and provides consistency and predictability in regulatory enforcement.

The case came about because AT&T began throttling broadband speeds on iPhones with unlimited mobile data plans. The FTC sued AT&T, saying it was an “unfair and deceptive” practice. It’s the kind of enforcement action that the Federal Communications Commission assumed the FTC would take when it scrapped network neutrality rules and declared that broadband is not a common carrier service.

It’s good news to the extent that telephone companies will have to follow the same consumer protection rules as other ISPs. But the case also highlight a major problem with giving the enforcement job to the FTC. Unlike the FCC, the FTC doesn’t directly enforce anything – it has to rely on federal courts, which takes a lot of time. The sin AT&T is accused of committing happened in 2011 and the FTC didn’t sue until 2014. It’s now 2018, with no end in sight.

With end of net neutrality, cable companies can put brakes on subscriber slide


Fewer than half of U.S. households have traditional cable television subscriptions, according to research done by PricewaterhouseCoopers (PWC). With the end of network neutrality rules, cable companies, AT&T and, to a lesser extent, other telcos will be able to fight this trend more aggressively. Even if they can’t stop or even slow it, they can use their monopoly broadband gatekeeper power to rake in a greater share of subscriber revenue.

Cable TV subscriptions have been trending downward over the five years that PWC has been running this survey. A total of 73% of homes have cable (or satellite) TV service, but that breaks down to 46% traditional, big line up subscriptions and 27% “cord trimmers”, who are people who have skinnier packages that they supplement with online – over the top (OTT) – services.

Even so, the cost of watching video keeps going up…

The number of traditional Pay TV subscribers continues to drop as more people are trimming or cutting the cord completely.

73% of our respondents subscribe to Pay TV, which is down from 76% last year and 79% the year before.

At the same time, people report they’re paying more for video today than they were last year.

53% of cord trimmers report paying more for their services in 2017 than they did in 2016; however, trimmers are still paying less than traditional subscribers overall.

Sports is the number one reason people keep paying cable TV companies. If there was another way to see live sports, 82% of sports fan would either trim back their cable subscriptions or chop them completely, according to PWC’s research.

Another interesting finding: 73% of households have Netflix, putting it dead even with cable and satellite providers on an overall basis, and way ahead of the old school, old business model subscriptions.

This accelerating shift away from linear television viewing – and subscriptions – has changed the game for broadband providers. Three years ago, when 61% of U.S. homes had traditional cable subscriptions, Google considered video to be an essential service offering on their fiber-to-the-home systems. But not any more.

As traditional video subscribers flee, cable companies and AT&T, which owns DirecTv, will be looking for ways to either bring them back, or charge more for other services. Like un-throttled, un-blocked and un-prioritised broadband service. If they continue to offer it at all.

FCC officially publishes decision reversing net neutrality


The game clock is now running on the Federal Communications Commission’s decision to reverse broadband’s status as a common carrier service and end network neutrality rules. Sorta. The decision approved by commissioners in December was published in the Federal Register yesterday. That means court challenges can begin – an earlier appeal by state attorneys general was largely symbolic and presumably will be refiled. There’s a ten day procedural window for everyone to pile on in the federal appeals court of their choosing, after that the challenges will probably, but not certainly, be consolidated into a single case that’ll be heard in Washington, D.C. Final deadline to file an appeal is two months out. You can find the details of how it works in an excellent blog post by Public Knowledge’s Harold Feld.

It will be an uphill battle to convince the courts that the FCC made the wrong decision. When congress gives an agency the job of choosing among policy options, past court rulings – including in the cases brought against the FCC’s 2015 net neutrality decision – generally defer to that agency’s expert judgement. There’s a stronger argument to be made that the FCC didn’t follow proper procedures in making its decision this time around, and that’s likely where the main legal battle line will be drawn.

Publication in the Federal Register also means that congress has two months to exercise its authority to overturn the FCC’s decision. There might be enough support for doing so in the U.S. senate, but agreement by the house of representatives is a long shot. The necessary concurrence by president Donald Trump is an even longer shot, to say the least.

The catch is that we still don’t know when the FCC’s decision will take effect – for what it’s worth, broadband is still a common carrier service and theoretically providers still have to abide by the erstwhile bright line rules: no blocking, no throttling, no paid prioritisation. The hammer won’t come down until after the white house signs off on some of the details and posts a second notice in the Federal Register.

FCC’s “Restoring Internet Freedom” order as published in the Federal Register, 22 February 2018

AT&T CEO explains why net neutrality is necessary


Randall Stephenson, AT&T’s chief executive officer, offered a hell of good example of why he can’t be trusted to do the right thing and refrain from using his position as a dominant, monopoly-centric broadband service provider to benefit his equally hefty video content business.

In an interview with CNBC, Stephenson complained that his online competition is beating him up…

“Reality is, the biggest distributor of content out there is totally vertically integrated. This happens to be something called Netflix. But they create original content; they aggregate original content; and they distribute original content. They have 100 million subscribers,” Stephenson said on CNBC. “Look at Amazon. They’re doing the exact same thing. Amazon Studios, creating, aggregating, distributing; Google, YouTube, Hulu, this thing is prolific.”

Reality is, Stephenson has a choke hold on their necks. AT&T is a gatekeeper – for hundreds of thousands of Californians, the only gatekeeper – between those online video platforms and their subscribers.

He intends to make good use of that power, too. The “Internet bill of rights” that AT&T published, and claims to honor, conspicuously fails to include paid prioritisation on the list of network management tactics it promises not to use. Voluntarily promises not to use – there’s nothing preventing it from posting another version of what, reality is, a declaration of AT&T’s rights.

Even if all AT&T does is play the paid prioritisation game, it will gain a big competitive advantage over video platforms that don’t share the top-to-bottom supply chain control it hopes to gain from its proposed purchase of Time Warner’s content and distribution business. AT&T can raise the price of Internet fast lanes to the point where it forces the likes of Netflix and Amazon to either reimburse it for any profits lost to the competition they present, or concede the fight to DirecTv Now and other in-house content engines. Even if the established players can adjust, new video ventures would be blocked. High prioritisation prices won’t matter much to AT&T – it’ll just shift money from one pocket to another.

Reality is, what reality is.

California senate votes for net neutrality


The California senate voted 21 to 12 earlier today to approve senate bill 460, which would reinstate network neutrality rules in California, in the unlikely event federal courts declare the FCC’s decision to scrap those regs to be arbitrary, capricious and an abuse of discretion. It was mostly along party lines, with Richard Roth (D – Riverside) voting no, but no republicans voting yes and several senators on both sides sitting it out. Next stop is the California assembly.

Battle lines drawn in fight for state, local telecoms policy role


Update: the state senate approved SB 460 by a 21 to 12 vote and sent it on to the assembly.

The Federal Communications Commission can regulate some aspects of broadband deployment, but not all. That’s the picture painted by two complementary analyses of federal law and telecoms policy, one by the California senate’s judiciary committee staff and the other by attorneys working for the City of McAllen, Texas and endorsed by the cities of San Jose and New York.

A bill that would reinstate network neutrality is working its way through the California senate. It’s been endorsed on a political level, but its legal foundation is shaky. The staff analysis essentially says that it’ll survive court challenges if the FCC decision to scrap federal net neutrality rules, which also specifically preempted state level regulations, is overturned. The likeliest grounds for that, according to the staff analysis, would be that it was “arbitrary, capricious and an abuse of discretion”.

On the other hand, whacking state and local governments with a sledgehammer that takes away control of public right of ways or municipally owned property, such as light poles, is unconstitutional, according to a white paper submitted to the FCC by McAllen: even if the federal congress authorised it (it hasn’t) the constitution protects property rights, both private and public…

By definition, charging fair market value for use of property is “fair and reasonable” compensation under the Fifth Amendment. The Supreme Court has construed the Fifth Amendment’s Takings Clause to protect the property of state and local governments from uncompensated taking under federal law, and held that it “requires that the United States pay ‘just compensation’ normally measured by fair market value"…

The Commission has no authority to require state or federal taxpayers to subsidize the business plans of private companies…

Proposals to compel local governments to surrender use of their property for below-market rates are fundamentally inconsistent with the functioning of a free market and will encourage inefficient, inequitable deployment.

So far, the FCC hasn’t made any decisions about further preemption of local or state authority, the dictates of industry lobbyists and supine accommodation of at least one commissioner not withstanding. But it has binned net neutrality and blocked states from reviving it. Its ultimate success at either endeavour will be decided by federal judges – likely, by the federal supreme court.