Series of Tubes

Net Neutrality, ICANN, and other issued related to internet infrastructure

The History of Net Neutrality In 13 Years of Tales of the Sausage Factory (with a few additions). Part I

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I keep being asked by people “Harold, can you please summarize the last 20 years of net neutrality for me while I stand on one foot?” Usually I answer: “do not do unto other packets what you find hateful for your favorite bitstream. The rest is commentary — located at 47 C.F.R. Part 8.” Alternatively, I send them to John Oliver’s 2017 piece on net neutrality. Or, if you want the longer story going back to the 1960s/70s, you can read this excellent piece by Tim Wu (who invented the term “net neutrality” in the first place).

 

But, as I’ve mentioned more than a few times in recent weeks, I’ve been doing this issue for a very, very long time. In fact, pretty much since the first time the question of how to classify cable modem service came up in 1998. So, in the spirit of “end of year montages,” I will now take you on a brief tour of the history of net neutrality at Tales of the Sausage Factory (with a few outside link additions) from my first post on the Brand X case back in 2004 to June 2016, when the D.C. Circuit affirmed the FCC’s 2015 Reclassification and Net Neutrality Order.

 

Although I suppose you could read the version I wrote about this in December 2015 to bring everyone up to date before the last court fight. Have I mentioned I’ve been doing this for a long, long time now and am repeating myself an awful lot? That’s why I spend more than 5000 words here and only get up to the beginning of 2009.

 

Prepare you favorite montage music and see more below . . .

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The 5 Weirdest Things About That Ajit Pai Video.

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Federal Communications Commission (FCC) Chairman Ajit Pai has made one of those “break the ‘net” videos — but not in the usual way. In an apparent effort to either pump up his base or win over undecideds, Pai made a video called “Seven Things You Can Still Do On the Internet After Net Neutrality.”

 

If the intent was to win over critics by showing how opponents are needlessly “fear mongering” (a favorite term thrown around by defenders of Pai’s net neutrality repeal), it backfired badly. But whatever its intent, I can say unequivocally as someone doing this for 20 years, this video is truly bizarre in the annals of FCC history for a number of reasons. While most of the attention has gone to the copyright issues or the Twitter fight between Mark Hamill and Ted Cruz, the genuinely weirdest thing about this video is that it ever got made in the first place.

 

So here are my picks for the Top 5 Weirdest Things About Ajit Pai’s ‘Seven Things’ Video.

 

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No, the Draft Net Neutrality Repeal Does Not “Restore Us To 2014” — And 2014 Wasn’t Exactly Awesome Anyway.

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In my ongoing series debunking the nonsense from Pai & Friends on what the draft net neutrality repeal/reclassification Order does and doesn’t do, I will now take on yet another cherished talking point that gets repeated ad naseum. “We are just winding back the clock to before 2015, when the Internet flourished and — to paraphrase  a popular song of the time from a different Lord Business — everything was awesome! Everything was cool when you were part of the team (cable)! ”

 

Like “the FTC, antitrust law and state law can handle net neutrality” and “the FTC can stop ISPs from blocking content/services,” this talking point is intended to be a “technically true but totally not the way you think/we imply” statement that lawyers, politicians and demons selling you wishes in exchange for your soul love to tell you to get you to sign on the dotted line. In this case, however, this statement turns out to be literally false to fact as well as false by implication. Below, I compare the regulatory regime in place on January 17, 2014 (the day after Verizon v. FCC) and the anticipated regulatory regime as it will exist on January 17, 2018, and explain the Top 3 Ways They Are Totally And Completely Different In Ways That Make Consumers Worse Off.

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No, the FTC CANNOT Have A Ban On All ISP Blocking.

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In my last post, took the 4 most famous net neutrality violations to see how they would come out under the current rules adopted in 2015 v. how they would come out under the regulatory framework following the FCC vote to repeal net neutrality rules, based on the draft Order. To condense the approximately 5500 word analysis — all 4 incidents are addressable under the 2015 rules. None of the incidents are addressable under the combined Federal Trade Commission (FTC) and antitrust regime that remains after the vote to repeal the rules, with the exception of Comcast’s deliberate deception about their blocking peer-2-peer protocols in 2007-08.

 

Since most folks won’t plow through 5500 words of legal analysis, I’ve gotten some requests to specifically address the claims by FCC Chairman Ajit Pai and others that the FTC can address blocking as easily as the FCC and prevent any ISP from blocking any content or application. My short answer is: “No. The FTC CANNOT have a “no blocking” rule like the FCC has today. The FTC may stop an ISP from blocking content or services when it can prove that the blocking violates the antitrust laws, or that the blocking violates the ISP’s published terms of service, or if the ISP blocking causes (or is likely to cause) substantial harm to consumers and is not outweighed by countervailing benefits. And, as I covered extensively in my previous post, proving these things can be hard.

 

My somewhat longer answer, laid out in more detail below, is that Section 5 of the Federal Trade Commission Act, 15 USC 45, simply cannot do what Section 201(b) and Section 202(a) of the Communications Act (47 U.S.C. 201(b) & 202(a)) can do. The two statutes are designed and interpreted very differently. The FTC has very broad jurisdiction but fairly limited authority because it is a very generalist agency. More importantly, it is purely an enforcement agency — designed to prosecute companies from doing what I will refer to here as “bad stuff.” Note, it is not even designed to prevent companies from doing the bad stuff in the first place. It is designed purely to enforce a fairly general consumer protection statute. In particular, the FTC Act Amendments of 1994 severely limited the FTC’s enforcement authority by adding Section 5(n), which requires the FTC to overcome certain obstacles before it can find conduct “unfair” and thus unlawful under Section 5(a).

 

By contrast, Congress designed the FCC to ensure that our critical communications infrastructure functions in a consistent and stable manner and to explicitly promote all kinds of industrial policy like innovation, universal service, affordability, and to ensure that telecommunications services operate in a manner that serves “the public convenience and necessity.” This is critical because we don’t generally require businesses to serve the public interest, we limit this requirement to a fairly small number of specific industries that are absolutely critical to the functioning of our economy and important in our daily lives. As a result, in contrast to the FTC, the FCC has very broad authority over telecommunications services but virtually no authority over other stuff — like information services.

 

As I explain below, this makes it literally impossible for the FTC to simply prohibit blocking (let alone prohibit “fast lanes” or “slow lanes”) as the FCC does. To the contrary, under the FTCA, the FTC cannot prevent a broadband carrier from blocking any website, application or service it chooses unless it can prove that this blocking (a) causes (or is likely to cause) “substantial injury” to consumers, (b) there is no other way the consumer could reasonably avoid the harm, and (c) there are no countervailing consumer benefits. While Section 5(n) does allow the FTC to consider “established public policies as evidence to be considered with all other evidence. Such policy considerations may not serve as the primary basis” for a finding of unfairness. So even if we assume that there is an “established public policy” against blocking, that alone does not allow the FTC to stop a broadband provider from blocking content or applications.

 

And all this, of course, assumes the FTC even has authority to deal with broadband carriers reclassified as information services, which remains up in the air at the moment pending the Ninth Circuit resolution of the en banc rehearing of FTC v. AT&T Mobility.

 

I explain all this in more detail below . . .

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Can the FTC Really Handle Net Neutrality? Let’s Check Against the 4 Most Famous Violations.

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I have been personally involved in just about every major network neutrality issue since this began as “open access” in 1998. It gives me a somewhat different perspective than others, I expect. For one thing, I actually remember the various network neutrality violations we’ve had over the years — and how the FCC previously expected to address them.

 

FCC Chairman Ajit Pai’s proposed draft Order repealing net neutrality is, without doubt, the most dramatic and radical about face committed on this matter in the almost 20 years this issue has percolated. Among other things, it completely renounces any FCC oversight over the behavior of broadband providers. Back in 2002, when Chairman Michael Powell’s FCC issued the Cable Modem Declaratory Ruling, defenders of the FCC’s action dismissed the claim that the FCC was abandoning all regulatory oversight of broadband as “fear mongering.” Now, of course, Pai insists that the draft Order simply resets the clock to the golden age of 2014, and that those who insist the FCC ever exercised authority over last-mile broadband are “fear mongering.” To paraphrase Inigo Montoya of the Princess Bride, ‘you keep using that phrase. I do not think it means what you think it means.’

 

In particular, Pai and defenders of the draft Order insist that a combination of the Federal Trade Commission (FTC) Section 5 (15 U.S.C. 45), state consumer protection law, and anti-trust law will provide more than adequate protection for consumers and anyone who doubts this is — you guessed it — fear mongering. Happily, we do not need to speculate on this entirely. We can simply apply the proposed rules in the draft Order and the protections cited by the draft Order and its defenders and apply them to the four most significant network neutrality violations on record.

 

(1) The 2013-14 “peering dispute” between Netflix and the four largest broadband Internet access service (BIAS) providers — Comcast, Time Warner Cable (now Charter), AT&T and Verizon;

(2) The 2012 decision by AT&T to limit Facetime to the highest tier plan on its mobile service;

(3) The 2007-08 blocking of peer-2-peer (p2p) applications such as BitTorrent by Comcast;

(4) The 2005 blocking of Vonage VOIP calls by the ISP Madison River.

 

It’s worth noting as we begin the analysis that, while the draft Order does not discuss the Netflix/BIAS peering dispute at all, it does discuss the other 3 and explain why they were (a) not a big deal, and (b) would probably be permitted under the FCC’s new approach. But lets run through the exercise on our own. As discussed below, under the existing 2015 rules, the FCC can address and resolve each of these. Under the FTC/State consumer protection law/Sherman Act approach, the only one of these actions subject to any sanction is the 2008 Comcast/BitTorrent blocking, and even then only for the misrepresentations to customers denying its “network management” decision to disrupt p2p traffic. Assuming Comcast actually admitted to blocking/degrading p2p traffic when initially confronted in 2007, neither the FTC nor any of the other proposed remedies would have ended Comcast’s “network management practice.”

 

This result should not surprise us. After all, not only does the draft Order explicitly cover the 2012 AT&T/Facetime, 2008 Comcast/p2p fight, and the 2005 Madison River VOIP blocking and explain why they should have been permissible rather than subject to “heavy handed” FCC enforcement, but those defending the current draft Order as the Nirvana of “light touch” regulation defended each of these BIAS actions as entirely within the rights of the BIAS provider and an unwarranted interference on the part of the FCC. Whether or not one agrees that these actions were appropriate network management/market negotiation decisions by broadband providers, no one can deny the rules adopted in 2015 expressly prohibits these four incidents whereas the rules in the draft Order expressly permit them.

 

More detail below . . .

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My Insanely Long Field Guide To Common Carriage, Public Utility, Public Forum — And Why The Differences Matter.

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Once upon a time, social conservatives used to be major allies on both limiting media consolidation and on net neutrality. Why? Because they recognized that if you had a handful of corporate gatekeepers controlling access to the marketplace of ideas, they could easily get shut out. Market forces being market forces, companies pressured to censor unpopular or controversial speech and views will do so. Add to that the belief on the part of conservatives that they face ideological bias from the “mainstream media” or “Silicon Valley,” and you had many conservatives back in the day who stood shoulder to shoulder with us back when I was at Media Access Project to oppose Powell’s efforts to relax media ownership rules in 2003 and who opposed Congress’ first attempt to gut net neutrality — the COPE Act — in 2006.

 

Then came the 2008 election and the Tea Party blowback of 2009-10. Net neutrality became a red team/blue team issue and even social conservatives who had previously supported net neutrality went silent on the issue.

 

Ironically, now that Republicans dominate all branches of government, conservatives are once again discovering the value of common carriage and government prohibition on any sort of interference with conduits of speech — at least with regard to social media platforms like Facebook, Youtube and Twitter. Why? As conservatives have once again discovered, if companies retain the right to exert editorial control based on content, they will get pressured by the market and government to use that editorial discretion to censor “harmful” speech. That, and the perception that Silicon Valley has a distinct liberal bias, have prompted some in the conservative movement to rediscover the idea that common carrier regulations actually protect and promote free speech and are not a regulation of speech. Because without access to the public square — whether the real life public square or its digital equivalent — your freedom of speech is simply a freedom to whisper to yourself.

 

I am happy to agree that the time has come to consider whether social media platforms — and other essential elements of communications such as operating systems, DNS registration, or content hosting — should have non-discrimination obligations consistent with our traditional concepts of common carriage. I believe this would also have the salutary effect of protecting companies from liability or social pressure by taking away their discretion. After all, we don’t see anyone demanding that the major mobile providers stop providing cell phones to white supremacists or that broadband providers block subscribers from accessing websites like Daily Stormer. The public accepts that these companies have no choice, because they are common carriers and must serve everyone equally as a matter of law. By contrast, we have seen successful campaigns to pressure DNS registrars to refuse to host the Daily Stormer domain name, Cloudflare, which itself decided to stop servicing Daily Stormer after Daily Stormer claimed that Cloudflare’s decision not to suspend service constituted an endorsement, posted this excellent blog post on why their actions should make people very uncomfortable.

 

So this should be a great time to reforge the Left/Right alliance on media diversity and government regulation to prevent private censorship, right? I hope so. Unfortunately, this very important conversation keeps getting muddled for two reasons.

 

1) People keep confusing the concept of “common carriage” with the concept of “public utility.” The differences actually matter a lot, despite 15 years of anti-net neutrality advocates muddling the two.

2) The most active proponents of using government regulation to prevent private censorship on the conservative side are pretty much treating common carrier regulation as a form of revenge porn rather than as a serious public policy debate. “Oh, you don’t want me? You want to break up with me? Well I’ll show you! I’ll make it so you have to carry me!” Indeed, since 2006, when Google (to my considerable annoyance) became the poster child for net neutrality for opponents and a trade press obsessed with treating every policy debate as an industry food fight, the debate about common carrier obligations or non-discrimination obligations or even privacy has always triggered a “but what about edge providers? Waaaaahhhhh!! Regulate them! Regulate them!”

 

Now I should make it very clear that I can find plenty of progressives who have conceived passionate hatreds for “Silicon Valley” platforms for various reasons, and who also get confused on the concept of “public utility.” Additionally, I can find at least some conservative free market types who understand why we need to regulate things like Internet access differently than hosting services or social media. But it’s conservatives lusting to regulate “Silicon Valley” that have been getting the headlines, and are driving the discussion among Republicans in Congress. Plus I’m getting tired of being asked the same stupid questions by the same folks on Twitter. So I’ll call out the conservatives howling for Silicon Valley blood by name.

 

Anyway, because whether and how to regulate various parts of the Internet supply chain (or, if you prefer, ecosystem), I will try to explain below why common carriage obligations, such as network neutrality, are different from public utility regulation (even though most utility providers are common carriers), which is different from natural monopoly regulated rate of return/tariffing/price regulation. I will briefly explore some of the arguments in favor of applying some sort of public forum doctrine or common carrier obligation to social media platforms, and — because this invariably comes up in telecom space — why platform or other infrastructure providers are not and should not be covered by Title II or the FCC, even if we agree they should have some sort of public forum or even public utility obligations.

 

More below . . .

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Will Rural Texas Ever Get Its Phone Service Back After Harvey?

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According to the official Federal Communications Commission (FCC) statics (current to August 30), Harvey is having a predictably significant impact on telecommunications in the path of its devastation. We won’t actually know the final damage for awhile yet, but it appears that cell sites are pretty much gone in the counties where Harvey made landfall (but service is being steadily restored). Over 265,000 landline phones have been rendered inoperative. No one expects a communications network to come through an epic flood like Harvey without serious disruption. Indeed, from the very surface look of things, it appears that the communications network in the impact area is performing much better than it did during either Katrina or Sandy.

 

But looking ahead, I have a different question. Once the floodwaters recede and the reconstruction begins, when can residents see their phone service — and broadband service — return. For rural residents of Texas still dependent on traditional landlines, the answer to that may be “never.”

 

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Why We Need Title II And Strong Net Neutrality Rules; Or, Fool Me Twice, Shame On Me. Fool Me Every Time — I’m the FCC!

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As we slog away once again on Federal Communication Commission (FCC) Chairman Ajit Pai’s summer blockbuster reboot “Net Neutrality: The Mummy Returns!,” it’s worth noting in passing the anniversary a previous Pai celebration of industry self-regulation, #DitchTheBox. I bring this up not merely as a fairly bitter bit of Cassandrafreude, but to remind everyone why only those who most desperately want to believe ever put any faith in “industry self-regulation” — especially when that industry is the cable industry.

 

The cable operators, along with the telcos and other broadband access providers, all claim to loooove the basic idea of net neutrality and a “free and open Internet.” Mind you, we still have the occasional True Believer trying to tell us how good for us it would be if ISPs could “innovate” in exciting pricing plans like “screwing with your video streaming to charge you extra” or “blocking/degrading your efforts to access peer-to-peer applications without telling you.” But as an industry, the major broadband providers have recognized that they need some kind of fig leaf concession (preferably cemented into law by a compliant Congress). And so we have seen the cable companies falling all over themselves to swear their undying support for net neutrality and promises to do nothing to harm the open Internet.

 

So a brief review of the history of cable industry self-regulatory promises, and Chairman Pai’s willingness to believe them, seems in order for the day.

 

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NCTA Agrees Title II Virtuous Cycle Totally Working; Or, Pai’s Economics v. the Actual Real World.

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Last week, NCTA, the trade association for the industry formerly known as cable, posted this amazing graph and blog post showing that the “virtuous cycle” the FCC predicted would happen when it adopted the open Internet rules (aka Net Neutrality) back in December 2010. Indeed, as the NCTA graph (based on the latest Akamai State of the Internet Report) shows, the average speed of broadband connections has not only continued to rise since the FCC first adopted net neutrality rules in 2010, but the rate of increase has accelerated since the FCC adopted the Title II Reclassification Order in February 2015. Finally, as NCTA also points out, in the approximately 10 years since the FCC first began to enforce net neutrality through the “Internet Policy Statement” and the Comcast/Bittorrent Complaint, the cost of moving bits from their source to your home has dropped 90% on a per bit basis. (Whether we are actually still paying too much because of our lack of competition in the broadband market is something of a different question.)

 

Perhaps unsurprisingly, this matches the findings from Free Press’ Dr. Erik Turner in this massive and meticulously documented report, “Broadband Investments And Where To Find Them.” But it’s still nice to see NCTA confirm it. One of the advantages of having blogged on net neutrality for 10 years is I can point to things like this 2006 blog post and say: “Hey, I totally predicted that. Glad to see things working as I predicted they would.” This contrasts with the net neutrality haters, who as far back as 2006 that predicted that preventing ISPs from discriminating and prioritizing traffic would result on average broadband quality getting consistently worse a bandwidth kept treating the Internet “like a truck you can just load things on” instead “of a series of tubes.”

 

 

So why did the self-appointed experts get it so wrong? And why do they still fixate on criteria like “ISP CAPEX” that neither Congress nor anyone outside the economics world cares about (and which a reviewing court utterly will not give a crap about) if better faster broadband is getting deployed as we all predicted and Congress directed?

 

 

The answer boils down to the old cliche: “Among economists, the real world is often a special case.” So while all of us out here in the real world focus on things like “hey, is broadband actually getting deployed, and is it getting better and faster and stuff so we can do all the things that make better faster broadband so critical in everyone’s lives these days,” economists poo-poo such concerns as being part of an “economics free zone.” Questioning this navel gazing in Econ Cloud Cuckoo Land will evoke sneers about how silly you must be for not understanding why the actual real world is irrelevant to the purity and wonderfulness of “real” economics. For some odd reason, a lot of folks eat this superior attitude up with a spoon and fail to ask the follow up question like “you know you didn’t actually address the substance of the argument, right?”

 

Anyway, I will below unpack all of this by: (a) reviewing what we actually predicted about the virtuous cycle; (b) reminding folks about the predictions of doom and gloom from the haters in Econ Cloud Cuckoo Lad (that’s a literary reference, btw, for when the usual suspects want to get all fake outragey to avoid dealing with substance); (c) reviewing why the evidence is consistent with the pro-Net Neutrality prediction and falsifies the anti-Net Neutrality prediction; and (d) why this means that if Pai tries to base his roll back of Title II/net neutrality by embracing the Singer/USTA CAPEX argument and ignoring all the other evidence, he is going down in flames in the D.C. Circuit.

 

(I would love include a section on what ISP CAPEX actually should look like, which casts further doubt on the question of the relevancy of any modest drop in ISP CAPEX over time as a useful measure, but I’m gonna have to save that for a later follow up.)

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Will Pai “Pull A Putin” And Hack the FCC Process? Or Will He Get Over Himself and Start Acting Like The Chairman?

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In my 20+ years of doing telecom policy, I have never seen a Chairman so badly botch a proceeding as Chairman Ajit Pai has managed to do with his efforts to repeal Net Neutrality. For all the fun that I am sure Pai is having (and believe me, I understand the fun of getting all snarky on policy), Pai’s failure to protect the integrity of the process runs the serious risk of undermining public confidence in the Federal Communications Commission’s basic processes, and by extension contributing to the general “hacking of our democracy” by undermining faith in our most basic institutions of self-governance.

 

Yeah, I know, that sounds over the top. I wish I didn’t have to write that. I also wish we didn’t have a President who calls press critical of him “the enemy of the American people,” triggering massive harassment of reporters by his followers. What both Trump and Pai seem to fail to understand is that when you are in charge, what you say and do matters much more than what you said and did before you were in charge. You either grow up and step into the challenge or you end up doing serious harm not only to your own agenda, but to the institution as a whole. Worse, in a time when the President and his team actually welcomed Russia’s “hacking” of our election, and remain under suspicion for coordinating with Russia for support, Pai’s conduct creates concern and distrust that he will also “pull a Putin” by welcoming (or worse, collaborating with) efforts to de-legitimize the FCC’s public comment system and hack the public debate around net neutrality generally.

 

Fortunately, as I told former Democratic FCC Commissioner Julius Genachowski when he was in danger of making the FCC’s process a laughingstock in the public eye, Pai can still recover and rescue himself and the FCC from his self-destructive conduct. Instead of calling his critics enemies of capitalism and free speech, instead of obsessing about his own hurt feelings while displaying a troubling indifference to identity stealing bots filing comments that support his own proposal and failing to follow up on his own claims that the FCC comment system suffered a critical cyber-attack – Pai needs to follow in the footsteps of Michael Powell, Kevin Martin and Tom Wheeler when they faced similar insults (and in Powell’s case, racial slurs). Welcome robust public debate and criticism, condemn the actually illegal hacking used by his supporters, and stop whining about his own hurt feelings. Michael Powell managed to take being called a War Criminal and son of a war criminal for supposedly allowing the press to sell us on the Iraq War, as well as the same kind of racist bullshit that Pai or any other prominent person of color sadly has to endure in an America where racists feel increasingly emboldened. Pai can chose to step up in the same way his Republican and Democratic predecessors did, or continue to contribute to the overall erosion of trust in our institutions of self-governance generally and his handling of the FCC specifically.

 

I unpack all this below . . .

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