Tales of the Sausage Factory

Ninth Circuit Knee-Caps Federal Trade Commission. Or: “You Know Nothing, Josh Wright.”

Back in October 2014, before the Federal Communications Commission (FCC) reclassified as Title II, both the FCC and the Federal Trade Commission (FTC) brought complaints against AT&T Mobility for failure to disclose the extent they throttled “unlimited” customers once they passed a fairly low monthly limit. You can see the FCC Notice of Apparent Liability (NAL) here. You can see the FTC complaint, filed in the district court for Northern California, here (press release here). As some of you may remember, the FCC was still debating whether or not to reclassify broadband as a Title II telecom service.  Opponents of FCC reclassification (or, indeed, of any FCC jurisdiction over broadband) pointed to the FTC enforcement action as proof that the FTC could handle consumer protection for broadband and the FCC should avoid exercising jurisdiction over broadband altogether.

 

In particular, as noted in this Washington Post piece, FTC Commissioner Maureen Olhausen (R) and then-FTC Commissioner Joshua Wright (R), both vocal opponents of FCC oversight of broadband generally and reclassification specifically, tweeted that the FTC complaint showed the FTC could require broadband providers to keep their promises to consumers without FCC net neutrality rules. Wright would subsequently reiterate this position in Congressional testimony, pointing to the FTC’s enforcement complaint under Section 5 of the Federal Trade Commission Act (FTCA) (15 U.S.C. 45) as an “unfair and deceptive” practice to prove that the FTC could adequately protect consumers from potential harms from broadband providers.

 

Turns out, according to the Ninth Circuit, not so much. As with so much the anti-FCC crowd asserted during the net neutrality debate, this turns out (pending appeal) to be dead wrong. Why? Contrary to what some people seem to think, most notably the usual suspects at Cable’s Team Rocket (who are quoted here as saying “reclassifying broadband means the FTC can’t police any practices of common carriers, at least in the Ninth Circuit” which is either an utterly wrong reading of the case or an incredibly disingenuous remark for implying that reclassification had something to do with this decision. You can see their full press release, which borders on the Trump-esque for its incoherence, here.)

 

As I explain below, the Ninth Circuit’s decision did not rest on reclassification of broadband. To the contrary, the court made it explicitly clear that it refused to consider the impact of reclassification because, even assuming mobile broadband was not a Title II service, AT&T Mobility is a “common carrier” by virtue of offering plain, ordinary mobile voice service (aka “commercial mobile radio service,” aka CMRS). The Ninth Circuit agreed with AT&T that because AT&T offers some services as common carrier services, AT&T Mobility is a “common carrier” for purposes of Section 5(a)(2) of the FTCA and thus exempt from FTC enforcement even for its non-common carrier services.

 

Given that Tech Freedom and the rest of the anti-FCC gang wanted this case to show how the Federal Trade Commission could handle all things broadband, I can forgive — and even pity — Tech Freedom’s desperate effort in their press release to somehow make this the fault of the FCC for reclassifying and conjuring an imaginary “gap” in broadband privacy protection rather than admit Congress gave that job to the FCC. After all, denial is one of the stages of grief, and it must come as quite a shock to Cable’s Team Rocket to once again see that Team PK-chu was right after all (even if it doesn’t make me particularly happy that we were, for reasons I will explain below). But this is policy, not therapy.  As of today, instead of two cops on the beat for broadband consumer protection access, we have one — the Federal Communications Commission. Fortunately for consumers, the FCC has been taking this job quite seriously with both enforcement actions and rulemakings. So while I consider it unfortunate that Ninth Circuit has cut out the FTC on non-common carrier related actions by companies offering a mix of common carrier and non-common carrier services, the only people who need to panic are Tech Freedom and the rest of the anti-FCC crowd.

 

OTOH, longer term, this does create a more general concern for consumer protection in more deregulated industries (such as airlines) covered by the exemptions in Section 5 of the FTCA. Yes, I know most folks reading this blog think the universe revolves around broadband, but this decision impacts airlines, bus services, private mail services like UPS, and any other company offering a common carrier service “subject to the Acts to regulate Commerce.” (15 U.S.C. 45(a)(2))  (Also meat packers and a few other named exceptions). So while I am hopeful the FTC appeals this to the full Ninth Circuit for en banc review (and even the Supreme Court, if necessary) from a general consumer protection perspective, the only direct result of this case for broadband policy is to underscore how important it is for the FCC to do its job despite the industry nay-sayers and their Libertarian cheerleaders.

 

More below . . .

 

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Tales of the Sausage Factory

Comcast & AT&T Apparently Smart Enough To Resist RIAA Invitation to Slit Own Throats.

As I’ve observed before, the IP Mafia have absolutely the worst judgment imaginable when it comes to their agenda. Now, the people who tried to kill the VCR, have just about killed internet radio, and who have sued dead people and sick children, have hit on another winning plan — using ISPs as enforcers.

Once upon a time and long ago, ISPs understood why it was important to be a common carrier and have no liability for this. That was why Congress included Section 230 and the “Good Samaritan” provision in the 1996 Telecom Act. It boils down to “when you act like a dumb pipe and just pass stuff from one place to another, we will not hold you liable for what happens.” For the same reason (as Bob Cannon explains over here on Cybertelecom), Congress generally immunized ISPs and created the whole “notice and take down” scheme in the Digital Millenium Copyright Act.

But all that was before our ISP industry boiled down to a handful of companies that were also either big content producers or video distributors dependent on the good will of big content producers. Suddenly, from the perspective of the IP Mafia, a whole new world of possible backroom dealings opened up. A world in which a few companies could make policies that would cover nearly the entire high-speed access market, and where they either shared common interest with the IP Mafia or could be “persuaded” to do so by threatening to withhold needed video content.

And so, the MPAA and RIAA walked right into my cunning trap, the fools! Alas, turns out Comcast and AT&T were too clever for me.

More below . . . .

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Tales of the Sausage Factory

My Simple Net Neutrality Fix.

In what Rob Friedan accurately describes as an obtuseness so thorough it looks suspiciously like deliberate misinformation, the Wall St. J. has yet another piece on what it imagines the network neutrality fight is about and why the best thing in the whole wide world is to do nothing.

Rather than rehash old ground (Rob does a fairly good job of it in his post), I will move on to my handy and simple network neutrality solution. “Simple,” in the sense of being a fairly straightforward piece of legislation. It would pass the buck back to the FCC for implementation — with all the attendant hassle and complications that brings. But from a Congressional standpoint, it is really quite straightforward. In fact, Congress already resolved this problem once a long time ago, back when the FCC was struggling with them new-fangled mobile wireless networks.

How did they do it? And what would I do for broadband? See below . . . .

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Tales of the Sausage Factory

Today on Telecom Mythbusters: FCC Ancillary Authority in Comcast/BitTorrent

Cable gets a lot of mileage out of repeating things over and over until folks believe it’s true. Today on Telecom Mythbusters I’d like to focus on the question of “ancillary” authority and regulating broadband. The cable guys generally circulate two myths about this.

1) Ancillary jurisdiction by the FCC is an exceedingly rare, wacky, way out thing and the fact that net neutrality advocates even want to rely on it shows how way out there and kooky it is.

2) The D.C. Circuit has been busy trimming back ancillary jurisdiction so that it really doesn’t exist anymore. Specifically, the D.C. Cir. 2005 decision in American Library Association v. FCC, 406 F.3d 689 (D.C. Cir. 2005) (and, to a lesser degree, MPAA v. FCC, 309 F.3d 796 (D.C. Cir. 2002) worked some kind of mojo against the expansive grant of power by the Supreme Court in United States v. Southwest Cable, 392 U.S. 157 (1968) and the Supreme Court’s explicit statement in Brand X so that the FCC cannot regulate broadband access and prohibit Comcast from targeting specific applications such as BiTtorrent under ancillary jurisdiction. A sub-myth of this is “Title I cannot be the source of authority on its own.”

Marvin Ammori, General Counsel of Free Press, has written a stunning tour de force rebutting these arguments. The 100+ page filing masterfully traces the FCC’s authority under Title I and in this particular proceeding. But for those who don’t want to read through the whole thing, I will give my own take below.

I must once again warn readers that this will be a breathtakingly dull review of applicable case law, along with an examination of FCC precedents and does not go to the juicier merits of policy (not that I expct this to stop the Brett-bot from his inevitable comments). If you do not find legal minutia fascinating beyond words, if you do not thrill at the discussion of the subtle differences between a “Telecommunications Service Provider” and a “Common Carrier,” then for God’s sake, turn back now! Lest your brain dissolve into tapioca pudding from the awesome power of legal analysis unleashed.

(and for Brett: Blah blah blah evil blah blah Free Press blah blah MAP blah blah Ginger)

Otherwise, to see both myths BUSTED, read more below….

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Tales of the Sausage Factory

Snowe & Dorgan ReIntroduce Net Neutrality Bill — and A Chance for Some Presidential Politics

Senator Snowe (R-ME) and Senator Dorgan (D-ND) have introduced the Internet Freedom Preservation Act. Interestingly, although neither is on the relevant Committee, both Barak Obama and Hilary Clinton are co-sponsors. While not exactly pandering (both co-sponsored the Snowe-Dorgan network neutrality bill last year when it was a lot riskier to do so), does anyone doubt that their decision to come out strongly in favor of NN this early was influenced by the popularity of this issue with the netroots?

Meanwhile, where the heck did Inouye go? And has anyone talked to the new members yet?

Some reflections on the new bill, and on the new politics network neutrality, below . . . .

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Tales of the Sausage Factory

DSL Item Released — coulda been worse

After pushing the FCC’s open meeting off for a day and then delaying another hour and half to reach a compromise, Martin got his DSL reclassification order by a uninamous Commission. Instead of the complete deregulation proposed by Powell, the Commission will take steps to protect “network neutrality” and will take steps to protect various other “social” policies (including, unfortunately for us civil libertarian folks, the ability of the FBI to read your email).

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