Before Freaking Out About The FCC's New Neutrality Rules, Perhaps You Could Be Bothered To Actually Read Them

from the pay-attention,-chicken-little dept

While there’s been no limit of hand-wringing over the new net neutrality rules, much of this has been either hyberbole by giant ISPs that don’t like having their anti-competitive pipe dreams quashed, or by folks who don’t actually understand what the rules actually do. There are a number of smaller ISPs, partisans and tech execs that exist in the second camp, assuming in kneejerk fashion that the FCC’s new rules saddle them with all manner of burdensome regulations. In reality, as we’ve noted several times, not much changes under the new rules — provided you don’t intend to engage in anti-competitive behavior.

Former Verizon regulatory lawyer turned FCC Commissioner Ajit Pai voted down the rules, and has been waging a bizarre, facts-optional assault on neutrality supporters like Netflix ever since. Last week Pai managed to drum up a little extra hysteria on this front by proclaiming that the new rules were crushing small ISPs with all manner of new costs. Pai trots out several small ISPs that, in filings to the FCC, take a page out of the AT&T pouting playbook and say they’re freezing investment in broadband because the rules are just too damn onerous:

“KWISP President Kenneth Hohhof told Ars that his two-person company makes revenue of $250,000 to $300,000 per year, and he estimates that he?ll have to pay $20,000 in legal costs because he intends to hire a lawyer to review his business practices. Hohhof admits that he ?pulled that [number] out of the air,? but given the hourly rates charged by telecom lawyers, he expects the bill to be substantial for such a small company.

…Another wireless ISP Pai described is SCS Broadband in rural Virginia, which serves 800 customers and ?has already stopped investing in new rural areas because of the FCC?s decision, and it won?t resume until it can ?determine if the additional cost in legal fees warrant such investments,?? Pai said. ?And investors have already told SCS Broadband that ?projects that were viable investments under the regime that existed before the Order will no longer provide the necessary returns to justify the investment.?”

Yes, like with any regulations, investors will need to do due diligence, and businesses need to occasionally consult attorneys to understand the market landscape in which they operate. Also, shockingly, lawyers do indeed tend to take extra advantage of people who can’t be bothered to understand when their services are or aren’t needed. And while it’s clear the FCC could do a better job communicating the rules’ impact, these problems aren’t the fault of the rules themselves.

Rather amusingly, Ars Technica then proceeds to dissect most of these concerns point by point, suggesting that most of the small ISPs engaged in hysterics over the rules appear to not understand them in the slightest. As Ars notes, most of the onerous portions of Title II (rate regulation, local loop unbundling) aren’t included in the rules, and most smaller ISPs are exempted from new transparency requirements. Indeed, most of the non-blocking, non-throttling, and “reasonable network management” requirements are the same, relatively-generous ones these ISPs lived under with the original net neutrality rules, which they didn’t need lawyers to understand and comply with.

The bottom line: a lot of confusion and fear on the part of hysterical anti-Title II folks could be eliminated by actually reading the rules (pdf), instead of listening to incumbent ISP lawyers, former incumbent ISP lawyers like Ajit Pai, or execs like Mark Cuban. Again, many folks who actually run ISPs for a living (like CEO Dane Jasper) note it’s only ISPs that engage in anti-competitive behavior that should worry. That’s not hard to realize if you’ve paid attention to the FCC’s recent, totally out of character, shift toward notably more consumer and competition-friendly telecom policies that are already benefiting consumers and companies alike.

Even the major ISPs that hate the idea of having their anti-competitive shenanigans policed have repeatedly and quietly admitted the rules don’t impact their day-to-day business operations much. While their lawyers and lobbyists have been busy predicting business Armageddon, dozens of ISP execs have gone on record in recent months to admit the rules don’t change much of anything for them operationally. And indeed, small ISPs that have bothered to pay attention to this bizarre new about-face at the FCC (like Joshua Montgomery of Wicked Broadband in Kansas) appear to understand this:

“If you’re behaving in your customers’ best interests and operating above the board, I don’t think you have anything to be concerned about,? he said. ?If you’re advertising a $19 rate and then jacking people’s bills up to $125 with fees and other things after six months and claiming some kind of long-term deal, yeah you’re probably going to have trouble. [The FCC] made it very clear that their goal is to encourage competition, and I don’t think they have their eyes on small players.”

At the heart of the net neutrality opposition are very wealthy companies immeasurably angry that somebody is finally trying to stop them from aggressively cashing in on the lack of competition over the broadband last mile. At the periphery are many satellite opponents who just oppose the new rules because (certainly not without some valid historic justification) they believe all regulation is always bad, and you don’t need to have an intelligent, nuanced debate on the merits of individual proposals because the fact that regulation is always, automatically bad is always true and la la la I can’t hear you. The former have a pretty easy time riling up the latter, but you can go a long way toward avoiding this kind of confusion by actually reading and understanding the regulations you’re busy claiming will destroy the business universe as we know it.

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Companies: at&t, kwisp, scs broadband, verizon, wicked broadband

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Comments on “Before Freaking Out About The FCC's New Neutrality Rules, Perhaps You Could Be Bothered To Actually Read Them”

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Anonymous Anonymous Coward says:


Hey Karl, would it be possible to post just the rules part, without the 400 or so extra pages of comments? It could just be possible that those small ISP’s look at the length of the document released by the FCC without understanding that the rules are only 8 pages. Or maybe you could post both, the full 400 or so pages, and then, just the rules part. You know, make it easier for them. With all appropriate disclaimers, of course.

Anonymous Anonymous Coward says:

Re: Re: Possible?

I understand that. You apparently understand that. What about those poor small ISP’s (or even the big ones, or even the general population)? Every time I have seen this, it is 400 pages, rather than just the 8 pages of rules with a link to the full document. Something simpler might help not only the average person, but the less than average person, as well as help to kill the rhetoric by the more than average person/company shill (and maybe even some non-telecom lawyers).

nasch (profile) says:

Re: Possible?

The core of it (IMO) is this part (not to say that this satisfies your request to Karl):

“Reasonable network management
A network management practice is a practice that has a primarily technical network management justification, but does not include other business practices. A network management practice is reasonable if it is primarily used for and tailored to achieving a legitimate network management purpose, taking into account the particular network architecture and technology of the broadband Internet access service.

Section 8.5 is amended to read as follows:
§ 8.5 No blocking.
A person engaged in the provision of broadband Internet access service, insofar as such person is so engaged,shall not block lawful content, applications, services, or non-harmful devices, subject to reasonable network management.
Section 8.7 is amended to read as follows:
§ 8.7 No throttling.
A person engaged in the provision of broadband Internet access service, insofar as such person is so engaged,shall not impair or degrade lawful Internet traffic on the basis of Internet content, application, or service, or use of a non-harmful device, subject to reasonable network management.
Section 8.9 is redesignated section 8.19
New section 8.9 is added to read as follows:
§ 8.9 No paid prioritization.
A person engaged in the provision of broadband Internet access service, insofar as such person is so engaged, shall not engage in paid prioritization.
“Paid prioritization” refers to the management of a broadband provider’s network to directly or indirectly favor some traffic over other traffic, including through use of techniques such as traffic shaping, prioritization, resource reservation, or other forms of preferential traffic management, either (a) in exchange for consideration (monetary or otherwise) from a third party, or (b) to benefit an affiliated entity.
(c) The Commission may waive the ban on paid prioritization only if the petitioner demonstrates that the practice would provide some significant
public interest benefit and would not harm the open nature of the Internet.
New section 8.11 is added to read as follows:
§ 8.11 No unreasonable interference or unreasonable disadvantage standard for Internet conduct.
Any person engaged in the provision of broadband Internet access service, insofar as such person is so engaged, shall not unreasonably interfere
with or unreasonably disadvantage(i) end users’ ability to select, access, and use broadband Internet access service or the lawful Internet content, applications, services, or devices of their choice, or (ii) edge providers’ ability to make lawful content, applications, services, or devices available to end users. Reasonable network management shall not be considered a violation of this rule.”

PRMan (profile) says:

Re: Just going to put this out there...

That’s certainly a distinct possibility.

But I know that Lariat’s (a small ISP in Laramie, WI) argument is as follows:

* As a wireless ISP, he has to pay money for spectrum and hardware to run that spectrum.

* The more people use bandwidth (such as Netflix, which maximizes bandwidth as much as possible), the more he has to pay.

* If he raises prices, he will lose subscribers so there’s no money to be made there.

* He wants to charge Netflix for eating up all his bandwidth.

The problem is that he’s promising people 20Mbps when he really can’t deliver anything close to it. Because of that, Netflix eats up the whole 20, because it’s available. Now, he can’t throttle Netflix or charge them money.

So, I understand the predicament he has gotten himself into, but the real reason is he oversold what he can do.

Almost Anonymous (profile) says:

Re: Re: Just going to put this out there...

Lariat’s argument might hold a little water, except that Netflix is not “pushing” content to its subscribers, it is only supplying requested content. Therefore, it is untrue to say that Netflix is eating up all the bandwidth; it is Lariat’s customers who are eating up all the bandwidth, which is ok, since that is what they pay to do.

Also, the FCC’s new rules don’t even apply to wireless carriers, so hopefully Lariat isn’t one of the sheep bleeting about how the new rules will hurt them.

nasch (profile) says:

Re: Re: Just going to put this out there...

* If he raises prices, he will lose subscribers so there’s no money to be made there.

That’s exactly what’s supposed to happen, it’s just unusual in the US ISP business that there’s enough competition that it works properly. If he’s operating in a competitive market, it’s his job to figure out how to deliver his services profitably. If he can’t do that, well most businesses fail after all, he would have plenty of company.

That One Guy (profile) says:

Re: Re: Just going to put this out there...

Yeah, if they can’t deliver what they’re promising, that’s the ISP’s problem/fault, not Netflix’s. Their job is to deliver what the customer wants, whether that be Netflix or otherwise, and if they can’t do that, then either drop what they’re promising, or raise prices until they can actually do so.

Anonymous Coward says:

My Problem

As I stated in a past post the problem was not that it put a stick in the eye of the ISP (that part I like).

I just do not like the wording that allows the FCC to pretty much decide on its own who is a fuck-up or not. Remember the FCC brought us this fucking problem to begin with!

They pretty much wrote the language so that “If we feel less cuddly with this ISP” we can fuck’em!. The other problem is that if they “Feel more cuddly with this ISP” we can fuck the rest instead.

That is a problem for me with their past track record. Now of course a lot of good could be done with this… but lets just say… we will see how the shit shakes out of the tree and who the shit falls on.

nasch (profile) says:

Re: My Problem

I just do not like the wording that allows the FCC to pretty much decide on its own who is a fuck-up or not.

Very true, and hopefully this will be a (brief?) intermediate stage on the way to regulations that produce healthy competition. Then the FCC won’t need to be so active in the market, because there will be actual market forces that can sort a lot of this out.

James Burkhardt (profile) says:

Re: My Problem

I thought the current problems were caused by a lack of competition in the marketplace. As has regularly been stated, net neutrality rules are really only needed because there isn’t any competition to keep ISPs honest. The only way that i see that the FCC could have avoided this condition is by imposing Title 2 initially, but then we’d be in the same theoretical boat we are in now, so I fail to see how the FCC could have fixed this problem in a way that does not have the pitfalls you envision.

Additionally, any scheme designed to ensure net neutrality without requiring the person complaining to be rich enough to sue will come down to a governmental body making a decision. Your complaints that the FCC might not go after legitimate violators would be true even if it wasn’t the FCC in charge.

Also, could you point to a case where the FCC went after a company for violations it didn’t commit to the detriment of consumers and the benefit of its competitors? I can’t find them, but I don’t have the time for an intensive google search to find something I am unfamiliar with.

Teamchaos (profile) says:

Slow news day?

Must be a slow news day since we are rehashing net neutrality again. Two things. First – Read the rule, and not just the sunny parts about net neutrality, to understand the potential damage of using Title II to regulate the Internet.

Second – There are seven court cases pending, there is a fair chance the whole thing will get thrown out and we’ll be back to where we started. Read the motion to stay the ruling to understand the other side of the argument (link below). Note that the requested stay would leave in place the three rules prohibiting blocking, throttling, and paid prioritization. They are fighting the negative effects of Title II, not net neutrality.….pdf

James Burkhardt (profile) says:

Re: Slow news day?

Perhaps, instead of producing a vague general comment about how if we actually read the ‘rule’ we would understand, you could point us to the region of the rules that is problematic. That is what allows for debate, as seen in this article where the author highlights a lack of understanding of what is actually in the current rules. If you have a different problem with the current rules, tell us, rather then suggest we read a 51 page brief. Highlighting the key points would allow us to read those sections carefully and craft a response.

Secondly, they are regulating ISPs, not ‘the internet’. I realize the distinction between the US corporation that provides you access to the internet and the large, worldwide network of servers owned by many different companies and governments, mostly not owned by your ISP, is hard to grasp, but please, stretch yourself.

And The legal challenges and the stay have been covered here. Notably, When the FCC tried to just impose some vague guidelines covering blocking, throttling and paid prioritization without title II that ISPs helped write, Verizon sued. Verizon couldn’t handle the most minimalist of rules regarding Net Neutrality. The FCC was then told by the courts that it only had the power to impose those types of rules if it imposed title II. Title II is necessary for the net neutrality provisions, and if Title II goes away, the rules that the stay would leave in place would be gone too, because Verizon already got a court to say they couldn’t be enforced without Title II. Notably, according to this article at least one opponent of the Title II change thinks the 3 ‘bright line’ rules are a problem that he’ll need a lawyer for, even though he didn’t need one back when those the bright line rules were implemented under different authority.

Moreover, It does block one net neutrality rule, the one that blocks a big violation that is actually occurring and has repeatedly occurred. It would not leave in place the rules on unreasonable interference or unreasonable disadvantage. This rule is critical for Net Neutrality and has already caused AT&T to stop discriminating against unlimited customers when the network isn’t congested. You can hide a lot of ‘blocking’ and ‘throttling’ by disguising it as network management. This fourth rule is designed to counter that effort.

Teamchaos (profile) says:

Re: Re: Slow news day?

In regards to your first point. I don’t apologize for recommending that people read the rules.

In regards to your second point. Many would and have argued that the Title II must apply to the entire US Internet infrastructure because of the very nature of Title II (it was originally written to regulate the phone system, although I’ll assume you knew that so as not to insult your intelligence). That will be debated in the courts so I have no interest in debating it here. There is no question that most TD posters will interpret the rules in the most favorable light toward their particular bias. No sense in arguing about it.

John Fenderson (profile) says:

Re: Re: Re: Slow news day?

“I don’t apologize for recommending that people read the rules.”

But you’re assuming that people haven’t read them, based on nothing more than they have a different opinion than you. That’s why some further explanation is necessary — you are clearly interpreting the rules in a way that is different than others. We would like to hear what your interpretation actually is.

“Many would and have argued that the Title II must apply to the entire US Internet infrastructure because of the very nature of Title II”

And those people are incorrect according to the FCC itself. Future court cases may change that, but for now that’s how it is.

Anonymous Coward says:

Already deprecated

It is pretty obvious what the new tack is for the carriers. OS vendors are busily installing toredo VPN on every consumer device they can auto update, bypassing your firewall and layer 3 stub networks in their entirety.

IPV6 portability is going to be an excuse to MIM the whole Internet. Everything will be a commercial value added service under the control of the OS vendors. Public Internet capacity will just get neglected into oblivion.

So there will be no BROADBAND “fast lanes”, but accelerated Internet will be backcharged to you through Microsoft or Apple. And since the network capacity is billed to them as a BUSINESS network and not to you as broadband, FCC Network Neutrality rules don’t apply.

Of course that means that ALL national consumer Internet traffic will be MIM’d through about 3 companies, which the NSA will like because those companies are already completely ambivalent to little things like constitutional law.

VPN isn’t ISP. They can contract throttling into their terms of service. And history tells us the OS vendors will EEE anything they don’t like, and FCC regs, again, DON’T apply.

So the CC/TWC merger failed. But my guess is that CC/TWC have probably already agreed to alliances respectively with two different OS vendors. Essentially CC/TWC have probably sold you like a bad debt is sold to a collection agency.

Or can you think of another reason that TWC would prune AOL from its inventory? I suspect they are severing network related contracts as part of a non-compete agreement, so they can divide up the world between them. Though technically, they’ve not merged.

So much for that victory with the FCC.

John Fenderson (profile) says:

Re: Already deprecated

“OS vendors are busily installing toredo VPN on every consumer device they can auto update, bypassing your firewall and layer 3 stub networks in their entirety.”

The toredo endpoints are being installed as a temporary measure to allow IP4 devices to work over IP6 networks. It is easy to remove them if you don’t like them. Also, to say they “bypass your firewall” is extremely misleading. While it’s true that firewall rules that filter IP4 traffic that isn’t the VPN will be bypassed (since it’s a VPN), it’s also true that you can firewall off the VPN itself.

“Of course that means that ALL national consumer Internet traffic will be MIM’d through about 3 companies”

Certainly not true. None of my traffic will route through the stopgap toredo VPN.

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