Why Must The FCC Insult Everyone's Intelligence By Misrepresenting Broadband Investment?

from the big-question dept

Last month, I wrote a post detailing Ajit Pai’s big lie, concerning his totally false claim that the order the FCC voted on today simply brings the internet back to where it was in 2015. As we explained that’s not even remotely close to accurate. That same post also mentioned a second, but still important, lie that Pai and Pai’s supporters have been telling repeatedly: that the 2015 rules harmed broadband investment.

There are two very important things to discuss regarding this claim. First, it is simply not true. Second, whether or not it is true, broadband investment is an incredibly meaningless proxy for whether or not the rules are good.

Let’s start with the first point. There is no credible evidence that Title II harmed investment. While the big broadband companies have made claims about this, and telco-funded thinktanks have pushed out studies claiming this, on financial reports (where the consequences can mean jail time if they’re lying), they all admit that classifying broadband under Title II has not harmed investment.

Here’s Neil Smit, Comcast Cable’s President and CEO telling Wall Street that nothing about Title II changes anything (on page 16):

On Title II, it really hasn’t affected the way we have been doing our business or will do our business. We believe on Open Internet and while we don’t necessarily agree with the Title II implementation, we conduct our business the same we always have…

He immediately follows that up by stating:

We have invested significantly in our capacity and will continue to do so and that includes both the — we launched a 2 gigabit speed, 2 gigabit symmetrical speed recently. We are rolling that out across 18 million homes by the end of the year…

That doesn’t sound like the disaster for broadband investment that Pai and his supporters are claiming.

How about AT&T? AT&T’s Randall Stephenson was asked by a UBS analyst “are these net neutrality or Title II rules an impediment…” and Stephenson responded:

No, we don?t think so.

How about Charter (formerly Time Warner Cable)? Well, just last year at a UBS conference, he said:

I mean, Title II, it didn’t really hurt us; it hasn’t hurt us.

And, that wasn’t the first time he said that. A year earlier he made it clear the company changed nothing about its investment plans:

“the commission?s decision to reclassify broadband Internet access under Title II has not altered Charter?s approach of investing significantly in its network to deliver cutting edge services.”

Verizon is basically the only big broadband provider that didn’t directly contradict its claims with a statement specifically about Title II… but, it did increase its investment spending quite a bit. Verizon’s only comments have basically been the company saying that it continues to invest exactly as planned prior to the 2015 rules change. None of this should be surprising. As we’ve explained there is nothing in the 2015 order that increases compliance costs — so long as you’re not screwing over customers. The only way that the 2015 Open Internet Order should be a burden is if the broadband providers were doing something that broke the rules.

And, of course, just yesterday we noted that contrary to Pai’s claims of five smaller ISPs decreasing investment, the actual data showed the opposite — that they had all expanded. And that says nothing of the over 40 small ISPs which spoke out in favor of keeping the 2015 rules, in part because it allows them to invest more, knowing that the giant incumbents mentioned above can’t use certain unfair, anti-competitive practices to keep them out of a market.

Without a legal foundation to address the anticompetitive practices of the largest players in the market, the FCC?s current course threatens the viability of competitive entry and competitive viability. As direct competitors to the biggest cable and telephone companies, we have reservations about any plan at the FCC that seeks to enhance their market power without any meaningful restraints on their ability to monopolize large swaths of the Internet.

It certainly looks like Pai’s rules may actually cause some of those ISPs to decrease their investment as they’ll have trouble competing with the large incumbents.

That’s why it’s so ridiculous not just to see Pai make these false claims about investment, but to also see Pai’s handpicked “chief economist” ridiculously claim that this FCC “is no longer an ‘economics free zone.’ This line was parroted a lot leading up to the 2015 rules (which, we must remind you, have been approved by the courts). People claimed that there was no economic basis for the changes in 2015, which ignores the fact that the 2015 rules pretty clearly lay out the economic rationale for reclassifying broadband under Title II. You can see it starting on Page 150 of the order.

And yet, in Pai’s new order he insists that it’s conclusively proven that the 2015 order hurt investment. He does name multiple studies — though every single one comes from a group or organization connected to the big broadband players. It’s hard to see how that’s a neutral, careful analysis. And, of course, some commenters on the proposal pointed to the studies that debunked all those studies — and rather than actually address those points, Pai’s rules hand-wave all of them away as just not credible.

But, of course, if you start to dig into the studies that Pai does rely on… they’re terrible. Basically all of them make questionable assumptions — assumptions that if you start to question them, the entire “economics” claims fall apart. Take, for example, the “study” by the Free State Foundation, which the FCC points to as saying its results are “consistent with other evidence in the record that indicates that Title II adversely affected broadband investment.” But read the analysis. It is hardly a rigorous economic look at broadband investment. It’s an extrapolation, with a bunch of assumptions.

Here is how I calculated that figure.

USTelecom publishes data on broadband capital expenditures (capex) for each year dating back to 1996. Using this historical data, I collected figures on the previous twelve years before the Open Internet Order was adopted in February 2015. I picked 2003 as the first year because the market had just collapsed from the dot-com bubble and total broadband capex was at its lowest point since 1996. I established a trend line from 2003 to 2016, which created a linear pattern over the first 12 years before the Open Internet Order and estimated what we could have expected broadband capex to be in 2015 and 2016 without Title II public utility regulation.

I also collected broadband capex data on sixteen of the largest ISPs for years 2014, 2015, and 2016. My sample found a 2.46% decline from 2014 to 2015 and a 4.69% decline from 2015 to 2016, totaling an overall decline of 7.04% from 2014 to 2016.

Count the assumptions. The date range is an assumption (at least that one’s explained). The “trend line” is a total extrapolation, without any research into whether or not there’s a reason for such a trend line or even if the timeline is a large enough sample size for a reasonable trend line. As for the capex data — why on “sixteen of the largest ISPs.” Sixteen is a fairly strange number. What happens if you just look at the top 3? Or the top 10? Or all of them? This is not a rigorous analysis.

And, of course, if it’s really true that all of these think tanks funded by the telcos magically have more insight into what’s happening with broadband investment, then… does that mean all those quotes we mentioned above are examples of these CEOs lying on investor calls? Because, if so, that seems like a pretty big deal. But, I’m generally going to assume that the execs are telling the truth to Wall St. and relying on others to put forth the misleading arguments — which Pai then parrots, and his “Chief Economists” gets to play make believe and say that the FCC cares about economics again.

But, really, none of this matters. Because my second point is more important: Broadband investment is not a good proxy for whether or not Title II is a good or bad idea. It’s a giant broken windows fallacy. I’ll use a few extreme examples to prove the point: if “broadband investment” is the sole proxy that we use as economic proof of a good or bad policy, well, then the best policy for the FCC right now is to physically destroy the internet. With all internet infrastructure broken, it will surely boost investment and economic activity around rebuilding the internet, right? Of course, no one would consider that a good policy, but if our metric is purely investment, then that’s the kind of crazy result you get. Or, let’s say that new technologies are developed that allow people to implement better broadband more cheaply. Indeed, that’s what some broadband access providers have been claiming. In that case, investment is likely to drop, even though the speeds/access/value that everyone gets increases.

Especially when you’re discussing a technology field, any halfway competent economist knows that you have different forces at play than in static markets. With technology, thanks to innovation, stuff gets cheaper as it gets better. Yet, under the new FCC’s sole focus on broadband investment as an economic measure, a more efficient, cheaper roll-out to more people would be “bad” because it would decrease investment. That’s not to say either of things have actually happened, but just to demonstrate the pure uselessness of aggregate investment data. It’s not “economics,” its junk science. It’s pretending that the numbers are meaningful because they’re numbers.

But the real “economic” test should be about the value to the end user. And broadband access and speeds is one part of that. But only one part. Indeed, a huge part of this discussion is how the real value on the internet comes from the edge providers, the apps and services that people use on the internet. That’s why the network is valuable. And the problem with killing net neutrality is it puts that in danger. It can make it more expensive, or limit competition, or make some of those services go away altogether. And that decreases the value of the internet to every user. And that’s because the internet works off of network effects for the services on them. That is, with many services, the more people use them, the more valuable they get. Killing net neutrality will interfere with those network effects in many cases, again decreasing value.

So, in short, even ignoring that the FCC’s numbers are bogus, so is its entire framing of the net neutrality debate. Perhaps it’s not surprising that the framing used here — broadband investment — only measures what the giant telco/cable companies do related to the internet. Because, after all, Chairman Pai has made it pretty damn clear that that’s all he cares about. But it’s economics malpractice to ignore where the actual value is on the network, and what these rules will do to all those service providers and the end users.

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Comments on “Why Must The FCC Insult Everyone's Intelligence By Misrepresenting Broadband Investment?”

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Anonymous Coward says:

Re: Re: Re:

irrational or insanity is doing the same things over and over but expecting different results.

Regulations cemented and blessed the monopolies and gave your voice away to an un-elected human being purchased by the very people you want to stop. Your solution is: “Telling people that do not respect you, care about you, and openly lie to you, how you want things to be run.”

Tell me again who is being rational? The government has already broken constitutional law, in lock step, for each word I have written in this post.

If you are what is to be considered rational, then I desire none of it!

Anonymous Coward says:

Re: Re: Re: Re:

Oh – hello again Mr Anarchy Guy.

WoooHooo – I bet you are riding high on the wave of idiocy hitting the FCC lately. Their grandiose efforts to undermine the foundations of society should be really scary but you are the champion of misdirection and bloviation – so … what’s it like to think you know everything and everyone else is a dumb shit? Does it get lonely at the top? – LOL

Anonymous Coward says:

Re: Re: Re:2 Re:

Wait, which random liar are you again?

I don not support anarchy, and no, I hate Ajit Pai along with the FCC.

“…you are the champion of misdirection and bloviation…”

says the bloviating person falsely presenting my position.

“Does it get lonely at the top? – LOL”

Actually it does. I know and understand some things you are not even capable of understanding. Read the following article, you might learn something.


The more I improve myself, the less I can commiserate with folks like you because you simply do not understand.

There is a reason why you are ruled over by those like me. You are too busy whining and crying like a baby to understand that I tricked you into giving me everything you have. And I mean everything, including your ability to understand.

If I want 50% of everything you own, all I have to do is send someone to take 100% of your possessions and you will grovel at my feet and worship me for stopping them from taking everything. You won’t know that I am the one that sent them in the first place. I will even turn your own child against you because I run control their education. I can teach them that up is down and that black is white. Sure it will be a low process, but I WILL WIN! Because you never fight against me!

I am your boss, I am George Soros & Donal Trump, I am the cop, the judge, and your lawyer. I am your Doctor, and your representative, you have already given me everything I have taken from you, all we are doing right now is negotiating how much I can take before you rebel!

Anonymous Coward says:

Re: Re: Re:4 Re:

I don’t see you standing at the top of anything. Is calling people that tower over you “dumb” your way of coping? If that helps, please continue… as long as I get what I want you can say or do anything you like.

How smart can the person tricked into giving away their liberty for the illusion of safety be?

Anonymous Coward says:

“And, of course, if it’s really true that all of these think tanks funded by the telcos magically have more insight into what’s happening with broadband investment, then… does that mean all those quotes we mentioned above are examples of these CEOs lying on investor calls?”

This woulnd’t be you calling the “experts” wrong would it Mike? I notice you like experts when you agree with them but not when you don’t.

Anonymous Coward says:

Re: Re: Re:

The point is that Mike is okay with referencing experts he agrees with but disregarding those he does not.

If you read enough responses you will find that Mike is like most other democrats. 100% of experts agree with his position except the 100% that do not because those are bought and paid for shills not worth listening to or are agenda driven.

The first rule of the game is to establish that only YOUR experts are the experts and everyone elses are biased because politics.

I have found that there is no such thing as an expert. You either have a knowledgeable person or you don’t. Their honesty and integrity are another matter. If you make their jobs reliant on advancing a certain agenda then it is very easy to get the right kind of “experts” to agree with you and ridicule everyone else that does not have them.

Anonymous Coward says:

Re: Re: Re: Re:

Why are there so many comments calling Mike Masnick a Democrat? Although it’s well known that San Franciscans in general tend to be politically far to the left of the average American, it seems most of the articles here tend to be pro-consumer, anti-monopoly, anti-special-interest and generally “forward thinking” perspectives that don’t neatly fit within the established Democratic/Republican mold.

Anonymous Coward says:

Re: Re: Re:2 Re:

“it seems most of the articles here tend to be pro-consumer, anti-monopoly, anti-special-interest and generally “forward thinking” perspectives that don’t neatly fit within the established Democratic/Republican mold.”

I will agree with you there. But his actions and the positions he supports result in, Pro Democrat, anti-consumer, and pro-monopoly and backward thinking regulatory capture perspectives.

The fruit of their labor is how I judge folks, not by what they say.

That One Guy (profile) says:

Re: Re:

Wow are you desperate to try and ‘win’ that one if you’re the person I think you are.

Just to be clear, you wouldn’t happen to be the one who just yesterday was arguing that it’s ‘obvious’ that agencies like the FCC weren’t constitutional, upon which Mike pointed out that aside from your assertion it appeared that basically no-one in the government since it’s inception agreed with your interpretation?

Anonymous Coward says:

Re: Re: Re:

” Wow are you desperate to try and ‘win’ that one if you’re the person I think you are.

Just to be clear, you wouldn’t happen to be the one who just yesterday was arguing that it’s ‘obvious’ that agencies like the FCC weren’t constitutional, “

No I am someone else, but full disclosure I believe pretty much the same way.

My arguments would be a little different but not by much. Plus I don’t really care to argue that, I mostly just point out hypocrisy. Trying to enlighten you numb-nuts is a job for people willing to endure your unfathomable ignorance. And I have to admit, I am not the likely candidate for that exercise in futility. You just can’t fix stupid, it has to fix itself.

I am just going to sit here call out hypocrisy when I see it and maybe a few other things.

Anonymous Coward says:

Re: Re: Re:6 Re:

I have an education… and likely superior to your own.

Manners are people looking to deceive others. Evil people are the ones looking to speak nice to you to get to agree with them right before you turn your back and they shank you.

Anyways, I don’t believe this report but…


So how about you take your manners and put them where the sun does not shine? My linguistic legerdemain would slay your meandering minuscule marginal mentality in short order!

Anonymous Coward says:

Re: Re: Re:

“basically no-one in the government since it’s inception agreed with your interpretation?”

Well that is a lie.


“Only Congress can put net neutrality on a sound legal footing.”


Look at and read the writings of the founders, they made it clear that any rule making without representation is BAD, WRONG, CORRUPT, TYRANNICAL… I mean how many other words can we use here?

The problem here is that the founding fathers failed to account for people stupid as you.

You need a bill of no rights MORE than you need a bill of rights.

Anonymous Coward says:

Re: Re: Re: Paint-drinkers, pick one please (also, re: rulemaking w/o representation)

First, I’ll address the issue of rulemaking without representation:

Look at and read the writings of the founders, they made it clear that any rule making without representation is BAD, WRONG, CORRUPT, TYRANNICAL… I mean how many other words can we use here?

You’re dead on the money that rulemaking in isolation from public opinion is bad/wrong/corrupt/tyrannical, which is precisely why the Administrative Procedure Act mandates a notice and comment process for all federal administrative rulemaking! (If you think that agencies should be split branchwise, with a rulemaking arm that reports to Congress and an enforcement arm that reports up to the President, then feel free to petition your Congresscritter for a rewrite of 5 USC 500 et seq as part of the House Judiciary Committee’s Administrative Law, Process, and Procedure Project.)

Now, to the idea that Congress should fix this with a bill:

"Only Congress can put net neutrality on a sound legal footing."

The principles of net neutrality are merely a subset of the common carrier concept codified for telecommunications in the FCC Title II regulation scheme, as authorized by 47 USC 200 et seq.. Why is a separate statute needed that would basically be duplicative of existing Communications Act verbiage in 47 USC 202? Or are you saying that the 47 USC 202 wording somehow does not apply to a wireline IP telecommunications provider, and thus needs to be amended/extended (which’d contradict the "The provisions of this chapter shall apply to all interstate and foreign communication by wire or radio" verbiage in 47 USC 152(a))? What statutory language would you propose that would not be rendered redundant by 47 USC 201 and 202’s provisions against unjust and unreasonable conduct? Or are you saying that somehow a new class of carrier should be created from thin air by statute, something that’s neither an information service nor a common carrier (which’d confuse an awful lot of people and courts, as the common carrier concept has evolved over oh, about two centuries of jurisprudence across the multiple domains it applies in)?

As to those Market Fundamentalists, you folks have three choices if you want competitive wireline telecoms markets in the "last mile":

  1. Have ISPs competing to provide service over publically owned last mile infrastructure. (We already see this with municipal broadband.)
  2. Force the ISPs to let competitors use their infrastructure, aka Local Loop Unbundling. Note that this requires the FCC to exercise Title II authority!
  3. Let everyone build last mile infrastructure willy-nilly all over your neighborhood until the pole owners and city say "ENOUGH!" from having their poles bent in twain and their streets torn to bits over and over.

Pick one, please, because there aren’t any ways I know of outside those three to have wireline telecom competition.

Anonymous Coward says:

Re: Re: Re:2 Paint-drinkers, pick one please (also, re: rulemaking w/o representation)

“which is precisely why the Administrative Procedure Act mandates a notice and comment process for all federal administrative rulemaking!”

Which has no real teeth and STILL unconstitutional. Why do you people keep acting surprised when the government keeps breaking it? You are literally cheering them on for doing when it fits your politics. And if you really believed the tripe you were spouting you would just accept the current FCC ruling and wait for the next election for president to appoint someone else to change it.

Congress either has that power or they don’t, and according to the constitution…

“All legislative Powers herein granted shall be vested in a Congress of the United States, which shall consist of a Senate and House of Representatives.”

Do you understand what that means? An agency regardless of who creates it can NEVER have any legislative power. ALL are ONLY granted to the Senate & House. A department or agency is not either the Senate or the House.

Concocting garbage like the “Administrative Procedure Act” is not a valid substitution either. To change this, the Constitution itself must be changed and that requires and amendment and 3/4ths ratification of the states.

You are willfully supporting the perversion of the Constitution in your ignorance. You no longer have the right to bitch when others corrupt it either!

“As to those Market Fundamentalists, you folks have three choices if you want competitive wireline telecoms markets in the “last mile”:”

“Have ISPs competing to provide service over publically owned last mile infrastructure.”

Totally agree with this! Businesses should never have been allowed to own public infrastructure!

Anonymous Coward says:

Re: Re: Re:3 Paint-drinkers, pick one please (also, re: rulemaking w/o representation)

You keep ignoring the last part of Section 8:

To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.

That literally gives them the power to make rule making agencies. For instance, if it is "necessary and proper" for a rule making agency to be formed to "carry into Exectution" the powers of Congress, then they can. And the inclusion of the last bit "or in any Department or Officer thereof." is essentially the definition of the FCC and other agencies.

Nowhere in the Constitution does it say that Congress can’t delegate some minor rule making ability to federal agencies. Regulations carry the weight of law but not precedence. Agencies can’t supersede Congressional law.

Anonymous Coward says:

Re: Re: Re:4 Paint-drinkers, pick one please (also, re: rulemaking w/o representation)

Have you never dissected a sentence in language class before?
Lets break this down.

What is the subject?

What powers is the part talking about?
Things Congress has power to do.

“To make all laws which shall be necessary and proper for carrying in Execution the foregoing powers,”

Read that about 5 million times, and pray to any gods you believe in for understanding because you are going to need it and in a bad way!

This means that all Department or Officers that Congress creates or designates are for EXECUTION of things ONLY.

You have to be daft to twist this to mean that congress can create law making agecies… that goes BEYOND mere execution!

Why is this so clear to me but beyond you?

James Madison, the father of the Constitution says the same thing! Now, please excuse me if I refuse to take your word or the word of 330 million other people over the person that personally helped write the fucking thing!

Anonymous Coward says:

Re: Re: Re:2 Paint-drinkers, pick one please (also, re: rulemaking w/o representation)

“The principles of net neutrality are merely a subset of the common carrier concept”.

Like the moon is just a really big street lamp.

“you folks have three choices if you want competitive wireline telecoms markets in the “last mile”:”

Here’s a 4th: Separate carriers and content providers by law, like Glass Stiegall did with banks and insurers.

All of your solutions 1 – 3, require additional buildout of state managed infrastructure. Solution 4, seperates the abusers from the abused, and lets two markets float in parallel. The reason that 1st amendment (by way of NN) is under assault, is because a few of the carriers are playing like this is a zero sum game. Take away that impetus, and most of the rest of the problem goes away.

What is going on with Ajit Pai is typical. Regulators are modeling law after technology, instead of modeling technology after law. This is how a lot of regulatory law is made. The regulator goes to the industry and says “how do you do X?” and then writes the regulation to support the existing practice.

The problem is that this seriously delays adoption of new technologies, because the state endorses deprecated systems. And this true across the board. You can see it in building codes a lot.

Thinking differently is a crime when the state becomes indistinguishable from industry. And by making unique Internet business models a crime against the carriers, Ajit Pai is potentially causing billions of dollars worth of damage to the GDP over the next 20 years. He is endorsing a deprecated model, that is going to impact augmented reality, distributed processing markets, crypto currencies, next gen layer 3 networking, etc. etc. etc.

If this doesn’t get overturned PDQ the damage is going to be catastrophic. It won’t be dramatic, but the economic damage could be as bad as that caused by the 9/11 hijackers over the next 20 years.

And it is going to screw the carriers backing Ajit Pai too. The fact is there are other carriers with a ton of capacity that want to do nothing more than build pipe in Comcasts and Verizons regions. So while CCVZATT is busy molesting the end users, their core networks are going to become less competitive. And eventually those competitors will start looking at the consumer markets, and CCVZATT will have no real advantage left.

What your looking at, should be the death of a bad business model. Textiles failed in England because mills moved closer to materials and customers, and nobody needed the middle man anymore. Comcast is the same thing. They do bad business. But instead of letting that model fail, Ajit Pai has granted them Prima Nocta over the transitory traffic of people they may have no contractual relationship with.

Now where is that blue face paint of mine?

Anonymous Coward says:

Re: Re: Re:2 Paint-drinkers, pick one please (also, re: rulemaking w/o representation)

The third option does sound like the optimal near-100% libertarian solution. Although, "over and over"? They call them dig-once bills for a reason.

Removing bureaucratic hurdles in the way of creating competing wireline networks is getting to the origin of the problem of local monopolies.

Anonymous Coward says:

Re: Re: Re:3 Paint-drinkers, pick one please (also, re: rulemaking w/o representation)

The “over and over” is referring to maintenance issues, not necessarily initial installation. A true “dig once” bill would install a utility duct beneath the road that is open to all providers — that way, there’s no need to go digging and busting up pavement to add a service to the new neighbors across the road or to fix a break in a cable. (Not saying that the existing “dig once” and One Touch Make Ready/pole attach work is bad, just that they’re half measures if you will.)

Anonymous Coward says:

Re: Re: Re: Re:

The fact that in the few short years after the Constitution was ratified, while founders were sitting as president, multiple federal agencies with rulemaking authority were created. Including the State Department, Treasury Department, Attorney General, Department of War, Department of the Navy, and the Postmaster General.

And you know what? They aren’t just enforcement agencies. They have the ability to make rules and regulations, because they couldn’t do their job otherwise. The State Department has the power to negotiate treaties with foreign governments, the Treasury decides when and how much money to print, Navy Regulations are determined by the Secretary of the Navy (not Congress), and so on and so forth. All these rule making powers were in baked into these departments from the beginning.

If every department had to run to Congress every time a minor rule change was needed the government would get even less done than they do now. So either the Founders were hypocrites or you are wrong, those are the only two options.

Anonymous Coward says:

Re: Re: Re:2 Re:

Time to prove your claim.

Name a law any agency created/passed/enacted that did not go past Senate and House when a founder was still alive and/or serving in government.

“They have the ability to make rules and regulations, because they couldn’t do their job otherwise.”

No, they don’t and there have been many cases over turning such powers when they tried to give them away.
is one such example.

“If every department had to run to Congress every time a minor rule change was needed the government would get even less done than they do now.”

That really is the point and also something that is mentioned in the Declaration of Independence itself.

“Prudence, indeed, will dictate that governments long established should not be changed for light and transient causes; and accordingly all experience hath shown that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed.”

Why do you think everything is going down hill so fast these days? Because we are adding regulations at a blinding speed and all without representation.


Do you want a democracy? Doing this is not either a Republic OR a Democracy and we are at least technically a Constitutional Republic.

There is something fundamentally wrong with your logic and it is a blight on our country. Sadly, the majority think like you do and are more than willing to sacrifice Order and Rule of Law to sate your politics. You are a cancer upon any nation you are a citizen too!

“All legislative Powers herein granted shall be vested in a Congress of the United States, which shall consist of a Senate and House of Representatives.”

The word ALL has a meaning. When you give that power to an agency, then ALL legislative power are no longer vested in Congress. They are vested in Agency and Congress.

So once again, Congress was never given the power or authority to delegate lawmaking “Duties” to any agency or department.

Or as a member of government, Douglas Ginsburg, a person that Mike says does not or never existed said…

“That the courts have flouted this principle does not mean that Congress can or should ignore this element of constitutional construction.”

You know that someone knows they are lying when they say

“It’s “rich” (and apparently funny?) to point out that there are literally zero experts who think your “obvious” interpretation of the Constitution and administrative law is correct? How’s that?”

~Mike Masnick

I found more that one expert and a few founding fathers, like James Madison, that hold my exact literal interpretation of Constitutional and Administrative law.

I am sick of you guys constantly telling lies, so naturally I am going to call you out on them. You deserve every unconstitutional thing that happens to you because you support perverting it to serve your politics and you waste no breath telling lies that are easy to prove false!

You should have been able to check this for yourself… you are a journalist for freaking sakes! What a fail Mike!

Anonymous Coward says:

Re: Re: Re:3 Re:

Well, I must say you have set me on quite the adventure into history. I have been researching your points most of the day and I have to say it is a fascinating read into the anals of history.

Sadly for both of us neither of us is going to be able to definitively prove our points. The reason for this is that while all laws were carefully recorded, any regulation passed by federal agencies was not consistently recorded and preserved until the 1950s when the Federal Register was created. So, in one sense, you are correct, no LAW was passed without Congress approval during the time of the founders. However, that is also still true today in that no LAW has been passed that has not passed through Congress. As I stated before, regulations are different from laws, they carry the weight of law but are not classified as such. Therefore regulations passed today are not considered law, even though they carry the weight of it.

I have, however, been able to find various historical references that very strongly imply that agencies created by the founders and others after them did indeed make regulatory rulings that carried the weight of law. Take for instance, the Department of the Interior created in 1849. Two of its very first acts were to establish the border with Mexico and make improvements to western wagon routes. It was also responsible for managing the jail and water system in D.C. at the time. You can’t manage something without being able to create rules for it.

Furthermore in March of 1863, the State Department issued a series of regulations dictating various "rules of the road" for seagoing vessels, particularly armed vessels, in the waters surrounding the U.S.

I was also able to find a collection of records for tax regulations issued by the Treasury department between 1781 and 2010 but unfortunately it is restricted access at heinonline.org. I’m sure there is a way to find the information in publicly available format but I have so far been unsuccessful without physically visiting a library of some kind.

Another thing I was able to find was a court case, Wayman v. Southard (1825), in which it was argued that Congress had unconstitutionally granted legislative power to the courts to determine judicial procedure. The argument was very similar to yours, that only Congress could dictate judicial procedure since that was a "rulemaking" or "legsilative" action. However, the Chief Justice, while admitting such a thing was a legislative action, disagreed overall stating: "a general provision may be made, and power given to those who are to act under such general provisions, to fill up the details." And thus it was determined that Congress could grant that power to the judiciary. I assume this likely extended to the making of regulations to "fill up the details" in other agencies.

Finally, in the initial draft of the Bill of Rights, there was a 16th article that stated: "The powers delegated by the Constitution to the government of the United States, shall be exercised as therein appropriated, so that the Legislative shall never exercise the powers vested in the Executive or Judicial; nor the Executive the powers vested in the Legislative or Judicial; nor the Judicial the powers vested in the Legislative or Executive." This obviously was removed and never made it into the final version of the Bill of Rights. Obviously someone felt strongly enough about this to add it but it was not, therefore the argument can be made that the Constitution does allow for some overlap. If it didn’t, than why did someone feel it necessary to add it if it was already clearly outlined in the Constitution?

As far as the court case you mention, the sick chicken case, there are some differences between that and federal agencies.

  1. This case involved private groups and entities setting regulations, while agencies like the FCC are still governmental and report directly to Congress. So technically the FCC is still Congress.
  2. The regulations in that case had no force of law until the president gave them such. It was this that was determined to be unconstitutional, the president (executive branch) was making law on the recommendation of a private entity. In the case of the FCC, they are an independent agency but still responsible to Congress, not the president. Congress can, at anytime they wish, revoke or invalidate any regulation put forth by, or completely dissolve the FCC entirely.
MyNameHere (profile) says:

Re: Re: Re:4 Re:

The regulatory branches of government is where the rubber meets the road, as it were. These agencies and departments have to take the laws as passed and turn them into functional operations.

What that usually means is explaining the methods by which someone complies with the law, setting the standard for things like record keeping, documentation, and the like.

Those agencies aren’t suppose to make new law. They are suppose to apply existing law, and provide the guidance and procedures needed to make it happen.

This is why the FCC under Wheeler has to put the internet companies under Title II. Unless they were in this title, the Net Neutrality rules could not be applied, because under Title I the FCC didn’t have the power to regulate in this manner.

It’s a bit of a “by the back door” way of doing things. The FCC could not regulate the internet as it was, but they did have the power (by court decision) to reclassify it. Wheeler used that to pull the internet into an area where congress has granted the power to regulate.

The flip side of this, of course, is that the FCC has the power to reclassify, and if you feel Wheeler was within his power to put things into Title II, then you have to agree that Pai has the power to put them back to Title I (where they belong).

What Wheeler’s FCC did was end run the process, using the powers granted narrowly to do X and the powers granted narrowly to do Y, and combine them to be able to create a whole set of regulations for an area that has never been specifically set up as regulated by congress.

Anonymous Coward says:

Re: Re: Re:5 Re:

That is actually an excellent description of agencies and departments. Very succinctly put. And I agree, they aren’t supposed to make new law, just put current law into practice.

However, I disagree with you regarding the FCC and Title classification, for several reasons.

  1. By your own admission, the FCC does have the power to classify ISPs however they wish. Therefore, re-classifying them and setting some ground rules against bad behavior isn’t making a new law, it’s simply exercising their power under the current one.
  2. ISPs were originally classified under Title II for the majority of the time the internet was developing. They were only re-classified under Title I in the early to mid 2000s. It is since then that most of the ISP shenanigans with blocking, throttling, and prioritization have occurred.
  3. I disagree that ISPs belong under Title I. Title I is for information services while Title II is for telecommunication services. I think that basic internet access as provided by ISPs, is pretty clearly a telecommunications service. The Communications Act defines information and telecommunications services as:

Information service – the offering of a capability for generating, acquiring, storing, transforming, processing, retrieving, utilizing, or making available information via telecommunications

Telecommunications service – 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

Basic internet service cannot do any of the things described in the definition of an information service. It can connect me to other sites that do have that capability but it, by itself, does not. What it can do though is exactly what is described in the definition of a telecommunications service.

Anonymous Coward says:

Re: Re: Re:5 Re:

And in the last sentence you are shedding light on the real problem. If congress was reasonable they would set up the laws to deal with this issue. If you accept that Wheeler didn’t have the authority, you are also accepting that Pai doesn’t have the authority, thus two wrongs etc. What makes Pais move more problematic is the disregard for the US courts. Wheeler didn’t change the law just to mock conservatives. The change was in response to this case: https://en.wikipedia.org/wiki/Comcast_Corp._v._FCC

The issue:
“the FCC issued an order censuring Comcast from interfering with subscribers’ use of peer-to-peer software”

The authority under Title I:
“A commission may exercise ancillary authority only if “(1) the Commission’s general jurisdictional granted under Title I [of the Communications Act] covers the regulated subject and (2) the regulations are reasonably ancillary to the Commission’s effective performance of its statutorily mandated responsibilities.”

And the fix, “Open Internet Order 2010” was also shot down since Title I did not permit that type of regulation.

So, unless you find it unacceptable that FCC interfere with blatantly consumer-damaging behaviour like Comcasts throttling, the move from Pai is bad.

Anonymous Coward says:

Re: Re:

Looking at the numbers, this is an analysis I could have done in a couple of hours for cheaps. Finding out why it is questionable relates to methodology:

– The overall numbers seem to change a lot from year to year, increasing uncertainty.

– Except for Sprint and AT&T (see original source!) there were no significant decreases in spending. AT&T was due to their 3-year project VIP running out, see http://www.eweek.com/mobile/at-t-s-project-vip-to-invest-14-billion-in-3-years-in-key-areas!).
Sprint was bought by Softbank in 2013 after having a terrible economy for years and is now a “controlled company” of Softbank. They are somewhat breaking even on operations today (You can argue that they are doing a bit better under the condition that the infrastructure keeps its value over time. That has some merit for now. There has still been a significant increase in borrowing, and borrowing costs were ballooning)! See SEC 10K for the appropriate years to assure the reliabilty here if you must.

– The rest are mostly flat or increasing spending. (https://haljsinger.wordpress.com/2017/03/01/2016-broadband-capex-survey-tracking-investment-in-the-title-ii-era/ contains the numbers used according to OS)

– Any more than 1 significant digit on numbers is a scientific nono, if you look at the y/y changes. Thus the correlation is likely not scientifically peer-reviewed.

– The result of 2 arguable outliers scewing the numbers seem to be the main cause of the results.

– Some reasonable other correlations you would need to conduct to be thorough are yearly grants from governments at different levels and the relative value (assuming a somewhat reasonable market, uninvested opportunities would provide less value!). Those may be a more significant factor!

– But the killer is time: The periods are just too short! You cannot derive much valuable information from such a short period as 2 years since the time to market is longer! But that is not what the source indicates. If you want to be an expert, then you have to conform to scientific standards which this analysis certainly doesn’t!

Anonymous Coward says:

Re: Re:

I run a large network. I also work with a small ISP. They provide a good deal to run fiber for me. I have asked them about how NN affects their business and found out it doesn’t. It wouldn’t be affordable to them to purchase the equipment required to manipulate the different types of data. The just limit their users by whatever bandwidth they purchase. What does affect their business is they can no longer spread out to other towns because of strange regulation that only seems to protect Comcast. So why are we removing NN that doesn’t seem to hurt small business and not going after the regulation that does?

JMT (profile) says:

Re: Re:

"This woulnd’t be you calling the "experts" wrong would it Mike?"

Whether or not they qualify for the simplistic term "expert" is irrelevant. One group are being paid to say what their client wants them to say, the other is under genuine threat of jail time for not being truthful. Hopefully you’re able to judge who’s more likely to be reliable.

"I notice you like experts when you agree with them but not when you don’t."

That’s real kindergarten-level analysis there.

Anonymous Coward says:

Verizon's contradiction

Verizon is basically the only big broadband provider that didn’t directly contradict its claims with a statement specifically about Title II

Its statements in legal documents do directly contradict that. Verizon specifically asked to be regulated under title II for the tax breaks… but they don’t want to take on any of the responsibilities we might expect in exchange.

Anonymous Coward says:

economics malpractice

Yes. But nobodies ever gone to jail for that in this country. Even when they were professional economists, as in the case of Harvard and Princeton professors who wrote get out of jail free cards for the banks, at six figures per paper in 2008.

I do believe that Comcast and Verizon are jammed up in terms of growth. People are cutting loose from high margin services (cord cutting) and using more data per capita. Capacity demand is linear growth, but revenues per MB will decline if they keep using their current business models.

But this has always been known. When you model doesn’t work, you change your model. You don’t break the whole United States.

What Ajit Pai is doing here is the same thing that British exchequers were doing when they were shaking town Boston traders who were shipping their own tea. It is blatant constraint over a broad market, without any means of recourse or representation, with willful contempt and disregard for public sentiment.

Which is why you’ve got guys like Patrick D. Angelo going to jail, and other people wondering what kind of ammo he wants for Christmas.

Anonymous Coward says:

FCC vs. Canada's CRTC - predictions vs. outcome

It would seem that the FCC’s Canadian counterpart, the Canadian Radio-television and Telecommunications Commission has been moving in the opposite direction, imposing regulations on ISPs that would make the US telecom giants crying bloddy murder.


Yet despite having what would be considered in Washington to be draconian regulations sure to severely harm the industry, Canadian telecoms have been busy investing in building infrastructure (including last-mile FTTH) at a rapid pace.


(note: this supposedly “members-only” article can be read on the page code)

So I’m trying to understand why economic theory seems to work perfectly well in Canada in ways that both the FCC and the telecom industry’s Washington lobbyists insist would be impossible in the USA.

And if the pro-consumer Canadian-style telecom regulation succeeds in the long run, how long before the US copies it?

Anonymous Coward says:

Re: FCC vs. Canada's CRTC - predictions vs. outcome

“So I’m trying to understand why economic theory seems to work perfectly well in Canada in ways that both the FCC and the telecom industry’s Washington lobbyists insist would be impossible in the USA. “


The type of candidates you elect to run government and how they run government are fundamentally different than those here.

Canada is not the cream puff nation everyone bills it to be either, in fact no nation is. It has it’s own pro’s and con’s just like every nation on earth, so there is no mystery why things that work there, do not work here.

MyNameHere (profile) says:

Figures don’t lie… or do they?

Comcast is a perfect example. They are investing mightily in their network. It looks like they are really investing in the internet!


Comcast is rolling out their X1 Boxes. Essentially, Comcast is trying to get away from traditional cable TV delivery (which is really still just TV channel width transmissions) and to move to an IP based system. It’s more secure, it’s more personal, and would allow them to deliver a near infinite amount of channels and on demand options to consumers.

To do it, they need to upgrade their IP network. But it isn’t to make the internet faster (it might happen in passing) but instead to make it so their boxes work so they can sell more pay per view and such.

Comcast has a fairly long roll out on this, they started 3 years ago and I think they have a few more years left yet. So you will see all sorts of “IP Network” investments, but it isn’t really about the internet.

it’s easy to make the mistake that their investment is in internet service. It’s all about their private IP network that will absorb almost all of the network improvements!

Gregory Gilbert says:

I don't believe it either

I’m ok trying Pai’s way with a more light approach but I do think Pai is playing politics when he stated those issues. I felt 2015’s orders were rather benign. Excessive regulation can create issues and it’ wise to go light and add more rules as needed, but I just don’t see any ISP looking at 2015s orders and changing their mind on any issue. At most a long contract on Zero-rating there might be some second though on, but I couldn’t see much more than that.

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