FCC Releases Net Neutrality Killing Order, Hopes You're Too Busy Cooking Turkey To Read It

Broadband

from the nothing-to-see-here dept

As we noted yesterday, the FCC is trying to use the Thanksgiving holiday to distract the press and public from its blatant handout to one of the least liked and least competitive industries in America. As we also noted yesterday, trying to bury such an epic middle finger to consumers behind the cranberry sauce is an obvious underestimation of just how unpopular this plan is, and the policy, political, and cultural backlash it’s going to generate for years.

That said, all six of you not currently driving long distances, buying turkeys and potatoes, or otherwise distracted by holiday preparation can now read a fact sheet provided by the FCC (pdf) explaining what Ajit Pai and his lobbying friends in the telecom industry have planned for you.

To Ajit Pai’s credit (and I’m using that term loosely here), the rules do pretty much everything he promised they would, including rolling back the Title II classification of ISPs as common carriers that gives the FCC its ability to enforce net neutrality. Without that authority, the FCC can’t really protect you as giant broadband providers abuse the lack of competition in the last mile (a lack of competition Ajit Pai refuses to acknowledge, much less actually fix). ISPs have been very busy trying to claim that gutting this authority doesn’t kill net neutrality protections, though we’ve already explained at length why that’s nonsense.

Throughout the order, the FCC repeatedly tries to claim that the very real harms we’ve seen in the broadband sector thanks to a lack of healthy competition are entirely “speculative” and “hypothetical”:

“Because of the paucity of concrete evidence of harms to the openness of the Internet, the Title II Order and its proponents have heavily relied on purely speculative threats. We do not believe hypothetical harms, unsupported by empirical data, economic theory, or even recent anecdotes, provide a basis for public-utility regulation of ISPs.428 Indeed, economic theory demonstrates that many of the practices prohibited by the Title II Order can sometimes harm consumers and sometimes benefit consumers; therefore, it is not accurate to presume that all hypothetical effects are harmful.”

You know, speculative instances like that time AT&T blocked customer access to Facetime in order to drive them to more expensive mobile data plans. Or the time AT&T throttled users then lied about it (something AT&T’s still fighting a lawsuit over). Or that time Comcast applied arbitrary and completely unnecessary usage caps and overage fees to its broadband service (again, thanks to a lack of competition), then exempted the company’s own content from those caps while still penalizing competitors. Or how about that time Verizon blocked competing mobile wallets from even working on its phones to give its own payment platform an advantage?

There’s plenty more very real, very non-speculative examples where that came from, and the problem gets worse if you look at the bad behavior by ISPs on the privacy front (also caused by a lack of competition). Like when AT&T decided to charge users hundreds of extra dollars a month just to opt out of snoopvertising, or the time Verizon was busted covertly modifying user packets to track users around the internet without telling them — or letting them opt out.

If you think these very real market harms are “speculative” you’ve been in a coma for the last decade. Yet this argument that net neutrality is an entirely theoretical problem sits at the heart of the FCC’s order. It’s an order that makes it abundantly clear that the real goal is to completely dismantle the FCC’s authority over broadband mono/duopolies, then shovel any remaining authority to an FTC that’s technically incapable of actually policing abuses in the sector. Anybody framing this as anything other than a grotesque example of crony capitalism is either viciously misinformed — or intentionally lying to you for personal financial benefit.

One thing of particular note in the Orwellian-named “Restoring Internet Freedom” order is the fact that the FCC wants to ban states that try to protect net neutrality and consumer welfare in the wake of the federal handout to industry. The agency doesn’t specifically spell out how it intends to do this, but it’s something ISPs like Comcast have been lobbying for for several months. ISPs have similarly been lobbying the government to ban states from protecting your broadband privacy after the GOP and Trump administration rushed to kill fairly basic broadband privacy protections earlier this year.

For years, ISPs have quite literally been allowed to write awful protectionist state laws that prohibit towns and cities from building their own broadband networks, or even striking public/private partnerships with companies like Google Fiber. Even in cases where the private sector refuses to. When folks pointed out that maybe giant uncompetitive duopolies shouldn’t be allowed to write shitty state law, ISPs and their pay-to-play allies insisted this was an assault on states’ rights. But when these same states try to protect consumers, you’ll notice these concerns magically disappear.

Another thing to note: the FCC’s original net neutrality order contained some very useful transparency rules that required that ISPs be entirely candid about what kind of traffic management they’re using on your connection. And while Pai and his friends at Comcast have made a big deal about how they’ll be retaining some of these protections, the order itself makes it abundantly clear that they intend to strip out most of the enforcement mechanisms that actually make these transparency protections work. For example, the order proclaims:

“Our enforcement changes will ensure that ISPs will be held accountable for any violations of the transparency rule.

But then proceeds to point out how it intends to eliminate most of the safeguards in place to ensure these requirements are actually adhered to:

“We eliminate the formal complaint procedures because the informal complaint procedure, in conjunction with other redress options including consumer protection laws, will sufficiently protect consumers. Additionally, we eliminate the position of Open Internet Ombudsperson because the staff from the Consumer and Governmental Affairs Bureau?other than the Ombudsperson?have been performing the Ombudsperson functions envisioned by the Title II Order. We also eliminate the issuance of enforcement advisory opinions, because enforcement advisory opinions do not diminish regulatory uncertainty, particularly for small providers. Instead, they add costs and uncertain timelines since there is no specific timeframe within which to act, which can also inhibit innovation.”

The FCC’s order also makes it clear that it wants to do away with protections governing interconnection. You’ll recall that as people got wise to how ISPs were trying to throttle or otherwise hamstring competitors, ISPs got more creative — and began intentionally letting interconnection points with transit operators and companies like Netflix get congested. Why? ISPs like Comcast and Verizon hoped to 1) kill the common practice of settlement-free peering, and 2) force companies like Netflix to pay an additional toll if they wanted video packets to reach subscribers on time, and intact (aka “double dipping” or more bluntly, extortion).

Unnoticed by many in the lawsuit by New York Attorney General Eric Schneiderman against Charter over slow speeds was the fact that Charter executives were busted candidly discussing this strategy to drive up costs for competitors and transit operators. When the FCC passed its 2015 net neutrality rules, this behavior mysteriously and magically ceased. Not surprisingly, the FCC is eager to eliminate any protections for this kind of anti-competitive behavior, insisting said protections were “unnecessary” and could magically be resolved by “market forces”:

“We believe that applying Title II to Internet traffic exchange arrangements was unnecessary and is likely to inhibit competition and innovation. We find that freeing Internet traffic exchange arrangements from burdensome government regulation, and allowing market forces to discipline this emerging market is the better course. Indeed, the cost of Internet transit fell over 99 percent on a cost-per-megabit basis from 2005 to 2015.

In short, the FCC’s plan to dismantle net neutrality rules is every bit as bad as most people expected it to be, and potentially a little bit worse. It opens the door to all manner of anti-competitive behavior by AT&T, Verizon, Charter and Comcast, while mindlessly dismissing the very real harms a lack of broadband competition is having on numerous industries. It tries to ban states from stepping in and filling the void in the face of obvious federal regulatory capture, and opens the door to giant, unaccountable ISPs to do pretty much whatever they’d like as they take full advantage of the broken residential and business broadband markets.

It’s easy to be disheartened by this grotesque handout to duopolists, but users should take heart in the fact that this FCC order is so aggressively vile and obnoxious as to be potentially legally indefensible. In court, the FCC will have to prove that the broadband market has changed so substantially in the last two years as to justify such a brutal reversal of consumer-friendly policies. It will also have to defend the fact that it ignored 22 million, largely oppositional public comments on the FCC effort, and turned a blind eye to numerous instances of fraud and abuse of the comment system in order to downplay the massive backlash to its plan.

Even if the FCC does manage to win in the courts, it then has to stop the inevitable political backlash that is likely to eject Ajit Pai and friends from power. That’s why you’ll likely see an ISP effort in the new year to try and pass a new net neutrality law ISP lackeys and sockpuppets will breathlessly claim “solves” this problem once and for all, but will be integrated with so many loopholes as to be effectively useless. It’s real purpose: to prevent the FCC from revisiting this subject down the road under the guise of “putting this issue to bed once and for all.”

The problem for ISP lobbyists is that we’re entering an election season, and countless politicians are going to be tripping over themselves to distance themselves from the unpopular policies of the current administration. You’re not going to find a more unpopular policy than this myopic assault on net neutrality and the health of the internet.

That said, it’s important to remember that net neutrality isn’t a fight that magically ends with the passage or elimination of consumer protections, strong, weak, or otherwise. Since net neutrality violations are just a symptom of a lack of competition in the broadband market, it’s a battle we’re going to have to fight in perpetuity — or at least until somebody in the United States government discovers the fortitude and courage to actually stand up to AT&T, Verizon, Charter and Comcast and begins implementing policies that finally attempt to actually fix our obvious competitive logjam.

Filed Under: ajit pai, fcc, net neutrality