January 2015

Regarding the companion network neutrality bills drafted by Sen Commerce Committee Chairman John Thune (R-SD) and House Commerce Committee Chairman Fred Upton (R-MI), Free Press Action Fund Policy Director Matt Wood said, "If you want a few unregulated monopolies and duopolies to stifle competition and control the future of communications, these are the bills for you. But if you think that essential communications networks deserve basic protections, then these bills are a wreck. The legislation fails at the very thing it claims to accomplish. It prohibits a few open Internet violations but opens the door to new industry abuses. It claims to give the Federal Communication Commission limited adjudication powers but removes the agency's ability to adopt and adapt rules to fit the changing landscape for high-speed Internet access. The solution is simple: The FCC should return to Title II, the applicable law that a bipartisan Congress wrote for all telecom networks, including broadband Internet access. The FCC can adopt rules under Title II and forbear from those that aren’t needed to protect the public interest. Title II with forbearance will protect Net Neutrality while preserving the agency's flexibility to respond to the ever shifting cat-and-mouse games ISPs play to favor their own content."

Free Press Breaks Down the Legislation:

The Bills Offer Inadequate Net Neutrality Protections

• The bills legalize numerous harmful discriminatory practices while preventing the FCC from adopting and enforcing rules that respond to changing circumstances. While the legislation appears to prevent a few of the more harmful Net Neutrality violations, it also opens the door to various other ways to discriminate.
• The legislation offers an extremely narrow approach to preserving Net Neutrality. While the bills may prohibit a few specifically defined harms, they do not allow any safeguards against forms of discrimination the legislation doesn’t describe (i.e., even if such other practices might constitute unreasonable discrimination, unjust or commercially unreasonable practices, harmful behavior, etc.).
• The removal of the FCC's rulemaking authority handcuffs the agency while also limiting the public's ability to comment on the process. Under the legislation, the FCC can only adjudicate complaints alleging violations of these rigidly defined categories, and there's no timetable required for such adjudications.
• Beyond the procedural limitations, the legislation may hamstring the FCC so that similar violations (e.g., different technical variations of throttling or prioritization practiced by different ISPs) may have to be separately adjudicated, an expensive and lengthy process.
• Reasonable network management is just as loosely defined as it was in the 2010 rules definition, creating a potentially unbounded loophole — especially if the FCC is prevented from implementing rules or providing further guidance about what constitutes a "legitimate network-management purpose" under the legislation. Considering how narrow the prohibited harms listed in the bills are, almost any other network-management practice may need to be deemed reasonable and outside of the FCC's authority, no matter how discriminatory and harmful that practice may be.
• Because the FCC can't even adjudicate beyond the "obligations" listed in the legislative provisions, this legislation could allow by implication all other practices omitted from the legislation, including:
• ISPs' unpaid or vertical prioritization, allowing for prioritization of their own or their affiliates' content, so long as there's no specific payment for such treatment.
• ISPs' throttling based on application used or some other factor may be expressly allowed, because the legislation only prohibits throttling based on the source, destination or content of Internet traffic. This could allow, for instance, throttling of any and all voice or video apps that compete with an ISP's legacy cable or voice services, or throttling of other applications so long as such throttling did not take the form of prohibited paid prioritization.
• ISPs' discriminatory application of data caps, where an ISP could exempt its own content from such caps, or a third party could pay the ISP for such an exemption since no packets would be sped up or slowed down for payment or non-payment.
• ISPs' continued argument that they may impose access charges and/or so-called "interconnection fees" simply for delivering traffic that the ISPs' own customers request, so long as the congestion allowed to occur at interconnection points does not constitute prioritizing or de-prioritizing packets over the last-mile network.

The Legislation Will Cause Collateral Damage to Broadband Competition and Service

• The legislation effectively guts all the consumer protections and public-interest principles Congress adopted in an overwhelmingly bipartisan fashion in 1996 for existing and future two-way communication networks. Americans need competitive, universal, affordable, accessible and fully interconnected nondiscriminatory communications services. This legislation fails on all these fronts by stripping the FCC of authority to deal with such topics under Title II and even under the weaker and less-tested Section 706 framework.
• The legislation would thus turn the public broadband network into a private one, allowing the Internet to be shaped by Comcast, Verizon and AT&T instead of by consumer and business demand, and the Internet innovation to meet this demand.
• Classifying broadband Internet access as an information service could hamper the FCC's ability to promote competition and protect users of any broadband telecom service, and all telecommunications service beyond plain old telephone service. Indeed, the legislation mandates treatment of any service that offers "advanced telecommunications capability" as an information service. This one single amendment to the law could void the entirety of the Communications Act.

Why Title II Is the Correct Path Forward

• The Internet exists today because of Title II. Researchers were able to use telecommunications services to connect computers together to form the Internet, without asking for the phone company's or the FCC's permission. This bill will kill any hope of a future, more open, more secure Internet, as it hands over control completely to the ISPs to determine the future of the Internet and all communications networks.
• The existing law, written and passed on a bipartisan basis, gives the FCC the power to keep all two-way communications networks open and nondiscriminatory, as well as to ensure that essential services like broadband access are universally available, competitive, and affordable, and to make sure that consumers are protected from all possible harms. This new bill takes away the FCC's ability to uphold these values and to respond to changing markets and technologies.
• Our nation's broadband problems go beyond just concerns about Net Neutrality. The FCC's restoration of the bipartisan Title II framework will not only preserve nondiscrimination and Net Neutrality, but also several other critical communications principles such as competition, universal service, interconnection and consumer protections.

[Commentary] The Federal Communications Commission imagines it doesn't need Congress, but it does.

The FCC’s current message is obvious -- it does not want Congress’ help, because the FCC wants to conjure up its own legal authority. The FCC is 0-2 in self-asserting the Internet regulatory authority it wants. How can the FCC imagine it will fare better with a Title II utility regulation of the Internet proposal that involves more legal overreach, more harm to reliance interests and a wholesale repudiation of over a decade of FCC legal precedents and findings of fact? If the FCC politically rejects Congress’ help, it alone will politically own any problems, unintended consequences, or public backlash resulting from an abrupt unilateral FCC reversal of the bipartisan policies that enabled the Internet we know today. The FCC will own the negative commercial and financial consequences of a unilateral decision to take control of the Internet via utility regulation. It will own any unintended tax or fee increases on consumers, any decline in broadband investment, deployment, jobs, growth and any legal uncertainty. Wake up FCC. You need Congress.

[Scott Cleland is the Chairman of NetCompetition]

President Barack Obama’s recent comments advocating municipal broadband networks have drawn a variety of rebuttals from groups such as the Phoenix Center, TechFreedom and Media Freedom. Perhaps the most vehement critique came from Media Freedom, which argued that “the bullies at the White House and the Federal Communications Commission will not stop until they have taken all of our lunch money.”

In response to claims from The Phoenix Center, Christopher Mitchell, director of community broadband networks at the Institute for Self-Reliance, accused the Phoenix Center of being a “mouthpiece of the cable and telephone industry.” Mitchell said it was inaccurate to say the Chattanooga (TN) network was built with “government money” but instead was built largely with bond funding sold to private investors. He also argued that Chattanooga ratepayers would be paying more for electricity had the utility not built the fiber network and also offered telecommunications services.

Cisco Systems Chief Executive John Chambers expects hacking attacks to become a lot worse in 2015, and he's positioning his digital networks company to take advantage of it.

"Security was bad last year," Chambers said, referring to high-profile hacks on companies such as Sony Entertainment and retailer Target. "Unfortunately, this year it's going to be much worse." As long as companies view digital security as a defense rather than an opportunity to grow with others in their industries, they will be vulnerable to malicious hacking, Chambers said. Most companies still don't know how vulnerable they are and that will play out with more high-profile hacks in coming months, he added.