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Who Has Authority Over the Internet?

Submitted on November 13, 2015

You’re reading the Benton Foundation’s Weekly Round-up, a recap of the biggest (or most overlooked) telecommunications stories of the week. The round-up is delivered via e-mail each Friday; to get your own copy, subscribe at www.benton.org/user/register


Robbie's Round-Up (November 7-13, 2015)

There’s some weeks when you just can’t avoid the fact that we just don’t know who, if anyone, has any authority to regulate Internet communications. From the courts, to the Federal Communications Commission to Bellevue, Washington, as Warner Wolf says, "Let's go to the videotape!"

ITC Loses in Court
The U.S. Court of Appeals for the Federal Circuit ruled that the U.S. International Trade Commission does not have authority to regulate information on the Internet. The ITC has become an increasingly popular venue for patent and copyright disputes, but its jurisdiction traditionally only extended to physical goods as they pass over borders. This latest case looked to change that, with potentially profound implications for data as it crosses international borders. In January, documents from the Sony leaks revealed that the Motion Picture Association of America and other industry groups were watching the ruling closely, hoping an ITC victory would give them new powers to go after international content piracy. After this week’s ruling, there's little chance of that happening. Judge Sharon Prost drew a clear line between physical articles and digital goods, planting the ITC firmly on the physical side.

Charles Duan, Director of the Patent Reform Project at Public Knowledge, said, “This decision is a big win for the open Internet. By rejecting the ITC's attempt to expand its jurisdiction, the Federal Circuit helps to ensure that Internet users have unfettered access to the free flow of information that has proved so useful for innovation and free expression.” Noting the ruling’s language that “the Internet remains an open platform for all,” Duan added, “This recognition of the central role that open information flow has played in the digital age is heartwarming to advocates like us who have tirelessly worked to protect that Internet openness.”

The ITC must now decide if it should appeal the ruling.

FCC Declines to Enforce ‘Do Not Track’
The Federal Communications Commission this week dismissed a request filed by Consumer Watchdog asking the FCC to initiate a rulemaking to require ‘edge providers’ (like Google, Facebook, YouTube, Pandora, Netflix, and LinkedIn) to honor ‘Do Not Track’ requests from consumers. When consumers enable the Do Not Track setting in their browsers, they send a Hypertext Transfer Protocol (HTTP)(1) header in an attempt to opt out of third-party tracking conducted by analytics services, advertising networks, and social platforms. Some companies have committed to honor Do Not Track requests, but the requests are mostly ignored. Consumer Watchdog wanted the FCC to impose rules using its Title I and Section 706 authority to regulate "information services." Consumer Watchdog pointed out that the FCC intends to impose new privacy rules on Internet service providers under Section 222 of the Communications Act, the privacy portion of the Title II common carrier regulations that the FCC is applying to broadband providers such as Comcast and AT&T. But those rules don't apply to websites. The FCC's dismissal of the petition didn't address whether the commission has authority to impose the rules under Title I or Section 706. Instead, the FCC noted that when it reclassified broadband as a common carrier service, it did not intend to “regulat[e] the Internet, per se, or any Internet applications or content.” "Rather, as the Commission explained, its 'reclassification of broadband Internet access service involves only the transmission component of Internet access service,'" the FCC said. Consumer Watchdog's proposed requirement on edge providers would be "inconsistent with the Commission’s articulation of the effect of its reclassification," and inconsistent with its plans for new privacy rules that affect only broadband providers, the FCC said.

“It’s outrageous that Google and Facebook will not have to protect our private information in the same way that AT&T and Verizon will have to under pending FCC rules,” said Jamie Court, president of Consumer Watchdog. Court believes this decision was designed to demonstrate to a federal court considering the legality of the network neutrality rules that the FCC will narrowly use its authority. Court hopes that the petition and decision could push Congress to act on the issue. In the short term, Consumer Watchdog plans to ask the FCC to reconsider its decision.

FCC’s Municipal Broadband Decision Goes to Court
Back in February 2015, the FCC voted to preempt state laws in Tennessee and North Carolina that were preventing municipal broadband providers in those states from expanding their coverage areas. They found that provisions of the laws in those states are barriers to broadband deployment, investment and competition, and conflict with the FCC’s mandate to promote these goals. The state laws had effectively prevented the cities from expanding broadband service outside their current footprints despite numerous requests from neighboring unserved and underserved communities.

As you might guess, Tennessee and North Carolina have issues with that decision and the states are taking the FCC to court. Somewhat surprisingly, on November 9, the Department of Justice announced that it will not be taking a position in the case. Writing in the Washington Post, Brian Fung noted that it is not unheard of for the Justice Department to bow out of a case involving a federal agency. But its decision this time is unusual, many policy analysts say. The Obama Administration, and the President himself, has vocally supported city-run Internet initiatives, and urged the FCC to take action on the matter. And the Justice Department is already supporting the FCC in another high-profile lawsuit on Internet policy involving network neutrality. Fung spoke with people who highlighted that the FCC's decision to preempt those state laws falls outside the Justice Department's traditional area of expertise, which could explain its decision to bow out this time.

We should note that the Benton Foundation joined Common Cause, the New America Foundation’s Open Technology Institute, Public Knowledge, and the Schools, Health and Libraries Broadband (SHLB) Coalition in a filing at the U.S. Court of Appeals for the Sixth Circuit highlighting successful municipal broadband efforts around the country.

T-Mobile Decides Which Content Moves for Free
Wireless carrier T-Mobile announced this week that it will allow some subscribers to stream video from 24 popular services without burning through their data caps. Subscribers can choose among popular streaming services including Netflix, HBO Now, HBO Go, Watch ESPN, Fox Sports and Hulu. Notable omissions from the list include YouTube, the world’s biggest video site, and Facebook and Snapchat. Video is, of course, one of the biggest gobblers of data. To make it feasible to offer unlimited streaming in the promotion called BingeOn, T-Mobile is ratcheting down the quality of video to something it says approaches “DVD quality” but is less than the HD feeds some users are accustomed to. In addition, those taking part in the Binge On program will see other videos reduced in quality — not just those that are part of participating services. T-Mobile CEO John Legere said that video providers didn’t pay T-Mobile to participate in the Binge On promotion. Another executive said the only requirement the company needed from video providers was a technical one — it needs a digital “signature” that will let T-Mobile identify their content. T-Mobile is also charging more for its data plans.

Cecilia Kang of the New York Times quickly highlighted that T-Mobile’s BingeOn could become the first test of the FCC’s new network neutrality rules, which are meant to prevent one content provider getting preferential treatment over another. “Net neutrality doesn’t allow Internet service providers to pick winners and losers, and if we look at T-Mobile’s plan as it is now, it will clearly distort the market for video streaming,” said Barbara van Schewick, a law professor at Stanford University and a proponent of the new rules.

T-Mobile said its new plan did not play favorites. Any video provider can join the program after meeting the technical requirements noted above. “We aren’t getting paid anything by video providers, and it’s open for all,” said Kathleen Ham, T-Mobile’s senior vice president of federal regulatory affairs. “It fits within the guardrails provided in net neutrality rules.” Still, an offer of unlimited streaming of some — but not all — video services, could ultimately harm customers, Professor van Schewick said. Start-ups and nonprofits without the resources of large companies like Netflix, she said, will not necessarily have the resources to meet the technical requirements. And studies show that when zero rating plans are offered, consumers overwhelmingly choose those services, she said. Another concern is that T-Mobile’s plan could open the gates for others to follow.

The Verge’s T.C. Sottek, using – um, er – more colorful language than allowed in a family telecommunications policy newsletter, said, emphatically, “Yes, John Legere, it is a net neutrality problem.”

Brian Fung, in the Washington Post, wrote that T-Mobile is trying to become cable faster than cable can become T-Mobile. As isn’t that we’ve always strived for – that ISPs look and act more like cable TV providers?

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Notes:
  1. For thems scoring at home, HTTP is an application protocol for distributed, collaborative, hypermedia information systems – and, most distinctly, the foundation of data communication for the World Wide Web.
By Robbie McBeath.

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