Analysis

As detailed in this BULLETIN, a proper implementation of Title II precluded the Federal Communications Commission’s approach, forcing the Agency to ignore the “vast majority of rules adopted under Title II” and “tailor[] [Title II] for the 21st Century.” Surprisingly, the DC Circuit found in United States Telecom Association v. FCC that the agency had wide latitude to interpret the Communications Act and not only upheld the agency’s decision to reclassify but also its gross distortion of Title II. In so doing, the DC Circuit has extended Chevron deference beyond any reasonable limit, greatly expanding the Commission’s authority well beyond its statutory mandate.

This BULLETIN first presents several examples of how the 2015 Open Internet Order ignores both the plain language of Title II and the extensive case law to achieve select political objectives, followed by a discussion of the DC Circuit’s acceptance of such legal perversions. Next, this BULLETIN discusses how the FCC attempted to use the same theory of the case found in USTelecom to regulate the prices of Business Data Services. Conclusions and policy recommendations are at the end.

As with many past industry-supported attacks on municipal broadband, it will take some time for interested readers to dig into the details of the University of Pennsylvania Law School professor Christopher Yoo’s study and fully understand its strengths and weaknesses. That will occur in due course. There are, however, a number of serious problems with this study that leap out at once.

For one thing, almost immediately after releasing their report, the authors issued a press release acknowledging that they had “erroneously stated that the bonds used to finance the projects in Chattanooga, TN; Lafayette, LA; and Wilson, NC; call for balloon payments toward the end of their bond terms.” While the authors claim that this error did not affect their financial analysis, one wonders how many other serious errors exist in the study—and how many other times the authors took shortcuts instead of reviewing the full available data. Perhaps if they had contacted the cities at issue to verify the data, they could have caught this mistake in advance. Apparently, they skipped that step as well. A particularly important shortcoming of the study is that the choice of 2010 through 2014 as the study period introduced significant selection bias. Another problem with the Yoo study is that the boldness of its conclusions is undermined by the many caveats and qualifications set forth at various points in the study.

Federal Communications Commission Chairman Ajit Pai officially released the agency’s Notice of Proposed Rulemaking (NPRM) recently to begin a process intended to undo the 2015 Open Internet Order and roll back vital Network Neutrality protections. The NPRM summarizes Chairman Pai’s thinking and sets up questions the FCC intends to explore during the rulemaking process. Unfortunately, it’s as bad as we expected.

Not only does the NPRM propose to eliminate the FCC’s only viable way to enforce Net Neutrality under Title II of the Communications Act, it specifically suggests elimination of bright-line Net Neutrality rules that prevent ISPs from engaging in paid prioritization, blocking and throttling content and websites. Yet Chairman Pai and his supporters in the cable industry are pretending that they’re not gunning for the Net Neutrality rules themselves. This claim is front and center on the homepage of cable industry front group Broadband for America: “The FCC is not trying to repeal Net Neutrality; it is working on separate regulations called Title II or ‘utility’ regulation.” This doublespeak obscures two central pillars of Pai’s approach (scattering in a few extra falsehoods along the way, like the inaccurate reference to so-called utility rules, and the repetition of Pai’s constant lies about alleged harms from Title II). Pai wants to pretend that he’s preserving the open internet, but he’s made up his mind to dismantle the rules that protect it and the foundation on which those rules stand.

[Commentary] The first half of the Federal Communications Commission’s Restoring Internet Freedom notice of proposed rulemaking (NPRM) sets out the FCC majority’s proposal for reversing classification of broadband internet access services as “telecommunications services” governed by Title II of the Communications Act. Among other things, this section discusses the effect this reversal would have on the FCC’s ability to enforce its privacy laws and implement its Lifeline program, which provides a subsidy to low-income households for broadband. The second half purports to “re-evaluate” the existing net neutrality rules, the mechanisms that enforce them and any legal authority (other than Title II) that could be used to support them.

The FCC majority proposes to eliminate the “general conduct standard,” which prohibits ISP practices that “unreasonably interfere or unreasonably disadvantage” the ability of consumers to access the online content and services of their choosing, and the ability of online content and service providers to freely access customers. With regard to the remaining rules (no blocking, no throttling, no paid prioritization, transparency), the majority doesn’t make firm proposals on whether to retain or repeal them. Instead, it asks questions about whether the rules are even necessary.

[Commentary] Michelle Quinn of the San Jose Mercury News wrote on October 17 that the tech industry's interest in Washington may be about to perk up. The status quo in Washington has meant that movement on many key issues has stalled. We’re less than two weeks from Election Day 2014 and deciding which party will control Congress for the next two years. Nate Silver gives Republicans a 66% chance of winning a majority of seats in the Senate which would give the party control of both Houses. What would that mean for telecommunications and technology policy?