Regulatory classification

The House Commerce Committee on July 31 asked for input from Google parent Alphabet, Facebook, Comcast, Amazon.com and other major companies on a proposed rewrite of rules governing consumer internet access. Last week, committee Chairman Greg Walden (D-OR) asked the chief executives of those three companies, as well as AT&T, Verizon, Netflix, and Charter to testify at a Sept. 7 hearing on the future of net neutrality rules. None of the companies have agreed yet to testify. On July 31, a lawyer for the committee, Robin Colwell, asked the companies to weigh in on what net neutrality legislation could look like. "So all we are looking for at this stage is a list of asks. From your perspective, what needs to stay, what needs to be added, and what needs to go?" she wrote in an e-mail.

While Verizon is telling the Federal Communications Commission to get rid of Title II classification and to weaken the open internet rules, Verizon Wireless is already trying to undermine the open internet by experimenting with potentially anti-consumer discrimination practices. Unfortunately, Verizon Wireless is proving why millions of Americans are correct in voicing their concern over the FCC’s proposal to repeal its 2015 net neutrality rules.

Recently, many Verizon Wireless customers reported their Netflix and YouTube speeds appeared to be capped at 10 Mbps. Verizon acknowledged that it was conducting “network testing” to “optimize” its video streaming, and claimed that it was reasonable network management. Verizon’s actions and the cloud of uncertainty surrounding their practices is a timely reminder that, absent a strong regulator, Internet service providers can and will use their gatekeeper power to harm consumers and grow their own market power. If you want to connect to the internet, and access all the services that you can get through that connection (from entertainment to education to employment) you must go through an internet service provider. Broadband companies know they have substantial leverage in the internet ecosystem, which is why it is so vital for the FCC to actively combat harmful practices such as throttling.

A Q&A with former FCC Chairman Tom Wheeler.

Asked, "Do you think it will be Congress that eventually decides how the internet is regulated, and the fate of net neutrality principles?" Wheeler responded, "The question is what does Congress do? There is a law on the books right now. So if Congress is going to renege on that, or walk back the safeguards that are in existence and that have been in existence since 2015 then that’s the wrong thing to do. And it seems to me that the people who are championing doing this are the big ISPs–Comcast, AT&T, Verizon, and Charter–and they’re Republican supporters and are not the people who have historically stood for a fast, fair, and open internet."

Asked, "[FCC Chairman Ajit] Pai likes to say that ISP spending on infrastructure has been chilled by the Open Internet order. Is that a true assessment of what’s happened?" Wheeler responded, "First of all, that assertion is balderdash. That so-called study is highly suspect because it was done by somebody who has never liked the open internet rules, has always taken the position of the ISPs, and during my tenure was exposed for having selectively chosen information to make that same point. So let’s go to what the ISPs tell their financial regulator. You know there’s an important thing that the ISPs have a lobbying message at the FCC and the Congress that is designed to accomplish their goals of giving them free rein. But then over at the Federal Trade Commission they are under the penalty of law required to tell the truth. How does what they say in their financial filings differ from what they say at the FCC? Well, in their financial filings they say they are spending a constant amount–they say they are spending about 15% of revenue on infrastructure investment. Two days ago, Comcast had their quarterly report and reaffirmed they are spending 15% of revenue on building infrastructure. So if this is the best thing the Trump FCC can come up with, the impact on infrastructure argument, then they are playing a pretty weak hand."

The Federal Communications Commission has told members of Congress that it won't reveal exactly how it plans to prevent future attacks on the public comment system. FCC Chairman Ajit Pai and Democratic lawmakers have been exchanging letters about a May 8 incident in which the public comments website was disrupted while many people were trying to file comments on Pai's plan to dismantle net neutrality rules. The FCC says it was hit by DDoS attacks. The commission hasn't revealed much about what it's doing to prevent future attacks, but it said in a letter in June that it was researching "additional solutions" to protect the comment system.

Democratic Leaders of the House Commerce and Oversight committees then asked Pai what those additional solutions are, but they didn't get much detail in return. "Given the ongoing nature of the threats to disrupt the Commission’s electronic comment filing system, it would undermine our system's security to provide a specific roadmap of the additional solutions to which we have referred," the FCC chief information officer wrote. "However, we can state that the FCC’s IT staff has worked with commercial cloud providers to implement Internet‐based solutions to limit the amount of disruptive bot-related activity if another bot-driven event occurs."

[Commentary] As wireless broadband carriers transition what was once referred to as “dumb pipes” to a richer content delivery system, the subject of net neutrality is becoming about as hot as the surface of the sun.

OTT or Over-the-Top content delivery will only continue to skyrocket through the carriers. Subscribers want their television, movies and music all on-the-go, and the continued marketing of unlimited data plans will continue that momentum. Instead of making thinly-veiled excuses or outright violation of net neutrality rules, the carriers will need to ensure network optimization for video consumption. 5G will help with lower latency and dramatically improved throughput but we are still 18 to 24 months away from a ubiquitous deployment. If the tier one global carriers don’t address it now, they will certainly suffer from subscriber loss, lower revenue and dwindling margins.

[Will Townsend is a Moor Insights & Strategy senior analyst covering wireless telecommunications and enterprise networking]

On July 17, 2017, Federal Communications Commission Chairman Ajit Pai responded to several members of Congress regard the Restoring Internet Freedom Notice of Proposed Rulemaking. Numerous lawmakers had written to Chairman Pai expressing concern that the proposal would roll back critical consumer protections by dismantling the current network neutrality rules.

Pai said he shared their view on the importance of having a free and open Internet. He wrote, "[I]n this proceeding, the Commission is currently examining the best legal framework for both protecting Internet freedom and providing strong incentives for the private sector to build and expand next-generation networks so that all Americans can be connected to digital opportunity. Currently, the FCC is in the midst of receiving public comment on this matter, and we will go where the facts and the law lead us. Your views are very important and will be entered into the record of the proceeding and considered as part of the Commission's review. I look forward to continuing to work with you and your colleagues on this critical issue."

On June 26, 2017, Reps Frank Pallone (R-NJ), Elijah Cummings (D-MD), Diana DeGette (D-CO), Robin Kelly (D-IL), Mike Doyle (D-PA), and Gerald Connolly (D-VA) wrote to the Federal Communications Commission to express concerns about the FCC's cybersecurity preparedness and the multiple reported problems with the FCC's website in taking public comments in the net neutrality proceeding.

On July 21, FCC Chairman Ajit Pai responded by saying the Information Technology (IT) staff at the FCC immediately addressed the disruption to the FCC's Electronic Comment Filing System (ECFS). Chairman Pai wrote, "Although i cannot guarantee that we will not experience further attempts to disrupt our systems, our staff is constantly monitoring and reviewing the situation so that everyone seeking to comment on our proceedings will be afforded the opportunity to do so."

[Commentary] The current network neutrality regulations set forth in the 2015 Open Internet Order (2015 OIO) prohibit Internet service providers (ISPs) from blocking or throttling lawful content or engaging in paid prioritization of Internet traffic. These three “bright line rules” cover a wide swath of ISP practices and are intended to promote competition and ensure quality service transmission for content providers and end users. At the same time, however, they fail to consider more nuanced issues that complicate achieving these outcomes.

Christopher Yoo, Professor of Law, Communication, and Computer and Information Science at the University of Pennsylvania Law School, and founding director of the Center for Technology, Innovation, and Competition, makes the case for one such issue in his recent work, “.” This post is the sixth in a series featuring the contents of a recent special issue of the Review of Industrial Organization, organized by the Technology Policy Institute and the University of Pennsylvania’s Center for Technology, Innovation, and Competition. Yoo argues that, contrary to the FCC’s claim in the Order, practices like zero rating can stimulate competition among infrastructure providers and edge services. He contends that zero rating should not be prohibited but rather handled on a case-by-case basis. He supports these claims with economic theory, competition theory, and a number of case studies featuring zero rating.

[Romzek is a 2017 Google Policy Fellow and Research Associate at the Technology Policy Institute. Wallsten is President and Senior Fellow at TPI]

The network neutrality debate is often framed as a fight by everyday citizens to prevent broadband providers like AT&T and Comcast from using their servers to throttle or slow the internet traffic of business rivals. But internet service providers’ opponents in the long-running Washington fight — major content “edge” providers like Amazon, Facebook, Google and Netflix — don’t exactly have clean hands in the fight, according to analysts who say those firms have a way of favoring their content, in the form of content delivery networks.

CDNs are clusters of servers that cache data from content providers to reduce the delay before a transfer of data begins — a way for the prominent and deep-pocketed sites to load more quickly than others. The networks are often owned by third party companies like Akamai Technologies, while some of the largest content providers have built their own. Globally, 71 percent of all internet traffic will cross CDNs by 2021, compared with 52 percent in 2016. Those networks have the ability to discriminate against and interrupt content flows, according to Dan Rayburn, principal analyst at Frost & Sullivan and executive vice president of Streamingmedia. Rayburn suggested that the Open Internet Order enacted by the Federal Communications Commission in 2015 was myopically focussed on ISPs. “If you’re thinking rationally about this, you’d address it with CDNs, with transit providers, with backbone providers,” Rayburn said. “You’d address it with everybody.”

Tom Wheeler, former chief of the Federal Communications Commission under President Barack Obama, warned the Trump Administration’s plan to repeal network neutrality rules could make accessing the internet like buying a cable TV package.

Wheeler, who led the passage of the embattled rules at the FCC in 2015, said the new Republican plan to undo them would let broadband providers like Comcast and Verizon carve up internet access like premium cable channels. “Do you want your access to the internet to look like your cable service?” Wheeler told a crowd in Baltimore. “Stop and think about it — cable operators pick and choose what channels you get. Cable operators pick and choose who they let on. Cable operators turn to you and say, ‘Oh you want that? That’s going to be a little bit more.'” “That is the difference between a closed network and an open network,” he said. “Net neutrality without Title II is net nothing.”