Regulatory classification

[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.”

One of the more notable recent filings from the Open Internet docket comes from a collection of engineers, technologists, professors, current and former Internet Engineering Task Force (IETF) and ICANN staffers, and numerous network architects and system engineers. Collectively, these experts argue that the Federal Communications Commission is not only making a mistake in killing net neutrality protections, it doesn't appear to understand how the internet actually works: "Based on certain questions the FCC asks in the Notice of Proposed Rulemaking (NPRM), we are concerned that the FCC (or at least Chairman Pai and the authors of the NPRM) appears to lack a fundamental understanding of what the Internet's technology promises to provide, how the Internet actually works, which entities in the Internet ecosystem provide which services, and what the similarities and differences are between the Internet and other telecommunications systems the FCC regulates as telecommunications services." The engineers single out numerous technical mistakes in the FCC's Notice for Proposed Rulemaking (NPRM), including incorrect assessments and conflation of the differences between ISPs and edge providers (Netflix, content companies), incorrect claims in the NPRM about how the transition from IPv4 to IPv6 functions, how firewalls work, and more. But the engineers and architects also warn, as countless others have before them, that not having meaningful rules in place will result in an "balkanized" internet that will be nothing like the one that drove decades of innovation.

[Commentary] Federal Communications Commission Chairman Ajit Pai’s proposal to undo the open internet rules argues that network neutrality has dissuaded internet providers -- like Comcast, Verizon, and AT&T -- from investing in building out and upgrading their networks. Likewise, at the congressional hearing, Chairman Pai said that a convincing argument that investment in internet infrastructure actually was on the rise could persuade him to stop trying to roll back net neutrality protections. The problem with this argument, though, is that according to the internet providers themselves, investment in their networks actually has gone up since the net neutrality rules were passed. Chairman Pai’s claims that internet providers aren’t investing in their networks is misleading, at best, and potentially ruinous for the future of a vibrant internet if his proposal to gut net neutrality rolls through unchallenged without a big public fight. And the scary thing is that in the current political climate, with so many major changes underway all at once, net neutrality may become a casualty.

The Federal Communications Commission was sued by a group that says the commission failed to comply with a public records request for communications about net neutrality between FCC officials and Internet service providers. On April 26, a nonprofit called American Oversight filed a Freedom of Information Act (FoIA) request asking the FCC for all records related to communications on net neutrality between Internet service providers and Chairman Ajit Pai or Pai's staff. The group asked for "correspondence, e-mails, telephone call logs, calendar entries, meeting agendas," and any other records of such communications. The group also asked for similar records related to FCC communications with members of Congress, congressional staff, and members of the media. But American Oversight's lawsuit against the FCC says the commission hasn't complied with the requests.

“The FCC has made it clear that they’re ignoring feedback from the general public, so we’re going to court to find out who they’re actually listening to about net neutrality," American Oversight Executive Director Austin Evers said in the group's announcement of its lawsuit. "If the Trump administration is going to let industry lobbyists rewrite the rules of the Internet for millions of Americans, we’re going to make them do it in full view of the public."

Rep Michael Doyle (D-PA) accused Federal Communications Commission Chairman Ajit Pai of pursuing an agenda that harms both consumers and small businesses. "Chairman Pai, in the time that you have been head of this agency, we have seen an agenda that is anti-consumer, anti-small business, anti-competition, anti-innovation, and anti-opportunity," Rep Doyle said during an FCC oversight hearing held by the House Communications Subcommittee. Rep Doyle pointed to several of Chairman Pai’s decisions, including ending a net neutrality investigation into what Rep Doyle called "anti-competitive zero-rating practices" by AT&T and Verizon Wireless.

Doyle also questioned whether anything would stop Pai's Republican majority from rolling back net neutrality rules and the classification of ISPs as common carriers. Doyle asked Pai, "what kind of comment would cause you to change your mind?" Chairman Pai responded, "economic analysis that shows credibly that there's infrastructure investment that has increased dramatically" since the net neutrality rules went into effect. Chairman Pai said he also would take evidence seriously if it shows that the overall economy would suffer from a net neutrality rollback or that startups and consumers can't thrive without the existing rules.