Regulatory classification

Over the last two years, the Bay Area’s (CA) community of Internet service providers has been tapping into the region’s bottomless demand for faster speeds at competitive prices. Take Sonic in Santa Rosa (CA). The high-speed broadband provider has doubled in size since 2015, according to CEO Dane Jasper, bolstering its ranks by 188 employees in 2016 alone. The company now employs 418 workers. The Bay Area’s broadband boom, in short, is confounding Federal Communications Commission Chairman Ajit Pai’s assurances that the FCC’s approach to regulating Internet providers was stifling the development of Internet infrastructure.

The FCC is working through a proposal that would unwind network neutrality rules, leaving Internet providers to largely regulate themselves when it comes to maintaining an open Internet — a development with troubling consequences for Jasper's Sonic. “We’ve continued to invest in infrastructure deployment and in fact, we’re more concerned about the unlevel playing field that a lack of net neutrality could create,” he said.

[Commentary] Few think about the implications of network neutrality outside of affecting the speed at which one can browse the internet; however, it also influences what you can watch and the online content you can view. Net neutrality is what allows us the freedom to peruse the internet and disseminate content without interference.

Besides affecting personal use, the fate of net neutrality also has a bearing on businesses -- particularly small- to mid-sized businesses (SMBs). Without net neutrality, companies like Netflix would probably be charged an exorbitant amount due to the amount of data needed to stream video at their current speed. These upcharges would then be passed down to the customer. Without net neutrality, you can even expect currently free platforms like YouTube to enact charges or impose more ads. Net neutrality is crucial for the survival of SMBs: without it, the recent bloom of entrepreneurship and startup culture would shrivel up and die. They rely on open internet to, among other things, launch their businesses, advertise, build a community and build a customer base.

Some of the Internet's biggest names are banding together for a “day of action” to oppose the Federal Communications Commission, which is working to undo network neutrality regulations for Internet providers that it passed during the Obama Administration. Among the participants are Etsy, Kickstarter and Mozilla, the maker of the popular Firefox Web browser. Also joining the day of protest will be Reddit, the start-up incubator Y Combinator, and Amazon.

On July 12, the companies and organizations are expected to change their websites to raise awareness of the FCC effort. Mozilla, for example, will change what users see on their screens when they open a new browser window. The digital rally recalls a similar online effort in 2012 by Google, Wikipedia and others to protest federal legislation on Internet piracy. The companies blacked out their websites in an effort to show how the bill could lead to censorship.

Network neutrality doesn’t just cover streaming video. It also ensures that you can use the devices that you want. Under the current net neutrality rules, your internet provider can’t stop you from connecting any laptop, tablet, smartphone, or Wi-Fi router you want to your home network. Without net neutrality, the days when broadband companies and cell carriers could let traffic flow faster to one brand of phone or computer over another could be coming. And that’s just the start.

With people connecting more and more devices, from voice-controlled personal assistants like Apple’s forthcoming Home Pod to thermostats to cars, net neutrality becomes that much more important, even as the federal government moves to drop its own protections. Dismissing the rules could be a big problem for the future of the Internet of Things, since companies like Comcast–which is already working on its own smart home platform–certainly have the motivation to create fast and slow lanes for particular gadgets and services. If your internet provider can decide which personal assistant or smart home gadgets you can or can’t use, the broadband can dictate the winners and losers in the Internet of Things race. That wouldn’t bode well for competition, innovation, or you.

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.

[Commentary] What America needs is clear, consistent, and sustainable internet policy. That can only come through legislation. We need a diligent rewriting of the 21-year-old act that guides telecommunication and internet policy. At the time of the law’s passage, there were just 13 million internet users in the United States. Today, there are 287 million.

The new telecom and internet law doesn’t have to be long and complicated, but it does have to be comprehensive. It has to enshrine the Clinton-era principles into law. It’s time to remove any ambiguity about whether the internet’s infrastructure is a public utility. It should not be. Competition and light-touch regulation built the internet, and they should keep on building it.

[Glassman was a former president of The Atlantic, publisher of The New Republic, executive vice president of US News & World Report, and editor-in-chief and co-owner of Roll Call.]

[Commentary] This post kicks of a series of blogs examining some of the more pernicious myths and misunderstandings in telecommunications policy. With a new fire lit under the network neutrality warriors, misinformation runs rampant and spreads quickly.

Let’s turn to the first myth: that financial data shows that Title II isn’t hurting Internet service providers’ investment in their networks.

Financial filings shows broadband investment went down roughly 2-3 percent after the Open Internet Order, consistent with industry’s own findings. It’s especially important that we see continued investment in the infrastructure that supports “best-efforts” open Internet. And there is good reason to think Title II would affect this. Not only did the Open Internet Order take potential business models off the table, and throw others into uncertainty under the Internet Conduct Standard, it represents the first step down the slippery slope to more onerous utility regulations, such as network unbundling requirements or price regulation.

Free Press and Free Press Action Fund sent a letter to the Federal Communications Commission’s general counsel calling on the agency to address its crackdowns against First Amendment freedoms during recent FCC meetings. “We write to express grave concerns about recent actions that call into serious question the Federal Communications Commission’s commitment to fostering free expression,” reads the letter authored by Free Press and Free Press Action Fund Deputy Director and Senior Counsel Jessica J. González and Policy Director Matt Wood. “In particular, the actions of FCC security and other FCC staff have chilled free speech and public participation in FCC decision-making processes that are supposed to be open to the public, and they have violated the due-process rights of Free Press and Free Press Action Fund staff and members.”

The letter details a series of incidents in which the federal agency and members of its security staff have silenced dissenting voices, manhandled a reporter and barred members of the public from attending the agency’s monthly open meeting without due process. During one incident, on the morning of March 23, 2017, two Free Press Action Fund members, Joe DeGeorge and David Combs, attempted to attend the FCC’s open meeting wearing plain white T-shirts that read “Protect Net Neutrality” in black letters. FCC security personnel informed the two that they would not be allowed to enter the public meeting room unless they removed the T-shirts or flipped them inside out to conceal their message.

The Federal Communications Commission's open internet docket, dubbed "Restoring Internet Freedom," has seen a huge wave of comments—or at least a major update of the number posted—since June 2, with over 4.9 million posted, up about 2 million from June 2's 2.9 million-plus. Sen Ed Markey (D-MA), an opponent of Republican FCC chairman Ajit Pai's proposal to roll back Title II, said earlier in 2017 he thought the comments would dwarf those in the docket for the 2015 Open Internet order—over 4 million. With still more than two months left in the comment cycle, he could be right.

The Federal Communications Commission is standing with the Federal Trade Commission when it comes to a federal court decision that leaves a potential regulatory gap for broadband regulation, in the process taking a shot at AT&T. The US Court of Appeals for the Ninth Circuit in May agreed to an en banc (full court) review of its three-judge panel decision that left the Federal Trade Commission's authority to oversee edge-provider's protections of privacy in some circumstances very much in doubt. The court also said that in the interim that panel decision was not to be cited as precedent of the Ninth Circuit.

Such en banc review is unusual, but the decision had prompted a lot of attention given that potential online privacy impact. The three-judge panel, in overturning the FTC's action against AT&T for throttling the speeds of unlimited data customers, last August ruled that the regulatory exemption that prevents the FTC from regulating common carriers is not "activity-based," confined to common carrier "activity" by an entity that has the status of a common carrier, but is status-based, extending to noncommon carrier activity by that entity as well. That meant that if Verizon, a common carrier, bought Yahoo!, an edge provider, the FTC could not enforce Yahoo! privacy policies, and the FCC could not either because it does not regulate edge providers, leaving a potential privacy gap.