吃瓜大本营

Chairman Tom Wheeler at the Federal Communications Commission is moving in the right direction toward true net neutrality. He deserves some plaudits for abandoning the deeply flawed proposal put forward last May, which would have allowed broadband providers to create fast lanes on the internet for those who can pay (and traffic jams for the rest of us).

Unfortunately, a proposal leaked to the last week would fail to address the real problem. While it certainly looks like an attempt at compromise, it鈥檚 exceedingly complex and even many hardened telecom lawyers don鈥檛 seem entirely clear on it. But I鈥檒l try to explain what I think the proposal is getting at.

First, we need to review the January federal court decision striking down the earlier net neutrality rules. Although there鈥檚 no universal definition of net neutrality, all agree it incorporates three basic tenets, which were incorporated into the rules the court invalidated:

1. No discrimination against content for reasons outside of normal network management;
2. No blocking of lawful content for any reason, including because it is offered by a competitor or is controversial; and
3. Transparency rules that ensure consumers know what their broadband provider is up to.

The court upheld the transparency rule, but found that the non-discrimination and no-blocking rules couldn鈥檛 hold up because of the way in which the FCC has chosen to categorize the internet under its rules.

In a series of commission decisions over the last decade, the FCC effectively determined that, for regulatory purposes, high speed internet should be categorized as an 鈥渋nformation service,鈥� meaning 鈥渢he offering of a capability for generating, acquiring, storing, transforming, processing, retrieving, utilizing, of making available information via telecommunications.鈥� In other words, information services involve doing something with the data as opposed to just moving it unmolested from point to point. Voicemail services are a good example.

By contrast, a 鈥渢elecommunications service鈥� is the dumb pipe. It means 鈥渢he offering of telecommunications for a fee directly to the public, or to such classes of users as to be effectively available to the public鈥� where 鈥渢elecommunications鈥� means 鈥渢he transmission, between or among points specified by the user, of information of the user鈥檚 choosing, without change in the form or content of the information as sent and received.鈥� The example here is the basic telephone system, where the provider just routes calls without doing anything to the underlying data.

All of this is important because the court effectively said that unless you reclassify high speed broadband as falling under the latter category, you can鈥檛 impose universal non-discrimination and no-blocking rules. Accordingly, the FCC needs to reclassify high speed broadband as a telecommunications service under Title II of the Communications Act of 1934, subject to regulation as a 鈥渃ommon carrier鈥� (like a public utility), before it can really protect network neutrality. For the sake of clarity, I鈥檓 going to call that 鈥淭itle II鈥� reclassification for the rest of this post.

Now, before getting into the weeds on the Wheeler proposal, it鈥檚 important to note a few features of the internet. Generally speaking, retail broadband providers do not have a direct commercial relationship with content or service providers such as Google and Netflix (there are exceptions, but don鈥檛 worry about that now). Rather, content or service providers (鈥渆dge providers鈥� in tech-ese) send their data out through various networks, which route it to your local internet service provider.

Based on my understanding, the Wheeler proposal would recognize an entirely new commercial relationship between the distant ISP and the edge provider. That is, even though the edge provider doesn鈥檛 have any direct relationship with the ISP鈥攊t simply sends data out on another network that finds its way to the ISP鈥攖he proposal would nevertheless recognize this as an entirely new service and would create a new legal relationship between the distant ISP and edge provider that didn鈥檛 exist before. This new service is what would be defined under the Wheeler proposal as a 鈥渢elecommunications service鈥� and therefore subject to common carriage regulation.

This means the FCC would be able to impose universal non-discrimination and no-blocking rules on the 鈥渟ender side鈥� but would leave the relationship between the ISP and its customers untouched. And, to make it even more confusing, the Journal story suggests that even if the FCC could impose universal rules, it鈥檚 not clear that it will. Most folks are calling this approach a 鈥渉ybrid鈥� in that broadband internet service would, under it, be regulated as both a telecommunications service and information service.

As I say, there are a couple of problems with this plan.

First, as the Electronic Frontier Foundation explains , the hybrid approach has a tough row to hoe in court (as opposed to pure Title II reclassification, which most of us following the issue believe to be more defensible). If you go back to the definition of telecommunications service above, you鈥檒l see that it has to be the offering of a service for a 鈥渇ee.鈥� Because most edge providers do not pay to send their traffic to the local ISP (see this on internet transit for more on how this works), it鈥檚 going to be tough to argue that it鈥檚 a service for a fee. And, fees for fast lanes are, as EFF notes, precisely what we鈥檙e looking to stop.

I鈥檓 also worried that leaving the retail service the ISP provides to the regular end-user outside of Title II could open the door to a particularly dangerous form of non-neutrality. Many broadband providers are vertically integrated; they own content producers alongside their broadband service. Accordingly, they have an economic incentive to provide an advantage to their services over outside competitors by, for instance, exempting their streaming video service from data caps or prioritizing the stream during times of network congestion. This 鈥渕onopoly leveraging鈥� has the potential to deeply impair innovation on the internet in that it entrenches the broadband provider鈥檚 power in the market for broadband and in the market for content.

Based on my understanding, the only real protection for consumers in this scenario would be of the Telecommunications Act of 1996, which obligated the FCC to take certain steps to promote broadband deployment, including promoting the 鈥渧irtuous cycle鈥� where innovation on the internet drives demand for the internet, which then drives deployment. At the risk of drastically oversimplifying, the FCC would have to demonstrate that such behavior makes the internet less appealing in order to invoke Section 706 to challenge such leveraging, which is potentially a tall order, and it would have to do so on a case-by-case basis. Enforcement would thus be needlessly difficult under this approach.

Finally, as EFF also points out, the hybrid approach could open the door to content regulation, which, for a free speech group like the ACLU, is the coffin nail in this proposal. By not applying Title II to the relationship between the ISP and its subscribers, a rogue FCC could someday argue that it has the power to, for instance, impose indecency regulations on content delivered over the ISP as part of Section 706鈥檚 authority to promote broadband deployment.

Further, the sheer complexity of the proposal, as with any law or regulation, opens the door future abuse. Regulation of communications infrastructure under vague or open-ended rules is is subject to creative and potentially troubling applications by a future administration.

All is not lost, however. The fact the FCC is even floating a hybrid proposal鈥攊ncluding a Title II element鈥攊s a very good sign. It means the millions of comments to the FCC urging reclassification have had the intended effect. Politically, it鈥檚 unclear to me why this proposal is somehow more palatable than Title II. Any open internet rule is sure to face immediate challenge in both courts and Congress. Going with pure Title II, Chairman Wheeler will be pleasing the millions of people who called for reclassification. This hybrid proposal will please no one.

We should continue to keep the pressure on for true net neutrality by calling our members of Congress and urging support for robust open internet rules.