NET NEUTRALITY: [See Net Neutrality for the basic definition. This part is a lot of HISTORY] Since 2006, at least three bills have been introduced in Congress which would require ISPs to treat all content passing through their networks in a “reasonable and nondiscriminatory” manner, without favoritism on a level playing field. The purpose of these bills has been to prevent companies with monopoly or duopoly (e.g. Comcast, Verizon) power from controlling what Internet content is available and how fast users can have access to it. None of these bills ever made it to a full vote in Congress, perhaps because the mere existence of the dispute has created a fund-raising opportunity for our lawmakers that they’ve milked for years. To fill the gap before any legislation was passed, some providers such as Verizon and Comcast introduced a two-tiered approach, offering both a fast lane and a slower lane, with pricing to match. Broadband providers such as Comcast took advantage of this window to also institute “capping” (sometimes called “throttling”) and notified their customers that there would be limits on service, with some users charged a premium for heavy usage. Comcast has started rolling out data caps. For example, if you go over 300GB per month, you get hit with a $10 surcharge for each additional 50GB. The caps started in Nashville around 2012, moved to Atlanta in December, 2013, and are poised to roll over much of the South before going national. Some service providers have allegedly slowed access to certain sites during peak times of network congestion. Opponents of net neutrality claim that a non-neutral net is actually beneficial: Like an auto highway, the Internet highway has its HOV lanes, auto-only lanes, toll roads and the like, without which a single paved roadway for every type of user would (arguably) be very slow. Similarly, a non-neutral net providing higher speeds and priority to some users (i.e. those with time-sensitive information such as stock market transactions, or medical information during an operation) might travel in a different and slower “lane” on the information superhighway than others, like Netflix movies, which require greater bandwidth. (In Comcast's case, it charged Netflix more to carry its traffic as a way to make up for the fact that Netflix wasn't using Comcast's own content-caching system anymore. Instead, Netflix had cut a deal with another provider, Level 3, to cache Netflix content, and Comcast was upset about losing Netflix's business in this regard. The Netflix issue was solved without impacting the net neutrality debate when Netflix agreed to co-locate its servers in Comcast facilities, bypassing intermediaries.) Supporters for non-neutrality argue that, especially if certain users are willing to pay extra for the speed or priority (as a driver would for a less-traveled and faster toll road), this shouldn’t bother the slower users, who haven’t paid for the additional speed.
In his (first) campaign, (and again on 11/10/14) President Obama said that he supported net neutrality, and had promised to select only pro-net neutrality appointees to the FTC. He appointed Julius Genachowski as the FCC head and on December 21, 2010 the FCC issued regulations giving the FCC regulatory power to protect the free flow of information over the Internet and requiring high-speed Internet providers to regard all types of connections equally (the so-called “nondiscrimination rule”). So, for example, ISPs like Comcast and Time Warner can’t block web video sites like Netflix and Hulu, or peer-to-peer websites (as Comcast has previously done) and they can’t deliver some sites such as Amazon faster than eBay, which would be “unreasonable content discrimination”. However, there’s always a loophole: These regulations, however, don’t cover wireless providers (watching videos over your smart phone, for example) and don’t forbid ISPs from either charging heavy users more than light users or charging some users for faster service.
However, Verizon wasn’t happy, and it took the FCC to court to void the FCC nondiscrimination rule. On January 14, 2014, the D.C. Circuit Court did in fact rule in favor of Verizon (Docket No. 11-1355), voiding the non-discrimination rule. It based its decision on the earlier action of the FCC classifying Internet service as an “information service” rather than as a “telecommunications service,” exempting broadband providers from treatment as common carriers (like telephone companies) prohibiting the FCC from regulating them. And on 9/9/14, the Fourth Circuit Court of Appeals ruled that the FCC doesn’t have the right to enforce rules covering the internet because, while it is tasked with overseeing crucial utilities like telephone and electric, under current law the internet is not one of those utilities. The ruling, however, said that the FCC could still make rules for the web, and it has the right to appeal to the Supreme Court, if Congress doesn’t pass any laws before that. After the ruling, and in view of the unprecedented 4 million public comments, Wheeler waffled in favor of a more hybrid approach, permitting “paid prioritization” of internet traffic (with FCC monitoring), while not classifying broadband as a public utility subject to regulation under Title II of the Communications Act. Back in November, 2014, President Obama had come out in support of the Title II reclassification, but Wheeler disagreed. In the beginning of 2015, however, Wheeler stated that he and the president were both pulling in the same direction so long as Title II was done right (“with forbearance”), with no blocking, throttling or paid prioritization. Still, lots of Title II issues, such as taxes and exemptions for the more onorous requirements of Title II.
It did seem a foregone conclusion that net neutrality would virtually disappear. Whether as a business decision, or supply and demand, or even on a whim, Comcast and Verizon could deliver service to some sites or services more quickly or reliably (and at different cost) than others. Meanwhile, even before the Verizon decision, the new FCC Chairman, Tom Wheeler (a former cable and wireless company lobbyist), had said that he actually finds it acceptable that ISPs charge Netflix and other companies for a faster lane to their customers without violating net neutrality; this, you’ll notice, flies directly in the face of the Open Internet Order (a/k/a the nondiscrimination rule) passed by his predecessor. His comments were criticized by consumer advocacy groups Public Knowledge and Free Press as holding ISP subscribers as hostages to be auctioned off. But we all thought we knew who would win here and who will pay for the increased cost. On May 15, 2014, the FCC voted 3-2 to move forward with Wheeler’s proposal forbidding a provider from blocking content but not forbidding a network provider from charging third parties extra (the “toll road”) to allow high-priority access to certain kinds of content. Public feedback and voting will still be required before the rules take effect. Due to the high volume, the deadline was extended to Oct. 29th. States like Kentucky, New York and California have opposed the Comcast/TW merger as well. Many urged the FCC to re-classify broadband as a telecom service rather than an information service, which would give the FCC more direct authority over the ISPs. But that would require reversal of the “Brand X” case, which went all the way to the Supreme Court for final resolution, so that may not be likely. InfoWorld’s Andrew C. Oliver has an interesting approach that compares our country’s regulation of railroads in their infancy as support for designating ISPs as “common carriers.” He reminds us that in the early days of railroad regulation, John D. Rockefeller negotiated a deal with the railroads to set high rates on shipping barrels of oil, but to get rebates whenever his own companies shipped them. But the Feds decided that such arrangements were illegal, because the railroads were “common carriers,” much like the ISPs today carry internet signal packets. But no one has picked up this thread. Final comments are now in and the FCC votes on new rules in February, 2015 Also, see NEWS for the national protest on September 10th bringing attention to this issue. Interesting, on 1/29/15 Chmn. Wheeler announced at an agency meeting “I will propose new protections that do not allow blocking, throttling, paid prioritization and any other discriminatory practice”. Perhaps in response to the huge public response (4 million comments between June and October, 2014 alone) the tide is turning. He did. By 2015, net neutrality is the law. In late 2015, the FCC declined to extend “do not track” into law, refusing to regulate Facebook and Google tracking of their users.
But you didn’t really expect the fight to end there, did you? The fight against the law is two-pronged: On the one hand, the Internet providers sued the FCC to overturn rules which reclassified broadband as a common carrier service. This, along with a bitterly contested vote in Congress in 2015 “reclassifying” the ISPs significantly expanded the agency’s role in overseeing the industry. While pending, Congress has repeatedly attempted to pass measures that would defund the agency (ha!) or prohibit its enforcement of net neutrality rules (more likely). One Congressional bill is H.R. 2666, the “No Rate Regulation of Broadband Interest Access Act” The purpose of this bill is to prevent the FCC from acting on consumer complaints about broadband rates, billing errors, data usage caps and the like, which the ISPs desire to include under the title of rate regulation. The actual purpose is to discourage cord cutters who stream TV shows through services like Netflix and Hulu which ISPs are trying to hamper with throttling, data caps and complicated usage plans in order to make more money. [Some of the recent new plans offered by T-Mobile (“Binge On”) or Comcast (“Streaming”), while attractive at first, are actually nominal violations of net neutrality because they involve throttling of the data stream say, from 1080p to 480p, which may work with cell phones, but now always TVs.]
UPDATE: On 6/14/2016, the U.S. Court of Appeals for the D.C. Circuit ruled in favor of the FCC, forcing Internet providers such as Verizon and Comcast to obey federal regulations that ban blocking or slowing of internet traffic to consumers and also supports FCC regulations that forbid carriers from selectively speeding up websites that pay providers a fee. Key is that the decision affirms the FCC’s ability to regulate internet providers (and by extension, wireless carriers) just like the legacy telephone companies.
However, a 6th Circuit Ct. of Appeals ruling on 8/17/16 which ruled that the FCC doesn’t have the power to block state laws which may insulate the big broadband providers benefits from the threat from popular city-owned broadband operators such as the Electric Power Board of Chattanooga, Tenn and Wilson, NC, which were attempting to install their own competing broadband network. This case was important because it appears to place a limit on what might have been viewed as the unfettered mandate of Section 706 of the Communications Act to allow for the timely deployment of broadband across the country, which was why the FCC fought the state laws in favor of Verizon and Comcast preventing government competition. Nevertheless, municipal broadband proponents are still moving forward, laying “dark fibre,” fiber optic cable that internet providers must pay to lease. But at least one state, Nebraska, has passed legislation specifically banning this plan.
GOING INTO 2017: The state of net neutrality can be summarized: One of the crowning achievements of the Obama administration was when the FCC passed rules that barred broadband providers from selectively blocking or slowing web traffic, or providing paid fast lanes for select content, enshrining the principal that all data traveling through ISPs pipes had to be treated equally. To give the rules a solid legal foundation, the FCC also voted to reclassify broadband as a utility provider under Title 2 of the Telecommunications Act.
So what will the new adminstration do? It’s well known that, while net neutrality enjoyed huge bipartisan support among consumers, the Republican lawmakers strongly opposed the rules and proceeded to try to push through over a dozen bills or amendments to kill or weaken the net neutrality regulations. None succeeded. But times change, and no doubt that, like Obamacare, the net neutrality regulations will be a big target. (Sen. Ted Cruz has already labeled it “Obamacare for the Internet”). In 2017, the Trump transition team for the FCC has made noises that it would strip the agency of its authority to champion consumer rights, promoting competition and combate anticompetitive telecom activities, effectively eviscerating the agency, reversing outgoing Chairman Tom Wheeler’s legacy.