The next few months will be full of bitter dissent regarding the FCC’s net neutrality rules, how they should be enforced, and indeed whether they should exist at all. Several primary arguments against the rules as they stand have appeared as talking points or recurring themes; they are worth considering seriously and refuting definitively if possible. That is what I intend to do here.
One quick note: the full text of the proposal isn’t available yet, and may affect a few of these items. I’ll update this article as soon as the rules are public and I’ve had a chance to read them.
1. Title II is a depression-era rule intended for regulating the AT&T/Ma Bell monopoly
TL;DR: A law from another time, yes, but a strong one that’s been updated
The age and regulatory environment of the statute under which the current net neutrality rules is a common refrain. Title II is in fact part of the far-reaching Communications Act of 1934, which was indeed instated during a period of depression and monopoly — but characterizing it that way is a bit like saying the Declaration of Independence is an “Enlightenment-era rule written by anti-government extremists.”
Industries that carried products across state lines, such as railways, had for many, many years been subject to special regulations as “common carriers” in order to ease interstate commerce. These regulations exist at the federal level and split authority with states, which have their own laws for how companies comport themselves within their borders.
Telephone service had begun crossing state lines by this time in 1934, and a unified body for regulating it and the companies that provided it (which were indeed acknowledged monopolies) was called for: hence, the FCC. And Title II is the part of the law that gives the agency authority over common carriers providing interstate or foreign communications services.
The FCC and the 1934 act were not solely created to break up Ma Bell or AT&T; they extended existing and working federal rules for interstate commerce to an industry that was growing to such an extent that they had become necessary. Of course it would be silly to apply those same rules to a vastly different era — that’s why we had the Telecommunications Act of 1996, which extensively modernized the original.
Notably, no one seems to complain about all the other businesses, including some broadband connections and mobile services, that have been governed under Title II for years and will continue to be so after this. Apparently depression-era monopoly rules are fine for those.
It’s worth mentioning here that if people are really afraid of broadband providers being governed by anti-monopoly authorities from the early 20th century, that is a precise description of the FTC, a bona-fide antitrust body established in 1914, and the agency that regulatory authority would return to should the FCC be relieved of it.
2. The 1996 Telecommunications act says the internet should be unfettered by state or federal regulation
TL;DR: It was “fettered” for years and did great — plus, that part of the law isn’t law, and it’s about porn
You can read the Act here; only one section concerns the internet, and it does indeed say this:
It is the policy of the United States…to preserve the vibrant and competitive free market that presently exists for the Internet and other interactive computer services, unfettered by Federal or State regulation.
Seems pretty straightforward, but context matters: 1996 was a very different time. Broadband was extremely rare and dial-up was the rule. The very fact that most people reached their internet provider through a telecommunications provider (regulated under Title II) made things fundamentally different. Think AOL and Earthlink, not NBC Comcast Universal (or, for that matter, Oath).
When the internet provider is essentially also the telecommunications provider, in charge of the cables, DNS, and so on, that changes things a great deal.
The argument is that Title II was never meant for broadband services, and that the industry flourished under the “light touch” of Title I. Kind of an inconvenient fact, then, that DSL — the most popular broadband service by far for many years — was regulated under Title II until 2005! In fact, some major DSL providers petitioned to stay under Title II at the time.
Do you remember the 1996-2005 era of internet use and provision as being a particularly oppressed one? It was in fact a period of unprecedented growth and economic prosperity, which the Title II regulation of a huge proportion of Americans’ internet access clearly did little to dampen.
Also, and this is more of a “by the way” thing, that part of the 1996 Act is actually under Section 230, “Protection for private blocking and screening of offensive material.” Read the whole thing and you find it’s basically a diplomatic way of saying that that things like porn, as on cable TV, shouldn’t be blocked by federal regulation, but by the likes of parents and computer administrators. This isn’t a joke, it’s an important part of the Act that prevents censorship, but it really isn’t about the issue at hand.
Lastly, but worth noting: it also isn’t actually a law, just an advisory section intended to help guide interpretation of the law. And courts, whose job it is to interpret law, have long known this and still accepted — even encouraged — Title II regulation.
3. The rules have discouraged investment
TL;DR: No company claims this and the numbers are inconclusive at best
Readers of TechCrunch in particular may be cognizant that major statements like X caused Y financial trend are to be treated with caution — especially when they’re based on only a year or so of data. That’s certainly the case here: the Open Internet Order came into effect in mid-2015, so we basically have the second half of that year and a chunk of 2016 to work with.
The current FCC administration has suggested there was a decline of about 5 percent after the Order took effect. But other analyses suggest that some of that decline was planned well ahead of time (AT&T winding down a major infrastructure rollout, for instance), but that overall investment is up. This long report from Free Press (PDF) extensively documents the SEC filings and investor relations documents bearing this out.
Executives of telecoms are on the record saying that net neutrality and Title II won’t be affecting their investments much if at all. If they were, they probably would have shouted it from the rooftops, since it would be helpful in the fight to change their classification.
The truth here is that there’s not a lot of data, and what we have isn’t decisive. However, it’s disingenuous of FCC leadership to treat it as though it were, especially when industry leadership indicates otherwise.
4. It stifles small businesses with reporting and restrictions
TL;DR: Potentially, but there are already has allowances for this
Being regulated under Title II is more burdensome than how it was before, but by how much, and is it really a problem? Claims have been advanced by Chairman Pai on behalf of several small businesses and ISPs that supposedly have had to delay or cancel features and services because of the rules.
In letters sent by cable associations, small ISPs allege that the rules have increased costs of compliance, and this is almost certainly true. I’ve several of them for specifics but have yet to hear back.
The cost of figuring out new paperwork was always going to be greater in the first year or two of the new rules, something the FCC acknowledged by exempting carriers under 100,000 subscribers from the transparency reporting part of the rule — a limit later increased to 250,000, despite the fact that the small ISPs complaining in these letters are mostly under 1,000.
I’m skeptical that the no-blocking and no-throttling rules are preventing any useful services from being rolled out, as several ISPs claim. The only one anyone has really pointed at is zero rating, and that’s a dubious one. And since the companies claim they’re not interested in breaking the other rules as it would be against their interests, there doesn’t seem to be any objection to enacting those rules. The main issue is the money.
The CEO of Sonic, a medium-sized (small compared to Comcast and its like) ISP in San Francisco, has repeatedly said that the rules aren’t a problem for them. But it could easily be a different story for a company with 500 subscribers and 3 employees.
An allowance or tax break for small companies temporarily under increased cost of compliance would be a great way to prevent this problem. The FCC is also already attempting to limit the volume of compliance paperwork and has genuinely always made attempts to accommodate those burdened by its regulations. We already tweaked the rule to make it easier on small businesses, why not do it again?
As a last consideration here, the opponents of net neutrality have characterized it as protecting against “phantom” offenses that have net yet occurred. Leaving aside that this is the purpose of regulation, many of the issues brought up by the smaller ISPs and magnified by FCC leadership are equally phantasmal. Potential issues cannot be considered worth accommodating at this scale but ignored at the larger scale of national ISPs.
5. The “general conduct rule” is vague and open-ended
TL;DR: So change it
The 2015 order has three “bright line” rules: no blocking, no throttling, and no paid prioritization. A fourth, less bright one has been singled out as being so vague and broad as to make almost any practice subject to FCC scrutiny:
[Broadband providers] shall not unreasonably interfere with or unreasonably disadvantage end users’ ability to select, access, and use broadband Internet access service or the lawful Internet content, applications, services, or devices of their choice, or edge providers’ ability to make lawful content, applications, services, or devices available to end users.
The order’s critics have a point. This clause, however well-intentioned, is quite open ended, something that those being regulated find unsupportable. And former Chairman Tom Wheeler made a severe error when, upon being asked what types of practices could be found to be unreasonable, replied “we don’t really know.” Too honest by half, unfortunately.
The general conduct rule is behind the inquiry into zero rating practices, which didn’t clearly fall under any of the other rules — and yet poses a serious threat if misused. It’s stuff like this that the FCC couldn’t predict, and so created a “catch-all standard.” All the same, it’s hard to disagree with people who call this particular rule too vague.
But ending net neutrality because one rule out of many is poorly defined is the very picture of throwing the baby out with the bathwater. FCC rules are revised all the time; why not revise this one? The general conduct rule could be restricted or even eliminated, and that would leave the other, more critical net neutrality rules intact. That option, however, doesn’t appear to be on the table.
6. We’re not trying to remove net neutrality rules, just Title II
TL;DR: Removing the rules is literally in the proposal
It is frequently said that the point is not to remove the rules themselves, just change the authority to something a little less heavy-handed.
This is a puzzling assertion to make when the proposal itself asks over and over again whether the “bright line” rules of no blocking, no throttling, etc should be removed. It’s pretty clear that proponents don’t think the rules are necessary and will eliminate them if they can. Just because they frame their preference in the form of a question doesn’t make it any less obvious.
A sort of corollary to this argument is that internet providers will voluntarily adhere to suggested practices. This is a pretty laughable suggestion, and even if it were true, it self-destructs: if companies have no problem subjecting themselves to these restrictions, how can they be as onerous as they say?
We’ll know more about what is and isn’t on the chopping block when the final text of the proposed rules is made available, at which point I’ll update this story.
7. The rules work without Title II anyway
TL;DR: Nope, we tried this already
Even if we were to allow that the rules in the 2015 order aren’t in danger of removal (they are), the argument is they don’t need Title II authority to work. They do, and this is supported by years of attempts.
The FCC tried for the decade before 2015 to enforce non-discrimination and other net neutrality rules using other legal authorities as a basis. Several different tracks were taken: ancillary authority under Title I and Section 706, both of which were rejected by courts as being insufficient for these kinds of strong rules. Hints that Title II was the only way to go have been dropped court after court and eventually the FCC took them at their word.
The FCC’s proposal provides no alternatives for authorities under which it would be able to enforce the rules — except for ones already tried and found lacking.
Make no mistake, the rules will not work without Title II. This isn’t speculation — it’s already been tried.
8. The internet wasn’t broken before 2015 and ISPs don’t block or throttle
TL;DR: It remained unbroken because of constant vigilance, not because ISPs didn’t try
As evidence that Title II-based rules are unnecessary, critics point to the success of the internet before 2015. Leaving aside that, as we noted above, internet access was governed by Title II for a good deal of that period, this argument is true. Of course, it’s only true because of constant vigilance by regulators!
Internet providers (both mobile and wireline) have attempted to throttle traffic by type or by user, have imposed arbitrary and secret caps on data, hidden fees that had no justification or documentation, and tried to give technical advantages to their own services over those of competitors. These attempts were only revealed in retrospect once they were discovered and lawsuits filed. If the deterrents those lawsuits provided eventually had been part of preemptive rulemaking then they would never have been attempted at all.
2015 wasn’t some magic year, either: the FCC and Congress had proposed net neutrality rules going back more than a decade before then. It’s only in 2015 that they made them stick.
Now, even if we were to grant that ISPs had not attempted these things when they clearly did, it would be unreasonable to think that they wouldn’t attempt to in the future. Voluntary agreements not to are hardly a substitute for strong rules against anti-consumer practices known to have been instituted before.
Have I missed any arguments, or any important rebuttals? Let me know in the comments and I’ll add them.
Featured Image: Bryce Durbin/TechCrunch