Hiltzik: The revival of network neutrality

In the midst of the battle to extinguish the 2018 Mendocino Complex wildfire, the Santa Clara County Fire Department discovered that its internet provider, Verizon have reduced their data flow to virtually zero, cutting off communications for firefighters in the field. One firefighter was killed and four were injured in the fire.

Verizon refused to restore service until the fire department signed up for a new account that more than doubled the bill.

That episode has long been Exhibit A in favor of restoring the Federal Communications Commission's authority to regulate broadband internet services, which the FCC relinquished in 2017, during the Trump administration.

This is a sector that requires a lot of research.

– Craig Aaron, Free Press, on the Internet services industry

Now that era is over. On Thursday, the FCC – now operating with a Democratic majority – reclaimed its regulatory oversight of broadband via an order that crossed party lines, 3-2.

The commission's action could hardly have come at a better time.

“Four years ago,” FCC Chairwoman Jessica Rosenworcel noted Thursday as the commission prepared to vote, “the pandemic changed life as we know it. … Much of work, school, and health care migrated to the Internet. …It became clear that no matter who you are or where you live, you need broadband to have a fair shot at success in the digital age. It went from 'nice to have' to 'need to have'. ”

Yet by 2017, the commission had forfeited its own ability to oversee this essential service. By categorizing broadband services as “information services,” the company gave up its right to handle consumer complaints about poor service, or even to collect data on outages. It didn't stop major Internet providers like Comcast from favoring their own content or websites over competitors' by degrading the rivals' signals when they reached their subscribers' homes.

“We resolved that today,” Rosenworcel said.

The issue the FCC addressed Thursday is usually seen in the context of “network neutrality.” This core tenet of the open Internet simply means that ISPs cannot distinguish between content providers trying to reach your home or business online. They cannot block websites or services, degrade their signal, slow down their traffic or, conversely, provide some with a better traffic lane than others.

This principle is important because their control over the information highways and byways gives ISPs enormous power, especially if they control the last mile of access to end users, as cable operators like Comcast and telecommunications companies like Verizon do. If they use that power to benefit their own content or content providers who pay them for a fast route, it is the consumers who suffer.

Net neutrality has been a partisan football for more than two decades, or ever since high-speed broadband connections began to replace dial-up modems.

In legal terms, the battle was over the classification of broadband under the Communications Act of 1934 – as Title I “information services” or Title II “telecommunications.” The FCC has no jurisdiction over Title I services, but it does have broad authority over services classified as common carriers under Title II.

The major turning point came in 2002, when a Republican-majority FCC under George W. Bush classified cable Internet services as Title I. In effect, the commission stripped itself of its authority to regulate the nascent industry. (Then FCC Chairman Michael Powell subsequently became the chief Washington lobbyist for the cable industrybig surprise.)

The error was not corrected until 2015, at the insistence of President Obama. Broadband was reclassified under Title II; Then-FCC Chairman Tom Wheeler was explicit about using the restored authority to enforce network neutrality.

But that regulatory regime lasted only until 2017, when a reconstituted FCC, chaired by former Verizon CEO Ajit Pai, reclassified broadband as Title I, in deference to President Trump's deregulation campaign. The major ISPs would have been preparing to take advantage of the new regime had California and other states not stepped into the void by enacting their own net neutrality laws.

A federal appeals court in 2022 upheld the California law, the most far-reaching state law. And while the FCC's action could theoretically pre-empt state law, “what the FCC is doing is completely in line with what California did,” said Craig Aaron, co-CEO of the consumer advocacy group Free Press.

The key distinction, Aaron told me, is that the FCC's initiative goes well beyond the issue of net neutrality — it sets a single federal standard for broadband and reclaims its authority over the technology more broadly, in ways that “ ensure national security, promote public opinion” safety, protect consumers and facilitate broadband rollout”, in the committee's own words.

For example, while Verizon's actions in the 2018 wildfire case did not violate the net neutrality principle, the FCC's restored regulatory authority would have allowed it to establish rules for providing service when public safety is at stake, which Verizon believes might have deterred from limiting services. primarily the Santa Clara Fire Department liaison.

Until Thursday, state laws acted as bulwarks against ISP abuses of net neutrality. “California has discouraged companies from trying things,” Aaron says. The California law's provisions are so explicit that state regulators did not have to file any enforcement cases. “It was mainly prophylactic,” he says, “by telling the industry what it can and cannot do. But it is important that you have laid down the traffic rules.”

None of this means that the partisan fight over broadband regulation is over. Both Republican FCC commissioners voted against the initiative on Thursday. A resurgence of Trumpism after the November election could return a deregulation-oriented Republican majority at the FCC to power.

In a lengthy dissenting statement, Brendan Carr, one of the committee's Republican members, reiterated all the conventional conservative arguments made to justify the repeal of network neutrality in 2017. Carr portrayed the restoration of net neutrality in 2015 as a liberal plot — “a matter of civil religion for activists on the left.”

He claimed that the FCC was then spurred into action by President Obama, who was outspoken about the need for reclassification and pushed Wheeler to get involved. Leftists, he said, “demand that the FCC adopt full Title II when a Democrat is president.”

Carr also depicted network neutrality as a drag on profits and innovation in the broadband sector. “Broadband investment slowed after the FCC imposed Title II in 2015,” he said, “and picked up again after we restored Title 1 in 2017.”

Carr chose his time frame very carefully. Take a look at the extended period in which net neutrality has been under discussion at the FCC, and you'll see that investments in broadband collapsed after a Republican-led FCC reclassified broadband as an information service in 2002, dropping it from $111.5 billion in 2001 to $57 billion in 2003.

Investments fell between 2015, when net neutrality rules were reintroduced, and 2017, when they were repealed – by a minuscule 0.8%. It hasn't been particularly robust since; in 2002 it was still running at only about 92% of what it had been twenty years earlier.

As the FCC noted in Thursday's decision, “Regulation is just one of many factors driving investment and innovation in the telecommunications and digital media markets.”

The committee mentioned, among other things, consumer demand and the arrival of new technologies. Strong, consistent regulations also open the way to new competitors with new ideas and innovations – and can drive down prices for users in the process.

The truth is that network neutrality is strongly favored by the public, in part because examples of ISPs abusing their power were not hard to find. In 2007, Comcast was caught debasing file-sharing service BitTorrent, which had contracts to distribute licensed content from Hollywood studios and other sources that competed directly with Comcast's pay-TV business.

In 2010, Tennis Channel from Santa Monica has filed a complaint with the FCC that Comcast kept it isolated on a little-watched sports level, while giving much better placement to Golf Channel and Versus, two channels that competed with it for advertising, and which Comcast happened to own. The FCC sided with Tennis Channel, but was overturned in federal court.

Even if there is no change in the White House, the need for vigilant enforcement will never go away; ISPs will always be on the lookout for business models and manipulative practices that could challenge the FCC's regulatory capabilities, especially as cable and telecommunications companies consolidate into larger and wealthier corporations and combine content providers with their Internet delivery services.

“This is an industry,” says Aaron, “that requires a lot of research.”

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