POLITICS FEBRUARY 21, 2014
Some people think of the issue of net neutrality as comparable to that of getting cancer from power lines—as something that resonates in a specialized constituency of nutty left-wingers. But believe me, it’s very important. Net neutrality is to the internet what the First Amendment was to the Gutenberg era. Without it, a few large firms—and maybe if the merger between Comcast and Time-Warner goes through, only one—will have an inordinate amount of power over what people hear, say, and see over the internet. They may use that power wisely, but the lesson of centuries is that it is better to have laws in place that incline them to do so.
President Barack Obama understands that. So did former Federal Communications Commission (FCC) chairman Julius Genachowski and so, perhaps, does Tom Wheeler, his successor. But Obama’s FCC had done precious little to enforce net neutrality. This week, Wheeler introduced an outline of new regulations on net neutrality. They are profoundly inadequate, and, in any case, will probably be thrown out in court just as Genachowski’s were. Wheeler could do something, but he and Obama appear unwilling to spend any political capital by taking a stance that is strongly opposed by Comcast, Verizon, and other companies with powerful lobbies in Washington. A little background is in order.
Under Title II of the Communications Act of 1934, the FCC can ensure “common carriers” like the telephone companies serve the “public interest” and do not discriminate in who can use their services. The act forbids—you can skip this, but I want readers to know how extensive the areas of regulation are—“discrimination in charges, practices, classifications, regulations, facilities, or services for or in connection with like communication service, directly or indirectly, by any means or device, or to make or give any undue or unreasonable preference or advantage to any particular person, class of persons, or locality, or to subject any particular person, class of persons, or locality to any undue or unreasonable prejudice or disadvantage.”
Under the Telecommunications Act of 1996, there is a critical distinction between “telecommunications,” which are subject to Title II, and “information services,” which are not. Information services consist of “the offering of a capability for generating, acquiring, storing, transforming, processing, retrieving, utilizing, or making available information via telecommunication.” These services are subject to the vague provisions of Title I, which do not forbid the kind of discrimination that is illegal under Title II. When the 1996 act was passed, the internet—that is, the World Wide Web—was still in its infancy.
Some legal experts assumed that while a service sold on the internet would not be subject to Title II, the internet itself would be seen as a “common carrier.” It makes information available via the internet. That’s an eminently reasonable position, and has become more so as the internet has matured as a pure medium very similar to the telephone. But in 2002, the FCC, led by Republican Michael Powell, the son of Colin Powell, ruled that internet companies provided “information services” and were not subject to Title II regulation. That meant that they could charge different rates to different customers and even refuse service to some content providers.
Discrimination could lead, for instance, to an internet where some content providers or “edge providers” like Amazon were able to purchase higher speed, higher resolution service at the expense of their competitors, or where Comcast, eager to force consumers to use its own movie services, could penalize Netflix. In an extreme, but not inconceivable case, discrimination would penalize certain kinds of political speech over others. Net neutrality would mean that the large internet providers could not discriminate.
To create net neutrality, Obama’s FCC could redefine internet companies as telecommunications services or it could try to write regulations against discrimination that it hoped could get past the courts. In May 2010, Genachowski boldly announced that he was redefining cable as a telecommunications service. That would have opened the door to re-regulating it. But the cable and wireless industry stepped in and were seconded by Republicans in the House and Senate. Genachowski backed down, and in December of that year introduced a proposal for net neutrality regulations for wired communications. As a sop to the big companies, wireless was exempted. But this January, a federal appeal court threw out Genachowski’s rules on entirely predictable grounds. It ruled that as an information service, internet companies were not subject to net neutrality rules. End of story.
So what could Wheeler, Genachowski’s successor, do? He could appeal the ruling, which he decided not to do. He could attempt, as Genachowski did earlier, to undo the damage that Powell, who is now the chief lobbyist for the National Cable and Telecommunications Association, did, or he could take another crack at writing regulations that might somehow get through the courts. Instead of risking a huge political battle that would come from trying to redefine internet providers, Wheeler outlined a new set of proposals for net neutrality.
Wheeler’s proposals seem to be even weaker than Genachowski’s. As senior FCC officials explained to the National Journal, the new proposal would allow a “two-sided market.” A company like Comcast could vary its charges to customers and also to content providers. Another official explained that there would be “flexibility” in applying non-discrimination rules. But leaving that aside, the proposal would still fail to get through the courts. The problem with Genachowski’s rules wasn’t that they were too strong, but that they were, strong or weak, rules against discrimination.
Here’s what the U.S. Court of Appeals for D.C. said in January about Genachowski’s rules:
Even though the Commission has general authority to regulate in this arena, it may not impose requirements that contravene express statutory mandates. Given that the Commission has chosen to classify broadband providers in a manner that exempts them from treatment as common carriers, the Communications Act expressly prohibits the Commission from nonetheless regulating them as such.
In other words, the commission has already exempted internet providers from Title II. There is nothing in Wheeler’s proposal that would prevent the Court of Appeals from coming to exactly the same conclusion. Wheeler’s proposal is wheel-spinning. It’s a waste of the people’s time.
In his proposal, Wheeler hints that he and the FCC might consider changing the definition of broadband providers. The statement is convoluted. He says that the FCC must “keep Title II authority on the table,” and continues:
As the Court of Appeals noted, as long as Title II — with the ability to reclassify Internet access service as a telecommunications service — remains a part of the Communications Act, the Commission has the ability to utilize it if warranted. Accordingly, the Commission’s docket on Title II authority remains open.
But it’s not enough—especially well into the Obama's second term—for the FCC’s docket to remain open. If Wheeler and the Obama administration really want to do something about net neutrality, they will have to move this proposal onto the docket and into law. That will bring the lobbies down upon them. Republicans will threaten to cut off funding for the FCC. But it can be done, and there is no other way to ensure net neutrality. My suspicion, though, after reading Wheeler’s proposals, is that he and Obama are not up to it.