Connecting The Telecom Dots Behind ‘Net Neutrality’ (Hint: It’s About The Money)
Connecting The Telecom Dots Behind ‘Net Neutrality’ (Hint: It’s About The Money)
Connecting The Telecom Dots Behind ‘Net Neutrality’ (Hint: It’s About The Money)

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    The Pew and the American Life project came out with a pretty scary report last week. The words, “Pew” and “scary” aren’t often used together, but in this case the description is apt.

    Pew’s latest study on the future of the Internet asked in technical terms whether the Internet over the next 10 year will be controlled by consumers. The specific question was: Will the Internet still be dominated by the end?to?end principle? The “end-to-end principle” that was built into the Internet at its early stages means that consumers at one end of an Internet connection had a direct, one-to-one relationship with the online destination – a chat site, music site, shopping site, news site, whatever you want and wherever you want to go without interference or influence from the company making that connection for you – the Internet Service Provider (ISP).

    It means you, the consumer, determine the level of service you want – how fast, how slow, how much data, how expensive. The ISP makes the bits flow but stays out of the content. It doesn’t, for example, make one movie company’s service work faster than another’s because one company paid (was forced to pay or felt it had to pay) the ISP for the privilege on a special “fast lane.” You make the call on how fast a service you want and how fast a movie should load up, without a business relationship out of your control figuring into the picture. The companies providing your Internet access have to abide by your wishes, providing the service in an open, non-discriminatory way. That’s Net Neutrality.

    Net Neutrality About the Money

    It is misleading, however, to say that the current debate over Net Neutrality and the open Internet is about the Net. The current debate over Net Neutrality and the open Internet is not about the Net. It’s not about Neutrality. It’s not about openness. It’s about you. It’s about Personal Internet Freedom vs. Corporate Internet Control. It’s all about the money.

    There’s a reason that Verizon and AT&T and Comcast and the rest of the crew are spending millions of dollars on their lobbying, campaign contributions, front groups and academics to beat up on the Federal Communications Commission (FCC), Congress, state regulators, state legislators and anybody else who gets in their way. It’s not for any particular principle. It’s not because of some disagreement over arcane issues in telecommunications law. It’s so they can shape today’s Internet to their liking, and make money from it as they want the Internet to be, and what they want isn’t pretty. They want two things: 1) To do what they want, including destroying (or at least severely restricting) the Internet as we know it. 2) To do it without any government oversight or consumer protection.

    Most of the industry experts polled in the Pew study liked the concept of the consumer-controlled, “end-to-end” model, because it has worked so well. Yet, one-third of those studied don’t think the model will endure. Why? Because of the power of the telecom industry. One of the most pessimistic answers came from Susan Crawford. She was an advisor to the Obama campaign, served on the transition team and worked for a year on the National Economic Council staff before returning at the beginning of this year to legal academia at the University of Michigan. Here is what she said: “The locked?down future is more realistic as things stand now. We've got a very cautious government, an international movement towards greater control, and a pliant public. I wish this wasn't the case.”

    The big question is whether our government will withstand the unprecedented all-out assault the industry has mounted since last fall when FCC Chairman Julius Genachowski announced plans for a Net Neutrality rulemaking. (Not that they haven’t opposed it previously. This is simply the latest chapter.)

    More recently, all the industry bigwigs banded together on one letter to the FCC. Verizon, AT&T and Qwest signed on to protest the possibility that the FCC could have any real jurisdiction and authority over Internet access. Comcast, the biggest distributor of high-speed broadband didn’t, but as usual worked through the National Cable and Telecommunications Association (NCTA), which did sign. They complained about an idea advanced by Public Knowledge that took the bizarrely radical position that somebody should be looking out for consumers in an industry that lacks meaningful competition and any safeguards. The letter, 14 pages long, was full of bluster, misleading arguments and misdirection. We’ll get to that in a minute, but first let us pause for a brief dive into the telecom weeds, followed by a little game of connect the dots.

    Shell Games In Telecom Law

    The weedy part is quite simple. There are two sections of the telecommunications law that govern most of high-speed Internet service. One part we will call Title II, because that’s the relevant part of the Communications Act. Under Title II, telephone service was considered as a “common carrier.” Much like buses or railroads, telephone companies had to carry everyone’s traffic, could not discriminate among customers and were subject to oversight by a governmental agency, in this case the FCC. Title II contained consumer protections, the regulatory oversight, the requirements that allowed the Internet to flourish by allowing other companies buy access to telephone company lines to offer their own services, and the potential to check the egregious behavior of telephone companies. (Note: the Internet access service offered by cable companies was never covered by Title II.)

    The other section of the telecommunications law is called Title I, after another part of the Communications Act. It’s a vague, sort of a catch-all section, covering by implication everything that’s not in any other part of the law. Over the last eight years or so, the FCC moved Internet access services out from the protections of Title II and into Title I. It was under Title I that the FCC found that Comcast has violated the agency’s Internet principles of non-discrimination by throttling the traffic of some of its customers.

    Now we come to the connect-the-dots part of our game.

    First dot – the entire weight of the telecom industry pounds on the FCC in that Feb. 22 letter that it would be a “profound mistake” to put the Internet access services back into Title II. My learned colleague Harold Feld dives into some of the more sordid details of the letter, including the unusual and anachronistic Red-baiting apparently intended for conservative members of Congress. One of the more laughable aspects of it was the passive-voice assertion that any attempt to reclassify broadband services “would plunge the industry into years of litigation and regulatory chaos.” Nowhere does the letter bomb note that it’s the telecom industry that files most of the lawsuits when it takes every FCC order to court.

    The letter also conjures a mythical parade of horribles intended to prey on some visceral anti-regulatory mindset ranging from the scare tactic of saying that the entire Internet could be regulated, including Google or YouTube to the regulatory burdens on the companies that such regulation would impose. (Helpful hint: It would probably cost less to comply with minimal regulation than all the money they are spending on lobbying.) There’s no mention of the great flexibility the FCC has to determine how to regulate something, if at all, under Title II.

    Anyway, call the first dot – no Title II.

    Second dot – In other FCC proceedings and in court, the same companies challenging the Title II authority are also arguing the FCC has no authority under Title I. When the FCC in October last year proposed rules for a free and open Internet under Title I, guess what the telecom industry, including AT&T, Verizon, Comcast and the cable trade group all said? OK, it’s too easy – the FCC has no authority to adopt the rules. In its throttling case, Comcast sued the FCC on those same grounds and may well win.

    Anyway, call the second dot – no Title I.

    Intermediate Ironic Dot. We note that in that 14-page letter, the industry argued that the FCC’s Title I treatment of Internet services “has produced huge benefits for consumers.” Consistency. Hobgoblins. Etc.

    Connecting these two dots is simple. In Dot One, the industry drops its letter bomb on the FCC saying it’s a bad idea to regulate under Title II. In Dot Two, the industry says the FCC has no jurisdiction under Title I. What are we left with? Nothing. The industry is arguing for no FCC jurisdiction at all over high-speed Internet access services. So if a company like Comcast is caught throttling the traffic of its customers, too bad for you. They don’t want to be bound by the rules against “unjust and unreasonable discrimination.” So they want to unjustly and unreasonably discriminate? Sure.

    Dismal End Game

    The industry has said it wants the freedom to offer “customized solutions,” or “managed services” or any number of jargon-ish descriptions that translate into changing the nature of the Internet. All of a sudden, new, expensive “quality of service” add-ons will be necessary for Web sites to get the “best service,” new “customized solutions” will be required, all of which will be expensive. The victims will be the start-ups and innovators who don’t have the money to be put into the new “fast lane.”

    It’s not all business. Thousands of organizations that use the Web to advocate causes also lose, because they wouldn’t have the money to get their messages out. One can ask, as the Personal Democracy Forum asks, Can the Internet Fix Politics? But it’s not worth asking the question if organizations can’t get online to start with, or are severely hampered once they do.

    Web sites will have to cut deals with every Internet Service Provider to get that extra-good treatment everywhere or find that without some “managed service” their sites don’t look as good and the video isn’t as crisp. The possibilities for mischief are endless, but the end game is clear – the Internet as we know it, with consumers in control, goes away. You lose your personal Internet freedom. The monster telecom industry gains Corporate Internet Control. You lose. They win. Pay up. That's why the Pew study is scary.