How The FCC Plans Neuter The Net, Even As The FCC Insists Everyone's Got It All Wrong

from the from-net-neutrality-to-a-neutered-net dept

Fri, Apr 25th 2014 8:59am — Mike Masnick

So, we already wrote about why Tom Wheeler's "open internet" proposal is problematic, but Wheeler and the FCC are hitting back on everyone who's arguing that -- telling everyone to calm down, insisting that nothing has changed, and that they're actually trying to preserve the old "open internet" rules from 2010 that a court tossed out earlier this year.

The problem is that this is absolutely misleading -- and either the FCC doesn't realize this or it's not being honest. And, I'm not sure which one is more bizarre. Wheeler is, indeed, correct in saying that under the court ruling from earlier this year, in order to be able to do anything under Section 706 of the Telecom Act, they had to shift from talking about "unreasonable discrimination" (which they can't regulate under 706) to "commercially reasonable" activities (which they can regulate). So, in effect, Wheeler is trying to argue that by basically shifting the basis for the rules and substituting in the "commercially reasonable" standard as opposed to blocking "unreasonable discrimination" (which can be done under common carrier rules, but since the FCC reclassified broadband service as not being a telco service, that's not available), they're now back in proper legal territory under the law.

Perhaps Wheeler and his friends at the FCC think that this subtle shift in phrases to abide by the blueprint the court set out really does leave the existing rules in place. But, it's not that simple. As Stacy Higginbotham points out, even if the FCC doesn't want to destroy net neutrality, this subtle shift will do so anyway. To understand why, the best article to read is the one by Marvin Ammori, who has been fighting this fight for years. He argues that, unlike the CNET article above that says to "calm down," we should actually be even more worried. Because even if the FCC thinks it can stop net neutrality violations, companies are still going to get screwed. Basically, the FCC can only act after the fact, and then it's going to come down to a fight between a big telcos' lawyers... and a tiny startups' lawyers. Guess who wins?

The FCC will propose an incredibly vague and complicated multifactor test, one that takes into account the market conditions, technology, alternatives available to each side, competitive dynamics. This is the kind of stuff that requires very expensive expert witnesses in very expensive legal proceedings. There may be up to 16 factors listed, plus a catch-all for "other factors."

So, according to the FCC, when Verizon discriminates against a startup, we shouldn't be alarmed, because (while being discriminated against), this startup can hire a lot of expensive lawyers and expert witnesses and meet Verizon (a company worth more than $100 billion) at the FCC and litigate this issue out, with no certainty as to the rule. The startup will almost certainly lose either at the FCC or on appeal to a higher court, after bleeding money on lawyers.

He's not basing this on some theoretical crystal ball. It's already happened -- and it's obvious from the Court's ruling earlier this year:

Back in January, the D.C. Circuit struck down the FCC’s last attempt at net neutrality, saying that Section 706 does not permit the commission to stop nondiscrimination. It pointed to another legal decision, concerning data roaming, in which the FCC adopted a 16-factor test like the one I explained above. Based on an earlier case, the FCC can probably ban one or two specific practices, such as blocking certain websites or applications. That’s about it.

So here's the issue: the old rules were incredibly weak and nearly pointless in the first place. They didn't apply to wireless (nor, apparently, will the new rules) and they didn't really protect net neutrality. They were crafted, in part by the telcos, through a long-drawn out process, in which the former FCC boss tried to keep everyone happy and ended up pleasing no one. That's why we were a little perplexed at the outrage over those rules being thrown out earlier this year in the first place. Those rules were nothing great.

The problem is that this new proposal isn't just "those same old rules" as the FCC would like you to believe. Instead, they're the same old rules, made weaker at the critical juncture by the necessary legalese change to "commercially reasonable" and by the clear nature of what the court says the FCC is able to do under Section 706. And while some think the answer is to shift broadband back under Title II and put them under common carrier rules, that's almost certainly a political impossibility -- which is why Wheeler is trying to thread this needle.

As we've said for a decade now, the underlying problem is a lack of competition. These kinds of rules, including things like transparency into the crap that the telcos are pulling only matter if you have options. When you don't, then they can be transparent as to how they're screwing you over, and there's really just not much you can do. And that's kind of the situation we're in today. Wheeler claims this is no change and people are overreacting, but what they're realizing is that the existing rules in 2010 were kind of a joke anyway, and what little power they had to keep the internet open and non-discriminatory back then is now pretty much gone with this new wording. So, Wheeler may not want to be killing off the open internet, but the end result may be exactly that.

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Filed Under: commercially reasonable, discrimination, fcc, net neutrality, open internet, tom wheeler

28 Comments

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Anonymous Coward, 25 Apr 2014 @ 9:06am

wheeler is as full of shit as those from the entertainment industries like Dodd. they dont have the slightest interest in stopping massive industries and companies from getting even bigger, making even more money, while giving absolutely nothing of any use in return! this has been a carefully orchestrated plot, starting with the court case disputing Net Neutrality a few weeks ago! i sure hope that the EU stands their ground against this!
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Alien Rebel (profile), 25 Apr 2014 @ 9:07am

Sure, Calm Down, . .
Hey all you frogs in the pan, no need to get out; it's just your imagination that the temperature's rising.
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Anonymous Coward, 25 Apr 2014 @ 9:12am

'Wheeler may not want to be killing off the open internet, but the end result may be exactly that'.

it's definitely going to mean tired speeds. fast for those who can afford to pay, and piss poor speeds for those who cant! this is the very thing that should not be allowed to happen! the problem, as stated, is not enough competition. and we all know why that is and who caused it. it's about time those in congress who are on the taker in one way or another were made to be accountable. lining their pockets just so companies can rip off customers and line pockets more has created and is still creating a whole lot of problems which are only getting worse!!
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Berenerd (profile), 25 Apr 2014 @ 9:16am

So how does one apply for Citizenship in the UK?
Cause at this rate....its that, or I find an island and live ther ein international waters until death does take me.
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Anonymous Coward, 25 Apr 2014 @ 9:18am

Let's fix this the best we can by classifying last mile landline ISPs public utilities. Comcast has already admitted they don't compete with other cable providers, such as Time Warner Cable, due to regional franchise monopolies.

Seeing as Verison, AT&T, and Comcast have broadband customers backed up against a wall. Public utility classification seems to be the only option left.
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That One Guy (profile), 25 Apr 2014 @ 9:22am

Simple rule of thumb:
Any time a politician/government employee utters anything remotely along the lines of 'Trust me', it's time to assume the worst, because that's probably where it's going.
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Brazenly Anonymous, 25 Apr 2014 @ 9:52am

Re:
Public utility classification seems to be the only option left.

It was the only viable option from the beginning. There simply will never be a sufficient positive return from running competing infrastructure in parallel. This is why we have the concept of utilities in the first place.

Think of the internet as a series of roads, with different websites being package delivery services. O365 v Gmail is akin to FedX v UPS. Time Warner v Comcast to the same neighborhood would be akin to a highway with multiple wholly closed off lanes, each with a toll collected by a different company.
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Anonymous Coward, 25 Apr 2014 @ 9:58am

Net neutrality destroyed, huge legal bills to challenge ISP decisions and MAFIAA companies gaining control over ISP's. Any bets against the consumer net bandwidth going asymmetrical, so that any uploads take forever, and get interrupted to kill uploads of big files, and peer-to-peer being killed off?
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Anonymous Coward, 25 Apr 2014 @ 10:35am

Re:
Indeed, the fact of the matter is there will simply NEVER be enough competition to prevent the kind of abuses that are going to happen without net neutrality.

The reason why there will never be enough competition are the following.

1) It would take billions of dollars to start up a serious competitor with the infrastructure to actually be a threat. Start ups don't have billions of dollars in capital.

2) Even if a new competitor had the money, it would take years to build the infrastructure.

3) It would take a very long time for a new competitor to become profitable and start paying back it's investors.

4) Start ups are risky, a majority of them fail and go bankrupt. So combine that with items 1, 2, and 3, and most investors will find something that needs less start up capital and will pay them back quicker.
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Anonymous Coward, 25 Apr 2014 @ 10:53am

Common carrier status would fix this.
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Anonymous Coward, 25 Apr 2014 @ 10:57am

Re: Re:
Exactly. The issue isn't neutrality, it's lack of competition in a monopoly situation.

Infrastructure needs to ruled as a public utility and the providers regulated as such.
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Trevor, 25 Apr 2014 @ 11:16am

Oops
By shifting from "Unreasonable Discrimination" to "Commercially Reasonable" standard, they are acting "solely to fit within the law" and are therefore in violation of it.

Your move, logic.
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Anonymous Coward, 25 Apr 2014 @ 11:30am

Re: Re:
It might be a slow build up, but the electricity distribution industry have the rights of way, and can include fiber in their cables, or over their poles and pylons, as the replace them, or put in new ones. The interesting point is that in combination they have have connections to everywhere the Internet needs to go.
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Anonymous Coward, 25 Apr 2014 @ 11:31am

Better deffinition
It is commercially reasonable to allow a company to pay for higher speed delivery of it's content to an ISPs subscriber base when the ISP delivers the maximum advertised speeds to all of it's customers regardless of all other conditions.
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toyotabedzrock (profile), 25 Apr 2014 @ 6:10pm

Why not sue the FCC to classify isps as common carriers?
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Anonymous Coward, 25 Apr 2014 @ 7:09pm

Let's look at this from a different angle. While it's true last mile landline ISPs having a monopoly on broadband subscribers, they also have a monopoly on content delivery ISPs, such as Netflix.

In order for Netflix to reach their end-users/customers, they're forced to go through last mile landline ISPs to reach them.

This effectively allows last miles ISPs to have a monopoly on both ends. They have a monopoly on the own subscribers, and they also have a monopoly on access to Netflix's subscribers, too.

This makes it all the more important to classify last mile ISPs as public utilities, and to heavily regulate them as monopolies.

This has all been caused by a lack of competition in the landline broadband market, due to aggressive regional franchise regulations being pushed by last mile landline ISPs, in order to keep competition out of their marketplace.

In the end, landline broadband providers would have no one to blame but themselves, if they become heavily regulated as public utility monopolies.
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Anonymous Coward, 25 Apr 2014 @ 7:24pm

So maybe this is how net neutrality needs to be framed...
There are two types of packets, black packets and white packets. White packets are the privileged little packets that have money behind them that everybody loves and knows. White packets carry the clout and resources from their privileged background that allow them to be excused for any inconveniences that they may happen to cause for whatever reason. Black packets are the little packets that have to struggle for acceptance every step of the way. Even if their purpose is good, they will be portrayed as the cause of all that is wrong with networking even when the problems really aren't anything that they had anything to do with. The problem with racial discrimination is the discrimination not the color. Still people seem to focus on the color aspect of it all for some reason. Maybe then if we introduce arbitrary color to this issue people will see how it is just as bad.
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vancedecker (profile), 26 Apr 2014 @ 10:51am

Preimium Services Cost Money
The problem is that we just don't have unlimited bandwidth to accommodate high usage piracy seeking customers.

It makes sense that companies offering premium services, which spend a lot of money producing professional content, should have their pages served up faster than some Mommy blogger hawking unsanitary cloth diapers or some 'natural' orange cleaner scam.
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nasch (profile), 26 Apr 2014 @ 11:01am

Re: Preimium Services Cost Money
The problem is that we just don't have unlimited bandwidth to accommodate high usage piracy seeking customers.

You're trolling, right?
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vancedecker (profile), 26 Apr 2014 @ 11:15am

Re: Re: Preimium Services Cost Money
Are you denying that the majority of the readership here are simply afraid that their torrents and access to piratebay and megashare will be curtailed?
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nasch (profile), 26 Apr 2014 @ 2:27pm

Re: Re: Re: Preimium Services Cost Money
Are you denying that the majority of the readership here are simply afraid that their torrents and access to piratebay and megashare will be curtailed?

Yes, absolutely.
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OrganizedThoughtCrime (profile), 27 Apr 2014 @ 1:14am

Re: So how does one apply for Citizenship in the UK?
Maybe start here. Though I am a bit of an anglophile, I don't think I'd recommend the UK as a first choice. Naturalized citizenship can take anywhere from 1 year on the low end (Brazil) to 12+ years on the high end (Switzerland) with the average being about 5 years. Also, citizenship through naturalization isn't always guaranteed, either. Definitely something worth considering, though.
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OrganizedThoughtCrime (profile), 27 Apr 2014 @ 1:52am

Re: Preimium Services Cost Money
"The problem is that we just don't have unlimited bandwidth..."

So, what you're saying is that it's ok for an ISP to advertise and sell a product or service and then not deliver what was promised? Or are you suggesting that customers are outrageously demanding more bandwidth / speed than they're paying for? Or are you saying that ISPs somehow cannot throttle speeds or set data caps?

That doesn't make sense, nor does your second statement. It does not make sense that companies which offer 'premium' services should have priority over anyone else whom you simply do not like.
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Anonymous Coward, 27 Apr 2014 @ 3:06am

Re: Re: Re: Preimium Services Cost Money
There is more than enough free legal content on the Internet to allow people to entertain and educate themselves without having to resort to piracy. Therefore I am more worried that the ISPs and the MAFIAA are conspiring to kill self publishing to protect their business. When you whole business depends on controlling other peoples works, convenient self publishing is a major threat, especially when technology makes the creation and production of films viable for a small group with limited capita. An expensive fast lane is a way of killing of their competition by pricing them off of the Internet.
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fgoodwin (profile), 27 Apr 2014 @ 6:36am

Have you actually SEEN the "proposed" rules?
Masnick, have you actually seen the proposed rules?

Either you've seen them (and no one else has), or you're psychic. Do you know if the final rules will read like the (so far unseen) proposed rules?

How else to explain the fact that you can lay out the impact of the proposed rules, sight unseen?
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Leonardo (profile), 28 Apr 2014 @ 6:19am

Net Neutrality over Wireless Licenses is nowhere yet Wheeler is rushing to auction these licenses
Wheeler is going full press with the incentive auctions yet when Verizon lobbied and achieved passage of a bill in 2002 declaring wireless broadband is not telecommunications, Net Neutrality has no standing, classifying them as �information services� not subject to Title II of the Communications Act.

Why would Wheeler rush to auction these licenses until the Net Neutrality is in place. Wireless broadband is telecommunications.
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John Fenderson (profile), 28 Apr 2014 @ 9:25am

Re: Re: Re: Preimium Services Cost Money
"Are you denying that the majority of the readership here are simply afraid that their torrents and access to piratebay and megashare will be curtailed?"

I absolutely, categorically deny that.
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John Fenderson (profile), 28 Apr 2014 @ 9:28am

Re: Preimium Services Cost Money
"The problem is that we just don't have unlimited bandwidth to accommodate high usage piracy seeking customers."

Granting your assumption that this is a problem for the sake of argument, the existing system already deals with this. When you pay for internet service, you're paying for a certain amount of bandwidth. Those "high usage piracy seeking customers" are paying for all that bandwidth they're using. If they're underpaying, then the solution is to raise the rates, not to break network neutrality.

"It makes sense that companies offering premium services, which spend a lot of money producing professional content, should have their pages served up faster than some Mommy blogger hawking unsanitary cloth diapers or some 'natural' orange cleaner scam"

Why does this make sense? You're just stating this as if it were an obvious fact, but I don't think it's obvious at all. What is the argument?
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