In The FCC's Own Words: Chairman Wheeler Has Proposed Online Discrimination, Paid Prioritization, And Exclusive Deals

from the that's-not-net-neutrality dept

Mon, Sep 15th 2014 12:32pm — Marvin Ammori

Last week, we showed how the Verizon court decision made it clear that without Title II reclassification, the internet would be open to discrimination, paid prioritization and exclusive deals. This week, we're looking at how FCC Chairman Tom Wheeler's claims back that up, despite his attempts to argue otherwise.

Chairman Wheeler claims to oppose discrimination and a two-tiered Internet of fast lanes and slow lanes.

Chairman’s speech on 5/15/14: “This agency supports an Open Internet. There is ONE Internet. Not a fast internet, not a slow internet; ONE Internet. … The potential for there to be some kind of ‘fast lane’ available to only a few has many people concerned. Personally, I don’t like the idea that the Internet could become divided into ‘haves’ and ‘have nots.’ I will work to see that does not happen. In this Item we specifically ask whether and how to prevent the kind of paid prioritization that could result in ‘fast lanes.’”

But his proposal would authorize discrimination and a two-tiered Internet of fast lanes and slow lanes.

Chairman’s proposal: “[W]e propose to adopt the text of the no-blocking rule that the Commission adopted in 2010, with a clarification that it does not preclude broadband providers from negotiating individualized, differentiated arrangements with similarly situated edge providers (subject to the separate commercial reasonableness rule or its equivalent). So long as broadband providers do not degrade lawful content or service to below a minimum level of access, they would not run afoul of the proposed rule. We also seek comment below on how to define that minimum level of service. Alternatively, we seek comment on whether we should adopt a no-blocking rule that does not allow for priority agreements with edge providers and how we would do so consistent with sources of legal authority other than section 706, including Title II.” (para. 89)

That is, the rule proposed would allow for cable and phone companies to offer and cut new deals with websites and applications, and those deals do not have to treat similar companies similarly. These priority arrangements could be for a fee, and wildly different fees for each site. As an "alternative" to the proposal, the FCC agreed to ask whether it should adopt a rule that forbids "priority arrangements," but that is certainly not Wheeler's official proposal.

Further, Wheeler is also proposing exclusive deals, with merely a rebuttable presumption against a very small subset -- between an ISP and a website it owns. So Verizon-Amazon or Comcast-Apple exclusives would be legal.

In light of such concerns, we propose to adopt a rebuttable presumption that a broadband provider’s exclusive (or effectively exclusive) arrangement prioritizing service to an affiliate would be commercially unreasonable. (para. 126)

What this means is that the FCC is presuming that all exclusive deals with websites and applications are reasonable -- except for a small subset where a cable company makes an exclusive deal with a company it owns. So if Comcast prioritizes NBC.com (which it owns) and one other company (say Apple or Facebook), then Comcast's deals are presumed reasonable. If Verizon makes an exclusive deal with one investment platform (e.g., E-Trade or TD Ameritrade), then the exclusive deal is presumed reasonable because Verizon does not own either of them.

As I noted in my previous post , if the FCC relies on the authority in Section 706, and not the one in Title II, the FCC must in fact permit discrimination, paid prioritization, and exclusive deals. Meaning, so long as the FCC grounds its rule in Section 706 and not Title II, Wheeler could not have even proposed a better rule.

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Filed Under: discrimination, exclusive deals, fcc, net neutrality, open internet, paid prioritization, reasonable, section 706, title ii, tom wheeler

33 Comments

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OldGeezer (profile), 15 Sep 2014 @ 12:47pm

This guy is so two-faced he could sing a duet with himself! Sounds too much like James Clapper's "least untruthful answer".
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That Anonymous Coward (profile), 15 Sep 2014 @ 12:55pm

Maybe instead of pouring money into them for the last decades, we should have taken that fund and wired up the whole damn country.

Then we'd not have a few companies trying to find creative ways to get even more money instead of having to actually expand their networks to meet what they already sold.

So services will have to pay to travel over the the lines, customers will have to pay to access the line, and pay more when the data caps get put into place because they are jealous of the money wireless is pulling in.

And magically no money will be put into improving the service or underlying infrastructure, making sure that broadband is capped at 1024kbps and the fact no one is willing to pay the cost of a new car for faster speeds will be all the convincing the FCC needs that we shouldn't have better.
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Anonymous Coward, 15 Sep 2014 @ 12:57pm

so, he IS a dingo...
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Baron von Robber, 15 Sep 2014 @ 12:57pm

The dingo has bit the baby.
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Richard (profile), 15 Sep 2014 @ 1:08pm

Cars
Imagine a system of toll roads where you paid differently according to what make of car you were driving - and/or had speed limtis that varied for the same reason.

This is what is proposed.
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John Fenderson (profile), 15 Sep 2014 @ 1:22pm

Re: Cars
You know, car analogies for the internet usually don't work, but this one isn't too bad. It needs an additional thing, though -- imagine if you had to pay differently depending on who owns the place you're traveling to.
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Anonymous Coward, 15 Sep 2014 @ 1:29pm

Re: Cars
That already happens. Hybrids pay lower tolls in some areas and trucks get different speed limits. Then there's the HOV lane.....

http://www.thruway.ny.gov/ezpass/greentag.html
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John Fenderson (profile), 15 Sep 2014 @ 1:35pm

Re: Re: Cars
I always forget about toll roads & bridges (I live in an area where there aren't any). Thank god that disease hasn't made it to my part of the country. They are an abomination.
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Anonymous Coward, 15 Sep 2014 @ 1:42pm

Re: Re: Re: Cars
You need Rick Perry for a guvna then.

He loves that shit!

~Texan
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Johnny B. Goode, 15 Sep 2014 @ 2:31pm

Pay Attention to the Phrasing
I'm afraid I disagree with the author's analysis of the statement. I would like to call attention to a part of the bold text(emphasis does not appear in the original) in the quote from the article, "with similarly situated edge providers".

Granted this gets into an area that I despise, the intersect of legal and technical definitions, but what what this sounds like to me is the preservation of the very common and long standing practice of peering agreements.

This is important because, in general, peering agreements have nothing to do with content. There are situations where the peering agreement does have to do with content, and I'm sure most of this site's readers will be familiar with the Netflix/Comcast agreement.

While the Netflix/Comcast agreement does give Netflix a "better" connection to Comcast's network, it is important to understand that this is an edge connection between two networks. I say this because most of the media attention(I include the blogosphere in this statement) illustrates a situation more similar to a QoS implementation prioritizing Netflix traffic.

This brings me to two important points:
1.) There is a world of difference between increasing throughput on an edge connection and implementing QoS.
2.) Without these peering agreements the internet as it exists today would cease to function.

What I think is the most important point to note is made in the last paragraph of the article, dealing with what authority the FCC is relying on. In reality, the FCC is on shaky ground making any attempt to regulate internet traffic in any way. The FCC knows this, and so do most other folks knowledgeable on the subject.

This is one of many reasons why I think most of what the FCC can/may do at this point is little more than lip service. What remains to be seen is whether or not they decide to pursue actions(undoubtedly with heavy opposition) that do make a significant impact.

This situation, in my opinion, also further underscores the need for significant internet related legislative actions far beyond the authority of the FCC.
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Johnny B. Goode, 15 Sep 2014 @ 2:35pm

Re: Pay Attention to the Phrasing
Dang it, forgot the '/' in the ending tag for the italics. Only "most" was supposed to be italicized.
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Anonymous Coward, 15 Sep 2014 @ 2:37pm

"So long as broadband providers do not degrade lawful content or service"

Who determines what's legal , Comcast and Verizon could decide that a site who's had a DMCA request sent to them as illegal , I'm not good with this wording, It's a dingo in a baby suit.
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Jack, 15 Sep 2014 @ 2:50pm

Re:
AC you need the read the rest of the sentence since you are missing the key piece - they CAN degrade content and services as long as it doesn't go below a specific and completely undefined "minimum level of access" threshold...

When the FCC references "minimum level of access" you really need to be concerned seeing as their "advanced" level of access is a whopping 4 Mbps...
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Anonymous Coward, 15 Sep 2014 @ 3:06pm

Big isp's better watch themselves sooner or later they'll be asking for tax money to upgrade the lines, that's when citizens should push for ownership rights. especially if it ends up as a 1% tax like the past.
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Anonymous Coward, 15 Sep 2014 @ 3:15pm

And so the revolving door strikes again. Corruption is once again displayed for all to see. Being flooded with congressional calls, emails, and an internet slow day didn't make a dent. Politics as usual.
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John Fenderson (profile), 15 Sep 2014 @ 3:26pm

Re:
Yes, I had the same concern about that wording. Not only in terms of who determines what is legal, but also in terms of how that is determined: the only way it really could be determined is to spy on the users through DPI.
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Anonymous Coward, 15 Sep 2014 @ 4:41pm

Re: Re:
Does Comcast consider TOR "illegal" or not - first they say one thing and then later deny it.
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Anonymous Coward, 15 Sep 2014 @ 4:45pm

Every day, I start to wonder more and more whether or not we're in the waning days of the internet. Or an internet worth paying money for, anyway.
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Nicci Stevens (profile), 15 Sep 2014 @ 7:15pm

Re:
Every day, I start to wonder more and more whether or not we're in the waning days of the internet. Or an internet worth paying money for, anyway.

Perhaps that is the true intent of the govt. It might sound like tin-foil-hat thinking but what if the pesky internet was removed and instant, user generated content (read: dissent) were quashed?
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Anonymous Coward, 15 Sep 2014 @ 11:31pm

Re: Re:
No I understood it , what I'm questioning is who'll be judge and jury and ultimately the executioner, when it comes to what content is legal or not , remember even fair use isn't assured, 4Mbps, being the lowest but many people only have the choice of that connection will they be slowed or completely shut off.
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LduN (profile), 16 Sep 2014 @ 4:42am

so...
I have 3 internets at my houses. Ones is for the facebook, ones is for mys emails (lets say gmail), and ones is for netflix. Is got great dealses on all 3 I only pay 3/4 of my monthly salaries a weeks!

That is what the future could turn out to be... oh my.
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Whatever (profile), 16 Sep 2014 @ 6:39am

Re: Pay Attention to the Phrasing
I think you are correct here. The FCC appears to be saying that they do not think that adding direct peering to services such as Netflix is a problem provided that their other peering arrangements are not overloaded or they otherwise deny or degrade access to other similar services.

The author really needs to take a step back and re-read the original FCC quote, and come to understand the issue.

Now, I personally think that such direct peering arrangements are still against the concept of net neutrality if you take it to it's absolute limit. My personal feeling is that ISPs should always obtain their peer connectivity from transit providers, and that services should do the same. In that manner, all services would generally have the same access to the ISPs network. However, peering is the very nature of the internet, and a direct peering arragement that doesn't cause other services to be degraded, blocked, or obstructed appears to be neutral enough.
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Whatever (profile), 16 Sep 2014 @ 6:42am

Re: Re: Re:
I should point out too that all of this is predicated on the nonsense concept that ISPs want to actively block normal web traffic to somehow extort more money from the public. It's amusing to see people pushing more straw into that already over stuffed strawman.
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John Fenderson (profile), 16 Sep 2014 @ 8:00am

Re: Re: Re:
I thought about bringing that up, but since Comcast is making a strenuous denial and I haven't heard of other reports of them doing this, I think that we don't really know what they're doing or not doing quite yet.
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LewisV (profile), 16 Sep 2014 @ 10:49am

The Truth About Chairman Wheeler...
Wheeler is a finger-puppet. And we all know where the cable & telecom industry's fingers are located.
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R Andrew Ohge, 16 Sep 2014 @ 11:57am

Wheeler-Dealer Tom
We sent E-mails-Millions, made calls-hundreds of thousands-if not millions, but the industry always had "Wheeler-Dealer Tom" in their pockets, and because they control the MSM, the Public can potentially be conned into believing it's all for the best, and will even save money.

"Wheeler-Dealer Tom" knows which side of the bread to butter.
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GEmont, 16 Sep 2014 @ 3:06pm

testing
testing
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nasch (profile), 16 Sep 2014 @ 4:19pm

Re: Re: Re: Re:
I should point out too that all of this is predicated on the nonsense concept that ISPs want to actively block normal web traffic to somehow extort more money from the public.

You're right, so far only one ISP has demonstrated a desire to do that. I mean, what are we worrying about right?
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Whatever (profile), 17 Sep 2014 @ 8:20am

Re: Re: Re: Re: Re:
Oh really? who did that exactly? If you are going to say "comcast" or whatever in dealing with Netflix, try not to hurt yourself trying to prove the point. It's not the ISPs blocking, it's Netflix rapidly ramping up the number of customers and overwhelming networking that was otherwise fine.

Should point out too that even with Netflix being willing to purchase prefential service, it's still going to take a long while to get it all hooked up and working. There are no instant solutions... just Netflix blaming others for their business model failings.
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nasch (profile), 17 Sep 2014 @ 8:48am

Re: Re: Re: Re: Re: Re:
If you are going to say "comcast" or whatever in dealing with Netflix, try not to hurt yourself trying to prove the point. It's not the ISPs blocking, it's Netflix rapidly ramping up the number of customers and overwhelming networking that was otherwise fine.

No, it was Comcast intentionally letting their links with Netflix's provider saturate.

Should point out too that even with Netflix being willing to purchase prefential service, it's still going to take a long while to get it all hooked up and working.

Wrong, speeds immediately recovered after Netflix paid up.
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Gwiz (profile), 17 Sep 2014 @ 12:06pm

Re: Re: Re: Re: Re: Re:
Should point out too that even with Netflix being willing to purchase prefential service, it's still going to take a long while to get it all hooked up and working. There are no instant solutions... just Netflix blaming others for their business model failings.

So much wrong in that sentence...

First off, the conflict was between Verizon and Netflix (and Level3 after Verizon pulled them into it).

Verizon "fixed" the problem by spending 5 minutes and a couple thousand dollars for a new port card, but only after Netflix payed up.

https://www.techdirt.com/articles/20140718/06533327927/level3-proves-that-verizon-is-absolutely-t o-blame-netflix-congestion-using-verizons-own-data.shtml
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nasch (profile), 17 Sep 2014 @ 2:54pm

Re: Re: Re: Re: Re: Re: Re:
First off, the conflict was between Verizon and Netflix (and Level3 after Verizon pulled them into it).

I was thinking it might have been Verizon, thanks for mentioning that.
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BernardoVerda (profile), 17 Sep 2014 @ 5:48pm

Re: Pay Attention to the Phrasing
"Armed robbery" is not allowed. We're not going to change that. But this is just a "side-arm incentivized transfer of funds" -- so it's not a concern.
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