Remaining FCC Commissioners Promise To Gut Net Neutrality 'As Soon As Possible'

from the nice-knowin'-ya dept

We've already noted how large ISPs are licking their chops on reports that the incoming Trump-led FCC plans to not only gut net neutrality, but to defang and defund the FCC also. Most of Trump's telecom advisors have direct ties to telecom; one, former Sprint lobbyist Mark Jamison, doesn't think telecom monopolies are real. Verizon lawyer turned current FCC Commissioner Ajit Pai is rumored to be the most likely candidate for future FCC boss, and just last week proclaimed that net neutrality's days are numbered under Trump.

Just in case the nation's incumbent ISPs didn't get the message that "happy days are here again" for Comcast, AT&T and friends, Pai and fellow FCC Commissioner Mike O'Rielly penned a letter this week to the telecom industry's five largest lobbying groups, proudly proclaiming that the new FCC will attempt to put net neutrality on the chopping block "as soon as possible":

"[W]e will seek to revisit [the disclosure] requirements, and the Title II Net Neutrality proceeding more broadly, as soon as possible," they wrote, referring to the order that imposed net neutrality rules and reclassified ISPs as common carriers under Title II of the Communications Act. Pai and O'Rielly noted that they "dissented from the Commission's February 2015 Net Neutrality decision, including the Order's imposition of unnecessary and unjustified burdens on providers."

Pai and O'Rielly will have a 2-1 Republican majority on the FCC after the departure of Democratic Chairman Tom Wheeler on January 20. Pai previously said that the Title II net neutrality order's "days are numbered" under Trump, while O'Rielly said he intends to "undo harmful policies" such as the Title II reclassification."

Of course if you've actually paid attention you'll recall that net neutrality has broad, bipartisan support among consumers, and companies like Comcast have let slip that neutrality -- and the shift to Title II -- really have had little actual impact on their businesses despite ample hand-wringing among sector giants. And of course the rollback of Title II won't just impact net neutrality, it would hamstring the FCC as broadband consumer watchdog entirely, demolishing efforts like the FCC's recently passed privacy rules that simply require ISPs are transparent about data collection and provide working opt-out tools.

This disconnect between what consumers want and what ISPs want will prove tricky for Pai and friends, who'll face major bureaucratic difficulties and a significant activist backlash in trying to roll back the rules. Doing so will require a lengthy, new comment period, during which the media and activists would only highlight how Pai and O'Rielly are undermining the very innovation they often pay empty lip service to.

As such, you can expect some impressive theatrics in the new year. This will likely come in the form of a Communications Act rewrite or another bill that professes to adore net neutrality, but actively works to undermine the entire concept via the law. Much like the eleventh hour faux-neutrality bill pushed last year by Senator John Thune and Representative Fred Upton, this legislation will almost certainly contain ample, intentional loopholes, will only ban the most egregious violations (like outright banning websites, which no ISPs would do), and will act to formally make non-net neutrality the law of the land.

It will then attempt to declare the matter settled, ignoring the lack of competition that makes such violations possible in the first place. This kind of net neutrality trojan horse is something Wheeler warned about last week when he announced his January 20 resignation as current boss of the agency:

"Wheeler mostly declined to speak about the Trump administration's potential policies but said he hopes that net neutrality rules that forbid blocking, throttling, and paid prioritization will survive. One possibility is for Congress to eliminate Wheeler's net neutrality rules and impose a new, weaker version. "I hope that if there is legislation, that it is net neutrality in more than name," and "not some kind of false labeling where net neutrality rules are actually gutted under the name of being net neutrality," Wheeler said."

Whatever form this new proposal takes you can be certain it will feature breathless adoration of consumers, innovation, and broadband competition -- while actively undermining all three.

Filed Under: ajit pai, fcc, mike o'rielly, net neutrality

Comcast Admits Net Neutrality Rules Had No Real Impact On The Company

from the chilling-effect-of-bullshit dept

Back when AT&T, Verizon and Comcast were fighting tooth and nail against the FCC's net neutrality rules, you'll recall that most of them made all manner of breathless, hyperbolic claims about how net neutrality would demolish sector investment, rip the planet off its axis, and disrupt the time-space continuum. For example in 2014 Comcast was quick to try and claim that the passage of such consumer protections would hurt jobs, stifle investment, and otherwise forge a calamitous, unlivable hellscape:

"The sheer uncertainty surrounding such a regulatory environment would produce ‘a profoundly negative impact on capital investment.’ By itself, reduced investment would inhibit job creation, hinder the deployment of broadband infrastructure, and undermine the ‘virtuous circle’ of innovation that the open Internet rules are designed to advance."

Of course, none of that actually happened. And while the industry did try to pay some industry-allied think tankers to fudge the numbers and make it look as if an investment apocalypse occurred, the actual numbers never actually supported that. While not always the case in less competitive areas, overall sector investment has been as healthy as ever, especially as wireless providers fixate on deploying fifth generation (5G) wireless services.

Speaking at an investor conference last week, Comcast CFO Mike Cavanaugh basically acknowledged that the company overstated the perils of the country's relatively basic net neutrality protections (and the reclassification of ISPs as common carriers under Title II), admitting the impact of net neutrality on Comcast's actual business one way or the other was negligible:

"If you saw Title II go away or the reclassification undone,” the analyst asked, “would that be a meaningful change or meaningful benefit for Comcast?"

Cavanaugh’s answer? Basically, it doesn’t matter.

“I think in terms of what actually happens,” Cavanaugh said, “it’s the fear of what Title II could have meant, more than what it actually did mean.”

Except the "fear of what Title II could have meant" was driven largely by baseless hysteria concocted by Comcast itself. And immediately after effectively admitting that there's nothing to fear but fear itself, Cavanaugh tried to suggest that the faintest specter of a telecom regulator actually doing its job had a "chilling effect" all the same (citation needed). He also tried to claim that Comcast really, truly loves net neutrality despite making up complete bullshit repeatedly in an attempt to scuttle it:

"As you know, we very much believe in the principles behind what [the] policy was trying to get at,” he continued, “but the overhang of where it could go in the future was something that I think had a chilling effect. Hopefully that chilling effect is gone; both from how investors look at the space and businesses look at the space."

Cavanaugh's enthusiasm about the lifting of this nonexistent "chilling effect" is obvious: the incoming Trump administration is making it abundantly clear it intends to not only gut net neutrality, but defund and defang the FCC itself. Comcast's actually facing less broadband competition than ever before as telcos give up on residential broadband to focus on content and advertising. Combine that with the looming, actual "chilling effect" of a rubber stamp toothless regulator in charge of a broken market, and it's clear that consumers, startups and innovators have plenty to worry about, even if Comcast doesn't.

Filed Under: investment, mike cavanaugh, net neutrality, title ii
Companies: comcast

FCC Commissioner Pai Says Net Neutrality's 'Days Are Numbered' Under Trump

from the celebrating-devolution dept

As we've been discussing, there's absolutely every indication that the incoming Trump administration intends to not only gut net neutrality, but defang and defund the FCC entirely. All three of Trump's telecom advisors have made it abundantly clear they see no role for the FCC as a broadband consumer watchdog. None of them have been able to admit the broadband space suffers from a lack of broadband competition; in fact, one of his top advisors is a Sprint lobbyist who doesn't think telecom monopolies are real.

One of the top candidates for the new top FCC spot, current Commissioner Ajit Pai, last week made it abundantly clear that net neutrality won't be around for much longer in a speech before the Free State Foundation in Washington, DC:

"I’m optimistic that last month’s election will prove to be an inflection point—and that during the Trump Administration, we will shift from playing defense at the FCC to going on offense," Pai said in a speech yesterday before the Free State Foundation in Washington, DC, said. The commission "need[s] to remove outdated and unnecessary regulations... We need to fire up the weed whacker and remove those rules that are holding back investment, innovation, and job creation," he also said.

That weed whacker won't just be chipping away at net neutrality; it will also be eliminating the FCC's new consumer broadband privacy rules, and potentially many of the agency's attempts to highlight and shore up the overall lack of competition in the market. According to Pai, net neutrality's days are numbered, and the incoming Trump FCC will be guided by, among other things, a "good dose of humility":

"On the day that the Title II [net neutrality] Order was adopted, I said that 'I don’t know whether this plan will be vacated by a court, reversed by Congress, or overturned by a future Commission. But I do believe that its days are numbered,'" Pai said. "Today, I am more confident than ever that this prediction will come true. And I’m hopeful that beginning next year, our general regulatory approach will be a more sober one that is guided by evidence, sound economic analysis, and a good dose of humility."

If you're new to this debate, Pai has been waging a facts optional assault on net neutrality for years. At one point, the Commissioner insisted that the US net neutrality rules actively encouraged dictators in Iran and North Korea (it, uh, doesn't). Pai also tried to claim that net neutrality violations by ISPs simply aren't real, while attempting to claim that Netflix was the one violating net neutrality by running a content delivery network (it isn't). In fact, when one looks at Pai's history on net neutrality, "evidence, sound economic analysis, and a good dose of humility" are often nowhere to be found.

Pai, a former Verizon regulatory lawyer, is obviously thrilled that the agency will soon stop trying to protect consumers and innovators and get back to what he (and many of the incoming advisors) believes the FCC's core mission truly is: protecting Comcast, AT&T and Verizon revenues from harm. The problem, as we've noted a few times, is that net neutrality has broad, bipartisan support, so activist backlash to overturning the rules is likely to be swift and fierce. Still, folks like Pai and companies like AT&T are supremely confident they'll be able to somehow put this whole pesky net neutrality thing to bed in the new year:That's a fundamental misunderstanding of what net neutrality is. Net neutrality is never going to just "go away as an issue." It's a fight that will be waged indefinitely as long as ISPs continue to explore new and creative ways of abusing their monopoly over the last mile. And with an incoming FCC that will try to pretend the market is intensely competitive, and telcos that are ceding control of the market to cable, this is actually only getting worse across large swaths of the country.

The goal for Pai and friends will be to dismantle net neutrality and the FCC without making it look like that's what they're doing. That will likely come in the form of a Communications Act rewrite, or some other ISP-supported act of Congress (like the flimsy and loophole-filled Thune/Upton proposal from last year) that pays ample, empty lip service to the concept but actually aims to codify breaking net neutrality into law. In other words, phony populism that actually runs in stark contrast to the best interests of the public and internet at large.

All of that said, whoever gets the FCC's top spot will need more than comedic absurdism and blanket denials if they want to do battle with the millions of Americans that actually like having a relatively open and healthy internet.

Filed Under: ajit pai, broadband, competiton, donald trump, fcc, net neutrality

T-Mobile Applauds Likely Death Of Net Neutrality Under Trump

from the with-friends-like-these dept

While T-Mobile has certainly brought some welcome changes to the wireless industry (including a CEO with a rare sense of humor), the consumer-friendly brand they've established has consistently fallen short when it comes to one major subject: net neutrality. The company lobbied and fought consistently against the reclassification of ISPs as common carriers and the creation of net neutrality rules. The operator then pissed off much of the internet when CEO John Legere mocked the EFF for raising questions about the misleading nature of the company's zero rating and throttling practices.

This week, the company again made its opposition to net neutrality clear. Speaking at a media and telecom conference, T-Mobile CFO Braxton Carter applauded the incoming President-elect Donald Trump, whose telecom transition team members have all made it abundantly clear that eliminating net neutrality rules and gutting the FCC as a consumer watchdog will be among their top priorities. This is, T-Mobile claims, going to be a real "positive" for the industry:

"It’s hard to imagine, with the way the election turned out, that we’re not going to have an environment, from several aspects, that is not going to be more positive for my industry,” Carter said in comments this morning at the 44th Annual Global Media and Communications Conference. “I think that it’s very clear that there’s going to be less regulation. And less regulation—regulation often destroys innovation and value creation."

Except of course that net neutrality rules exist to protect innovation from entrenched telecom monopolies. But Carter doubles down, insisting specifically that the elimination of net neutrality rules should provide "opportunity" for "significant innovation":

"Carter also specifically addressed the issue of net neutrality, arguing that the reversal of the FCC’s Open Internet rules would pave the way for additional innovation in the space. “It would provide the opportunity for significant innovation and differentiation,” Carter said of a telecom industry without net neutrality rules. “You could do some very interesting things” without net neutrality."

Carter appears excited about "deregulation" because it might lower T-Mobile's tax burden and increase its chances of merging or being acquired. But his excitement is shortsighted and fairly typical for executives in the telecom sector.

The problem is that in telecom, "deregulation" (of the sort promised by folks like Trump advisor Jeff Eisenach) doesn't actually mean straight deregulation. What it means in practice is pay-to-play regulation, where the biggest and most politically powerful companies (usually AT&T or Comcast) get to literally write the law. That's why you'll often see these folks breathlessly proclaim they adore "open markets," yet turn a blind eye when AT&T or Comcast write protectionist state law that hamstrings local communities and keeps competitors at bay.

In telecom, "deregulation" is all-too-frequently code for "let's let AT&T and Comcast decide what's best." That was the preferred mantra of former FCC boss Michael Powell (now the cable industry's top lobbyist), who also shared Jeffrey Eisenach as a transition team member. The end result of that administration was "deregulation" that wound up empowering AT&T and Comcast, making broadband less competitive and customer service worse than ever. We've apparently decided to collectively forget that.

As such, when your biggest competitor is AT&T, cheering for the one regulator that has tried to ensure a level playing field for smaller competitors seems a bit myopic. Remember it was the FCC and DOJ that blocked AT&T's attempted acquisition of T-Mobile, which ultimately resulted in T-Mobile being a more innovative, fierce competitor than ever before. Again, every indication coming from Trump's telecom transition team and the GOP is that they hope to completely defund and defang the FCC. That means more mergers, less competition, less innovation, and more net neutrality violations than ever before.

T-Mobile has repeatedly tried to downplay its opposition to net neutrality by claiming that the company is on the "right side of history" as it fights neutrality rules with broad, bipartisan support among consumers. But the company's enthusiastic support for the gutting of nearly all consumer protections in the broadband space make it clear, once again, the brand's dedication to consumers and "innovation" is entirely and unsurprisingly superficial.

Filed Under: braxton carter, broadband, john legere, net neutrality, wireless
Companies: t-mobile

FCC Warns AT&T, Verizon They're Violating Net Neutrality With Zero Rating Schemes

from the nice-timing,-hero dept

Last month, we noted how the FCC had finally woken up from a deep slumber to realize that zero rating (an ISP exempting its own or a partner company's content from usage caps) can be anti-competitive. The FCC's net neutrality rules don't specifically ban zero rating, but the agency had said it would act on a "case by case basis" should the practice be used anti-competitively. But a year came and went, and the FCC consistently failed to act as ISPs from Comcast to Verizon began giving their own content an unfair leg up in the market.

That was until last month, when the FCC sent AT&T a letter warning it that exempting its DirecTV Now content from AT&T wireless usage caps raised "serious concerns" about the open internet. Apparently unfazed by AT&T's defense of its behavior, the FCC last week sent an additional letter to AT&T (pdf) saying it believes that AT&T's implementation of usage caps hurts competition:

"...Your submission tends to confirm our initial view that the Sponsored Data program strongly favors AT&T's own video offerings while unreasonably discriminating against unaffiliated edge providers and limiting their ability to offer competing video services to AT&T's broadband subscribers on a level playing field. We have therefore reached the preliminary conclusion that these practices inhibit competition, harm consumers, and interfere with the "virtuous cycle" needed to assure the continuing benefits of the Open Internet."

Again, why it took the FCC the better part of a year to realize this isn't clear, but the agency sent a similar letter to Verizon (pdf). In that letter, the FCC criticizes Verizon's "Free Bee" sponsored data service that lets competing content companies enjoy the same cap-exempt status Verizon's own content enjoys -- if companies are willing to pay a steep premium:

"Under either option for competing with Verizon' s Go90 or other affiliated edge services, unaffiliated edge providers appear to confront significant disadvantages when trying to compete with Verizon from the combined impact of Verizon's FreeBee Data 360 fees and zero-rating of its own Go90 offerings. We are therefore concerned that this combination could present anti-competitive effects."

That's great, FCC, we're so glad you could join the rest of us in realizing the obvious. But while the FCC's letters urge both AT&T and Verizon to offer up further justifications before December 15, there's no indication any FCC enforcement or punishment for these violations will survive the Trump administration. We've noted how all of Trump's telecom advisors not only have deep ties to the broadband industry, but have actively stated they want to gut net neutrality rules entirely in addition to hamstringing and defunding the FCC.

In fact Ajit Pai, a current Commissioner in the running for new FCC boss issued a statement (pdf) reminding the FCC that whatever it does can (and likely will) be undone by the new administration:

"Chairman Wheeler launched yet another broadside against free data for consumers, notwithstanding the objections of Republican commissioners. This end-run around Congress’s clear instruction is sad—and pointless. For any unilateral action taken by the Wireless Telecommunications Bureau at the Chairman’s direction in the next 49 days can quickly be undone by that same bureau after January 20, 2017."

So again, it's great that the FCC finally realized that using caps to give your own content an unfair market advantage is anti-competitive, but the enforcement (if you can call it that) comes too little too late for consumers, given the incoming administration has made every indication it intends to either refuse to enforce the existing rules, or work to scrap net neutrality protections entirely.

Filed Under: competition, fcc, net neutrality, zero rating
Companies: at&t, verizon

Trump Appoints Third Anti-Net Neutrality Advisor To Telecom Transition Team

from the burn-the-house-down dept

President-elect Donald Trump's promise to "drain the DC swamp" has become a bit of a running gag as his administration plugs a wide variety of lobbyists and cronies into key cabinet positions. Telecom is certainly no exception, with Trump appointing a number of telecom sector lobbyists and allies to guide telecom policy and help select a new FCC boss. One of these picks doesn't believe telecom monopolies exist. None of them can actually admit the broadband market isn't competitive. And all of them have made it abundantly clear that they intend to roll back net neutrality and effectively gut the FCC from the inside out.

Trump completed a telecom sector trifecta of anti-net neutrality advisors this week, with the selection of American Enterprise Institute think tanker Roslyn Layton. Layton joins Jeffrey Eisenach (a long-standing Verizon consultant) and Mark Jamison (a former Sprint lobbyist) to form a perfect circle of industry allies -- all of whom are on record opposing not only net neutrality, but nearly every FCC effort to make the broadband sector more competitive. All three have been visiting fellows over at the American Enterprise Institute, which takes money from large telecom providers in exchange for muddying the discourse waters.

Over at the AEI blog, Layton has consistently made her disdain for net neutrality very clear. Like so many broadband industry allies, Layton insists that net neutrality protections for consumers aren't necessary, and that the concept is all some kind of secretive cabal on the part of Netflix to ride incumbent ISP pipes for free:

"Using their own definitions, however, companies such as Netflix hijack the language of net neutrality to lobby for regulatory favors. They want the government to mandate that transit costs they pay for today become free. In the offline world, such a deal would mean that retailers could not negotiate agreements with their suppliers or even where products could be placed on shelves.

This idea that net neutrality is a phantom problem and mostly about somehow secretly giving Netflix free bandwidth is a ridiculous idea we've debunked time and time again. Current FCC Commissioner Ajit Pai, among the finalists to lead the next FCC, has tried to claim net neutrality is some kind of unholy Netflix cabal for years. Why the disdain and bizarre focus on Netflix? Incumbent cable companies loathe Netflix for its support of net neutrality, opposition to usage caps, and the erosion of their legacy TV subscriber base, so they work pretty tirelessly to smear the company as often as possible via proxy policy voices.

Blaming everything on Netflix helps incumbent broadband ISPs (and their allied think tankers, consultants, and lobbyists) avoid two glaring truths: one, that net neutrality is a symptom of the disease that is limited broadband competition, but if you admit the broadband market isn't competitive, then you have to actually do something about it; and two, that net neutrality has broad, bi-partisan support among the public. Pretending net neutrality is solely about giving Netflix "free stuff" is a handy narrative that obfuscates both truths.

Layton, like Eisenach and Jamison, also opposed the FCC's basic new privacy protections. Those rules, which only require that ISPs are transparent about what's being collected and provide working opt-out tools, were passed only after Verizon was busted modifying user data packets to track users around the internet -- without informing them or providing working opt out tools. The FCC also acted after AT&T began trying to charge broadband customers a premium just to protect their own privacy, and Cable ONE hinted at offering worse customer service to users with bad credit scores.

Like net neutrality, these violations are just another symptom of the lack of broadband competition, and the bad behavior on the part of incumbent ISPs has been fully apparent to anybody paying attention. But according to Layton, these privacy rules were just "partisan" gamesmanship, and utterly unnecessary because ISPs weren't doing anything wrong:

"Chairman Wheeler’s three years at the FCC have broken records in partisanship, with more votes along party lines for rulemaking than previous commissions combined. Consider the recent online privacy rulemaking, which came about only because the FCC’s Open Internet rules reclassified Internet broadband under Title II, giving FCC new authority to regulate Internet privacy. Simply stated, the FCC rulemaking was not born out of any concluded necessity."

Yes, the FCC has long split along partisan lines, quite often on issues (like net neutrality) that shouldn't be partisan. Under Wheeler, that was largely thanks to Commissioners Ajit Pai and Mike O'Rielly, who voted down nearly every consumer-benefiting policy the FCC tried to enact. That includes the duo voting down every single attempt to hold AT&T accountable for outright fraud, whether that involved AT&T ripping off programs for low income families, turning a blind eye to abuse of IP Relay systems intended for the hearing imparied, or intentionally helping crammers rip off AT&T customers by making fraudulent charges on bills harder to detect.

Under the guidance of Layton, Eisenach and Jamison, you can expect every effort to hold incumbent ISPs accountable for bad behavior to evaporate. Gone will be the FCC's net neutrality rules. Gone will be the agency's new privacy protections. Gone will be efforts to shore up broadband competition. In addition to selecting an FCC boss that will be sure to avoid admitting any substantive faults on the part of incumbent ISPs, you can expect a rewrite of the Communications Act in 2017 with a full focus on hamstringing the FCC's ability to protect consumers while dramatically slashing its funding.

This tends to get lost among farmed think tank pie charts and misleading arguments from dollar-per-holler economists and fauxcademics, but boiled down to their purest essence, these positions are about one thing and one thing only: protecting giant incumbent ISP revenues. This isn't really about deregulation -- given that these same folks are generally ok with awful regulation, just as long as it's AT&T, Verizon and Comcast writing the law. And the ultimate irony remains that this gutting of all popular, bipartisan consumer protections will be conducted under the false banner of "populist reform."

Filed Under: donald trump, drain the swamp, fcc, jeffrey eisenach, lobbyists, mark jamison, net neutrality, roslyn layton