Comcast Pinky Swears That The Death Of Net Neutrality Won't Hurt In The Slightest

from the just-a-little-pin-prick dept

In the wake of the FCC's attempt to kill net neutrality, ISPs like Comcast have been working overtime trying to convince the press and public that nothing bad is actually happening. Shortly after the FCC voted to begin killing the rules, Comcast posted a trifecta of press statement, comment from company CEO Brian Roberts and commentary from top lobbyist David Cohen all saying the same thing: nothing bad is happening, and whatever happens -- Comcast really, truly adores transparency and will work tirelessly to defend the open internet:

The fact that this runs in stark, documentable opposition to reality and Comcast's behavior over the last twenty years isn't something you're supposed to dwell on. Cohen (the company gets mad at us for pointing out he's still a lobbyist despite using the title of "Chief Diversity Officer" to dodge lobbying accountability rules) has also been spending the last month or so trying to argue that we can still have net neutrality despite walking back the FCC's authority over broadband providers:

"While some try to conflate the two issues, Title II and net neutrality are not the same. Title II is a source of authority to impose enforceable net neutrality rules. Title II is not net neutrality. Getting rid of Title II does not mean that we are repealing net neutrality protections for American consumers."

That ignores history. You'll recall that the FCC's original 2010 rules were demolished by the Verizon lawsuit, with the courts saying that the FCC couldn't impose such rules without first classifying ISPs as common carriers under Title II. So in 2015, former FCC boss Tom Wheeler did precisely that. Walking back that decision means stripping out the legal authority to actually enforce net neutrality, and Comcast certainly knows this. In fact we've repeatedly noted how the government's plan is to effectively gut privacy, net neutrality and other broadband consumer protections, and to replace them with the policy equivalent of wet tissue paper.

This message that nothing bad is actually happening and that Comcast really secretly loves net neutrality has been the cornerstone of an ongoing PR effort at the company the last few weeks. But given there's few if any people who trust what's arguably the least-liked company in America, responses to these claims on Twitter haven't been what you'd call warm:

One of the only pieces of evidence Comcast provides for its professed dedication to net neutrality is that it didn't, unlike Verizon, sue to overturn the FCC's 2010 rules. But as we noted back then, Comcast and AT&T didn't oppose the rules back then because they weren't really enforceable, but more importantly they simply didn't do very much. Having been written by Google and major ISPs, they carved out massive loopholes for all manner of anti-competitive behavior, and didn't even cover wireless networks.

But as the EFF writes in a missive taking aim at Comcast's new image reformation effort, the company also saw no point in suing then because it was bound to adhere to the (already flimsy) rules as a condition of its 2011 merger with NBC Universal:

"In its PR campaign, Comcast claims that its decision not to challenge the 2010 Open Internet Order is evidence of its support for network neutrality. In reality, it's likely the company stayed quiet because shortly after the Open Internet Order was approved Comcast was required to operate neutrally as a condition of its merger with NBC Universal. It had little to gain from publicly opposing the 2010 Order because they could not lift network neutrality obligations over their network even if they won in court due to merger conditions."

In short, Comcast didn't fight to overturn the 2010 rules because it loves net neutrality -- it did so because it knew the rules were garbage, and merger conditions wound up binding the company to them anyway (for whatever good that would have actually done). It's only once the rules had actual teeth -- provided by Title II authority -- that Comcast began to get nervous that somebody might actually stop the company from being an anti-competitive jackass.

Comcast's positions are viciously contradicted by a decade of indisputable anti-competitive decisions on this front, including the company's early decision to throttle all upstream BitTorrent traffic (and lie about it, repeatedly), its ham-fisted decision to use usage caps and overage fees to hamstring video competition, and it's decision to try and limit what devices consumers use to view the content of their choice on the platforms of their choosing.

By and large you'd be hard pressed to believe any major ISP -- especially Comcast -- has much if any credibility on this subject, and it's not really clear exactly who one of the least-liked companies in America thinks it's fooling.

Filed Under: competition, fcc, net neutrality, open internet, title ii
Companies: comcast

Don't Get Fooled: The Plan Is To Kill Net Neutrality While Pretending It's Being Protected

from the pay-attention dept

Back in February, we had former top FCC staffer Gigi Sohn on our podcast and she laid out the likely strategy of Ajit Pai and Congress to kill net neutrality while pretending that they were protecting net neutrality. And so far, it's played out exactly according to plan. Each move, though, seems to be getting reported by most of the tech press as if it's some sort of surprise or unexpected move. It's not. There's a script and it's being followed almost exactly. So, as a reminder, let's go through the exact script:

Step 1: Set fire to old net neutrality rules

New FCC boss Ajit Pai announces that he's going releasing a plan to roll back the Open Internet rules that his predecessor, Tom Wheeler, put in place two years ago. This has been done, and Pai has released what's called an NPRM (a Notice of Proposed Rulemaking) which opens up a comment period. Once the comment period is over, the FCC can release its new rules and vote on them. The problem -- as basically everyone in telco knows (but which almost never gets mentioned in the press coverage) is that the FCC almost certainly will lose in court if it rolls back the rules that Wheeler put in place. This is important. Contrary to what you may have heard, the FCC isn't allowed to just willy nilly flip flop the rules.

Indeed, the FCC is barred by statute from putting in place "arbitrary and capricious" rule changes. Basically, every lawsuit challenging any FCC rulemaking includes claims that they were "arbitrary and capricious." And, to get over that burden, the FCC can't just change the rules willy nilly, but have to lay out clear evidence for why a change in policy is necessary. That's why the Wheeler Open Internet rules have been upheld by the DC Circuit (who shot down previous rules). Wheeler effectively laid out the clear reasons why the market had changed drastically in the decade plus since the FCC had declared broadband to be an "information service" rather than a "telecommunications service" (under Title II).

For Pai to successfully roll back those rules, he'd need to show that there was some major change in the market since the rules were put in place less than two years ago. That's... almost certainly going to fail in court. Again, this is important: Pai can change the rules, but that rule change will almost definitely be shot down in court. While many are assuming that the Pai's new rules are a done deal, they are not. I mean, he's almost certainly going to ignore the public outcry about how rolling back these rules will harm the internet. And he's almost certainly going to continue to blatantly misrepresent reality and (falsely) claim that investment in broadband has dropped because of these rules (despite tons of clear evidence that he's wrong). And, then he will pass new rules. But those rules will be challenged and he will almost certainly lose in court, and the old rules would remain in place.

Again: basically everyone in the FCC (including Pai) and in Congress know this. The press not reporting on this is a shame.

Step 2: Congress to the "rescue"

Congressional net neutrality haters (e.g. those receiving massive campaign contributions from big broadband players...) are well aware that Pai's plans have no chance in court. Yet, they want there to be this kind of uproar over the plans. They want the public to freak out and to say that this is bad for the internet and all that. Because this will allow them to do two things. First, they will fundraise off of this. They will go to the big broadband providers and act wishy washy on their own stance about changing net neutrality rules, and will smile happily as the campaign contributions roll in. It's how the game is played.

The second thing they will do... is come to "the rescue" of net neutrality. That is, they will put forth a bill -- written with the help of broadband lobbyists -- that on its face pretends to protect net neutrality, but in reality absolutely guts net neutrality as well as the FCC's authority to enforce any kind of meaningful consumer protection. We've already seen this with a plan from Senator Thune and this new bill from Senator Mike Lee.

Unfortunately, some reporters will buy this argument and pretend that these bills will "save net neutrality." The article at that link is correct that a change in administrations can lead an FCC to try to flip flop again on net neutrality, but totally ignores that any such attempt would totally flop in court as arbitrary and capricious, without actual evidence of a changed market. The article is also correct that Congress should fix this permanently, but misses two key factors: (1) Congress is way too beholden to broadband lobbyists to come up with anything that actually protects neutrality and (2) the plans presented so far are designed to kill net neutrality while pretending to "protect" it.

This latter point is why Verizon's General Counsel can say with a straight face that no one wants to kill net neutrality. Because he's going to be supporting Congress' plan that pretends to save it. That's because the Congressional plans do put in place a few bright line rules that seem important to net neutrality -- saying that it bars "paid prioritization," throttling and the like. The problem is that those are last decade's net neutrality issues. The big broadband providers have already said they're fine with those kinds of rules because they've found ways around them.

Specifically, the big broadband providers are doing things like deliberately overloading interconnect points to force large companies like Netflix to pay not to be throttled. Or they're putting in place totally arbitrary and low data caps, and then offering to "zero rate" certain services, pretending that this is a "consumer friendly" move. Again, as we've said dozens of times, you're not a hero if you save people from a fire that you set yourself. And that's exactly what zero rating is. Access providers set low data caps themselves and then "save" their customers from having to pay for going over those caps... but, only if you use approved services (often ones owned by the access provider themselves).

And this is the problem. Under the existing Wheeler rules, the FCC was able to adjust and respond to efforts by the telcos to continue to abuse net neutrality and block the open internet, while pretending they were doing something else. The Congressional proposals for "net neutrality" actually take away that authority from the FCC. In other words, they are opening the floodgates for the big broadband access providers to screw over customers, by saying (1) you can't do the obviously bad stuff, but you can do the hidden bad stuff that's effectively creates the same problems and (2) the FCC can no longer stop you from doing this.

That's not a plan to save net neutrality or an open internet. It's a plan to bless the access providers' plans to start walling off the internet and getting to double and triple charge companies for offering services. This is a plan to put tollbooths on the internet, but in ways that are less obvious than people were first worried about.

Step 3: Leverage the Controversy

Meanwhile, everyone who wants to kill net neutrality knows what's going to happen here. They will use the fact that Pai's rules absolutely can't withstand scrutiny in the courts to step up and push for the Congressional "rescue." Even more likely: they'll say that we need Congress to step in to "prevent uncertainty" from the inevitable lawsuits. Believe it or not: they're happy that this will get tied up in courts for years, because that gives Congress extra cover to push through this pretend "compromise." You'll hear lots of tut-tutting about "uncertainty" that has to be stopped. But, like zero rating and the fact that it's not heroic if you rescue people from your own fire, the fire here is being set by Ajit Pai and big broadband's key supporters. They're setting this fire of rolling back Wheeler's rules solely to whine about the uncertainty that will be caused by their own unnecessary rule change... and then will say that "only Congress can settle this."

So, what does all this mean? It means people who are mad about this (as you should be) need to be direct in what they're talking about here. Don't pretend that Pai's rule change is the real problem. It's not. It's just a mechanism to get to new regulations from Congress that will cause real problems. Don't let anyone say that the Wheeler rules have harmed the internet or investment. They have not. Don't let anyone (especially supporters of killing net neutrality) launch into self-pitying cries about "uncertainty." Remind them that the uncertainty is coming from them and their supporters. And, most importantly, don't pretend that a bill from Congress pretending to "save" net neutrality will actually do so, when it's quite obvious that the bills being offered will undermine our internet, help big broadband screw over users, and diminish competition.

Filed Under: ajit pai, broadband, competition, controversy, fcc, john thune, mike lee, net neutrality, open internet, tom wheeler

ISPs Lose En Banc Appeal, Current Net Neutrality Rules Remain Intact...For Now

from the if-at-first-you-don't-succeed dept

Last June, you'll recall that the U.S. Court of Appeals for the D.C. Circuit upheld the FCC's net neutrality rules, claiming the FCC was within its rights to reclassify ISPs as common carriers under Title II of the Communications Act. In fact, the FCC was driven toward that move by Verizon, which sued to overturn the agency's much weaker 2010 rules. Needless to say, ISPs were quick to try and appeal last June's court decision by requesting an en banc hearing before the whole court.

This week the court refused the industry's request, meaning the existing 2015 rules crafted and passed under former FCC boss Tom Wheeler remain intact. Consumer groups and content and hardware trade groups like Incompas were quick to applaud the ruling as a victory for consumers and those wary of large ISP attempts to hamper streaming video competition:

"Today’s court decision is a significant blow to those who want to take away Open Internet protections, raise prices and cut off the streaming revolution. The FCC and the courts have spent a significant amount of time and effort over more than a decade on various Open Internet policies, and the current law has shown itself to be both legally sustainable and market effective."

Of course things have been complicated by the fact that current FCC boss Ajit Pai last week unveiled his plan to kill the existing net neutrality rules and replace them with the policy equivalent of wet tissue paper. So while the current net neutrality rules will continue to stand, for now, Pai (likely with Congress' help) continues his attempt to roll the rules back at the behest of AT&T, Comcast, Verizon and Charter. ISP lawyers could appeal the en banc rejection to the Supreme Court, but with the current FCC looking to completely kill the rules anyway, it doesn't seem likely that the high court would hear the case.

And while consumer groups got notably excited about having any win in what's been an ugly few months for consumer-centric telecom policy, the actual opinions in the en banc rejection are a somewhat mixed bag. It's worth noting that the rejection made it clear that the en banc appeal was refused, at least in part, because of Pai's decision to launch a new NPRM:

"En banc review would be particularly unwarranted at this point in light of the uncertainty surrounding the fate of the FCC’s Order. The agency will soon consider adopting a Notice of Proposed Rulemaking that would replace the existing rule with a markedly different one. In that light, the en banc court could find itself examining, and pronouncing on, the validity of a rule that the agency had already slated for replacement."

And the dissenting positions of some of the judges are notably alarming in some regards. Especially that of Judge Brett Kavanaugh, who somehow managed to buy into an ISP claim that the courts -- and most observers -- had been laughing at for years. Specifically, the ISP claim that net neutrality rules somehow hamper their First Amendment rights. Said Kavanaugh:

"Absent a showing of market power, the Government must keep its hands off the editorial decisions of Internet service providers. Absent a showing of market power, the Government may not tell Internet service providers how to exercise their editorial discretion about what content to carry or favor any more than the Government can tell Amazon or Politics & Prose what books to promote; or tell The Washington Post or the Drudge Report what columns to carry; or tell ESPN or the NFL Network what games to show; or tell How Appealing or Bench Memos what articles to feature; or tell Twitter or YouTube what videos to post; or tell Facebook or Google what content to favor."

Again though, arguing that rules protecting consumers from anti-competitive ISP behavior is a free speech issue remains a bizarre distortion. The idea was largely shot down during the court's ruling last year. Even many ISPs had been walking away from this argument -- after having simply used it as a scattershot attempt to see what claims stuck. But in their own options, Judges Srinivasan and Tatel are quick to warn that Kavanaugh's opinion, if piggybacked upon during future rulemaking, could let large ISPs easily dodge Pai's plan to hold them accountable via "voluntary" commitments and shaky FTC oversight:

"Under that view, an ISP, for instance, could hold itself out to consumers as affording them neutral, indiscriminate access to all websites, but then, once they subscribe, materially degrade their ability to use Netflix for watching video — or even prevent their access to Netflix altogether — in an effort to steer customers to the ISP’s own competing video-streaming service. Alternatively, an ISP, again having held itself out as affording its customers an unfiltered conduit to internet content, could block them from accessing (or significantly delay their ability to load) the Wall Street Journal’s or the New York Times’s website because of a disagreement with the views expressed on one or the other site.

An ISP has no First Amendment right to engage in those kinds of practices. No Supreme Court decision suggests otherwise ... The First Amendment does not give an ISP the right to present itself as affording a neutral, indiscriminate pathway but then conduct itself otherwise. The FCC’s Order requires ISPs to act in accordance with their customers’ legitimate expectations. Nothing in the First Amendment stands in the way of establishing such a requirement in the form of the net neutrality rule."

Where we go from here could get even complicated (at a time when Joe Public already had no idea what any of this means), but the opinions of the en banc rejection will be certain to resurface on May 18, when Pai's 2-1 partisan majority will formally vote to begin dismantling the rules. Keep in mind Pai still has to prove to the courts that the market has changed substantively enough to justify a complete reversal of Title II in the wake of last year's court ruling.

Pai knows this will be a challenge, which is why it seems likely that net neutrality opponents will try to use Pai's saber rattling to push through a "compromise" GOP law promising to "fix" net neutrality once and for all. Folks relentlessly pushing this route tend to ignore the fact that large ISP lobbyists and lawyers will be the ones writing these laws, ensuring they're so packed with loopholes as to be less helpful than no rules at all.

Filed Under: appeals, dc circuit, fcc, net neutrality, open internet, supreme court

New Verizon Video Blatantly Lies About What's Happening To Net Neutrality

from the up-is-down,-left-is-right,-and-you're-a-walrus dept

Lies and hyperbole are certainly no strangers to either side of the net neutrality debate, but as the FCC moves to kill net neutrality -- net neutrality opponents have taken things to an entirely new level. FCC boss Ajit Pai's speech last week unveiling the move was utterly packed with claims that had already been painstakingly debunked over the last decade (read: lies), from the absurd claim that gutting consumer protections would somehow help consumers in the Comcast era, to the similarly untrue claim that net neutrality killed broadband investment.

Of course ISPs followed Pai's speech with a bunch of their own misleading statements. Most of them tried to claim that nothing is actually going on and even if it were -- consumers shouldn't worry because large duopolists can always be trusted to remain on their best behavior in light of no oversight. Comcast, for example, was quick to post a missive to its website trying to claim that net neutrality somehow gets better -- by killing net neutrality. Just look at the banner used by the ISP:

Yes, consumers, prepare to "enjoy" the amazing benefits of gutting nearly all oversight of one of the least competitive, least-liked, and most anti-competitive companies in the history of American industry. You're welcome!

But Verizon upped the ante and deserves some kind of award for publishing this abomination of a video to the internet:

In it, a bespectacled faux-journalist named Jeremy asks Verizon General Counsel Craig Silliman about net neutrality. The "interview" is only under way for a few seconds before Silliman drops a major lie:

"The FCC is not talking about killing the net neutrality rules and in fact not we, or any other ISP are asking them to kill the open internet rules. All they're doing is looking to put the open internet rules in an enforceable way on a different legal footing."

To be clear: this is the same company that has been trying to kill net neutrality (in any form) for more than a decade, trying to claim that a former lawyer (FCC boss Ajit Pai) isn't trying to accomplish that goal (hint: he is). And while Pai may be pushing a line of nonsense about how gutting oversight of mono/duopolies like Comcast and Verizon is somehow a major step forward, anybody that actually believes that hasn't been paying attention. Rolling back Title II obliterates the FCC's authority over broadband providers, shoveling a tiny-thread of remaining oversight to an FTC authority ISPs have already shown they can tap dance around.

Verizon, you'll recall, has historically been so opposed to even the weakest net neutrality rules, it sued to overturn the original, flimsy 2010 rules it helped write (rules, it should be noted, even Comcast and AT&T were ok with). But Silliman crafts an entirely other reality out of whole cloth, insisting that unspecified "advocacy groups" are somehow lying to the American public, leaving it to a Verizon lawyer to provide the public with THE TRUTH (TM):

"You gotta understand there's a lot of advocacy groups out there that fund raise on this issue. So how do you fund raise? You stir people up with outrageous claims. Fortunately we live in a time where people have discovered it doesn't matter what's true, you just say things to rile up the base. It's not sexy to say they're changing the legal foundation for this, it's only sexy if they say they're killing the open internet. It's not true."

Silliman then trots out an analogy that, like most net neutrality analogies, is comprised predominately of nonsense:

"Imagine in your town someone says 'I'm really concerned homeowners may prohibit people from walking up their front walks, so the mailman can't deliver mail, girl scouts can't sell cookies,' it will be chaos, right? So the mayor says I'm gonna pass a rule: I'm gonna pass a rule that no one can prohibit people from walking up their front walk. But to pass this rule, I need you Jeremy and all home-owners to give me complete authority over your property. Well, how are you going to feel about that?"

But I'm not ok giving that authority, and the Mayor may even say 'Don't worry, I won't use that authority.' But you're not comfortable giving them that, right? So, that's where we are with Title II and net neutrality."

That argument makes no coherent sense. Net neutrality is about a lot of things. It's about keeping Verizon from using usage caps to harm streaming competitors (which Verizon is already doing). It's about keeping ISPs from using their power to unfairly drive up costs for transit or content providers (they've already done that, too). Verizon and Ajit Pai's "solution" to these problems is to make it virtually impossible to hold companies like Verizon accountable should they use a lack of competition in broadband to harm competitors and consumer choice in this fashion.

Mayors and god-damned sidewalks have nothing to do with it. And what Silliman really doesn't want you to understand is that it's Verizon's fault we're here in the first place.

In 2010, the FCC passed some feeble net neutrality rules. Despite helping write them (to ensure they didn't cover wireless), Verizon sued to overturn them anyway, and won. As a result, the courts told the FCC that it needed to reclassify ISPs as common carriers under Title II if it wanted to have the authority to enforce them, which is what the FCC did. Again, that's something you can thank Verizon for specifically. And while Verizon whines about over-reach, even the 2015 rules weren't very tough by international net neutrality standards, avoiding hard line bans on zero rating and broadband rate regulation.

The large ISPs spearheading this new assault on privacy and net neutrality protections are no stranger to using lies and hyperbole to justify eroded oversight of the uncompetitive broadband industry, but this video clearly ratchets things up to another level. Companies like Verizon are clearly feeling emboldened in the Trump post-truth era by the press' struggles to handle a tsunami of falsehoods. They also clearly hope their bare-knuckled attempt to crush meaningful consumer protections can somehow be twisted, contorted and massaged until it's perceived as a net gain for the public.

Filed Under: ajit pai, craig silliman, fcc, net neutrality, open internet
Companies: verizon

Netflix Is No Longer Worried About Net Neutrality Now That It's Massive And Successful

from the sorry,-I-got-mine dept

Once upon a time, Netflix was among the fiercest supporters of net neutrality, and a consistent critic of arbitrary and unnecessary broadband usage caps. So much so that the company effectively became public enemy number one at many of the nation's broadband providers, resulting in a steady stream of bizarre policy and lobbying attacks on the company. Netflix, we were told by a rotating crop of ISP-tied mouthpieces (even by current FCC boss Ajit Pai), was a dirty freeloader, and a nasty company responsible for most of the internet's ills.

But as Netflix has grown larger and more powerful, the company's positions on usage caps and net neutrality has, well, softened.

Back in January, a company letter to shareholders downplayed the looming death of net neutrality, suggesting that Netflix was so popular -- any attack on it would be seppuku:

"Weakening of US net neutrality laws, should that occur, is unlikely to materially affect our domestic margins or service quality because we are now popular enough with consumers to keep our relationships with ISPs stable."

Of course, what Netflix actually meant was that it's now powerful and wealthy enough to go toe to toe with giant ISPs on interconnection and other disputes. The problem: while Netflix may now be strong enough to survive a world without net neutrality, that's not necessarily going to be true for the next Netflix. Smaller companies will absolutely be hampered by the rising spread of usage caps and zero rating, which as we've long noted are increasingly being used as anti-competitive weapons against them. And the current government has made it very clear that's perfectly ok.

Netflix CEO Reed Hastings reiterated the company's confidence on this subject in a meeting with reporters last week at the company's headquarters, where he insisted the company was "not too worried" about the government's plans to gut net neutrality:

"Netflix CEO Reed Hastings says he’s “not too worried” about what will happen if new FCC chairman Ajit Pai eliminates the Title II regulations that have guaranteed a neutral internet experience for US consumers in recent years.

Speaking to a group of journalists at Netflix’s headquarters in Los Gatos, California, earlier today, Hastings said he believes “the culture around net neutrality is very strong. The expectations of consumers are very strong. So even if the formal framework gets weakened,” he continued, “we don’t see a big risk actualizing, because consumers know they’re entitled to getting all of the web services."

Hastings believes that Netflix is just so damn popular, consumer outrage will magically keep ISPs on their best behavior even if Pai, Trump and the GOP kill all telecom consumer protections. But as we saw during recent interconnection feuds, ISPs have become clever at dodging blame for the congestion they intentionally caused in order to kill settlement-free peering and extract additional funds from transit and content companies (detailed in the New York AG's recent lawsuit against Charter). You'd be hard pressed to think that 10% of the population actually understood what was happening during these feuds.

That said, consumers, startups and people that care about a healthy, open internet should worry.

The new FCC has already killed an inquiry into zero rating, which means incumbent ISPs are now free to use caps to hamper competing streaming services. And with AT&T, Verizon, Comcast and Charter now effectively dictating government internet policy, you can be sure broadband competition issues will be placed on a far back burner -- resulting in a steady expansion of usage caps and overage fees. And Congress is cooking up one or more bills that will not only kill net neutrality and consumer privacy protections, but gut regulatory oversight of one of the least competitive industries in America.

But gosh, now that Netflix is large and successful (with 94 million subscribers worldwide), this is all just something that's apparently going to work itself out. We've tracked a similar trajectory at Google, where net neutrality principles slowly but surely disappeared as the company jumped into the wireless industry. With net neutrality's two biggest and wealthiest proponents wavering on net neutrality now that they've got theirs, the idea of an internet free of incumbent ISP control needs all the help it can damn well get.

Filed Under: competition, fcc, innovation, monpolies, net neutrality, open internet, reed hastings
Companies: netflix

Wyden, Other Senators Warn That Net Neutrality Repeal Will Make SOPA Backlash Look Like A Fireside Snuggle

from the put-your-money-where-your-mouth-is dept

We've repeatedly noted how for some stupid reason, net neutrality is treated as a partisan issue in Washington -- with Democrats (generally) in support, and Republicans (generally) opposing the idea. It's an absurd, myopic paradigm given the fact that net neutrality has broad, bipartisan consumer support. Most people want the internet to function as a relatively-level playing field. Everybody wants to be able to access the content and services of their choice without interference from the likes of Comcast and AT&T, who seem hell bent on using their monopoly over the last mile to their anti-competitive advantage.

With the looming specter of a net neutrality rule repeal under Trump, the GOP, and new FCC Boss Ajit Pai, a number of Democratic Senators (including Ron Wyden and Ed Markey) held a press event (video) warning that if the GOP and FCC try to repeal net neutrality, it will result in a "political firestorm" they may not be entirely prepared for. The Senators were quick to recall that roughly 4 million consumers reached out in support of the FCC's net neutrality rules a few years ago, a number Markey proclaimed would look "miniscule" in comparison to the looming backlash against the rules' repeal.

Markey's office also issued a statement saying that he'd fight tooth and nail against repeal of the rules, in whatever form that arrives:

"Despite what the cable companies and Republicans say about net neutrality, there is nothing broken that needs fixing,” said Senator Markey, a member of the Commerce, Science and Transportation Committee. “I will oppose any regulatory efforts, including repeal, forbearance, interpretative rule, or refusal to enforce existing rules, as well as any legislative efforts to undo or roll back the Open Internet Order. We stand united in this fight to ensure that all Americans have access to a free and open Internet."

While it's true that the backlash to an attack on net neutrality could make SOPA and PIPA look like a beach-side picnic, the repeal won't arrive in the way the agency's rules first arrived. With the process of repealing the rules within the FCC's existing regulatory framework a giant bureaucratic headache that would require another very public comment process, the ISPs (and the politicians that love them) likely have another tactic in mind -- at least based on my 20 years, ten hours a day, of watching the telecom sector (and every other industry) dominate both parties of Congress.

At first, that will involve having Pai simply refuse to enforce the rules as they exist now (which we already saw with Pai's decision to scrap the FCC's zero rating inquiry). Pai's job in this stage play will be to pay empty lip service to things like the digital divide, while generally keeping the FCC focused on bland, non-controversial policies until the real hangman (a campaign-contribution soaked Congress) arrives.

From there, the GOP has quietly been making it clear they want to push a Communications Act rewrite that will focus on rolling back the FCC's classification of ISPs as common carriers under Title II, therefore obliterating not only net neutrality -- but the FCC's ability to act as broadband watchdog entirely. This being a new, charming post-truth era, this assault on net neutrality, broadband provider oversight and accountability will most likely be dressed up as a massive boon to job creation, broadband expansion, and the nation's puppies.

Expect it to be named something along the lines of The Making Broadband Great Again Act of 2017.

This bill, whether it comes as a Communications Act rewrite or some other bill, will also probably claim to put the net neutrality debate to bed by including a few net neutrality restrictions even large ISPs don't actually care about (like banning them from outright blocking websites). What it won't do is address any of the hot-button areas where the net neutrality debate is occurring right now, like zero rating, interconnection, or the use of usage caps and overage fees. Given it will certainly be written in part by AT&T, Verizon, Comcast and Charter lawyers, it will just as certainly contain other loopholes to ensure their satisfaction.

Whatever this bill winds up looking like or is called, it will be (and already is on some fronts), portrayed as a "compromise" that Democrats will be told they must support if they're to be considered "serious" in their pledge to protect net neutrality and the public at large. But given the goal of removing oversight from the likes of Comcast, the bill itself will likely hurt more than it helps, and if these Democratic Senators actually want to show they have anything resembling a spine, they'll need to stage fierce opposition to the bill to prove their dedication to a healthy internet is more than just smoke and mirrors.

In light of a Congress that long ago made it clear that it prioritizes telecom cash contributions over consumers, the best "solution" for net neutrality at this juncture would be leaving the existing rules -- and the FCC's authority over broadband providers -- intact.

Filed Under: copyright, fcc, net neutrality, open internet, public, ron wyden, sopa

Netflix May Not Be Worried About The Looming Death Of Net Neutrality, But Startups Should Be God-Damned Terrified

from the what-broadband-competition-problem? dept

With Trump's telecom advisors and the remaining FCC Commissioners making it abundantly clear that they intend to gut net neutrality rules and dismantle pretty much all of the FCC's consumer watchdog functions, there are more than a few worried companies, startups and consumers concerned that the net neutrality fight is about to get downright stupid. One of Trump's telecom advisors doesn't even think telecom monopolies are real, which should speak volumes about our looming vacation to dysfunction junction.

One company that's busy pretending it's not worried is Netflix, which penned a letter to the company's shareholders this week (pdf) insisting that it doesn't expect the death of net neutrality rules to materially impact the company's revenues:

Weakening of US net neutrality laws, should that occur, is unlikely to materially affect our domestic margins or service quality because we are now popular enough with consumers to keep our relationships with ISPs stable.

Of course, that's easy to say when you're now the biggest pay TV provider in the United States, coming off one of your most successful quarters in history, while quickly expanding into hundreds of countries internationally. But what about the smaller, disruptive Netflix-like companies of tomorrow? They're about to face a future in which the government doesn't appear to give two flying shits about the wide variety of problems caused by AT&T, Comcast, Charter and Verizon's stranglehold over the broadband last mile. In fact, likely FCC boss Ajit Pai has made it repeatedly clear he does't even think any broadband competition issues exist.

Clearly, smaller companies and startups won't have the size or lobbying muscle to defend themselves from ISP efforts to use this very real competitive logjam as a weapon against competing services (see: usage caps, overage fees, interconnection shenanigans, and whatever other "creative" efforts ISPs haven't even birthed yet to allow them to double dip). And Netflix appears to have forgotten that the mere presence of the FCC's rules prevented ISPs from attempting to extract significant, new interconnection fees at the network edge. So really, even companies the size of Netflix will have plenty to worry about.

Fortunately Netflix does indicate the company isn't entirely oblivious to the advantage it holds, and proceeds to acknowledge that yes, a healthy and functioning internet free of obnoxious gatekeepers is kind of important:

However, strong net neutrality is important to support innovation and smaller firms. No one wants ISPs to decide what new and potentially disruptive services can operate over their networks, or to favor one service over another. We hope the new US administration and Congress will recognize that keeping the network neutral drives job growth and innovation.

If you've spent even five seconds reading comments made by Marsha Blackburn and other Trump telecom advisors, you should realize there's a snowball's chance in hell of that happening. The most likely path forward begins with the incoming FCC simply refusing to enforce the net neutrality rules on the books. After that, you can be fairly certain (said as somebody that has watched this industry for two decades) that the GOP will be pushing a new Communications Act rewrite (or some other new stand-alone legislation) packed with breathless platitudes toward broadband expansion, jobs, and net neutrality.

In reality this legislation will have one, singular, unwavering focus: eliminating any and all government oversight of some of the least liked, and least competitive companies in any industry in America. Any network neutrality provisions in this looming legislation will be comically hollow, much like the promises surrounding job creation, innovation, and broadband competition. If Netflix execs truly think they're going to be immune from the repercussions of this shift back to letting AT&T, Comcast and Verizon dictate internet policy, they've got a lot of painful learning to do over the next few years.

Filed Under: discrimination, donald trump, fcc, net neutrality, open internet, power, startups, throttling
Companies: netflix

AT&T Just Showed Us What The Death Of Net Neutrality Is Going To Look Like

from the not-with-a-bang-but-with-a-whimper dept

For some time now we've warned how the FCC's decision to not ban zero rating (exempting some content from usage caps) was going to come back and bite net neutrality on the posterior. Unlike India, Japan, The Netherlands, Norway, Chile, and other countries, the FCC crafted net neutrality rules that completely avoided tackling the issue of usage caps and zero rating. Then, despite ongoing promises that the agency was looking into the issue, the FCC did nothing as AT&T, Verizon and Comcast all began exempting their own content from usage caps while still penalizing competitors.

Fast forward to this week, and AT&T has delivered what may very well be the killing blow to net neutrality thanks predominantly to the FCC's failure to see the writing on the wall.

AT&T this week is launching its new "DirecTV Now" streaming video service. According to the full AT&T announcement, the service offers various packages of streamed TV content ranging from $35 to $70 per month. Thanks to AT&T's looming $100 billion acquisition of Time Warner, AT&T's even throwing in HBO for an additional $5 per month, the lowest price point in the industry. Though a bit hamstrung to upsell you to traditional DirecTV (two stream limit, no 4K content, no NFL Sunday Ticket, no DVR functionality), all told it's a fairly compelling package for cord cutters.

But somewhat buried in AT&T's announcement is the long-expected confirmation that this new service won't count against usage caps if you're an AT&T wireless subscriber:

"And, if you’re an AT&T Mobility customer, DIRECTV will pick up the tab for data to help you achieve all your binge-worthy goals. Data Free TV means you won’t use your AT&T mobile data for watching DIRECTV NOW or FreeVIEW in the App. Fullscreen will also cover your data for streaming in the Fullscreen App on the AT&T mobile network."

For consumers who have no idea what zero rating or net neutrality even is (read: most of them), this sounds like a great idea. Most don't know that usage caps are an entirely-arbitrary construct completely untethered from network or financial necessity. As such, they believe they're getting something for free. This collective illusion means fewer annoyed users, which means less political pressure on the FCC, which is why the FCC failed to act. The problem, as we've noted time and time again, is that AT&T is violently distorting the open market and giving its own content a distinct and decidedly unfair market advantage.

Because most consumers either aren't bright or informed enough to understand this doesn't mean it's not happening all the same.

In addition to existing offerings by Dish (Sling TV) and Sony (Playstation Vue), the "over the top" market is about to get flooded with an absolute torrent of live TV streaming competitors including Apple, YouTube, Hulu, and Amazon. Ideally, these services would all compete with DirecTV Now based on quality and pricing. But under AT&T's new zero rating umbrella, all of those services will count against AT&T's usage caps, while DirecTV Now won't. Owning the pipe and the content will protect AT&T from the full brunt of increased competition in the space.

This is precisely the sort of "new normal" AT&T has spent the last decade trying to build, and exactly the sort of future net neutrality rules were supposed to help us avoid. And while the current Wheeler-led FCC recently finally acknowledged that it now understands this sort of behavior is anti-competitive, it's too little, too late. There's every indication that Trump's new FCC intends to not only gut net neutrality, but the FCC entirely. Trump's telecom transition team is filled to the brim with telecom-sector cronies who can't even admit telecom monopolies are real. Large ISP executives and investors are thrilled.

With no (or unenforced) net neutrality rules and a toothless FCC, you can expect all of the incumbent broadband ISPs to follow AT&T's lead, while folks like Trump telecom advisor Jeffrey Eisenach regurgitate telecom sector think tank pieces trying to claim that zero rating is a huge boon to consumers. These are men and economists for hire who'll breathlessly inform you they adore "free markets" and open competition, while simultaneously working to thwart competition at every turn -- whether it's dismantling the level streaming playing field with zero rating, or letting telecom giants literally write abysmal telecom law.

Those who have actually paid attention to net neutrality realize this may very well be the beginning of the end for the idea -- or at best a very long, dark and unfortunate detour off of the path -- with the ultimate irony being that because zero rating is seen as little more than "free stuff" by many misinformed consumers, net neutrality's death knell will arrive to thunderous public applause.

Filed Under: discrimination, fcc, net neutrality, open internet, streaming tv, zero rating
Companies: at&t, directv