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

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

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

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