How AT&T's Own Legal Fights Show It's Lying In Claiming Broadband Reclassification Would Create Collateral Damage

from the dispensing-with-the-fud dept

Earlier this year, we shared our own comments to the FCC on the issue of net neutrality and keeping the internet open. The key, as we noted, is that if this issue is left to the FCC (as appears to be the case), it should use Title II reclassification in combination with forbearance to narrowly tailor rules for broadband access providers that maintain an open internet. As with so many things related to net neutrality, this gets a bit down in the weeds, and is a bit wonkish, but it's important to understand. Even the EFF -- a longtime critic of Title II reclassification -- changed its position in light of other factors, but made sure to emphasize forbearance as a key part of this. Forbearance, in short, is effectively a statement from the FCC that it's using certain rules, but has committed to not enforcing parts of what it's allowed to do under those rules. As the EFF explains:

Forbearance is crucial to net neutrality because it helps to limit FCC regulation. If the FCC reclassifies broadband as a telecommunications service, which it must if it is going to do its part to protect an open and neutral Internet, then many folks fear it will be obligated to impose on the Internet a whole set of rules that were developed for telephone service. That would be a disaster, because most of those rules just don’t make sense when we’re talking about Internet infrastructure. For example, there are rules about obscene phone calls, rate schedules, telephone operator services, carrier reporting requirements, etc., that could lead to a host of new problems if misapplied to our Internet.

Forbearance is how we help ensure the FCC does what is necessary – and no more. It isn’t an iron-clad limit; the FCC must choose to do it, and it can change course if need be. But having made the choice to forbear, the FCC can’t change its mind willy-nilly, or in secret. Instead, it has to invite public comment, and respond to public concerns. If Internet users stay vigilant, forbearance would give us some lasting confidence that the FCC couldn’t use "net neutrality" as an excuse to interfere with free expression and innovation.

In fact, under the Telecommunications Act of 1996, the FCC is required to use forbearance when enforcing rules that would be against the public interest. And, it seems rather obvious that obsolete parts of Title II that might limit the free and open internet would clearly be against the public interest, and thus rather easy to forbear.

But, to hear the big broadband guys talk about it, forbearance is a messy process that is almost impossible to do right, with all sorts of complicated facets that will create problems. AT&T sent a letter to the FCC earlier this year decrying forbearance and repeatedly suggesting that it was a difficult process, likely to create uncertainty and lawsuits. AT&T further posted a blog post talking about all of the parade of horribles that other parts of Title II would dump on the rest of the internet:

The implications of that rationale for every Internet company are enormous. It would capture movies purchased from Google Play or iTunes, videos downloaded from YouTube, and OTT subscription services like Netflix and HBO Go. It could also implicate advertising served over the Internet — if those companies are providing, at least in part, a Title II transmission service, contribution to USF is mandatory for the revenue associated with the Title II service. That means allocating revenues between the telecommunications service and the information service, filings justifying those allocations, Form 499s…. you get the drift. Innovators would be paralyzed before they even get off the ground.

And this only scratches the surface of potential harm. Hundreds of other questions would face Internet companies under Title II, scenarios discussed in a recent article by former Clinton Administration official Robert E. Litan of Brookings. Turning up or shutting down services would require FCC permission. State PUCs would also have a fulsome regulatory role over the Internet. Pricing regulation, which is inherent throughout Title II, could intrude into all types of Internet services. Wireless location data would likely be considered CPNI, which means it could no longer be shared with Internet companies for mapping, advertising and other purposes. And once data like IP addresses, URL destinations, browser settings, and location are considered part of a Title II service, FCC privacy rules would surely follow.

AT&T is mostly playing a FUD game. And... AT&T knows this because it took part in a lawsuit that helped define how forbearance can be used here. The case, AT&T Inc. v. FCC, involved AT&T trying to get the FCC to "forbear" from applying Title II regulations to IP services in the first place. The FCC originally refused, claiming that it was entirely speculative that the FCC would even use Title II on those services, but a court overruled the FCC and basically said the forbearance process is easy to do, even for potential obligations.

Other lawsuits against the FCC (all involving... AT&T) further made it clear that the process is rather straightforward and easy for the FCC. For example, they show that, contrary to the claims of AT&T and others, the idea that forbearance would require a costly market-by-market analysis is not true, as was noted in Earthlink v. FCC. In that case, AT&T (oh look!) got the FCC to forbear certain unbundling requirements. Earthlink went to court to say that the FCC failed to do a thorough enough market-by-market analysis. The court said there was no such requirement:

According to EarthLink, the statute permits the FCC to grant forbearance only after a "painstaking analysis of market conditions" in "particular geographic markets and for specific telecommunications services." We disagree. On its face, the statute imposes no particular mode of market analysis or level of geographic rigor.

Moving on. In another, rather important, case, Ad Hoc Telecommunications Users Committee v. FCC, related to an effort by AT&T (hello!) and others getting the FCC to forbear from certain Title II (uh huh) common carrier regulations on "special access" broadband lines, AT&T got its wish for forbearance (no problem!). Some competitive broadband providers challenged this, saying that the FCC couldn't just forbear parts of Title II (i.e., picking and choosing which pieces to apply and which it would officially ignore). The court totally rejected this argument, saying the FCC could very much pick and choose in order to apply rules very narrowly:

The FCC reached a hotly debated and eminently debatable, but ultimately reasonable, conclusion that eliminating the extra layer of dominant-carrier pricing regulation on the ILECs' special access lines— while leaving in place basic Title II common-carrier regulation—will better promote competition and the public interest. We find no legal basis to upset the FCC's policy judgment.

In other words, contrary to AT&T's repeated insistence that forbearance is a mess, difficult to implement, and that Title II reclassification would have all sorts of collateral damage from all those other (obsolete) parts of Title II, the FCC has wide latitude to use forbearance to very narrowly tailor Title II to just protect an open internet from broadband providers acting like gatekeepers. And a big part of the reason why we know this is because of three lawsuits involving AT&T and the FCC, which showed that the FCC not only can, but actually must, use forbearance to very narrowly tailor which parts of Title II will apply.

So, for all the talk about how Title II will require all sorts of onerous regulations on other parts of the internet, and how the forbearance process won't work... well, we have three separate lawsuits, all involving AT&T, that certainly seem to indicate otherwise. You'd think that AT&T would be aware of those decisions, wouldn't you?

This and other net neutrality stories made possible thanks to the generous support of hundreds of you via BeaconReader

Filed Under: common carrier, fcc, forbearance, reclassification, title ii
Companies: at&t

Techdirt's Comments To The FCC On Net Neutrality And Preserving An Open Internet

from the speak-up dept

While the FCC has thankfully extended its deadline for filing comments on the net neutrality issue through Friday after its site melted down (again), I also wanted to share with you exactly what it is that we're submitting to the FCC. In short: we support reclassification under Title II in combination with clear forbearance, to limit the regulatory power of the FCC to just the specific issues dealing with keeping the internet free and open for competition. We note how important this has been to us on a variety of levels. For example, as a small company, we've been able to effectively compete against much larger news organizations. That would be much more difficult when those organizations could negotiate and pay to be on "fast lanes" while smaller operations like ourselves would be unable to do so.

Furthermore, we note the harm that this would cause to free speech. Given that we are frequent critics of the major broadband players, it's likely that even if we were able to afford to pay for "priority access," those companies would make it difficult for us to actually do so, using some sort of pretense to limit the ability of vocal critics to get access to the "fast" internet.

In addition, we urge the FCC not to ignore the interconnection issue, by which broadband access players have "shifted" the debate away from the last mile, but have effectively achieved the same result: getting big internet companies to pay double for the bandwidth consumers already thought they were paying for. Beyond that, though, we hope that the FCC will actually do what it's been promising for the better part of a decade and encourage actual competition in a variety of ways: knocking down barriers to entry, increasing (vastly) the amount of spectrum available and exploring possibilities to encourage competition at the service level, rather than just at the network level. You can read our entire comment below. While some friends in Washington DC have promised to deliver our comments by hand today, we'll keep trying the electronic way as well. Hopefully we'll get them delivered by the end of the week.

PS: If you like our reporting on net neutrality issues, please consider supporting our crowdfunding campaign, which will allow us to put even more resources towards reporting on this key issue.

Filed Under: broadband, fcc, forbearance, nprm, open internet, title ii
Companies: floor64

EFF Changes Position On Net Neutrality: Recognizes FCC Must Act, But Narrowly

from the makes-sense dept

For years, the EFF has pushed back against the FCC's attempts to preserve net neutrality, reasonably worrying that it might open the door to the FCC further meddling in the internet where it had no real mandate. We here at Techdirt have been similarly concerned. As we've noted, net neutrality itself is important, but we were wary of FCC attempts to regulate it creating serious unintended consequences. However, over the past few years, the growth in power of the key broadband internet access providers, and their ability to degrade the internet for profit, has made it quite clear that other options aren't working.

Thus, the EFF has -- quite significantly -- announced that it has changed its position on the FCC's role in net neutrality, starting with Title II reclassification, combined with a strong forbearance, which effectively blocks the FCC from claiming too much power to regulate other aspects of the internet:

We want to be very, very clear: the FCC’s regulatory role should be narrow and firmly bounded. Network neutrality rules should be limited to specific prohibitions—such as blocking, discrimination among applications and prohibiting special access fees—potentially combined with a renewed “open access” requirement that would foster local competition, and no more.

Luckily, the FCC has a way to bind itself and thereby limit its own regulatory reach. It’s called “forbearance.” While forbearance doesn’t set the limits on the regulatory agency in stone as Congress could, it does require the FCC to make a public commitment that is difficult to reverse.  If it ever wants to change course, it has to engage in a contentious and tedious public process of notice and comment. We’ll have more to say about these very basic regulations in our comments on the FCC’s proposed rules, which we will also unpack in upcoming posts.

To get to a place where it can actually enforce neutrality rules and do nothing further, however, the FCC first needs to do one important thing: reverse its 2002 decision to treat broadband as an “information service” rather than a “telecommunications service.” This is what’s known as Title II reclassification. 

Part of the problem with the net neutrality fight is that there's a lot of nuance and technicalities involved. Many -- especially in the telco world -- point to the fact that Title II reclassification would grant the FCC much greater ability to regulate all parts of the internet, but they ignore the fact that basically everyone pushing for reclassification is doing so with the forbearance process in mind. And, yes, the whole forbearance process opens up a whole new avenue for potential game playing and abuse, but as the EFF is recognizing, this seems like the only real near-term solution to the current situation in which the big broadband companies are looking to hold the rest of the internet hostage.

It's worth noting that this is, in no way, an "ideal" solution. There's a tremendous amount of details and nuances involved in all of these decisions -- almost none of which you'll read about in the press (and, of course, good luck finding anything about net neutrality on TV news). The reality is that this is what we're left with after a decade or more of failed broadband policy, which has brought us to the situation today where the broadband access providers have basically set themselves up as being able to set up toll booths to doublecharge, not because of any innovation or improved service on their part, but solely by nature of themselves getting so big that they can make life difficult for internet services.

There's one other key point in the EFF's "change of heart," which is the response to anyone who claims Title II grants too much power to the FCC (leaving aside the question of forbearance). And that's that under the appeals court ruling back in February, it was made clear that the FCC already has tremendously broad powers to regulate other aspects of the internet under Section 706. As some noted after that ruling came out, while many people were talking about how the court rejected net neutrality, they may have missed how much the court broadened the FCC's powers under Section 706. The end result is that we should be equally worried about the FCC abusing 706, where its powers are dangerous and also ineffective at protecting net neutrality, while focusing on putting in place a better regime under Title II with a strong forbearance plan:

Some have said that reclassification would give the FCC too much power to regulate the Internet. That very concern is why forbearance is so important. Nor is it the case that the FCC has very limited power now—the D.C. Circuit affirmed that the FCC has broad powers to “promote competition” which could be just as vulnerable to misuse by a future FCC as any regulatory authority granted via a “common carrier” reclassification. More important than the potential breadth of power, however, is the fact that the powers that the FCC has now don’t match the real goal: protecting the neutral Internet we expect and need to flourish. Reclassification, combined as it must be with a commitment to forbear from imposing aspects of Title II that were originally drafted for 20th century telephone services and that don't make sense for the Internet, can give the FCC the right tool for the job without giving it regulatory tools it doesn’t need and may dangerously misapply.

In other words, while there are dangers of giving the FCC too much power under Title II, those can be dealt with via forbearance, while at the same time actually allowing it to protect net neutrality. Under the current system, we have the worst of both worlds. Section 706 has now been interpreted such that the FCC has powers that are too broad in regulating a variety of aspects of the internet... but without the power to actually protect net neutrality!

Given that reality, it does seem that the best path forward has to be reclassification under Title II, with clear forbearance that limits the FCC's powers under Title II to just the situations where it can prevent net neutrality abuses.

Filed Under: broadband access, competition, discrimination, fcc, forbearance, net neutrality, open internet, reclassification, title ii
Companies: at&t, comcast, eff, verizon