Broadband Industry Takes To Congressional Hearing To Praise Wimpy, Neutrality-Killing Proposal It Helped Write

from the pure-theater dept

To derail February's expected unveiling of Title II-based neutrality rules, the broadband industry is engaged in a last ditch effort to pass some of the flimsiest net neutrality rules we've seen yet. Spearheaded by Senator John Thune and Representative Fred Upton (the latter a particular magnet of Comcast campaign contributions), the goal appears to be to propose intentionally awful neutrality rules, offer a few meager concessions, then insist the marginally-less-awful result was crafted only after a long "public conversation" and with bipartisan support.

If you actually bother to read the proposal (pdf), you'll find it actually erodes FCC authority and flexibility to enforce violations by stripping FCC rulemaking rights away, leaving the FCC only able to adjudicate dispute after dispute with no timetable (essentially allowing ISPs to bury complaints in paperwork). The proposal also has intentionally vague loophole language large enough to drive several trucks through, with terms like "specialized services" and "reasonable network management" left intentionally ambiguous. It also intentionally fails to address the latest neutrality flash points (like usage caps or interconnection).

Despite the proposal being a hot mess, phase one of Thune and Upton's plan is to convince the press and public that neutrality opponents had seen the error of their ways and are finally willing to negotiate on real rules. Phase two appears to be to hold a series of public hearings (starting this week) featuring industry friends gushing about the effort -- like former FCC boss turned top cable lobbyist Michael Powell, who today told hearing attendees that all of those clever loopholes his industry helped painstakingly embed in the draft proposal are wonderful for consumers and industry alike:

"The Committee’s proposal to enact bipartisan legislation is a much-needed alternative to this harsh result (read: Title II). Instead of leaving the FCC to find statutory authority in existing provisions of law, we must work together to craft new legislation that establishes unambiguous rules of the road for ISPs while also clearly defining the parameters of the FCC’s authority. The legislative proposal under consideration today represents a new path forward that meets these policy goals. I firmly believe that the proposed legislation under review today achieves the aims of every stakeholder in the Internet ecosystem."

The wireless industry is similarly thrilled by the draft proposal with language you'll note mirrors the cable industry ("excellent start," "great path forward"). Former FCC Commissioner Robert "what broadband competition problem" McDowell, now employed by frequent Comcast client Wiley Rein LLP, also testified at the hearing and offered up a Wall Street Journal editorial using much of the same rhetoric (gosh, it's almost like they're all reading from the same script):

"It’s time to consider a different path—one that leads through Congress—to end the net-neutrality fiasco. Although the legislative process can be perilous, Congress can provide all sides with a way out."

Yes, the same Congress that can't tie its own shoes can most certainly lead us out of a complicated, decade long net neutrality debate -- by trying to pass net neutrality rules written by the nation's biggest broadband companies. Of course if this effort follows the traditional telecom industry trajectory, phase three of the sales job for the Upton/Thune proposal will be to bombard the public with editorials and support from a litany of purportedly objective experts and minority groups -- all breathlessly arguing that this awful bill is our "best path forward" and that Title II will harm puppies and create tears in the space time continuum.

Unfortunately for the phone and cable industries, most folks (with a few press exceptions) appear to realize this change of heart is really just telecom industry business as usual: large companies writing draft legislation and then throwing money at politicians, individuals and groups eager to parrot support for cash. The only interest here is in undermining real net neutrality, not protecting it, and the goal isn't consensus -- it's the illusion of consensus. In the end we're still headed for a fight over Title II, whether the industry likes it or not.

Filed Under: congress, fred upton, john thune, michael powell, net neutrality, open internet, robert mcdowell, title ii

That Study In Every Paper Claiming Title II Will Result In $15 Billion In New Taxes? Yeah, That's Total Bunk

from the damn-lies-and-statistics dept

A few weeks back, we noted how a new study by the Progressive Policy Institute was making the claim that reclassifying ISPs under Title II would result in $15 billion in new state and federal taxes. As also noted, the claim was quickly picked up by media outlets and large ISP executives as the centerpiece of a campaign to convince the press, public and regulators that Title II will result in the sky falling. The cable industry was also quick to use the study as the underpinning of a series of ads pretending they care about soaring consumer bills (adorable!).

The problem, as usual in farmed telecom think tank wonkery, was that the study's findings were largely bunk. Consumer groups were quick to complain (pdf) that study author Hal Singer packed the study with conflations, misleading math (when calculations weren't obscured entirely) and the inclusion of unrelated programs and issues (like 911 funding) to intentionally bloat the predicted impact. Singer also misleadingly included the unrelated temporary moratorium on Internet service taxation in his findings, even though the Internet Tax Freedom Act (ITFA) has since been made permanent, wiping $4 billion, or 27%, off of Singer's prediction in one fell swoop.

None of this of course stopped the study and the scary $15 billion tax estimate from being used by ISPs, CEOs and loyal politicians to wage war on Title II, and the study has since been regurgitated unskeptically in thousands of news reports. Well, except for the Washington Post, which recently decided to actually fact check the study's findings (journalism!), only to discover that even if you could accurately state the full financial impact of Title II, the report went out of its way to paint as ugly of a scenario as possible:

"It is impossible to quantify the exact impact of the potential FCC decision, since Internet regulation is a new area of policy. New taxes are prohibited as long as the Internet Tax Freedom Act is in effect, so it is inaccurate to say there would be $15 billion in new taxes. There may be state charges and fees, but there is no proof that all of the current fees on telephone services would apply again to Internet services. It will not add up to $15 billion, and likely not add up to $11 billion — the worst-case scenario. The researchers agree it is a “high-end” estimate, which was the purpose of the report."

Amusingly, the Post's Michelle Ye Hee Lee contacted politicians that have bandied around the estimate, and few were interested in changing their positions when they were informed the $15 billion total was a phantom. Also of note, the story notes that Singer did at least edit his study when the Internet tax moratorium was introduced, but buried the update:

"There are too many unknowns to alarm consumers who are not well-versed in the technical and legal details of telecommunications regulations and laws. Given the uncertainties, it would be more appropriate to give a range of potential charges. But the researchers did not calculate a low-end figure for the report. In addition, the modification from $15 billion to $11 billion is a 27 percent decrease, yet the change is buried in a footnote and not readily visible for the public."

Note that none of this is to say that Title II won't see some form of tax increase, but most analysts (the ones not trying to scare people) appear to think it will be somewhere in the range of not that big of a deal. Even if Singer was able to successfully calculate the myriad trajectory of dozens of Internet policies and tech trends to come to a hard number, he should have at least used his crystal ball to try and factor the cost benefits neutrality rules -- and a healthy Internet -- would have on the consumer. Would a tax increase be offset by the savings from not being price-gouged by neutrality-violating duopoly? How much would most consumers be willing to pay in additional taxes for a healthy Internet? These are questions Singer doesn't want to ask.

After being called out by the Post, Singer took to Twitter with a unique defense of his bloated, intentionally-inaccurate missive, only highlighting the part of the story that shows there may be some kind of tax increase:

Free Press effort to discredit PPI study fails. @myhlee finds there will be some new charges. http://t.co/dXFKW4iQGp pic.twitter.com/LGIUTjUVQk

— Hal Singer (@HalSinger) January 16, 2015

When Mike pointed out Hal was being incredibly disingenuous, Singer actually responded by blaming the news outlets that used his inaccurate figure. He further argued that even though the Washington Post gave those "three pinocchios" to everyone citing his report, it didn't apply to him because he'd added that little footnote. "Your analysis clearly stating that I'm completely wrong is proof that I'm right," is a new one, and one I'll have to remember the next time I find myself creating bogus science to help prop up duopolists.

Filed Under: hal singer, net neutrality, taxes, title ii
Companies: progressive policy institute