How The FCC Plans Neuter The Net, Even As The FCC Insists Everyone's Got It All Wrong

from the from-net-neutrality-to-a-neutered-net dept

So, we already wrote about why Tom Wheeler's "open internet" proposal is problematic, but Wheeler and the FCC are hitting back on everyone who's arguing that -- telling everyone to calm down, insisting that nothing has changed, and that they're actually trying to preserve the old "open internet" rules from 2010 that a court tossed out earlier this year.

The problem is that this is absolutely misleading -- and either the FCC doesn't realize this or it's not being honest. And, I'm not sure which one is more bizarre. Wheeler is, indeed, correct in saying that under the court ruling from earlier this year, in order to be able to do anything under Section 706 of the Telecom Act, they had to shift from talking about "unreasonable discrimination" (which they can't regulate under 706) to "commercially reasonable" activities (which they can regulate). So, in effect, Wheeler is trying to argue that by basically shifting the basis for the rules and substituting in the "commercially reasonable" standard as opposed to blocking "unreasonable discrimination" (which can be done under common carrier rules, but since the FCC reclassified broadband service as not being a telco service, that's not available), they're now back in proper legal territory under the law.

Perhaps Wheeler and his friends at the FCC think that this subtle shift in phrases to abide by the blueprint the court set out really does leave the existing rules in place. But, it's not that simple. As Stacy Higginbotham points out, even if the FCC doesn't want to destroy net neutrality, this subtle shift will do so anyway. To understand why, the best article to read is the one by Marvin Ammori, who has been fighting this fight for years. He argues that, unlike the CNET article above that says to "calm down," we should actually be even more worried. Because even if the FCC thinks it can stop net neutrality violations, companies are still going to get screwed. Basically, the FCC can only act after the fact, and then it's going to come down to a fight between a big telcos' lawyers... and a tiny startups' lawyers. Guess who wins?

The FCC will propose an incredibly vague and complicated multifactor test, one that takes into account the market conditions, technology, alternatives available to each side, competitive dynamics. This is the kind of stuff that requires very expensive expert witnesses in very expensive legal proceedings. There may be up to 16 factors listed, plus a catch-all for "other factors."

So, according to the FCC, when Verizon discriminates against a startup, we shouldn't be alarmed, because (while being discriminated against), this startup can hire a lot of expensive lawyers and expert witnesses and meet Verizon (a company worth more than $100 billion) at the FCC and litigate this issue out, with no certainty as to the rule. The startup will almost certainly lose either at the FCC or on appeal to a higher court, after bleeding money on lawyers.

He's not basing this on some theoretical crystal ball. It's already happened -- and it's obvious from the Court's ruling earlier this year:

Back in January, the D.C. Circuit struck down the FCC’s last attempt at net neutrality, saying that Section 706 does not permit the commission to stop nondiscrimination. It pointed to another legal decision, concerning data roaming, in which the FCC adopted a 16-factor test like the one I explained above. Based on an earlier case, the FCC can probably ban one or two specific practices, such as blocking certain websites or applications. That’s about it.

So here's the issue: the old rules were incredibly weak and nearly pointless in the first place. They didn't apply to wireless (nor, apparently, will the new rules) and they didn't really protect net neutrality. They were crafted, in part by the telcos, through a long-drawn out process, in which the former FCC boss tried to keep everyone happy and ended up pleasing no one. That's why we were a little perplexed at the outrage over those rules being thrown out earlier this year in the first place. Those rules were nothing great.

The problem is that this new proposal isn't just "those same old rules" as the FCC would like you to believe. Instead, they're the same old rules, made weaker at the critical juncture by the necessary legalese change to "commercially reasonable" and by the clear nature of what the court says the FCC is able to do under Section 706. And while some think the answer is to shift broadband back under Title II and put them under common carrier rules, that's almost certainly a political impossibility -- which is why Wheeler is trying to thread this needle.

As we've said for a decade now, the underlying problem is a lack of competition. These kinds of rules, including things like transparency into the crap that the telcos are pulling only matter if you have options. When you don't, then they can be transparent as to how they're screwing you over, and there's really just not much you can do. And that's kind of the situation we're in today. Wheeler claims this is no change and people are overreacting, but what they're realizing is that the existing rules in 2010 were kind of a joke anyway, and what little power they had to keep the internet open and non-discriminatory back then is now pretty much gone with this new wording. So, Wheeler may not want to be killing off the open internet, but the end result may be exactly that.

Filed Under: commercially reasonable, discrimination, fcc, net neutrality, open internet, tom wheeler