VoIP Pioneer Worried About Net Neutrality Reclassification -- But Without It, Broadband Providers Could Kill VoIP Startups

from the respectfully-disagree dept

I've known Jeff Pulver for many, many, many years, and he is truly one of the earliest and most important pioneers in the VoIP (Voice over IP) space. He believed it was going to change the world before pretty much anyone else, and then set about helping to make that happen. The fact that so many voice communications now happen via VoIP systems are partly due to his pioneering efforts. Part of Pulver's efforts weren't just focused on making sure the technology kept improving and becoming more useful, or in just educating the world about VoIP (though he was instrumental in both of those spaces), but also in fighting the early regulatory fights concerning VoIP. Over a decade ago, we wrote about the efforts by some to declare VoIP a Title II regulated phone service, something that many states tried to do. Thankfully, in 2004, Pulver was able to convince the FCC to issue the so-called Pulver Order, declaring that voice services like Pulver's Free World Dialup (FWD) were not regulated under Title II, and were information services rather than telecommunications services.

This was the right decision at the time, and remains so today. Without regulating VoIP as as telco, it allowed some really great experiments and advancements, including more "phone replacement" services, to the fact that voice features are now built into lots of products today. Given that, I can understand why Pulver has come out vocally against efforts to reclassify broadband infrastructure players under Title II. As we've discussed, while we're wary of increasing regulations, in this case, we actually feel that Title II reclassification, with forbearance, is the proper result for the big broadband players.

Where I think the disconnect comes from is in the difference between the infrastructure providers -- building the core underlying pipes that make the internet work, almost always doing so with direct assistance from the government (rights of way, franchises, subsidies, tax rebates, pole rights, spectrum, etc.) -- and the services that are built on top of it. For example, without being able to stop broadband players from discrimination, those broadband players could, in fact, decide they want to block out VoIP players for taking away business from their own phone service. That's not a hypothetical. It's happened.

So I agree with Pulver that we don't want burdensome regulations on the services that exist on the internet. And I'll stand right beside him in arguments to extend any such regulations to those services. But, at this stage of the game, the big broadband players have become so powerful, and so anti-competitive with their terminating monopoly, that they have the ability to kill off all the kinds of cool and unique services that Puliver lauds in his article.

For anyone born after 1985, the idea of connecting with a relative on FaceTime, Skyping a friend traveling abroad or discussing a Halo mission with friends over a headset in real time is second nature.

But it's equally true that these services might never have come to pass without significant efforts over a decade ago by many in the Internet community to keep government regulators at bay as they actively considered how to regulate one of the forerunners of these technologies -- a novel Internet-based communications service called Free World Dial-up (FWD).

He's right about that, but he's underestimating the flip side problem: if the Comcasts, Verizons and AT&T's of the world are too powerful, we wouldn't have that either, because they'd make sure to degrade or block such services, driving users to their own services, or requiring innovative services like Pulver's to pay a toll just to reach their subscribers.

We should certainly be careful about excessive government regulation, but just as equally we should be wary of monopolists with the power to block out innovation. Just because Title II is the wrong solution for most internet services, it does not automatically mean it's wrong for the underlying infrastructure.

Filed Under: common carrier, fcc, jeff pulver, market power, net neutrality, reclassification, title ii, voip

Web Inventor Tim Berners-Lee Gets To The Core Of Net Neutrality Debate: You Need An Open Internet To Have A Free Market

from the the-free-market-is-at-the-service-level dept

The creator of the World Wide Web, Tim Berners-Lee, has now spoken out strongly in favor of net neutrality in an interview with the Washington Post. The headline and much of the attention are going to his quip that what the big broadband providers are doing is a form of "bribery" in trying to set up toll booths to reach their users. And that is, indeed, the money quote, but it's not the most interesting part of what he's really saying. It's in the context that he gets to that, where he's countering the bogus arguments from folks who insist that we don't need net neutrality rules because that would mess with "the free market." That's wrong for a whole number of reasons that we've discussed previously, but Berners-Lee points out that to have a free market, you do need some basic accepted rules, and that's where some basic regulations are useful: regulations to keep the market free and open. And that's true of most "free markets."

"A lot of congressmen say, 'Well, sign up for the free market' and feel that it's just something you should leave to go by itself," said Berners-Lee. "Well yeah, the market works well so long as nobody prints money. So we have rules, okay? You don't steal stuff, for example. The U.S. dollar is something that everyone relies on. So the government keeps the dollar a stable thing, nobody steals stuff, and then you can rely on the free market."

In other words, in most cases, you do need some basic rules in place to make sure the free market is functioning fairly. It's why most free market supporters recognize that there's some sort of government role in preventing monopolies or fraud -- situations where the free market can break down. And that is what net neutrality rules would do. That's why free market supporters should be totally on board with net neutrality as well: because it's about making sure that there is a real free market for internet services that are above the infrastructure level.

This is why we find it so frustrating that the big broadband players and those who attack net neutrality as "regulating the internet" keep conflating internet infrastructure with internet services. They're doing it on purpose, of course. But net neutrality is really just about making sure that there is a free market for internet services by making sure that the big broadband providers, who represent terminating monopolies, can't abuse that position to break the free market. Because if that happens, it harms everyone. As Berners-Lee absolutely recognizes, hence his comment about bribery:

"We need rules," said Berners-Lee. "If businesses are to move here and start here rather than start in Europe or Brazil or Australia — they're going to look around and make sure, 'Oh, does the power stay up?' And they'll look for other things. "Is the Internet open?' Will they have to effectively bribe their ISPs to start a new service? That's what it looks like from the outside. It's bribery."

You have rules against bribery. You have rules against fraud. You have rules against abusive monopolies. That's to keep the free market functioning. And that's all net neutrality is. It's a way to keep the underlying infrastructure players from totally mucking up the free market in internet services. It's great that Berners-Lee gets this, but it boggles my mind that so-called free marketers still have trouble with this.

Again, none of this is to say that reclassifying under Title II is a perfect solution. It's not. There are risks involved, and there are some legitimate concerns. But compared to all the other options out there (short of Congress getting a clue, which isn't a particularly realistic option), it appears to be the best possible solution. Again, rather than "regulating the internet," it's really just setting the rules to keep the internet a free market.

Filed Under: bribery, economics, free market, infrastructure, net neutrality, open internet, services, tim berners-lee

Why Hasn't The Obama Administration Weighed In On The FCC's Net Neutrality Comment Period?

from the take-a-backseat-to-no-one? dept

Marvin Ammori has a good article over at Slate questioning why the Obama White House does not appear to have submitted comments with the FCC concerning net neutrality. As you know by now, the FCC received over 3 million comments when the commenting period finally closed on Monday -- but so far, it does not appear that the Obama administration weighed in (it's possible that not all comments are in the database yet, but still...). While you might think this isn't a huge deal -- Obama has said he supports net neutrality (indeed, campaigned heavily on it originally), Ammori notes that it is somewhat odd. The administration frequently does submit its own comments on other FCC issues:

While President Obama campaigned heavily on net neutrality and recently reiterated his support for it, he hasn’t filed a thing to the FCC. The president has alluded to the FCC being an independent agency, and therefore suggested he should not publicly encourage the commission to fulfill his campaign promises. Yet since becoming president, his Executive Branch has submitted more than 200 filings to the FCC in over 80 proceedings. (If you want proof, see this spreadsheet.)

If the administration were to file comments, it might come through a White House office, such as the National Economic Council or the Office of Science & Technology Policy, or the Commerce Department’s National Telecommunications and Information Administration (NTIA). In 2009, the NTIA submitted comments telling the FCC that the “NTIA expects to offer views on the issues presented in [the network neutrality] rulemaking at the appropriate time.” You would think that we have reached the appropriate time. But President Obama has stood largely silent while his FCC chairman, Tom Wheeler, barrels toward dismantling an open Internet and threatening the entire economy that now rides atop it.

The commenting period seems like it would have been the appropriate time for at least some part of the administration to weigh in. Even with 3 million other comments, a comment coming from the administration would not get lost in the process. Instead, the President seems to be more or less admitting that his campaign promises on net neutrality were simply empty promises.

Obama has proclaimed that he “will take a backseat to no one in my commitment to network neutrality.” By not commenting in the FCC proceeding, the president has taken a back seat to dozens of tech companies, including Etsy, Kickstarter, Vimeo, Reddit, and Tumblr, the AARP, dozens of senators and members of Congress, and millions of people that have strongly filed or commented in favor of real, strong Title II network neutrality. It’s time for that to change.

Filed Under: administration, barack obama, comment period, fcc, net neutrality, open internet, title ii

Net Neutrality Is Not 'The Government Takeover Of The Internet' -- Or Why Republicans Should Support Reclassification

from the myths dept

One of the general rules that we try to follow here on Techdirt is to avoid anything that has to do with "partisan politics" or debates that involve "Democrats" v. "Republicans." Thankfully, many of the tech issues that we discuss don't fall neatly into one camp or the other -- issues around intellectual property, privacy, innovation and surveillance seem to have supporters and detractors on both sides of the traditional aisle. Sometimes that's because the issue is so "new" that it hasn't been twisted and distorted into a partisan fight yet. Sometimes (more frequently) it's because these issues aren't ones that get enough attention at all. Net neutrality was like that in the early days, a decade ago. It was a legitimate concern that was being raised about broadband providers potentially abusing market power. Somewhere around 2004 or 2005, however, something shifted in the debate, and it suddenly became a "partisan" issue with Democrats tending to be "for" net neutrality and Republicans tending to be against it. At this point, the debate became stupid. This often seems to happen with partisan issues. Once the "Parties" take over (and this is true of both parties), pretty much all debate on the relevant facts goes out the window, and it all becomes hyperbole and rhetoric. That has absolutely been the case with the net neutrality debate as well.

So, while we don't normally dive into any kind of partisan spin on things, because the rhetoric has become absolutely ridiculous on net neutrality, it seemed worth discussing why the Republican claims that reclassification under Title II is some sort of "government takeover of the internet" or "regulating the internet" are just wrong. And we'll go one step further and point out why Republicans should actually be standing right along side their Democratic colleagues in supporting reclassification. This shouldn't be a partisan issue at all, but a bipartisan effort to make sure that the internet remains free and open for true innovation and competition (the kind of thing that both parties should agree on).

We'll start by pointing to a fantastic article from James Heaney, a self-identified conservative, who goes into great detail explaining why free marketers should support reclassification of broadband access by the FCC. He covers a lot of ground that we've discussed before, but does so in a clear and concise manner that makes it easy to read. In short, he notes that free markets and competition are great for innovation -- and that while regulation can often get in the way of those things, so can monopoly power. Further, he highlights how internet infrastructure is effectively a natural monopoly (just like we discussed... a decade ago). And, thus, it makes sense to have very limited regulation to keep the natural monopoly from getting out of control and more importantly, to stop the natural monopoly from hindering all sorts of other innovation. Heaney's argument goes into a lot more detail, including a discussion of why the FCC was crazy wrong in its 2002 decision to declare cable a Title I "information service" rather than a Title II "telecommunications service," and why now is the time for the FCC to correct that mistake. Either way, he notes, the nature of broadband -- like highways or electricity -- makes it clear that it's a natural monopoly:

That’s because – guess what! – internet service is a market where natural monopolies prevail. Just like with the electric company, most of the cables and most of the network are already purchased and deployed. Adding a new customer often means literally just flipping a switch at HQ, or – at most – laying a few yards of cable to an existing network. In the end, the more the company sells, the less it costs them. Over time, the big companies beat the small ones on cost, gobble them up… then lobby the government to freeze out potential competitors, while jacking up costs and slashing service quality,.

If you have ever interacted with Comcast in any way, you already know about their “service” “quality” – the infinite wait times, the incompetent “help,” the constant upselling, the blatant lies (usually about credits they promise), the desperate measures. Since they are our local monopoly, I don’t hear too much about the other monopolists out there, but I understand Time-Warner isn’t any better. It is a fact that customers despise their ISPs on average:

What you may not realize is that they are overcharging you, too, like textbook monopolists.

From there, he points out that often the best way to deal with natural monopolies is through the threat of a government crackdown, rather than actual regulation. This was actually a position that we supported for a long time as well. I can't seem to find a reference to it now, but I'm pretty sure that this was the suggestion of Professor Ed Felten as well, noting that a sort of "Sword of Damocles" dangling above broadband providers' heads might be the best form of net neutrality as we learned more. However, as Heaney notes, we have learned more and that plan has now failed, thanks to the appeals court ruling in favor of Verizon (Heaney incorrectly says it's Comcast -- possibly confusing it with a different net neutrality lawsuit). And, thus, he notes, without the hovering threat, the playing field is now open for monopoly-power abuse -- which is the kind of thing that Republicans and conservatives should be against:

So now the delay-and-harass strategy has failed. The monopolists have a blank check from the law, and they are exploiting it with tremendous rapacity (as we’ve seen in the series of Netflix stickups, which picked up the moment net neutrality collapsed). Perhaps the next most attractive option is to pull a Reagan and just break up the major ISPs into smaller companies. Unfortunately, there is no obvious legal way to do that. The Bell breakup resulted from a lot of special circumstances, some plain-as-day antitrust violations, and an 8-year court battle. Moreover, breakup would probably not solve the problem: the wee ISPs would still have local monopolies in many areas, and economics 101 would force them to immediately begin reconsolidating into new national monopolies (as the Baby Bells are doing today). In the long run, the consolidation and price gouging of natural monopolies are probably inevitable. It’s a cold, heartless law of economics: the same laws that allow the government to increase revenues by cutting taxes will eventually compel certain telecom markets to become monopolies, no matter how many times we break them up.

Given that, he notes, the next best option is Title II. He notes, correctly, that the early days of the internet saw growth and investment in broadband thrive under Title II (contrary to claims to the contrary) and how the telcos today still beg to be classified under Title II for parts of their infrastructure:

To sum up, the only reason the Internet isn’t protected from monopolies today is because, in 2002, the FCC decided to experiment with not regulating the Internet. Almost immediately thereafter, the telecoms began fighting the core Internet principle of network neutrality, aiming to take control of the Internet for themselves and impose monopoly prices on consumers. All attempts to restrain them outside of Title II have failed. The Wall Street Journal regularly argues that the Internet has thrived because ISPs have never been regulated like phone companies. This is false, and the Journal should know better. Indeed, the years of the Web’s most explosive growth and development happened under the auspices of strict common carrier regulation, identical to those of phone companies. (Heck, even today, limited portions of Verizon’s high-speed fiber network, FiOS, fall under Title II!)

The fix to the growing monopoly problem is very, very easy, and several courts have pointed to it over the past several years: simply revisit the obviously nonsensical ruling of 2002. Overturn it, and (correctly) decide this time that Internet Service Providers are “telecommunications providers”. Instantly, every ISP in America would go back to common carrier status, and net neutrality regulation wouldn’t just become easy; in many ways, neutrality is baked into Title II. The FCC would gain many tools to reduce the risk of natural monopoly where it doesn’t exist, or its effects where it does. The market would be saved, the consumer freed from the tyranny of monopoly.

His full piece is much longer and well worth reading, but I have one further quibble with it, which gets back to the underlying claim about all of this that Title II is somehow "regulating the internet." It's not. It's never been about that at all. Quite the opposite, in fact. It's about choosing which form of regulation internet infrastructure will be ruled by. The anti-net neutrality crew like to make this mistake (and they make it often), trying to pretend that internet infrastructure is the internet. It's not. And internet infrastructure has always been heavily regulated, often out of necessity. In order to allow a cable company or a telco to install broadband infrastructure, local cities and towns often did special deals, handing over subsidies, rights of way, pole rights, tax breaks, franchise agreements and other such things to the broadband players. The idea that internet infrastructure has ever been "a free market" is laughable. No matter what kind of infrastructure was being installed, it's always relied on some sort of deal with government in exchange for access. As such, it's entirely sensible to argue that there should be certain requirements in exchange for such public support for their network, and that includes keeping the network itself free and open to use.

And that's really what net neutrality is all about. It's not about "regulating the internet," but making sure that the big broadband players don't "regulate" the internet themselves, by setting up toll booths and other limitations, allowing them to pick the winners and losers. It's about blocking monopolistic powers from putting in place systems to extract monopoly rents that harm the public and limit innovation and consumer surplus. Net neutrality frees the internet from such monopolistic regulations by putting common carrier rules at the infrastructure level to make sure that there's true competition and freedom at the service level. And that makes total sense, because you don't want competition of natural monopolies, you want to make sure natural monopolies don't block competition.

Given that Republicans like to claim that they're pro-innovation, pro-business and pro-competition, they should absolutely be in favor of net neutrality as well because it creates the environment where there will be real competition and innovation at the service level. The argument that they're using against it is to pretend that Title II regulates "the internet" when it really just changes the existing style of regulation for internet infrastructure, preventing a few monopolistic powers from squeezing monopoly rents from everyone else. Normally stopping monopolies is supposed to be a key tenant of conservative economics. It honestly seems like the only reason that isn't the case here is because big broadband lobbyists have carefully spun this tale (and heavily funded some campaigns) to pretend that what they're trying to stop is "regulation of the internet."

Filed Under: conservatives, economics, government takeover of the internet, infrastructure, monopolies, natural monopoly, net neutrality, reclassification, regulations, republicans, title ii

Internet Slowdown Day Generated 1,000 Calls Per Minute To Congress

from the nice-work... dept

A brief update on how the Internet Slowdown Day effort went, in case you missed it. Tons of sites jumped on board, including my favorite, Clickhole (The Onion's lovingly wonderful attempt to satirize clickbait sites), which showed off images of koalas that refused to load to in an effort to call for net neutrality... With the effort on so many different websites, reports are that, at its peak, there were over a thousand calls per minute going into the Congressional switchboard, which is a huge deal. Many in Congress are indicating that their offices are getting swamped with calls.

The main act is over at the FCC, but not in Congress (mainly because Congress has no desire to get anywhere near reforming the Telecommunications Act, as it should). However, a big part of the issue at the FCC is the political fight that it will set off no matter what decision it eventually comes to. The more Congress realizes that the public really supports an open and neutral internet, the more likely it is that the FCC will have the political cover to do what's right. This is good news. Again, if you're still trying to understand all this net neutrality stuff, we've got a big primer to check out.

Filed Under: activism, calls, internet slowdown day, net neutrality, open internet

Everything You've Wanted To Know About Net Neutrality But Were Afraid To Ask

from the let's-do-this dept

Okay, ever since our big Net Neutrality Crowdfunding, we've had some new readers who aren't as familiar with the details and issues -- yet we've been mostly writing as if everyone is informed of the basics. So, we figured it only made sense to take a step back and do a bit of an explainer about net neutrality.

What is net neutrality?

This is not an easy answer, actually, which, at times, is a part of the problem. The phrase, first coined by law professor Tim Wu, referred originally to the concept of the end-to-end principle of the internet, in that anyone online could request a webpage or information from any online service, and the internet access provider (usually called internet service providers or ISPs) in the middle would deliver that information. At the time, the ISPs were starting to make noises about how they wanted to "charge" service providers to reach end users, effectively setting up toll booths on the internet. This kicked off in earnest in October of 2005, when SBC (which became AT&T) CEO Ed Whitacre declared that internet companies were using "his pipes for free."

The phrase has been warped and twisted in various directions over the years, but the simplest way to think about it is basically whether or not your ISP -- the company you pay for your internet access (usually cable, DSL or fiber, but also wireless, satellite and a few others) -- can pick winners and losers by requiring certain companies to pay the ISP more just to be available to you (or available to you in a "better" way). John Oliver probably summarized it best by arguing that it's about "preventing cable company fuckery" (though, to be clear, it goes beyond just cable companies).

The internet access providers claim that service providers, like Netflix and Google, are getting a "free ride" on their network, since those services are popular with their users, and they'd like to get those (very successful) companies to pay.

Wait, so internet companies don't pay for bandwidth?

They absolutely do pay for their bandwidth. And here's the tricky part of this whole thing. Everyone already pays for their own bandwidth. You pay your access provider, and the big internet companies pay for their bandwidth as well. And what you pay for is your ability to reach all those sites on the internet. What the internet access providers are trying to do is to get everyone to pay twice. That is, you pay for your bandwidth, and then they want, say, Netflix, to pay again for the bandwidth you already paid for, so that Netflix can reach you. This is under the false belief that when you buy internet service from your internet access provider, you haven't bought with it the ability to reach sites on the internet. The big telcos and cable companies want to pretend you've only bought access to the edge of their network, and then internet sites should have to pay extra to become available to you. In fact, they've been rather explicit about this. Back in 2006, AT&T's Ed Whitacre stated it clearly: "I think the content providers should be paying for the use of the network - obviously not the piece for the customer to the network, which has already been paid for by the customer in internet access fees, but for accessing the so-called internet cloud." In short, the broadband players would like to believe that when you pay your bandwidth, you're only paying from your access point to their router. It's a ridiculous view of the world, somewhat akin to pretending the earth is still flat and at the center of the universe, but in this case, the broadband players pretend that they're at the center of the universe.

Why is this suddenly big news again? Haven't people been fighting about this for years?

After the last fight over this issue, the FCC issued some pretty weak "open internet" rules, in an attempt to try to appease everyone by effectively creating a "compromise" based, in part, on an agreement negotiated by Verizon, AT&T and Google. Rather than putting in place strong rules to protect an open internet, the FCC's rules were fairly limited and sought to block more egregious forms of discrimination while increasing transparency. However, the rules did not even apply to wireless access and left a bunch of other loopholes -- for example, as long as the broadband players could make a halfway credible claim that what they were doing was for "the security and integrity of the network," it would be allowed. Even though it was part of the negotiations for the rules, once in place, Verizon sued, claiming that the FCC had gone beyond its mandate in issuing the rules.

Following a long court battle, in February of this year, the appeals court ruled that, indeed, the FCC had overstepped its boundaries, and the open internet rules were not enforceable. The ruling effectively said that the part of the law that the FCC had used as the basis for its compromised open internet rules, Section 706 of the Telecommunications Act of 1996, did not allow for the rules it presented. It did, however, suggest that Section 706 gave the FCC some fairly broad powers that might be used instead.

In the following months, the FCC's Chair, Tom Wheeler, tried to craft a new set of rules, basically looking to rewrite the existing (already weak) rules with the guidance the court gave. The big problem is that based on the February ruling and Section 706, Wheeler basically had to replace a block on "unreasonable discrimination" with an argument saying that any priority efforts had to be "commercially reasonable."

A switch from "unreasonable discrimination" being forbidden to "commercially unreasonable discrimination" being forbidden doesn't sound like that big of a difference.

Well, remember that the original rules weren't very strong in the first place. Secondly, the term "commercially reasonable" means something fairly specific, and it makes it much more difficult for the FCC to prevent internet access providers (big cable and telcos) from picking winners and losers. In short, under these new rules, the cable and telco companies can put in place restrictions on internet companies, and then only after that happens, those companies can go to the FCC and challenge them as being "commercially unreasonable." This is a long, difficult and expensive process. And, rest assured, the cable and telco companies have some of the best and most experienced lawyers around when it comes to appearing before the FCC (or, later, facing off with the FCC in court). A small startup would have to basically go broke arguing before the FCC that certain rules are commercially unreasonable, and there's a decent chance it would still lose to much more powerful lawyers with much more experience. Even if a startup could win in such a fight, it would be a huge time and money waster.

What's all this stuff about "Title II"

What many net neutrality advocates are asking the FCC to do is to "reclassify" broadband under Title II of the Telecommunications Act of 1934, effectively classifying broadband providers as "common carriers," which would allow the FCC to (1) have more power over them and (2) have more of a mandate towards rules and regulations that would stop those services from picking winners and losers among internet-based services. In short, Title II would give the FCC more power to "prevent cable company fuckery."

Why are some people so opposed to Title II?

There are a bunch of reasons -- some of which are more reasonable than others. They range from things like the simple idea that it's crazy to try to regulate modern communications systems under a law from 1934, to concerns about too much regulation "chilling investment" in broadband, to fears about lawsuits that will come about concerning the whole reclassification process.

Wait, why aren't broadband providers already considered "common carriers" -- it seems obvious that they should be?

Well, not everything is obvious. A decade ago, there were questions about whether or not cable broadband providers were technically "telecommunications" services (classified as common carriers under Title II) or if they were providing an "information service" (not under Title II and not a common carrier). The FCC (as always, under tremendous lobbying pressure from the cable companies) claimed that cable modem service should be exempt from Title II regulations. This was challenged, but the Supreme Court sided with the cable companies (and the FCC) in saying that this ruling made sense. Soon after that, as people questioned whether or not such a rule also applied to DSL lines, the FCC also reclassified DSL outside of Title II.

If the Supreme Court already said that, can the FCC switch back now?

Yes, though it is a somewhat complicated process (though not nearly as complicated as the telcos and cable companies would have you believe). It will also almost certainly be fought in court and it will be a few years before a final ruling is made as well. It is certainly doable, however.

Do we really want a law from 1934 ruling over modern internet access systems?

In an ideal world, probably not. But this isn't an ideal world. If we lived in a better world, Congress would update the Telecommunications Act to take into account what's actually happening online. But we all know about how well Congress works (i.e., it doesn't). And when it comes to political hot potatoes like telco policy, where there are tremendous lobbying dollars at stake, not only would it be nearly impossible to get anything through Congress, there's a better than decent chance that anything that did get through would be... messy and potentially even worse.

I've heard that reclassifying will lead to internet companies like Google also being required to live under Title II rules including antiquated issues like tariffs and having rate settings.

This is a little myth that the telcos and cable companies have been spreading. Yes, there's a ton of unrelated crap under Title II (again, why it's not ideal, but the best of a terrible list of options). But there's a (mandatory) process under the law by which the FCC must "forbear" from applying regulations that the FCC determines are not necessary for protecting consumers and thus would not be in the public interest. The forbearance process has been used numerous times, and most of the people advocating for reclassification under Title II are also doing so in combination with recommending forbearance against those obsolete and unrelated parts of Title II, beyond the narrow issue of stopping the internet access providers from picking winners and losers on the network.

Should we be afraid that reclassification will create a massive legal battle that leaves everyone uncertain for years?

No. First of all, no matter which way the FCC goes, there's likely to be a big legal battle that will go on for years. While Comcast and AT&T have more or less said that they would accept the rules under 706, Verizon has made it pretty clear that it would challenge them, just as it challenged the original open internet rules. Second, we already went through a big legal battle over the original rules for the last four years, and there was little indication that that legal battle had any impact one way or the other on broadband deployment or any other innovation.

Won't Title II reclassification cause the big broadband providers to give up all hope, stop investing in broadband and destroy all that is good and holy about broadband in the US?

Uh, no, though that's the story that the companies will tell you. They'll also leave out the fact that they actually really, really like to be classified under Title II when it comes to getting tax breaks, subsidies and rights of way for installing their lines in the first place. Also, the largest period of investment in broadband infrastructure happened before the big Brand X Supreme Court decision, when broadband was still considered to be under Title II. Other areas of telecommunications, including mobile phone service, are still classified under Title II, and there's a ton of investment going on in that space. The claims that Title II will chill investment have little basis in reality.

Even so, shouldn't we be at least a little uncomfortable about "regulating the internet"?

Yes, we should always be somewhat concerned about internet regulations, but this part of the internet is already heavily regulated. Remember how Verizon begged to be classified under Title II to install its lines? Installing cable, fiber and other broadband infrastructure already involves tremendous regulatory systems, in which local governments are granting all sorts of subsidies, rebates, tax breaks and allocating spectrum to these companies -- basically having the public pay. And all of this is heavily regulated. The real question here is under which regulations this will happen. It's not about suddenly "taking over" the internet or "regulating the internet," it's about which laws will be used for a process that is already highly regulated.

What about all this stuff with Netflix being slowed down by Comcast, Verizon and AT&T and paying to be sped up?

That's a related issue, but slightly different. That concerns "interconnection." Historically, net neutrality was just about "the last mile" -- the connection point between you as an end user and your internet access provider's router. However, there are many other issues happening beyond that, including interconnections between giant companies moving lots of traffic back and forth across the internet. Sometimes this happens via transit agreements and sometimes via peering arrangements (which are usually free). In the last year or so, the biggest broadband players -- Comcast, Verizon and AT&T -- appeared to be letting their connections to Netflix clog up at their border router, slowing down the delivery to end users.

Effectively, these big broadband providers had figured out a different way to accomplish the same result: getting big internet companies to pay extra to reach you efficiently. By letting their ports clog, they've really just moved the problem upstream to another point they control, and getting Netflix (for now, but soon others) to pay up, even though there's plenty of bandwidth on all sides. All the broadband players need to do is connect a few cables to turn on a few more ports, a trivial and inexpensive process.

Historically, most people following this space never expected interconnection to be a problem, because what kind of sick broadband company would purposely let its own ports clog up and deliver such a crappy experience to consumers? The answer, apparently, is Comcast, Verizon and AT&T, once they realized that they're basically the only game in town and that they could squeeze a lot of money out of internet companies.

So, in the end, while interconnection wasn't originally considered a "net neutrality" issue, it is. It's the same basic concept concerning "broadband company fuckery" in picking winners and losers and harming your internet connection.

Unfortunately, however, FCC boss Tom Wheeler has said he doesn't yet consider it a net neutrality issue (even if he did instruct the FCC to begin investigating these agreements). Thus, even if the FCC reclassifies broadband under Title II, the interconnection loophole may still be a powerful tool for broadband fuckery.

But I've heard that Comcast supports net neutrality? It's been running all these ads saying that.

The company is lying. Or, at the very least, it's being incredibly misleading. What it supports is Chairman Wheeler's proposal to use Section 706, which we already explained earlier is the path by which net neutrality dies. Furthermore, Comcast is effectively "required" to abide by the old net neutrality rules as a condition of its merger with NBC Universal a few years ago -- and it was the one that proposed the condition, knowing full well that it didn't really limit the company and its plans for setting up toll booths.

But is the internet really neutral already? Don't some companies already have faster access than others?

This is another misleading argument made by the broadband companies and their supporters. Yes, big companies will often have faster connections or more use of content delivery networks that cache content and make it available closer to the end points so that it's faster to access. But that's about improving access for everyone online, not about a particular broadband company charging the companies to better reach its users. Again, it goes back to the question of whether or not the broadband providers are picking winners and losers.

If you don't like what your broadband provider is doing, why don't you just switch to a competitor?

That would require real competition, which there is very little of in the US. While broadband providers like to point to things like mobile data offerings or Google Fiber as proof of competition, the truth is that there is very little real competition in the US for broadband services, when broadband is properly defined. Most places have one cable option and one DSL/fiber option, mostly from the large players mentioned above. Basically as you get into true broadband speed ranges, competition almost entirely disappears. And, even where there is competition, it may be getting even weaker, as Verizon is basically pushing its own users to cable, and has effectively stopped expanding its fiber offering. Verizon has made it clear that it wants to focus on wireless.

So what about wireless? Isn't that competition?

Not really. Most mobile data offerings are incredibly limited, slow and much more expensive than DSL/fiber/cable. They tend to have ridiculously low caps (usually on the order of 5GB) and restrictions on things like streaming. Many have terms that effectively bar you from using it as a home broadband replacement. Is it possible that these wireless offerings will eventually be true competition? Maybe, but it's still a long way out. Besides, as currently in place, the open internet rules don't even apply to wireless data anyway, and the largest players in the space are... Verizon and AT&T already. So, wait, how is wireless a real competitor?

Google Fiber! Doesn't that prove there's competition?

Google Fiber is a really interesting experiment, but it's only in a very few locations and expanding pretty slowly. There's little indication that there are any plans to make it a nationwide or even widespread offering. Besides, Google has also backed away from its early promise to allow competing networks to use its infrastructure.

Do we need more competition in broadband?

Hell yes. For basically a decade we've been saying that the risk of losing net neutrality is more of a symptom of a lack of competition. And, in fact, we've seen that when things like Google Fiber do show up, offering viable competition, the incumbents suddenly start ramping up their own offerings. Funny how that happens.

Okay, then how do we get more competition?

There are a bunch of possible options, though none are particularly easy or definite at this point. One idea is to encourage open access networks instead of just facilities-based competition. Under such a system, the broadband infrastructure players would wholesale their internet services to third-party service providers who could then offer service directly. The internet world used to work this way, prior to the original broadband reclassifications. There's little indication that the FCC is even considering pushing the big broadband providers to go back to wholesaling their connections, but it's an idea that has some amount of merit. Australia started down this path years ago, but that's been tied up in politics. There have been some other ideas designed around encouraging similar infrastructure competition, such as the "homes with tails" idea, where individuals would own the connection from their home to a network where services could compete.

The basic thinking here is that the core infrastructure is costly to install and inefficient to do multiple times in multiple ways (which is part of the reason why we have so little competition). Thus, rather than focusing on competition at the infrastructure level, you can put the competition at the service level and have multiple providers on the same network. It's effectively a "natural monopoly" argument, akin to the highway infrastructure. You don't want "competing" highways, because that's wasteful and inefficient. So you build one (massive, super fast) infrastructure, and then wholesale it out to lots of competitors. For now, this idea seems to have almost no support at the policy level, however.

Much more focus these days is on municipal networks and their ability to offer local competition. I'll expand this a bit to suggest that some local private networks (including Google fiber) are in the same camp. Allowing more local area competitors has long been shown to improve all connections as the incumbents freak out and realize they really have to compete. Many muni-broadband providers get a bad rap because they're derided as "government-run" or "local utilities." And, indeed, some attempts at municipal broadband have failed badly (often due to bureaucratic incompetence). That said, there are a growing number of successful muni-broadband implementations that offer real competition -- and often better services at a lower price.

Great! So let's get muni-broadband competitors everywhere!

Not so fast, sparky. The big broadband providers (them again!?) have been able to pass laws in about 20 states that either ban outright or severely limit the ability of local municipalities to offer such broadband to residents. The big broadband providers have done little to hide the fact that these bills were written by the broadband companies themselves and designed solely to limit this kind of competition. While Tom Wheeler did make a statement earlier this year claiming that he would use the FCC's power to preempt such laws if they were blocking competition, this caused the big broadband players and their friends to freak out. Congress is now trying to stop the FCC from being able to move forward on such plans.

The claims by supporters of such bans are ridiculous. They usually argue that states have the right to "make their own choice" about these kinds of laws without federal interference. However, they are then leaving out the fact that the states tend to be blocking cities from making their own choices to create municipal broadband competitors.

The simple fact is that this is a messy front in the broadband players' war against competitors. In an ideal world, cities and states would actually be making it easier to enable competition (whether private or muni-) and then get out of the way. Once again, we don't live in an ideal world.

What about other forms of competition?

For years the FCC has been holding out for some miraculous new broadband method, and it's failed to show up. Under Michael Powell, the FCC insisted that "broadband over powerlines" would present a "third pipe" into the home to compete with phone and cable lines. This was despite multiple reports noting that broadband over powerlines was not a particularly good way to do broadband (especially with the way the US sets up its electrical grid). We already discussed wireless competition above. There is the potential that if there were much more spectrum made available, new competition might spring up, but the FCC (them again?) hasn't been able to make that much spectrum available (a whole different issue for a whole different day). There's also satellite broadband which has gotten much better in the past few years, but is still limited by reliability problems and crappy latency. For years, we've made fun of the claims of satellite broadband providers for never living up to their promises. There may be some promise there, however, especially as satellites and space launches are getting much cheaper. There may be some exciting developments there in the future, but it's still a ways off.

And what's this I've been hearing about data caps?

Another somewhat related issue (which the FCC insists is not a net neutrality issue, but certainly does fall under the "broadband company fuckery" label), is that broadband companies are increasingly interested in putting data caps on your broadband usage, trying to get end users to pay more. This has taken a variety of forms -- some more draconian than others -- but the broadband providers have made it clear they'd like to use it as a way to get more money out of users. Yes, they always pretend it's about getting low bandwidth users to pay less, but there's little actual focus on that, because why would they, other than for PR reasons?

So what's going to happen now?

Well, chances are that before the end of the year, the FCC will officially announce the new rules that it wants. If there's enough public and political support for it, they might actually vote to reclassify internet access under Title II, but so far Tom Wheeler has been afraid to go there. If Wheeler chickens out (as is more likely), they'll stick with the plan using Section 706, opening up "commercially reasonable" fuckery. Either way, there are likely to be lawsuits (with Verizon leading the charge), and nothing will be determined finally for a few years. Congress could act, but won't.

The public pretty clearly wants reclassification under Title II. So do many, many internet companies who know they'd be targets (or wouldn't even be able to exist at all) under a system where the broadband access providers get to set up tollbooths. But, tragically, things in DC don't happen just because the public wants something. Reclassifying would also lead to a political fight in Congress.

Why is Congress so messed up on this?

For reasons that still don't make much sense, sometime around 2006, net neutrality went from a wonky issue that wasn't particularly partisan, to a stupid partisan issue in which Republicans decided it was "regulating the internet," and Democrats deciding that it was about free speech. Neither is entirely accurate, though the Democrats are much more accurate. As stated above, the internet is already regulated. The reality is that the Republicans arguing against net neutrality tend to be those who often (you guessed it) receive the most money from the big broadband players. It's unfortunate and silly that Republicans -- who claim to be the party of business and innovation -- haven't yet realized that startups and innovators are actually helped by a neutral internet with real competition.

So what should I be doing?

Make some noise. Join the effort to send comments to the FCC. While many have argued the process is a foregone conclusion, it's not. If there really is enough support for reclassifying, it can absolutely happen. Not helping because you don't think it will make a difference is only a self-fulfilling prophecy. You can be cynical, right and end up with a limited internet... or you can be idealistic, right and have a chance at creating real change with a more competitive, open internet. Your choice.

Anything else?

That's about it for now, but feel free to submit more questions in the comments. Also, special thanks to everyone who supported our net neutrality reporting crowdfunding effort, which has helped make posts like this possible.

Filed Under: broadband, fcc, interconnection, internet, internet slowdown, net neutrality, open internet, section 706, telecommunications act, title ii, tom wheeler
Companies: at&t, comcast, verizon