23 Attorneys General Urge Appeals Court To Restore Net Neutrality

from the round-and-round-we-go dept

As expected, Mozilla, 22 State attorneys general, INCOMPAS, and numerous consumer groups this week asked a U.S. appeals court to reinstate FCC net neutrality rules. The state AGs, led by New York Attorney General Barbara Underwood, filed a lawsuit back in January attempting to overturn the repeal, arguing that the decision will ultimately be a "disaster for New York consumers and businesses." Mozilla and a few other companies also filed suit, as well as consumer groups including Free Press and Public Knowledge.

The AG's statement-- as well as the brief (pdf) filed with the U.S. Court of Appeals for the District of Columbia Circuit late Monday night--not only urges the court to restore the FCC's 2015 net neutrality rules, but asks the court to scuttle ISP and FCC efforts to block states from protecting consumers:

"The government petitioners’ brief focuses on two critical issues: first, that the FCC’s order is arbitrary and capricious because it puts consumers at risk of abusive practices by broadband providers, jeopardizes public safety, and more; and second, that the FCC’s order unlawfully purports to preempt state and local regulation of broadband service."

As we've noted previously, both Comcast and Verizon successfully lobbied the FCC to include language in its "Restoring Internet Freedom" order that attempts to "pre-empt" (read: neuter) state authority over broadband ISPs. ISPs like Charter (Spectrum) have already tried to use this language to wiggle out of state lawsuits over terrible service and false advertising, though the courts so far haven't thought much of the effort. ISPs have threatened to sue states that try to pass state level net neutrality laws in response to federal apathy, but those suits have yet to materialize.

While Facebook and Google have been largely AWOL from the net neutrality fight this go round, INCOMPAS also jumped into the mix this week, issuing its own filing and statement getting to the crux of the issue, a lack of competition in broadband:

"At its core, net neutrality is a competition issue. The FCC’s own order acknowledged that nearly 50 percent of consumers are living in a broadband monopoly. Yet, in the face of a brazenly uncompetitive marketplace, the FCC abandoned two decades of bipartisan consensus that ISPs should not block, throttle, implement paid prioritization, or otherwise harm online content by engaging in anticompetitive behavior.

"The FCC also refused to consider extremely relevant findings from previous merger investigations involving ISPs that control access to almost 65 percent of consumers, which found that despite their public statements to the contrary, ISPs have the means and motive to interfere with online content they perceive as a threat."

US telecom, a lobbying organization primarily funded and managed by AT&T, issued a statement responding to the filings that claimed the repeal of net neutrality was no big deal because the internet has yet to implode:

"As this case winds its way through federal court, it is worth noting what has not happened since the FCC’s order: the internet as we know it is still thriving, growing, open and continues to spin on its axis. The predictions made by some that ISPs would engage in throttling, blocking, and anti-competitive prioritization, have not happened."

Of course ISPs like AT&T have only behaved so far because they know this lawsuit could easily go badly, and they're not keen on adding any fuel to the fire before the court fight heats up (oral arguments should arrive sometime in the fall). All of today's filers are eager to show that the FCC not only violated agency procedures, but violated laws like the Administrative Procedures Act by basing such a stark reversal of policy on little more than fluff and nonsense.

Filed Under: attorneys general, fcc, net neutrality, states
Companies: incompas, mozilla

India Embraces Full Net Neutrality As The U.S. Runs The Opposite Direction

from the ill-communication dept

While the United States walks away from the concept of net neutrality, India just passed some of the toughest net neutrality rules in the world. You'll recall that net neutrality became a hot topic over in India when Facebook tried to roll out a walled-garden service known as "Free Basics." Free Basics provided users free, "zero rated" (usage cap exempt) access to a limited selection of curated content and services chosen by Facebook, something Facebook claimed would immeasurably benefit the nation's poor farmers.

In reality, many pointed out that Facebook's breathless concern for the poor really just masked the company's attempt to corner the ad markets in developing nations. Content providers didn't like Facebook being the one to dictate which services would or wouldn't be included for obvious reasons. Others (like Mozilla) noted that if Facebook was truly interested in connecting developing nations with broadband, it could, you know, actually do that. Others still weren't keen on another white, Western billionaire proclaiming that only he had the magical solution to the nation's problems.

Facebook's response to these concerns wasn't what you'd call impressive, with Zuckerberg insisting those opposed to his plans were simply hurting the poor. That behavior in turn only galvanized activist support for tougher net neutrality rules in the country, the foundations for which were laid last year. There too Facebook engaged in some shady behavior, at one point trying to trick Indian citizens into supporting its plans and opposing meaningful net neutrality protections.

That didn't work, and last week the Indian government put the finishing touches on what, by most measures, are considered some of the toughest net neutrality rules in the world:

Not only do the rules prohibit most of the standard bad behaviors you wouldn't want ISPs to engage in (throttling or blocking competitors, for example), it takes a hard stance against the practice of zero rating, or letting an ISP exempt its own (or say a deep-pocketed partner like Disney or ESPN) content from usage caps, while penalizing competitors. As we've seen in the states, ISPs in India were fine with the bans on blocking and throttling (since most ISPs know such a move would be PR suicide), but expressed disdain at portions of the rules that banned more nuanced, creative areas where anti-competitive behavior occurs today.

You'll also notice some now-common arguments from India's wireless carriers, including claiming that rules banning anti-competitive behavior will "hamper innovation," or insisting that net neutrality somehow prevents wireless carriers from deploying faster, better 5G networks:

“Where the net neutrality recommendations are concerned, we have already expressed our support on issues pertaining to non-discriminatory use of the Internet, including no blocking, no throttling and adoption of same service-same rules. That said, we reiterate our earlier position that a light touch regulatory approach should be adopted so that innovation is not hampered by the Net Neutrality rules,” Rajan S Mathews, director general, COAI, said in a statement.

In particular, COAI believes that industry practices with regard to traffic prioritisation should be reviewed to help “foster 5G-enabled applications”.

“Now that the commission has approved the recommendations, which are before the Cabinet for approval, we hope that the Cabinet will consider the concerns raised by the industry so that the Net Neutrality rules that are adopted in India benefit the consumers, incentivise innovation and adoption of new technologies, and enable the seamless spread of state of the art networks and service,” he added."

Again, if you're an ISP that doesn't engage in anti-competitive behavior, you have nothing to worry about. And the only "creative" or "innovative" behaviors banned by rules (assuming they're crafted properly) are efforts to further abuse a lack of competition in the space. Without them, ISPs have and will do everything in their power to abuse their gatekeeper positions to glean additional revenue. It's a lesson the United States appears intent on learning the hard way.

Filed Under: india, net neutrality, us

Netflix CEO Proclaims The Death Of Net Neutrality Is No Big Deal

from the this-will-just-sort-itself-out dept

We've noted repeatedly that while Silicon Valley giants like Facebook and Google are portrayed as net neutrality supporters, that hasn't been true for many years now. Google stopped giving a damn about the idea back in 2010 or so when it started eyeing the broadband (Google Fiber) and wireless (Android, Project Fi) markets. Similarly, Facebook has never really been much of a genuine supporter, and has actively undermined the concept of net neutrality overseas in developing nations. Once they became powerful and wealthy enough, they stopped seriously worrying about the threat posed by broadband monopolies.

For a while there, Netflix jumped in to supplant Google as a major net neutrality supporter, frequently highlighting how usage caps can be used anti-competitively or how ISPs were abusing interconnection points and their broadband monopolies to drive up prices for competitors.

But as Netflix has grown more powerful, its advocacy for net neutrality has waned proportionally. The company has repeatedly made it clear that now that it's large and successful, it no longer really has to worry about being bullied by ISPs like Comcast, since it can now afford to pay the abitrary troll tolls they're keen on erecting around the internet:

"It’s not narrowly important to us because we’re big enough to get the deals we want,” Hastings said. It was a candid admission: no matter what the FCC decides to do with Title II, Netflix isn’t worried about its ability to survive. Hastings says that Netflix is “weighing in against” changing the current rules, but that “it’s not our primary battle at this point” and “we don’t have a special vulnerability to it."

That's arguably myopic, and it's unlikely the next Netflix is quite so confident. Because Netflix is wealthy and powerful enough to fend off anti-competitive efforts by AT&T, Verizon and Comcast, doesn't mean the death of the rules won't be problematic for thousands of small businesses, startups and entrepreneurs who'll be operating on a decidedly-tilted playing field.

Netflix doubled down on its myopia this week during the company's conference call with analysts and the media, when CEO Reed Hastings tried to insist that the death of net neutrality rules here in the States was no big deal. Why? Apparently, "consumer expectations" will somehow magically keep telecom giants on their best behavior:

"Around the world net neutrality has won as a consumer expectation," Hastings said Monday during a video discussion of Netflix's second-quarter financial performance. "Broadly around the world consumers have the expectation and ISPs are delivering it," he added, referring to Internet service providers.

"The net neutrality advocates have won the day in terms of those expectations," he said.

That's not how any of this works.

Consumers can have all the "expectations" they want in terms of a healthy, open internet. But expectations mean nothing in the face of limited broadband competition and napping or compromised regulators, since there will soon be no penalty for behaving anti-competitively. ISPs right now are on their best behavior because they're worried about adding fuel to the looming lawsuits against the FCC. But should ISPs win in court, we'll quickly get a crash course on how little "expectations" will matter in the face of unchecked monopoly power.

Filed Under: competition, net neutrality, reed hastings, streaming video
Companies: netflix

First House Republican Backs Effort To Restore Net Neutrality

from the steep-uphill-climb dept

While the best chance of reversing the FCC's attack on net neutrality still likely rests with the courts, an uphill effort to restore the FCC's 2015 rules via Congress appears to have taken a small step forward this week.

The Congressional Review Act lets Congress reverse a regulatory action with a simply majority vote in the Senate and the House (which is how the GOP successfully killed FCC consumer broadband privacy protections last year). And while the Senate voted 52 to 47 back in May to reverse the FCC's attack on net neutrality, companion efforts to set up a similar vote in the House have, as expected, had a hard time gaining traction thanks to ISP lobbying influence.

But things progressed slightly this week on the news that Representative Mike Coffman of Colorado agreed to be the first House Republican to sign off on the effort to restore the rules. But Coffman also introduced his own, new net neutrality legislation, and proclaims in a statement that he would be taking an "all of the above" approach to tackling the problem:

"The fight to keep the internet open belongs in Congress, not at the Federal Communications Commission,” said Representative Coffman. “The American people deserve to know that their elected officials, not unelected bureaucrats, are fighting for their interest. That fight begins with my bill, which will create an ‘internet constitution’ with the foundational elements of net neutrality."

“While my bill moves through the Congress, I am taking an ‘all of the above’ approach by simultaneously signing the discharge petition on the CRA, and introducing my bill” added Coffman.

A discharge petition needs 218 votes to even see floor time, and another 218 votes to pass the measure. So far however, the petition only currently has 172 likely votes -- 173 with Coffman's cooperation. It remains a steep uphill climb, and even if it passes it will need to avoid a veto by President Trump, who has yet to signal he has the faintest idea what the fight is even about.

As we've long noted, ISPs have spent the better part of fifteen years successfully (but idiotically) framing net neutrality as a partisan issue to sow debate and stall progress. Except the idea of keeping the internet a level playing field free from monopoly meddling has broad, bipartisan public support for what should be obvious reasons. The rules were a stop gap measure until somebody decided to actually do something about the lack of competition in the sector, something both parties have a long-standing habit of trying to ignore for fear of stifling AT&T, Verizon, and Comcast campaign contributions.

Coffman's bill (pdf), meanwhile, comes amidst efforts by ISPs to pass legislation they wrote in a bid to prevent tougher state or federal rules from being passed (or the 2015 FCC rules being restored in case of a court loss). Having read the bill it's weaker than the FCC's 2015 rules, carving out numerous loopholes for things like interconnection shenanigans, usage caps and zero rating, and "reasonable network management" (a term ISPs love to abuse). It also isn't likely to survive Marsha Blackburn's committee in the House, since she has her own even weaker, ISP-favored legislation she's been pushing.

It's Coffman's decision to join the CRA repeal that's more interesting, though that effort too has a long way to go before it sees any serious traction. Politicians facing re-election may want to join to avoid being vilified by activists ahead of the midterms, but most House Republicans likely deem net neutrality as too confusing and fringe of an issue for their opposition to really pose much of an existential threat.

Filed Under: congress, congressional review act, cra, fcc, mike coffman, net neutrality

After Backlash To AT&T Chicanery, California Salvages Tough Net Neutrality Law

from the turnabout dept

As we recently noted, California was on the cusp of passing the toughest net neutrality law in the nation, a bill the EFF declared to be the "gold standard" for state-level rules. But late last month AT&T and Comcast lobbyists descended on California to scuttle the effort, convincing California Assemblyman Miguel Santiago to neuter the most important portions of the proposal. Santiago, no stranger to AT&T campaign cash, rushed through a series of last-minute amendments behind closed doors without providing the bill's backer or the public a chance to chime in.

But Santiago quickly felt the ire of net neutrality activists and internet users, including a new crowdfunded billboard intended to shame Santiago. Lo and behold, lawmakers including Santiago and the original bill's backer (State Senator Scott Wiener) held a press conference today to announce that they'd come to an agreement, and would be largely restoring the bill to its original form.

Originally, Santiago managed to successfully kill language policing zero rating, or ISP efforts to impose arbitrary usage caps then exempt their own content while still penalizing competitors. The previous FCC had found AT&T and Verizon's use of such limits to be anti-competitive.

Santiago also heeded ISP lobbyist calls to eliminate language policing interconnection. You'll recall a few years ago Netflix traffic slowed to a crawl after ISPs began intentionally letting peering points congest -- allegedly in a bid to kill things like settlement-free peering and drive up costs for transit and content competitors. Those behaviors magically ceased when the FCC passed rules policing this behavior, but with the federal rules now dead, it's left to states to try and keep ISPs on their best behavior.

According to state leaders, all of those provisions (plus a component blocking ISPs from "double dipping" via erroneous "access charges") have been restored to the bill in the wake of public pressure. From a fact sheet I received today from legislators:

"Under this agreement, SB 822 will contain strong net neutrality protections and prohibit blocking websites, speeding up or slowing down websites or whole classes of applications such as video, and charging websites for access to an ISP's subscribers or for fast lanes to those subscribers. ISPs will also be prohibited from circumventing these protections at the point where data enters their networks and from charging access fees to reach ISP customers. SB 822 will also ban ISPs from violating net neutrality by not counting the content and websites they own against subscribers' data caps. This kind of abusive and anti-competitive "zero rating," which leads to lower data caps for everyone, would be prohibited, while "zero-rating" plans that don't harm consumers are not banned."

At the moment this is the policy equivalent of a pinky swear, since state officials tell me the full text of the bill won't be released until sometime in early August. The California legislature will then have until August 31 to pass the bill and send it to Governor Jerry Brown for signing. If passed with the bill's most important measures intact, that would mean the entire west coast would be protected by state-level rules in the wake of previous bills passed in both Washington State and Oregon. That's obviously not the sort of end result ISPs were hoping for when they successfully killed federal rules.

ISPs have threatened to sue any states that try to pass net neutrality rules after convincing the FCC to include some legally-dubious language in the repeal that attempts to thwart states from protecting consumers. And while the restoration of the original bill is promising, AT&T, Comcast and Verizon lobbying influence runs deep, and they have another month to try to stop California from respecting public opinion and standing up to entrenched telecom monopolies with rules preventing them from abusing the obvious lack of real competition in most broadband markets.

Filed Under: california, miguel santiago, net neutrality, scott wiener, transparency, zero rating
Companies: at&t

AT&T Begins Testing Its Power In The Wake Of Merger Mania & The Death Of Net Neutrality

from the boiling-frog dept

So as we've long noted, the death of net neutrality and the latest round of M&A mania isn't going to result in an immediate internet apocalypse. ISPs are nervous about looming court challenges which, thanks to all manner of ridiculous behavior at the FCC, have a good chance of succeeding. They also know that unless they can get a phony, pre-emptive law on the books, the next FCC or future, less-cash-compromised Congress could just come in and restore the rules. As such, they're going to be testing their newfound freedoms very slowly, much like the boiling frog metaphor (you are the frog in this equation).

Case in point: on the heels of the company's $86 billion merger with Time Warner, AT&T introduced a new $15 per month streaming video service dubbed "AT&T Watch." Watch is a bare-bones skinny bundle that competes with services like Philo, a $16 per month offering from several major broadcasters. But AT&T's ownership of the pipes this content flows over gives the telecom giant a very notable advantage. In this case, that has resulted in AT&T offering the service for free to the company's wireless customers, an advantage smaller streaming operators may find hard to overcome:

"Not that it matters anymore since the Federal Communications Commission, headed by telecommunications shill Ajit Pai, successfully killed net neutrality protections earlier this year, but AT&T’s tiered unlimited plans that are strapped with limitations and its decision to offer access to properties it owns for free to its subscribers are cardinal sins against the bright line rules of net neutrality."

Of course that's just the start. With no hard net neutrality rules on the books and the FCC stripped of its authority to police ISPs, there will ultimately be nothing stopping AT&T from disadvantaging its competitors further in more aggressive ways, whether that includes counting a competitors' content against usage caps while exempting AT&T's own services (zero rating), or engaging in gamesmanship at interconnection points in a bid to drive up costs of would be competitors (as we saw with the ISPs' battle with Netflix a few years ago).

Meanwhile, AT&T continues to engage in very AT&T-like behaviors beyond just net neutrality. For example, AT&T began offering its wireless customers free access to HBO last year as it tried to sell regulators on the idea the Time Warner merger would be wonderful for everyone. But it didn't take long for that perk to quickly disappear this week as the company began fiddling with (and raising the prices on) its unlimited data tiers:

"But AT&T revamped its two unlimited mobile plans this week, and in the process it raised the price for the entry-level plan by $5 a month while removing the free HBO perk. The entry-level unlimited plan now starts at $70 instead of $65. Existing customers can keep their old plan and the free HBO, but new customers or those who switch plans will have to buy the more expensive unlimited plan to get HBO at no added cost."

Synergies, yo! Again, like the boiling frog metaphor, these companies make these changes at a somewhat glacial pace, hoping that consumers won't notice as they are gradually squeezed. For example, AT&T this week also leaned in on a long-standing, misleading practice in the telecom and cable TV sectors: bullshit fees. The company quietly announced it would be jacking up its "administrative fee" for all customers from $0.76 to $1.99, effectively providing AT&T with roughly $800 million in additional revenue every year.

The fee, as with most similar fees, simply involves taking some errant cost of doing business and then shoveling it below the line. This serves two real purposes: it lets companies falsely advertise a lower rate, and it allows a company to quietly raise prices while claiming it isn't -- by pointing to the unchanged advertised price. And for years, we've let companies like AT&T provide flimsy justifications like this one:

"When reached for comment, an AT&T spokesperson confirmed the existence of the fee increase. “This is a standard administrative fee across the wireless industry, which helps cover costs we incur for items like cell site maintenance and interconnection between carriers,” the spokesperson said in a statement."

Right. But "cell site maintenance" and "interconnection between carriers" are just the cost of doing business. There's no reason to break these out below the line outside of trying to falsely advertise a lower rate. This behavior has become an obnoxious standard of the telecom and cable TV industries, and you'd be pretty hard pressed to find a regulator or politician from either party that cares. Meanwhile, numerous lawsuits over these kinds of practices haven't done much to limit the behavior.

Again, it's important to remember that the FCC's net neutrality repeal didn't just kill net neutrality. It also dismantled state and FCC oversight of ISPs, intentionally throwing any fleeting, remaining oversight back to the FTC -- an overhwhelmed agency with such limited authority over telecom these kinds of concerns will fall through the cracks (the entire point of the ISP policy gambit). The one-two-three punch of limited competition, crippled regulatory oversight, and unchecked vertical integration power is going to reverberate internet-wide for the next decade.

To keep public and press outrage muted as they cash in on this newfound lack of any real checks and balances, ISPs are going to slowly-but-surely impose an endless array of new restrictions and caveats that seen alone aren't earth-shattering. But if you pay attention over time, you'll note that the temperature of the pot we're all currently sitting in will slowly but surely start to feel decidedly uncomfortable.

Filed Under: ajit pai, fcc, fees, hbo, limited, net neutrality, raising prices, unlimited, zero rating
Companies: at&t

Effort To Save Net Neutrality Via Congressional Review Act Appears Stuck In Neutral

from the sisyphean-endeavor dept

Efforts to reverse the FCC's historically unpopular attack on net neutrality using the Congressional Review Act (CRA) appear stuck in neutral.

The CRA lets Congress reverse a regulatory action with a simply majority vote in the Senate and the House (which is how the GOP successfully killed FCC privacy protections last year). And while the Senate voted 52 to 47 back in May to reverse the FCC's attack on net neutrality, companion efforts to set up a similar vote in the House don't appear to be gaining much traction as the clock continues to tick. A discharge petition needs 218 votes to even see floor time, and another 218 votes to pass the measure.

But so far, the petition only currently has 172 likely votes, all Democrats:

Again, not a single Republican in the House has signaled any interest in saving net neutrality. As we've long noted, the quest for a healthy internet free from anti-competitive meddling by telecom monopolies has long been idiotically framed as a partisan issue despite broad, bipartisan consumer support. ISPs and their numerous political proxy organizations have long enjoyed using rhetoric that only further fuels these divisions (derailing real consensus) by conflating meaningful consumer protections with a "government takeover of the internet," ideas that are happily parroted by many ISP cash-loving DC lawmakers.

Undaunted, net neutrality activists held an advocacy day yesterday trying to drum up some additional support among lawmakers among a clearly debate-fatigued public. Another net neutrality group, Fight for the Future, has constructed this page to track which lawmakers haven't signed on, while making it easy to contact those that haven't.

That said, this effort was always an uphill climb. Even if the CRA vote succeeded in the House, it would have to avoid a veto by Trump. Many activists I've spoken to believe a vote in both Houses would appeal to Trump's "populist" streak forcing him to bend to the whims of public consensus. But given Trump's version of populism tends to be as authentic as a Hollywood Wild West set and as consistent as a brush fire, that prediction always seemed a tad optimistic. Still, stranger things have happened, so maintaining hope in the face of this level of corruption isn't entirely outrageous.

That said, the best path forward for reversing the repeal is two fold. One, there remains a notable chance that the courts see the FCC's fraud-riddled net neutrality repeal as the blatant, facts-optional nonsense it actually is, and reverses it for being an "arbitrary and capricious" abuse of procedural norms and the FCC's obligation to represent the public. If that doesn't work, there's always voting in the the midterms and thereafter for a new breed of lawmakers that don't mindlessly place ISP campaign contributions above the welfare of the public, the internet, and genuine, healthy competition.

Filed Under: broadband, congressional review act, net neutrality

AT&T Successfully Derails California's Tough New Net Neutrality Law

from the AT&T-wins-again dept

This truly is, as they say, why we can't have nice things.

In the wake of the FCC's ham-fisted net neutrality repeal, more than half the states in the country are now exploring their own, state-level net neutrality protections. California's proposal, Senator Scott Weiner's SB 822, was seen as particularly promising in that it went even farther on some important issues than the 2015 FCC rules it was intended to replace. The EFF went so far as to call California's proposal the "gold standard" for state-level net neutrality laws, noting it did a better job policing many of the problem areas where modern anti-competitive behavior occurs, such as zero rating or interconnection.

You probably saw that AT&T just got done spending $86 billion to acquire Time Warner. The company harbors dreams of using its combined dominance over broadband and media content to anti-competitive advantage, something that's undeniable if you've watched AT&T do business for any particular length of time.

Since California's law would have severely hampered AT&T's dreams of dominating the streaming video and ad wars to come, the company got right to work derailing California's legislative push in its usually-underhanded way. The company managed to convince California Assemblyman Miguel Santiago to introduce a series of last-minute secretive Tuesday night amendments that were then voted on without debate during a Wednesday morning hearing:

"The committee, lead by Assemblyman Miguel Santiago, D-Los Angeles, issued amendments to the bill late Tuesday night. Among its recommendations were to permit a controversial internet service provider practice called “zero rating,” where some websites and apps don’t count against a consumer’s data allotment. Opponents view zero rating as a backdoor way of discriminating against online services that don’t strike free-data deals with broadband and wireless companies."

In the early days of net neutrality, ISPs like AT&T engaged in more ham-fisted and non-transparent abuse of their broadband monopolies. Like the time AT&T blocked Facetime from working unless users upgraded to more expensive data plans, or the time Comcast throttled all upstream BitTorrent traffic then repeatedly lied about it.

As people got smarter to what ISPs were up to, ISPs began getting more nefariously clever. Like the time ISPs let their peering and interconnection points intentionally congest to kill settlement-free peering and drive up costs for companies like Netflix, slowing down Netflix streams for everyone until the company paid up. Or the way that ISPs now impose arbitrary and unnecessary usage caps, then exclude their own streaming services from them while still penalizing competitors (aka zero rating), something it took years for the last FCC to finally realize was just as anti-competitive.

Fast forward to this week. To convince lawmakers to back off the restrictions on zero rating, AT&T first employed the use of a group dubbed CALinnovates, one of numerous groups AT&T covertly funds to pee in the discourse pool. CALinnovates then circulated an incredibly misleading study among lawmakers falsely claiming that AT&T's anti-competitive use of usage caps is a huge boon to the state's minority populations (err, false). AT&T then got state lawmakers to approve of a list of major amendments Tuesday evening that would cripple the most important parts of the bill.

Specifically, AT&T (and likely Comcast and Verizon) convinced Santiago to strip away all rules governing zero rating, all guidance preventing interconnection shenanigans, as well as a rule that would have prevented ISPs from charging other companies "access fees" if they want to reach AT&T customers. Santiago's office refused any and all contact from reporters (myself included) on Tuesday night, then quickly rushed those amendments through the voting process before they could even be debated. Disgusted by the railroading, Weiner ultimately pulled his bill entirely, arguing that it no longer adequately protected consumers:

"It is no longer a net neutrality bill,” a visibly frustrated Wiener said after the vote. In an unusual move, the committee voted on the bill before Wiener was given a chance to testify. “I will state for the record ... I think it was fundamentally unfair,” he said.

Net neutrality activism groups like Fight for the Future were notably less subtle in their own statements:

"The level of corruption we just witnessed literally makes me sick to my stomach,” said Evan Greer, deputy director of Fight for the Future, a digital rights group with more than 350,000 members in California. "These California democrats will go down in history as among the worst corporate shills that have ever held elected office.Californians should rise up and demand that at their Assembly members represent them. The actions of this committee today are an attack not just on net neutrality, but on our democracy."

If you've watched AT&T do business, the fact that it was able to scuttle this bill in such a "progressive" state shouldn't be surprising. AT&T's political power over many state legislatures is often downright comical, to the point where AT&T lawyers are quite literally the ones writing terrible state law. That's particularly true in states like Tennessee, though in ignoring the undeniable will of the public on this subject, California has proven itself no better.

All told it has been a great year and a greater few weeks if your name is AT&T. Net neutrality formally died on June 11, the company's latest megamerger was approved thanks to a comically narrow understanding of the markets by a Federal Judge, and it managed to scuttle state-level net neutrality in California, purportedly a stronghold for net neutrality activism. This on the heels of successful efforts to neuter FCC oversight of historically unpopular and anti-competitive incumbent ISPs. What could possibly go wrong?

Filed Under: california, miguel santiago, net neutrality, scott weiner, zero rating
Companies: at&t

ISPs Lobbying California Lawmakers In Bid To Weaken State's Looming Net Neutrality Law

from the if-at-first-you-don't-succeed... dept

More than half the states in the nation now pursuing individual net neutrality rules, either in the form of executive orders (banning state contracts with net-neutrality violating ISPs) or new state laws. And while ISPs have been whining about the unfairness of having to adhere to independent requirements in each state, that's probably something their lobbyists should have thought more deeply about when they worked to kill what, despite all the prattle about heavy-handed regulation, were probably some of the more modest net neutrality rules worldwide.

ISPs first tried to stop states from protecting consumers by lobbying the FCC to include language in its "Restoring Internet Freedom" repeal attempting to ban states from doing so. But in the process of gutting their authority over ISPs Ajit Pai's FCC may have also, amusingly, completely neutered its ability to tell states what to do.

As such, ISP lobbyists have been forced to run, state to state, trying to convince state lawmakers that giving consumers, small businesses and internet competition a giant middle finger is the smart political play here with midterms looming. Verizon, AT&T and Comcast are working extra hard to weaken a bill in California, that is actually a bit tougher than the FCC rules it's intended to replace. As the EFF notes, ISPs are particularly worried that California will ban "zero rating," or the practice of using usage caps and overage fees anti-competitively:

"California’s legislature has so far opted to ban discriminatory users of zero rating and prevent the major wireless players from picking winners and losers online. But new and increased resistance by the ISP lobby (led by AT&T and their representative organization CALinnovates) unfortunately has legislators contemplating whether discriminatory zero rating practices should remain lawful despite their harms for low-income Internet users. In fact, AT&T and their representatives are even going so far as to argue that their discriminatory self-dealing practices that violate net neutrality are actually good for low income Internet users.

AT&T (and even Facebook) have been pushing this idea that zero rating "helps poor people" for a while. Basically, they're trying to argue that because some users get content that doesn't count against the cap, they're somehow providing added value to low-income Americans. Of course that ignores the fact that it's only an incumbent ISP's own content (or content from the biggest, wealthiest partners) that's usually exempt, raising all kinds of anti-competitive questions.

You'd also have to ignore than American consumers pay more money for LTE mobile data than a laundry list of developed nations, and that usage caps and overage fees on these lines are arbitrary, unnecessary and meaningless constructs in the first place. Still, AT&T has spent a few years now trying to falsely conflate arbitrary caps and penalties with things like "1-800" numbers or "free shipping," successfully convincing many consumers they're getting something for free.

You'll recall that initially, the FCC didn't want to act on usage caps, overage fees and zero rating for fear of being accused of stifling carrier innovation and creativity. As a result, the 2015 rules were crafted with pretty ambiguous guidance on zero rating, something we warned would be a problem. Only at the tail end of its tenure did the Wheeler FCC start to realize caps and overage fees were being used anti-competitively to favor an ISPs' content over smaller competitors, at which point Donald Trump and Ajit Pai had already come to power--and quickly set to purging the rules entirely. You know, for freedom.

California's net neutrality law doesn't ban zero rating if an ISP wants to exempt an entire class of content (say, video) from usage caps and overage fees. But it does prohibit ISPs from striking deals that give specific companies cap-exempt status, preventing companies from buying an unfair advantage for themselves or a competitor. Given AT&T just gobbled up Time Warner and HBO with zero rating specifically in mind (HBO is free on our network but costs money if you use a competitor), you can understand why AT&T's so opposed to these rules.

This all comes to a head this Wednesday with a vote and hearing before the California Assembly’s Communications and Conveyance Committee. And while the majority of that committee say they support net neutrality, net neutrality activists say that major ISP lobbyists have succeeded in getting some lawmakers (like Committee head Miguel Santiago) to waffle on the whole zero rating part of the equation. After all, nothing quite says "restoring freedom" like letting AT&T give its own horse a half-mile lead in the streaming video wars to come.

Filed Under: broadband, california, competition, lobbying, net neutrality
Companies: at&t, comcast, verizon

Ajit Pai Now Trying To Pretend That Everybody Supported Net Neutrality Repeal

from the allergic-to-the-truth dept

By now it's abundantly clear that the Trump FCC's repeal of net neutrality was based largely on fluff and nonsense. From easily disproved claims that net neutrality protections stifled broadband investment, to claims that the rules would embolden dictators in North Korea and Iran, truth was an early and frequent casualty of the FCC's blatant effort to pander to some of the least competitive, least-liked companies in America (oh hi Comcast, didn't see you standing there). In fact throughout the repeal, the FCC's media relations office frequently just directed reporters to telecom lobbyists should they have any pesky questions.

With the rules now passed and a court battle looming, FCC boss Ajit Pai has been making the rounds continuing his postmortem assault on stubborn facts. Like over at CNET, for example, where Ajit Pai informs readers in an editorial that he really adores a "free and open internet" despite having just killed rules supporting that very concept:

"I support a free and open internet. The internet should be an open platform where you are free to go where you want, and say and do what you want, without having to ask anyone's permission. And under the Federal Communications Commission's Restoring Internet Freedom Order, which takes effect Monday, the internet will be just such an open platform. Our framework will protect consumers and promote better, faster internet access and more competition."

'Course if you've paid attention, you know the FCC's remaining oversight framework does nothing of the sort, and is effectively little more than flimsy, voluntary commitments and pinky swears by ISPs that they promise to play nice with competitors. With limited competition, FCC regulatory oversight neutered, the FTC an ill-suited replacement, and ISPs threatening to sue states that try to stand up for consumers, there's not much left intact that can keep incumbent monopoly providers on their best behavior (barring the looming lawsuits and potential reversal of the rules).

Over in an interview with Marketplace, Pai again doubles down on repeated falsehoods, including a new claim that the repeal somehow had broad public support:

Marketplace....this is not a popular decision. Millions of people have written in opposition to it. Public opinion polling shows most Americans favor net neutrality, not your open internet rule. And I wonder why you're doing this then? If public opinion is against you, what are you doing?

Pai: First of all, public opinion is not against us. If you look at some of the polls —

Marketplace: No, it is, sir, come on.

Pai: If you look at some of the polling, if you dig down and see how these polls were constructed, it was clearly designed to reach a particular result. But even beyond that —

Marketplace: It's not just one, there are many surveys, sir.

Pai: The FCC’s job is not to put a finger in the wind and decide which way the winds are blowing, it's to look at the facts and make a sober judgment based on what the law is. And that is exactly what we've done here. Moreover, the long-term interest is in building better, faster, cheaper internet access. That is what consumers say when I travel around the country, and I’ve have spoken to consumers in Los Angeles to the reservation in South Dakota, places like Dahlonega, Georgia. That is what is on consumers’ minds. That is what this regulatory framework is going to deliver.

First Pai tries to claim that the public supported his repeal, then when pressed tries to claim that the polls that were conducted were somehow flawed. Neither is true. In fact, one recent survey out of the University of Maryland found that 82% of Republicans and 90% of Democrats opposed the FCC's obnoxiously-named "restoring internet freedom" repeal. And those numbers are higher than they were just a few years ago. That the public is overwhelmingly opposed to Pai's repeal is simply not debatable.

When discrediting the polls doesn't work, Pai then implies consumers aren't smart enough to realize that gutting oversight of indisputably terrible ISPs like Comcast will be secretly good for them. He then tries to insist that public opinion doesn't matter and that he's simply basing his policy decisions on cold, hard facts. Which, for a guy that claimed during the repeal that net neutrality aids fascist dictators, made up a DDOS attack, ignored countless widelesly respected internet experts and based his repeal entirely on debunked lobbyist data--is pretty amusing.

Whether Pai's repeated lies result in anything vaguely resembling accountability remains to be seen. But based on the volume of time Pai spends touring flyover country, it's pretty clear he's harboring some significant post-FCC political aspirations. Those ambitions are likely to run face first into very real voters (especially of the Millennial variety) harboring some very real annoyance at his gutting of a healthy and open internet.

Filed Under: ajit pai, fcc, net neutrality, public support