What Is It?BDD logo-001

The term is just about as engaging as an ice cold drink on a frigid day; but if we slow it down a bit, there’s much more to what has been a raging debate between supporters and detractors.   The “Net Neutrality” or the “open Internet” encompasses a demand for Internet service providers (ISPs) like Comcast and Verizon to treat all data transmitted across their lines fairly.

The Federal Communications Commission (“FCC” or “Commission”) is the federal agency that holds the statutory authority to regulate—monitor and punish—ISPs.  The FCC has been wrestling with whether or not to and how to police the Internet since its inception.

The current debate, which is truly an all-out fight, boils down to whether or not the FCC should change the classification of the service that broadband companies provide from “information service” to “telecommunications service.”  Advocates of net neutrality want the FCC to reclassify broadband service providers as “common carriers.”

Why does it matter? 

Because under Title II of the 1934 Communications Act, a “telecommunications service” tag (1) initiates a long list of obligations the companies must adhere to and (2) places restrictions on how the broadband companies can run their businesses.  Service providers want to continue operating under Title I of the 1934 Act so they’ll have to comply with fewer regulations.

Those on the side of protecting an open Internet believe that a Title II categorization would prevent “paid prioritization.”  Not fully a North Korean free-speech subversion act, but close enough, paid prioritization occurs when Internet service providers discriminate between the data generated for the public by different websites.  To put it simply, cable companies could choose who gets more or broader access to web traffic and speed based on how much is paid, or they can decide which websites are good for consumers to visit by censorship or simply by “prioritizing” who pays them more to route consumers away from competitors.

A Brief Background on the History of Regulating the Internet

In the 1980s, the Commission instituted rules under what was known as the Computer II regime.  Then, they established a distinction between providers of “basic services” and providers of “enhanced services.”  The difference between enhanced and basic services was that the former      involved the processing of information rather than simply its mere transmission.

Back then, providers of basic services (mostly telephone companies) were subject to regulations under Title II of the Communications Act of 1934, and were categorized as “common carriers.”  To further elaborate “common carriers” means any person engaged as a common carrier for hire, in interstate or foreign communication by wire or radio or interstate or foreign radio transmission of energy.  And to go just one step further, under the U.S. Code of Federal Regulations ( 47 U.S. 153, 51, 53), a “telecommunications carrier”—i.e., any provider offering telecommunications services for a fee directly to the public—shall be treated as a common carrier … only to the extent that it is engaged in providing telecommunications services.”

Where do we stand now?

Today, Internet service providers are categorized as “information service” providers.  The term “information service” means the offering of a capability for generating, acquiring, storing, transforming, processing, retrieving, utilizing, or making available information via telecommunications, and includes electronic publishing.

On January 14, 2014, the United States Court of Appeals for the District of Columbia Circuit struck down some key parts of an FCC order attempting to require broadband companies “treat all Internet traffic the same regardless of source.”  At the heart of the controversy is competition (translation “money”), freedom of expression and access.

When the Court decided to reject a substantial portion of the FCC’s Open Internet Order rules as a threat to Internet openness and innovation, many felt that it was a flawed decision.  Opponents saw the decision as a triumph against menacing government regulation of the Internet.

Abuses of net neutrality are a very factual problem.

Several U.S. and international ISPs interfere with and discriminate against traffic on their networks in ways that threaten the innovative fabric of the Internet.  Golden Frog, a technology company, testified before the Federal Communications Commission in June 2014 of instances where Internet providers were throttling traffic and impeding the encryption/privacy capabilities of users.

The ISPs best argument to date is that being reclassified under Title II would turn them into a public utility and therefore they would no longer have any “incentives” to invest in new technologies.

The President’s Ask: Meddling or Saving the American Consumer

The message is a simple one.  President Obama believes there should be “no gate-keepers” between consumers and their “favorite online sites and services.”

He upped the ante when he asked the FCC to craft new rules to “safeguard competition and user choice.”  The President laid out a clear plan in his November 2014 State of the Union speech, and called for a free and open Internet.   He wants the FCC to classify broadband and Internet service providers as “common carriers” under Title II of the 1934 Communications, because “for most Americans, the Internet is an essential part of everyday communications and everyday life” and their usage should be protected.

Reiterating that over 4 million consumers have voiced their support for open Internet, President Obama’s ask is for the FCC, as a regulating body, to yield to the wishes of the majority and not the wealthy corporate minority.  There should be no blocking, no throttling, increased transparency, and no paid prioritization in the provision of Internet services.

Questionable Call of Civil Rights Groups: Advocates or Mouthpieces?

Sometimes we give an ear to the opinions of national civil rights groups because they tout that they represent thousands and thousands of people.

Back in late 2014, the leadership of the NAACP and the national Urban League reportedly lined up against the FCC’s rules to protect net neutrality.  Their curious arguments are somehow that the FCC’s steps to reign back a pay-for-play and unchecked enterprise will somehow harm communities of color.

The claim from the civil rights groups is that by subjecting big broadband companies to oversight, such actions “would deter broadband companies from expanding service in their communities, preventing more minorities from adopting the Internet.”

Let’s be plain on one thing.  Financial support and authenticity are strange bed fellows..

Relationship building is a key component for any business, and it is no different for broadband services.  Fancy names like “government affairs” are the covert halos for lobbying and the tangible check-writing support extended to politicians and nonprofits.  Nonprofits like the National Urban League, National Hispanic Media Coalition and the NAACP.

In 2010, when Comcast was merging with NBC it launched a well-orchestrated campaign with minority-led organization toeing the line as “diversity” supporters.  The company followed what can be called the “blueprint of public support” where it garnered hundreds of expressions of support for its deal so the federal government (which looks for local communities and diversity in public support) would approve the merger.

As expected, top executives at these companies will be quick to divert careful scrutiny by denying any suggestion that their corporate practice of supporting charities and nonprofit groups that serve Asian, Latinos, and African Americans isn’t solely motivated by the need to have political allies in their back pocket.

But the contributions received by civil rights groups make you think twice about the authenticity of testimonies or statements in support of corporations resisting the balancing arm of federal agency regulations meant to protect the public.

From 2004 to 2012, the NAACP and National Urban League respectively received $30,000 and $835,000 in funds from ISPs.

It’s also noteworthy that David Cohen, executive vice president of Comcast Corporation, served on the Urban League’s board of trustees since 2008.  In addition, according to the Center for Public Integrity, from 2012 to 2013, the Comcast Foundation, headed by Cohen, contributed almost $2 million to the National Urban League and more than 100 of its affiliates.

In a 2014 New York Times’ article highlighting the tangled web of philanthropy (charitable giving) and lobbying, a Comcast lobbyist who wanted to remain anonymous said the “relationship with some groups had a transactional flavor.”  He went further by saying that, “If you have a company like Comcast that has been with them for a long time and continues to support them, they will go to bat for them even if it means they have become pawns.”

A group called the Minority Media and Telecommunications Council, which received minimum $725, 000 from net neutrality opponents (including Time Warner, Verizon, and the National Cable and Telecommunications Association) between 2009 and 2011, eagerly filed comments along with the 40 other “funded” organizations opposing FCC oversight.

However, when the position of the National Hispanic Media Coalition changed to one of opposition, their president Alex Nogales reported “that was the end of the relationship” with Verizon.  “If you have programs with any of these companies, you feel beholden to go along with what they believe.” 

Choosing Between Section 706 and Title II

The pundits aren’t sure on which side of the fence FCC Chairman Tom Wheeler is going to stand. Some speculate he wants to be the champion for net neutrality; but no one knows for sure what rules Wheeler and the 5-member team are set to release in February 2015.

Chairman Wheeler’s options are either to classify ISPs under Section 706 of the Telecommunications Act of 1996 or to opt for Title II of the 1934 Act.

It’s believed that Section 706 would give the FCC the authority to regulate ISPs, to “promote competition in the local telecommunications market,” and to “remove barriers to infrastructure investment,” but it’s not totally clear how that would allow the Commission to safeguard net neutrality.

Section 706 has been called “Title II Lite,” and some advocates are encouraging the FCC to establish rules under Section 706 with Title II as the backup measure to survive any future Court challenges.  However, it’s not likely to be selected as an option by the FCC.

Good or Bad Law

There just is no easy solution to protecting net neutrality; therefore to ask if the upcoming FCC regulations are good or bad law isn’t sufficient.

Undoubtedly the answer will vary based on whether you’re big business trying to fend off competition and maximize profits, and dictate who has priority access to the Internet.

According to Michael Weinberg of Public Knowledge, the categorization of broadband companies as “common carriers” would not be the complete solution toward net neutrality. However, classifying the Internet as a utility might just be the best option available to protect consumers and restrict Internet service providers from charging content providers for faster Internet access.

In 2014, the numbers show that ISPs spent a little over $42.4 million fighting net neutrality, with Comcast alone spending  close to $4.5 million in the second quarter.

The rebellion of Chairman Wheeler, a former cable lobbyist, came as a surprise to the telecom industry.  No one knows which way he’ll come out on the issue of net neutrality; but he has warned that he’s not afraid to advance the President’s plan to protect consumers by using Title II and to upset the virtual monopoly that cable companies enjoy.