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Why The Latest FCC Net Neutrality Plan Is Meaningless

By - Source: Tom's Guide US

FCC Chairman Tom Wheeler meeting with protesters.FCC Chairman Tom Wheeler meeting with protesters.Directly after a vote by the five heads of the Federal Communications Commission on May 15, a news alert popped up on my unregulated mobile device (an iPhone) saying, "FCC approves new rules for Net neutrality." That's not true. In fact, the FCC did virtually nothing other than let each of its five commissioners give a speech about why the Internet should be open and non-discriminatory, and then hand the issue over to the American public to sort out. 

Multiple times during the meeting and in the weeks before, FCC Commissioner Tom Wheeler called the document presented today a proposal. All the vote did was make the document public so people could criticize it. Furthermore, Wheeler backed away from his own proposal, which doesn't call for changing the legal means of regulating ISPs, by continually saying that "all options are on the table."

MORE: What Is Net Neutrality: FAQ

No matter what happens, the whole Net neutrality debate has so far been about nuanced legal interpretations rather than open discussions about the role of the Internet in modern life and the best way to protect that openness. 

There are two reasons why the latest vote achieved nothing: First, most of the draft plan is unenforceable because it's based on a legal interpretation that was struck down twice in prominent cases, the last just this year in January. Second, it doesn't address the one proven way the FCC could regulate ISPs to insure they don't discriminate against content providers ranging from Netflix to makers of YouTube cat videos.

What are Section 706 and Title II?

The May 15 meeting kept referencing two little-known pieces of legal jargon, without anyone explaining what they are: Section 706 and Title 2. These two items from the Telecommunications Act are at the heart of the question facing the FCC: whether the agency can ever make and enforce rules to prevent ISPs from controlling what information people get, and how they get it, on the Internet. 

So far, Section 706 has been the basis for the FCC's Net neutrality policies, last spelled out in the Open Internet Order of 2010. On first reading, Section 706 looks like a solid grounding. But in two huge cases, one brought by Comcast and one by Verizon, the FCC's reasoning was shot down. Section 6 requires the FCC to make sure that the Internet is as fair and accessible as possible, to promote the economy and the public good. This is the money quote:

"The commission … shall encourage the deployment on a reasonable and timely basis of advanced telecommunications capability to all Americans … by utilizing, in a manner consistent with the public interest, convenience and necessity, price cap regulation, regulatory forbearance, measures that promote competition in the local telecommunications market or other regulating methods that remove barriers to infrastructure investment." 

The FCC's reasoning is that insuring an Internet that is most useful to citizens is the best way to grow this technology industry. The Washington, D.C., Appeals Court in the recent Verizon case agreed with how the FCC interpreted Section 706. In its Jan. 14 ruling, the court wrote, "Does the Commission's current understanding of section 706(a) as a grant of regulatory authority represent a reasonable interpretation of an ambiguous statute? We believe it does."

Title II and the "common carrier" roadblock 

So why did the D.C. court strike down the Open Internet Order? Because, as clear as Section 706 is, it doesn't jibe with another part of the Telecommunications Act called Title II, which trumps anything else. (The court did let some of the lesser parts of the Open Internet Order stand, however, such as a requirement that ISPs report how they manage their networks.)

MORE: The Case Against Time Warner-Comcast Just Got Stronger

Ironically, the FCC caused this legal conflict in the first place by deciding not to classify ISPs as something known as a "common carrier."

To understand this nuance, you have to go way back to the original Communications Act of 1934 (the 1996 law is technically just a set of amendments). That act defines a type of company called a common carrier as, among other things, "any person engaged as a common carrier for hire, in interstate or foreign communication by wire or radio." (Under U.S. law, a company is a person.)

Title II of the 1934 law then provides sweeping regulatory control over common carriers in Sec 202 (a):

"It shall be unlawful for any common carrier to make any unjust or unreasonable discrimination in charges, practices, classifications, regulations, facilities or services for or in connection with like communication service, directly or indirectly, by any means or device, or to make or give any undue or unreasonable preference or advantage to any particular person, class of persons or locality, or to subject any particular person, class of persons or locality to any undue or unreasonable prejudice or disadvantage." 

That's exactly the authorization the FCC needs. A common carrier can't discriminate against the parties it serves or what they deliver, and this goes for any means or device. In other words, it's future-proof for new technologies that have developed. The law also prevents giving preference to any party, which would cover, for example, a telecom company favoring its own online video service over Netflix or Amazon. The words "undue or unreasonable" might worry some Net neutrality advocates who fear the FCC would bend to political pressure, but it could also be encouraging to skeptics of government regulation that the FCC can't be too meddlesome.

Just one problem: The FCC decided way back in 1980 that, while transmitting voice calls is a common carrier activity, transmitting data is not. In terms of that day's tech, the FCC can protect your right to service when you talk on the phone, but not when you hook your modem up to it. As broadband emerged, cable companies took on the role of ISPs, and the FCC never designated them as common carriers. As wireless grew, the FCC explicitly ruled that wireless data providers are not common carriers. 

So those sweeping powers under Title II of the Communications Act of 1934 — they don't apply to the Internet. And without those powers, the FCC has, by its own volition, opted out of regulating ISPs, so say two huge court cases.

Title II or bust 

Given all that, it seems impossible for the FCC to impose its Net neutrality rules without designating ISPs as common carriers. Technically, there's nothing to stop the FCC from doing so. But politically, it would be a nightmare — which, Wheeler has hinted, is why he's trying to pass new regulations without going that route. Adding regulatory authority goes against current conservative doctrine. House Speaker John Boehner and the House Republican leadership just issued a letter to Tom Wheeler on May 14 praising the growth of the Internet economy and warning that "efforts to regulate the Internet as a utility under Title II are threatening to set back this progress."

MORE: How to Watch Live TV Online

The most conservative of the FCC's five commissioners, Michael O'Reilly, said essentially the same thing during the hearing, before he and fellow conservative Ajit Pai voted against the proposed rules. 

The Title II route will be a hard one for all sides in the Net neutrality debate. But it's the only route that leads to a conclusion where the FCC can enforce real Net neutrality.

Follow Sean Captain @seancaptain and on Google+. Follow us @tomsguide, on Facebook and on Google+.

Add your comment Display 7 Comments.
  • 3 Hide
    skit75 , May 15, 2014 2:16 PM
    1. ElephantNet = Fortune 500 companies finish first

    2. DonkeyNet = .gov & .org & Fortune 500 companies finish first

    3. Internet = We all finish at the same time.

    I still like option 3.

  • 5 Hide
    neon neophyte , May 15, 2014 3:02 PM
    just classify isps as a common carrier and be done with this nonsense already
  • 0 Hide
    house70 , May 15, 2014 4:37 PM
    Quote:
    just classify isps as a common carrier and be done with this nonsense already

    Makes one wonder why is Wheeler dancing around this solution; could be the fact that he was a lobbyist for ISPs not too long ago? This looks more like that fable where the wolf is designated shepherd.
  • 1 Hide
    DRosencraft , May 15, 2014 6:53 PM
    I would have it noted that this is the way FCC rules are done. All of them. They are put up for a vote, and if the vote passes in favor the issue is released for public debate. Thing is, no one pays any attention whatsoever to the minutia of rules making, let alone with the FCC, except those who are really into government, or are really interested in the subject matter, such as this net neutrality debate.

    I would go on to note that those who think "common carrier" is the panacea to net neutrality, that is a misplaced hope, because it is actually quite easy to circumvent. Because so many ISPs are not also content providers, the simple end-run is to charge a simple flat rate. Just charge everyone more to access the top-tier service channel. They of course would legally have to pay it as well, but they are essentially moving that cost from one pocket to the other. And because it is a flat rate they aren't "technically" violating the common carrier rule. Can you define what would be an unjust or unduly high charge? We all have an opinion, but I can bet it's a lot lower than what that limit would actually be. The common carrier route CAN help, but not alone. There will still need to be rules added in to make it all work properly. Better to fight and put the rules in place than fight that war AND the added regulatory burden common carrier creates.
  • 0 Hide
    ddpruitt , May 15, 2014 10:14 PM
    Quote:
    I would have it noted that this is the way FCC rules are done. All of them. They are put up for a vote, and if the vote passes in favor the issue is released for public debate. Thing is, no one pays any attention whatsoever to the minutia of rules making, let alone with the FCC, except those who are really into government, or are really interested in the subject matter, such as this net neutrality debate.

    I would go on to note that those who think "common carrier" is the panacea to net neutrality, that is a misplaced hope, because it is actually quite easy to circumvent. Because so many ISPs are not also content providers, the simple end-run is to charge a simple flat rate. Just charge everyone more to access the top-tier service channel. They of course would legally have to pay it as well, but they are essentially moving that cost from one pocket to the other. And because it is a flat rate they aren't "technically" violating the common carrier rule. Can you define what would be an unjust or unduly high charge? We all have an opinion, but I can bet it's a lot lower than what that limit would actually be. The common carrier route CAN help, but not alone. There will still need to be rules added in to make it all work properly. Better to fight and put the rules in place than fight that war AND the added regulatory burden common carrier creates.


    Finally someone who actually understands what's going on. For some reason people think this process of debating a law is just wrong. This is how it's always done. The debates and comments become part of the record and could eventually be used as to the intent of the law when it comes up in court.

    Reclassifying ISPs as common carriers would be difficult at best, the ISPs will fight it and there are dozens of ways around it. Even if they were classified as common carriers this won't solve the problem. That phone call you made that everyone is complaining is the same as a general purpose communications line is different, your voice call is transmitted over an IP network. Common carriers only have to treat communications within a single class as the same. You know all of those different protocols out there? They're designed to handle different classes of communications. Most people would agree that email is a different class of communication from Netflix. And that phone call? It's already on the same communications channel as everything else and it's treated as a different class. Someone at the FCC has through this through the NBC/CNN/Fox soundbites haven't. I have no problem with someone paying for faster service as long as I get the speed I'm promised and if service degrades it does so equally for everyone. I'm under the impression this is where the FCC is trying to go in the simplest possible manner. The rules still have kinks to be worked out, that's why they ask for these things known as comments. This way people can poke holes in the rules and they can fix them. That's the way the system works and is suppose to work.
  • 0 Hide
    jungleboogiemonster , May 16, 2014 6:14 AM
    There are multiple issues facing the internet today, unfortunately, only one is getting attention. The lack of internet access to large parts of the country is a problem. Unless you're in certain rural areas where the federal government has funded local carriers to provide internet or you're in a highly profitable area, you don't have access to internet that doesn't include dial-up speeds, small data caps and/or high costs. There is absolutely no incentive to service these areas when there's no penalty for only providing service in the most profitable areas. For areas lacking internet it means the inability to access jobs, education, government programs and up to date information required to function in today's society. It's a recipe for poverty. Title II could address this issue.

    The other issue is the lack of competition. How many of those who have access to broadband have the choice between equal services? If you're lucky enough to have two ISPs servicing your location, it's a cable TV company and a telephone company. Telephone companies abandoned the internet business years ago and can only provide service over antiquated copper pairs. It just can't provide the bandwidth needed for today's internet. That leaves you with a single option, your cable TV provider, who is then free to charge what they want for service. Of course there are satellite and cell carriers. But again, slow, data caps and expensive. This issue has also lead us down the path where a company like Comcast can dictate how data is delivered to consumers. If Comcast had to compete would it have dealt with the Netflix issue in the same manner? Of course not, because they would have lost customers to their competitors. In this case, it may be best to have a utility that provides fiber optic access to all homes for ISPs to offer their services over.

    There are great issues facing the internet and unfortunately we're only addressing one.
  • 0 Hide
    Simonzee1 , May 16, 2014 6:52 PM
    It is time Americans had had a good hard look at themselves.

    What does this say about American voters when these election gurus like David Axelrod and others who were so successful with Obama, and had so much success in America, fizzled or are currently fizzling badly in Australia and Britain.

    Americans just keeps showing the big love to big government and now to an administration that is putting an end to "net neutrality."

    You guys have to seriously wake up to yourselves and what is happening to your freedoms. You seem to live in a parallel universe where you preach freedom to the world but have an FCC who wants monitors in newsrooms and now a "fast lane," to end "net neutrality."

    Big government...big coorporations...but what about the people? You are a nation surrendering to the drug of gradualism. Sound familiar.."drug of gradualism....let righteousness fall...."

    America however...is not going "gradually" backwards...but speedily... as we see with the Mozilla CEO and "hate speech laws," in a state that once burned witches. Now we have an end to "net neutrality." America is becoming a joke to the world.

    http://www.cbsnews.com/news/former-obama-adviser-stumbles-in-british-election/
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