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Net Neutrality: In Support of the 2015 Open Internet Order [Slideshow]

net neutrality

Yesterday, I participated in a debate sponsored by Johnson & Wales University and the Bastiat Society, a libertarian organization, regarding Net Neutrality. Specifically, I argued in support of the recently adopted 2015 Open Internet Order.

I don’t envy opponents of Net Neutrality. For the most part, opponents seem to be either direct supporters of the Internet Service Providers, or those who have a more general objection to government regulation.

My opponent, Brent Skorup of the Mercatus Center at George Mason University, made a strong presentation aligned with the latter, indicating that he doesn’t trust the FCC to ensure protection of the internet.

As I said in the debate, I don’t envy those who have to argue against the rule. Wisely, the FCC kept the application narrow, and specifically countered some of the strongest arguments that those opposing reclassification of ISPs as common carriers generally make. The reason they’re strong arguments is that they’re good points.

Check out my presentation and information (including sources) from my presentation below:

The internet will not be the same without net neutrality.

Following the D.C. Circuit Court of Appeals decision in Verizon v. FCC, 740 F.3d 623 (D.C. Cir. 2014), striking down the 2010 Open Internet Order, the FCC sought comment on new proposed rules for protecting the open and innovative nature of the internet. Among the questions to be considered was whether Broadband Internet Service Providers should be classified as “telecommunication services,” and thus being subject to “common carrier” provisions.

The FCC ultimately decided to reclassify both wireless and wire line broadband, and in the Order placed restrictions on the influence those providers could exercise over the lawful use of internet services by their users. They got it right.

The order, seeking to protect the open nature of the internet, accomplishes its task for three reasons:

  1. It’s clear
  2. It’s reasonable
  3. It’s necessary

The Net Neutrality Order is Clear

Rules have to be clear if they’re going to be followed, particularly when they deal with technology and the internet.

The order contains clear, bright line rules for ISPs to follow, that will be very difficult to misinterpret. The order handles these rules in a total of about 4 pages. However, to provide added clarity, each rule is then explained down to the letter, using examples and suggested action to provide additional guidance. 2015 Open Internet Order.

1) No blocking of lawful content

2) No throttling of lawful content

3) No paid prioritization

4) No unreasonable interference/disadvantage

5) Enhanced transparency

2015 Open Internet Order at ¶¶ 14-24.

As I mentioned, the order does allow certain practices if they’re a part of reasonable network management. So what is that?

  1. Has a primarily technical network management justification, but does not include other business practices
  2. Primarily used for & tailored to achieving legitimate network management purpose
net neutrality

Speaking in support of the 2015 Open Internet Order

We know what’s prohibited, but who does the order apply to?

The order applies only to mass-market services that connect people to all or substantially all internet end points (wireless and wire line)

The order does not currently extend to “specialized services” 2015 Open Internet Order at ¶ 209.

  • Facilities-based VoIP
  • Heart monitors
  • Energy consumption sensors

The defining characteristic of specialized services is that they don’t offer access to the whole internet, and usually involve only a single internet application (e.g. video).

However, the FCC will monitor to ensure specialized services are not used to circumvent the other rules.

The Net Neutrality Order is Reasonable

The rules would be both ineffective and unworkable if they interfered with the way ISPs managed their network. In order to meet the goals set out in the request for comments, the order needed to be narrowly tailored to achieve its purpose without interfering in the “virtuous cycle of innovation” that makes the internet so vibrant.

These rules are reasonable.

The rules are narrowly tailored, designed to secure an open internet without preventing the ISPs from performing necessary functions to support their networks.

ISPs can’t block or throttle legal content, unless it’s for reasonable network management. However, ISPs are given a pretty wide degree of latitude to determine what is reasonable.

Moreover, by exempting specialized services from the Title II designation, the FCC has ensured that there will be no reduction in the innovation currently driving technologies like telemedicine and the Internet of Things – services that are not internet access services, but which will require dedicated bandwidth to function.

Forbearance

The FCC decided not to apply a large number of Title II regulations to the ISPs, using only the rules absolutely necessary to maintain the internet’s open nature.

  • No additional fees or taxes
  • No requirement to make their pipelines available to third-party services
  • No requirement that the transmission and service business separated
  • Over 700 regulations under Title II were not applied

2015 Open Internet Order at ¶ 5.

Wireless

Given the nature of wireless broadband communication (mobility, inconsistency, population density) wireless carriers are given a lot more leeway to manage their networks.

Congestion is a much bigger issue for mobile (it might not even be an issue for wireline broadband (government study indicates it’s all about profit)

Waivers

For each prohibited activity, waivers are available under the rules. The only one that seems even remotely plausible is the waiver for prioritization.

In order to have prioritization approved (for things like zero rating), an ISP will need to show the following:

  • ISP must demonstrate a significant public benefit (furthers competition, innovation, consumer demand, or investment); and
  • Does not harm the concept of the open internet, including but not limited to
    1. Does not degrade internet service for public
    2. Does not hinder consumer choice
    3. Does not impair examples from 1
    4. Does not impede expression

Under these rules, the widely cited example of Wikipedia receiving a zero-rating from African carriers (for free) would be allowed.

The Net Neutrality Order is Necessary

Now we get to the real meat of the argument.

Even as it struck down the FCC’s 2010 order, the DC Circuit Court of Appeals held that the FCC had provided more than adequate support for the position that the ISPs were in a position to be a direct threat to the open internet.

The “virtuous cycle of innovation,” is fragile. 2015 Open Internet Order at ¶ 77. The Court of Appeals Held:

Internet openness spurs investment and development by edge providers, which leads to increased end-user demand for broadband access, which leads to increased investment in broadband network infrastructure and technologies, which in turn leads to further innovation and development by edge providers.

Verizon, 740 F.3d at 634. 2015 Open Internet Order at ¶7.

ISPs have incentive to disrupt that virtuous cycle.

Whether to advance their own services or those of providers who paid for special access, ISPs have built in incentive to use their position as gatekeepers to pick favorites, whether through blocking, or through less direct throttling or other measures. 2015 Open Internet Order at n. 148, ¶ 103, n. 293

ISPs have the ability to disrupt that virtuous cycle

Through control of chokepoints, negotiations with backbone providers, and outright interference, can make it difficult for customers to access lawful content.

All it takes is 2 seconds of video delay before viewership decreases significantly and the likelihood of the user returning nosedives.

Plus, users themselves are poorly equipped to find out what the real cause of network congestion is, meaning ISPs’ customers, who already have little choice in their providers, are not in a position to make an educated choice about their internet service.

They have a terrible track record

ISPs have:

  • Banned wi-fi networks, VPNs, and home networking
  • Threatened criminal action against anyone using home internet for a commercial purpose
  • Blocked competing VoIP (wire line and wireless) (2015 Open Internet Order at n. 69
  • Interfered with peer-to-peer networking (and lied about it) (2015 Open Internet Order at n. 123
  • Exempted their own services from caps applicable to competing services (2015 Open Internet Order at n. 10
  • Throttled unlimited data plans (and lied about it); attempted to use throttling as way to force customers with unlimited use to either switch to a capped plan or pay more for commercial use (2015 Open Internet Order at ¶96
  • Blocked smartphone tethering
  • Blocked Apple’s FaceTime app (2015 Open Internet Order at n. 123
  • Blocked Google Wallet, purportedly for security reasons (then released their own version) (2015 Open Internet Order at n.123, ¶ 96

Comcast:

Neflix actually purchased every possible route for its traffic to take to get to customers on Comcast’s network, but this still happened during negotiations. 2015 Open Internet Order at n. 504. Netflix also asserts that Comcast abused their market share to gain a competitive advantage in the negotiations. 2015 Open Internet Order at n. 128.

Increased horizontal integration due to mergers has decreased consumer options for Broadband ISP. 2015 Open Internet Order at ¶ 98 Vertical integration has only increased incentives for ISPs to act in anticompetitive ways to promote their own or affiliated content. 2015 Open Internet Order at n. 122.

Support for Net Neutrality

Of course, you can’t address net neutrality without acknowledging all of the technology innovators who helped make the 2015 Open Internet Order a reality. From my presentation, here are just a few: