Tuesday, November 28, 2017

No, the FCC is NOT Repealing "Net Neutrality."


"Net neutrality" is not going away.


Net neutrality is, indeed, good for everyone. That's not really what the FCC is changing. A lot of the opposition to this change is really an overreaction. Some is spurred by misunderstanding, some by a reflexive anti-corporatism, and some is fueled by previous and current FCC commissioners who took regulatory control unilaterally, and don't want to relinquish it.


As a lawyer who has also worked in IT for over two decades, allow me to try and clarify what's going on, and dispel some of the hysteria that's all over the internet these days - with references to the actual law, for those who care.


What's being changed is this: Broadband ISPs are being re-classified as Title I entities instead of Title II under the Communications Act of 1934. Broadband ISPs were Title I entities from the dawn of the internet till 2015.


Title II classification is NOT net neutrality.


Net neutrality principles are different. They existed and were enforced prior to this change in 2015. Neither Title II nor the FCC created them. They developed along with the Internet itself, and the government has endorsed them as guiding principles in regulation of the internet. They will continue to exist and be enforced after this change is done. Just not by the FCC using the tools in Title II. Enforcement has always been by a combination of FCC (under Title I), FTC, and Anti-trust law. That enforcement will continue.


A note about the examples currently circulating online of past violations of net neutrality by ISPs:


ISPs have only been Title II entities since June 2015. So, whenever you hear examples of what ISPs have tried to do in the past to violate net neutrality, remember that ALL of those situations were resolved by the FCC, FTC, and the courts enforcing net neutrality *before* they were classified as Title II entities. In other words - after this change is implemented, we will still have all the same tools that solved all of those problems. Anyone who tries to tell you that title II classification was necessary to solve any of these issues is lying, misinformed, or just giving in to the hysteria of others.


History and effects of Title II classification:


The initial reclassification of ISPs as Title II entities was done at the urging of President Obama following a court ruling which struck down one attempt by the FCC to enforce net neutrality. The court decision offered another path to regulation besides making ISPs Title II entities. The FCC commission at the time chose instead, at the President's urging, to simply reclassify ISPs.


Title II classification was one method of allowing the FCC to regulate ISPs and enforce PRE-EXISTING net neutrality principles. And a very heavy-handed method. It's akin to preventing speeding by placing every licensed driver in the country on criminal probation - with GPS tracking, and all the other restrictions and requirements that come with it.


Remember, Title II was designed to regulate a government-enabled monopolistic phone company.


Are there some positive provisions that mesh with the goals of net neutrality? - Yes. Title II does prohibit discrimination and preferences among users of the service. (47 USC 202). It requires safeguarding personal information. (47 USC 222). And it gives access to utility conduits in a uniform manner proscribed by the FCC. (47 USC 224).


But those goods are paired with a heavy, intrusive set of requirements and grants of authority to the FCC. The requirements imposed on ISPs are neither simple, nor cheap - and go far beyond net neutrality, intruding into all aspects of the business. Sure, Verizon, or Comcast may be able to comply. But imagine the following list applied to small, local, or regional ISPs (XMission, Utopia, Rise Broadband, etc). Among other things, Title II:


  • Gives the FCC power to set and approve rates (47 USC 205)
  • Requires filing of fee schedules (47 USC 203)
  • Requires filing of all contracts with other carriers (47 USC 211)
  • Allows FCC to inventory and set the value of all corporate assets, and allows access to all corporate records and free access to all corporate physical property. (47 USC 213)
  • Requires prior approval of the FCC to expand ISP networks. (and they are only allowed to do so if it's in the public interest). (47 USC 214).
  • Gives the FCC power to modify or void contracts with equipment providers. (47 USC 215)
  • Gives the FCC power to intervene in corporate management and obtain trade secrets and new technology to make them "available to the people of the United States." (47 USC 218)
  • Requires filing of annual reports including: stock classes, values, and the names of the largest shareholders, corporate finances, corporate payroll info - including all employee salaries, value of all corporate equipment, etc. (47 USC 219)
  • Allows the FCC to create and enforce accounting methods and practices, including capital asset depreciation schedules. (47 USC 220)


Is it any wonder the ISPs oppose Title II regulation?


Title II itself contains literally nothing about net neutrality as applied to a modern switched IP network. Such a concept didn't exist in 1934. What it does contain is massive regulatory compliance burdens for ISPs and sweeping powers for the FCC to violate traditional contract and corporate law principles. It will not be a big deal for the large ISPs and their large legal departments, but it will prevent smaller ISPs from forming or being successful.


If we feel the system used to enforce net neutrality from the dawn of the Internet until 2015 is inadequate, Title II classification is a big, blunt hammer of a solution. Let's take the lighter-touch path, and have Congress address any problems that arise.


Read the FCC Proposal here: http://transition.fcc.gov/Daily_Releases/Daily_Business/2017/db1122/DOC-347927A1.pdf


Read the Communications Act of 1934 here: https://transition.fcc.gov/Reports/1934new.pdf