FCC’s Threat to Net Neutrality

President Obama has been a vocal defender of “net neutrality,” but a recent leaked report suggests that Obama’s FCC chairman is planning to divide the Internet into one with faster and slower speeds, as Free Press’ Craig Aaron told Dennis J. Bernstein.

By Dennis J Bernstein

Media democracy advocates are up-in-arms over a report that the Federal Communications Commission is set to propose rules on Internet traffic that would allow broadband providers to charge companies a premium for access to their fastest lanes.

Opponents to this rule argue that the fast lanes would be out of reach for non-profits, independent creators and small businesses, thus moving away from a democratic Internet in favor of one that favors big companies that can pay more.

Flashpoints host, Dennis J Bernstein spoke last week to Craig Aaron, president of the advocacy group Free Press, about the FCC plan to destroy net neutrality in the name of saving it.

DB: You said today, sir, that in implementing these changes, if they occur, the FCC is aiding and abetting the largest ISPs in their effort to destroy the open Internet. Please begin by explaining your understanding of the changes, and how they are contrary to the notion of net neutrality.

CA: Essentially, this is not net neutrality these new rules. It looks a lot more like the end of net neutrality. The problem with the FCC’s approach, as it has been described in the press and there’s been no indication from the FCC that any of those reports are inaccurate is that it would essentially open the door to letting the most powerful Internet service providers, the big phone and cable companies, and the biggest content companies, carve out an express lane on the Internet for their content. Where they could pay for preferential treatment, pay for priority, so that their traffic reached the audience faster than everybody else.

Essentially, they would speed up a few big guys and slow down everybody else. This is a very attractive model to the big Internet service providers but it’s never been the way the Internet has worked. So this would, fundamentally, change the free and open Internet as we have known it, and, I think, furthermore the FCC’s approach here, really leaves them all but unable to stop any kind of blocking or discrimination online. They are sanctioning some of it, I think they are going to be unable to really stop any bad behaviors. It’s really from top to bottom a terrible approach that doesn’t serve the average Internet user at all.

DB: Let’s talk about that, the average Internet user. How would they lose and say a little bit more about how corporations would gain?

CA: First of all, you have to understand as I’m sure, most of your listeners know, there aren’t a lot of choices when it comes to your Internet service provider. You are lucky, if you want truly high speed Internet capable of regularly streaming video, you’ve got at best, where you live, one or at most two choices. And if those companies decide they are going to discriminate or interfere, there’s really not anywhere for the average customer to turn.

And because they don’t face any competition and, therefore, don’t really need to serve the needs of their customers, these companies are finding other ways to price gouge.  So you’re already paying your $50, $60, $70, $80 a month for their service which is supposed to bring you the entire Internet.

And now they’re saying “Well, what if we charged some of these bigger companies an extra fee to reach you over that last mile a little faster in an express lane?” And what this essentially does is it creates an incentive for them to create congestion or to create artificial scarcity. Because the only way they can get these big companies to pay up, is if the main road is always jammed.

So what you end up with is a divided Internet. A fast lane for the haves, these big content companies, Hollywood studios, maybe people like Netflicks or Google. And everybody else gets stuck on the cyber equivalent of the winding dirt road where their independent content, their start-ups and competition never gets a chance to get the same kind of foot hold. And that really fundamentally changes the way the Internet is supposed to work.

DB: The FCC has not been really doing a good job for the people. The courts have taken some action to restrain them from going down this path. Could you explain the legal battles that have been happening?

CA: Sure. It’s hard to do without getting a little bit wonky, but I’ll try not to delve too much into the minutiae of the telecom law. But, basically, if you go back to the last time the nation’s communications laws were updated was in 1996. The word Internet only appeared maybe 11 or 12 times in a huge bill. That bill had a lot of problems. It was especially bad in terms of media consolidation and in allowing radio to become especially heavily concentrated, but when it came to Internet policy there were a number of good things in that legislation.

But, as the FCC went about implementing that legislation, the big companies started to pick away at it. And so, from that, including in 1996 and all the way until 2002, and really all the way, as long as we’ve had networks, telecommunication services, the phone network was treated under what’s called Title 2 of the Communications Act.

And there were certain requirements that came with that, including no discrimination. And treating it as a telecommunications service is what provided the protections that prevented AT&T from dictating what kind of answering machine you could attach to your line. It’s what opened things up so there was competition for long distance telephone service, where prices actually went down. It’s what created an environment back in the days of dial-up where you maybe had 10 or 12 different choices for your Internet service provider. That’s because the big phone companies were required to share their lines and offer them at a fair and competitive wholesale rate to other companies. Consumers benefitted.

But, when Cable decided to get into the broadband business, they didn’t want to follow the same rules. And they were traditionally regulated under a different part of the Communications Act, Title 6. So, they went to the FCC, this is during the Bush administration, they went to the FCC, under the chairmanship of Michael Powell, Colin Powell’s son, and they said “Hey, we don’t want to have these rules that apply to the telephone companies. We want you to change the way that broadband is classified under the law. So instead of broadband being a telecommunications or transmissions service, as it always had been, they were now going to be an information service.
And lump in the pipes going into your house with the content riding over those pipes.

And the FCC insisted when they did this, that they could still find ways to stop that behavior. They got sued. It was a case that went all the way to the Supreme Court called Brand X.  And what the Supreme Court ultimately ruled was, not that, this was a good or bad policy, but that it was up to the FCC. There were some scathing dissents including a very good one from Justice [Antonin] Scalia, but in the end that was the rule.

So once Cable didn’t have to play by those rules, the phone companies went to the FCC and said “Well, we don’t want to play by those rules either.” And the FCC said “Okay, broadband is now no longer a telecommunications service, even though it obviously is a telecommunications service, but under the law we’re going to treat it as an information service. But don’t worry we’re going to apply ancillary authority to protect from bad behavior.”

Fast forward a little bit, and now we start to have the net neutrality wars and net neutrality fights because when they got rid of Title 2, they got rid of non-discrimination protections. So things that had always been baked into the law were suddenly gone. And there were a lot of fights in Congress about whether that would be re-established, no law was ever passed. And eventually Comcast actually got caught blocking Internet traffic in 2007. They were caught blocking lawful file sharing using Bit Torrent. The FCC, under a Republican administration, moved to sanction them and stop them from doing it.

 

And Comcast chose to sue the FCC saying they lacked the authority, and the court agreed. They said, “If you are going to declare yourselves, that broadband is not a telecommunications service, you can’t make these kinds of rules.” This was sent back to the FCC which is now under control of the Democrats. They had an opportunity to do what’s called reclassifying broadband, in other words they could undo the decision that the Bush administration made, but, they chose not to do it.

And instead they crafted a convoluted, watered-down set of rules that were meant to protect net neutrality, the inevitable results of which is they were sued again, this time by Verizon saying that they didn’t have the authority to make these rules. And in January of this year, the same federal appeals court, the D.C. Circuit, ruled that again, the FCC did not have the authority to make these rules. And it’s important to note that the court did not rule that the net neutrality was a bad policy, a bad idea, that it wasn’t a worthy goal. They just said that the FCC couldn’t do it the way they were doing it.

And it went back to the FCC, again, now under the chairmanship of a guy named Tom Wheeler, who was a big Obama bundler and formerly the head of both the biggest cable lobbying association and the biggest mobile phone wireless lobbying association.

DB:  Wait, wait. The head of the current FCC, Chairman Tom Wheeler was a corporate lobbyist for these media companies?

CA: Absolutely right. In the 1980s and early 1990s he was the nation’s top cable company lobbyist. And in the early 2000s he was the nation’s top wireless association lobbyist. Then he got very involved in the Obama campaign, and here he is now chairman of the FCC. Interestingly, the new head of the Cable lobby is Michael Powell, the guy who started this whole mess.

So that tells you a lot about what’s happening at the FCC, I suppose. The bottom line is that the FCC faces the same choice again. They could reclassify broadband. That’s what groups like us have been urging them to do. Re-establish clear, legal guidelines under the law for broadband, offer clear protections, or they could choose another path, the path they appear to be choosing, which is to concoct a convoluted approach that doesn’t offer real protections. Because the court has made clear if they don’t change how broadband is classified they can’t stop web site blocking, they can’t stop discrimination, so instead they are sanctioning new kinds of discrimination apparently in this new proposal that leaked.

DB: Well, now that we know that the FCC chairman was a former lobbyist, I imagine there’s quite a bit of money being spent by lobbyists who want this to go a certain way. Do you have any information on that?

CA:  Sure. What I think a lot of people don’t know is that the media sector, Cable, Internet, phone, big media companies are among the biggest spenders in Washington. In fact, I think they’re second only to the pharmaceutical drug industry in terms of their lobbying spending, and campaign spending in Washington. Bigger even than the oil and gas industry, in recent years.

So these are very, very powerful lobbyists, the biggest phone and cable companies and their trade associations employ more than 500 lobbyist. So essentially every member of Congress has their own personal lobbyist from the industry. So that’s, in many ways, what good public policy is up against. And the FCC is an agency, as we just described, where the revolving door is constantly spinning. And so it is very closely tied to industry. A lot of people working for the agency are looking for their next job in [the] industry and that’s part of why we’ve had such a series of bad policy decisions, or really weak-kneed approaches from the agency, unfortunately.

DB: We know that the Internet has been a democratizer when it comes, for instance, to people of color. Brown people, black people, getting involved in business, being able to use the Internet. This will again, sort of bring back the traditional racism that has undermined black businesses getting started as well as non-profits continuing.

CA: I think that’s one of the biggest concerns here. I mean, the Internet has proven to be a huge boon for organizing, labor organizing, the kind of activists organizing that groups like mine do. That’s made possible by a free and open Internet where you can get your message out without necessarily having to go through the mainstream media or knock on doors. It’s a very, very powerful tool. Certainly any of those groups are not going to be offered a spot in the fast lane.

Similarly, small businesses, entrepreneurs, especially those outside of Silicon Valley, essentially storefronts that people are starting online, they aren’t going to get any of the advantages of this system. It’s not going to be offered to them. So I think, whereas the free and open environment as it is now, offers a chance, if you can get online, hey, you can find your audience. You got something interesting to say? You can compete with the New York Times, you can compete with CNN.

But, if you do away with net neutrality, all those opportunities are really put in jeopardy.

DB: Let’s talk a little bit about what’s possible here. I know you’re really encouraging people to get out and to take some kind of an action to protest, to demonstrate, to write letters. What’s the process here, and what’s the time frame?

CA: So, this is what’s been leaked. It’s essentially what’s called a Notice of Proposed Rule Making. And, so, Tom Wheeler and his office at the FCC has drafted this new rule and in order to put it out publicly, he has to get at least two of his colleagues to support it. And there’s a meeting at the FCC scheduled for May 15th, where we expect this measure will be voted on. If it is indeed voted on then, in its current form or some altered form based on what kind of pressure comes to bear in the next few weeks, then it would go out for further public comment. There would probably be a 60- or 90-day period, for the public to weigh in, followed by another 60-day period for people to reply to what others said.

And then ultimately the FCC would make the decision, which could come as soon as late summer. I’ll be surprised if it comes before Election Day, but we’ll see. That’s basically the process. But, I would argue that the next three weeks are absolutely crucial because it’s really up to the FCC chair to set the parameters of the debate. And the fact that he had chosen to take this Title 2 broadband reclassification off of the table, effectively, by concocting the rules in this way, I think, is a really big problem.

I think it needs to be part of the discussion if we’re going to make these rules, and frankly, it’s just also an opportunity. Clearly, the FCC is out-of-touch with Internet users, out-of-touch with the American public. They’re spending too much time staring in the faces of these lobbyists, and their old friends from when they were lobbyists. And they need to start hearing from people out all across the country. And they’ve heard some – a million people signed a petition in just the two weeks after the court decision came down in January.

But it’s very clear that we’re going to have to do a lot more than that if we’re going to reverse this failed approach and actually get the kind of protections we need. So, if all you can do is sign a petition, I hope you go to freepress.net and do that. If you can pick up the phone and call the FCC, I’m urging the people to do that. You can call your members of Congress. That congressional pressure is really key here. And we’ve seen some encouraging statements from Bernie Sanders and Cory Booker criticizing the FCC, something that a lot of Democrats on Capitol Hill have been unwilling to do.

DB: Now, this FCC chairman, the former lobbyist, was appointed by Obama?

CA:  That’s correct.

DB:  So, he’s a Democrat. And I’m concerned because there’s a lot of the liberal television folks, the MSNBC, really spent a lot of time defending Obama, and they’ve been quite silent on this issue. Are you concerned that Obama and the Democrats are deeply embedded in this process that might undermine net neutrality and this beautiful, free Internet that we, so far, can use for the peoples’ benefit?

CA: I’m incredibly concerned because Barack Obama, when he was running back in 2008, pledged to take a back seat to no one on net neutrality. This is an issue he’s actually talked about from the Oval Office. That should be all the endorsement that’s needed for a Democratic FCC to move forward with good rules, but it hasn’t happened.

DB: But, he hired a lobbyist!

CA: That’s exactly it, so there’s the truth of it. You can look at the decisions he’s made. The previous FCC chair was a complete disaster. Julius Genachowski was Wheeler’s predecessor. A lot of people, in this town, tried to sell us on the idea that Tom Wheeler “he’s at the end of his career” and “he’s going to be his own man” but I think we’re seeing evidence to the contrary in this decision.

And I think it is a real concern. These companies have invested heavily in the Democratic Party as well as the Republican Party. But companies like Comcast are huge Democratic supporters. Companies like Comcast own MSNBC, so you have to be pretty brave to tackle these stories over there. And with the exception of Chris Hayes, basically no one has been willing to do this.

When the Comcast merger, that they’re trying to push through, got announced, the “Morning Joe Show” had both sides of the debate. They had an executive from Comcast and an executive from Time/Warner.

DB: There’s some balance!

CA: There’s the fair-and-balanced approach. So I think it’s a really big concern and I think it’s really problematic that there are a lot of Democratic legislators, there are certainly exceptions to this, but there are plenty who are willing to speak out when it was Republicans making the bad decisions, but who aren’t willing to go against members of their own party. And, that’s frankly, how we got into this mess.

A little bit of statesmanship, of political wisdom … just foresight, could have avoided so many of these problems, and yet, you know, Capitol Hill has sat back too much, and obviously the corporations are up there, and who’s got the most power? These big companies, including the big Internet companies that at one point were very active in pushing for things like net neutrality and now are less active because maybe they figure, “Well, we can probably cut a deal.”

DB: And, should it be a concern, for instance, that you’ve got a news organization like The Washington Post that’s now, shall we say, partners with Amazon news content providers, big corporations? This is all a big problem, isn’t it?

CA:  Yeah, I mean media consolidation certainly plays a role here. I think, the Post news side has covered this story quite well and thoroughly. The editorial page has been terrible, before Jeff Bezos was there, and continues to be. They endorsed the Comcast merger just last week. They haven’t been good on these issues of net neutrality. So, in terms of where’s the Washington establishment on this issue? Well, they are certainly not looking out for the average Internet user.

Now, that said, do not get too pessimistic too quickly. We’ve seen when people organize, and when people organize using the Internet in big numbers, they can change the nature of these debates. We saw it in the debate over the SOPA/PIPA web censorship bills. Ten million people contacted Congress, and all of a sudden co-sponsors of these bills, that were pushed by Hollywood, started bailing off and they stopped that bill from happening.

 

I think we’ve seen it in the response to NSA spying and surveillance, where a strange bedfellows coalition has not yet passed legislation to rein it in but certainly changed that conversation significantly. So that had happened before on this issue of net neutrality, I absolutely think it can happen again. But it needs to happen now.

DB: And very briefly, in closing, at the core what is lost if net neutrality is lost? What’s the bottom line?

CA: We lose the free and open Internet, as we know it. And the Internet, it may not be perfect, but it’s certainly an unrivaled environment for democratic participation, free speech, and economic innovation. And if we give that up, just for the short-term profits of a few big phone and cable companies, we’ll never get it back.

Dennis J Bernstein is a host of “Flashpoints” on the Pacifica radio network and the author of Special Ed: Voices from a Hidden Classroom.