Net Neutrality day is here: a guide to today’s vote

What is the right way to run the internet? After months of pitched debate over so-called net neutrality, the FCC will finally vote on a proposal that will prevent broadband providers from slowing down or speeding up certain websites.

While there’s little doubt about the outcome of the vote, Thursday’s FCC hearing could still bring some surprises. Here’s an overview of how the process will unfold, key issues to watch, and what will happen next.

When is the vote taking place?

The hearing begins at 10:30am ET at the FCC in Washington, where the five Commissioners will vote on two items. The net neutrality proposal is the second item (the first is about municipal broadband – update: which has passed 3-2), and a vote is expected to occur in the early afternoon.

What are they voting on?

The crux of the proposal is new regulations that will replace the net neutrality rules that a court struck down in early 2014. The new rules themselves (contrary to recent rhetoric) are rumored to be 8 pages long and, under FCC convention, are an appendix to a larger document that contains the Commissioners’ positions.

The FCC staff will summarize the key parts of the new rules, but the document itself is not likely to be available to the public for several weeks. This is due to agency protocol, which gives the Commissioners time to add final comments (though the substance of the rules will not change between now and when they appear).

How exactly does the vote take place, and what will be the outcome?

After the staff summaries, each of the five Commissioner will offer their comments in order of seniority. Republican Commissioner Ajit Pai, who has been an outspoken critic, is expected to speak for an hour so this could take some time. They will then take a vote, and hold a press conference.

The outcome will be a 3-2 vote on partisan lines, with the two Democratic Commissioners siding with Chairman Tom Wheeler. (Update: that’s exactly what happened)

What are the key things to watch?

While the outcome of the vote is a sure thing, some key details of the proposal are still unknown. The most high profile of these concerns what the FCC will do about so-called interconnection, and what the rules will do to prevent ISPs from forcing sites like Netflix to pay a toll in return for not having their streams degraded.

There is also the issue of “zero rating,” which is when phone and companies exclude certain apps or services (such as music) from a customer’s monthly data cap. While this violates the general principle of net neutrality, Chairman Wheeler has yet to explain how strictly the new rules will prevent this. (Read my colleague Stacey Higginbottam’s excellent overview of potential loopholes here).

Finally, since much of the recent net neutrality debate has been about theater, it will be worth watching to see how far Commissioner Pai (who has been waging a nasty political and social media campaign against Wheeler) will go to stir the pot during the hearing.

So will the new net neutrality rules go into effect right away?

No. According to Harold Feld of Public Knowledge, the rules only go into effect 30 days after they appear in the Federal Register, which could take a few weeks.

Will there be lawsuits?

Yes, buckets of them. Expect big telecom companies like Verizon or AT&T to sue in the coming weeks. Meanwhile, it’s possible that activist groups on both the right and the left may bring suits of their own.

What will be the effect of the lawsuits?

Feld says, in the event of multiple lawsuits, the first order of business will be for various appeals courts to decide which of them will take the case. After that, the telecom companies are likely to receive a brief stay of the rules until they can file their first round of arguments. At that point, the stay will likely be lifted while the court hears the case.

The court cases are likely to kick off in March or April, and a ruling on whether the new FCC plan is legal will probably come in late 2015 or early 2016. In the meantime, the net neutrality rules will be in effect.

I just can’t get enough of this stuff! Where can I learn more?

Gigaom will have updates on the days proceedings through Thursday. The FCC will have a live stream here (if the internet holds up!).

I’ll be tweeting about it here. Other Twitter accounts to watch are those of Gigi Sohn (FCC lawyer), Commissioner Pai, Public Knowledge’s Feld and Professor Tim Wu (who coined “net neutrality” in the first place).

For political flavor: The New York Times has opined on the FCC’s “wise new rules” here while the Wall Street Journal, on the other hand, hates everything about the FCC (paywall).

This story was corrected at 10:05am to note the court decision was in 2014, not 2013.

Net neutrality’s cost to consumers pegged at $17B — or zero

After a dramatic shift in the debate over net neutrality last month, many expect the FCC will reclassify internet providers so as to bar them from giving special treatment to some websites over others. The question now becomes how much (if at all) the agency’s decision, which turns on an arcane process called Title II, will cost consumers.

Depending on who you ask, the answer is that Title II, which would treat internet providers akin to public utilities, will be ruinously expensive — or will have little financial impact at all. Among the Cassandras, you can count Republican FCC Commissioner Ajit Pai:

“It will cost $17 billion in new fees,” Pai told an audience of telecom lawyers in Washington on Friday, warning that consumers’ monthly internet bills are set to soar.

Pai’s number, which has also popped up on the Wall Street Journal‘s editorial page and in other right-leaning outlets, is lifted from a purported study by the Progressive Policy Institute, a think tank that has reportedly taken funding from [company]AT&T[/company].

The crux of the PPI study is that state and local governments will seize on the Title II legal regime to impose a bevy of new internet taxes, and that the FCC will soon apply a levy known as the Universal Services Fund levy to internet users.

The $17 billion figure, if accurate, provides additional ammunition for companies like [company]Comcast[/company] and [company]AT&T[/company], which are lobbying fiercely to stop net neutrality. The companies have already claimed that the new legal classification will dissuade them from investing in new internet infrastructure (though the $41 billion the industry just spent on spectrum casts doubt on that claim).

Like so much else in the pitched debate over net neutrality, however, the $17 billion number may have been ginned up for political purposes. According to Free Press, a nonpartisan advocacy group for open internet, the figure represents a misleading worst-case scenario that will never come to pass.

As the group points out, reclassification does not appear to require any new consumer fees. Such fees, it they do appear, will instead be the result of a separate set of decisions by the FCC and various governments.

Two different debates

To understand the fuss over the alleged $17 billion of new consumer costs, it’s helpful to recognize that the current debate over the internet is actually two debates: the first turns on net neutrality; the second turns on what sort of taxes and fees should apply to the internet. And one debate is not intrinsically tied to the other.

In the case of net neutrality, an FCC decision to reclassify internet providers as “common carriers” under Title II would trigger a new set of regulatory obligations. But the agency has the power to immediately excuse the companies from many of these obligations — a process called “forbearance” in telecom parlance.

Already, the agency has signaled that’s exactly what it plans to do. If the plan goes ahead, broadband providers will be barred from providing “fast lanes” for select websites, but will also get a pass from antiquated portions of the reclassification law. For consumers, no new broadband fees spring into place if the FCC waves its regulatory wand and turns internet providers into common carriers.

But that doesn’t end the larger concerns over fees and taxes, or eliminate conservatives’ fear that consumer internet bills will soon be filled with the same maddening series of charges that appear on their phone bills.

The outcome of this debate will turn not to Title II, but on issues tied to the FCC’s general powers over telecommunications and, to a large part, on whether Congress decides to extend the Internet Tax Freedom Act, a law that forbids states and local governments from taxing internet services. That law, known as ITFA, will expire on December 11 and, unless Congress renews it, consumers could get hit with all sorts of charges no matter what the FCC does with net neutrality.

As for the FCC adding charges to broadband bills, the agency already has the power to do so under the Universal Service Fund. This is a levy that has appeared on consumers’ phone bills for decades, and is spent on things like subsidizing phones for low-income Americans, school broadband or building telecommunications infrastructure in rural areas.

Collecting and spending the fund is a policy decision for the agency that is unrelated, however, to net neutrality.

“In the short term, nothing changes the next day when broadband gets declared Title II,” said Harold Feld, a lawyer with the advocacy group Public Knowledge. “On the Universal Service Fund, the FCC already has a proceeding on USF reform going and would need to have further proceedings on USF to determine how to apply the statute.”

A source close to the agency, meanwhile, said that if the FCC does decide to apply the Fund levy to broadband, it won’t necessarily mean that consumers’ overall expenses will go up. As it stands, a nonprofit corporation decides how much the Fund requires every quarter (the most recent amount was $16.1 billion), and the FCC then instructs a variety of companies to pay into it. If the list of contributors is expanded to broadband companies, that means that consumers could see new charges appear on their internet bills but, at the same time, see the same charge (currently $1.23 per month in my case) decrease on their phone bill.

The bottom line is that broadband users could see new fees and taxes on their internet bills in coming years, but that’s hardly a sure thing — and, more importantly, the outcome will have little to do with whether or not we have net neutrality.