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.

Love or hate net neutrality, GOP probe is pointlesss

Let the dog and pony show begin! Republicans in Congress and their cable company allies are smarting over news that the FCC will reclassify internet providers, and have responded with not one, but two investigations that seek to uncover illegal meddling by the White House.

The twin probes, which are being led by Sen. Ron Johnson (R.-Wis) and Rep. Jason Chaffetz (R-Utah), call on FCC Chairman Tom Wheeler to explain how he came to favor net neutrality — a policy that prevents ISPs from giving special treatment to some websites over others when they deliver broadband.

Net neutrality is indeed an important issue, and Republicans are within their rights to implement investigations of it. The problem, however, is that their premise for probing Wheeler appears to be completely baseless.

According to Senator Johnson, the purpose of the investigation is to determine if Wheeler’s decision resulted from “undue outside pressures, particularly from the White House.” The message is that President Obama has someone flouted the rule of law, and run roughshod over an independent agency.

But there’s little evidence to justify such a charge. While Johnson cites public remarks by the President and a report in the Wall Street Journal about the White House’s interest in the net neutrality file, that’s hardly a smoking gun.

More importantly, the Republicans have yet to explain how exactly they think the White House behaved illegally. Johnson’s public letter says the executive branch’s behavior has been “inappropriate from a constitutional standpoint” and “improper from an Administrative Procedures Act perspective,” but fails to point to specific laws or regulations.

Unfortunately for net neutrality critics, “inappropriate” and “improper” seem pretty thin gruel, even as a political charge. And they almost certainly fall far short of material for a lawsuit.

While Presidents typically steer clear of saying what independent agencies should or should not do, President Obama is hardly the first to speak up on an FCC issue. Indeed, every chief executive in the last 30 years has stuck their oar in the water at one time or another, according to Harold Feld, a senior lawyer with the advocacy group Public Knowledge.

“By strong convention, the President is supposed to respect the independence of the agency, and Presidents generally save their ammo on this for things they really care about. There are good reasons for this general rule,” wrote Feld by email. “But there are also good reasons for the President to speak up from time to time — particularly on matters of national importance such as the fate of broadband (Obama), reducing the influence of money on politics (Clinton) and the fate of media ownership rules (Reagan, Bush I, and Bush II).”

Feld, who has created a graphic of Presidential pronouncements about FCC issues, added that there is no law that prevents the President from sharing his views about the agency or from talking to its Chairman. Meanwhile, none of the previous Presidents’ remarks on FCC issues have resulted in a court action — meaning it’s near certain that Obama’s won’t either.

So what’s going on? In the view of Berin Szoka of TechFreedom, a group critical of Wheeler’s proposal, the legal case is “subtle” but turns on two issues: whether the White House “threatened” Wheeler as the head of an independent agency, and whether the executive violated an anti-lobbying law by having FCC staff lobby Congress. Or something.

The better explanation is that the twin Congressional investigations are no more than a political stunt to muddy the waters in the net neutrality debate. That’s a shame. No matter what you think of the substance of Wheeler’s proposal — you can read about a Republican FCC Commissioners’ latest objections here and here — the American public deserves better on this matter than Congress’s “investigations.”

GOP calls for open internet, but more in symbol than substance

“Open internet” has become one of those political catch-phrases like “freedom” or “innovation” that enjoys universal support but is rapidly losing any real meaning. Consider, for instance, the new broadband bill trotted out on Friday by Republicans with a press release that promises “open and unfettered access to the Internet.”

The bill itself, which comes as the FCC prepares to vote February 26 on new rules for the internet, contains language intended to address consumers’ fears that telecom giants like AT&T want to remake the web so as to favor the delivery of some websites over others.

The preamble, in particular, contains strong words that will ring familiar to net neutrality advocates (my emphasis):

ensure Internet openness, to prohibit blocking lawful content and non-harmful devices, to prohibit throttling data, to prohibit paid prioritization, to require transparency of network management practices

And the text of the bill, proposed by Sen. John Thune (R-SD) and Rep. Fred Upton (R-MI), drives the point home by saying that internet providers “may not throttle lawful traffic by selectively slowing, speeding, degrading, or enhancing Internet traffic.”

Alas, what the bill gives, it also takes away. For instance, it gives internet providers broad latitude to offer “specialized services,” a term that, as Public Knowledge notes, could quickly come to stand for “fast lanes” by another name.

Meanwhile, the bill also strips the FCC of key oversight powers, and is silent about whether its proposed anti-throttling rules should apply to a deeper layer of the internet, where Verizon and ISPs have been demanding companies like Netflix pay a toll or else see their streams get degraded.

For net neutrality advocates, all of this suggests that the Republican approach presents considerably more risk than the one that FCC Chairman Tom Wheeler is expected to propose at the February meeting. (His plan is expected to invoke a law known as Title II in order to treat broadband like a utility, akin to electricity or phone service, but also using the FCC’s so-called “forbearance” powers to spare ISPs from most of Title II’s regulatory obligations.)

For practical purposes, though, the Republican bill is most likely a symbolic gesture given that President Obama has made clear his preference for the Title II approach, and will almost certainly veto the bill if it passes.

But whatever the outcome, the Republican bill is significant as it reflects how notions of “open internet” and “throttling,” which were long familiar only to geeks and policy wonks, have now become part of mainstream political discourse in the U.S.

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.

Could crowdsourcing be a better way to make legislation?

In an attempt to come up with better laws on copyright, Reddit is crowdsourcing the creation of a Free Internet Act, while Public Knowledge is trying to introduce its own alternatives. But will crowdsourcing work, or will it just add to the chaos and confusion?

Fight Over “Selectable Output Control” DRM Heats Up

The Motion Picture Association of America (MPAA) and the advocacy group Public Knowledge sent tit-for-tat letters to the FCC yesterday over the issue of Selectable Output Control (SOC). The MPAA has petitioned for waiver on the FCC’s ban of SOC, which would allow analog outputs from consumer electronics devices to be disabled, and, by extension, would prevent people from watching certain content unless they had special digital inputs on their TV sets.
The MPAA says that enabling Selectable Output Control would help stem piracy and would allow studios to release movies on VOD sooner after they appear in theaters.
Public Knowledge doesn’t buy that argument and sees the issue as a matter of control over what kind of TV you can use. It sent a letter to FCC Genachowski asking the Commission to deny the MPAA the waiver. Public Knowledge wrote:

[O]ver the past year, the MPAA has failed to provide a reason as to why the limited interests of its six member movie studios should be allowed to outweigh the interests of those consumers that will be forced to replace over 20 million television sets and countless other devices in order to view content that their current equipment is capable of displaying.

In its response, the MPAA sent its own letter (PDF) to the FCC and wrote:

[G]rant of the waiver would for the first time allow millions of consumers to view high- value, high-definition theatrical films during an early release window that is not available today. MPAA has explained that release of this high-value content as part of an earlier window, especially with respect to movies released for home viewing close to or even during their initial theatrical run, necessarily requires the highest level of protection possible through use of SOC.