FCC Listens To Consumers And Adopts Strong Rules To Keep the Internet Open

After receiving input from businesses, lobbyists, technology companies, politicians, public-interest groups, corporate broadband providers, public-policy think tanks, and nearly 4 million consumers, the commissioners at the Federal Communications Commission (FCC) voted on Thursday last week for strong rules to keep the Internet open. The FCC went beyond supporting net neutrality, that consumers choose where to go with their Internet service and that Internet Service Providers (ISPs) must treat all content equally. The FCC stated in a press release the situation and threat:

"Absent action by the FCC, Internet openness is at risk, as recognized by the very court that struck down the FCC’s 2010 Open Internet rules last year in Verizon v. FCC. Broadband providers have economic incentives that “represent a threat to Internet openness and could act in ways that would ultimately inhibit the speed and extent of future broadband deployment,” as affirmed by the U.S. Court of Appeals for the District of Columbia. The court upheld the Commission’s finding that Internet openness drives a “virtuous cycle” in which innovations at the edges of the network enhance consumer demand, leading to expanded investments in broadband infrastructure that, in turn, spark new innovations..."

In short, both consumers and businesses use the Internet daily... need the Internet... for a variety of applications. It has become essential to everyday life. The new rules apply to both mobile and "fixed" broadband Internet. Fixed means stationary devices such as desktop computers.The first three rules adopted by the FCC would prohibit practices by ISPs that threaten an Open Internet where consumers decide when and where to go with the high-speed connections they pay monthly for:

1. No Blocking: broadband providers may not block access to legal content, applications, services, or non-harmful devices.
2. No Throttling: broadband providers may not impair or degrade lawful Internet traffic on the basis of content, applications, services, or non-harmful devices.
3. No Paid Prioritization: broadband providers may not favor some lawful Internet traffic over other lawful traffic in exchange for consideration of any kind—in other words, no “fast lanes.”

The FCC explained:

"This rule also bans ISPs from prioritizing content and services of their affiliates. The bright-line rules against blocking and throttling will prohibit harmful practices that target specific applications or classes of applications. And the ban on paid prioritization ensures that there will be no fast lanes."

This is good stuff. Large, corporate conglomerates have amassed a variety of programming content in divisions and subsidiaries. The rule reflects this reality, and helps ensure that when YOU, the consumer, access the Internet you choose where to go (and your ISP doesn't because of their internal bias toward content at owned affiliates, divisions, or business units). The FCC also adopted additional rules consistent with the changing nature of the Internet:

"Standard for Future Conduct: Because the Internet is always growing and changing, there must be a known standard by which to address any concerns that arise with new practices. The Order establishes that ISPs cannot “unreasonably interfere with or unreasonably disadvantage” the ability of consumers to select, access, and use the lawful content, applications, services, or devices of their choosing; or of edge providers to make lawful content, applications, services, or devices available to consumers. Today’s Order ensures that the Commission will have authority to address questionable practices on a case-by-case basis..."

Greater Transparency: The rules described above will restore the tools necessary to address specific conduct by broadband providers that might harm the Open Internet... the Order requires that broadband providers disclose, in a consistent format, promotional rates, fees and surcharges and data caps. Disclosures must also include packet loss as a measure of network performance, and provide notice of network management practices that can affect service. To further consider the concerns of small ISPs, the Order adopts a temporary exemption from the transparency enhancements for fixed and mobile providers with 100,000 or fewer subscribers..."

These rules are important to hold ISPs accountable in the future and to help consumers make informed decisions about the services they choose. I liken this to the nutritional labels you find on packaged foods. Consumers need, and depend upon, similar disclosures for high-speed Internet services.

Previously, high-speed Internet service was classified as an information service. The FCC adopted new rules:

"... the Order reclassifies “broadband Internet access service”—that’s the retail broadband service Americans buy from cable, phone, and wireless providers—as a telecommunications service under Title II. This decision is fundamentally a factual one. It recognizes that today broadband Internet access service is understood by the public as a transmission platform through which consumers can access third-party content, applications, and services of their choosing. Reclassification of broadband Internet access service also addresses any limitations that past classification decisions placed on the ability to adopt strong open Internet rules... the Order’s provisions on mobile broadband also are based on Title III of the Communications Act. The Order finds that mobile broadband access service is best viewed as a commercial mobile service or its functional equivalent."

Reclassification was something the corporate ISPs strongly opposed and will probably contest through the courts. And, the Republican party will continue to promote Senator Thune's proposed legislation through Congress to undo all of the good in the latest FCC rules. I called the proposed legislation a bait-and-switch. After reading this blog post, you'll probably reach the same conclusion.

Reclassification is good for high-speed Internet is more like a utility (e.g., water, electricity). Reclassification will drive both penetration in under-served areas where consumers can't get broadband services, and encourage new businesses and start-ups based upon Internet technologies.

And, for those consumers concerned about paying taxes the FCC said:

"Broadband service will remain exempt from state and local taxation under the Internet Tax Freedom Act. This law, recently renewed by Congress and signed by the President, bans state and local taxation on Internet access regardless of its FCC regulatory classification... Universal Service Contributions: the Order DOES NOT require broadband providers to contribute to the Universal Service Fund under Section 254. The question of how best to fund the nation’s universal service programs is being considered in a separate, unrelated proceeding..."

Also on Thursday, the FCC approved an order to pre-empt local laws in two states that limit municipal broadband Internet services. The two states: North Carolina and Tennessee:

"Tennessee law allows municipal electric systems like EBP to provide telecommunications services anywhere in the state, but limits provision of Internet and cable services to the electrical system footprint. In North Carolina, a 2011 law imposed numerous conditions that effectively precluded Wilson from expanding broadband into neighboring counties, even if requested. One condition, for example, restricted expansion into areas where the private sector delivers service at speeds as slow as 768 kbps in the faster direction – an archaic standard that fails to support modern needs and is a fraction of the FCC’s 25/3 Mbps benchmark."

Local residents want the expansion and can't get broadband services. The restrictions seem arbitrary with the goal to allow the corporate ISPs to provide services at slower speeds, limit competition, and keep prices high. Any corporate ISP should be embarrassed for providing a slow download speed of 768 kbps. That is so 2001.

This action by the FCC is a good start and a framework for removing similar limitations in other states. 19 states have local laws that prevent or restrict citizens from forming competitive high-speed, municipal Internet services. Those states: Alabama, Colorado, Florida, Louisiana, Michigan, Minnesota, Mississippi, Missouri, Nebraska, Nevada, North Carolina, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Virginia, Wisconsin, and Wyoming. While 72+ percent of households in the USA have high-speed Internet services, studies have proven that American pay more monthly for high-speed Internet services, and get slower speeds than consumers in other countries.

These local laws hurt consumers. The lack of competition keeps broadband prices high. We'd all like to pay less. How did things get this way? Who lobbied for the limitations in these states? PR Watch reported:

"The ALEC "Municipal Telecommunications Private Industry Safeguards Act" is a "model" bill for states to thwart local efforts to create public broadband access. Promoted under the guise of "fair competition" and "leveling the playing field," this big telecom-supported bill imposes regulations on community-run broadband that they would never tolerate themselves. Iterations of this anti-municipal broadband bill passed in 19 states to stop local governments in communities like Wilson, North Carolina from wiring their communities with fiber... At closed-door ALEC meetings, state legislators sit down with lobbyists for corporations like AT&T, Time Warner Cable, Verizon, Comcast, and News Corp to be handed changes to our laws that further the right wing agenda and directly benefit the corporate bottom line..."

So, the same political party that usually touts less regulation and free-market capitalism with competition have engineered a situation with more laws and less competition. And, the lawmakers in these 19 states went along with this charade to place corporate profits ahead of their constituents' (e.g., consumers') needs for the fastest and affordable high-speed Internet services.

I applaud the FCC's vote and actions to protect consumers' interests. I have blogged a lot about this because the issues are huge, they affects all of us, and we Americans deserve better than what we have received from corporate ISPs. This was a huge win by net-neutrality advocates, of which I am one. Consumer feedback won out over lobbyists and special interests. Left unchecked, ISPs would have created tiers of service making monthly Internet bills and service plans as convoluted as cable television packages, prioritized their own affiliates' content deciding what consumers accessed online, raised prices or kept prices high, and stifled innovation and new business.

Will the corporate ISPs listen to consumers as the FCC did? What are your opinions of the new FCC rules?

Comments

[Bill]

This will be a bigtime downgrade of a great service! This will do the opposite of what we are being told. What a shame ... the government will now control a truly free and remarkable resource. No good will come from this. Question, has this even been a problem? I have seen no evidence in my life. Another made up problem the agencies can now make come true.

[paula]

hi george, thanx for your explanation. i am surprised that big business has not managed to get what it wants for this one. hope to see you soon, paula

[George]

Bill:
Thanks for sharing your opinions. I strongly disagree. You seem focused upon freedom for corporate Internet service providers (ISPs) and ignore freedom for consumers (e.g., Internet users). The FCC is trying to ensure that Internet users have the same freedoms going forward that they do today.

You asked what the problem is. I could not have explained it more clearly. First, corporate ISPs want to take away the freedom Internet users have had to go online where they want to go with the bandwidth they've purchased. Consumers get to surf to any website, use any search engine, use any news site. Corporate ISPs want to make your monthly high-speed Internet bill look like your cable TV bill. With cable, they tell you which channels you can watch. You can't order only the channels you want. Instead, you have to purchase their pre-defined blocks of channels.

Is that how you want your Internet service? I don't, and I doubt that you would either.

Second, corporate ISPs want to keep your monthly high-speed Internet bills artificaly high. How? By limiting competition with local laws in 20 states. Those laws prevent cities and towns from forming their own municipal broadband networks. Why limit municipal freedom? That is a problem which you seem to either ignore or don't understand. The lack of competition from municipal broadband networks and gentleman's agreements among ISPs mean there is little competition in any single market (e.g., Boston, New York City, Chicago, etc.) to exert downward pressure on monthly Internet prices. Good for ISPs; bad for consumers.

I have been and always will be an advocate for consumers. As I explained in the above post, lower Internet prices will help BOTH consumers and small businesses; especially innovation and new-business startups. You see a problem with THAT? I don't.

Third, I mentioned above the international study where consumers in other countries get better values -- faster AND cheaper high-speed Internet service than Americans. That is a problem. We should get comparable value. In that study, the only ISPs that ranked highly in the USA were municipal broadband networks, not the corporate ISPs. That is another problem that needs solving.

Maybe you haven't read that international study. It is available in my blog:

Report: Researchers Compare High-Speed Internet Services Worldwide. Consumers In The USA Pay More And Get Slower Speeds
http://ivebeenmugged.typepad.com/my_weblog/2015/01/cost-connectivity-2014.html

You asked what the problem were. I outlined them both in this comment, in the above blog post, and in the linked blog post. If you have any data or facts to support a contrary conclusion, feel free to share in a comment below.

Have a good ay,

George
Editor
http://ivebeenmugged.typepad.com

[Chanson de Roland]

The broadband industry (Industry) will fight the FCC's new order (New Order) that reclassifies ISPs as telecommunications services, instead of as information services, so as to protect and promote net neutrality and invigorate innovation and competition in the market for broadband services, with everything that it has. Will they succeed? The thinking in the legal community is that, by reclassifying ISPs as telecommunication services, the FCC has based the authority of its New Order on a sound foundation that is likely to survive the Industry's legal challenges.

This, of course, remains to be seen, but the D.C. Circuit struck down the FCC's 2010 Open Internet Order on the grounds that, pursuant to the Telecommunications Act, the FCC did not have authority to regulate a information service to require net neutrality and hinted that, had the FCC classified ISPs as a telecommunications service, its order might have withstood judicial scrutiny. Now that the FCC has reclassified ISPs as telecommunication services, the D.C. Circuit's rational for striking down the FCC's attempt to protect net neutrality is gone, and the legal basis, reclassification to a telecommunications service, which the Court's dicta suggested would prevail, is now in place.

But attack in the courts isn't the only avenue of assault. Industry will also attack politically. It will attempt to elect a Republican president to get a majority of conservative commissioners at the FCC who will revert the classification of ISPs back to information services, destroying the legal foundation for the FCC's New Order and who will vacate the New Order, either directly or by modifying the New Order or substituting an order that effectively reverses the New Order. The Industry will also act through Congress, and with a Republican President, to enact legislation, like Sen Thune's bill, that will, notwithstanding its claim of protecting net neutrality, codify into law the big broadband ISPs' anticompetitive oligopoly and that will effectively destroy net neutrality.

The bottom line is that, while it's okay to do a victory lap, the fight isn't over, nor will it be, because the Industry will persist in this fight forever, so that those advocates for net neutrality and a competitive market for Internet services must be ever vigilante to preserve what they have won and to complete the work of seeing effective competition in the markets for broadband Internet services, and, in any instances where the structure of the market doesn't permit effective competition, move the FCC to use its new authority to regulate that market to provide broadband service at prices that return reasonable, rather than excessive, profits.

[George]

The battle is already underway:

"US Rep. Marsha Blackburn (R-TN) this week filed legislation she calls the "Internet Freedom Act" to overturn the Federal Communications Commission's new network neutrality rules... These rules "shall have no force or effect, and the Commission may not reissue such rule in substantially the same form, or issue a new rule that is substantially the same as such rule, unless the reissued or new rule is specifically authorized by a law enacted after the date of the enactment of this Act," the Internet Freedom Act states. The legislation has 31 Republican cosponsors."

Republicans’ “Internet Freedom Act” would wipe out net neutrality
http://arstechnica.com/business/2015/03/republicans-internet-freedom-act-would-wipe-out-net-neutrality/

George
Editor
http://ivebeenmugged.typepad.com