What an Internet Analyst Got Wrong About Net Neutrality

[Len]

THE FEDERAL COMMUNICATIONS Commission's plan to jettison its net-neutrality rules found a surprise supporter this week in respected technology industry analyst and blogger Ben Thompson.

In a blog post Tuesday, Thompson argued that he supports net neutrality, but thinks the FCC is right to repeal rules that ban broadband providers like Comcast and Verizon from blocking, slowing down, or otherwise discriminating against legal content.

The FCC's authority to enforce net neutrality comes from its designation in 2015 of broadband providers as "common carriers" under Title II of the Communications Act. That means they're treated similarly to telephone providers, although they are exempt from some of the more strict regulations that apply to phone services. The FCC now proposes to throw out nearly all the 2015 rules.

Thompson argues that designating broadband providers as common carriers is a "heavy-handed” way to enforce net neutrality, echoing industry voices, and FCC chair Ajit Pai. Thompson argues "pre-existing regulation and antitrust law, along with media pressure, are effective at policing bad behavior."

But it’s far from clear that that pre-existing protections can prevent bad behavior by ISPs. The FCC spent years trying to find some way to police internet providers without labeling them as Title II carriers. It failed repeatedly, and Thompson doesn't offer a convincing alternative approach.

To bolster his claim that earlier regulations are effective, Thompson cites a 2005 FCC investigation into claims that Madison River Communications, a North Carolina-based DSL internet provider, blocked access to the internet-based phone service Vonage to favor its own voice service. As a result of the investigation, Madison River agreed not to block Vonage or similar providers, with no need for the Obama-era regulations.

The problem with this argument is that at the time of the FCC investigation, DSL was classified as a Title II service. The agency even cited common-carrier rules in its agreement with Madison River.

That's important, because the next time the FCC tried to stop a broadband provider from hindering a service, a federal court ruled that it had overstepped its bounds.

In 2008, the FCC ordered Comcast to stop slowing BitTorrent traffic on its network. Thompson argues that the Comcast case is insignificant because Comcast had stopped throttling BitTorrent by the time the FCC issued its order. But the real importance of the case was a federal-court ruling that the FCC didn’t have authority to regulate Comcast’s internet service, in part because it wasn't a Title II service.

The FCC approved net-neutrality rules in 2010, but was sued by Verizon. In 2014, the same federal court again ruled that the FCC would need to reclassify broadband providers as Title II services in order to enforce its rules.

The FCC later downplayed the importance of Title II in the Madison River agreement when it reclassified DSL as an information service, as opposed to a common carrier. But the 2008 and 2014 rulings make it unlikely that the FCC could have forced Madison River to stop blocking Vonage had DSL not been a Title II service at the time.

In an email to WIRED, Thompson argues that the Federal Trade Commission, as opposed to the FCC, could file suit in cases where a broadband provider blocks access to a competing service. Pai has argued much the same. And in blatant cases, the FTC likely could act. But the FTC has no authority to issue blanket rules that ban blocking or discriminating against content. It can only deal with alleged violations after they occur, on a case-by-case basis. And Democratic FTC commissioner Terrell McSweeny tells WIRED that the agency wouldn't be able to stop broadband providers from blocking other legal content, giving preferential treatment to select companies, or allowing companies to pay for better treatment.

Another of Thompson's examples is illustrative. In 2011, mobile carrier MetroPCS began offering its first 4G enabled phone and a $40 a month "unlimited" web plan to go with it. The catch: YouTube was the only video service supported on the $40 plan. To view videos from MetroPCS's other partners, which reportedly included NBC and BET, users had to upgrade to a $50 plan.

Thompson describes this as an example of "zero rating," the practice of exempting some services from a data cap. For example, AT&T will let you watch as much DirecTV Now as you want without it counting towards your data cap.

There are arguments both for and against zero rating, which is not banned by the Obama-era net neutrality rules, but the MetroPCS offering wasn't zero rating. The company's only 4G phone at the time, the Samsung Craft, used a proprietary operating system with a severely limited browser. "It won't do Javascript, for example, so the full versions of sites like Google Maps don't work," one reviewer wrote. "It won't play video from most sites, either." As a result, users could stream as much YouTube as they wanted, but they couldn't watch Hulu, Netflix, or Vimeo.

This is exactly the sort of nightmare scenario that net-neutrality advocates warn against: a carrier picking and choosing which services are available on your plan. And the FTC would have little power to stop it.

Thompson argues that plans like this short-lived MetroPCS offering are very rare, and proof that blanket rules aren't really needed, especially since, he says, regulations incur costs for broadband providers that might hamper investment and innovation. But the nation's largest broadband providers have been bound by some sort of net-neutrality regime for most of the past 12 years, so you shouldn’t expect to see many violations.

From 2005 until the Comcast suit in 2008, broadband providers were banned from blocking lawful content by an FCC policy statement. From 2010 until the ruling in the Verizon suit in 2014, they were bound by a more robust set of net-neutrality rules. During the "gap year" between the 2014 ruling and the passage of the 2015 rules, Comcast had to follow net-neutrality rules as a result of its 2011 merger with NBCUniversal. Verizon, likewise, was obligated under the terms of a 2012 agreement with the FCC not to block customers from using the applications of their choice.

If the rules go away, there's reason to think these companies might violate net neutrality. Verizon today claims to support net neutrality. In 2013, however, Verizon lawyer Helgi C. Walker told a federal court that the company would allow content providers to pay for special treatment on the company’s network if not for the FCC's net-neutrality rules. Comcast, meanwhile, may be backpedaling away from promises not to let companies pay for priority treatment.

There may yet be a better way to enforce net neutrality than Title II. But removing the existing rules without replacing them with something better leaves regulators unable to police all but the worst behavior.