2015 Is the Year the FCC Finally Grew a Spine
You could be forgiven for thinking that the Federal Communications Commission was a rubber stamp machine for the telecommunications industry. Until this year that is.
Despite the Obama administration’s promise to crack down on monopolies and mega-mergers, the FCC approved Comcast’s purchase of NBCUniversal in 2011. Four months later Meredith Attwell Baker, the FCC commissioner who handled the case for the US government, landed a job at Comcast as the senior vice president of government affairs. That same year former FCC chairman Michael Powell became a cable industry lobbyist.
Then, in 2013, President Obama appointed Tom Wheeler, a former cable industry lobbyist himself, to the position of FCC chairman. This revolving door policy made it hard to take the FCC seriously. So when Wheeler and company proposed new rules that would have allowed Internet service providers like Comcast and Verizon to give preferential treatment to certain traffic as long as it was “commercially reasonable,” few people were surprised and most of us expected network neutrality to be toast. Then a curious thing happened. The FCC grew a spine.
Net Neutrality for Real
The FCC took its first stab at enforcing network neutrality in 2010, back before Wheeler took the chair. But an appeals court struck the rules down in January 2014, arguing that because Internet service providers were legally classified as “information services” instead of so-called Title II common carriers, like traditional voice telephone services, the FCC didn’t have the authority to enforce those rules.
That led to a spineless proposal in March of 2014 that would have allowed “commercial reasonable” prioritization. Wheeler insisted that the rules meant commercially reasonable for consumers, not for Internet providers. But to outsiders it looked as if Wheeler, the former lobbyist, was content to let network neutrality die now that he was in charge. There was an explosion of opposition to the proposal, including protests outside the FCC’s office, massive Internet petitions and, perhaps most importantly, a 14-minute rant by Last Week Tonight host John Oliver.
Suddenly, what was once an arcane telecommunications policy debate was international news. President Obama issued a statement in favor of reclassification in November. By the beginning of the year, Wheeler had changed his tune, and in early February came out in favor of reclassification. He even explained his reasoning here at WIRED.
Later that month, the agency passed the Open Internet Order, a surprisingly robust set of network neutrality regulations that included both wired and wireless internet providers and even interconnection deals—the esoteric agreements that Internet providers make with each other to swap bandwidth.
No More Rubber Stamp
If all the FCC did this year was pass the Open Internet Order, it still would have been a hell of a year for the agency. But it didn’t stop there. Emboldened by the groundswell of support for network neutrality, the agency endeavored to bring the telecommunications industry to heel. The order was quickly followed by a vote to pre-empt state laws that restrict community broadband initiatives from expanding into other regions.
In April, Comcast abandoned its bid for fellow Internet provider Time-Warner Cable, largely because it had failed to secure support from the FCC and the Department of Justice. The agency hasn’t blocked every merger, of course. It approved AT&T’s acquisition of DirecTV. But the Time-Warner decision sent a message: the FCC would no longer rubber-stamp merger proposals.
In June, the agency announced its intention to fine AT&T $100 million for throttling connection speeds for customers with unlimited data plans without giving those customers adequate warning. In October, it cracked down on prison telephone companies that charge inmates as much as $14 dollars per minute for calls by capping rates at 11 cents per minute. It also launched an investigation into whether companies like Verizon, Comcast and AT&T overcharged wireless carriers like Sprint for access to their networks.
Politico reported in November that the agency has yet to collect any of the $100 million it said it would fine AT&T, and has many other outstanding fines left to collect from recent years. But that’s not as bad as it sounds. The collection process often takes years because the agency has to conduct a thorough investigation before it can force a company that disputes the fine to pay up. And merely serving the notice of a proposed fine is often enough to change behavior. For example, AT&T changed its bandwidth cap for unlimited users from 5GB to 22GB after the FCC announced its fine.
Rating Zero Rating
Of course, not everyone is happy with the the actions the FCC has taken. In March, the agency issued a document that at the very least strongly implied that the agency would force WiFi router manufactures to lock down their products so that consumers couldn’t install third-party firmware, such as the open source DD-WRT. The agency has since revised its language, but many manufacturers may still think locking down their devices is the best way to comply with the FCC’s rules.
A bigger worry may be loopholes in the agency’s network neutrality rules. The Open Internet Order doesn’t explicitly ban Internet providers from selectively allowing certain content to not count against data caps—a practice known as “zero rating.” T-Mobile now offers two high-profile zero rating services that exempt streaming audio and video from select partners, such as Spotify and Netflix. Comcast has confirmed that its new Stream TV won’t count against its customers data caps, and both AT&T and Verizon are working on “sponsored data” partnerships.
Each of these offerings go against the spirit of network neutrality, since they favor the provider’s own services or those of their partners and effectively create different costs for different types of traffic. The FCC has reserved the right to intervene in zero rating and data capping on a case-by-case basis, so the agency does have the authority to close these loopholes and has requested to meet with the telcos to talk about sponsored data in January. But it’s not clear how far the FCC is willing to go to close these loopholes. For example, Wheeler has praised T-Mobile’s zero-rated plans as “innovative.”
The Politics of Neutrality
But the agency’s biggest critics are the telecommunications industry and the Republican Party, who are none too pleased with the agency’s network neutrality rules. An appeals court is currently hearing a case brought by the telecommunications industry that could significantly curb the FCC’s power to impose network neutrality regulations. Even if the court rules on the FCC’s side, it could go to the Supreme Court. Meanwhile, congressional Republicans are trying to cut the FCC’s enforcement budget. A recent attempt to slip an amendment into a spending bill has been dropped, but you can expect them to keep trying.
Meanwhile, network neutrality, and the FCC by extension, have become more politicized. A survey conducted by the University of Delaware in last November found that a majority of both Democrats and Republicans opposed “allowing Internet service providers to charge some websites or streaming video services extra for faster speeds,” but respondents across the political spectrum were skeptical of government regulation to achieve network neutrality. The number of people who opposed allowing fast lanes actually decreased between November of 2014 and November 2015, with the steepest change of opinion coming from Republicans, who had previously been even more opposed to fast lanes than Democrats.
The shifting political sands mean that keeping the Internet open will involve more than just relying on a single government agency to set policy. It means opening broadband markets to new competitors, educating the public on the value of network neutrality and an open internet, and a vigorous public debate about the best ways to achieve that. The FCC may have finally grown a spine, but that doesn’t mean it can do all the heavy lifting.