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Enterprise


Net neutrality is dead, and the Internet is in peril.

Or, maybe: Net neutrality is dead, and the Internet will be fine.

Or, perhaps: Net neutrality is threatened, but can be saved.

Or maybe none, or all, of the above?

You can be forgiven if you looked at the coverage of yesterday’s net neutrality court decision, and can’t figure out what to think — beyond the fact that it seemed like a big deal. (Cough. Me too!)

So here to help is Susan Crawford, a law professor with an intense interest in the subject and the ability to help the rest of us make sense of it.

Crawford, currently a visiting professor at Harvard Law School, doesn’t attempt to describe herself as an unbiased observer. She’s a longstanding critic of the companies that dominate broadband service in the U.S., and if you want the in-depth version, she has a book that spells out why.

If you have a few minutes, here’s an edited version of a conversation we had yesterday. I’m happy to have the same conversation with a telco defender if they can put their view in terms the rest of us can grok, too.

susan-crawford-by-dxoneil

credit: dxoneil

Peter Kafka: Let’s start at the beginning. What does “net neutrality” mean?

Susan Crawford: The basic idea is that the companies that are selling Internet access to Americans are not supposed to choose winner or losers — to decide which applications or services will be more successful in reaching subscribers.

Is that a concept? Or a law?

For 100 years, that was the idea applied to telephone companies — that they weren’t supposed to favor particular conversations or discriminate in the selling of services. So it’s a very old-fashioned idea, which continues to have great salience in the Internet era.

But who’s in charge of enforcing it? When I talk to analysts who cover cable and telco stocks, they always make a point of telling me net neutrality is an idea, not a law.

They’re right and I’m right. There was a decision 10 years ago, by the FCC, to deregulate high-speed Internet access and service — not to treat it like the telephone companies had been treated for the last 100 years. The assumption the FCC made was that there would be so much competition that it would protect Americans, and we wouldn’t need regulation.

Then a few years later, there was a lot of concern about the ability — particularly in the really concentrated market we’ve got for high-speed Internet access — of providers to act as gatekeepers. After all, it’s in their interest to make more money from the same piece of infrastructure. And to not only charge users and subscribers, but also charge content providers, for the privilege of reaching those subscribers.

So with all that uproar — in particular a kerfuffle in 2007, when Comcast was found to be systematically blocking BitTorrent across their network — and then as part of the [first] Obama campaign, the president promised that net neutrality would be one of the elements of his administration. So in 2010, the FCC adopted what it called the Open Internet rules, aimed at limiting the power of Internet service providers to block or discriminate.

Which is what Verizon challenged in court.

Right. It’s those rules that Verizon is saying the FCC had no legal authority to enact. The reason that Verizon was successful was because of the basic incongruity I described to you at the beginning — that 10 years ago, the FCC deregulated these actors. And it can’t now simultaneously pretend to regulate them.

So what happens next?

Realistically, what will happen is that in order to have authority over high-speed Internet access, the FCC is going have to have clear statutory grant of power. It has that [now]. All it has to do is relabel these services as common carriage services. It’s likely that’s what they’ll end up doing.

You make that sound like it’s basically just a matter of doing some paperwork. It sounds like shuffling some papers, and stamping a stamp, and you’re done.

That is actually what it would take. Administrative agencies get to change their mind.

We thought in 2002 that the market would work in a particular way. That has not proven to be the case. Instead, we’ve seen a consolidation and dividing up of the markets by Internet service providers. We also see that Americans perceive high-speed internet access as a utility — it’s just like water or electricity. Something you need when you move to a new place. So there’s no question that it’s functioning like the telephone service used to in the old days.

It may be that not every detail of that regulatory structure should be applied. But there were good reasons for it, in the telephone context — after all, we’re handing all of our speech over to these private actors. And there’s no good reason for it [not to exist] in the Internet context as well.

So Congress doesn’t need to step in?

Absolutely. There’s no need for congressional involvement.

Now, there’s truthfully going to be congressional threats. Republicans, in particular on the House side, have already said that if the FCC moves a muscle toward net neutrality, they’ll gut the commission’s budget. So there will be a political battle over this.

This is just like the banks. This is a collapse of regulatory authority. And we’re going to need to refit it.

So the carriers are on one side of this battle. Who’s taking them on?

The problem is, our major Internet companies have interests that are aligned with the carriers. They’re like ESPN. You can think of Facebook and Google and the other guys as really like major cable channels. It’s not in their interest to be particularly loud about this.

Who’s on the other side is going to be [some of] Silicon Valley, investors, venture capitalists, some civil society actors. And the principle of the idea is that the speech of 300 million Americans is more important than the profit-making activities of four or five companies.

Why don’t the Googles and Facebooks of the world want to fight the telcos?

Again — it’s like ESPN. Facebook and Google are powerful enough that the providers need them more than they need the cable guys. So they know they’ll be able to make all the deals they want. They’re not so worried about the fate of the next Google, or the next Facebook.

But I’m always hearing about the back and forth between Netflix and the cable guys about who’s going to bear the cost of all that bandwidth that Netflix users take up. Won’t Netflix want to take this on? And if they do, doesn’t Google/YouTube and everyone else?

No, that’s not the case. Google, way back in 2010, made common cause with Verizon. And then exited the net neutrality discussion. And Netflix, every once in a while, acts like it just wants to be a cable channel, so they’re deeply divided.

Earlier you made the court decision seem like something like the FCC could fix in a couple of minutes, or days. Now you’ve painted a scenario where there’s a political battle, and on the one side is a ton of power, and then on the other side are some people without much power.

But those aren’t the reasons why an independent regulatory agency makes decisions. There’s a principle here which is really important, which is the free flow of information and commerce in America. Our ability to compete on a world stage. So whatever the lineup of the political actors, it’s in the commission’s interest to make clear the source of its statutory authority.

And it can do that, relatively easily. You had the president, today, announcing that he’s all for net neutrality. So if the president’s willing to go into battle, that will help a lot.

But the FCC is staffed by political appointment. Do you think Obama really wants to spend his political capital on this?

He’s the guy who was elected online, in large part. And I would hope he understands the value of high-speed Internet access to America.




15 comments
answerguy
answerguy

 Having written about the issue several time, as recently as this week (http://answerguy.com/2014/01/14/death-of-net-neutrality-january-2014/) and dating back through the links you can see there, I'm especially gratified to see Ms. Crawford point out Google's de facto alignment with the telcos several years ago.


I'm all for free markets, but unless the FCC does what Crawford says they need to do, this is going to become a very big problem.

MotorbikeMike
MotorbikeMike

If you limit the providers ability to enforce quality control (and content control) for their systems; bandwidth intensive protocols like streaming services, FTP/peer to peer traffic, etc will run rampant and unmanaged. This will saturate base stations, cable nodes, CO's, basically anything that can deliver a bit except maybe FITH, leading to a poor customer experience. Aggregately, quality of service will degrade.

If Net Neutrality goes through, it will be a real blow to the smaller "Mom & Pop" unlicensed wireless providers (like me).  You say Obama is joining the fight against the Telcos?  Isn't that the guy that wanted to support broadband in rural america? hmmm...

uninventiveheart
uninventiveheart

Lest we forget, we have an FCC Commissioner who is pro-Corporate and has no issue with "premium access" and market controls.


I know, it's one guy out of 5 who can vote to make Internet Service Providers be defined as common carriers but under Genachowski, most votes were narrowly approved in favor of Net Neutrality in the first place.  With Wheeler at the chair, the discussion will be directed at killing the practice, not saving it.

JMWJMW
JMWJMW

Actually, as recited by the court decision, the basic decision to separate pots (plain old telephone service) or title II telecom from "enhanced" (or data) services, was NOT made 10 years ago, as Ms. Crawford apparently believes, but in the FCC's "Computer II" decision of late 1980.  The die was cast then.  There were only a few of us who read the document at the time and realized Computer II was one of the most important FCC decisions ever.  At the time, I was in a new field that was regulated under Title III of the Communications Act.


As for "net neuts" they cannot define their idea in a way that is enforceable, so we end up with idiotic "scare" stories and an unfalsifiable concept.  Existing laws and regulations are more than adequate to deal with the minor predations the net neuts come up with from time to time.


Say, has there been a violation -- in their minds -- since Comcast got caught, changed their policies, and overturned these new, absurd and unenforceable FCC notions?


The funniest part is that what the net neuts want ultimately will be regulation of ISPs under Title II of the Communications Act, as a common carrier.  This will make the Internet as dynamic and responsive to new technologies as wired telephones have been over the last 70 years or so.


We will be very bad off if the net neuts get what they want. 

dean.collins
dean.collins

As soon as carriers and cable tv providers are willing to give up their monopoly contracts.....they can kill net neutrality, eg. if Time Warner agrees to let competitors run cable tv services in their suburbs here in NYC....then they can "partner" with Espn and kill off Netflix with shitty restrictions........until then 'suck it' you are a utility and have restrictions that "private enterprise" may not have forced upon them.

Mystic
Mystic

I support the idea of free and unrestricted access to all content providers, but I don't see it as something that can be legally enforced. (not a lawyer) I understand that a private for profit company has the right to sell its services and if they restrict content, then you can choose another provider. It's not like anyone has a guarenteed "right" to internet access. 

tmgotech
tmgotech

So still confused.  Where are the carriers discriminating?  By asking those who use more of their service to pay more?  Seems like that makes sense to me.  

straightcomment
straightcomment

Glad to hear that the Internet is considered common infrastructure. The US Postal Service provides class based mail to prioritize traffic. Local governments operate toll lanes for prioritizing road traffic in many congested places. Why should the Internet not have the same? Could class of service and a "sender pays" model for priority traffic (Netflix, Google, CDNs) increase innovation?

OfficialDoughboy
OfficialDoughboy

@MotorbikeMike People who are saying Net Neutrality = Unmanaged are wrong, an ISP having to manage traffic so everyone gets equal service isn't the problem.  Discriminating where a user can go, or managing based on content is the problem.  What do I mean - Verizon, who owns Redbox, decides to mark all content going to Netflix as having low priority but Redbox streaming on their network is good and gets the clear.


We as consumers need that protection that an ISP can't discriminate and unfairly use that advantage to drown out and slow down their competition.  It's not about the management end where an ISP is trying to ensure QOS across the board.


And your argument doesn't hold weight when it comes to ISPs wanting to double dip in billing.  Netflix pays for their bandwidth, I pay for my bandwidth, now Netflix has to pay again because of congestion and being popular????   If congestion is the problem, then Netflix paying double for access and getting it would mean something else would have to suffer on that ISPs network has to suffer - Right?  Or it means they just the ability to charge more and don't care about customers and QOS by picking winners and losers based on money.


So the poor "Mom & Pop" webstore that is competing against Amazon already suffers and loses because they cant' pay double for access?  How is that fair?

JMWJMW
JMWJMW

@uninventiveheart One commissioner out of five is dangerous?  I would suggest that you engage in some additional reading: Tom Wheeler is for net neut.

Mathew Peckinpah
Mathew Peckinpah

@dean.collins


"Monopoly" ???


It does on the face of it appear that the respective cable companies do have a monopoly.  But their respective franchise agreements are evidently not exclusive.  Other cable companies can compete with them but they do not.  They compete against the traditional telecom companies.  WiMax may be competitive alternative soon also.

Mystic
Mystic

@dean.collins In my neighborhood you have a choice of Verizon, BrightHouse or AT&T for your cable and internet. You also have DSL through the bell company or satellite option as well. Where is the Monopoly?

JMWJMW
JMWJMW

@dean.collins None of the companies you mention actually have monopolies, Dean.  All throughout the boroughs, residents have at least three different providers of enhanced telecom, and usually much more.  The only monopoly would be in the single provider many people decide to use, which, of course, isn't a monopoly.

Walt French
Walt French

@straightcomment You cannot have failed to recognize that your examples are all subject to government, i.e., the voters, who can set the pricing policies.


Economists often talk about people “voting with their wallets” in the products they choose, but there is little or no effective competition for high-speed broadband in many—I'm not sure, but perhaps “virtually all”—areas of the US. For example, often it's just the landline phone company and one cable company; with neither offering good prices to somebody who doesn't want a landline or cable TV. In other words, you get to vote, but no choice and no write-in.

OfficialDoughboy
OfficialDoughboy

@Mystic @dean.collins I have one choice for broadband in my neighborhood.  I moved two years ago, having Comcast Business Internet.  I wanted to keep service with Comcast but was told that I couldn't because they didn't have franchise agreements in the area I was moving.  For me that meant going from Docsis 3.0 and good speeds, moving and going to Doscis 2.0 and slower speeds.  And on top of that my bill was $20 higher a month.


The kicker - I lived a mile from the line where Comcast could offer service.


On top of this - I can't 3/4G for access through cell because signal is spotty in my own house.  Satelite is not viable either and too expensive for the speed.


In simple terms - there is ONE choice for Broadband speed internet in my area, when I could have two or three choices.  Comcast could give me service but the franchise agreement is prevent that.  You call it whatever you want, but I call it a monopoly on that type of service when an agreement is preventing my choice of ISP that can service my area if allowed.

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