Listen to Episode 22 on Net Neutrality
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In this episode, I go in-depth on the history of net neutrality and the FCC beginning in 2002 and ending with the 2017 decision to repeal net neutrality. We discuss the different ways broadband providers and internet service providers have been classified under the Communications Act of 1934 as well as how courts have ruled on net neutrality in recent years.
Brief Show Notes
What is Net Neutrality?
This definition is via Wikipedia; it is necessary for understanding the discussion on Net Neutrality. Internet neutrality, network neutrality, or net neutrality is the principle that internet service providers treat all data on the Internet the same, and not discriminate or charge differently by user, content, website, platform, application, type of attached equipment, or method of communication. Under such rules, internet service providers (ISPs) are prohibited from blocking, throttling, or promoting certain websites.
Net Neutrality Timeline
The Federal Communications Commission (FCC) begins to treat cable internet access and digital subscriber line (DSL) internet access differently for regulatory purposes by deregulating cable. This deregulation was a result of cable modem service being unclassified as a telecommunications service, thus no longer subjecting it to common carrier regulation.
The term net neutrality is coined for the first time by Columbia University Law Professor Tim Wu. He writes an article describing the different means of achieving net neutrality, which may not solely be via governmental regulation.
The FCC fines Madison River Communication of North Carolina, a local ISP, $15,000 for blocking Vonage’s voice over internet protocol service (VoIP). Vonage’s VoIP was in direct competition with Madison River’s own voice calling service.
The FCC deregulates DSL broadband service by reclassifying it as an information service.
The FCC sets out proto-net neutrality rules for Internet Service Providers. The rules are intended to protect consumers. They say consumers are entitled to access the lawful internet content of their choice; to run applications and use services of their choice, subject to the needs of law enforcement; to connect their choice of legal devices that do not harm the network; and to competition among network providers, application and service providers, and content providers.
Comcast is sued for blocking BitTorrent. BitTorrent is a peer-to-peer networking service that was responsible for 25% of all internet traffic in November 2004. As a result of this traffic, a single user of the site consumes a tremendous amount of bandwidth. In 2008 the FCC ordered Comcast to stop blocking BitTorrent.
Comcast appeals the FCC’s order to unblock BitTorrent to the Washington, DC Circuit Court of Appeals. The decision is out in April 2010. The court rules in favor of Comcast, saying, “Because the
Commission has failed to tie its assertion of ancillary authority over Comcast’s Internet service to any statutorily mandated responsibility, we grant the petition for review and vacate the Order.”
Google and Verizon attempt to cut a net neutrality deal that ultimately falls through. The deal is guided by two goals: first, that users should be able to choose what content, applications, or devices they use and second, that America ought to encourage investment and innovation to support the underlying broadband infrastructure.
They also lay out seven key elements for the legislative framework. We cover two in the show. First, that there should be an enforceable prohibition against discriminatory practices by internet service providers. Second, that broadband providers ought to giver consumers clear, understandable information about the services they offer and their capabilities.
The FCC finds a new way to enforce the Open Internet Order. The Open Internet Order creates two classes of broadband providers: fixed broadband networks and wireless networks. Additionally, the Order’s regulations followed three rules: transparency, no blocking, and no unreasonable discrimination. The three rules included different regulations for the two types of broadband.
AT&T, a major cellular provider, begins blocking Apple’s FaceTime app on their mobile network for users not on the MobileShare plan. The move appears to be a violation of the FCC’s Open Internet Order, multiple groups notify AT&T of their intent to file a formal complaint against the company unless the block is lifted. In early 2013, AT&T folds and unblocks FaceTime for all users.
AT&T is again the subject of criticism regarding net neutrality. They announce a new service called Sponsored Data. Under this service, companies “pick up the tab for data usage whenever their particular products or services are being used.” For example, Google would pay for any data usage on their own services to encourage users to use Google over another company.
On January 14, 2014, the US Circuit Court of Appeals strikes down the FCC’s Open Internet Order. They uphold the FCC’s right to regulate broadband access, but the court questions their authority to impose rules on how broadband providers manage other networks. They state, “Even though the commission has the general authority to regulate in this arena, it may not impose requirements that contravene express statutory mandates.”
However, the court also upholds multiple arguments put forth by the FCC. Specifically that internet openness leads to innovations at the edges of the network, thus leading to expanded investments in broadband infrastructure. Additionally, that “broadband providers represent a threat to Internet openness and could act in ways that would ultimately inhibit the speed and extent of future broadband deployment.”
The FCC endorses “fast and slow lanes” on the internet. In a party-line vote, the committee’s three democratic commissioners vote to give faster service to companies willing and able to pay for it.
Netflix announces it has come to a paid-peering-interconnection agreement with Verizon. This comes just two months after Netflix had reached a similar deal with Comcast. The Comcast agreement came after Netflix’s average speed for Comcast subscribers declined by more that 25%. Netflix criticized both deals for having to pay additionally fees for their traffic on the internet. After the Comcast agreement, Netflix’s speeds increased by 65%.
The FCC announces they will investigate these paid-peering-interconnection agreements. Then-chairman Tom Wheeler put out a statement in which he said, “Consumers need to understand what is occurring when the Internet service they pay for does not adequately deliver the content they desire, especially when that content is also paid for.” However, he believed that peering was not a net neutrality issue.
T-Mobile announces that it will exempt some music streaming services from data caps. This type of practice is called zero-rating. It occurs when data is not counted against a plan’s data cap.
President Barack Obama endorses Title II regulations for broadband companies under the Communications Act of 1934. Title II is the legal foundation on which the FCC enacted the Open Internet order of 2015. Broadband providers are classified as common carriers under this provision.
The term “common carrier” or “Carrier” means any person engaged as a common carrier for hire, in interstate or foreign communication by wire or radio or in interstate or foreign radio transmission of energy, except where reference is made to common carriers not subject to this Act; but a person engaged in radio broadcasting shall not, insofar as such as such person is so engaged, be deemed a common carrier.
A discussion draft of a net neutrality bill is released by Senator John Thune (Republican, South Dakota) and Representative Fred Upton (Republican, Missouri). The bill is “to amend the Communications Act of 1934 to ensure internet, to prohibit blocking lawful content and non-harmful devices, to prohibit throttling data, to prohibit paid prioritization, and to require transparency of network management practices, to provided that broadband shall be considered to be an information service, and to prohibit the Commission or a State commission from relying on section 706 of the Telecommunications Act 1996 as a grant of authority.”
The FCC votes 3-2 to pass open internet rules grounded in Title II authority. They ban three specific practices: blocking, throttling, and paid prioritization. Blocking occurs when consumers cannot access certain internet destinations because they are blocked by the broadband internet access service. Throttling is when the internet service providers impair or degrade lawful Internet content, applications, or services, or use of a non-harmful device. Paid prioritization is when a broadband provider accepts payment to speed up or facilitate access to certain content, application, services, or devices.
The Washington, DC Appeals court upholds the 2015 Open Internet Order. They conclude their brief saying, “Because a broadband provider does not— and is not understood by users to—‘speak’ when providing neutral access to internet content as common carriage, the First Amendment poses no bar to the open internet rules.”
New FCC Chairman Ajit Pai announces his plans to begin repealing the Title II regulations in a speech. He describes how the internet has been the “greatest free market success story in history,” which he attributes to light regulations under the Telecommunications act of 1996, passed by the Republican Congress and Democratic President Bill Clinton.
He states that under that act, the private sector invested around $1.5 trillion to build the networks we have today. Pai contrasts this with the investment under Title II regulation, which dropped 5.6%, or $3.6 billion, between 2014 and 2016. This was the first time investment in internet infrastructure has declined outside of a recession.
Pai proceeds to lay out his framework for reversing Title II and returning to the previous “light-touch regulatory framework.” His plan has three elements. First, reclassify broadband service as an information service under Title I of the Communications Act of 1934. Second, eliminate the Internet Conduct Standard. Third, seek comment from the public on how to approach the Open Internet Order of 2015.
He also lists four benefits of the plan: it will bring high-speed internet access to more Americans, it will create jobs, it will boost competition, and it will protect internet users’ privacy by allowing the Federal Trade Commission to regulate broadband providers.
The FCC votes to restore the pre-2015 internet regulations. They classify broadband internet access service asn an “information service” under Title I of the Communications Act. They restore broadband consumer protection authority to the Federal Trade Commission.
The new rules will require ISPs to disclose information about their practices regarding any blocking, throttling, paid prioritization, or affiliated prioritization.
The dates and events are via WhatisNetNeutrality.org. However, the research in the show is from a myriad of other sources.
Bills with Luke Scorziell does not provide investment, tax, or legal advice or recommendations. This material is solely intended for educational purposes based on publicly available information and may change at any time.
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About Luke Scorziell
Mr. Scorziell created The Edge of Ideas when he was 15 years old. After a few years of blogging he found a passion for podcasting and now regularly has guests on his show, Bills with Luke Scorziell. Find out more about Luke and his unique journey. Feel free to send Luke a message below.
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