Thoughtful, detailed coverage of the Mac, iPhone, and iPad, plus the TidBITS Content Network for Apple consultants.

FCC to End Net Neutrality

Earlier this year we noted that the U.S. Federal Communications Commission (FCC), under Trump-appointed chairman Ajit Pai, was preparing to roll back Obama-era regulations that classified Internet service providers as common carriers and mandated “net neutrality.” (See “FCC and Congress Work to Roll Back Net Neutrality,” 05 May 2017.) Well, now is the time the hammer meets the nail: the FCC is expected to vote on the proposal to undo net neutrality on 14 December 2017.

The full 210-page proposal (PDF) is available to the public, but it boils down to:

  • The FCC will reclassify Internet service providers as “information services” rather than more-regulated common carriers like utilities and telephone companies.

  • Mobile Internet service will be reclassified as a “private” service subject to little regulation rather than “commercial” service, on the basis of some hairsplitting about connecting to the public switched telephone network.

  • In the spirit of transparency, network operators will have to publish (or disclose to the FCC) some information about their network operations and commercial offerings that is “sufficient to enable consumers to make informed choices.” This would include information about blocking, throttling, or prioritizing of some services or apps at the expense of others. However, providers would essentially be able to take any action they like under the aegis of “network management” without disclosure.

  • States and localities will be prevented from drawing up their own broadband consumer protections.

Under this new framework, the FCC is essentially forfeiting its authority to regulate the broadband Internet market. This means responsibility for keeping network operators on the up-and-up falls to the Federal Trade Commission. The FTC has never had anything to do with net neutrality and cannot impose regulations on network operators, but it can investigate anti-competitive behavior.

Commissioner Pai has consistently characterized net neutrality as a solution looking for a problem. Generally, Pai sees net neutrality regulations as an unneeded burden because the Internet did not devolve into a dystopia of slow lanes, fast lanes, and paid prioritization before 2015. Pai also feels the FCC is unnecessary to keep network providers in line: in the handful of instances where anticompetitive behavior did crop up, most were handled by the industry without the FCC’s intervention. Further, Pai claims that eliminating net neutrality regulations — or, rather, “restoring Internet freedom” — is essential to spur investment in America’s broadband infrastructure. Pai cites studies claiming broadband investment fell in the two years since the Obama-era FCC enacted net neutrality regulations.

All these claims are dubious. Where the FCC says broadband investment has fallen since 2015, ISPs have consistently told their investors (via legally-binding financial disclosures) that net neutrality regulations were not impeding them. Almost every major network operator — from Comcast and Verizon to Time-Warner, Sprint, and T-Mobile — has engaged in or is actively engaging in some form of blocking, paid prioritization, or (particularly) throttling with little or no disclosure to customers. And network operators didn’t set up fast lanes in the “light-touch” regulatory era before 2015 because they were waiting to see how a number of court challenges to FCC authority were going to turn out.

Public opinion also does not agree with Commissioner Pai. Surveys sponsored by both the cable industry and Mozilla — arguably on opposite sides of the issue — find the American public remains overwhelmingly in favor of net neutrality.

In this light, Commissioner Pai’s view on the value of public opinion is interesting. When proposing to undo net neutrality, Pai promised a “far more transparent” process than that used by the FCC in 2015. Yet the process the FCC implemented this time around apparently gave no thought to filtering out automated spam and trolling of the comment process, leading to the FCC claiming that it was just too burdensome on them to, you know, actually process the comments. Also too burdensome? Publishing the comments, or responding to inquiries about the comment process. In the words of Commissioner Mignon Clyburn, the process completely ignored “thousands of consumer complaints and millions of individual comments that ask the FCC to save net neutrality and uphold the principles that all traffic should be created equal.”

The FCC’s proposal states that the “disinfectant of public scrutiny and market pressure” is far more effective at controlling the broadband industry than any government regulation. Yet, under Pai’s leadership, the FCC has found a way to disregard public comment and craft a regulatory framework that relies on network providers voluntarily disclosing whether they’re violating any rules. And market pressure works only if there is a market: according to the FCC’s own proposal, at the end of 2016 some 48.9 percent of Americans had access just a single broadband provider capable of meeting the FCC’s definition of “modern broadband” (25 Mbps downstream and 3 Mbps upstream) or no access at all. If you don’t like your ISP, it’s hard to take your business elsewhere when there is no other ISP. So much for market pressure.

Although many consumer rights groups continue to protest the FCC’s proposal (and the EFF has created a service enabling citizens to directly lobby their congressional representatives on the issue), the fix is in: it’s very unlikely any public action will delay or fend off the FCC’s action.

It’s difficult to say how all this will play out for network operators, Internet companies, and consumers. Network operators all give lip service to wanting a free and open Internet, and they claim they have no interest in blocking services or restricting access. But these are the same companies that feel Internet heavy-hitters like Apple, Amazon, Facebook, Google, and Netflix have made billions off the “free lunch” of network neutrality requirements, and the only leverage network providers have is limiting access to consumers. So, there is absolutely no question network operators will want more money from Internet companies — as fast as they can get it. Similarly, Internet companies will pay up if there’s no alternative, and they’ll almost certainly pass those costs on to consumers. So, consumers can expect charges and fees to increase, along with having virtually no recourse if their ISP blocks or degrades Internet services they want or need.


Try productivity tools from Smile that will make your job easier!
PDFpen: PDF toolkit for busy pros on Mac, iPhone, and iPad.
TextExpander: Your shortcut to accurate writing on Mac, Windows,
and iOS. Free trials and friendly support. <>

Comments about FCC to End Net Neutrality
(Comments are closed.)

Michel Hedley  2017-11-29 00:05
Can someone advise how the abolition of net neutrality will be regarded even accepted by the Rest of the World?
Firitia  2017-11-29 00:29
Very simple. It is just as with the old Roman citizenship. Roman citizens had all the rights; non citizens could be tortured to death. Wisely the latter kept their mouths shut.
Just replace 'Roman' of then by 'USA' of today.
Tom Gewecke  2017-11-29 09:42
Re Europe, see
ssteiff  2017-12-05 10:34
NetNeutrality was an internal US issue and remains such. In other parts of the world there's competition on the last mile access which, unlike the monopolised US, allow users to switch to other ISPs if they feel their ISP is playing games.
Tom Gewecke  2017-11-29 09:33
Gruber's item on this is interesting
Josh Centers  An apple icon for a TidBITS Staffer 2017-11-29 10:38
There are many excellent rebuttals to Thompson's article, but I agree with it in the sense that Obama's net neutrality regulations addressed problems that didn't exist, and ignored the real issues facing Americans — namely, broadband access, competition, and bandwidth caps, which I've written about before here on TidBITS.

That said, I agree with Geoff in that this is likely not good news for Internet users. The secretive process and constant Comcast ads on Twitter promising that they'll be good if the reins are removed do not give me the warm fuzzies.
Geoff Duncan  An apple icon for a Friend of TidBITS 2017-11-29 12:13
Comcast's "we love net neutrality too!" campaign used to go on about how they did not and will not engage in any paid prioritization plans.

That language has now vanished from Comcast's "we love net neutrality" promotions.
Geoff Duncan  An apple icon for a Friend of TidBITS 2017-11-29 15:50
I agree with Thompson that Title II and its burdens are an inelegant way to deal with net neutrality concerns - the regulations were created for different technologies in a different era - and Title II regulation creates its own set of problems. However, it's the title we've got: given the extreme political polarization in the United States, the odds of Congress being able to formulate and enact a reasonable regulatory framework for Internet service that ensures neutrality without the burdens and problems of Title II seems nil. So the Obama administration made a pragmatic, finger-in-the-dike decision to drag the FCC to adopt Title II regulation.

Thompson's discussion of zero-pricing , broadband competition (esp as regards municipal broadband), and "net neutrality" allowing incumbents like Facebook and Google to dig deeper moats is provocative and highlights points many discussions omit. However, the burdens of Title II relative to the fixed cost of network development and operation don't seem tremendous—otherwise ISPs' bottom lines would be hurting. And they aren't.
Tom Gewecke  2017-11-30 10:37
Some argue that distribution margins are in fact very low compared to the profits of content producers, e.g
Geoff Duncan  An apple icon for a Friend of TidBITS 2017-11-30 11:47
That item is inaccessible behind a register-wall, so I can't really comment on it. No question network operators have a different set of fixed costs than content producers.
To those like Pai and other NN-opponents who like to espouse these pretty views on free market competition catering to individuals' needs at the best price, I'd like to ask one simple question: which world do you live in?

In my neighborhood (urban city of 120k in CA) there is ZERO actual competition. AT&T offers DSL at 1.5 Mbps, i.e. unusable. There is no fiber. There is cellular, but that's capped and comparably slow in real-world usage, hence also unusable for a private home. That leaves me with Comcast where I pay $40/month for 100 Mbps ("promotional" offer). If Comcast starts creating slow and fast lanes and asks for extra fees, I have NO actual alternative. There will be NO competition for my money. It will be Comcast's way or the highway.

Seeing as in such situations customers are faced with a de-facto monopoly, the only sensible thing to do is regulate. People like Pai and our current administration obviously chose to blatantly disregard facts in order to push a certain agenda.
Tom Gewecke  2017-11-30 10:32
What I would most like to see is some policy that would, at least over time, provide incentives for breaking this defacto monopoly. What would that be?
Anonymous  An apple icon for a TidBITS Angel 2017-12-19 10:20
Exactly. Long distance phone service benefited greatly when we were given the opportunity to choose our carrier. The company that built and/or still serviced the physical infrastructure got a piece but on top of that could be a different company providing the "service". In my city, it's all TWC/Spectrum and they deserve something for the physical but, like long distance, let me chose my carrier, or in internet parlance, "provider!"
Jean-Pierre SMITH  2017-12-05 08:15
Citizen of France, I have been, to the extent I could, a supporter of defending Net Neutrality in the US. I posted a comment to the FTC. I now realise it may have been dumped by the FTC for those reasons outlined by the new [anti-FTC] FTC chairman. Shame !!!

That being said, competition, when it exists and is effective and really enforced, may be a better substitute to regulation (Portugal, according to a recent post on "Security Now", may be different). So, it is quite possible that I may be and subsequently remain better protected here, where antitrust seems to be enforced, than the average US citizen. Indeed, assuming I accept the fact that my ADSL connection is about 2500 kbps down (low, to prevailing standards), I have plenty of carriers competing with Orange (my ISP, the successor of France's national France Telecom carrier) for my business. Crossing my fingers, I would assume that the early demise of Net Neutrality in the US will not affect my own service.

Fingers crossed.
starosta  2017-12-05 09:33
The primary lament i hear is that the market mechanisms cannot work because most "markets" offer only one ISP. But isn't it the burden of FCC regulations that discourages new entrants into the market? So what we have now is a regulated monopoly in most places, thanks to FCC oversight. Had we stuck with the regulated monopoly of Ma Bell back in the 70's there never would have been an Internet! I'm inclined to place my faith in the market forces.
Curtis Wilcox  An apple icon for a Friend of TidBITS 2017-12-06 00:12
No, there is very little regulation of ISPs by the FCC. There is more regulation of phone companies and cable companies but for their phone and TV services. The FCC does regulate wireless spectrum but does so by *creating* a market for bands, auctioning them off.

Until, I think 2005, there was more ISP competition because there was a federal requirement that phone companies allow competitors to use "the last mile" to offer DSL service; the Bush administration ended that so you could no longer get DSL from anyone other than your phone company.

Because installing and maintaining the last mile is so expensive, there a limit to how much competition can exist. Municipalities and state law determine right-of-way and telephone pole access and in most places they don't foster competition.

The Internet existed in the 1970's and even if AT&T hadn't been broken up, they still could have faced competition for home Internet services from the cable companies.