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Section one, Why Net Neutrality was a Good Idea

Section II of The DISSENTING STATEMENT OF COMMISSIONER MIGNON L. CLYBURN
Re: Restoring Internet Freedom, WC Docket No. 17-108..

Misreading Regulatory History

This item’s justification for rolling back our light-touch Title II approach is grounded primarily in assertions that this is simply returning to the regulatory status quo ante. The item even cites precedent going as far back as 1998 for the proposition that the FCC has always considered internet service an information service. Well, take a walk back with me down the halls of FCC Past.

It is the 1960’s and 70’s when packet-switched precursors to internet access were uniformly considered Title II services. The FCC was thoughtfully considering packet-switched networks as early as 1966 when it launched the first Notice of Inquiry into the interdependence of computers and common carrier telecommunications services. Now, all telecom geeks know that the ARPANET was the precursor to the commercial internet, but what you may not know is how close we came to having it owned by AT&T. In the early 1970s, AT&T was approached with a proposition: buy ARPANET and operate it as a public, common carrier service. AT&T declined, because it did not fit with their business objectives. It was over a decade later before AT&T developed its own packet-switching solution.

So, the logical thing to do was commercialize the offering itself. Some key ARPANET players thus founded Telenet Corporation and, in 1973, applied for a FCC license to operate the nascent service on a common carrier basis, offering functionality like database access and electronic mail. In 1974, the FCC approved Telenet’s application and began offering the service, filing its first tariff on August 15, 1975.

What does this show? That the FCC majority is being disingenuous in its retelling of regulatory history, particularly as it relates to internet and packet-switched services. This majority is not “returning” to a time where packet-switched networking, and the internet access variant, in particular, were regulated as Title I services. Indeed, the item is internally inconsistent since it admits that Digital Subscriber Line (DSL) services were regulated as Title II services until 2005. Even after 2005, and to this day, hundreds of wireline carriers continue to offer broadband as a Title II service.

It was not until the early 2000s that the FCC began deregulating internet transmission. Up until that point, broadband providers were required to line share and unbundle their networks, which allowed vibrant retail competition for internet access over the incumbent networks. It was only when as a policy matter the FCC decided to collapse the protocol stack and rely wholly on intermodal competition for fixed services, that it had to decide what to do with the transmission component that was clearly a telecommunications service.

These are issues with which the FCC has struggled mightily, and I am sure will continue to struggle with in the future. But painting the FCC’s past approach to internet access as a deregulatory nirvana fails to grapple with the truth of our regulatory past.

Re-Re-Classification

As I have said before, it makes no sense to take regulatory protections away from a transmission medium that consumers use to connect to the world and go about their business. It makes even less sense when you realize that voice service, which contains many of the same transmission properties, is treated as a Title II service.

While much of the item is focused on whether broadband has this “capability” or not, whether that capability is “offered” to consumers or not, I believe it is instructive just to bring it up a level and compare the FCC’s historic classification of voice service with broadband service. Again, it makes absolutely no sense that broadband is about to be a Title I service, while voice service is a Title II service. And, as I noted in my dissent to the NPRM, there is not a single modern service that the majority would characterize as a telecommunications service, effectively reading that definition out of the statute. Hundreds of computer scientists who filed in the record agree that this reclassification is nonsensical and does not match up with the underlying internet technology. This can easily be lost in the regulatory- gobbledygook that I will let the lawyers deal with, but I think it is illuminating to make a few points about this.

From a consumer perspective, both voice and broadband serve to connect people and information. For a voice service, you type in the person’s name on your smartphone, hit the dial button, and in a matter of milliseconds, the phone network does a series of database dips and passing of signaling information to figure out the best network routing for your phone call. The network connects the two phones, and now you can speak back and forth. Now, let’s compare what happens in the broadband context. To visit a website, you type in the name of the website on your smartphone, hit the enter key, and in a matter of milliseconds, the broadband network does a series of database dips and passing of signaling information to figure out what is the best network routing for your web session. The network connects your computer with the server, and now you can send data back and forth.

Consumers use both of these services to connect to people and information. It is akin to counting angels dancing on a head of a pin to single out a database that transforms identifiers into addresses (DNS or Domain Name System) and an efficient routing mechanism (caching) in the broadband context to say that this somehow transforms the transmission of information into something else. Why not single out the Local Exchange Routing Guide, a database for voice service that transforms identifiers into addresses, as a reason to reclassify voice as an information service? Or why not use virtual connection caching, a mechanism for more efficient routing on Time Division-Multiplexing (TDM) networks, as a reason to reclassify voice as an information service? On the consumer side, does a call to a voice-menu that allows you to pay your credit-card bill somehow turn your telephone service into an information service? Does a call to dial-a-forecast number? No. I believe this exposes this as an outcome-oriented decision, devoid of any reasonable mooring in technology or consumer expectations.

And this becomes even more clear as the FCC majority clears the decks of all the authority it could use to address these problems. It neuters section 706 of the Act, a provision which the D.C. Circuit has said can reasonably be interpreted as a substantive grant of authority. It refuses to exercise ancillary authority, or the Commission’s Title III authority. All of this has far-reaching consequences for the future of the internet, and particularly for mobile broadband.

DISSENTING STATEMENT OF COMMISSIONER MIGNON L. CLYBURN
Re: Restoring Internet Freedom, WC Docket No. 17-108.

Section I

Why I Must Dissent

I dissent. I dissent from this fiercely-spun, legally-lightweight, consumer-harming, corporate- enabling Destroying Internet Freedom Order.
I dissent, because I am among the millions outraged. Outraged, because the FCC pulls its own teeth, abdicating responsibility to protect the nation’s broadband consumers. Some may ask why are we witnessing such an unprecedented groundswell of public support, for keeping the 2015 net neutrality protections in place? Because the public can plainly see, that a soon-to-be-toothless FCC, is handing the keys to the internet – the internet, one of the most remarkable, empowering, enabling inventions of our lifetime – over to a handful of multi-billion dollar corporations. And if past is prologue, those very same broadband internet service providers, that the majority says you should trust to do right by you, will put profits and shareholder returns above, what is best for you.

Each of us raised our hands when we were sworn in as FCC Commissioners, took an oath and promised to uphold our duties and responsibilities ‘to make available, so far as possible, to all the people of the United States, without discrimination… a rapid, efficient, Nation-wide, and world-wide wire and radio communication service with adequate facilities at reasonable charges.’ Today the FCC majority officially abandons that pledge and millions have taken note.

I do not believe that there are any FCC or Congressional offices immune to the deluge of consumer outcry. We are even hearing about state and local offices fielding calls and what is newsworthy is that at last count, five Republican Members of Congress went on the record in calling for a halt of today’s vote. Why such a bipartisan outcry? Because the large majority of Americans are in favor of keeping strong net neutrality rules in place. The sad thing about this commentary, it pains me to say, is what I can only describe as the new norm at the FCC: A majority that is ignoring the will of the people. A majority that will stand idly by while the people they are committed to serve lose.

We have heard story after story of what net neutrality means to consumers and small businesses from places as diverse as Los Angeles’ Skid Row and Marietta, Ohio. I hold in my hand letters that plead with the FCC to keep our net neutrality rules in place but what is striking and in keeping with the new norm, despite the millions of comments, letters, and calls received, this Order cites, not even one consumer comment. That speaks volumes about the direction the FCC is heading. That speaks volumes about just who is being heard at the FCC.

Sole proprietors, whose entire business model, depends on an open internet, are worried that the absence of clear and enforceable net neutrality protections will result in higher costs and fewer benefits because you see: they are not able to pay tolls for premium access. Even large online businesses have weighed in, expressing concern about being subject to added charges as they simply try to reach their own customers. Engineers have submitted comments including many of the internet’s pioneers, sharing with the FCC majority, the fundamentals of how the internet works because from where they sit, there is no way that an item like this would ever see the light of day, if the majority understood the platform some of them helped to create.

I have heard from innovators, worried that we are standing up a mother-may-I regime, where the broadband provider becomes arbiter of acceptable online business models. And yes, I have heard from consumers, who are worried given that their broadband provider has already shown that they will charge inscrutable below-the-line fees, raise prices unexpectedly, and put consumers on hold for hours at a time. Who will have their best interests at heart in a world without clear and enforceable rules overseen by an agency with clear enforcement authority? A toothless FCC?

There has been a darker side to all of this over the past few weeks. Threats and intimidation. Personal attacks. Nazis cheering. Russian influence. Fake comments. Those are unacceptable. Some are illegal. They all are to be rejected. But what is also not acceptable, is the FCC’s refusal to cooperate with state attorney general investigations, or allow evidence in the record that would undercut a preordained outcome.

Many have asked, what happens next? How will all of this – net neutrality, my internet experience, look after today? My answer is simple. When the current protections are abandoned, and the rules that have been officially in place since 2015 are repealed, we will have a Cheshire cat version of net neutrality. We will be in a world where regulatory substance fades to black, and all that is left is a broadband provider’s toothy grin and those oh so comforting words: we have every incentive to do the right thing. What they will soon have, is every incentive to do their own thing.

Now the results of throwing out your net neutrality protections, may not be felt right away. Most of us will get up tomorrow morning and over the next week, wade through hundreds of headlines, turn away from those endless prognosticators, and submerge ourselves in a sea of holiday bliss. But what we have wrought will one day be apparent and by then, when you really see what has changed, I fear, it may be too late to do anything about it, because there will be no agency empowered to address your concerns. This item insidiously ensures the FCC will never be able to fully grasp the harm it may have unleashed on the internet ecosystem. And that inability might lead decisionmakers to conclude, that the next internet startup that failed to flourish and attempted to seek relief, simply had a bad business plan, when in fact what was missing was a level playing field online.

Particularly damning is what today’s repeal will mean for marginalized groups, like communities of color, that rely on platforms like the internet to communicate, because traditional outlets do not consider their issues or concerns, worthy of coverage. It was through social media that the world first heard about the police shooting in Ferguson, Missouri, because legacy news outlets did not consider it important until the hashtag started trending. It has been through online video services, that a targeted entertainment ecosystem has thrived, where stories are finally being told because those same programs were repeatedly rejected by mainstream distribution and media outlets. And it has been through secure messaging platforms, where activists have communicated and organized for justice without gatekeepers with differing opinions blocking them.

Where will the next significant attack on internet freedom come from? Maybe from a broadband provider allowing its network to congest, making a high-traffic video provider ask what more can it pay to make the pain stop. That will never happen you say? Well it already has. The difference now, is the open question of what is stopping them? The difference after today’s vote, is that no one will be able to stop them.

Maybe several providers will quietly roll out paid prioritization packages that enable deep- pocketed players to cut the queue. Maybe a vertically-integrated broadband provider decides that it will favor its own apps and services. Or some high-value internet-of-things traffic will be subject to an additional fee. Maybe some of these actions will be cloaked under nondisclosure agreements and wrapped up in mandatory arbitration clauses so that it will be a breach of contract to disclose these publicly or take the provider to court over any wrongdoing. Some may say “of course this will never happen.” But after today’s vote, what will be in place to stop them?

What we do know, is that broadband providers did not even wait for the ink to dry on this Order before making their moves. One broadband provider, who had in the past promised to not engage in paid prioritization, has now quietly dropped that promise from its list of commitments on its website. What’s next? Blocking or throttling? That will never happen? After today’s vote, exactly who is the cop on the beat that can or will stop them?

And just who will be impacted the most? Consumers and small businesses, that’s who. The internet continues to evolve and has become ever more critical for every participant in our 21st century ecosystem: government services have migrated online, as have educational opportunities and job notices and applications, but at the same time, broadband providers have continued to consolidate, becoming bigger. They own their own content, they own media companies, and they own or have an interest in other types of services.

Why are millions so alarmed? Because they understand the risks this all poses and even those who may not know exactly what Title II authority is, know that they will be at risk without it.

I have been asking myself repeatedly, why the majority is so singularly-focused on overturning these wildly-popular rules? Is it simply because they felt that the 2015 net neutrality order, which threw out over 700 rules and dispensed with more than 25 provisions, was too heavy-handed? Is this a ploy to create a “need” for legislation where there was none before? Or is it to establish uncertainty where little previously existed?

Is it a tactic to undermine the net neutrality protections adopted in 2015 that are currently parked at the Supreme Court? You know, the same rules that were resoundingly upheld by the D.C. Circuit last year? No doubt, we will see a rush to the courthouse, asking the Supreme Court to vacate and remand the substantive rules we fought so hard for over the past few years, because today, the FCC uses legally- suspect means to clear the decks of substantive protections for consumers and competition.

It is abundantly clear why we see so much bad process with this item: because the fix was already in. There is no real mention of the thousands of net neutrality complaints filed by consumers. Why? The majority has refused to put them in the record while maintaining the rhetoric that there have been no real violations. Record evidence of the massive incentives and abilities of broadband providers to act in anti- competitive ways are missing from the docket? Why? Because those in charge have refused to use the data and knowledge the agency does have, and has relied upon in the past to inform our merger reviews. As the majority has shown again and again, the views of individuals do not matter, including the views of those who care deeply about the substance, but are not Washington insiders.

There is a basic fallacy underlying the majority’s actions and rhetoric today: the assumption of what is best for broadband providers, is best for America. Breathless claims about unshackling broadband services from unnecessary regulation, are only about ensuring that broadband providers, have the keys to the internet. Assertions that this is merely a return to some imaginary status quo ante, cannot hide the fact, that this is the very first time, that the FCC, has disavowed substantive protections for consumers online.

I have made it clear that I am no lawyer, so while I make some policy points below, I will attach a more legally-oriented appendix to my statement.

Chicken Little Rises Again

Two years ago, the FCC minority predicted that the sky was going to fall. Not literally, but that all manner of harms would befall the internet ecosystem as a result of the FCC’s reclassification of broadband. Just like the minority in 2010 predicted that the much more modest net neutrality rules would hamstring the internet as we know it, no concrete harms were ever shown.

It is telling that the draft cites deep regulatory uncertainty as justification for repealing the 2015 Open Internet Order, and includes sparse citations to the record. To be fair, we have seen self-serving statements from broadband providers that our net neutrality rules have somehow hamstrung them from bringing “innovative” new offerings to market before. But they never did tell us what those offerings would have been at any real level of detail. My view is that if there indeed were innovative offerings that would have garnered any real consumer interest, the better course would have been to make those ideas public, and let consumers badger the contrarian FCC into submission. Indeed, providers actually did bring to market sponsored data and zero-rating plans that the FCC closely reviewed. But, since no detailed plans of these other phantom offerings that were allegedly foreclosed by our rules were made public, my sense is that those offerings were as real as rainbow-maned unicorns.

As I mentioned in my dissent to the Notice of Proposed Rulemaking (NPRM), the majority’s reliance on broadband providers assertions of reductions in investment is highly-flawed. Nothing in this item convinces me that investment has dropped as a result of our net neutrality policies. I’d suggest taking a look at my dissent from the NPRM on this point, and incorporate that dissent by reference here generally, since the majority has failed to take my concerns into account.

For one, even a Statistics 101 student knows that correlation does not equal causation. Simply identifying an effect lends no insight into what caused it. So too with capital expenditures. To suggest that net neutrality rules shifted billions of dollars in capital beggars the imagination, and the record offers no proof that investment trends match the regulatory landscape. The purported “natural experiment” research approach in the draft also fails because it does not seek to isolate differences between the past and present. For as dynamic a market as the majority suggests the broadband market is, and as interested in economic rigor as they claim to be, it would be good policy making to attempt to isolate the relevant variables.

And to make it even more ridiculous, the broadband capital expenditures trend articulated by those believing investment has dropped, follows the capital expenditures trend in the nation more broadly. The Federal Reserve Bank of St. Louis tracks Gross Private Domestic Investment, a component of the gross domestic product that tracks capital expenditures across all industries in the United States. If you believe the information submitted by broadband providers in the record, that information tracks the Fed’s assessment of investment in the broader economy. This suggests that any alleged decrease in investment by broadband providers could be due to macroeconomic factors that influenced the overall economy, rather than the 2015 Open Internet rules.

End of section one, Continue on to Section II.

Section Two, Misreading Regulatory History

Re-Re-Classification