By Lambert Strether of Corrente.
The day before Thanksgiving, November 23, the FCC dropped its proposal “Restoring Internet Freedom,” FAQ and Declaratory Ruling, Report and Order, and Order (PDF); they hope to schedule a vote on it for December 14. (Honestly. Why don’t they just go whole hog and schedule the vote for December 24?) Let me start out by drawing attention to this remarkable passage in the FAQ:
What the Order Would Do:
• Find that the public interest is not served by adding to the already-voluminous record in this proceeding additional materials, including confidential materials submitted in other proceedings.
What could those “confidential materials submitted in other proceedings” possibly be? Let’s speculate. New York State Attorney General Eric Schneiderman writes in an open letter to (former Verizon lawyer and) FCC chair Ajit Pai:
[F]or six months my office has been investigating who perpetrated a massive scheme to corrupt the FCC’s notice and comment process through the misuse of enormous numbers of real New Yorkers’ and other Americans’ identities
Long story short: Bots organized by some unknown entity filed enormous numbers of often identical comments on the proposal with the FCC. This matters, because as Schneiderman points out:
Federal law requires the FCC and all federal agencies to take public comments on proposed rules into account — so it is important that the public comment process actually enable the voices of the millions of individuals and businesses who will be affected to be heard.
Which is hard to do when the organic comments are drowned out. As a legal matter, Schneiderman seems concerned with the theft of the identities that putatively signed the comments, and to that end:
We made our request for logs and other records at least 9 times over 5 months: in June, July, August, September, October (three times), and November.
To which the FCC has so far been unresponsive. As Yves pointed out:
The Trump Administration says it plans to ignore public comments, which would seem to open up the ruling to a procedural challenge by anyone who had standing.
And what I would speculate is that the “confidential materials submitted in other proceedings” bear on Schneiderman’s request, which the FCC intends to stiff, since not taking pubic comments into account would certainly open the FCC to procedural challenge.
With that detour into the weeds out of the way, in this post I will answer the following questions:
1) What is “Net Neutrality”?
2) What would a “Packaged Internet” look like? (I needed a phrase that implies the opposite of “Net Neutrality,” which “Packaged Internet” seems to do. “Rigged Internet,” my second choice, didn’t incorporate the cable-like package business model; see below.)
3) What are the real and theoretical harms of a “Packaged Internet”?
And I’ll conclude with some thoughts on action to secure net neutrality, past and present. (I will also add an Appendix on how the Democrats helped create this mess, because of course they did.)
What is “Net Neutrality”?
In the shortest posssible form: You are surfing the net at your browser, and your ISP is delivering bits that build the pages that you read (or watch (or listen to)). All bits are treated equally, no matter what (“neutrality”). The ISP must treat the bits that build this page at Naked Capitalism exactly as it treats the bits that build the Google search page or the Washington Post front page or whatever. So they can’t cripple us to boost WaPo.
In somewhat longer form, FCC commissioner Jessica Rosenworcel writes in the Los Angeles Times:
Net neutrality is the right to go where you want and do what you want on the internet without your broadband provider getting in the way. It means your broadband provider can’t block websites, throttle services or charge you premiums if you want to reach certain online content.
Without it, your broadband provider could carve internet access into fast and slow lanes, favoring the traffic of online platforms that have made special payments and consigning all others to a bumpy road. Your provider would have the power to choose which voices online to amplify and which to censor. The move could affect everything online, including the connections we make and the communities we create.
And in long form, as I wrote earlier this year:
Although the Obama administration initially set the table for net neutrality’s abolition — its choice for FCC Commissioner, Tom Wheeler, was a
tubecable lobbyist — a successful grassroots campaign — which, besides online activists, also included corporate heavweights that benefit from net neutrality, like Google — ultimately led in 2015 to net neutrality’s adoption, as the FCC decided to regulate ISPs under Title II of the Communications Act as common carriers. (This is like treating ISPs as public utilities, and the issue is often framed that way, but the two are not identical in function or law). Tim Wu explains “common carrier”:
The concept of a “common carrier,” dating from 16th century English common law, captures many similar concepts [to open access and anti-discrimination remedies for “threats to the end-to-end nature of the Internet”]. A common carrier, in its original meaning, is a private entity that performs a public function (the law was first developed around port authorities).
Taxis, for example, are common carriers.
So, if taxis were no longer common carriers, but worked the way Ajit Pay — sorry, Pai — wants the Internet to work (and incorporating Rosenworcel’s verbiage), taxis wouldn’t have to pick you up if they didn’t want to (“choose which voices”), wouldn’t have to take you where you asked to go if they didn’t want to (“blocking”), could take the slow route to the airport unless you offered to pay extra (“throttling”), could charge you a fee to turn off the sound for that [family blogg]ing TV on the back of the driver’s seat (“charge you premiums”), or even charge you extra for picking you up at Penn Station as opposed to the Port Authority (“favoring the traffic of online platforms”). The taxi companies would love this. Nobody else would. ISPs would love a Packaged Internet. Nobody else would.
What Would a “Packaged Internet” Look Like?
In short form, the Packaged Internet would look like cable. Ro Khanna tweets:
The FCC is getting ready to overturn #NetNeutrality. If they succeed, ISPs will be able to split the net into packages. This means that you will no longer be able to pay one price to access any site you want. pic.twitter.com/vEkNxPmVlu
— Ro Khanna (@RoKhanna) November 21, 2017
A more concrete portrayal:
Soon the net will become a #CableTV like money-pit for consumers. Where providers like @verizon @ATandT and @comcast will charge consumers with high prices to visit their favorite websites. pic.twitter.com/bC5ysWgaoZ
— Godfather of Soul (@Pikminister) November 21, 2017
And good luck trying to change the terms of your package:
ME: I’d like to negotiate this term of your boilerplate service contract
ISP: Why certainly, let me get our counsel on the line. We are, after all, equally powerful bargaining partners
— Patrick Monahan (@pattymo) November 21, 2017
What Are the Real and Theoretical Harms of a “Packaged Internet”?
The ISPs say they’ll behave:
We do not and will not block, throttle, or discriminate against lawful content. We will continue to make sure that our policies are clear and transparent for consumers, and we will not change our commitment to these principles. pic.twitter.com/YHDADvFqau
— Comcast (@comcast) November 22, 2017
Too funny. The Rice-Davies Rule applies to what they say: “They would, wouldn’t they?”
And the FCC agrees with the ISPs. From the Order:
“Because of the paucity of concrete evidence of harms to the openness of the Internet, the Title II Order and its proponents have heavily relied on purely speculative threats. We do not believe hypothetical harms, unsupported by empirical data, economic theory, or even recent anecdotes, provide a basis for public-utility regulation of ISPs.428 Indeed, economic theory demonstrates that many of the practices prohibited by the Title II Order can sometimes harm consumers and sometimes benefit consumers; therefore, it is not accurate to presume that all hypothetical effects are harmful.
The ISPs are lying, and the Ajit Pai is lying. Stanford’s Barbara van Schewick has a long list of the legal maneuvers the ISPs have deployed to circumvent net neutrality. And Techdirt has an excellent compilation of real harms where ISPs blocked, throttled, and generally gamed the net to their advantage.
You know, speculative instances like that time AT&T blocked customer access to Facetime in order to drive them to more expensive mobile data plans. Or the time AT&T throttled users then lied about it (something AT&T’s still fighting a lawsuit over). Or that time Comcast applied arbitrary and completely unnecessary usage caps and overage fees to its broadband service (again, thanks to a lack of competition), then exempted the company’s own content from those caps while still penalizing competitors. Or how about that time Verizon blocked competing mobile wallets from even working on its phones to give its own payment platform an advantage?
There’s plenty more very real, very non-speculative examples where that came from, and the problem gets worse if you look at the bad behavior by ISPs on the privacy front (also caused by a lack of competition). Like when AT&T decided to charge users hundreds of extra dollars a month just to opt out of snoopvertising, or the time Verizon was busted covertly modifying user packets to track users around the internet without telling them — or letting them opt out.
If you think these very real market harms are “speculative” you’ve been in a coma for the last decade. Yet this argument that net neutrality is an entirely theoretical problem sits at the heart of the FCC’s order.
“We do not and will not block, throttle, or discriminate against lawful content” my sweet Aunt Fanny.
And here is a list of theoretical harms that a cursory survey of the Twitter provides:
- Bitcoin throttling: “Loss of ‘Net Neutrality’ means US government will be able to throttle traffic to #Bitcoin exchanges…” (presumably by asking the ISPs to do so)
- Search engine packaging: If FCC dismantles [net neutrality], and you get internet from Verizon, they may force you to use Yahoo as your search engine (because they own it), but PAY to use GOOGLE.
Free speech suppression: From The Nation:
[The FCC proposal] would “rig the internet,” according to Congressional Progressive Caucus co-chairs Mark Pocan of Wisconsin and Raúl Grijalva of Arizona, who say, “If [Pai] is successful, Chairman Pai will hand the keys to our open internet to major corporations to charge more for a tiered system where wealthy and powerful websites can pay to have their content delivered faster to consumers. This leaves smaller, independent websites with slower load times and consumers with obstructed access to the internet—a particularly harmful decision for communities of color, students, and online activists. This is an assault on the freedom of speech and therefore our democracy.”
- Crippled activism: From Tim Karr of Free Press on Democracy Now:
The Internet was created as this network where, where there were no gatekeepers. Essentially, anyone who goes online can connect with everyone else online. And that’s given rise to all sorts of innovation, it’s allowed political organizers, and racial justice advocates to use this tool to contact people, to organize, to get their message out.
Net Neutrality is important to Naked Capitalism. As I wrote:
Naked Capitalism is a small blog. It’s in our interest — and we like to think it’s in your interest too, dear readers, and in the public interest as well — to be just as accessible to the public on the Internet as a giant site like the Washington Post or the New York Times (or Facebook). If you agree, please support Naked Capitalism and all small blogs by vociferously supporting network neutrality in every venue available to you. Help Naked Capitalism stay unthrottled!
(And if you think the battle is hopeless, see this must-read by Matt Stoller on the fight that got the FCC to treat the Internet as a common carrier in the first place.) The Verge has an excellent article on all the venues where Net Neutrality is being supported; the tactic that particularly appeals to me is protests at stores also owned by Ajit Pai’s owner: Verizon. And, as ever, I recomment a Letter to the Editor in your local newspaper.
 Via Motherboard:
This one was sent to the FCC 1.2 million times:
The unprecedented regulatory power the Obama Administration imposed on the internet is smothering innovation, damaging the American economy and obstructing job creation.\n\nI urge the Federal Communications Commission to end the bureaucratic regulatory overreach of the internet known as Title II and restore the bipartisan light-touch regulatory consensus that enabled the internet to flourish for more than 20 years.\n\nThe plan currently under consideration at the FCC to repeal Obama’s Title II power grab is a positive step forward and will help to promote a truly free and open internet for everyone.\n
Yes, the “\n” was really there. (I say “unknown entity” because although the New York Post blames “Russians,” they give no source, and attribution is hard.)
 Market fundamentalists argue that competition will keep the ISPs honest. Which might be true if competition were a thing:
[The FCC] argues that customers offered a two-speed internet will defect to other ISPs, and that beefed-up antitrust enforcement will prevent the worst offences. These are not strong arguments. Only half of American households have more than one ISP to choose from. Most of the rest are served by lazy duopolies.
 “Economic theory demonstrates.” Stop it, Ajit. You’re killing me!
APPENDIX: The Role of the Democrats
Ajit Pai, the FCC Commissioner leading the charge to rig the internet, was appointed by Obama. Wikipedia:
He has served in various positions at the FCC since being appointed to the commission by President Barack Obama in May 2012, at the recommendation of Mitch McConnell. He was confirmed unanimously by the United States Senate on May 7, 2012, and was sworn in on May 14, 2012, for a five-year term.
Before his appointment to the FCC, Pai held positions with the Department of Justice, the United States Senate, the FCC’s Office of General Counsel, and Verizon Communications.
Another Flexian slithers through the revolving door. Obama no doubt asked McConnell for his very valuable opinion to maintain partisan balance among the FCC commissioners (one of those “norms” liberal Democrats are always yammering about). But actually:
Only three commissioners may be members of the same political party
In other words, Obama could have nominated a pro-Net Neutrality independent, and chose not to. When Trump was elected, he nominated Pai for FCC Chair, and that only happened because four Democrats — remember when Trump used to be a fascist? Good times — went along and helped him out. Politico:
DEMOCRATS FOR PAI? — FCC Chairman Ajit Pai locked down his reconfirmation Monday evening in a largely party-line 52-41 vote. But Pai did win votes from four of the six Democrats who voted in favor of last week’s procedural vote on his confirmation: Gary Peters (D-Mich.), Joe Manchin (D-W.Va.), Claire McCaskill (D-Mo.) and Jon Tester (D-Mont.)….
— So why did these four buck Democratic colleagues? “I disagree with him on net neutrality, but the president has a right to the chairman because he won the election,” McCaskill told John. “I have worked with him closely on the Lifeline issues and found him to be easy to work with on those issues — and .” [credentialism!] Peters echoed her on Pai’s qualifications and also cited his interest in working with Pai to address the Lifeline program./p>
— The senators like his broadband views. “I just need a lot of help in West Virginia, and he’s been moving in that direction,” former Commerce Committee member Manchin said, lauding Pai’s work in “trying to get the rural broadband fund moving.” Pai is “working with us,” Manchin said. Peters also mentioned rural broadband, singling out Michigan’s Upper Peninsula as an area in need: “I found him very receptive to ways to expand broadband access.” But like McCaskill, Manchin is “still very concerned about net neutrality,” as is Peters, they told POLITICO. Pai’s move to roll back net neutrality regulations dominated the Democrats’ opposition on the floor in the last week.
Uh huh. Let me know how that works out, Gary.