Daily Digest 7/9/2018 (Lifeline Decision)

For years, the big internet service providers have striven to hamstring competition across the telecommunications landscape. And in June 2018, they essentially asked the Federal Communications Commission to finish the job by repealing a rule granting competing phone and internet companies wholesale access to their copper-wire phone infrastructure. The industry petition argues that the rule is an “intrusive” regulation that has outlived its usefulness. Dane Jasper says the opposite is true — that the access to copper, which is guaranteed by a 1996 law, is what has enabled his small regional internet firm (Sonic) and others like it to continue rolling out high-speed broadband services to their customers, in competition with the big firms. Sonic and other small ISPs like it owe their business models to an obscure provision of the 1996 Telecommunications Act. The act required the major phone companies to lease their copper wire infrastructure, on which phone service traveled, to competitors at a regulated price. This allowed hundreds of competitive companies, known as CLECs, for “competitive local exchange carriers,” to flourish by offering cheap, innovative phone service and expanding into DSL — that is, phone-line-based broadband access. Some, such as Sonic, have used revenue from their phone and DSL customer base to finance expansion into fiber internet service.

Sinclair was vigorously defending its proposal to buy Tribune's stations against all comers July 5, responding to critics by telling the Federal Communications Commission that it is being asked to make decisions based on subjective disagreements over Sinclair content or views of a marketplace that no longer exists. In its reply to various petitions to deny the deal at the FCC, Sinclair said that critics seemed to think it was still a world with seven TV channels and phones are just phones rather than video access devices. "Sinclair’s acquisition of Tribune will not radically disrupt the media marketplace or impede viewers’ access to quality local news, nor will it violate any FCC rules or policies." And while critics have said Sinclair is trying to skirt the spirit of the FCC rules through sidecar deals that give it continuing relationships with some of the stations it is spinning off, Sinclair says: "The proposed divestitures, including those that contain sharing arrangements, are consistent with the rules and with other transactions previously approved by the Commission."

There once was a legendary troll, and from its hideout beneath an overpass of the information superhighway, it prodded into existence the internet we know, love, and increasingly loathe. That troll, Ken ZZ03, struck in 1995. But to make sense of the profound aftereffects—and why Big Tech is finally reckoning with this part of its history—you have to look back even further. Section 230 of the Communications Decency Act, passed in 1996, states that platforms are not liable for the content they host—even when, like Good Samaritans, they try to intervene. Ken ZZ03 would be its first test. Ask many web scholars and they’ll tell you that Section 230 in general, and the Zeran case in particular, created the modern internet. CompuServe, Prodigy, and AOL became Google, Facebook, and Twitter, companies that have for years relied on Section 230 as a legal shield against claims of publishing abusive content. Yet the law never could have anticipated the unchecked growth of Big Tech.