Vox

[Commentary] The debate surrounding the net neutrality vote at the Federal Communications Commission has been all about "fast lanes." Federal Communications Commission Chairman Tom Wheeler says his proposal would prohibit them.

Critics on his left say that stronger rules are needed to prevent them. The FCC's Republican commissioners say that the specter of fast lanes is largely imaginary, and that net neutrality rules are a solution in search of a problem.

They're all wrong. Fast lanes are real. They exist now. And none of the rules the FCC proposed are going to prevent them.

So why is the FCC focusing on hypothetical fast lanes while ignoring the ones that already exist? One factor is inertia. Comcast's current business strategy, in which it charges almost everyone to deliver traffic to its own customers, only dates to about 2010. This kind of dispute wasn't even on the radar of policymakers when the term network neutrality was coined a decade ago.

So a lot of network neutrality advocates are still fighting the last war, not noticing that the open internet is coming under attack on a new front. The other reason is that regulating the terms of interconnection on the internet is even more complex than regulating classic network neutrality. It's relatively straightforward to say that a network provider can't prioritize one type of traffic over another on its network.

But writing rules to govern when two networks must connect with each other and how much they can charge is really difficult. So FCC policymakers may have decided to tackle the easier problem first.

Not everyone thinks this stronger network neutrality rules and broadband reclassification are a good idea. Incumbent telecom companies, free-market advocates, and a number of members of Congress have all urged the Federal Communications Commission to retain the low-regulation "information service" category.

Here are the three biggest problems that, opponents claim, could be created by reclassification.

Gus Hurwitz, a legal scholar at the University of Nebraska College of Law, says that reclassifying could give the FCC the power to regulate broadband prices, connection and disconnection of service, and interconnection with other Internet companies.

Reclassification opponents say broadband providers will be less willing to open their wallets when there's a lot of uncertainty about when and how they'll be allowed to profit from their networks.

Also, if the FCC reclassifies, that decision is almost certain to trigger a lawsuit.

"If we do see reclassification, we're probably looking at another 2 to 4 years of just litigating questions of the commission's basic authority," Hurwitz says.

And politically, there are two ways opponents of reclassification could make life difficult for Chairman Tom Wheeler if he reclassifies. First, members of Congress can haul Chairman Wheeler before Congress to grill him about his policies. And second, telecom companies could mount more legal challenges to FCC decisions, forcing the agency to spend more time defending itself in court, leaving it with less time to pursue other initiatives.

The Federal Communications Commission is currently considering "reclassification," a legal maneuver that would allow the agency to enact stronger network neutrality regulations.

A favorite talking point of reclassification opponents is that the last time the FCC considered this option, in 2010, 74 Congressional Democrats signed a letter urging FCC chairman Julius Genachowski not to do it. Genachowski listened, choosing an alternative legal strategy that wound up being rejected by the courts in January.

Now history is repeating. Genachowski's successor, Tom Wheeler, is considering how to respond to that court ruling, and he is under pressure from network neutrality advocates to reclassify. And once again, telecommunications industry allies have circulated a letter among House Democrats opposing reclassification.

The letter was written by Rep Gene Green (D-TX), the same member of Congress who wrote the 2010 letter. And it warns the FCC not to "open the door to subjecting broadband service to a wide array of regulatory burdens and restrictions." A former member of Congress who is now a cable lobbyist has been emailing his former colleagues urging them to sign on. But this time, only 20 of the 199 Democrats in the House signed on.

[Commentary] Allowing Comcast or Time Warner Cable to build fast lanes on the internet means that they'll have enormous incentives to push everyone towards them -- and almost no incentive to improve the miserable standard experience in the slow lanes, which will remain expensive and congested.

Want Netflix to work better? Just pay Comcast a little more. You're a social networking startup that wants to take on Facebook? Better factor in the ISP tax to make sure your content loads as fast as Zuckerberg's. This is basically free money for broadband providers; Comcast throttled Netflix traffic for years, but when the company finally broke down and paid, speeds shot up 65 percent.

This is lawyer-money, not engineer-money. Everyone involved should feel dirty. Let's call the opposite of net neutrality broadband theater: the cable industry will claim it's spending a lot of money on innovation to make us feel better, but absent any competition or oversight, the rest of us will end up standing around like most of us do in airport security, with no shoes on, wondering where our dignity went.

[Commentary] The broadband industry does not like the idea of government regulations that would make it less profitable. In search of a more persuasive argument than that, Tom Downey, a lobbyist for the National Cable Telecommunications Association, is circulating a letter to members of congress arguing that "in the years that broadband service has been subjected to relatively little regulation, investment and deployment have flourished and broadband competition has increased, all to the benefit of consumers and the American economy." So is broadband investment flourishing? Not according to the NCTA's own data which shows investment booming in the years before the Great Recession and declining more recently. They looked at cumulative gross investment so that literally any possible state of the world will show an upward slope. Even if all the broadband industry did was repair lines that were downed in storms, cumulative investment would go up over time. But they threw in a bonus trick of using four-year periods (1996, 2000, 2004, 2008) and then switching to a five-year period for the last one.

[Commentary] In response to my post on the cable industry trade association's misleading broadband infrastructure investment chart, National Cable & Telecommunications Association (NCTA) came out with some new data that they say will correct the record left by the broadband industry.

Obviously the facts about declining investment aren't enough on their own to prove anything about Internet competition or the appropriate level of regulation. But the fact is that this is a profitable industry operating in a low interest rate environment that is choosing not to make the kind of capital investments that it made in years past.

Free Press says that Rep Gene Green (D-TX) is asking colleagues to sign onto a letter urging Federal Communications Commission Chairman Wheeler not to reclassify broadband.

"In the years that broadband service has been subjected to relatively little regulation, investment and deployment have flourished and broadband competition has increased," the letter argues. The letter warns that reclassification could open the door to a "wide array of regulatory burdens and restrictions" that could halt progress toward improved broadband service.

"I respectfully urge you to consider the effect that regressing to a Title II approach might have on private companies’ ability to attract capital," it concludes. Free Press also says that Tom Downey, a former member of Congress and current cable lobbyist, is contacting members of Congress and urging them to sign on.

Brian Dietz of the National Cable and Telecommunications Association declined to comment on that report, but he didn't deny that the group was "making our views known as widely as possible.”

A lot of members of Congress were caught off guard in 2012 when the Internet exploded in opposition to the Stop Online Piracy Act. Lobbyists for the motion picture and recording industries had assured them that the proposal, which involved creating a government-sponsored blacklist and forcing ISPs to block sites on it, wouldn't be too disruptive to the Internet ecosystem.

But the people who actually run the Internet were barely consulted. It would be nice if Congress had some technical experts on staff to analyze proposed legislation and advise members about its technical implications.

And in fact, Congress did have an agency like that, called the Office of Technology Assessment, until Newt Gingrich zeroed out its funding in 1995. Rep Rush Holt (D-NJ), one of the few members of Congress with scientific training, wants to change that. He recently introduced an amendment that would have allocated funds to re-start the agency. But it was defeated in a 164-248 vote.

When Mark Zuckerberg created Facebook in his Harvard dorm room, he didn’t need to ask Comcast, Verizon, or other Internet service providers to add Facebook to their networks.

He also didn’t have to pay these companies extra fees to ensure that Facebook would work as well as the websites of established companies. As soon as he created the Facebook website, it was automatically available from any Internet-connected computer in the world.

This aspect of the Internet is network neutrality.

Federal Communications Commission Chairman Tom Wheeler's decision to water down network neutrality regulations isn't even the biggest threat to the open Internet right now. The Internet itself is changing in ways that threatens to make the conventional net neutrality debate almost irrelevant.

Netflix’s deal to pay first Comcast then Verizon for private connections was signed only under protest. Netflix charged that it had been coerced to pay "tolls" just to deliver content to their own customers. That might sound like a net neutrality violation, but the practice doesn't actually run afoul of the network neutrality rules advocates have been pushing for the last decade. Those rules ban "fast lanes" for content that arrives over the Internet backbone, the shared information super highway that carries the bulk of the Internet traffic today.

Conventional network neutrality rules don't regulate this kind of deal. If the only way to get excellent service on America's largest broadband networks is to negotiate a private connection directly to those networks, smaller companies with less cash and fewer lawyers are going to be at a competitive disadvantage.

In other words, those public transit links that were providing Netflix with subpar service could become the de facto slow lanes on Comcast's network, while private, direct connections could become the fast lane. Neither the FCC's 2010 Open Internet Order, which the courts struck down earlier in 2014, nor FCC Chairman Tom Wheeler's new proposal, would govern this kind of interconnection dispute.

The bottom line is that network neutrality advocates will need to broaden their thinking to respond effectively to the Internet's changing structure. Merely banning fast lanes isn't going to accomplish much if the largest ISPs are allowed to sell new private roads.

[Commentary] People who love the Internet's lack of regulation have its bill-and-keep structure to thank.

Unlike the telephone industry, which had a sender-pays model (the customer who dials the phone pays for the call; the payment goes to the long-distance company of the customer's choice; the long-distance company, in turn, makes a payment to the local phone company that operates the other end of the connection), in the bill-and-keep Internet, companies at each "end" of a connection bill their own customers -- whether that customer is a big web company like Google, or a an average household. Neither end pays the other for interconnection. Instead, the Internet Service Provider (ISP) at each end is responsible for ensuring that its traffic can reach the ISP at the other end.

This is part of the service that the ISP sells to its customers, a guarantee that traffic will get where you want it to go. The terminating monopoly problem occurs when a company at the end of a network not only charges its own customers for their connection, but charges companies in the middle of the network an extra premium to be able to reach its customers.

In a bill-and-keep regime, the money always flows in the other direction -- from customers to ISPs to transit companies. And because the market for transit is highly competitive, there's no need for government regulation of transit fees. It's an ordinary market where if a transit company tries to charge too much, ISPs will switch to another company.

By solving the terminating monopoly problem, bill-and-keep makes possible a robust and competitive market for Internet connectivity that requires minimal government oversight.

Since 2010, Comcast has engaged in a campaign to undermine the bill-and-keep system. In a letter to the FCC defending its handling of a pay dispute with Level 3 for Netflix content delivery, Comcast argued that the two companies' "traffic ratio" -- the ratio between the traffic Comcast was sending Level 3 and the traffic Level 3 was sending Comcast -- had been thrown out of balance by the growth of Netflix streaming. Comcast portrayed it as a standard industry practice for the network that sends a disproportionate amount of traffic to pay the receiving network for the costs of carrying the traffic.

The traffic ratio rule Comcast advocated with Level 3 in 2010 was a variation on the sender-pays rule. It will create the same kind of terminating monopoly problem that plagued the long distance telephone market. But that might not seem like a bad thing if you own the monopoly.