Internet/Broadband

The Federal Communications Commission’s 2015 Open Internet Order follows years of advocacy to implement network neutrality rules, which appears to contravene Congress’ intention that the internet be free of regulation and the people’s will for a free market for broadband. The application of the Title II regulatory framework to the internet has harmed consumers and innovators. While proponents claim they want competition in the broadband market, the objective of Title II is to create a system of government-owned broadband networks under FCC control and to significantly reduce, if not eliminate, private-sector provision.

A group of small and mid-sized manufacturers of broadband network products has told the Federal Communications Commission to roll back Title II, just one in a wave of comments coming in to the FCC by July 17, the deadline for initial comments in FCC Chairman Ajit Pai's net neutrality proposal. The makers of modems and routers, switching equipment and semiconductors—which included Blonder Tongue Labs, FiberSource, Infinera and more than a dozen others—say their input should get "special weight" since the D.C. appeals court that has principal jurisdiction over FCC issues has said those who sell goods and services have an "incentive to make a completely unbiased judgment on the matter." Their judgment, they told the FCC, is that there is a "serious and substantial risk" that continuing to regulate broadband under Title II "will have a negative impact on the economic well-being of the numerous small and medium size companies that make hardware and software used to provide Internet services."

[Commentary] At bottom, network neutrality is nothing more than good old-fashioned rate regulation. Accordingly, if you are going to impose rate regulation, then Title II prescribes certain rules you must adhere to in order to ensure that the regulated firms’ Fifth Amendment due process rights are not violated....At stake...is whether an administrative agency should be permitted to re-write the law—especially when it does so simply to fit a political agenda. According to the D.C. Circuit in United States Telecom v. FCC, the answer appears to be “yes.” Citing the Supreme Court’s seminal case in Brand X, the D.C. Circuit found in USTelecom that the FCC had wide—nearly unbounded—latitude to interpret the Communications Act and not only upheld the agency’s decision to reclassify but also upheld the agency’s ability to “tailor” how it chose to implement Title II. In so doing, the D.C. Circuit—rather by design or by omission—has taken Chevron deference to the extreme.

USTelecom has greatly expanded the commission’s authority to set the rates, terms and conditions of private actors well beyond its statutory mandate. Accordingly, the statutory construct of “Title II” now has no meaning; it is some bizarre legal hybrid that the FCC has made up and the D.C. Circuit has sanctioned. For those who care deeply about due process and the rule of law, the precedent set by the D.C. Circuit in USTelecom is deeply troubling and is a case that we will likely have to deal with its aftermath for years to come.

[Lawrence J. Spiwak is president of the Phoenix Center for Advanced Legal & Economic Public Policy Studies.]

IBM said that it has achieved a breakthrough in security technology that will allow every business, from banks to retailers to travel-booking companies, to encrypt their customer data on a massive scale — turning most, if not all, of their digital information into gibberish that is illegible to thieves with its new mainframe.

“The last generation of mainframes did encryption very well and very fast, but not in bulk,” said Ross Mauri, general manager of IBM's mainframe business. Mauri estimates that only 4 percent of data stolen since 2013 was ever encrypted. As the number of data breaches affecting US entities steadily grows — resulting in the leakage every year of millions of people's personal information — IBM argues that universal encryption could be the answer to what has become an epidemic of hacking.

As part of Federal Communications Commission Cgairman Ajit Pai's proposal to roll back Title II and review network neutrality regulations, the agency is proposing to use a "multiplier" to calculate the amount, if any, of lost investment from Title II, beyond the immediate investment to the total impact of that lost investment, say on construction workers not getting paid because of buildouts not being built out -- something like counting the number of other dominoes that fall rather than just counting the first one. The Free State Foundation, in comments to the FCC, submitted an assessment of such a cost-benefit analysis by senior fellow Theodore Bolema that suggested it would be reasonable to multiply lost investment assessments by between 1.25 and 1.75, which would mean Free State's own estimate of a $5.6 billion reduction in what would have been invested between 2015 and 2016 were Title II not in place would translate to more like between $7 billion and $9.8 billion. "If the current investment trend were to continue," said Free State president Randolph May in the FCC submission, "the negative economic impact resulting from the Open Internet Order regulatory regime will only become greater over time.”

[Commentary] If there's anything lawmakers should have learned from activists over the past few years it's this: Do not make the internet angry.

In March, congressional Republicans once again felt the wrath of the internet community when they reversed the Federal Communications Commission’s broadband privacy rules. The blowback from the vote was massive, prompting members of Congress to hide from angry constituents. Now President Donald Trump and FCC Chairman Ajit Pai are digging even deeper and looking to overturn the historic 2015 Net Neutrality win. If they think the internet is going to take that sitting down, they have another think coming. The internet community and allied companies come together to remind President Trump, Chairman Pai and Congress that millions of people in America have made their support for net neutrality known. They know that the repeal of net neutrality means the end of real privacy protections, means paying more for worse service — and enables companies like AT&T, Comcast and Verizon to decide how you use the internet.

[Sandra Fulton is the government relations manager for Free Press Action Fund]

Key tech industry leaders are expressing openness to having Congress step in to legislate net neutrality — putting pressure on Democrats who've been adamantly opposed to such a move. Facebook’s Mark Zuckerberg and Sheryl Sandberg said they’re willing to work with lawmakers on the issue, and Reddit’s Alexis Ohanian expressed a similar view. That flies in the face of the resistance many Democrats and activists have shown to working with Republicans on enshrining open internet protections into law. Democrats have been focused on stopping the GOP-led FCC from rolling back the current net neutrality rules, and fear their Republican colleagues want to pass weaker standards than what the FCC has already put in place.

[Commentary]

1. Freedom of expression isn’t a function of the values of a place but the structure of the information infrastructure. Oppressive regimes led by the likes of Adolf Hitler and Joseph Stalin understood this and used the power of centralized/consolidated information systems to spread propaganda.
2. The 1960s were famous for the rejection of these centralized systems (in this case, the Bell/AT&T monopoly). And, the internet was explicitly designed to be network neutral as a way to fight consolidation.
3. This network neutrality or net neutrality means that every service on the internet competes on a level playing field and it is users (i.e. us) that choose which internet service wins. This system brings its own set of issues with it but it is better than the alternative.
4. Net neutrality principles are closely aligned with the principles behind the freedom of expression. So, the real question underlying the net neutrality discussion is — how much do you care about freedom of expression?

AT&T plans to separate its telecom operations from its media assets after clinching a takeover of Time Warner, putting veteran AT&T executive John Stankey in charge of the Time Warner business, according to people familiar with the matter. The reorganization would separate AT&T’s wireless business and its DirecTV satellite television business from the newly acquired Time Warner assets, including HBO, Warner Bros., and the Turner cable unit that houses CNN. The new structure would keep AT&T Chairman and Chief Executive Randall Stephenson atop the company with two top lieutenants, in an organization that would resemble Comcast Brian Roberts, Comcast’s chairman and chief executive, has two segment chiefs: one in charge of the cable business and the other heading NBCUniversal. Under the new structure, DirecTV would be combined with the company’s telecom operations, which are run out of AT&T’s Dallas headquarters and include both the wireless and landline business, the people familiar with the matter said. That segment would be run by John Donovan, another AT&T veteran who is currently chief strategy officer.

[Commentary] A curious thing happened on a day that many internet companies and public policy groups had christened a “Day of Action” aimed at protesting the Federal Communications Commission’s plan to overturn so-called net neutrality rules. The curiosity was that several broadband companies — the very same companies that pushed to rewrite the rules that undergird net neutrality — put out statements suggesting that they, too, supported the aims of the protesters.

So why, now, are broadband companies suggesting that they support the aims of the other side? There are two possibilities: A cynic might argue that it’s just puffery, that the broadband industry is simply trying to present a friendly image to an outraged online horde. Or you might take them at their word. Here’s one idea for longtime proponents of network neutrality: Call the broadband companies’ bluff, if that’s what it is. Maybe it is time to push Congress, rather than the FCC, to take up the neutrality fight — and maybe, finally, end the debate for good. Internet giants control the world’s most important channels for information, from your Facebook feed to Google results to your phone’s home screen. They are more than capable of applying enormous pressure to members of Congress to push for what they want. And then, if nothing else, we’ll be able to see where the broadband companies really stand.