Daniel Lyons

[Commentary] Broadband speed has become a key metric for internet policy. Outgoing Federal Communications Commission Chairman Tom Wheeler has repeatedly emphasized that 25 megabits per second (Mbps) download speed should be “table stakes” for a 21st century network. Others have pushed for higher speeds. Susan Crawford, for example, has called for a nationwide gigabit network. But when pressed, advocates typically offer little to justify these benchmarks beyond a generic appeal to the truism that “more is better.”

Given the role that such benchmarks play in telecommunications policy, the incoming administration should consider establishing a robust, objective, activity-based definition of minimum broadband speed.

[Daniel Lyons an associate professor at Boston College Law School]

[Commentary] During the internet service provider privacy proceeding, Federal Communications Commission (FCC) Commissioner Mignon Clyburn teamed up with Sen Al Franken (D-MN) to call for a ban on arbitration clauses in consumer telecommunications contracts. They argued that such clauses “effectively lock[] the courthouse door” on customers and allow companies to evade responsibility for misbehavior. The proposed ban did not make it into the final privacy order, though FCC Chairman Tom Wheeler promised to open a new rulemaking proceeding on the issue in February.

Thankfully, the November election likely makes this threat moot. But because the issue is unlikely to go away, it is worth exploring why this proposed ban is both bad law and bad policy. That’s the subject of my most recent Perspectives article, published earlier in Dec by the Free State Foundation.

[Commentary] Traditional cable is a declining industry: Nielsen estimates the number of households subscribing to pay television fell by 1.7 million last year alone, driven by increased competition for new Internet-based video alternatives such as Netflix. AT&T is trying to deliver its product in new ways to meet the needs of those dissatisfied with the traditional cable model—including by making its product available on wireless devices as well as televisions. Zero-rating makes DirecTV Now even more attractive for AT&T wireless subscribers—and may help the company in the highly competitive wireless market as well.

[Daniel Lyons is an associate professor at Boston College Law School]

[Commentary] Though tech policy was not a significant focus for the Trump campaign, one aspect should be vitally important to the new administration: expanding broadband access.

Policymakers across the political spectrum recognize the importance of narrowing the digital divide. Unfortunately, while many acknowledge the problem, a solution has proven elusive, in part because of the flotsam and jetsam of legacy universal service programs that hamper efforts at revolutionary change. Through universal service reform, the incoming administration has an opportunity to achieve significant and lasting reform on an issue that has bipartisan support and that affects the population upon which President-elect Trump focused his campaign message—those at risk of being left behind by the forces of change.

In March 2016, AEI published my white paper outlining a proposal for more comprehensive universal service reform. The high cost for monthly broadband service is only one of many factors that prevent low-income households from purchasing internet access. Even with a subsidy, many families cannot afford a computer, while others do not fully appreciate the value of online connectivity. To address these multiple drivers, the white paper encourages Congress and the Federal Communications Commission to take a more holistic approach, encompassing not only a targeted monthly subsidy but also digital literacy programs in local communities and a one-time equipment purchase subsidy for qualified households. It also reflects a market-based approach, focused on increasing the purchasing power of low-income households rather than simply giving them a monthly handout.

[Lyons is an associate professor at Boston College Law School]

[Commentary] In retrospect, the key moment for network neutrality was neither the Federal Communications Commission’s 2015 Title II reclassification order nor President-elect Donald Trump’s 2016 electoral victory. It was outgoing FCC Chairman Tom Wheeler’s decision to reject a legislative compromise that would have insulated net neutrality from review, a display of regulatory hubris that empowered President-elect Trump to undo President Barack Obama’s signature tech policy initiative.

It is unlikely that the Open Internet Order will survive the Trump Administration. Tech policy was not a significant focus of the Trump campaign, but the president-elect’s general antiregulatory bias suggests his administration will not favor the policy. Moreover, Republicans have uniformly criticized net neutrality, which they view as unwarranted and a deterrent to investment in broadband networks. The order itself was passed on a party-line vote against the vociferous dissents of both Republican commissioners, who decried the agency’s regulatory overreach.The more realistic question is whether the doctrine will suffer a fast or slow death.

[Daniel Lyons is an associate professor at Boston College Law School]

[Commentary] It is far too early to predict with certainty which issues will be the focal point of regulatory scrutiny of the AT&T/Time Warner merger. But based on the issues flagged in the Comcast/NBC proceeding, one can expect that regulators will at least ask about the following topics:

Nondiscriminatory access to programming: Many of the conditions placed on the NBC transaction involved Comcast’s commitment to allow rival cable operators and potential online video distributors access to Comcast-owned content. One can imagine regulators will discuss similar conditions to assure that AT&T’s library of content post-transaction will not remain the exclusive prerogative of AT&T customers. It’s important to note that, independently of any merger conditions, the Federal Communications Commission’s program access rules give the agency jurisdiction to investigate such conduct if a cable company complains.

Management of Hulu: Although the transaction is primarily vertical, there is one potential anticompetitive wrinkle. Time Warner has a 10 percent stake in Hulu, which potentially competes with AT&T U-Verse, DirecTV, and the company’s proposed DirecTV Now virtual cable offering. In the NBC case, regulators required Comcast to be a silent partner with regard to its 33 percent stake in Hulu, out of fear that Comcast would steer Hulu in ways that limited competition. The Justice Department is likely to ask similar questions with regard to AT&T’s exercise of its shares as well.

Zero-rating of Time Warner content: The FCC conditioned its approval of the Charter-Time Warner Cable merger on the company’s commitment to avoid usage-based pricing. Given the heat and light about this issue, one might anticipate regulators to explore whether AT&T would be permitted to exempt Time Warner content from monthly wireless data caps. Such agreements might raise anticompetitive concerns, although I have written before that these concerns are probably overblown, particularly in today’s competitive wireless marketplace. Nonetheless, regulators are likely to consider this issue as part of their overall regulatory approval.

[Daniel Lyons is an associate professor at Boston College Law School]

[Commentary] For the past two years, internet policy types have debated the wisdom of reclassification — the decision by the Federal Communications Commission (FCC) to saddle broadband providers with arcane statutory common carriage restrictions originally developed to discipline 19th century railroads. Just when we thought we had covered every possible angle of that debate, the Ninth Circuit Court of Appeals added a new wrinkle.

In FTC v. AT&T Mobility, the court broadly exempted common carriers from a key antitrust law designed to promote fair competition. The ruling could have far-reaching implications for the future of internet regulation. A status-based common carrier exemption made sense in the early 1900s, when Congress relied on other mechanisms such as tariffs to discipline common carrier monopolies. It is more problematic today, where competitive markets require antitrust oversight to police against abuses. The FCC may aggrandize power to itself to fill the gap, but as it has shown in the privacy proceeding, it does not always view issues through a competition law perspective. Overall, the Ninth Circuit has shown yet another unintended consequence of the FCC’s hasty decision to resurrect common carriage as a vehicle for its paid prioritization ban — and I fear this will not be the last.
[Lyons is an associate professor at Boston College Law School]

[Commentary] Much of the Federal Communications Commission municipal broadband order focused on the benefits of municipal broadband as a policy matter. The agency stressed the value of facilities-based competition and the effects of municipal entry on prices and service levels of incumbent private broadband providers. But legally, this was little more than smoke and mirrors. The key question before the court was not whether municipal broadband was good policy. Rather, the key question was who should decide whether municipal broadband is good policy and what restrictions, if any, should be placed upon municipal broadband providers. More specifically, the case represented a classic power struggle between the FCC and the states. Can a federal agency in Washington tell the sovereign states what they can and cannot do with regard to the cities they operate?

Unfortunately for the FCC, the contours of its authority to preempt state law were settled long ago. The broader lesson to be learned is that agencies should pay more than mere lip service to the legal restrictions on their authority. It is not enough to be right on policy; there are (and should be) limits on the ability of agencies to finesse the law to achieve narrow policy objectives. These legal restrictions often indicate broader, more fundamental principles at stake than the outcome of a particular policy dispute — in this case, state sovereignty. It seems an important lesson to remember as the telecommunications community struggles with the effects of reclassifying broadband as a public utility in order to secure a per se ban on paid prioritization.

[Lyons is an associate professor at Boston College Law School]

[Commentary] The network neutrality opinion may be the most significant court decision in the telecom space since the Supreme Court’s Brand X decision a decade ago. In a highly deferential decision, the DC Circuit court ratified the Federal Communications Commission’s controversial reclassification of broadband Internet access as a Title II common carrier service, setting the stage for a broad regulatory agenda and permitting greater oversight over the Internet ecosystem. Given the stakes, it is unsurprising that the agency’s opponents refuse to throw in the towel, instead vowing to take the case to the Supreme Court. But will the high court take an interest in the case? If the Justices are interested in the case, there is one important legal question they may find worthy of their time and it is rooted in the deference that was key to the agency’s victory: the scope of the “major questions” exception to the Chevron doctrine.

[Commentary] Much of the controversy surrounding the Federal Communications Commission’s network neutrality proceeding involves the issue of paid prioritization: whether an Internet content or application provider can pay for priority delivery or minimum guaranteed speed over last-mile broadband networks.

Title II Section 202 prohibits telecommunications providers from engaging in “unreasonable discrimination.” But there’s an important limitation on the scope of Section 202. It does not require that the telecommunications provider offer only a single class of service to all people. Rather, it only prohibits discrimination among “like” services -- services that a customer may view as “functionally equivalent.”

In other words, we need to separate differentiation (offering different products at different prices) from discrimination (offering the same product at different prices).

[Lyons is an associate professor at Boston College Law School]