McAdams On: Network Neutrality and the World of Statecraft

COINCIDENCE—This will sound like a conspiracy theory, so let me just say that I find most conspiracy theories tedious and not contributive. Most would require tactical organizational skills that do not exist in Washington, D.C. There’s a boatload of shenanigans going on in D.C., to be sure, but no one’s keeping aliens prisoner outside of Roswell. I’m pretty confident on that one.

The unraveling of network neutrality is more of a shenanigan. It’s not an earth-shaker that the D.C. Court of Appeals bounced it back to the Federal Communications Commission. The court ruled that while the FCC has the authority to regulate broadband, it cannot impose network neutrality rules under the current classification of broadband as a Title I service under the 1996 Communications Act. Title I provides the FCC with “ancillary” jurisdiction over wired and wireless services; Title II provides more explicit authority.

Robert McDowell called it back in December of 2010, when the commission adopted a network neutrality order during his tenure there:

“The order claims that it does not attempt to classify broadband services as Title II common carrier services. Yet functionally, that is precisely what the majority is attempting to do to Title I information services, Title III licensed wireless services, and Title VI video services by subjecting them to nondiscrimination obligations in the absence of a congressional mandate. What we have before us today is a Title II Order dressed in a threadbare Title I disguise. Thankfully, the courts have seen this bait-and-switch maneuver by the FCC before, and they have struck it down each time.”

The court saw it in 2007 when the commission cited Comcast for throttling BitTorrent. Comcast sued in the D.C. Appeals Court and won on the same premise that network neutrality was struck down on last week.

“For a variety of substantive and procedural reasons, those provisions cannot support its exercise of ancillary authority over Comcast’s network management practices,” the court wrote in its April, 2010 decision. “We therefore grant Comcast’s petition for review and vacate the challenged order.”

To clarify, network neutrality rules prohibit Internet Service Providers like Comcast from fiddling with the bits that traverse the networks they paid to build and manage. I am not a fan of network neutrality in part for this very reason—it violates the Fifth Amendment, in my view.

It’s no different than buying farmland, building the infrastructure and having the government tell you what you can and cannot grow. Which—behold!—the government does, but under a subsidy program. So why not pay ISPs to abide by network neutrality? Because that would be as ridiculous as comparing U.S. broadband speeds to those of Korea or any other country with a tiny fraction of the landmass of the United States. I’ve commented on this absurdity before, but it continues to persist in what passes for the national dialog about broadband in this country. (Richard Bennett does a cogent takedown at High Tech Forum.)

The other reason I’m not all acolytic over network neutrality is because it presumes what I’m getting over the Internet isn’t already being controlled by the search engine of my choice. We’ll call it “Google.” Google is worth $390 billion precisely because it does control what I see on the Internet. How is that different from Comcast throttling BitTorrent streamers? It’s not, really, except that A) we’ve all tacitly accepted Google’s interference as a fact of life, and B) it’s virtually impossible for the average user to quantify Google’s impingement on users versus throttling by an ISP. To hold up network neutrality as a tenant of a “free and open Internet” is like complementing the naked emperor on his fine attire.

So where’s the conspiracy theory already? It goes like this. The FCC already was under pressure from Google and the file-sharing community to impose network neutrality when Comcast was caught throttling BitTorrent. Here’s Google’s Eric Schmidt in 2006:

“The Internet as we know it is facing a serious threat. There’s a debate heating up in Washington, D.C., on something called ‘net neutrality’—and it’s a debate that’s so important, Google is asking you to get involved. We’re asking you to take action to protect Internet freedom.”

Thus, “Internet freedom” already was established in the D.C. Lobbyist Lexicon when Comcast gifted its proponents. This all came about as a new Democratic Administration entered the scene with a goal to cover the country with the fastest broadband service on earth, upon which Google could do anything it wished.

The Obama Administration and Democrats in general pushed for network neutrality while the GOP railed against it. So the Administration came up with a broadband plan that promised to put several billion dollars in the Treasury for Congress to spend six or seven times. The plan involved taking 40 percent of the TV spectrum and selling it to wireless providers.

This plan, however, depended on the participation of the very ISPs who would be subject to network neutrality, particularly Verizon and AT&T, because they have all the money. Spectrum decked out in net neutrality regulations would attract less of it for Congress to have already spent.

So then you have an FCC caught in the crosshairs between Google and the major ISPs as well as an expectation from Congress to cough up $26 billion in spectrum auction proceeds. The agency had to do something, and it was becoming increasingly clear that it would not involve regulating broadband under Title II.

By May of 2010, more than 275 members of Congress from both sides of the aisle had “urged” then-FCC Chairman Julius Genachowski not to try it. This is more D.C. slang for, “we’ll reverse it so fast your head will spin.” This was due in part to the aforementioned spectrum auction proceeds, which Congress has spent at least once extending unemployment benefits. Never mind both the spectrum and the auction have yet to materialize.

Genachowski needed Google because none of the major ISPs were ever going to provide wireless broadband in the boonies, while Google was doing it with nascent white-space technology. He also needed Verizon and AT&T positioned for a pretend bidding war over spectrum so that whatever members of Congress remained alive by the time of the auction could crow about it. Crowing is of tantamount importance in Washington, D.C., and must never be underestimated.

The result was the 2010 network neutrality order that required “all broadband providers to publicly disclose network management practices, restrict broadband providers from blocking Internet content and applications, and bar fixed broadband providers from engaging in unreasonable discrimination in transmitting lawful network traffic.” It reflected the language of Title II, which authorizes the commission to compel Internet service free of “unjust or unreasonable discrimination in charges, practices, classifications, regulations, facilities or services.”

Title I service, meanwhile, can be regulated only “reasonably ancillary to the effective performance” of its responsibilities. Net neutrality applied under Title I would be a cinch for Verizon’s lawyers to overturn in court, which they did. It will now appear to hang in the balance while the new FCC chief, Tom Wheeler, decides his next move.

In the meantime, virtually everyone got what they wanted. The ISPs got out from under network neutrality and will be more likely to bid up spectrum for wireless broadband to the delight of Congress, while supporters can hope that Wheeler’s FCC will keep it alive.

Full of sound and fury, signifying nothing.