McAdams On: Title II Overkill

MEAN, WHILE—Reclassifying broadband access under Title II is like pounding push pins into a cork board with a sledgehammer. The intent is to impose network neutrality rules—no blocking, throttling or fast lanes—of which there have been a total of two incidents. Comcast got caught throttling BitTorrent in 2007, and despite having won that court battle with the FCC, Comcast stopped throttling BitTorrent because it made the Interwebs very, very unhappy. The second instance involved Netflix paying AT&T for a fast lane, to which the Interwebs replied, “meh.”

It seems fast lanes are despised in theory but OK in practice. Fast lanes are what got us to Title II in the first place. Federal Communications Commission Chairman and former cable and telco boss Tom Wheeler proposed allowing Internet fast lanes last May. Internet citizenry went bonkers, much to the delight of Larry and Sergey, the Google Brothers. The chairman’s proposal got something like 4 million comments extolling the virtue of the Internet exactly the way it is now. When Netflix and AT&T announced a fast-lane deal in July—crickets.

Then in November, while the chairman reportedly was telling executives from Google, Yahoo, Etsy and other Websters that he preferred a more “nuanced solution” than Title II, his boss, the president, was racking up views on his YouTube video calling for Title II. (C’mon, guys. It’s not the Federal Passive-Aggressive Communications Commission.)

So what exactly is the point of reclassifying ISPs under Title II? It certainly will appease Larry and Sergey’s 4 million friends and probably keep protesters from blocking Wheeler’s drive, but is it necessary? Analyst Rich Greenfield at BTIG doesn’t think so.

“We did not believe any rules were needed. [The] Internet works great,” he said, sharing a sentiment he tweeted in November: “Dear @BarackObama. Without regulation, my broadband is 100 Mbps from 56 Kbps & costs less than my 1995 phone bill.”

Whether or not it’s necessary is one thing; whether or not it’s even possible is another. Network neutrality itself was hung up in court for six years in two separate lawsuits. Greenfield reckons ISPs will sue over Title II “the minute it’s filed with the Federal Registrar.”

We do not yet know the precise language of Wheeler’s proposal, which will be put to a full commission vote during its Feb. 26 open meeting. The vote’s likely to be 3-2 in favor, with Republicans Ajit Pai and Michael O’Rielly rending their garments. From there, it becomes a hot mess.

Republicans in general cast a hairy eyeball on network neutrality. Democrats in general believe it is the apple in apple pie; meaning that, court cases aside, Congress will have a catfight. Depending on who’s back needs scratched for what, Republicans could overturn a Title II Order with a Congressional Review Act, an amendment to the ’96 Telecommunications Act, or by simply telling the FCC it can’t spend any money on implementation.

Further, Wheeler is proposing a sort of Title II light, with some, but not all, of the provisions outlined in the Telecom Act. Again, we don’t yet know the details of his proposal, but we do understand from information released this week that it will not, for example, impose sections pertaining to rate regulation, Universal Service Fund contributions and other new taxes or fees.

This partial application of Title II is referred to as “forbearance,” something “unlikely to work in this situation,” Wells Fargo analysts wrote in November. “While forbearance is something the FCC has used in the past, Title II in and of itself is so complex—with 70-plus provisions—this is not a realistic or practical solution, in our view.”

Veteran D.C. attorney Jim Burger doesn’t think so, either.

“They basically have stripped so much out of the section that isn’t applicable… prices, for example, terms of service… a whole bunch of things that are regulated for common carriers,” he said. “The interesting thing is, what are the large ISPs going to do? Comcast in particular is saying, ‘look, we’re all for net neutrality light. We’re all right with treating everybody fairly, but we don’t like Title II.’ Somebody out there’s likely to sue because they’ve cherry-picked from Title II.”

Burger also is concerned on a more prosaic level.

“The thing I worry about, with history of bureaucracy and regulation, once you start regulating, it’s hard to stop,” he said. “So the problem with starting a new regulatory regime is, where do you go from there? Rooting out and getting rid of a major function of a regulatory agency is like pulling teeth. Look at all the work that’s already gone into this. Think of them doing Title II… then there’s mission creep. You open up an office of consumer complaints, and consumers start complaining. It takes on a life of its own, and it exists for the purpose of preserving itself.”

So what is a viable alternative to imposing Title II in order to ensure network neutrality principles? Again, Jim Burger:

“All of this stuff wouldn’t be a problem if we had competition.”