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Net neutrality critics and advocates alike all despise the plan equally, but for different reasons

At long last, the new FCC Chairman Thomas ("Tom") Wheeler has presented his vision of net neutrality.  But replacing his predecessor's ambitious, yet failed regulation has proven as difficult as one might imagine.  While there's plenty of time for revisions, one thing is clear at this point -- if the previous version of net neutrality managed to anger some, the new plan accomplishes an even more dubious feat -- angering just about everyone.
 
I. Twin Rejections Paved Road to the New Plan
 
The first time the U.S. Court of Appeals for the D.C. Circuit struck down the U.S. Federal Communications Commission's (FCC) net neutrality draft rules on behalf of Comcast Corp. (CMCSA) back in 2008, they ruled that the FCC lacked authority to regulate companies throttling the internet.
 
The same court -- and even some of the same judges -- reevaluated their decision earlier following a fresh lawsuit from Verizon Communications Inc. (VZ) and others over the FCC's second try at a net neutrality policy.  Those rules -- the 2010 "Open Internet Order" drafted under former Chairman Julius Genachowski -- were struck down in a Feb. 2014 decision.  However, this time around the decision to kill them were due not to criticism of the FCC's authority to regulate, but rather a complaint that it was regulating against "common carriers" in a discriminatory fashion.

Julius Genachowski
Former Chairman Genachowski tried adamantly to push net neutrality through, but his time atop the FCC ended without being able to craft a policy that was defensible in court.
[Image Source: Getty Images]

But the court did critically rule that the FCC was empowered to enforce some form of net neutrality under its powers granted by Congress.  Specifically, it decided upon reevaluation that net neutrality falls under the FCC's Congressionally ordered duty to enforce a "vibrant and competitive free market" (47 U.S.C. § 230 Chapter 5, Subchapter II, created by The Communications Act of 1934 [PDF], modified by the Telecommunications Act of 1996).
 
That decision put the pressure on the FCC to "reboot" net neutrality, trying its hand at a third draft under Chairman Wheeler.  Pressure has mounted in recent months as part of the warning delivered by Netflix, Inc. (NFLX) came true -- Comcast subsequently began throttling Netflix's service, forcing it into an agreement to pay annual fees of several million dollars annually, according to reports (the exact dollar figure was not disclosed).
 
After paying this toll, Netflix was unthrottled, but the incident was both damaging to Netflix and alarming to the internet industry as a whole.  Customers were quick to note that shortly after the decision, the streaming video service announced that it would be charging new customers a higher rate later this year.

Netflix turtle speed
Netflix was recently forced to pay fees to Comcast to avoid being condemned to the "slow lane". [Image Source: Mashable]

Last week the FCC in a roundabout way delivered part of its response, when Chairman Wheeler's latest was shared with some members of Congress.
 
It didn't take long after the release of the plan for a firestorm of criticism to ignite over it.
 
II. A Fair Compromise, or Special Interest Debacle?
 
According to net neutrality advocates, the FCC seemed to mostly ignore the roughly 10,000 comments that were submitted by the public during the last couple of months.  Instead the FCC focused on the 69 or so lobbyist interests that reached out to it in recent months offering political payments to both parties if they bent or tweaked the rules in certain directions.
 
Many had feared this might happen given Chairman Wheeler's background as a telecom industry lobbyist; now those fears may be coming true.

Tom Wheeler
Chairman Wheeler's critics are quick to point to the time he spent as a telecom lobbyist.
[Image Source: Bloomberg]

Under the new plan Mr. Wheeler proposes allowing internet service providers fees to charge fees to create internet "fast lanes", while condemning those who don't want to or are unable to pay (e.g. startups and smaller sites) to the internet's "slow lane".  To be fair, Mr. Wheeler phrased this in slightly different terms, saying effectively that most sites will remain at "normal speeds" while others will be accelerated via unique business models.
 
But given that the plan fails to define what "normal" speed is and has no prohibitions on throttling explicitly, virtually every expert says that the plan boils down to fast lanes and slow lanes.

Slower traffic keep right
The new plan allows ISPs to charge for internet "fast lanes", as Comcast is doing with Netflix.  Those who don't pay may be bumped to "slow lanes". [Image Source: Gas Buddy]

So what does the plan do?  Mr. Wheeler blogged about it last week, trying to defend his controversial strategy.  He wrote:

There has been a great deal of misinformation that has recently surfaced regarding the draft Open Internet Notice of Proposed Rulemaking that we will today circulate to the Commission.
...
To be clear, this is what the Notice will propose:

 
  1. That all ISPs must transparently disclose to their subscribers and users all relevant information as to the policies that govern their network;
  2. That no legal content may be blocked; and
  3. That ISPs may not act in a commercially unreasonable manner to harm the Internet, including favoring the traffic from an affiliated entity.
But again, this seems slightly disingenuous, as he didn't address the main sources of the criticism.  The draft does forbid a few extreme practices including outright blocking of websites (unless they engage in illegal activity), favoring traffic of an in-house competitor to a third party offering, and ISPs must publish their throttling plans in a clear fashion.
 
III. Why (Almost) Everyone Hates the Plan
 
However, the crucial issue that has net neutrality advocates fuming mad is that the new plan has literally no provisions to firmly block throttling or accepting fees from third-party services to create a "fast lane".  In other words, this version of net neutrality isn't so neutral.
 
Even the White House has been silent on the new plan, perhaps not wanting to get caught up in the controversy.  A petition launched Friday on We The People -- the White House petition site -- called on the President to scrap Mr. Wheeler's latest rules and offer up a plan for a truly "neutral" internet.  That petition had over 30,000 signatures by Monday.
 
Most Democrats in Congress expressed outrage at the idea of internet "fast lanes" and "slow lanes", calling it antithetical to net neutrality, taking to Twitter to voice their thoughts.  
Chairman Wheeler will have a tough time convincing Democrat-appointed Commissioners Mignon Clyburn and Jessica Rosenworcel to support the plan.
 
And if Democrats hated the plan for what it didn't do -- ban throttling -- Republicans hated it even more vehemently for what it did do -- regulate the internet to some degree and ban outright blocking or favoring of in-house services.  They wanted to see net neutrality killed altogether.  Rather than "monopolistic" anticompetitive tools, Republicans in Congress view blocking websites as a "free market solution" -- valid emerging business tactics that should not be stifled.  Given this opposition, the pair of Republican-appointed Commissioners will likely vote against Chairman Wheeler's plan.
 
Congress Buillding wide
Neither Republicans nor Democrats are pleased with the new net neutrality draft.
[Image Source: U.S. Congress]

Both sides also dislike the vagueness and ambiguity of some parts of the proposal.   While each party at times in other bills defends such vague terminology -- when it suits them -- in this case both sides take issue to it largely because the terminology isn't really advancing their view.
 
One thing is sure after last week's response; both major sides of the issue find it offensive in different ways.  It seems that nobody is pleased.
 
IV.  Special Interests: We Asked You to KILL Net Neutrality, Not Disfigure It
 
Barring a change to the proposed rules, the Chairman's office must now try to desperately convince Congressional Democrats and his fellow Democratic commissioners to rethink their opposition of throttling and support his weakened brand of net neutrality.  But things are looking dire for his plan.
 
Michael J. Copps, a former FCC commissioner who helped former Chairman Genachowski draft his rejected version of the regulation, lashed out at the plan in a comment to The New York Times, complaining of the influence of lobbyists on the plan.  He also points out that the plan fails to rectify the fundamental reason that the court struck the rules a second time -- unequal regulation against common carriers.
 
Mr. Copps -- who now works for net neutrality advocacy Common Cause -- remarks in an interview with The New York Times:

[The new plan] is a lot closer to what they [the lobbyists] wanted than what we [net neutrality advocates] wanted.  It reflects a lot more input from them.  The courts did not tell Chairman Wheeler to take the road that he is reportedly taking.
 
Fiber optic cable
Net neutrality are demanding a new proposal from the FCC, one that forbids throttling in all forms.
[Image Source: Guardian UK]

In other words, he believes that the courts will strike down the plan for the same reason they killed it the second time.
 
The irony is that while the plan may be viewed as a glass-half-full victory for telecoms and ISPs, they appear unhappy with it.  They wanted Mr. Wheeler to essentially throw out net neutrality altogether.  Verizon Communications -- which successfully struck down former Chairman's Genachowski's order -- issued a thinly veiled criticism of the new plan:

[Verizon] is publicly committed to ensuring that customers can access the Internet content they want, when they want and how they want. [However] given the tremendous innovation and investment taking place in broadband Internet markets, the FCC should be very cautious about adopting proscriptive rules that could be unnecessary and harmful.

The fact that Verizon is giving Mr. Wheeler's plan the cold shoulder is perhaps the most troubling sign of all, and not just because it indicates that another lawsuit could be incoming and strike the rules down -- should they pass.  Rather, the biggest issue is that these days in Washington D.C. money talks.  Were Verizon, et al. to be pleased by Mr. Wheeler’s plan they might be able to put their money behind it and successfully convince their Republican and Democratic allies to push the other four FCC commissioners to support it.

Verizon executives
While net neutrality activists see the plan as a "win" for lobbyist for telecoms like Verizon, those telecoms are equally pleased with the plan, which they fear could still be potent in some ways.   They will likely spend money lobbying to scuttle their own "win". [Image Source: AP]

But the response suggests that lobbyists will likely oppose the plan as well.  And that means that it is more than likely dead before it has even received an official vote -- which, according to Mr. Wheeler, would be held at a meeting sometime before the end of 2014.  Anything's possible, but it would be very surprising not to see Mr. Wheeler's office scrambling to change this proposal in some way in order to try to get someone to support it.

Sources: FCC Blog (Chairman Wheeler), The New York Times





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