Politics 117
The regulation of the Internet
The dot bomb: prelude to the crisis
Early cable television
• 1972: 70 cable
systems serving
about 14,000
subscribers,
mostly in
mountainous or
hill areas
1968 – 1972: FCC rules on cable television
• 1968:
– movies and sports events on
cable have to be at least two
years old
– Pay TV sites can only run in
cities with more than four
operating commercial
stations
– No commercials
• 1972:
– Cable can expand to the top
100 markets, but has to offer
channels to municipal
governments and provide
public access
NBC’s Sylvester “Pat” Weaver tried to
build a cable network in California
Pacifica vs. FCC, 1978
• FCC cannot edit
broadcasts in advance
• But right to privacy
trumps First
Amendment
• FCC can prohibit
“indecent” broadcasts
when children likely to
be listening
1984-1992: Congress unleashes cable
• 1984 Act deregulated cable
• From 1984 - 1992, cable
subscribership rises from 37
million to 57 million.
• 1992, the percentage of
homes passed by a cable
wire goes from 71 percent in
1984 to 97 percent.
• But prices rose too fast
• 1992 Act gave cities and
counties authority over
cable rates again
• Requires cable companies to
broadcast local TV signals
Telecommunications Act of 1996
• Eliminated market barriers
• Abandoned the utility model
of media regulation (one
company in charge of cable,
telephony, etc)
• Anybody can get into
anything: phone, video, ISP
service
• Almost 70 percent of U.S.
households subscribe to
cable by 1999: 65 million
people
Computer Inquiry decisions
(1966-1976)
• FCC calls for “functional separation”
between basic phone service and data
processing services among telcos (especially
AT&T)
• From this concept Congress grafts the
concept of “telecommunications services”
and “information services” onto the
Telecommunications Act
What is net neutrality?
• ISPs can’t
– Block applications
because they compete
with an ISP content
service
– Play favorites among
content providers
– Keep its network
management practices
secrret
“a neutral network
should be expected to
deliver the most to a
nation and the world
economically, by serving
as an innovation
platform, and socially,
by facilitating the widest
variety of interactions
between people. ”
Tim Wu
Brand X decision, 2005
• FCC rules that cable systems
are not “telecommunications”
common carriers, they are
“information” services
• Don’t have to follow common
carrier rules
• Don’t have to interconnect
with smaller providers at
wholesale rates
• Takes cable ISPs off the
regulatory hook
• 2005: Supreme Court
approves the decision, 6-3
The FCC’s Internet Policy Statement
(August 2005)
• “consumers are entitled
– to access the lawful Internet
content of their choice”
– Run applications of their choice”
– Connect their choice of legal
devices that do not harm the
network.”
– Have competition among
network providers”
Peer to peer (P2P) networking
• A system in which a
network of people
have the same files,
and they allow their
computer to become
part of an open
network for sharing
files
Silicon Valley wants an Open Internet
•
•
•
•
•
•
•
Google
eBay
Netflix
Amazon
Facebook
Skype
Twitter
Did Comcast engage in P2P blocking?
• Associated press and EFF
share digital version of King
James Bible using BitTorrent
• It repeatedly gets slowed
down and blocked
• Comcast admits it uses
network management
techniques, then admits that
it just plain blocked the app
FCC decision on Comcast, August 2008
•
•
•
Comcast must disclose the details of its
discriminatory network management practices to
the Commission
·Submit a compliance plan describing how it intends
to stop these discriminatory management practices
by the end of the year
Disclose to customers and the Commission the
network management practices that will replace
current practices
FCC hearing at Harvard Law School:
Timothy Wu of Columbia; below right: David
Cohen of Comcast
FCC Chair Kevin Martin on Comcast
• “Would it be OK if the post office
opened your mail, decided they didn’t
want to bother delivering it, and hid
that fact by sending it back to you
stamped “address unknown – return
to sender”? Or would it be OK, when
someone sends you a first classstamped letter, if the post office
opened it, decided that because the
mail truck is full sometimes, letters to
you could wait, and then hid both that
they read your letters and delayed
them?”
• “Unfortunately, that is exactly what
Comcast was doing with their
subscribers’ Internet traffic.”
What Comcast did
• Used the RST (reset) method in the
TCP protocol to interrupt P2P
transmissions the company didn’t
like
– “When Comcast judges that there are
too many peer-to-peer uploads in a
given area, Comcast’s equipment
terminates some of those
connections by sending RST packets”
– “On its face, Comcast’s interference
with peer-to-peer protocols appears
to contravene the federal policy of
‘promot[ing] the continued
development of the Internet’”
Comcast was not clear about what it
was doing
• Comcast’s claim that it has
always disclosed its network
management practices to its
customers is simply untrue.
Although Comcast’s Terms of
Use statement may have
specified that its broadband
Internet access service was
subject to “speed and upstream
and downstream rate
limitations,” such vague terms
are of no practical utility to the
average customer.”
Why the FCC sanctioned Comcast:
The August 2008, Order
• Comcast has motive to
discriminate:
– “Peer-to-peer applications,
including those relying on
BitTorrent, have become a
competitive threat to cable
operators such as Comcast
because Internet users have the
opportunity to view high-quality
video with BitTorrent that they
might otherwise watch (and pay
for) on cable television. Such video
distribution poses a particular
competitive threat to Comcast’s
video-on-demand (“VOD”)
service.”
FCC: We have the authority
• FCC has power to act via Sec 230(b) of the
Communications Act
– (b) POLICY.--It is the policy of the United States-– (1) to promote the continued development of
the Internet and other interactive computer
services and other interactive media;
– (2) to preserve the vibrant and competitive
free market that presently exists for the
Internet and other interactive computer
services, unfettered by Federal or State
regulation;
– (3) to encourage the development of
technologies which maximize user control
over what information is received by
individuals, families, and schools who use the
Internet and other interactive computer
services;
FCC: We have the authority
• FCC has power to act via Sec
706(a) of the
Communications Act
• Congress charges the
Commission with “shall
encourage the deployment
on a reasonable and timely
basis of advanced
telecommunications
capability to all Americans.”
Ancillary power
• This language (and other
parts of the Comm Act),
give the agency
“ancillary” authority to
issue the Internet Policy
Statement and to
regulate
• Ancillary =
“supplementary”
When we approved Adelphia buyout,
we set conditions
• Comcast and Time Warner given
ok to buy out Adelphia cable, but
• “[i]f in the future evidence arises
that any company is willfully
blocking or degrading Internet
content, affected parties may file a
complaint with the
Commission,”125 and noted that
Commission’s Internet Policy
Statement “contains principles
against which the conduct of
Comcast[ and] Time Warner . . .
can be measured.”
Adelphia under arrest;
FCC approves TW and
Comcast buyout of
Adelphia network
McDowell’s dissent: ancillary authority
isn’t enough
• The majority’s view of its
ability to adjudicate this
matter solely pursuant to
ancillary authority is legally
deficient as well. Under the
analysis set forth in the
order, the Commission
apparently can do anything
so long as it frames its
actions in terms of promoting
the Internet or broadband
deployment.
Robert M. McDowell
McDowell’s dissent: we never made
any rules
• “We have no rules to
enforce. This matter
would have had a better
chance on appeal if we
had put the horse before
the cart and conducted a
rulemaking, issued rules
and then enforced them.”
Comcast’s Helgi Walker (left) and the DC Circuit
Court of Appeals (the guys)
DC Circuit throws out the FCC’s
Comcast Order
• "Statements of policy, by themselves, do not
create 'statutorily mandated
responsibilities'," -- David Sentelle
May 2010: The “Third Way”
• To the Four Freedoms Internet
Policy Statement , the FCC would
add
– A non-discrimination rule (ISPs
can’t block)
– A transparency rule (ISPs must
disclose what they’re doing)
• FCC would “reclassify” ISPs as
Title II common carriers, but
“forbear” from regulating
anything except nondiscrimination rules
• For example, wouldn’t regulate
rates
Partisan pushback
• Republicans
declare opposition
to new net
neutrality rules
• ISPs promise to sue
FCC if agency
establishes rules
• FCC delays
proceeding . . .
Google reverses on net neutrality
• Issues “legislative
framework” statement with
Verizon calling for wireless
to be exempted from net
neutrality nondiscrimination rules
• Lots of possible exemptions
for priority access deals
• FCC wouldn’t issue rules,
just make “case-by-case”
decisions based on a
“community” advisory body
(probably dominated by
Google and ISPs)
Darrel West, Brookings Institution
Where are we now?