The future of the internet is up for grabs — theoretically

Introduction

The Trump administration is weighing one of the most significant rulings on how the internet will operate in the future — broadly affecting both the U.S. economy and how Americans get crucial information — but the decision is already a foregone conclusion.

Unlike three years ago, when Washington was abuzz over the Federal Communications Commission enshrining net neutrality into hard-set rules, this time around it’s crickets. And that has net-neutrality supporters worried.

The FCC, led by Ajit Pai, whom President Donald Trump appointed this year, has proposed killing the net-neutrality rules the agency passed under the Obama administration in 2015. Those regulations prohibited internet providers such as Verizon Communications Inc. and Comcast Corp. from favoring certain online content, or charging firms like Netflix or Facebook Inc. to deliver their offerings at faster speeds. The rules, shepherded through by then-Chairman Tom Wheeler, treated the internet more like a public utility needed by everyone, like regular telephone service or power, which are regulated by the government.

When Wheeler, a Democrat whom President Barack Obama appointed in 2013, proposed those rules, progressive consumer advocates were thrilled by the idea — but internet providers were livid. Armies of lawyers and lobbyists representing AT&T Inc., Verizon, Comcast and others poured into FCC’s headquarters, about a half mile from the iconic Washington Monument. They came armed with binders, briefs and PowerPoint presentations to confront and cajole FCC commissioners and staff.

In all, FCC commissioners and staff held 79 meetings between the release of Wheeler’s proposal in May 2014 and the comment deadline in September 2014, more than a meeting every two days, according to an analysis of FCC documents by the Center for Public Integrity. Nearly 63 percent of those get-togethers were with businesses or their trade groups. In the end, the Democratic-majority commission voted 3-2 along party lines to reclassify internet providers as a utility-like “common carrier,” much like telephone service.

But that was then.

Now, three years later, current FCC Chairman Pai, a free-market Republican and staunch critic of government regulations, has proposed to reverse Wheeler’s rules, aggressively pushing a return to classifying internet providers as an “information service,” a designation with far fewer regulations.

The change, which the FCC is likely to vote on later this year, would both neuter the commission’s ability to rein in providers and open the possibility, again, of creating slow and fast lanes for internet traffic — determined in part by who is willing to pay.

This time around, Republicans control the commission. And it’s a lot quieter at the FCC — perhaps because the internet titans see a friend in the chair who isn’t prone to considering other opinions.

From May 18, when the FCC released Pai’s proposed rules, to the end of the public comment period on Aug. 30, commissioners and agency staff met only 16 times with companies and other organizations — about one meeting every six days, or one-fifth as many as when Wheeler issued his proposal in 2014, according to the Center’s analysis.

No one from AT&T set up a meeting. No Verizon. No Comcast. In fact, of the 16 meetings, the FCC met with only two, relatively small, internet providers: Antietam Cable Television Inc., a provider serving a rural county in Maryland, and Home Telephone Company Inc., which provides service north of Charleston, South Carolina.

Most of the people sitting down with the FCC worked for advocacy groups such as the National Hispanic Media Coalition, which lobbies for inclusive and affordable communications, and the Voices for Internet Freedom Coalition, a group of minority organizations that support net neutrality.

The reason for so few meetings, say broadband policy experts, lies in the stark differences between Wheeler’s and Pai’s approaches. Wheeler, despite having run powerful wireless and cable associations in Washington, was seen as trying to solve a regulatory puzzle, attempting to balance consumer interests with business priorities. That attitude drew a horde of disparate groups seeking to influence the debate by having face time with FCC staff, those who worked with him said.

Conversely, Pai, a former Verizon attorney, is widely viewed as driven to give the telecommunications industry what it wants, despite surveys showing more than half to two-thirds of the public support keeping net-neutrality rules as they are.

“You had, under Wheeler, a search for an answer, and under Pai, you begin with an answer,” said Michael Copps, a former FCC commissioner and now a special adviser at the left-leaning consumer-advocacy group Common Cause. “You’ve got a chairman with his mind already made up.”

The Senate voted Monday to confirm Pai to a second term as a commissioner and continue as chairman.

While the big providers have largely skipped meeting with FCC staff, what they have done is wage a PR campaign claiming they want an internet open to all without conditions, while simultaneously filing comments at the FCC seeking to kill the rules implemented under Wheeler. Big firms say they simply want to eliminate needless regulation. Their critics say the large providers are cynically trying to play both sides of the street.

Still, it’s the face-to-face meetings that have the most influence over FCC policies because executives and lobbyists can sit down across the table from rulemakers to discuss how a regulation would impact their business.

“If there is a point you really want to make, and you really want to make sure the commissioner or the chairman hears it, you go in and talk to them, one on one,” said Gigi Sohn, a former top adviser to Wheeler. “To not meet at all, on a docket like this, is highly unusual.”

The message in the few meetings is clear: Internet providers have little doubt that Pai intends to kill net-neutrality rules without considering other views.

“There was a lot of effort to shape what [Wheeler’s] notice would say,” said Harold Feld, a senior vice president at the telecommunications and internet advocacy group Public Knowledge. “Pai is about as pugnaciously pre-decided as it is possible to get.”

Pai’s public push to spike net neutrality has now drawn notice on Capitol Hill, where lawmakers want to meet with a variety of internet players and craft a possible legislative solution that would clearly spell out providers’ limits. So far that’s been a rocky process. But if the Republican-controlled Congress finds a way to pass legislation, it’s likely to align with Pai’s position.

‘Damascus road experience’

The current net-neutrality rules are also called the open internet order or Title II, a reference to the section of the Communications Act of 1934 that provides regulation of common carriers, like telephones — and it allows for tighter regulations. The current rules prohibit internet providers from charging online companies more for delivering services such as video faster to consumers, referred to as “paid prioritization.” Internet providers also can’t block or slow the delivery of content, and that prevents them from favoring their own programs and companies. Comcast, for example, owns NBC Universal and part of the on-demand video service Hulu LLC.

Pai argues that from 2014, the year before the net-neutrality rules went into effect, through 2016, those rules caused internet providers to cut spending on upgrading and expanding their broadband networks by $3.6 billion, a 5.6 percent drop, because they can’t expect a reasonable return on their investment. The analysis behind the claim was conducted by Hal Singer, a principal at Economists Inc. and a professor at Georgetown University’s McDonough School of Business. Singer said he did not receive funding for the study. Other groups, such as the left-leaning advocacy group Free Press, dispute Singer’s conclusion, arguing investments have actually increased during that time.

When the FCC proposes regulations, such as for net neutrality, it provides the public time to file comments to the agency. Companies, advocacy groups, lobbyists and the public can also meet in person with commissioners and agency staff. If they do, they must file a so-called ex parte notice with the FCC, identifying who was at the meeting and the topics discussed.

During the 123-day-comment period for Wheeler’s proposed open internet order, commissioners and FCC staff met with businesses and trade associations 50 times out of 79 total meetings, or 63 percent. During the 99-day-comment period for Pai’s proposed rules, only seven, or 44 percent, of the 16 meetings were with companies and their trade associations. The comment period for Wheeler’s proposal was longer because the FCC extended the comment and reply-comment periods after the agency’s computer system to file comments crashed.

One company that met a lot with the FCC in 2014 was AT&T. The third-largest broadband provider in the nation sat down with FCC staff more than any other provider, visiting the agency six times. Comcast, the largest internet provider, had three meetings. Verizon and broadband providers CenturyLink Inc. and Charter Communications Inc each met with the commission once.

During one meeting in September 2014, Jim Cicconi, then AT&T’s top lobbyist, and Robert Quinn Jr., then head of AT&T’s federal regulatory group, met with Ruth Milkman, Wheeler’s chief of staff, and Jon Sallet, FCC’s general counsel. Cicconi and Quinn suggested the FCC could, instead of forbidding paid prioritization, impose a “commercial reasonableness standard” on payments for faster speeds. They also warned that regulating providers as utilities would create “significant harms” and “a chilling effect on investment and jobs in the broadband economy.”

AT&T, Comcast and Verizon didn’t respond to requests to comment on why they haven’t met with the FCC this year.

Executives at Mediacom Communications Corp., which offers internet service in the Midwest and parts of the South, met with FCC staff twice in 2014 because they thought Wheeler could be persuaded to include their opinions.

“We believed, incorrectly, that Chairman Wheeler had an open mind about net neutrality and that there was an opportunity to influence the record,” said Tom Larsen, a spokesperson for Mediacom. “You could see that Chairman Pai sort of has his mind made up for what he believes the right path is for net neutrality. … You don’t often spend a lot of time convincing people on your side to stay on your side.”

Those supporting strong net-neutrality rules said Wheeler wrestled with what to do and reluctantly concluded that internet providers should be reclassified under Title II as utility-like.

Wheeler said it was a decision he didn’t expect he’d come to.

“My description of the whole process was that I had a Damascus road experience,” Wheeler said, using an idiom to describe a radical, religious-like conversion. “It was an evolutionary process, and I think that’s the way the administrative-procedural process is designed to work.”

‘I can’t think of anything’

Broadband experts doubt Pai will experience a similar epiphany.

That may be why only two internet providers have met with FCC staff. Antietam Cable, in a July 12 meeting with Pai and local Maryland officials in a town library, told Pai that Wheeler’s net-neutrality rules had a “detrimental impact” on the company’s expansion of new technology. “Restoring the light-handed regulatory approach … will remove the threat of carrier rate regulation and relieve us of the fear of moving forward with our plans,” the company wrote.

South Carolina-based Home Telecom met with an FCC staffer to express the rare — for internet service providers (ISPs) — support for net neutrality: “Rural subscribers served by Home could face blocking or discrimination” and without the regulations, “the largest [internet service providers] could produce adverse results with respect to both quality and cost of broadband transmission services.”

The FCC didn’t respond to requests for an in-person interview with Pai.

But at a press conference in August at FCC headquarters, the Center for Public Integrity asked Pai why he thought so few internet providers and other organizations have come to meet with FCC staff about his proposal. Pai said he couldn’t think of a reason.

“Nothing in particular” comes to mind, he said.

Pai, as well as many of the executives at the largest internet providers, were involved in the 2014 net-neutrality debate — Pai was a commissioner — and may not be interested in rehashing the same arguments in even more meetings, said George Ford, an economist at the Phoenix Center for Advanced Legal and Economic Public Policy Studies, which typically opposes broadband regulations.

“Chairman Wheeler didn’t know anything when he started off” debating the net-neutrality rules, said Ford, whose analysis Pai also cited in his proposed rules. “Ajit [Pai] has already been through this, he’s not new to this. There’s probably a sense in the industry that what’s been said has already been said a thousand times over.”

But that’s not the only interpretation. Former Wheeler adviser Sohn, now a fellow at Georgetown Law’s Institute for Technology Law & Policy, said the lack of meetings may be the result of internet service providers not wanting their names recorded in a public document supporting a rollback of Wheeler’s net-neutrality rules, which numerous polls show that Americans favor by as much as 76 percent.

“In the case of the ISPs, the position they’re taking is extraordinarily unpopular,” Sohn said. “I don’t think they necessarily want to put anything on paper.”

Public relations ploy

Internet providers who have ducked meetings to discuss Pai’s proposal to roll back Wheeler’s net neutrality rules have chosen to weigh in in other ways. Verizon, Comcast, and AT&T have all published comments with the FCC. In filings, which range from a couple dozen pages to more than 100, as well as in blog posts on company websites, the providers are careful to show support for the concept of net neutrality — just not the rules Wheeler implemented to enforce it.

“Comcast has been a longstanding and consistent supporter of the Commission’s policy of ensuring that the Internet remains free and open to all,” the company wrote in a filing.

In a blog post on its website, AT&T said it supported an open internet that ensures “freedom of expression and a free flow of ideas.” But, it added that current net-neutrality rules create “an environment of market uncertainty that does little to advance internet openness.”

After Pai announced his intentions to reclassify broadband, Verizon released a video on YouTube called “Where we stand on Net Neutrality,” featuring its general counsel, Craig Silliman.

“The FCC is not talking about killing the net neutrality rules. In fact, not we, nor any other ISP, are asking them to kill the open internet rules,” Silliman said.

But there’s no shortage of folks who disagree. The net neutrality that internet providers claim to support is not the net neutrality defined in the existing rules, said Nicholas Economides, an economics professor specializing in telecommunications at New York University’s Stern School of Business. For providers, an open internet means an internet free of regulations that prevent them from affecting speeds, blocking, and prioritizing content, and it’s a public relations ploy, he said.

Internet service providers “may have a PR position in which they say they love the open internet, but what they mean by open internet, does not include network neutrality,” Economides said. “It’s stuff that lobbyists put around because it sounds good to the average congressman or even the average voter, but it has nothing to do with the public interest.”

Congress steps in

Congress, which has the ultimate say in what the FCC can or cannot do, has begun to weigh in, hoping to pass legislation that will set into law what level of regulation the FCC can impose.

But that is proving to be difficult.

Rep. Greg Walden, R-Oregon, chairman of the House Energy and Commerce Committee, this summer invited CEOs from Verizon and Comcast, as well as internet companies such as Facebook, Google and Netflix — supporters of current net-neutrality rules — to testify this month on how a compromise might be hammered out.

“It’s time for Congress to call a halt on the back-and-forth and set clear net neutrality ground rules for the internet,” Walden optimistically said in a statement released in July. “In some form or another, we have been working for at least 20 years on the intertwined goals of incentivizing the huge investments needed to connect Americans, while keeping the internet open and protecting consumer privacy.”

The hearing, which was set for Sept. 7, was postponed, however, because no company had accepted the invitation to appear, according to Reuters.

Republicans said they postponed the meeting to allow more time for providers and internet companies to discuss possible solutions. In the meantime, GOP leadership, which supports scaling back Wheeler’s rules, have reportedly warned Google, Facebook and other technology companies to back off their strong support of the current regulations, according to Axios.

Rep. Marsha Blackburn, R-Tenn., chairman of the Subcommittee on Communications and Technology, introduced a bill in February 2015 to overturn Wheeler’s rules. The bill, which has 31 Republican cosponsors and no Democrats, has not been taken up by the subcommittee since, and Blackburn said this year there are no plans to because she wants the FCC to act first on net neutrality.

In May, Sen. Mike Lee, R-Utah, introduced a bill like Blackburn’s that would nullify Wheeler’s rules. Sen. John Thune, R-S.D., chairman of the Commerce Committee, introduced a similar bill in 2015.

Most Democrats oppose any rollback of the net-neutrality rules. Eleven Democratic representatives who sit on committees with jurisdiction over the FCC and the internet filed a comment last month with the FCC calling into question Pai’s commitment to protecting the public interest.

“The agency’s responsibility is to the entire public and it is required to balance multiple important considerations,” the representatives wrote. “The FCC’s current proposal does not satisfy the Commission’s legal obligation to consider the breadth of important national priorities.”

Economides for one is doubtful that Congress can pass any sort of net-neutrality legislation. With pressure to pass tax reform, health care changes, immigration reform, and fund a border wall and construct a budget, net neutrality is unlikely to be a high priority, he said.

“It’s very difficult, time consuming and complicated to pass a telecommunications law,” Economides said. “People are going to say, ‘Why doesn’t Pai do the job and let’s see what happens?’”