In late October, Ajit Pai, Chair of the Federal Communications Commission, proudly announced, “We’ve been energetic in advancing the public interest…over the past nine months, the Commission has voted on 63 items at our monthly meetings, compared to 103 in the preceding three years.” It now surpasses 70.
This certainly has been a busy year for the FCC. But Pai is dead wrong that this flurry of activity has been done to advance the public interest. Indeed, as one might expect from a man who once worked for telecom giant Verizon, Pai has directed an unprecedented abdication by the FCC of its responsibility to protect the public welfare.
In March, Congress, with virtually no debate or publicity, allowed Internet companies to gather and sell our personal data. It was a monstrous and cowardly act. To avoid the public glare, Republicans stealthily developed a “secret strategy” the Washington Post reports. “While the nation was distracted by the House’s pending vote to repeal the Affordable Care Act, Senate Republicans would schedule a vote to wipe out the new privacy protections.”
An outraged Tim Berners-Lee, creator of the World Wide Web appropriately labeled the decision “disgusting”. “(W)hen people use the web what they do is really, really intimate,” he explained. “They go to their doctor for a second opinion; they’ve gone to the web for the first opinion on whether it’s cancer. They communicate very intimately with family members that they love. There are things that people do on the web that reveal absolutely everything, more about them than they know themselves sometimes.”
Internet service providers (ISP) can now compile a detailed profile of our web behavior and market it. Some may deign to charge us a premium for not doing so. This has occurred before. In 2016, AT&T began charging a monthly premium of $30 for users who wanted to retain their privacy.
The Electronic Frontier Foundation (EFF) the oldest organization defending civil liberties in a digital age, warns that allowing ISPs to monitor and manipulate data makes the web more vulnerable to attacks. Condemning the FCC’s privacy decision as “a disaster for America’s cybersecurity”, the EFF explained, “Privacy and security are two sides of the same coin: privacy is about controlling who has access to information about you and security is how you maintain that control.”
Adding insult to injury, Pai’s FCC also halted enforcement of a rule demanding Internet providers “take reasonable measures to protect customer (personal information) from unauthorized use, disclosure or access.” That means Internet providers won’t be liable if their lax security exposes our personal information.
The FCC doesn’t regulate prices for residential service but it does for certain business data services (BDS). These are commonly used by public entities like hospitals, schools, libraries, and police departments as well as by bank ATM networks, retail credit card readers and business networks.
In 2016, to “account for over a decade of efficiency gains” Obama’s FCC Chair Tom Wheeler proposed lowering the maximum price ISPs could charge for BDS by 11 percent over three years. The FCC threw out his proposal and went in the opposite direction by lifting all price caps. Responding to businesses complaints that this was giving monopolies a license to extort, the FCC blithely redefined what a monopoly is. Even if there is only one broadband provider the FCC still considers there to be “sufficient competition”, so long as a potential provider, is not far away!
Anticipating Pai’s largesse, AT&T scheduled a 15-percent price increase for BDS lines in certain states to take effect “on or after” the day of the FCC’s vote.
And then there is the recent net neutrality decision. Although the FCC had only formally demanded net neutrality in 2015, it had been trying to do so for almost a decade. In 2008, the FCC voted to punish Comcast for “discriminatory management practices” but Comcast sued and the courts ruled that the FCC lacked the authority to prevent such practices. In 2010 the FCC again imposed rules to prohibit blocking, throttling and paid prioritization. This time Verizon sued and in 2014 a federal appeals court again decided the FCC lacked the authority.
The FCC would have the authority to require net neutrality, the courts acknowledged, only if it redefined ISPs as common carriers regulated under Title II of the Communications Act.
In 2015 the FCC did so and in 2016 federal courts finally upheld its decision.
Coming under Title II also offers consumers significant protections. Broadband customers and companies that offer services over Internet can complain directly to the FCC about unjust or unreasonable behavior. Anyone damaged by an ISP’s behavior could sue in court. Reclassifying ISPs as entities regulated under Title I of the Communications Acts means these protections are no longer in place.
And of course, as the world knows, the FCC’s net neutrality decision gives ISP the right to throttle or block data distribution, and to engage in paid prioritization, that is, requiring companies to pay more for a faster lane.
We already have a glimpse of what this means because some telecom companies have been discriminating against competitors for several years. The FCC’s 2015 net neutrality rules didn’t impose an outright ban on telecom companies exempting favored services from data caps, but the Commission reserved the right to intervene on a case-by-case basis. Companies immediately took advantage and in late 2016, the FCC notified AT&T and Verizon that its data management practices were anti-competitive. If Wheeler were still FCC Chair it is likely that a system wide ban on such practices would have been rolled into the net neutrality ruling.
As one of his first acts as FCC chair, Pai reversed Wheeler’s proposal regarding AT&T and Verizon’s data management practices. Klint Finley, writing in WIRED, describes these companies’ practices, which will undoubtedly become widespread after the FCC’s decision.
“AT&T… allows users to watch as much video as they want from its own DirecTV Live streaming service without having it count toward their data caps. Competing services like Dish’s Sling, on the other hand, will count against those caps unless the companies behind them pay AT&T to “sponsor” that data. Verizon has a similar system in place…
Home broadband providers are starting to impose data limits on their customers as well. AT&T customers can use 300 gigabytes before extra fees kick in, but can avoid those extra charges if they subscribe to DirecTV. Comcast customers in 28 states have a limit of one terabyte before they’re charged extra, raising concerns that Comcast could use that limit to favor its own video services.”
Less than a month before Pai’s FCC issued its draft rules on net neutrality in October telecom companies added another “ask”: the FCC should preempt states from regulating broadband. CTIA, a mobile telecom industry group wrote to Pai complaining about the exercise of democracy after it abolished Internet privacy, “Earlier this year, legislators in various states attempted to countermand Congressional action on broadband privacy regulations.” Indeed they did. Some 20 states debated legislation to protect their residents right to privacy. In the face of enormous opposition by the telecommunication industry, Colorado, Montana and North Dakota now have such. The city of Seattle has set privacy standards for cable ISPs
Pai received a legal brief from his former boss Verizon warning, “(I)n the absence of preemption, states with the most restrictive rules effectively would have the final say on the appropriate level of regulation, as many broadband providers as a practical manner will need to comply with the strictest state rules.”
Ironically, but not inconsistently, two years ago the telecommunications industry robustly opposed the FCC’s preemption of state broadband laws. Not inconsistent because those laws were trying to protect telecom customers rather than leave them defenseless.
Since the late 1990s, communities have come to understand that access to broadband is crucial for a modern economy and thus, broadband networks are essential infrastructure, like water pipes and roads. In light of the persistent refusal of their incumbent cable and phone companies to moderate price increases, upgrade their systems, or improve their famously horrendous customer service, communities began to build their own networks.
Horrified at the prospect of real competition the telecom giants lobbied states to enact barriers to community broadband, often with success. By 2014, 4 states had enacted an outright ban on municipal networks. Fifteen others imposed burdens of varying degrees.
The vast majority of municipal networks were highly successful. Chattanooga’s municipal network has been widely recognized as world class. In 2015 it boasted the nation’s first 10-gigabit network. Residents in neighboring communities clamored to connect. Wilson, North Carolina’s municipal network offered phone, Internet and cable series at prices much lower than the giant incumbent telecoms. Individuals in five neighboring counties sought to connect.
But at the bidding of telecom companies, Tennessee and North Carolina passed laws prohibiting their cities from providing broadband services to their neighbors even though they were able to provide their neighbors electricity.
The Chattanooga Times Free Press reported on the resulting frustration and anger of people living tantalizingly close to one of those networks:
“When Joyce Coltrin looks outside the front door of her wholesale plant business, her gaze stops at a spot less than a half mile away.
All she can do is stare in disbelief at the spot in rural Bradley County where access to EPB’s fiber-optic service abruptly halts, as mandated under a Tennessee law that has frozen the expansion of the fastest Internet in the Western Hemisphere…the small business owner has no access to wired Internet of any type, despite years of pleas to the private companies that provide broadband in her community.”
Chattanooga and Wilson petitioned the FCC to overturn these state laws. In early 2015 Obama’s FCC did so. In 2016, a federal appeals court ruled the FCC lacked authority to stop states from frustrating the will of its people.
Before that happened, Republicans furiously protested the FCC’s decision. House Republicans voted 221-4 to freeze FCC funding if it attempted to enforce its rule freeing communities to make their own broadband decisions. Sixty Republican House members sent an angry letter to Wheeler pledging their allegiance to states rights: “Without any doubt, state governments across the country understand and are more attentive to the needs of the American people than unelected federal bureaucrats in Washington, D.C.” Eleven Republican Senators similarly maintained, “States are much closer to their citizens and can meet their needs better than an unelected bureaucracy in Washington, D.C… State political leaders are accountable to the voters who elect them…”
Of course city councils and county commissions are even closer and more accountable to their voters.
I’ve not heard a murmur of Republican protests about the current decision by three Republican FCC Commissioners to deny the right of states to protect their citizens right to Internet privacy and their small businesses to fair and equitable access.
Some FCC Commissioners argue we need not worry because when the FCC relinquishes its authority, the Federal Trade Commission (FTC) will step in. That is nonsense. The FTC regulates after the fact. It doesn’t create hard systemic rules. It does have the authority to protect net neutrality and privacy but only if telecom companies promise beforehand that they would do so.
Moreover, the law bars the FTC from regulating common carriers. A federal appeals court last year let AT&T escape FTC oversight entirely as long as it has some type of common carrier business, like phone services. The FCC could regulate AT&T because Obama’s FCC had defined ISPs as common carriers. But that’s the decision the FCC reversed on December 14th. Which offers us the ghastly prospect of ISP regulation becoming a “no-cops- on-the- beat” situation, says Terrell McSweeney, former chief counsel for competition policy at the Department of Justice prior to becoming an FCC Commissioner. As McSweeney told Jon Brodkin a reporter for ArsTechnica, to rectify the situation, Congress would have to amend the FTC Act to eliminate the common carrier exemption for phone services. We can Rest assured that is not going to happen.
What is to be done?
The FCC decision will place most Americans at the mercy of increasingly large telecommunications companies with tentacles in many parts of the communications/entertainment/news industries. According to the FCC, at least half of American households can access broadband only from a single provider. This uses the FCC’s conservative definition of broadband as having a minimum speed of 25 Mbs download and 3 Mbs upload. (Pai wants, astonishingly, to lower the minimum standard to a pokey 10Mbs download. He wants that because wireless can meet these standards and he will then be able to boast that virtually all Americans have high-speed broadband access, to the ridicule of much of the industrialized world.
My organization, the Institute for Local Self-Reliance (ILSR), estimates that 145 million Americans can choose between 2 broadband providers. But some 50 million of them choose between two companies that have a record of violating network neutrality even before that was legal.
The FCCs decision about net neutrality will be challenged in court, as will its last minute decision to preempt state authority over Internet privacy as well as unequal access. But even if these challenges were to win, the FCC could, and probably would, still refuse to enforce Obama FCC’s rules.
The only sure fire strategy to regain control of this vital underpinning of modern economies is for us to own the broadband networks themselves. Only then will we able make the rules that serve the public interest. Decisions about caps and rates and access, about the digital divide and net neutrality and privacy can and should be debated and made at the local level, not in some distant boardroom or in even more distant federal agencies and federal courts. As Terry Huval, director of the highly successful Lafayette broadband network, LUS Fiber observes, “While Cox Communications can make rate decisions in a private conference room several states away, Lafayette conducts its business in an open forum, as it should.”
Public ownership can be indirect, through local governments, or direct, through cooperatives. Happily, communities have been enthusiastically embracing both strategies. Some 2-3 million people currently can access high speed broadband from 300 or so rural telephone or electric cooperatives. An equal number can do so from more than 150 cities that have citywide fiber or cable networks (another 350 or so have fiber networks that serve primarily public agencies and institutions). Over 100 of these communities offer speeds of at least 1 gigabit per second.
For low-density rural areas that large ISPs ignore, cooperatives may be the primary vehicle for public ownership. There are 260 telephone co ops and 900 electric coops. ILSR has just released a policy brief containing a map of 350+ cooperatives with fiber Internet access. ILSR’s larger Community Broadband Map provides information on over 500 publicly owned systems, as well as information on state laws that impede public ownership.
Cities and coops can operate the network and provide services through their networks, as many do, or have open access networks, or contract with a private party to operate the network. In all cases the owner can make the rules. A contract can include whatever consumer protection or net neutrality or privacy rules it wants as well as regulate rates and speeds. A recent ILSR report on broadband public/private partnerships offers some examples.
Lincoln, Nebraska, for example, contracted with a private company, ALLO to operate its citywide fiber network. ALLO is required to provide two levels of services: 100 MB per second and 1 Gigabit. It must offer practice strict net neutrality and impose no blocking or throttling or paid prioritization or data caps. It can have no installation fees or modem fees, and no residential contracts.
The contract between Westminster Maryland’s citywide fiber network and its private operator, TING shows how detailed the customer service provisions can be. Ting must adhere to specific customer service standards. A human customer service agent must answer all customer calls. It must attempt to answer all inbound calls within 90 seconds and inbound emails within 24 hours.
We must continue to vehemently and loudly protest the federal government’s decisions. In less than 12 months we will have the opportunity to make our displeasure known at the ballot box, not only to kick out federal politicians who supported the FCC’s ill-conceived and ill-considered actions, but also to kick out state politicians who refuse to allow communities to make their own decisions about the future of the Internet.
But our focus right now and for the foreseeable future must be on promoting democratic broadband networks guided by the needs of their customers and their communities. Which means doubling, tripling, increasing ten fold the number of communities that own their fiber Internet networks. 
Happily there are a number of organizations and networks and websites that can assist us in reaching that goal. Next Century Cities, has 182 member cities, towns and counties that it supports in creating world class broadband networks. The Coalition for Local Internet Choice provides legal assistance and advice to governments, private individuals and grassroots organizers.
And there is my own Institute for Local Self-Reliance and our Community Broadband Initiative, which I immodestly submit is the largest single source of ongoing news, in-depth research, and comprehensive information on public broadband networks in the world.
The tools are there. Through the efforts of tens of thousands of Americans on farms and towns and in cities large and small, the foundation has been laid. The FCC and Congress have given us both the incentive and the opportunity to build on that foundation a nationwide democratic Internet governed in the public interest.
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