Nine unfounded claims made by the anti-net neutrality camp

[Updated 5/3/2018]

On Nov. 23, 2017 the Wall Street Journal’s Editorial Board published an opinion piece backing a proposal for the Federal Communications Committee (FCC) to gut net neutrality. In a 3–2 vote the FCC then approved this proposal on Dec 14. Many of us are fighting back, determined to get the rules back in place!

Below I present an excerpt of the key argument included in the WSJ opinion piece, and explain why the Editorial Board made a mistake in backing FCC Chairman Pai’s decision to gut net neutrality. These arguments present an interesting opportunity to provide the reader with some tools to engage with friends and family on the issue. I hope you find them useful. Feel free to comment, share, and reuse (cc-by).

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Paragraph 1: “The political outrage doesn’t match the underlying merits, which is a return to the free internet that reigned for 20 years”

Response: The internet originally relied on a network that was technically incapable of traffic discrimination. Internet service providers (ISPs) had no option but to provide equal treatment to all content traveling through the network. That is not the case today.

But how does the internet work? As the court explains in the Verizon case:

  • “when an edge provider such as YouTube transmits some sort of content — say, a video of a cat — to an end user, that content is broken down into packets of information which are carried by the edge provider’s local access provider to the backbone network, which transmits these packets to the end user’s local access provider, who then views and hopefully enjoys the cat”.

What has changed? For the first couple of decades (internet was actually invented in the 60s) all packets of data were treated equally because the network was technically incapable of reading its contents. Traffic discrimination wasn’t an option.

More recently R&D has allowed the network to know a great deal about each packet (see for example “Deep Packet Inspection”).

Now discrimination is possible.

Over time the quantity and value of what is being transmitted over the internet has risen steadily if not exponentially. The incentives for the ISPs acting as intermediaries to try to get a cut have become stronger as what they transport increases value. Unless the incentive structures are realigned (as the FCC has tried to do through net neutrality rules), ISPs will act in ways that will shrink the overall pie (see Web inventor Tim Berners-Lee’s op-ed).

Now discrimination is possible AND there are incentives for discrimination.

This risk is not merely theoretical. ISPs have acted on these incentives in the past. As international expert Barbara van Schewick explains, the FCC has been actively trying to keep ISPs away from traffic discrimination practices for many years. In fact, that is precisely why the FCC decided to push for net neutrality rules over a decade ago: To reduce uncertainty by defining what ISPs can and cannot do in terms of traffic management.

Therefore today’s internet is not the same as it was 20 years ago. Not in technical terms. Not in terms of incentives. Nor in terms of how ISPs are behaving.

The forces that kept ISPs at bay (tech limitations at first, and FCC push-back later) will not hold without enforceable rules.

By rolling back the rules in place the FCC is signalling that ISPs are free to pursue their short term interests, and break internet’s flat architecture.

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2. “Broadband network investment dipped 5.6% in the following two years[since the 2015 net neutrality rules], as Mr. Pai noted this week, and one reason is the uncertainty about government micromanagement”

Response: According to what some of these ISPs told their shareholders, the investment levels actually rose. A detailed analysis by the NGO Free Press supports that claim based on a broad range of sources.

But in any case the WSJ’s statement has three BIG problems:

  • A. In 2 years it’s simply not possible to control for all the other changes that affect investment (e.g. uncertainty triggered by the electoral period, prior investments, etc). Therefore causal links between broadband investment and net neutrality rules are baseless. Drawing these connections might eventually be possible, but only after a couple of years go by under the same regulatory environment. That’s yet another reason to stop changing the rules.
  • B. Any serious attempt to establish the economic impact of a regulation should consider the internet ecosystem as a whole. This includes consumer surplus, and innovation by content producers and other sectors that rely and benefit from the internet directly and indirectly (eg. Mom & Pop shops).Yet no such data informs the FCCs analysis.
  • C. How does the FCC reduce uncertainty by triggering a process to revise the existing rules? Now that the FCC approved these changes legal challenges will extend the regulatory uncertainty for at least another year, and perhaps further, as political renegotiation of the rules has migrated from the FCC to Congress.

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3. “Mr Pai’s order will abandon euphemisms like the internet “conduct standard”, which allows the agency to go after behaviour it doesn’t like” (+eg. mentioned: unlimited data plans)

Response: The conduct standard empowered the FCC to ensure big telcos and ISPs aren’t selling rotten fish in a thin market: there is incomplete information and very few players. Consumers have a weak negotiating position.
The WSJ uses the example of the FCC going after companies that offer “Unlimited plans”. Net neutrality does not challenge unlimited plans as such. Yet through the conduct standard the FCC has been able to go after telcos that marketed a service as “unlimited” even though they included hidden data caps (eg. here).

meme by @juanOF9 portraying the difficulties in switching between providers in a thin market.

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4. “The move will also remove a ban on “paid prioritization,” which is jargon for the strange idea that a service provider cannot speed up some content for a price”

Response: Net neutrality is consistent with the idea that a CONSUMER should be able to pay for as high a speed available. This includes payment by content producers (eg. the big platforms) for the service that connects their servers to the internet. What net neutrality requires is that once someone pays for access to the internet, all the internet is made equally available, without discrimination. The packets that compose a cat video should not be given a “special lane” that would allow it arrive any faster or slower than a Rihanna video.

Paid Prioritization = ISP charging for specific content to be made available for consumers at a higher speed than those produced by people who don’t pay the fee. Access fees are the basic version of this, where all websites could be charged AGAIN by each and every different local last mile ISP, as a condition for the websites to be accessible for the ISP’s clients. That’s a double dip. Nobody likes people who double dip.

created by @juanof9 loosely based on a presentation by Tim Wu

This is basically ISPs trying to cage the internet so it behaves like Cable TV, where if you wanted your show to be available to viewers you had to negotiate with the cable company that transmitted content to each home.

The fact that the cable TV system organically failed to compete with internet-based platforms is precisely why cable companies want to cage the internet, and why we need to protect net neutrality: Net neutrality ensures the dynamism of a level playing field for actors to compete.

On a neutral net anyone can make content available to anyone…without having to enter a contractual relationship with every ISP that delivers content to consumers. After paying for an internet connection, end users get the liberty to decide if they want to listen to the latest grammy winner or a talented kid from Canada. As the Indian equivalent of the FCC stated, “Internet Access Service is a service to access the Internet that is: (…)Designed to transmit data to and receive data from all or substantially all endpoints on the Internet”.

5. “The Obama rule all but blocks the telemedical innovation (…) “

Response: This is the textbook aim-for-the-heart response pushed by those who dislike net neutrality. The problem is that we are all for telemedicine, AND it doesn’t require paid prioritization. It requires internet providers to focus on upgrading their infrastructure. It requires more bandwidth and less latency. Not paid prioritization.

There’s proof telcos blocked innovations like VoIP & videocalls (basic precursors of telemedicine) when they first appeared, most likely because they threatened the telco business model.

It’s clear that the future of medicine is therefore better protected by net neutrality rules that let people deploy new tech without having to discuss their usefulness vis a vis incumbent systems with the network gatekeepers.

Underlying net neutrality is the principle that hospitals, doctors, and patients are better prepared than ISPs at deciding what tech works best for them. Same as consumers knew more about the content they wanted than the Cable TV owners who were defining what would be on screen…or so it seems.

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6 “The FTC will then have a clear standard for misleading behavior”

Response: The Federal Trade Commission (FTC) is a generalist body with no rule making authority (≠FCC).

This means:

a.The FTC is less technically prepared to deal with ISP breaches of net neutrality than the FCC.

b. The FTC can only deal with “misleading behaviour” on a case-by-case basis. This would take ages and put a huge burden on individual consumers. Plus, the lack of a clear set of rules would create huge uncertainty for ISPs regarding the limits of network management practices. Not to mention the uncertainty it triggers for startups that might be unsure regarding whether or not their innovations might end up blocked by ISPs that may or may not ask for a cut to enable deployment.

In terms of protecting net neutrality we are therefore better off with the FCC as the cop on the beat.

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7. “One of the most hilarious objections is that (…) Mr Pai is rolling out his plan during the holidays to sneak it by the public.”

Response: It is a fact that the draft was officially released the day before thanksgiving. That is THE day most people are on travel according to Government statistics. By doing so the FCC basically robbed the public of a focal point for coordinated action. That is a politically savvy move for an unpopular decision. According to a recent poll, 73 percent of Republicans and 80 percent of Democrats support net neutrality. The word sneaky doesn’t seem to be an unreasonable term to describe how the FCC leadership has timed the release of the draft.

Yes, Pai enabled participatory mechanisms and this is something we should acknowledge, and many of us certainly have. Yet participation is not merely telling people they are allowed to scream, and taking them to a stadium so that they can blow some steam.

Participatory mechanisms should enable robust debates between citizens and decision-makers. These conversations should provide all interested parties the reassurance that the interests of all stakeholders are being taken into account, and that the best available arguments will inform the final decision.

If the FCC cannot provide an appropriate feedback loop for the comments received, the participatory mechanism fails to provide participants the space for actual deliberation. This undermines participatory mechanisms in general–by making people feel that participating is useless–, and it undermines government–by making people think it is unresponsive.

Poorly designed or executed participatory processes are thus legitimately perceived as a mechanism to drain the people into submission.

The FCC received 22 Million written comments. As you can imagine it’s simply not possible for the average participant to read 22 million comments in a couple of months, or even process them accurately with the aid of software (which the FCC claims to have, but the public does not).

Many of these 22M comments were submitted by bots. This is the disruptive equivalent of paying hooligans to storm a town hall meeting and shout out the debate. Whose comments are you going to read and reply? Yet the FCC didn’t do much to restart the conversations, explain who disrupted them or why. It paced on.

Of those comments actually submitted by humans, thousands if not millions outlined the impact gutting Net Neutrality would have on their small businesses and user experience. Yet the FCC’s analysis of the costs and benefits of a change in regulation (pg 172) is extremely superficial: It compares the worst possible scenario under today’s rules vs. the best possible outcome that could follow from gutting the net neutrality rules. And does so relying only on qualitative accounts, not actual math. If those running companies were angels we wouldn’t need rules, but that’s not the case. Whilst we might hope for the best, we have to prepare for the worst. That means considering the likelihood and impact of scenarios other than paradise.

The FCC isn’t being transparent about the fact that no cost benefit analysis was carried out despite so many people expressing legitimate and well-founded anxiety regarding a world with no net neutrality rules.

So no, the participatory mechanism enabled does not save the FCC leadership from the critics claiming the process was conducted behind our backs. A close look at the way the participatory process was executed might even suggest that the FCC leadership played smart and tried to tame the public through exhaustion.

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8. “Mr Wheeler [FCC Chairman in 2015] prepared one net neutrality order but dumped it when President Obama called for tougher regulations in a YouTube video”

Response: The rules enacted in 2015 were not the result of a frantic all-nighter. The FCC has been assessing and targeting the threat posed by violations to net neutrality since the Bush era. Trying to establish a legal footing for its power to enforce net neutrality has been a bipartisan effort for years. The previous two attempts to establish such legal footing (2008 and 2010) were struck down by the courts.

The rules in place between 2015 and 2017 (the ones Pai scrapped) followed a recommendation by the Court in the Verizon Case (2014): net neutrality implies a common carriage obligation that is only consistent with classifying broadband providers under Title II of the Communications Act. See key section below:

Section of the Court’s ruling in the Verizon case

After complying with this requirement the framework passed judicial review. That is, an independent court decided the rules were a reasonable interpretation of the law, and a reasonable mechanism to achieve the goals it pursued.

So no, the partisan card does not work. Both democrats and republicans have actively defended the need for enforceable net neutrality, and even independent non-partisan judges have supported the current rules, finding them “reasonable and supported by substantial evidence”.

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9. “…this week a few tech giants in Silicon Valley lost to American consumers who will benefit from more innovation and choice online”

Response: What could be called the “internet ecosystem” consists of two distinct layers: connectivity and content. These have developed as separate layers since the beginning (for reasons explained in point 1). The net neutrality framework set up in 2015 sought to keep these two layers separate by providing enforceable rules against traffic discrimination. In short: those managing internet access should not be able to leverage their gatekeeper powers to discriminate between companies in the content sector. There has to be a firewall. Those controlling the pipes can’t pick winners and losers on the edges.

Having separate layers puts incentives in line and enables a virtuous circle of growth and innovation between the layers.

GIf created by the author static version here (cc-by)

The separation of layers aligns incentives. To earn more money:

  • ISPs have to compete against each other based exclusively on their quality of service as ISPs. That is, they have to focus on making their data-packet delivery service faster and cheaper than that of their competitors; and invest to expand their infrastructure to reach more prospective clients.
  • Content and platform providers have to focus on quality of content and user experience.

This virtuous circle is what triggered a spiral of innovation and growth on both the connectivity and content markets over the past decades.

Even the Bush era FCC recognized this phenomenon: “Such openness encourages competition among Internet applications and services, which will in turn make broadband platforms more valuable to both consumers and network owners.”

The FCC’s job is to see the big picture and keep the incentives aligned so that the virtuous circle of innovation and growth continues.

As long as the virtuous circle is is in motion the cake keeps growing, and thus the slice of every actor in the system (ISPs, users, content providers..)grows bigger in absolute terms.

Without net neutrality rules, the ISPs will be allowed to follow their short term interests: ISPs will break the separation between the markets, and effectively snatch a slice of the cake from consumers and content providers. The virtuous circle would be halted if ISPs stop competing among each other and start tinkering with the competition that goes on between content providers. The uncertainty these distortions would produce among content providers would slow down growth, in the best of cases. Stall it in the worst.

The board of directors of the Wall Street Journal commands deep respect. I believe they have made a mistake and hope they correct their position in the near future. Net neutrality is good for the consumer, and good for the economy at large.

Raise your voices. The internet as we know it IS at risk. #SaveNetNeutrality

CC- Vimeo

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Juan Ortiz Freuler

Juan Ortiz Freuler

Justice & participation. ICTs & Data. Affiliate @BKCHarvard. Alumni: @oiiOxford & @blavatnikSchool . Chevening Scholar. Views=personal. Here-> open discussion.