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The gap between the public and the US Congress over net neutrality

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There is a substantial gap between the positions of Republican members of the US Congress and the US public, if we believe the opinion poll published by Morning Consult, November 29, 2017, and the positions reported by BattleForTheNet.com, a consumer advocacy group focused on this issue; see the accompanying figure. Net neutrality supporters are asking the US Congress to overturn the December 14, 2017, decision by the US Federal Communications Commission (FCC) on “Restoring Internet freedom”. According to the Electronic Frontier Foundation and other sources, that's the freedom of Internet access providers like Comcast, Spectrum (formerly Chartered and Time Warner Cable), AT&T, and Verizon to block, throttle, alter, and redirect your requests for information from the Internet.[1]

Net neutrality positions: US public v. Congress. Public opinion survey data from Graham, Edward (2017-11-29), Majority of Voters Support Net Neutrality Rules as FCC Tees Up Repeal Vote; Follow-up action from lawmakers on Capitol Hill is iffy, at best, Morning Consult, retrieved 2018-02-01. Data on US Congress from We can make Congress save net neutrality, Battle for the Net, retrieved 2018-01-31

This new regulation was published on January 4, 2018.[2][3] The 539 pages of this January 4 Restoring Order includes an extensive but selective review of the history of regulating telecommunications, especially the Internet, and the available data. If you believe the FCC majority, the 2015 Title II Order that made net neutrality enforceable created such "regulatory uncertainty" of an "undue burden" on Internet access providers that it depressed by 3.1 percent the USTelecom broadband capital expense (CapEx) investments[4] or by 5.1 percent the CapEx not subject to the 2015 Title II Order among the 12 largest Internet Service Providers (ISPs) in the US in 2016 relative to 2014.[5] However, these numbers are no where close to being statistically significant,[6] and this January 4 Restoring Order downplays alternative perspectives.

Some of these alternative perspectives were discussed by FCC Commissioner Clyburn in her dissent.[7] She wrote that with this Restoring Order's "reliance on broadband providers assertions of reductions in investment is highly-flawed. Nothing in this [Order] convinces me that investment has dropped as a result of our net neutrality policies. ... [T]he broadband capital expenditures trend articulated by those believing investment has dropped follows the capital expenditures trend in the nation more broadly. ... This suggests that any alleged decrease in investment by broadband providers could be due to macroeconomic factors that influenced the overall economy, rather than the 2015 Open Internet rules."[8] The FCC majority is further misreading regulatory history. In the 1960s and 1970s "packet-switched precursors to internet access were uniformly considered Title II services. ... [T]he FCC majority is being disingenuous in its retelling of regulatory history, particularly as it relates to internet and packet-switched services. This majority is not 'returning' to a time where packet-switched networking ... were regulated as Title I services. Indeed, [this Order] is internally inconsistent since it admits that Digital Subscriber Line (DSL) services were regulated as Title II services until 2005. ... [P]ainting the FCC’s past approach to internet access as a deregulatory nirvana fails to grapple with the truth of our regulatory past.[9] This Order may leave us "with no one to protect consumers. This Order loudly crows about handing over authority of broadband to the FTC, an agency with no technical expertise in telecommunications and one that may not have authority over broadband providers in the first instance. But don’t just take my word for it: even one of the FTC’s own Commissioners has articulated these very concerns. ... I asked my colleagues to delay the vote until we knew for sure whether the FTC could even exercise its limited role in the net neutrality space. Unfortunately, my request was denied". ... [In this Order the FCC is also] preempting state consumer protection laws ... without notice". In 2014 and 2015, then-Commissioner Pai and Commissioner O'Rielly vigorously opposed federal preemption of state and local "laws that unduly restricted municipal broadband". Now they seek to prevent states from enacting "broadband privacy protections, net neutrality protections, or other consumer protections ... . [Moreover, they gave zero notice of this preemption, which] is contrary to the Administrative Procedure Act, and a Reagan-era Executive Order that requires 'notice and an opportunity for appropriate participation in the proceedings' whenever federalism issues are presented.[10]

For more background on this see, Net neutrality and 'Restoring Internet freedom' and Net neutrality in the United States.

Net neutrality supporters need only one more vote in the US Senate[11] but 43 more in the US House to overturn this FCC action using the Congressional Review Act (CRA) of 1996. The CRA allows Congress to bypass some of the standard committee reviews within 60 legislative days after a new regulation is officially published. However, even if they get the votes in the US House and Senate, President Trump could still veto it. On November 12, 2014, then-presidential candidate Trump tweeted, "Net neutrality is the Fairness Doctrine. Will target conservative media."[12]

There are at least three other paths to blocking this FCC action:

  1. The courts.
  2. Actions by individual states.
  3. Changes in Congress resulting from, e.g., the 2018 elections.

Courts

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On January 16, attorneys general of 21 states and the District of Columbia filed a “protective petition for review,” asking the US Court of Appeals for the District of Columbia Circuit to overturn this FCC decision[13] on the grounds that it was “arbitrary, capricious, and an abuse of discretion within the meaning of the Administrative Procedure Act” (APA) of 1946 and other grounds. The APA, in particular, says that courts can set aside agency actions for precisely these grounds, noting that agency decisions must be supported by “substantial evidence.”[14]

This FCC decision was supported by an extensive but selective review and interpretation of the history of FCC regulations in this area,[15] challenged immediately by FCC Commissioner Clyburn, who said it was “Destroying” not “Restoring Internet freedom”, as claimed in its title, and “there is no cogent economic analysis to be found [and] most Americans lack options for robust fixed broadband because most ... providers are not competing against each other.”[16] On December 8 FCC commissioner Rosenworcel claimed that the FCC was withholding evidence of fraud due to irregularities its comment period.[17]

 
Broadband Capital Expenditures by U.S. Broadband Providers ($ billions, 1996-2015)[18]

The quantitative justification the FCC gave for this decision was a drop of almost a $1 billion in US Telecom capital expenditure (CapEx) investments in new telecommunications infrastructure in 2015, which they said was due in part to “regulatory uncertainty”.[19] However, this drop of almost $1 billion is less than three quarters of the annual changes in US Telecom CapEx investments; see the accompanying figure.

Moreover, Ernesto Falcon, Legislative Council with the Electronic Frontier Foundation, said that the publicly traded companies in that market have not mentioned the Title II Order in their filings with the Securities and Exchange Commission (SEC), which is the only place with credible penalties for misleading comments. There, they've said that business is good.[20] This claim is supported by an analysis by Turner of Free Press in a report that includes 26 figures and tables, 21 of which were extracted from SEC filings and three of the remaining five came from the U.S. Census Bureau’s Annual Capital Expenditures Survey.[21] None of Turner's tables were accompanied by statistical tests, but two showed statistically significant positive results following the Title II Order,[22] the change was negative for only 5 of the 24 tables, and the mean and median change over the 24 tables for which it seemed reasonable to extract a typical annualized percentage change were 8.1% and 5.2%, respectively.[23]

Actions by individual states

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Action on net neutrality has started in several states,[24] in addition to the lawsuit just described.

  • The governor of Montana signed an executive order requiring all telecommunications services receiving contracts from the state to abide by net neutrality principles in all their dealings in Montana, not just in their business with state agencies.[25]
  • At least 20 bills with some net neutrality impact is pending in at least 10 states as of 2018-02-02: Alaska,[26] California,[27] Massachusetts,[28] Nebraska,[29] New Mexico,[30] New York,[31] Rhode Island,[32] Tennessee,[33] Virginia,[34] and Washington state.[35] Legislators in several other states are considering similar action. This includes North Carolina, Illinois,[36] and Wisconsin.[37]
  • Oregonians for Net Neutrality have filed an initiative petitions with the Oregon Secretary of State.[38]
  • In addition, the City of New York has issued a “Truth in broadband request for information [RFI] ... to gather input from industry and subject matter experts to help implement a system for monitoring the quality and performance of internet service providers. [It] seeks technical insight and policy guidance for monitoring net neutrality and other network performance issues through the use of regular diagnostic tests that would not require special authorization from the providers themselves. The data generated through these tests would be vital for consumers, planners and regulators interested in promoting fair and trustworthy broadband because it could reveal disparities between different neighborhoods, discrimination against certain kinds of content or among different providers, or a divergence between what a company has promised and what it delivers.”[39]

Changes in Congress resulting from, e.g., the 2018 elections

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If this becomes a major campaign issue in 2018 contributing to the Democrats taking control of the US House and Senate, they could pass legislation to restore net neutrality if the courts fail to overturn this FCC decision.

If that does not happen but a Democrat wins the Presidency in 2020, s/he could appoint people to the FCC, who would overturn this decision in the same way Trump's FCC overturned the 2015 Obama-era Title II Order that made net neutrality enforceable. If, in the meantime, the Supreme Court decides to support the December 14, 2017 FCC decision on this issue, it should provide a precedent with an extremely low bar for the “substantial evidence” required per the Administrative Procedures Act to change a regulation.

Impact on “regulatory uncertainty”

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The FCC stated in their Notice of Proposed Rulemaking (NPRM) on “Restoring Internet Freedom”, published May 18, 2017, that “regulatory uncertainty” was a major problem, which they hoped to reduce with this NPRM.[40] With the virtual certainty of at least one court challenge and with net neutrality bills introduced in January 2017 in New York, and February 2017 in California, months before this FCC NPRM was published, it should have been clear to the majority on the FCC that their decisions on this issue in May and December would increase, not decrease, regulatory uncertainty.

References

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Notes

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  1. ↑ 191 Internet Engineers, Pioneers, and Technologists (2017-07-17), Joint Comments of Internet Engineers, Pioneers, and Technologists on the Technical Flaws in the FCC’s Notice of Proposed Rule-making and the Need for the Light-Touch, Bright-Line Rules from the Open Internet Order, U. S. Federal Communications Commission, retrieved 2017-08-31
  2. ↑ FCC Restoring Internet Freedom Order (2018)
  3. ↑ Brodkin, Jon (2018-01-04), FCC releases final net neutrality repeal order, three weeks after vote: With repeal officially published, FCC will soon face lawsuits., Ars Technica, retrieved 2018-01-05
  4. ↑ Brogan, Patrick (2017-10-31), Broadband Investment Continues Trending Down in 2016 (PDF), USTelecom, p. 2, retrieved 2018-02-07, Chart 2. Historical Capital Expenditures by U.S. Broadband Providers ($ billion, 1996 - 2016)
  5. ↑ Singer, Hal (2018-03-01), 2016 Broadband Capex Survey: Tracking Investment in the Title II Era, Hal Singer, retrieved 2018-02-07
  6. ↑ Statistically significant relative to the changes between years for the USTelecom numbers or to the differences between companies for Singer's figures.
  7. ↑ FCC Restoring Internet Freedom Order (2018, pp. 223-232)
  8. ↑ FCC Restoring Internet Freedom Order (2018, p. 226). She also says, "The Federal Reserve Bank of St. Louis tracks Gross Private Domestic Investment, a component of the gross domestic product that tracks capital expenditures across all industries in the United States. If you believe the information submitted by broadband providers in the record, that information tracks the Fed’s assessment of investment in the broader economy."
  9. ↑ FCC Restoring Internet Freedom Order (2018, p. 226-227)
  10. ↑ FCC Restoring Internet Freedom Order (2018, p. 230)
  11. ↑ Fung, Brian (2018-01-15). "The Senate's push to overrule the FCC on net neutrality now has 50 votes, Democrats say". Washington Post. Retrieved 2018-01-22.
  12. ↑ Trump, Donald (realDonaldTrump) (November 12, 2014), Obama's attack on the internet is another top down power grab. Net neutrality is the Fairness Doctrine. Will target conservative media.
  13. ↑ State of New York; State of California; State of Connecticut; State of Delaware; State of Hawaii; State of Illinois; State of Iowa; Commonwealth of Kentucky; State of Maine; State of Maryland; Commonwealth of Massachusetts; State of Minnesota; State of Mississippi; State of New Mexico; State of North Carolina; State of Oregon; Commonwealth of Pennsylvania; State of Rhode Island; State of Vermont; Commonwealth of Virginia; State of Washington; the District of Columbia (2018-01-16), Protective Petition for Review, Case No. 18-1013 (PDF), Attorney General of the State of New York, retrieved 2018-02-01
  14. ↑ Title 5--Government Organization and Employees, sec. 706. Scope of Review (PDF), US Government Printing Office, 1946-06-11, p. 109, retrieved 2018-02-02
  15. ↑ FCC Restoring Internet Freedom (2017)
  16. ↑ Clyburn's dissent, pp. 62ff in FCC Restoring Internet Freedom (2017)
  17. ↑ Cameron, Dell. "FCC Commissioner Blasts Her Own Agency for Withholding Evidence of Fraud". Gizmodo. Retrieved 2017-12-17.
  18. ↑ Broadband Investment Remains Large, but Ticked Down in 2015, USTelecom, December 14, 2016, retrieved 2017-09-01
  19. ↑ FCC Restoring Internet Freedom (2017, p. 18)
  20. ↑ Graves, Spencer; Falcon, Ernesto (July 25, 2017), $15 minimum wage on Aug. 8 ballot in KCMO plus Trump’s attack on net neutrality, KKFI, retrieved 2017-09-01.
  21. ↑ Turner (2017)
  22. ↑ Turner (2017): His Figures 5 and 6 showed different revenue numbers for 18 and 17 different companies, respectively, and all were positive, averaging 12% and 4.6% annualized growth rate in 2015 and 2016 over 2013 and 2014. The annualized percentage change in the other Figures / Tables ranged from -12% to +40%.
  23. ↑ See Turner (2017) and the summary of it in Table 1 in Friends of Community Media Reply Comment in Opposition to Restoring Internet Freedom NPRM, U. S. Federal Communications Commission, 2017-08-30, retrieved 2017-08-31
  24. ↑ This section was constructed by reviewing the list of “State initiatives” published by ActionNetwork.org and Fight for the Future and checking the sources they cite to confirm the veracity of their claims, as noted in the individual notes in this section. These states are fighting for net neutrality. Is yours one of them?, ActionNetwork.org, retrieved 2018-02-02
  25. ↑ Bullock, Steve, Executive order providing for internet neutrality principles in state procurement (PDF), Executive Order 3-2018, State of Montana, retrieved 2018-02-02
  26. ↑ Granger, Erin (2018-01-26), Alaska legislator introduces net neutrality bill, Daily News-Miner, retrieved 2018-02-02
  27. ↑ Two pieces of legislation have been introduced on this issue. The first was SB-460 Communications: broadband Internet access service, which proposes to mandate net neutrality for all Internet access providers operating in California. SB 822 would require the exist California Public Utilities Commission to enforce net neutrality on all telecommunication services operating in the state. de León, Kevin (January 22, 2018), SB-460 Communications: broadband Internet access service.(2017-2018), SB-460, California state legislature (published February 16, 2017), retrieved 2018-02-02. Senator Wiener; six principal coauthors in the California senate; seven co-authors in the California Assembly (2018-01-03), SB-822 Broadband Internet access service.(2017-2018), SB-822, California state legislature, retrieved 2018-02-02
  28. ↑ Senator Barbara A. L'Italien; 39 other members of the Massachusetts state senate, An Act protecting consumers by prohibiting blocking, throttling, or paid prioritization in the provision of internet service, SD.2428 190th, Massachusetts legislature, retrieved 2018-02-02
  29. ↑ Sen. Adam Morfeld (2018-01-05), A BILL FOR AN ACT relating to telecommunications and technology; to amend sections 86-125 and 86-580, Reissue Revised Statutes of Nebraska; to adopt the Internet Neutrality Act; to change requirements for communications providers under the Nebraska Telecommunications Regulation Act; to change provisions relating to financial assistance from the Nebraska Internet Enhancement Fund; to harmonize provisions; to provide an operative date; to provide severability; and to repeal the original sections (PDF), LB856 2018, Nebraska state legislature, retrieved 2018-02-02
  30. ↑ Sen. Howie C. Morales introduced two bills: SB 155, regarding “Broadband access unfair trade practices”, introduced 2018-01-23, and SB38 “Relating to trade practices; enacting a section of the unfair practices act to prohibit and make subject to penalty certain acts. Sen. Howie C. Morales (2018-01-23), Broadband access unfair trade practices, SB155, New Mexico legislature, retrieved 2018-02-02 and Sen. Howie C. Morales, Relating to trade practices; enacting a section of the unfair practices act to prohibit and make subject to penalty certain acts (PDF), SB39 2018, New Mexico legislature, retrieved 2018-02-02
  31. ↑ Two bills have been introduced into the New York Senate and three in the Assembly. Four carry similar titles (S07175, S07183, A08882, and A09057, “An Act to amend the public service law and the state finance law”) but differ their contents. This other is a general “Omnibus Telecommunications Reform Act of 2017”, A01958. Sen. Parker (2018-01-03), An act to amend the public service law and the state finance law, in relation to state contracts being only with internet service providers compliant with net neutrality and establishes a revolving fund for the establishment of municipal internet service providers; and making anappropriation therefor, S07175, New York Assembly, retrieved 2018-02-02. Sen. Carlucci (2018-01-03), An act to amend the public service law and the state finance law, in relation to instituting internet service neutrality, S07183, New York Assembly, retrieved 2018-02-02. Fahy; 34 other members of the Assembly (2017-12-22), An act to amend the public service law and the state finance law, in relation to instituting internet service neutrality, A08882, New York Assembly, retrieved 2018-02-02. Member of the Assembly Cahill (2018-01-18), An act to amend the public service law and the state finance law, in relation to state contracts being only with internet service providers compliant with net neutrality and establishes a revolving fund for the establishment of municipal internet service providers; and making an appropriation therefor, A09257, New York Assembly, retrieved 2018-02-02. Member of the Assembly Pretlow (2017-01-17), An act to amend the public authorities law, the public service law, the executive law, in relation to reforming the telecommunications sector of the New York economy, by creating a broadband authority, authorizing statewide cable franchises for the purposes of competitive cable service, promoting the wide-spread development of high-capacity broadband internet access, and increasing the availability and quality of services in this key economic development area and ensuring the safety, reliability and affordability of telecommunications services, A01958, New York Assembly, retrieved 2018-02-02.
  32. ↑ Representative Kennedy; Representative Abney; Representative Shekarchi; Representative Serpa; Representative Marshall (2018-01-10), An act relating to public utilities and carriers - Internet service providers - net neutrality (PDF), H7076, Rhode Island General Assembly, retrieved 2018-02-02.
  33. ↑ Harris (2018-01-10), An act to amend Tennessee Code Annotated, Title 4; Title 5; Title 6; Title 7; Title 10; Title 12; Title 65; Title 67 and Title 68, relative to internet neutrality. (PDF), SB1756, State of Tennessee, retrieved 2018-02-02.
  34. ↑ Lee J. Carter (2018-01-09), Broadband services; prohibited features, HB705, Virginia's legislative information system, retrieved 2018-02-02.
  35. ↑ Two bills on this have been introduced in the Washington House and one in its Senate. Representative Hansen; Representative Cody; Representative Goodman; Representative Pettigrew; Representative Tarleton; Representative Fey; Representative DeBolt; Representative Bergquist; Representative Springer; Representative Santos; Representative McBride; Representative Smith; Representative Chapman; Representative Slatter; Representative Peterson; Representative Wylie; Representative Fitzgibbon; Representative Morris; Representative Stonier; Representative Lytton; Representative Sawyer; Representative Robinson; Representative Tharinger; Representative Kagi; Representative Pellicciotti; Representative Dolan; Representative Orwall; Representative Valdez; Representative Haler; Representative Kilduff; Representative Senn; Representative Frame; Representative Sells; Representative Kirby; Representative Stanford; Representative Blake; Representative Reeves; Representative Clibborn; Representative Macri; Representative Kloba; Representative Appleton; Representative Stambaugh; Representative Jinkins; Representative Ormsby; Representative Ryu; Representative Hayes; Representative Pollet; Representative Doglio; Representative Ortiz-Self; Representative Riccelli; Representative McDonald (2018-01-08), An act Relating to protecting an open internet in Washington state and adding a new chapter to Title 18 RCW. (PDF), House Bill 2282, Washington state legislature (published 2017-12-13), retrieved 2018-02-02. Smith; Cody; Tarleton; DeBolt; Springer; Santos; McBride; Chapman; Wylie; Fitzgibbon; Peterson; Morris; Stonier; Kagi; Senn; Kirby; Stanford; Blake; Reeves; Kilduff; Clibborn; Macri; Pettigrew; Orcutt; Stambaugh; Ormsby; Ryu; Hayes; Pollet; Doglio; Ortiz-Self; Riccelli; McDonald; Jinkins; Gregerson (2017-12-14), Protecting consumers by prohibiting blocking, throttling, or paid prioritization in the provision of internet service in Washington state., House Bill 2284 2017-18, Washington state legislature, retrieved 2018-02-02. Carlyle; Hunt; Keiser; Kuderer (2018-01-18), Ensuring consumers rights to internet transparency., SB 6446 2017-18, Washington state legislature, retrieved 2018-02-02.
  36. ↑ Kang, Cecilia (2018-01-11), States Push Back After Net Neutrality Repeal, New York Times, retrieved 2018-02-02
  37. ↑ Lorenzsonn, Erik (2018-01-20), "Democrats to propose net neutrality rules at state level", The Cap Times, retrieved 2018-02-02
  38. ↑ "Oregon Net Neutrality Initiative Filed With State Secretary: Oregonians for Net Neutrality will need nearly 90,000 signatures to get their initiative on the November 2018 ballot.", Across Oregon Patch (published 2018-01-21), 2018-01-22, retrieved 2018-02-02
  39. ↑ NYC Connected Truth in Broadband Request for Information, Chief Technology Officer for The City of New York., 2018-01-22, retrieved 2018-02-02
  40. ↑ FCC Restoring Internet Freedom (2017, esp. p. 18)
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