Why Network Neutrality Will Not Die (But It Doesn’t Mean We’ll Win, Either).

Was it only last month when network neutrality was supposedly dead, deceased, passed on, expired, gone to meet its maker, run down the curtain, and joined the bleedin’ choir invisible? Yet here we are, with a network neutrality rule teed up for a vote at the FCC’s December 21 meeting. Even more surprising, it appears that a number of long-time opponents may actually be willing to come to the table on a compromise rule, with AT&T’s Jim Cicconi practically living in the Chairman’s office for the past few weeks presumably negotiating over the details of a proposal. Mind you, if the proposed rule is too much of a compromise, network neutrality supporters will oppose it. And, even if major carriers support it, Republicans at the FCC and in Congress are dead set against it.  But for the moment, network neutrality appears to have once again gone from “totally dead” to “certain to become law.”

Truth is, network neutrality has been declared dead so many times it ought to have its own movie or television franchise. I picture Jim Cicconi as Dr. Evil staring at a garishly dressed Josh Silver as Austin Powers and saying: “But you died in that landslide election, when my Tea Party sharks with laser-beams grafted to their skulls had you trapped in their lair!” Josh flips back his hair and replies: “Network neutrality will never die, baby. It’s too shaggidelic!” Or perhaps I, in my secret identity as Perry the Platypus, will once again foil Scott Cleland as Dr. Heinz Doofenshmirtz as he attempts to destroy the open internet with his Close-Internet-Inator (besides, I think FCC Chair Julius Genachowski and Chief of Staff Eddie Lazarus would look cute dressed as Major Monogram and Carl). Or perhaps a looming Voldemort-eque composite of the cable industry will turn its high power lobbying wand on a Network Neutrality Harry Potter (played by Sascha Meinrath, since Ben Scott is no longer available) and asking “Why do you live?” and a defiant Meinrath answers: “Because I have something to live for!”

But while network neutrality appears almost comically unkillable, that does not mean those pushing for strong network neutrality rules  will actually prevail.  As The Mikado once observed: “it’s an unjust world, and virtue is triumphant only in theatrical performances.” Hence the concern over the actual substance of the rule and the endless last minute wrangling.

Why Network Neutrality keeps coming back from the dead but why supporters still need to pull out the stops to get a strong rule below . . . .

The history of network neutrality has proven so improbably ridiculous that, had I not had a ringside seat throughout, I would have difficulty believing it. Net neutrality was born as the pathetic shred rescued from the wreck of the Brand X decision (which permitted the FCC to declare broadband access a Title I “information service” rather than a Title II “telecommunications service”), and has since grown to become the dominant issue in telecom.  It began life as a non-binding policy statement grudgingly included in the 2005 deregulation of DSL by then-FCC Chairman Kevin Martin to get the necessary votes from Democrats Michael Copps and Jonathon Adelstien (the FCC being down to 2-2 at the time). Over the last five years, it has lived a storied existence as the great spoiler of modern telecom policy. It crashed the Republican effort to rewrite the Communications Act in 2006, generating the “series of tubes” cultural moment along the way. When the first complaint of a violation by Comcast came in 2007, Kevin Martin, the Republican Chairman who hadn’t wanted to issue the policy statement in the first place, embraced it and affirmed it in a 3-2 vote joined by the two Democrats and over the nay votes of his two fellow Republicans.

Yet it stalled in a Democratic-controlled FCC and a Democratic-controlled Congress, despite endorsement from President Obama and the Democratic Congressional leadership. The D.C. Circuit overturned the existing rules in a case Comcast should never have brought and has since regretted that it won, precisely because its court victory so thoroughly undermined the FCC’s ability to exercise any regulatory oversight over the Internet at all. This prompted Genachowski to propose reclassifying broadband as a Title II service. Since then, we have bounced consistently from “reclassification is inevitable” to “network neutrality is dead” to “network neutrality is back, but Title II is dead” to “network neutrality is dead but do Title II” to “network neutrality and Title II are dead” to “network neutrality is back, but Title II is still dead” to “Title II is dead, unless the carriers oppose network neutrality, in which case it is back, but no one believes Title II is going to happen so it’s not a very effective threat to get carriers to sign on to Title I.” (See Feld’s Rule of Hand Grenades and Public Policy.)

So how is it that, five years after network neutrality grudgingly came into being as the pathetic shard of oversight salvaged from the total deregulation of broadband, it now utterly dominates the telecom policy landscape and will not die? And why hasn’t it actually passed?

Because the Internet, once the network of networks, is now the platform of platforms. The idea of “convergence” where everything in media and telecom policy that used to take place in separate silos — voice, video, wireless policy, you name it — came true. It all revolves around the Internet.  This ensures two very important things: 1) No matter how good carriers try to behave, they will inevitably step on a lot of industry toes, and 2) without a rule, there is no good way for anyone to get on with their lives. As a result, when something like the Comcast-Level 3 fight comes up, it becomes a major donnybrook that paralyzes everyone. It’s too big and potentially important to ignore, but there is no orderly way to resolve it — or even to establish what is actually going on. So everything grinds to a halt while parties publicly posture and all the other ISPs sit on the sidelines and wait to see how customers and regulators react.

A note by the way to opponents of a rule who simultaneously insist that “the market will discipline carriers” while bemoaning how supporters of network neutrality make such a big deal out of everything that looks like a potential network neutrality violation. How the heck do you think the “the market will discipline carriers” works? You cannot on the one hand claim that we don’t need a rule because Rob Topolski caught Comcast blocking BitTorrent and thus forced Comcast to change its practices, then complain when folks like Topolski (or competitors like Level 3) repeat what you claim is the right approach. You get what you reward, particularly when it is the only way to address a problem that impacts your ability as a business to survive. That is how “the market” works. the result, as carriers have learned, is a very inefficient market with a great deal of uncertainty.

Consider the Comcast/Level 3 fight. We have fights about prioritization and unreasonable fees and anticompetitive behavior all the time in Title II. But we have a process to deal with them. That what things like the special access fight are all about. Please note, I’m not saying the special access process works. It doesn’t. But had Comcast/Level 3 flared up under Title II, Level 3 would have had legal recourse and everyone would have said “well, if there is a problem, use the process” and it all would have gone boring and legal.

This is why at least some carriers are willing to cut a deal now and get this settled. They know as well as everyone else that if Genachowski does not move a rule before the Republicans take over the House, it is unlikely that a rule will move anytime soon unless something really disastrous happens. While that might sound ideal from the carrier’s perspective, it’s not. They want this over, and the regulatory uncertainty finally resolved so they can get on with their lives.

On the other hand, for the same reason, carriers have been willing to spend money like water and do whatever it takes to stop a rule. The Internet is simply too important to their future for them to accept the inevitable quietly — something rational people would have expected but which apparently took Genachowski by surprise. As a result, supporters of a network neutrality have spent the last two years consistently disappointed with the Obama Administration’s failure to deliver on its campaign promise of a strong network neutrality rule (yeah, I know, join the club).

Network neutrality supporters therefore face the prospect of going several more years without an actual rule, while all kinds of potentially bad stuff gets cemented as “industry practice.” Network neutrality opponents, on the other hand, face a relentless drain of blood and treasure while waking up every morning wondering what dumb-ass thing Comcast might do that will trigger yet another backlash against the industry. And as any good Ferengi up on his Rules of Acquisition knows, “when both sides are uncertain is the best time to Deal.” Or, to quote from James Keelaghan’s most excellent song Since You Asked: “You never had a chance this good, and that’s too bad.”

So we see a long list familiar players on both pro- and anti-network neutrality sides expressing their guarded praise for Chairman Genachowski for actually moving something, while holding their fire for the upcoming battle. Thus, AT&T, National Cable Telecommunications Association, CTIA — all of whom have vigorously opposed the need for any rule in the first place — have all issued statements about how they could live with something like this assuming the details work out. It’s not that they are suddenly in love with network neutrality, but they are hoping that by making a deal now they can finally get this sufficiently resolved to get on with their lives (although Verizon, for reasons I do not understand, loves the network neutrality debate so much it wants to have it all over again in 2012). Similarly, organizations like my employer Public Knowledge — which want a stronger rule than what has been proposed — “commend” the FCC Chairman for finally circulating a proposed rule and “look forward to working with the Commission to strengthen the order.” Because the only way to get even a vaguely adequate rule in place for the foreseeable future is to roll the dice and push for something now.

Which brings us to the follow up point. Getting a rule for its own sake is pretty meaningless. In fact, that’s what the carriers would like in the ideal world — a rule for its own sake that’s pretty meaningless. I expect the ideal for carriers would be something like the pathetically ineffective system the FCC set up to protect independent cable programming networks. Everyone in the cable industry knows the process is a total joke, and that the FCC would rather gnaw off its hand at the wrist rather than enforce it. [Just ask Sky Angel, still waiting on a Media Bureau decision on whether Sky Angel is covered by the statute, or the folks at WealthTV  and MASN, still waiting for the full Commission to review their various internal appeals.] But because there is a process, independent programmers get no sympathy in their complaints that the largest MVPDs use their market power to beat the crap out of them. “Well,” say MVPDs and staff at the FCC, apparently in all seriousness, “If you really have a case, why not bring a complaint?” Then they rush out of the room to giggle hysterically at this incredibly funny suggestion.

That is the kind of rule and enforcement carriers would love to have for network neutrality. From their perspective, a rule in name that has absolutely zero impact on reality is even better than no rule at all. Not only does it provide a shield against the possibility of adopting a real rule, it has a soul-crushing affect on the industry as a whole. But carriers know they need to give up something real to get the other Democrats on the FCC to vote for it, and because if the photo op is Genachowski surrounded by adoring carriers the issue does not actually end because no one outside of Washington will buy that for a minute. So they take a risk going forward that the final form of the rule may be stronger than they want — although they can always oppose the final version and run to the DC Circuit. Meanwhile, on the pro-net neutrality side, we take the serious risk that what the FCC ultimately decides on is too damn weak and we’re stuck with it.

Which makes the next three weeks among the most critical in telecom policy for some time. Between now and December 21, all sides will be pushing as hard as they can to shape a final rule. Carriers will do what they can to broaden loopholes and undercut the enforcement mechanisms while trying to make sure that network neutrality supporters cannot get stronger rules. Network neutrality supporters will be doing the opposite — trying to close loopholes and prevent the proposed rules from getting even weaker (PK has its wish list for improvement here). Because the Republicans have locked themselves into opposition, the real question is how far the three Democrats are willing to go, which depends in large part on what the public blow-back is from both sides and how the internal knife-fighting comes out.

But that’s life here in the Sausage Factory. I’m not liking it. But the alternative is go home and let the carriers write the rules to suit themselves. So — once more into the net neutrality breach my friends! And watch out for AT&T sharks with the laser beams on their heads.

Stay tuned . . . .