Can the FTC Really Handle Net Neutrality? Let’s Check Against the 4 Most Famous Violations.

I have been personally involved in just about every major network neutrality issue since this began as “open access” in 1998. It gives me a somewhat different perspective than others, I expect. For one thing, I actually remember the various network neutrality violations we’ve had over the years — and how the FCC previously expected to address them.

 

FCC Chairman Ajit Pai’s proposed draft Order repealing net neutrality is, without doubt, the most dramatic and radical about face committed on this matter in the almost 20 years this issue has percolated. Among other things, it completely renounces any FCC oversight over the behavior of broadband providers. Back in 2002, when Chairman Michael Powell’s FCC issued the Cable Modem Declaratory Ruling, defenders of the FCC’s action dismissed the claim that the FCC was abandoning all regulatory oversight of broadband as “fear mongering.” Now, of course, Pai insists that the draft Order simply resets the clock to the golden age of 2014, and that those who insist the FCC ever exercised authority over last-mile broadband are “fear mongering.” To paraphrase Inigo Montoya of the Princess Bride, ‘you keep using that phrase. I do not think it means what you think it means.’

 

In particular, Pai and defenders of the draft Order insist that a combination of the Federal Trade Commission (FTC) Section 5 (15 U.S.C. 45), state consumer protection law, and anti-trust law will provide more than adequate protection for consumers and anyone who doubts this is — you guessed it — fear mongering. Happily, we do not need to speculate on this entirely. We can simply apply the proposed rules in the draft Order and the protections cited by the draft Order and its defenders and apply them to the four most significant network neutrality violations on record.

 

(1) The 2013-14 “peering dispute” between Netflix and the four largest broadband Internet access service (BIAS) providers — Comcast, Time Warner Cable (now Charter), AT&T and Verizon;

(2) The 2012 decision by AT&T to limit Facetime to the highest tier plan on its mobile service;

(3) The 2007-08 blocking of peer-2-peer (p2p) applications such as BitTorrent by Comcast;

(4) The 2005 blocking of Vonage VOIP calls by the ISP Madison River.

 

It’s worth noting as we begin the analysis that, while the draft Order does not discuss the Netflix/BIAS peering dispute at all, it does discuss the other 3 and explain why they were (a) not a big deal, and (b) would probably be permitted under the FCC’s new approach. But lets run through the exercise on our own. As discussed below, under the existing 2015 rules, the FCC can address and resolve each of these. Under the FTC/State consumer protection law/Sherman Act approach, the only one of these actions subject to any sanction is the 2008 Comcast/BitTorrent blocking, and even then only for the misrepresentations to customers denying its “network management” decision to disrupt p2p traffic. Assuming Comcast actually admitted to blocking/degrading p2p traffic when initially confronted in 2007, neither the FTC nor any of the other proposed remedies would have ended Comcast’s “network management practice.”

 

This result should not surprise us. After all, not only does the draft Order explicitly cover the 2012 AT&T/Facetime, 2008 Comcast/p2p fight, and the 2005 Madison River VOIP blocking and explain why they should have been permissible rather than subject to “heavy handed” FCC enforcement, but those defending the current draft Order as the Nirvana of “light touch” regulation defended each of these BIAS actions as entirely within the rights of the BIAS provider and an unwarranted interference on the part of the FCC. Whether or not one agrees that these actions were appropriate network management/market negotiation decisions by broadband providers, no one can deny the rules adopted in 2015 expressly prohibits these four incidents whereas the rules in the draft Order expressly permit them.

 

More detail below . . .

Let us take each of these incidents in reverse chronological order, from most recent to most distant. I analyze each under the 2015 rules, then under the regulatory regime adopted by the draft Order.

 

The Netflix/BIAS Interconnection Dispute.

 

This incident did the most to raise public awareness about network neutrality, although I and others did not technically consider it a “network neutrality” dispute at the time but classified it as an “interconnection dispute. Nevertheless, in no small part thanks to John Oliver focusing on this in his famous 2014 show on the subject, this incident became for many the prime example of how broadband providers could interfere with competing video content despite widespread public anger at the broadband providers.

 

What Happened?

You can read a fairly lengthy and detailed report published by Open Technology Institute analyzing the dispute and what happened over here. You can read the more friendly to carriers version here. You can see some stuff I wrote about this along the way here and here.

 

Briefly, companies that move lots of high bandwidth content, like movies, have traditionally used “content delivery networks” (CDNs) to store content close to the last mile network. This benefits both the ISP (since its customers get the desired content faster, and it takes pressure off the general interconnection point. It also benefits the companies that pay CDNs, since their content gets delivered comparatively more quickly than companies using standard transport. CDNs traditionally pay the last mile network to interconnect. By contrast, last mile networks and large transport providers (the companies that move stuff around in the cloud) usually exchange traffic for free (an arrangement called “peering”). As the large “transport” companies like Level 3 and Cogent laid more fiber, it became possible to send huge files like video through the much cheaper “peering” points than to pay for CDNs.

 

Broadband carriers did not like this. They considered it cheating to bring video traffic traditionally brought by CDNs in through peering/interconnection. They insisted that Netflix pay for a CDN. Netflix refused, although they offered to instal their own CDN for free. The four largest broadband providers — Comcast, Time Warner Cable (now owned by Charter), Verizon and AT&T — refused to upgrade their interconnection points to handle the increased volume.  The transport carriers (e.g., L3 and Cogent) offered to pay the cost of upgrading the interconnection points to handle the traffic. The BIAS providers said no dice. Either pay CDN rates or peer over the increasingly congested links.

 

Throughout 2013, to the increasing frustration of customers, Netflix performance continued to degrade for people using the four major ISPs in the peering dispute. Worse, because this impacted all traffic coming across the interconnection points, it generally slowed down and degraded all traffic  — particularly high-bandwidth traffic like video (unrelated to Netflix). A subsequent report by M-Labs found that many consumers had the effective speed of their internet connection drop to .5 mbps download speed, no matter what speed package they were paying for. Finally, in 2014, Netflix agreed to pay Comcast (and ultimately other providers) in exchange for direct interconnection. Once this separate interconnection between Netflix and the various ISPs occurred, Netflix functionality returned to full usability and the issues associated with congestion resolved.

 

Concerns: Public backlash against this event was massive, prompting the FCC to investigate. In particular, the FCC in the 2015 Order expressed concern about the broader spill over impacts on all Internet traffic from the congestion the peering dispute caused. But the FCC 2015 Order also observed that the largest ISPs were capable of ignoring customer backlash for almost a full year until Netflix caved, despite the widespread popularity of Netflix. The FCC ultimately included provisions in the 2015 Rules to address these concerns.

 

How would this come out today? Under the 2015 Rules, broadband providers are entitled to negotiate reasonable rates for interconnection. Where edge providers or subscribers believe that broadband Internet access service providers are interfering with interconnection for anti-competitive reasons, or leveraging their last-mile connection to subscribers to charge unjust and unreasonable rates, subscribers can file a complaint and the FCC can act to ensure that the conduct does not interfere with unrelated traffic, otherwise degrade the service he subscriber is supposed to get from the BIAS provider, and that the rates charged for interconnection are reasonable and not the result of market power.

 

Additionally, and this is critically important, in the event of an emergency the FCC could act immediately to issue an injunction to the parties, require parties to carry each other’s traffic,

 

How would this come out under the draft Order. The draft Order explicitly repeals the rules the FCC adopted to address this situation in 2015. Additionally, whereas the FCC maintained it had legal authority to address interconnection disputes in 2014, the draft Order explicitly states the FCC has no authority going forward to deal with interconnection or other “upstream” traffic.

 

So the FCC is out of it. We know from 2014 exactly how well the public backlash worked to moderate the conduct (not at all). Lets run through the other potential sources of legal authority: FTC, anti-trust, and state authority. Mind you, none of these actually stepped up in 2013-14 (although there is some effort by NY state I’ll discuss below), but lets assume that now that FTC has clear possession of the football they will step up — assuming they can.

 

Could the FTC Act?

The FTC acts under its Section 5 authority, 15 U.S.C. 45. So is this “unfair” or “deceptive” conduct by the broadband providers?

 

Unless the broadband providers actively lie about the cause of the problem (which is what the NY state lawsuit against Charter is about, I will discuss more below), then there is no deception. This is not even the sort of thing you have to declare under the FCC’s remaining “transparency” rules, since it isn’t really even a network management practice (other than ‘folks gotta pay for interconnection via CDN or meet our peering policy or otherwise pay for interconnection). This is just a contract dispute.

 

Sure, that contract dispute has massive impacts on more than just Netflix. It totally degraded the entire interconnection point, rendering the broadband experience wretched. So what? That’s not deceptive. You get advertised speeds, as best effort, subject to whatever else happens upstream. As long as the various carriers are honest about the contract dispute, then it’s not deceptive.

 

OK, is it unfair? Again, contract disputes between providers of consumer services and the various upstream inputs are not generally what falls into the “unfair” analysis of the FTC’s Section 5 authority. Take a typical case when a cable programmer and the cable company don’t agree on retransmission terms (a “retrans dispute”) that may result in a blackout. That is not actionable under Section 5 as “unfair” to consumers.

 

So, no unfairness, no deception. No basis for FTC authority, no matter how much the peering dispute may screw things up for your broadband connection — or interfere with you getting a service you pay an edge provider for. Nor does it matter that the ongoing dispute threatens the stability of the broadband network as  whole, and has lots of spillover effects on lots of businesses and consumers that aren’t in any way, shape or form involved in the dispute. That’s why we have a Federal Communications Commission with all kinds of special power over telecommunications platforms. We consider telecom a special case (like finance, or health, or power or a bunch of other “sector specific” industries with broad impact on the economy as a whole), so we have a special agency to address telecommunications with an express instruction from Congress to keep things from melting down and impacting everyone else.

 

So once the FCC is out of the picture, that pretty much eliminates any broader concern for broader impacts, or issues relating to general consumer frustration. A provider offering crappy service because of a contract dispute with someone else is not “unfair” no matter what the overall impact.

 

So the FTC would have no jurisdictional hook should we see a repeat of the 2014 peering dispute — with Netflix or anyone else.

 

What about antitrust law?

The FCC certainly expressed concerns that broadband providers have particular reasons to target video providers like Netflix. After all, they offer competing video services. As the DoJ (and FCC) found when analyzing the Comcast/NBCU deal, broadband providers that are vertically integrated with cable providers (and even more so those vertically integrated with their own competing content providers) have both the incentive and ability to interfere with competing video services like Netflix. So does anti-trust law help?

 

For starters, we need to get past the fact that the draft Order actually poo-poos this idea fairly heavily. So following adoption of the draft Order, the “expert agency” has pretty severely undermined any antitrust argument. But let’s pretend we can ignore that. What then?

 

It’s still unclear if anyone can bring an antitrust case for this kind of “contract dispute” between the broadband provider and a competing video service — including the video service arguing it is subject to anti-competitive discrimination. The critical cases on this are Bell Atlantic v. Twombly and Verizon Communications v. Law Offices of Curtis v. Trinko, LLP. These cases dealt with the refusal of providers to deal with parties following FCC deregulation removing the “duty to deal.” Additionally, Twombly dealt with the “parallel conduct” by various telecom companies to refuse to overbuild each other’s territory. The Supreme Court held in Trinko that where the FCC, via deregulation, removes the “duty to deal,” there can be no antitrust violation for refusing to deal. That would appear to cover this case rather explicitly. The FCC is removing any duty for broadband providers to deal with Netflix (or any other edge provider), so there can be no antitrust violation under Section 2 of the Sherman Act. Q.E.D. Twombly held that mere parallel conduct is not sufficient to establish a conspiracy under Section 1 of the Communications Act, so the fact that the four biggest last-mile ISPs all engaged in the same conduct does not give rise to a conspiracy theory under Section 1.

 

So that would appear to pretty much knock out any sort of anti-trust action. But lets pretend we can get around both Trinko and Twombly. Would we have an anti-trust violation then?

 

I hate to say “absolutely no,” but the odds are incredibly tiny. You can see the massive effort cable operators have been making to try to sue programers like Viacom for insisting on selling in bundles to understand why this is unlikely to work. First, it takes a long time and is extremely expensive. Second, it takes a showing that there is no other motivation but an anticompetitive use of market power. Even then, assuming there is some offsetting “consumer welfare benefit,” it is OK. (You can read a good article on the whole big fight in antitrust and its inability to handle issues like this here.) Here, Comcast and all the other broadband providers have a perfectly good, market-based explanation for why they think they should hold up Netflix to pay extra for “CDN-interconnection” rather than using a transport ISP that has a peering arrangement with the major broadband providers. Again, that the cable operators are demonstrably in a better position based on who had to cave despite how upset consumers were is irrelevant. Sure, you might think that if a company has such enormous market power they can make the most popular online service cry “uncle” despite consumers being mad about it that would automatically be an antitrust violation, but antitrust doesn’t work that way.

 

This Is A Feature, Not A Bug.

 

Those defending the FCC’s draft Order will explain (as they did back in 2014), that the inability of either the FTC Section 5 or antitrust law to address the Netflix “peering dispute” is proof that it was regulatory overreach for the FCC to interfere. After all, if Section 5 doesn’t address it, and antitrust doesn’t address it, than the conduct must be permissible — Q.E.D.

 

As a matter of policy, you can certainly take that position. As long as you own the outcome. The 2015 FCC rules provided an explicit means of limiting the potential harm that could occur to consumers and broadband traffic generally as a a consequence of a future peering dispute. The draft Order eliminates the ability of the FCC to address the conduct, and no one else has the ability to address the conduct. So, after adoption of the draft Order, we can expect to see the return of these “peering disputes” as simply “market place negotiations” in which consumers and regulators should have zero input.

 

What About the States?

 

State consumer protection law and state competition law effectively mirror existing federal antitrust law and federal consumer protection law under 15 U.S.C. 45. So if the FTC and the Sherman Act can’t touch it, then state laws are unlikely to be able to address these concerns as well. But even if they could, the draft Order explicitly preempts any state law that “contradicts” the FCC’s deregulation of broadband services.

 

So if federal law wouldn’t cover it, the FCC preempts the states from trying to cover it on their own. Again, remember that Chairman Pai and others supporting the draft Order have consistently said since 2014 that they think that the negotiations between Netflix and the ISPs was a good thing and that it would be bad for any federal or state law to interfere with these marketplace negotiations.

 

Which brings us to the ongoing lawsuit by the state of NY against Charter for Time Warner Cable’s conduct in 2014 wrt Netflix. Specifically, the NY AG alleges in the complaint that Time Warner Cable (now owned by Charter) told customers they could resolve their problems running Netflix by buying a more expensive, higher-capacity broadband subscription. Since TWC knew the problem was entirely from allowing the interconnection points to congest, the NY AG office maintains this violated NY state consumer protection law.

 

Citing to the broad preemption law in the draft Order at Paragraph 191, Charter has asked the New York state court to dismiss the complaint. It remains to be seen whether Charter is ultimately successful in getting the NY State AG complaint dismissed. But the fact that Charter has filed the dismissal motion even prior to the FCC adopting the Order foreshadows how the draft Order will effectively undermine just about every state enforcement action.

 

To conclude, there is an excellent reason why the FCC’s draft Order does not ever discuss the single biggest violation of net neutrality (from a public perspective) addressed by the 2015 rules. Any such analysis would demonstrate that Chairman Pai and his fellow Republicans believe that the year-long degradation of broadband traffic for subscribers that resulted from the peering dispute between Netflix and the four largest ISPs that lasted for almost a full year was a completely appropriate marketplace negotiation and that the “regulatory overreach” they seek to cure are — in part — the rules designed to address such peering disputes going forward. That is not an unreasonable policy position. It is simply an unpopular one. Which, of course, is why no one defending the draft Order seems willing to come out and say so explicitly.

 

AT&T/Facetime.

 

Fortunately, having now covered the basics of the analysis, we can speed through the other 3 incidents much more quickly. In 2012, AT&T announced it would limit access to Apple Facetime to those subscribers in shared data plans. My employer Public Knowledge (along with Free Press) filed a formal net neutrality complaint under the rules adopted in 2010. We ultimately settled and AT&T made Facetime available to all subscribers.

 

The draft Order discusses this incident, and especially in the discussion of how antitrust could handle everything at ft. 524. Even the draft Order is skeptical that an antitrust action could be maintained against AT&t in these circumstances. The draft Order concludes that this should not worry anyone because “the same forces that led AT&T to change its policy in that instance likely apply now, but with greater strength.” Since the “forces” that led AT&T to change its policy” was a complaint filed under the no longer existing rules, this seems a rather dubious assertion.

 

In any event, thanks to the draft Order’s own footnote, we don’t have to worry about running through an antitrust analysis. So what about the FTC? Here, AT&T explicitly announce this would be policy, so no deception. What about the “unfairness” prong? It is hard to see how this constitutes “unfair” under the requirements of Section 5(n). To find conduct “unfair,” the FTC must find that (a) it causes, or will likely cause “substantial harm” to consumers; (b) not reasonably avoided by consumers; and (c) has no countervailing benefits. I might find AT&T blocking Facetime annoying, but I could avoid the harm (assuming my inability to use this particular ap constitutes “substantial harm” under the statute) by buying a more expensive plan or using another carrier. Furthermore, AT&T claimed that this would  have “countervailing benefits” by relieving congestion on its network — a benefit the draft Order praises as appropriate network management (see ft. 524).

 

Which again brings up the big problem in relying on Section 5 “unfairness.” What is your claim of “substantial consumer harm?” Remember, you only have an enforceable right to access whatever content or services you want right now because the FCC has said so — and has enforced this since at least 2005. But the FCC is now explicitly repealing this right. So what harm do you suffer from not being able to use Facetime (or any other application) that is cognizable under the unfairness standard? Answer – none. It’s the same “harm” that I experience when my cable company makes me buy ESPN and 20 gazillion other channels that I don’t ever watch. I pay a lot more to get the actual channels I do want, and I have to get a lot of crap I don’t want. But that isn’t harm in the legally cognizable sense under Section 5 of the Federal Trade Commission Act.

 

So, once again, the draft Order sees the ability to limit applications to particular tiers of service as a positive feature. If you agree, that’s fine. But honesty should compel Chairman Pai and other defenders of the draft Order to be more transparent about what they mean when they say “the FTC and antitrust law can address concerns about net neutrality.” They mean “these rules can address anything that we think are appropriate concerns, while the stuff you hated actually doesn’t fall into any of the conduct the FTC or antitrust law (or the states) can reach.”

 

Comcast/BiTorrent.

 

Once again, I remind folks that we know exactly what Comcast did to “manage it’s network” back in 2007-08. You can read the full report submitted by Comcast under oath to the FCC here. Tl:dr; In 2007, Comcast decided to start interrupting peer-2-peer file transfers as a means of getting people to stop using bandwidth on their (at the time) really crappy network. While this primarily targeted bittorrent (as well as the company BitTorrent), it also had broad impact on other peer-2-peer applications. Critically, Comcast did not limit the disruption of p2p applications solely to times of congestion. It targeted p2p applications at all times, as part of a deliberate effort to train users not to use such protocols. This was consistent with the other actions taken by Comcast to reduce overall use on their “unlimited” network — such as canceling the subscription of the top 10% of users every month(regardless of how much they used, so there was no way to figure out the “safe” amount of bandwidth to use). You can read all the details in my evaluation of Comcast’s report here.

 

The draft Order actually discusses this incident at considerable length, even citing to my blog post as evidence that Comcast was not behaving in an anti-competitive way but simply managing its network. I am, of course, flattered that the FCC considers me a better expert on Comcast’s motivations than it’s own 2008 Order finding that Comcast violated the right of users to access lawful content and services of their choice. See draft Order at Par. 112-113 and ft. 413. Mind you, that doesn’t change the fact that Comcast basically decided to mess with people’s downloads to avoid investing in their own network (which is what “network management” was about.)

 

Now we actually reach something the FTC could get at, but not because Comcast decided to block p2p applications. Rather, Comcast spent over a year lying about their conduct — which would violate the “deceptive” prong of Section 5. This failure to disclose also did a fair amount of harm to people trying to use p2p services unaware that Comcast was “managing” its network by injecting fake termination packets to break the communication between the parties.

 

But suppose Comcast had simply come out and said “we don’t like peer-2-peer protocols. They take up a lot of bandwidth and our network is rather crappy under DOCSIS 2.0 and we would rather not spend money improving it.” What result then?

 

Once again, we are back to the reliance on the Section 5 “unfairness” standard. “Unfairness” requires that the FTC demonstrate substantial harm (or likelihood of substantial harm), that the consumer could not otherwise avoid the harm, and that there are no countervailing benefits to the conduct.

 

Comcast consistently argued that the point of “managing” its network in this particular way was to improve the user experience by getting rid of “bandwidth hogs” who were sucking up all the bandwidth and thus making it a worse experience for everyone (assuming you wanted to download stuff that didn’t take a lot of capacity). As the blog post the FCC cites so approvingly points out — that has a lot of really, really bad policy outcomes. For one thing, it allows carriers to avoid investing in their networks, which is supposedly a bad thing according to the draft Order. (I am not sure why the draft Order concludes that there is no evidence — or even likelihood –  that carriers will use aggressive blocking and traffic degradation (or prioritization) to avoid investment when every single major net neutrality violation has involved avoiding investing in the network. One of many reasons I am looking forward to challenging this Order in court.)

 

Anyway, we can all agree that from the perspective of the policy concerns of the Communications Acts, Comcast’s decision to disallow use of an entire class of applications (p2p) had major consequences for users, for the economy, and for network investment as a whole. But the Federal Trade Commission Act and Section 5 therein do not care diddly/squat about these policy goals. That is why we have a Communications Act and an FCC.

 

And it is why those who absolutely hate the FCC and have repeatedly said they would like to see it abolished or dismantled love and support the draft Order. Again, it’s not because the FTC could have filed a complaint and obtained an injunction against Comcast to prevent them from disallowing the adoption of any p2p or other high-bandwidth (for whatever definition of “high”) Comcast decided to prohibit on its network. Section 5 only considers this conduct “unfair” if it causes demonstrable harm in the context of the specific market — like targeting kids with in game advertising or negligently exposing your medical information online (maybe, still waiting on a final verdict on LabMD). But the general rule, absent some sector specific obligation to the contrary, is that the company offering the service gets to offer it however they want. If they don’t want you to have access to particular applications, that is not a “harm” any more than an Indian restaurant refusing to sell puri is a “harm.”

 

Which is why — and I keep coming back to this — all the people who love the current draft Order defended Comcast’s right to go after “bandwidth hogs” however they wanted, including targeted interruption of p2p services. Because if we think getting broadband is like getting pizza or any other good or service, than you don’t care about making sure that folks get to access whatever legal content they want or run any service that does not harm the network. That’s a telecom thing. We have required common carriage over telecommunications networks because of the critically important social policies associated with telecommunications (as I explained at length recently over here).

 

Look, flip it around. Let’s say that Twitter decided to block Marsha Blackburn from running an anti-abortion campaign ad as violating their terms of service. Is there any harm under Section 5?

 

No. As longs as Twitter has terms of service that give it the right to block whatever it feels like, the FTC can do nothing if Twitter decides it wants to block a political ad. Likewise, if Facebook or Google feel like blocking some video or messaging application (like, say, Amazon video streaming something or other), that doesn’t constitute a “harm” under Section 5.

 

Again, whether you like this policy, or think it’s fair, or whatever, is irrelevant to the plain fact that the FTC can’t under Section 5 do anything about it. Which means that, once we kick broadband over to the same regime, the FTC can’t do anything when Comcast, Verizon, AT&T or whoever decides to block. Because that does not constitute a harm as required by Section 5(n) to satisfy the “unfairness” prong of Section 5.

 

So once again, if you think this is a good policy, then own it. Stop pretending that the FTC can “deal with” these incidents of blocking or discrimination when what you mean is “I don’t think anyone should have the authority to stop broadband providers from messing with content, blocking what they want, and screwing over others in third party negotiations because I think that’s how the free market ought to work — and I don’t think broadband is any different than cable or pizza to whatever.”

 

Madison River/Vonage.

 

OK, I think you get how this works now. Possibly, there might be an antitrust issue if you could prove (a) Madison River the ISP had market power in the relevant geographic and product market; (b) that Madison River engaged in blocking for the purpose of maintaining its market power in the relevant product and geographic markets; and, (c) there were no countervailing consumer welfare benefits to apply under the “consumer welfare test.” Thats basically what a Section 2 Sherman Act claim requires. That will, of course, take you a couple of years to prove, assuming you actually have standing to bring such an action at all under Trinko and Twombly.

 

As for the other sources of possible protection, you should know the drill by now. If Madison River decided to offer broadband access service with a “no VOIP” provision, does that constitute a “substantial harm” as required by Section 5(n) to qualify as “unfair” under Section 5(a). I hate to say “no,” but I’m going to go with “really, really doubtful.”

 

Conclusion

 

We actually don’t have to guess how the new net neutrality regulatory regime is going to work and what the FTC can and cannot address. We simply have to look at the things that have already happened and whether those in favor of the draft Order said at the time that the ISPs should have the right to do those things. If you think the FCC was a nasty big bad regulatory agency by restricting the ability of ISPs to negotiate interconnection agreements without regard to any problems this caused to subscribers or unaffiliated traffic, as happened in 2014 with Netflix, then the Order is awesome. If you thought it was absolutely insane that Comcast and the other giant ISPs were able to impose this sort of massive congestion issue to force Netflix to pay more money for interconnection, the draft Order repeals the rule that addresses that.

 

Heck, it arguably even preempts state consumer protection rules surrounding that conduct. So if you bought a more expensive package because Time Warner Cable told you that would solve your problem, you are doubly out of luck.

 

Likewise, if you think AT&T or any other broadband provider has the right to decide what content and services subscribers should access — then this Order eliminates what you have considered nasty FCC overreach for the last 15 years (more, really, but at least since the 2002 Cable Modem Order). Don’t bother with handwaving about how you think it won’t happen, or how consumer pushback will keep ISPs from doing bad things, etc. On the question of “does the FTC have the power to stop a broadband provider from saying ‘I’m not going to let you use a particular service or access particular content,’ the answer is a flat out straight up “no.” Because for normal everyday businesses, absent a specific enforceable regulation, offering you some limited service is not “unfair” under 15 USC 45(a). Period. Full stop.

 

Anyone who tells you not to worry about that little detail, while not in violation of anything, is certainly being less than transparent.

 

Stay tuned . . . .