Series of Tubes

Net Neutrality, ICANN, and other issued related to internet infrastructure

S. Korea “Sender Pays” Is a Warning, Not a Model, or Why (Almost) Everyone Keeps Telling the EU This Is a VERY Bad Idea.

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Economist/NYT opinion writer Paul Krugman coined the term “Zombie idea” to describe an idea that, despite being repeatedly refuted with evidence, keeps coming back. Not surprisingly, zombie ideas typically have powerful constituencies that benefit from the adoption of the zombie idea they push, and who invest a great deal of money and energy continuing to resurrect the idea each time it gets killed.

 

This Halloween brings us the return of the “content companies should pay money to last mile networks because they use more resources” idea. I first explained why this was a dumb idea back in 2006, after then-AT&T CEO Ed Whitacre explained that he wasn’t going to let companies with content his subscribers actually wanted “use his pipes for free,” Despite lots of reasons why this is a Dumb Idea that would end up seriously reorganizing the internet economy for the worse, you find carriers around the world reviving it because $$$. This is particularly true outside the U.S., where the argument also gets caught up in debates about American dominance of internet content and popular culture. There is a separate U.S. flavor, supported by folks like Brendan Carr, about charging “big tech” to build out broadband infrastructure, which I’ve also previously criticized. But the non-US flavor has been gaining traction as a function of the “Techlash” and therefore needs some in depth discussion — especially since we can actually see the predicted bad consequences play out in real time in South Korea.

 

Back in 2016, South Korea adopted a new interconnection rule based on a long-standing telco compensation rule called “sending party network pays” (SPNP). As I’ll explain in detail below, SPNP has deep roots in the whacky world of telecom “settlement” (the fancy word for who pays whom in international calling) how networks compensated each other for exchanging traffic. Those opposed to adopting this approach predicted (based on about 100 years of history) that it would prove impossible to enforce without super intrusive government oversight and would introduce severe latency into S. Korea’s networks as the “sending networks” (such as Netflix, but also gaming companies and others with high resolution visual content) routed traffic in clever ways to avoid paying significant charges. To the surprise of no one except the advocates for the proposal, the predicted badness happened. The cost of transit skyrocketed, latency dramatically increased, and the Korean government keeps needing to consider new and more intrusive ways to (a) stop companies from avoiding the fees to ISPs while (b) trying to target foreign content providers while protecting domestic uses they like — such as video chat and video games.

 

Despite this real world example, and an impressive array of folks explaining in detail why they totally hate this stupid idea, important folks in the European Council (egged on by the EU telcos) continue to think this is a Totally Awesome Idea. So I will explain how we got here, what traditional “sending network party pays” actually means, why this ain’t it, but even setting that aside, why what happened in S. Korea shows this is a Really Dumb Idea.

 

More below . . . .

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No Sohn Means No Broadband Map, and No Broadband Map Means No BEAD Money.

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I would never have imagined that we could get past Memorial Day without Gigi Sohn’s confirmation as the 5th FCC Commissioner/3rd Democrat. But Republicans who think there is no downside to dragging Sohn’s confirmation out interminably to block Title II — especially those who voted in favor of the Infrastructure Investment and Jobs Act of 2021 (IIJA) and are looking for that broadband money to begin flowing to their states — may wish to think again. Why? Because without a vote on the broadband map of 2022, the NTIA cannot distribute the bulk of the Broadband Equity Access and Deployment (BEAD) money (or the Middle Mile money, FWIW). And while it is entirely possible that the FCC might issue the map on a 4-0 vote without controversy, I would not want to bet my state’s broadband on it given that I can’t find a single broadband report vote in the last decade that wasn’t a 3-2 party line vote. (Technically, the 2011 vote was 3-1 with Commissioner Baker not participating. But you get the idea. This does not traditionally go smoothly, and is a lot less likely to go smoothly with $45 billion on the line.)

 

Why yes, the FCC broadband map does need a majority vote of the full Commission to get issued. Nor does the relevant provision of the IIJA (Sec. 60103) require the FCC to publish the new maps by any specific deadline. It simply requires the FCC to publish the maps before NTIA distributes either the BEAD money or the Middle Mile grant money. So if the Republicans and Democrats cannot come to an agreement on the new 2022 broadband map, the broadband map does not issue in 2022. Or 2023. Or until whenever the FCC gets a third Commissioner.

 

This is not, of course, much of a problem for the giant ISPs lobbying hard to keep Sohn off the Commission. For them, the BEAD program is more a threat than a money maker, since the money will go to places the largest ISPs don’t want to serve (otherwise, they would be building there already). Indeed, the money is likely to go to potential rivals/competitors. Hence the likely controversy over the maps. The ISPs will do their best to minimize the geographic area unserved by broadband (defined in the statute as 100 megabits down/20 megabits up). Because while giant ISPs might like some of that money, it is far more important to them to keep potential new entrants or existing potential competitors from getting the money anywhere close to where the established ISPs offer service. By contrast, areas that don’t actually have broadband today want maps that reflect this reality — not maps that protect existing incumbents. Hence my belief that (like previous mapping exercises with even less on the line) the vote to produce the 2022 broadband map will be along party lines and thus need a 3rd Democrat.

 

Which, of course, is impossible without Sohn being confirmed as the 5th Commissioner. Which is just fine by the giant ISPs doing the lobbying, but not for Senators — R or D — from rural states.

 

I unpack all this below.

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U.S. Actually Performed Worse During Covid Than Some Net Neutrality Countries, Not Better.

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Every time the net neutrality debate flares up, the ISP industry and its anti-net neutrality allies come up with some reason why leaving unfettered gatekeeper power in the hands of the people who invented the cable video bundle is awesome rather than something that needs oversight to prevent rip offs and anticompetitive behavior. It used to be “net neutrality/Title II will kill investment.” This claim has been repeatedly disproven (you can see some Free Press explanation for why this is nonsense here, here and here). Furthermore, Covid showing the truly massive dimensions of the persistent digital divide has largely discredited “deregulation will spur investment — really!” to all but the most diehard true believers.

 

With Title II back on the table again, we are seeing the repetition of yet another talking point that sounds plausible but turns out to be totally wrong when you actually dig into the evidence. ISPs and their defenders are repeatedly claiming that the U.S. did better than other net neutrality countries (specifically, the EU27) when it came to handling the crush of Covid-19 induced traffic. Unsurprisingly, they credit the lack of regulation for this amazing response. Once again, this claim does not hold up to real scrutiny.

 

As with the investment nonsense, this is a highly complicated area and therefore subject to a lot of spin and heated arguments over what the data actually show and how to explain it. It is made even more difficult by the complete lack of any official statistics (or, as the recent BITAG report put it more politely: “Data sources vary from independent measurement systems to self-reported internal company sources.” (P 7 n.1) So I will just give a few headlines up top and dig into the details below.

 

Contrary to industry boosterism, everything was not awesome for networks during Covid. As one industry observer put it: “By ‘handling’ the volumes they mean that their networks are not crashing and shutting down. But I think there is a whole lot more to these headlines than what they are telling the public.” For reports from the actual time about U.S. problems, see here, here, and here.

 

The U.S. Performed Worse Than Some Countries With Net Neutrality Laws. Studies vary, but one important one looked at not simply the EU and U.S., but also the European Free Trade Association (EFTA) and Canada. EFTA member states have the same net neutrality mandates as the EU (sometimes referred to as the EU27, referring to the full member 27 as distinct from the EFTA). Canada has treated broadband as a telecom service for something like 2 decades now, and has similar net neutrality laws to the U.S. 2016 rules. As this study found the U.S. internet traffic as a whole suffered a 4.9% increase in congestion as compared to 7.25% for the entire EU27, but this was significantly higher than for EFTA (3.3%) or Canada (2.4%). Additionally, when surveyed a week later, EFTA and Canada had made significantly greater progress on reducing congestion than the U.S. Furthermore, the U.S. numbers were for the largest cities with the strongest networks. If you start taking out members of the EU27 who aren’t considered our economic peers, the numbers for Europe improve to be comparable with those of the U.S. So sure, there were some differences but they had nothing to do with net neutrality regulations.

 

There isn’t a lot of evidence to support the “U.S. did better than the EU” claim. While you can find some studies that support the thesis that the U.S. did “better” by some set of metrics, there are a lot of other studies that show that from a consumer perspective, E.U. and U.S. subscribers had similar experiences. See here, here, here, and here.

 

The Netflix Red Herring. The “EU asked YouTube and Netflix to downgrade traffic” factoid beloved of ISPs and their supporters is a red herring. Yes, EU regulators approached Netflix, YouTube when lockdowns began to reduce the quality of their video from high-def to standard. But this was a prophylactic precaution to head off a potential concern, not a response to congestion. Only in the U.S. — and only among industry and Libertarians — would the idea of government and all industry sectors coordinating and accepting “a joint responsibility to take steps to ensure the smooth functioning of the internet” be regarded as a sign of weakness or regulatory overreach rather than a simple statement of reasonable prudence and preparedness.

 

More below . . .

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No, California Net Neutrality Law Did Not “Nail” Veterans — Carriers Are Using Vets as Pawns.

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It’s a cliche villain scene: “Don’t force me to kill the hostages. Unless you do as I say, their blood is on your hands.” While no one would mistake policy fights for a hostage situation (usually), the same principle applies frequently when challenging industry to stop anticompetitive and anti-consumer practices. Industry will take some anti-competitive practice that provides an apparent marginal benefit to someone sympathetic and threaten that the proposed law change will make it impossible for them to do the “nice” because it stops them from doing the bad thing.

 

So it is no surprise that after California’s 2018 net neutrality law survived it’s first day in court, carriers are doing everything in their power to make it look like banning zero-rating (which the California law does to some degree, but not completely. See more detail below.) is bad for consumers. Almost immediate, for example, AT&T announced it would discontinue its anti-competitive practices of zero-rating it’s own video product and “sponsored data” from third parties. But carriers have now reached a new low by claiming that California’s net neutrality law forces them to discontinue zero rating a specific telehealth program available from the Department of Veterans Affairs. Needless to say, opponents of net neutrality have rushed to trumpet this claim without troubling themselves to investigate whether it is even true.

 

Spoiler alert: Its not true.

 

As net neutrality expert and law professor Barbara Van Schewick explained in a blog post immediately after the Politico story broke, California’s net neutrality law does not prevent carriers from zero rating telehealth programs for veterans. What the law does do, as it was designed to do, is prevent carriers from choosing a single program among a universe of competitors and anointing this one program as the only program that gets such special treatment. Or, as I explain below, carriers can choose to continue to zero rate the Veterans Affairs program in a number of ways, provided they don’t disadvantage other programs that do the same thing (here, veterans health). Mind you, carriers could also decide not to impose artificial bandwidth caps as a means of overcharging consumers and/or favoring their own affiliated content. But hey, where’s the fun and profit in that?

 

I break this out below . . . .

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Another Massive Hurricane, Another Chance for the FCC to Do Nothing — and Why Congress Must Pass the RESILIENT Act.

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When I was growing up, I used to hear the nursery rhyme about the itsy bitsy spider climbing the waterspout, getting washed out, and then doing the exact same thing again. Whereas most people I have encountered regard this little jingle as a pean of praise to perseverance, I always thought it was a warning about what happens when you refuse to learn from past experience. Seriously spider dude, it’s a rain pipe. Reality does not care about your rugged determination and individualism. You need to take a lesson from the ant with the rubber tree plant and stop wasting time.

 

I bring this up as, once again, we have wildfires in California with rolling blackouts and massive hurricanes hitting the Gulf Coast — both of which have historically caused major telecom outages (although so far the infrastructure appears to be holding up). Rather than learn from these experiences over the last three years, the Pai FCC has become famous for it’s three-part Republican harmony version of the Itsy Bitsy Spider (telecom version) while the Democratic Commissioners are relegated to feeling the Cassandrefreude. So I will take this opportunity to plug the “Reenforcing and Evaluating Service Integrity, Local Infrastructure, and Emergency Notification for Today’s Networks Act” (aka the RESILIENT Act (section by section by section analysis here, press release here).

 

Briefly, Congress ought to pass the RESILIENT Act as quickly as possible. Neither the FCC nor state governments have taken the needed steps to update our regulations governing repair of physical networks to reflect modern network construction. The biggest change — that communications networks are no longer self-powered — requires that the FCC and the Department of Energy (DOE) (through the Federal Energy Regulatory Commission (FERC)) to work together to require power companies and telecom companies to coordinate. That takes federal legislation. But we also need to recognize that we can’t require every network to maintain reliability on its own. We need networks to use the redundancy that comes from having competing networks to provide the reliability we used to have from a highly regulated monopoly provider.

 

I explain more below . . .

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Want to Keep America Home? Give Everyone Free Basic Broadband.

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This originally appeared in substantially similar form on the blog of my employer Public Knowledge.

 

Medical experts agree that the most important thing we can do to support the efforts against the COVID-19 outbreak is a medical protocol known by the acronym STHH, or “Stay the Heck Home.” (Yes, I know how it’s usually written.) To keep Americans home, we need everyone to have broadband. It’s really that simple. Without telework, the economy would shut down completely. We would lose half a school year without distance education. But the value of everyone having a residential broadband connection goes well beyond that in the current crisis. Want to keep people off the streets to flatten the curve? Make it possible for them to shop online? Want them to access forms to receive government aid during this economic crisis? Cut down on physical doctor appointments to avoid infecting others? Fill out the 2020 Census so we don’t need armies of Census Takers going door-to-door? That all takes broadband.

 

But most importantly, human beings are social creatures. If you want to make it as easy as possible for human beings to stay in their homes, you need to make it possible for them to visit each other virtually. Always make it as easy as possible for people to do what you want them to do, and the STHH protocol requires lots and lots of people to do something entirely unnatural to human beings — stay socially isolated for an indefinite period of time that may last months. Virtual visits may not be as good as the real thing, but a video call with parents or grandchildren can do a great deal to relieve stress when you are stuck inside.

 

Unfortunately, as most folks know, the U.S. has some of the most expensive broadband in the developed world. Even with broadband providers signing the “Keep Americans Connected Pledge” to not disconnect anyone or charge late fees for the next 60 days, we will still see millions of unemployed Americans potentially accumulating significant past-due bills for a connection they desperately need in order to avoid getting sick. Nor does this help the estimated 18 million Americans who live in areas with broadband available but remain offline because they can’t afford a connection. Finally, the uncomfortable elephant in the room is that this may last much longer than the 60 days covered by the Keep Americans Connected Pledge. Even if we expect internet service providers to keep this promise during the entire pandemic, these are also businesses with employees. We want to support them during this economic crisis so they can pay their own employees.

 

So here is a very simple idea to persuade Americans to stay home, keep our virtual society running, and stimulate the economy. As part of the coronavirus stimulus package, the United States government should cover everyone’s broadband bill for a basic connection capable of supporting two-way video (ideally 25/25 Mbps, but we may have to settle for the Federal Communications Commission official definition of broadband of 25/3 Mbps).

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I get to deflate the 5G Hype Bubble a Bit at an Unusually Good Senate Hearing.

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Official Washington is generally consumed with all things impeachment — especially the Senate. Nevertheless, other business does go on. So while it surprised many, Senate Commerce Committee Chair Roger Wicker (R-Miss) and Ranking Member Mariah Cantwell (D-WA) scheduled a hearing this morning (Wed. 1/22) on “The 5G Workforce and Other Obstacles to Broadband Deployment.” (Warning! The video of the hearing doesn’t actually begin until about 15 minutes have passed after you hit “play.” Hopefully this will be corrected in the future.) And, in what will no doubt be to the surprise of many, it was actually a pretty good hearing.

 

It was a fairly good hearing. Sparsely attended (members, including Wicker, joked about holding a morning hearing after impeachment proceedings ran until 2 a.m.), but the members who were there were actually trying to find out facts rather than just score some points. Because it was sparsely attended, members had lots of opportunity to ask their questions and get thoughtful responses. It was cordial and substantive. You know, the kind of thing everyone claims they want to see and laments we never have but is actually reasonably common on technical stuff and when it does happen everyone zones out because, lets face it, actual substance on important issues bores the pants off nearly everyone.
 
I was there primarily to address the “barriers to deployment” piece (although I had some things to say about workforce training, which is critically important and a fantastic opportunity to promote digital equity in urban and rural America — hopefully I will be able to write that up in a separate blog post). In particular, I focused on ‘why we should stop stomping on local governments just because carriers repeat over and over that if we don’t give them what they want then China will win the “race to 5G” — whatever the Hell that means.’ (No surprise, but I also put in a plug for opening up the 5.9 GHz band and 6 GHz band for unlicensed use on a non-interfering basis as quickly as possible.)
In addition to everything else, I must add a personal note. In these times, I feel enormously grateful for the opportunity to wear my kippah when testifying before Congress. I am not there as a Jew, or to testify about Israel or some other issue people think is particularly a “Jew thing.” I am there as an American. Proud of my religion and ethnicity, but fully integrated into the world of policy and national affairs. I don’t dress like either of the two Jewish stereotypes you see on television: a Hassid or a Woody Allen clone. I’m a real person. So are all the other Orthodox Jews I know.
Anyway, t get back to the subject at hand, you can read my testimony here. I am reprinting my opening oral statement below.
Stay tuned . . . .

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A Tax on Silicon Valley Is A Dumb Way to Solve Digital Divide, But Might Be A Smart Way To Protect Privacy.

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Everyone talks about the need to provide affordable broadband to all Americans. This includes not only finding ways to get networks deployed in rural areas on par with those in urban areas. As a recent study showed, more urban folks are locked out of home broadband by factors such as price than do without broadband because of the lack of a local access network. The simplest answer would be to simply include broadband (both residential and commercial) in the existing Universal Service Fund. Indeed, Rep. Doris Matsui has been trying to do this for about a decade. But, of course, no one wants to impose a (gasp!) tax on broadband, so this goes nowhere.

 

Following the Washington maxim “don’t tax you, don’t tax me, tax that fellow behind the tree,” lots of people come up with ideas of how to tax folks they hate or compete against. This usually includes streaming services such as Netflix, but these days is more likely to include social media — particularly Facebook. The theory being that “we want to tax our competitors, “or “we hates Facebook precious!” Um, I mean “these services consume more bandwidth or otherwise disproportionately benefit from the Internet.” While this particular idea is both highly ridiculous (we all benefit from the Internet, and things like cloud storage take up more bandwidth than streaming services like Netflix) and somewhat difficult —  if not impossible — to implement in any way related to network usage (which is the justification), it did get me thinking about what sort of a tax on Silicon Valley (and others) might make sense from a social policy perspective.

 

What about a tax on the sale of personal information, including the use of personal information for ad placement? To be clear, I’m not talking about a tax on collecting information or on using the information collected. I’m talking a tax on two-types of commercial transactions; selling information about individuals to third parties, or indirectly selling information to third parties via targeted advertising. It would be sort of a carbon tax for privacy pollution. We could even give “credits” for companies that reduce the amount of personal information that they collect (although I’m not sure we want to allow firms to trade them). We could have additional fines for data breaches the way we do for other toxic waste spills that require clean up.

 

Update: I’m apparently not the first person to think of something like this, although I’ve expanded it a bit to address privacy generally and not just targeted advertising. As Tim Karr pointed out in the comments, Free Press got here ahead of me back in February — although with a more limited proposed tax on targeted advertising. Also, Paul Roemer wrote an op ed on this in the NYT last May. I have some real problem with the Roemer piece, since he seems to think that an even more limited tax on targeted advertising is enough to address all the social problems and we should forget about either regulation or antitrust. Sorry, but just as no one serious about global climate change thinks a carbon tax alone will do the trick, no one serious about consumer protection and competition should imagine that a privacy pollution tax alone is going to force these companies to change their business models. This is a push in the right direction, not the silver bullet.

 

I elaborate below. . . .

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Net Neutrality Oral Argument Highlights Problem For Pai: You Can’t Hide The Policy Implications Of Your Actions From Judges.

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Friday, February 1, we had approximately 4.5 hours of oral argument before Judge Millett, Judge Wilkins, and Senior Judge Williams. You can listen to a recording of the oral argument here. As everyone who does this for a living will tell you, you can’t judge the outcome by what happens at oral argument. Because that’s the biggest set of tea leaves we have that can tell us anything about the black box of the court making its decision, however, we all speculate shamelessly. Unsurprisingly, Williams seemed most favorable to the FCC. He dissented in USTA v. FCC, and generally prefers deregulatory policy choices. Millett, as expected, pushed both sides hard. But ultimately both she and Wilkins seemed to come down against the FCC on several issues, including a lengthy discussion of the Section 257 argument I highlighted last week.

 

My colleague John Bergmayer has this summary of the substance of the argument. I want to just highlight one theme, the refusal of the FCC to be honest about the expected policy consequences of its actions. I highlight this for several reasons. First, people need to understand that while the agency can always change its mind, it has to follow the Administrative Procedure Act (APA), which includes addressing the factual record, acknowledging the change in policy from the previous FCC, and explaining why it makes a different decision this time around. As I have noted for the last couple of years, there is a lot of confusion around this point. On the one hand, it doesn’t mean you have to show that the old agency decision was wrong. But on the other hand, it doesn’t mean you get to pretend like the old opinion and its old factual record don’t exist. Nor do you get to ignore the factual record established in this case.

 

It was on these points that Millett and Wilkins kept hammering the FCC, and where they are likely in the biggest trouble in terms of the Order. Because FCC Chair Ajit Pai has pretty much made it his signature style to ignore contrary arguments and make ridiculous claims about his orders, this problem has already chomped the FCC on the rear end pretty hard (ironically, in an opinion released on Friday), and will likely continue to do so.

 

More below . . .

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Fun Arguments To Watch At Net Neutrality Oral Argument, or Did Marsha Blackburn Accidentally Save Net Neutrality?

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At last, the contest everyone has been waiting for is finally here! Get ready tomorrow (Friday February 1) for the oral argument in Mozilla v. FCC, the challenge to the 2017 repeal of net neutrality and re-reclassification of broadband as a Title I “information service.” (aka the “Restoring Internet Freedom Order” or “RIFO”).  Obviously, as one of the counsel’s in the case, I am utterly confident that we will totally prevail, so I am not going to try to rehash why I think we win. Besides, you can get horse race coverage and results anywhere. ToTSF is where you go for the geeky and get your policy wonk on!

 

So in preparation for the Superb Owl of the the 2018 telecom season, I thought I would point out some of the more fun arguments that may come up. As always, keep in mind that oral argument is a perilous guide to the final order, and the judges on the panel have a reputation for peppering both sides with tough questions. Also, there is a lot of legal ground to cover, and many important issues raised in the briefs may not get discussed at all because of time limitations. With all that in mind, here are some things to look for if you are lucky enough to be in the courtroom tomorrow, or listen to the full audio when it’s released.

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