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

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?

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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Hurricane Michael A Wake Up Call On Why Total Dereg of Telecom A Very Bad Idea.

Readers of Harry Potter should be familiar with Cornelius Fudge, the Minister of Magic who refuses to believe Voldemort will return because believing that would require taking precautions and generally upsetting lots of powerful and important people. Instead of preparing for Voldemort’s return, Fudge runs a smear campaign to discredit Potter and Dumbledore, delaying the Wizarding World from preparing to resist Voldemort until too late.

 

I was reminded of this when I read Federal Communications Commission (FCC) Chairman Ajit Pai’s statement of frustration with the slow pace of restoring communications in the Florida in the wake of Hurricane Michael. Pai explicitly echoes similar sentiments of Florida Governor Rick Scott, that carriers are not moving quickly enough to restore vital communications services. Pai is calling on carriers not to charge customers for October and to allow customers to switch to rival carriers without early termination fees.

 

What neither Pai nor Scott mention is their own roll in creating this sorry state of affairs. Their radical deregulation of the telephone industry, despite the lessons of previous natural disasters such as Hurricane Sandy, guaranteed that providers would chose to cut costs and increase profits rather than invest in hardening networks or emergency preparedness. That is how markets actually work in the real world (as opposed to in the delightful dereg fantasy land dreamed up by hired economists). But rather than take precautions that might annoy or upset powerful special interests, they chose to mock the warnings as the panic of “Chicken Little, Ducky Lucky and Loosey Goosey proclaiming that the sky was falling.”

 

Now, however, the Chicken Littles come home to roost and, as predicted, private market incentives have not prompted carriers to prepare adequately for a massive natural disaster. This result was not only predictable, it was predicted — and mocked. So now, like Cornelius Fudge, Chairman Pai and Governor Scott find themselves confronted with the disaster scenario they stubbornly refused to believe in or safeguard against. And while I do not expect this to change Pai’s mind, this ought to be a wake up call to the 37 states that have eliminated direct regulatory oversight of their communications industry that they might want to reconsider.

 

Still, as Public Knowledge is both suing the FCC to reverse its November 2017 deregulation Order, and has Petitioned the FCC to reconsider its June 2018 further deregulation Order, perhaps the FCC will take this opportunity to rethink the certainty with which it proclaimed that carrier’s have so much incentive to keep their customers that they would never cut corners and risk service going down. Or perhaps Congress will now pay attention and decide that their constituents need enforceable rights and real protections rather than promises and platitudes.

 

I provide a lot more detail below.

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Verizon California Throttling Mistake Shows How Radical Pai’s Repeal Order Really Was.

Congress created the Federal Communications Commission (FCC) in order to ensure we would have working communications infrastructure for, among other things, handling public safety. It says so right up front in Section 1 of the Communications Act. This critical authority has allowed the FCC to do things like impose 911 obligations on VOIP providers before Congress got around to it, and even set up the original High Cost and Lifeline Programs before Congress got around to it. So you would think that when Verizon throttled the Santa Clara Fire Department’s mobile broadband connection for coordinating response to the Mendocino Complex Fire — the largest wildfire in California history — that the FCC would naturally be all over it.

 

The vast and mighty silence you hear is the utter lack of response by the FCC — for the simple reason that last December the FCC utterly, completely and totally divested itself of all authority over broadband. This was, as I and others pointed out at the time, utterly, completely and totally unprecedented. Regardless of classification, every single FCC chairman prior to Ajit Pai asserted authority over broadband to prevent exactly this kind of disaster. Under Michael Powell and Kevin Martin it would be under Title I ancillary authority. Under Julius Genachowski and Tom Wheeler (prior to reclassifying broadband as Title II in February 2015), it would have been under Section 706. Under Ajit Pai — bupkis.

 

Which leaves us with a major problem. How the heck do we stop this (and other potential failures of our broadband infrastructure) from happening again when the agency Congress actually directed to handle this has decided to abdicate its responsibility entirely? I have been preaching for nearly 10 years now that Title II authority over broadband is absolutely necessary to protect and manage our critical communications infrastructure. As I keep saying, this goes way beyond net neutrality. As broadband becomes integrated into everything in our lives – including public safety – there needs to be someone other than a group of unaccountable private companies looking out for the public interest. Because, as this event demonstrates, we are not just talking about ‘Netflix and cat videos’ or about ‘innovation’ or any of the other industry deflections. We are talking about stuff that literally impacts people’s lives. According to this report from NPR, the Verizon incident occurred just at the moment firefighters were deploying to stop the Mendocino Complex Fire. It’s impossible to determine just how much this screwed things up and whether the fire could have been better contained at the outset if throttling hadn’t knocked out their entire command-and-control for hours at the outset. But it is certainly safe to say that the first few hours of organizing to contain a wildfire are critical, and having your ISP throttle your command center broadband connection down to effectively useless is like trying to organize a parade while wearing a blindfold, earplugs and a gag over your mouth.

 

Happily, we have an easy answer to the question of “how do we make sure someone is responsible from preventing these kinds of screw ups going forward.” Congress needs to vote the CRA and force the FCC to take back authority for broadband. Or, if you’re California and don’t like seeing your state literally go up in flames while on hold with customer support, then you need to pass SB 822 — the California net neutrality bill. Anything else is literally fiddling around while California burns.

 

Lots more below . . .

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I Take the #CallYourRep4TheNet Challenge, and You Can Too!

My buddies at Free Press are running a challenge to get people to call their Member of Congress to support the Congressional Resolution Act of Disapproval (CRA) to repeal the FCC Order eliminating net neutrality rules (more info here). You can find out more about #CallYourRep4TheNet Karaoke Challenge here.

I was tagged by Free Press’ Candace Clement. So here is my contribution. I’m posting the lyrics below the fold. If you can’t think of your own lyrics for the #CallYourRep4TheNet Challenge, feel free to steal use these. Creative Commons attribution license on the lyrics. Music is copyright to Disney. Given Disney’s traditional opposition to net neutrality, I believe this is transformative social commentary/fair use — and I’m hoping they have a sense of humor (but if I get a takedown notice I will let you know).

 

Even if you don’t make your own entry, you can call your Congressional Representative by using this tool from my employer Public Knowledge. And reminder, you don’t need to call your Senators because we already won that vote! Booyah!

 

 

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UPDATE: Why Tech Freedom Are Totally Wrong About The CRA.

Last week, I wrote this blog post addressing the argument that the Markey resolution under the Congressional Review Act would not actually restore the 2015 net neutrality rules. Since then, my opposite numbers at Tech Freedom have put together this 8-page letter saying otherwise. To save myself the trouble of repeating myself, I will update my previous blog post to explain why Tech Freedom specifically is utterly and completely wrong.

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Yes, the 2017 Net Neutrality Repeal Is A “Rule” Under the CRA.

I have a rule of thumb that when I hear a stupid argument three times or more, I will blog about it so I don’t have to keep repeating myself. In this case, the argument that the CRA would not undo the FCC’s 2017 Net Neutrality Repeal Order/Declaratory Ruling because it is not a “rule,” and the CRA only applies to “rules.” See 5 U.S.C. 801.

 

This argument falls into the stupid category because the CRA defines what it means by “rule.” See 5 U.S.C. 804. In typical legal fashion, Section 804 refers you to 5 U.S.C. 551. Section 551(4)(a) defines “rule” as follows:

 

rule” means the whole or a part of an agency statement of general or particular applicability and future effect designed to implement, interpret, or prescribe law or policy or describing the organization, procedure, or practice requirements of an agency and includes the approval or prescription for the future of rates, wages, corporate or financial structures or reorganizations thereof, prices, facilities, appliances, services or allowances therefor or of valuations, costs, or accounting, or practices bearing on any of the foregoing.

 

Section 804 excludes rules relating to agency organization (which clearly does not apply to the 2017 Net Neutrality Repeal Order), or decisions applicable to a specific individual or group of individuals (such as merger decisions) (again, clearly does not apply here), or specific tariff/rate making/wage setting proceedings (again, clearly not applicable here). It clearly is a “statement of general or particular applicability and future effect designed to implement, interpret or prescribe law or policy.”

 

Put another way, did the agency action require notice and comment? Is it governed by the Administrative Procedure Act? Congratulations! You have a “rule” for purposes of the CRA.

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How Popular Is Net Neutrality? Opponents Have to Hide They Are Campaigning Against It.

Nothing brings home the peculiar nature of “the D.C. Beltway Bubble” than listening to the local news station WTOP. Lets start with the fact that our local 24-hour news station is actually the most popular radio station in the D.C. market. It’s also fun when some incident around the White House or the Capital ends up sequentially on the national news, the local news, and the traffic report.

 

But what really sets D.C. apart is our advertisements. The political ads never stop. Particularly when a major vote is about to happen — such as the upcoming vote in the Senate on S. J. Res. 52, aka the “net neutrality CRA,” aka the repeal of the FCC’s net neutrality repeal. Today (May 9), Senator Markey will file the resolution to force the vote — which is expected to actually happen next week. So, naturally, we are getting all kinds of ads from broadband companies and their various associations (e.g., Broadband for America) trying to push the public to get their Senators to vote against the resolution.

 

The problem for the anti-net neutrality folks, however, is that network neutrality remains enormously popular with the general public. Which leaves these groups trying to rally the public with a problem. Die-hard anti-net neutrality folks like Rep. Marsha Blackburn may think “let ISPs discriminate so that your online experience can be more like going through a TSA security line before flying” is a selling point, people who actually sell stuff for a living recognize that “make your browsing experience like your airline experience with long waits and hidden fees” is kind of a loser.  So if you just advertise “The Senate is considering a resolution to restore the network neutrality rules the FCC repealed last December, call your Senator today and tell them to stand up for ISP freedom to throttle competitors charge new fees ‘innovate’!” — odds are good you will actually drive lots of people to call their Senator and tell them to vote for the resolution and restore net neutrality. (Which, btw, you can do here.) So how do you campaign against network neutrality without actually telling the public you are voting against restoring the net neutrality rules?

 

UPDATE: Jay Cassono has this piece in Medium providing details on a similar scam opposing net neutrality while pretending to be in favor.

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Net Neutrality Does Not End Today. We Still Don’t Know When It Will. Which Is Weird When You Think About It.

There is a lot of confusion on the effective date for the 2017 Net Neutrality Repeal Order, aka “Restoring Internet Freedom — Which Is Not In The Least Overdramatic Unlike You Hysterical Hippies.” This is not surprising, given the rather confusing way the Federal Register Notice reads.

 

You can see the Federal Register Notice here. If you look at the section labeled dates, you will see it says the following:

“Effective dates: April 23, 2018, except for amendatory instructions 2, 3, 5, 6, and 8, which are delayed as follows. The FCC will publish a document in the Federal Register announcing the effective date(s) of the delayed amendatory instructions, which are contingent on OMB approval of the modified information collection requirements in 47 CFR 8.1 (amendatory instruction 5). The Declaratory Ruling, Report and Order, and Order will also be effective upon the date announced in that same document. (Emphasis added.)

 

Which is a very confusing way of saying the following: ‘Before net neutrality gets repealed and the new, much weaker disclosure obligations go into effect, we are going to wait for the Office of Management and Budget (OMB) to review the much weaker transparency rule under the Paperwork Reduction Act and other legislation that is supposed to make it harder to pass rules. Once OMB signs off, we at the FCC will publish a second notice in the Federal Register announcing when everything goes into effect. But until we do that, nothing actually happens. Zip. Nadda. Zero. Total psyche!’

 

This is, to say the least, highly unusual. There is absolutely no reason for FCC Chairman Ajit Pai to have stretched out this process so ridiculously long. It is especially puzzling in light Pai’s insistence that he had to rush through repeal of net neutrality over the objections of just about everyone but the ISPs and their cheerleaders because every day — nay every minute! — ISPs suffer under the horrible, crushing burden of Title II is another day in which Princess Comcast Celestia, Princess Twilight Verizon Sparkle, and all the other Broadband Equestria Girls must endure the agonies of a blasted regulatory Hellscape rather than provide us all with wonderful new innovative services at even lower cost than they do now. Because Broadband Is Magic.

 

So yeah, if Pai thought it was a total emergency that he take his vote in December, why did he basically extend the current Title II regime indefinitely? We hasn’t Pai restored our Internet Freedom? Why has Pai instead forced us to languish here in the terrible regulatory Hellscape that is the merely “open Internet” rather than the private sector controlled de-regulatory paradise he and his fellow Republican Commissioners have promised us? Hell, the FCC didn’t even submit the new rule to OMB for approval until March 27. For a guy who was all on fire to repeal Title II and free his Broadband Ponies, Pai sure has taken his time making it actually happen.

 

An excellent question. Somebody who is an actual reporter might want to ask him about that. I have some guesses and rank speculation — but they are just that, guesses. It’s like wondering why Number 6 resigned, or why the Minbari surrendered at the Battle of the Line. Unless we get a big reveal, we’ll never know.

 

But one thing is clear. For whatever reason, Ajit Pai is taking his own sweet time restoring that Internet freedom he claimed to be so obsessed about back in December. Whenever the net neutrality appeal does happen, it won’t be Monday, April 23.

 

Stay tuned . . .

Can The States Really Pass Their Own Net Neutrality Laws? Here’s Why I Think Yes.

We are seeing lots of activity in the states on net neutrality. The Governors of MontanaNew York and New Jersey have issued Executive Orders requiring that any broadband provider doing business with the state must certify that it won’t block, throttle, or prioritize any content or applications. Several states are looking at passing legislation applying some version of the 2015 FCC Net Neutrality Rules, with California furthest along in passing something that effectively replicates the pre-2017 rules. All of which raises the question — can the states actually do that?

 

The FCC not only says “no,” but in the 2017 Net Neutrality Repeal Order, the FCC purported to explicitly preempt any state effort to recreate any net neutrality rules. However, as I pointed out back in 2011 when Republican Commissioners wanted to preempt state reporting requirements, the FCC does not have unlimited preemption power. The FCC has to actually have some source of authority to preempt localities. Indeed, Chairman Pai was so insistent that the FCC lacked the authority to preempt state regulation of intrastate communications services that — in a highly unusual move — he refused to defend the portion of the FCC’s Prison Phone Order capping intrastate rates.

 

 

The critical question is not, as some people seem to think, whether broadband involves interstate communications or not. Of course it does. So does ye olde plain old telephone service (POTS), and state regulated that up to the eyeballs back in the day (even if they have subsequently deregulated it almost entirely). The question is whether Congress has used its power over interstate commerce to preempt the states (directly or by delegating that power to the FCC), or whether Congress has so pervasively regulated the field so as to effectively preempt the states, or whether the state law — while framed as a permissible intrastate regulation — impermissibly regulates interstate commerce (aka the “dormant commerce clause” doctrine). Additionally, certain types of state action, such a the action of the state as a purchaser of services, are exceedingly difficult (if not impossible) to preempt.

 

As always with complicated legal questions, one cannot be 100% sure of how a court will decide. But for the reasons set forth below, I’m reasonably confident that the states can pass their own net neutrality laws. I’m even more confident that a state can decide to purchase services exclusively from carriers that make enforceable pledges not to prioritize or otherwise discriminate against content. Mind you, I don’t think either of these is an effective substitute for federal Title II classification and the 2015 rules. But I encourage states to do what they can and for activists to push for state action in addition to federal action where possible.

 

More below . . . .

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