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

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†theonly 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 . . . .


Let’s start with the obvious. Zero rating starts with a decision by carriers to limit how much you can download using your Internet connection. In other words, while in theory charging you based on speed, carriers imposing bandwidth caps†also charge based on how much you download. This is, of course, a real problem for people given rising demand from Covid lockdowns. As we increasingly live and work online, our download (and upload!) use have increased dramatically — much to the profit of ISPs collecting overage fees. That providers can have data caps at all (and worse, why they can call capped plans “unlimited”) raises all kinds of questions about artificial scarcity to raise prices and a serious lack of competition in the broadband marketplace.


Why Do You Hate Puppies and Drown Kittens By Limiting Our Benevolent Gatekeeper Power?


So to make a bad thing look like a good thing, carriers employ a classic strategy. Find some sympathetic group and make an exception for their case. Then, when you try to crack down on the anti-consumer/anticompetitive practice, claim that your crackdown will hurt the this group to whom you are so nice and kind. I call this the “basket of puppies” strategy. “Look at this basket of puppies. Why would you want to hurt the puppies? Don’t you love puppies?” We used to see this all the time in the cable a la carte fights.† Cable networks would give carriage to one or two Black-oriented channels (usually BET) and one or two Spanish language channels while blocking any competing Black owned channels. (Because how much diversity do people need, right?) Then whenever the FCC or Congress threatened to make it possible for people to get only the cable channels they wanted rather than buying the whole outrageously priced bundle (a rule called “a la carte,” French “stop charging me for things I don’t want), cable operators would tell everyone that this would kill BET and other non-white programming channels because they would not get enough takers to stay financially viable. “See,” they would say. “Forcing us to offer channels a la carte will kill Black cable networks, even though we are actually the ones throttling any competing black cabe networks. Why do you hate black owned programming?” When in fact, of course, cracking open cable gatekeeper power would have allowed for more diverse programming, not less.


So now we see the same strategy with data caps. A big problem with data caps is that they stop people from getting access to things they need online. Rather than solve the problem by eliminating data caps in the first place. The providers pick a few photogenic puppies (who are expected to be suitably grateful for the privilege of being hostage to the whims of each individual ISP)) and make a carefully controlled exception in their case. It needs to be something people generally love, but not something that cuts too deeply into the profits generated by the artificial scarcity created by data caps. And it needs to be something that reinforces, rather than undermines, the ISP’s gatekeeper control.


Hence the “generous” decision by some carriers to work with the Department of Veterans affairs to allow a select chosen programs to bypass the data caps via zero rating. Mind you, veterans — and health professionals working on veteran care — use a wide range of applications for telehealth (and lots of other people also use telehealth services). But rather than let veterans and their doctors actually†choose which applications they want to use in an unlimited way, the carrier decides for them what applications it will zero rate. So if you’re a veteran, and your doctor prefers a competing program like Zoom rather than the carrier selected VA Video Connect, you are SOL (military talk for “sadly out of luck”). But you are supposed to be a grateful peasant that your corporate overlord gives you any “unlimited” access, and will take it away from you if anyone tries to limit their gatekeeper power.


What Does California Law Actually Say About Data Caps and Zero Rating?


Setting aside whether we should have data caps — and therefore zero rating — at all, we now turn to whether California’s law has the effect some carriers apparently claim it has. Does CA’s net neutrality law prevent carriers from zero rating the VA’s video conferencing application. Short answer: no, but the carriers will need to open up their zero rating a tad to stop being anti-competitive and anti-consumer about it.

Here’s the California law on zero rating. Section 3101(a)(6) prohibits any ISP from “Zero-rating some Internet content, applications, services, or devices in a category of Internet content, applications, services, or devices, but not the entire category.” (emphasis added). Section 3101(a)(8)(B) says: “Zero-rating Internet traffic in application-agnostic ways shall not be a violation of subparagraph (A) provided that no consideration, monetary or otherwise, is provided by any third party in exchange for the Internet service providerís decision whether to zero-rate traffic.” (emphasis added)


So what does that mean here? Clearly carriers can zero rate the VA’s video conferencing app, or any other app for that matter, provided that it either they exempt the “entire category” of applications or services, or offer the specific service in an “application agnostic way” (and do not charge for the privilege). That means that carriers currently zero rating the VA’s video conferencing app can continue to zero rate it, provided they open up their gatekeeper power a smidge more. Because the law is new, it’s unclear exactly how much more they need to let users decide for themselves. Can the carrier define the “category” as “all government applications?” “All veterans health services?” “All VA applications?” Or something else similarly narrow to prevent veterans and their providers from selecting a preferred commercial application? Can the carriers simply exempt “all veterans health-related video conferencing,” without regard to whether the veteran and her healthcare provider select a different application so that the zero rating is suitably “application agnostic,” or does application agnostic require a somewhat broader array of choices?


Either way, the law actually works as intended — to the great benefit of veterans, their doctors, and other healthcare providers. It prevents carriers from overly restricting users and requires some degree of choice, while still permitting the carrier to maintain data caps generally and avoid providing the same benefit to the broader population (mind you, nothing stops carriers from resolving the problem by exempting all telehealth-related Internet traffic for everyone if they wanted to, but the objective from the carrier perspective is to limit the exemption as much as possible while still pretending to be doing a favor for veterans and pretending that supporting net neutrality means drowning puppies).


What Happens Now? Let My Data Go!


As Passover starts tomorrow, I’ll throw in a little story from Exodus Chapter 5. Moses and Aaron go to Pharaoh and ask him to let the Children of Israel leave to go and “hold a festival to God in the wilderness.” Pharaoh sends Moss and Aaron packing, but doesn’t stop there. He tells his overseers that this request for a holiday shows that the Hebrew slaves have too much free time on their hands. So from now on, the Israelites will need to gather their own straw, while still making the same number of bricks. When the Jews protest to Pharaoh that this is impossible, Pharaoh responded: “Hey, if you have time to whine about wanting to go and sacrifice to your God, then obviously you aren’t working hard enough. So it’s your own fault.” Sadly, rather than directing their anger at Pharaoh for being even more cruel in response to their reasonable and humble request, the Jews turn against Moses and Aaron: “May the Lord judge you, because you have made our smell stink to Pharaoh and his servants, you have placed a sword in their hands to kill us!”


Sometimes, of course, the “basket of puppies” strategy backfires. Most of you will recall how Australia recently passed a law requiring Facebook and Google to pay tribute to Australia’s big media companies to “compensate” them for the value of linking to their news content.† Facebook responded after the law passed one chamber of the Australian Parliament by blocking access to all Australian news. This triggered a massive backlash against Facebook for trying to use its monopoly power to blackmail the Australian government. But while ISPs exercise similar gatekeeper control here, they are not nearly so heavy handed and obvious about it. Meanwhile, allies of the ISPs — such as the Wall St. Journal editorial page or FCC Commissioner Brendan Carr — happily tell those suffering that it is the fault of net neutrality rather than the refusal of their broadband access overlords that causes their suffering.


Hopefully, the public, the FCC and Congress will see this for what it is — a cynical ploy to use veterans as pawns while denying them benefits California’s net neutrality law allows them to continue to provide.† But — lacking a miracle staff and a plague of frogs — we will need a loud and collective cry of “bullshit” from the public and political leaders. As ISPs continue to sing Jhene Aiko’s “All Good” (“Why you let me hurt you so bad? Why you let me get you so mad”), we need to drown them out by shouting “we’re not gonna take it. We won’t get fooled again.”


And to broadband pharaohs everywhere: “Let my data go!”


Stay tuned . . .

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