In my last post, took the 4 most famous net neutrality violations to see how they would come out under the current rules adopted in 2015 v. how they would come out under the regulatory framework following the FCC vote to repeal net neutrality rules, based on the draft Order. To condense the approximately 5500 word analysis — all 4 incidents are addressable under the 2015 rules. None of the incidents are addressable under the combined Federal Trade Commission (FTC) and antitrust regime that remains after the vote to repeal the rules, with the exception of Comcast’s deliberate deception about their blocking peer-2-peer protocols in 2007-08.
Since most folks won’t plow through 5500 words of legal analysis, I’ve gotten some requests to specifically address the claims by FCC Chairman Ajit Pai and others that the FTC can address blocking as easily as the FCC and prevent any ISP from blocking any content or application. My short answer is: “No. The FTC CANNOT have a “no blocking” rule like the FCC has today. The FTC may stop an ISP from blocking content or services when it can prove that the blocking violates the antitrust laws, or that the blocking violates the ISP’s published terms of service, or if the ISP blocking causes (or is likely to cause) substantial harm to consumers and is not outweighed by countervailing benefits. And, as I covered extensively in my previous post, proving these things can be hard.
My somewhat longer answer, laid out in more detail below, is that Section 5 of the Federal Trade Commission Act, 15 USC 45, simply cannot do what Section 201(b) and Section 202(a) of the Communications Act (47 U.S.C. 201(b) & 202(a)) can do. The two statutes are designed and interpreted very differently. The FTC has very broad jurisdiction but fairly limited authority because it is a very generalist agency. More importantly, it is purely an enforcement agency — designed to prosecute companies from doing what I will refer to here as “bad stuff.” Note, it is not even designed to prevent companies from doing the bad stuff in the first place. It is designed purely to enforce a fairly general consumer protection statute. In particular, the FTC Act Amendments of 1994 severely limited the FTC’s enforcement authority by adding Section 5(n), which requires the FTC to overcome certain obstacles before it can find conduct “unfair” and thus unlawful under Section 5(a).
By contrast, Congress designed the FCC to ensure that our critical communications infrastructure functions in a consistent and stable manner and to explicitly promote all kinds of industrial policy like innovation, universal service, affordability, and to ensure that telecommunications services operate in a manner that serves “the public convenience and necessity.” This is critical because we don’t generally require businesses to serve the public interest, we limit this requirement to a fairly small number of specific industries that are absolutely critical to the functioning of our economy and important in our daily lives. As a result, in contrast to the FTC, the FCC has very broad authority over telecommunications services but virtually no authority over other stuff — like information services.
As I explain below, this makes it literally impossible for the FTC to simply prohibit blocking (let alone prohibit “fast lanes” or “slow lanes”) as the FCC does. To the contrary, under the FTCA, the FTC cannot prevent a broadband carrier from blocking any website, application or service it chooses unless it can prove that this blocking (a) causes (or is likely to cause) “substantial injury” to consumers, (b) there is no other way the consumer could reasonably avoid the harm, and (c) there are no countervailing consumer benefits. While Section 5(n) does allow the FTC to consider “established public policies as evidence to be considered with all other evidence. Such policy considerations may not serve as the primary basis” for a finding of unfairness. So even if we assume that there is an “established public policy” against blocking, that alone does not allow the FTC to stop a broadband provider from blocking content or applications.
And all this, of course, assumes the FTC even has authority to deal with broadband carriers reclassified as information services, which remains up in the air at the moment pending the Ninth Circuit resolution of the en banc rehearing of FTC v. AT&T Mobility.
I explain all this in more detail below . . .
To understand why the FTC cannot prohibit blocking content or services, we first must understand why the FCC can — and why the FCC had to reclassify broadband as a Title II telecommunications service to do it.
Why The FCC Can Absolutely Prohibit Any Blocking of Lawful Content or Services.
The Communications Act Title II requires all telecommunications services to serve anyone who wants service in the same way as any similarly situated customer. (47 USC 201(a)). That’s what being a “common carrier” telecommunications service means. You have to serve everyone, and you can’t block anyone. So when a customer says “I want to download information from over here,” the carrier can’t say “nope, sorry, don’t want to do that.” Additionally, Section 201(b) prohibits any “unjust or unreasonable” charges or practices, and Section 202 prohibits a common carrier from “any unreasonable discrimination.” So a common carrier can’t pick and choose who it wants to serve or what kind of applications it wants to permit — as long as it treats similar services or customers the same.
So blocking is right out — by statute. If you would like to see some real world examples in the traditional telephone world, check out when the various phone companies refused to complete phone calls to free conference call services. The FCC promptly issued a declaratory ruling telling carriers that they did not have a choice about completing phone calls. Similarly, when we began to have problems with rural call completion, the FCC issued a bunch of declaratory rulings and orders to make sure that phone calls to rural Americans would be completed and work properly. This is the statutory authority the FCC uses for its “no blocking” rule — as well as for its no paid prioritization, no throttling, and general conduct rules.
Without defining broadband as a Title II telecommunications service/common carrier, even the FCC would not be able to enforce an ironclad “no blocking” rule. That’s why the DC Circuit threw out the FCC’s 2010 rules adopted pursuant to its Title I and Section 706 authority. As the court found in Verizon v. FCC, a rule requiring a carrier to carry all traffic is the “essential hallmark” of common carriage. So either classify broadband as a Title II common carrier telecommunications service subject to Sections 201 & 202 or forget about an absolute ban on blocking. Which is why the FCC finally bit the bullet and did the right thing and classified broadband as common carrier telecommunications under Title II of the Communications Act.
The FTC Does Not Work This Way.
The FTC cannot assume that a provider is a “common carrier” and therefore not allowed to refuse to provide service. Just the opposite, under Section 5(a)(2), the FTC is prohibited from enforcing Section 5 prohibition on “unfair or deceptive methods of competition,” or “engaging in unfair or deceptive acts or practices” against federally regulated common carriers. (That’s what the whole FTC v. AT&T Mobility case is about, for more info see my old blog post here.) So the FTC, under the terms of its own jurisdictional statute, cannot impose an absolute ban on blocking. Period. Full stop.
I cannot repeat this loudly and often enough. Anyone who says the FTC could prevent any and all blocking by an ISP either does not understand the law or is selling something. There is utterly no way under the FTC’s existing statute that the FTC could prevent all ISP blocking the way the 2015 rules do now. Claims to the contrary are — bluntly — big fat lies. Falsehoods. Untruths. Contrary to fact. Because if the FTC could prevent a broadband provider from blocking all lawful content, that would be regulating the broadband provider as a common carrier, which the FTC is expressly prohibited from doing.
This is why Chairman Ajit Pai and his fellow conservatives whine about how Twitter is the real enemy of the open internet for supposedly blocking conservative messages. If the FTC could prevent all blocking, it would say: “Yo! Twitter, and the rest of you liberal Silicon Valley companies with your left-wing socialist agenda to destroy America. Stop blocking all those important real Americans who are defending our values, like The Daily Stormer!” But they can’t. As long as these platforms reserve the right to kick off anyone who they determine violates their terms of service (which includes no promoting racism and such what), as long as they aren’t violating antitrust law, and as long as no customers suffer any harm in the process, then they can block whoever they damn well please.
Since one of the supposed points of this exercise is to regulate edge providers and broadband providers the same — even though everyone outside of DC has no trouble distinguishing between these two — the same rule will apply to broadband carriers under the FTC. As long as they behave in a manner consistent with their published terms of service, as long as they aren’t violating antitrust, and as long as the conduct is not otherwise “unfair” as the term is defined in Section 5 of the FTCA, then broadband carriers can block whoever they want. Period. Full stop.
But Why Isn’t It Unfair?
As I spent lots and lots of time explaining in my previous blog post, it’s not “unfair” for a business (absent some special law, like the Communications Act) to decide to limit its inventory or limit the type of goods it wants to offer or types of customers it wants to serve. So if a broadband company says “I am going to block certain websites like 4Chan because I get lots of complaints about them,” they can totally do that without violating Section 5. That’s not unfair, because — absent a statute giving you a right to access 4Chan, it’s not unfair for a broadband provider to say ‘not going to offer it.’ Similarly, if a carrier says “I’m going to respect the request from law enforcement to degrade messages from mobile devices in areas undergoing what law enforcement characterizes as illegal activity or incitement, like say the protest out at Standing Rock, that’s not “unfair” as that term is used in Section 5 of the FTCA.
Sure, I can argue that we have a valuable social policy not to censor and to promote diversity of views and so forth. But there are two problems. First, those are policies associated with telecommunications. They are not, generally, associated with plain old information services. Granted I can make an argument under Packingham v. NC, but that is hardly a sure thing.
But even more important, Section 5(n) explicitly states that while the FTC can consider public policy along with other evidence of unfairness, the FTC is absolutely prohibited from finding something unfair based solely on public policy. The FTC still has to find substantial injury (or likelihood of substantial injury), not otherwise avoidable, and without countervailing benefits.
It is hard to find the legally cognizable “substantial injury” I suffer from not getting access to 4Chan. Furthermore, is addressing customer complaints about the awfulness of some websites a countervailing benefit? How about assisting law enforcement to prevent “incitement” and “maintain civil order?” Obviously, it is a case-specific inquiry. But by definition “case specific” means “cannot have an absolute ban on blocking.”
Unlike the FCC, the FTC cannot have a categorical ban on blocking. Heck, even the FCC could not have an absolute categorical ban on blocking until it classified broadband as a Title II common carrier telecommunications service. That is, after all, the difference between a common carrier and a regular business.
Once again, if you think broadband providers should be able to block content, then cool beans. But then own what you’re saying. It’s not that the FTC can prevent a carrier from blocking. It’s that the FTC can, probably, stop a carrier from blocking in cases where you think that would be appropriate. It’s a rather important difference.