Sen. Wicker

WASHINGTON (Reuters) – A U.S. Senate hearing to reform an internet law and hold tech companies accountable for how they moderate content quickly turned into a political scuffle as lawmakers not only went after the companies but also attacked each other.

Lawmakers are split on ways to hold Big Tech accountable under Section 230 of the Communications Decency Act – which protects companies from liability over content posted by users but also lets the firms shape political discourse.

Republican lawmakers used most of their time during the hearing to accuse the companies of selective censorship against conservatives. Democrats primarily focused on insufficient action against misinformation that interferes with the election.

In response to a limited number of questions discussing the law, the chief executives of Twitter, Facebook, and Google said it was crucial to free expression on the internet. They said Section 230 gives them the tools to strike a balance between preserving free speech and moderating content, even as they appeared open to suggestions the law needs moderate changes.

All three CEOs also agreed the companies should be held liable if the platforms act as a publisher but denied being the referees over political speech – a claim that angered some Republicans.

Senator Ted Cruz went after Twitter’s Jack Dorsey after the CEO said Twitter has no influence over elections.

“Who the hell elected you and put you in charge of what the media are allowed to report and what the American people are allowed to hear,” Cruz said, referring to the platform’s decision to block stories from the New York Post about the son of Democratic presidential candidate Joe Biden. Ahead of the hearing, the senator released a picture on Twitter titled “Free Speech showdown Cruz vs Dorsey” that showed him and Twitter’s Dorsey pitted against each other.

Democratic Senator Brian Schatz said he did not have any questions, calling the hearing “nonsense”.

“This is bullying and it is for electoral purposes,” he said.

Other Democrats including Tammy Baldwin, Ed Markey and Amy Klobuchar also said the hearing was held to help President Donald Trump’s re-election effort.

Trump, who alleges the companies’ stifle conservative voices, tweeted “Repeal Section 230!” during the hearing.

Twitter’s Dorsey, who drew the most amount of criticism from Republicans, warned the committee that eroding the foundation of Section 230 could significantly hurt how people communicate online. Pichai said Google operates without political bias and that doing otherwise would be against its business interests.

Zuckerberg at today’s hearing.

Zuckerberg, who briefly had difficulty with his internet connection at the start of the hearing, said he supports changing the law but also warned that tech platforms are likely to censor more to avoid legal risks if Section 230 is repealed. Biden has expressed support for revoking the law.

NO MORE “FREE PASS”

Republican Senator Roger Wicker, who chairs the committee, said it was important to shield companies from liability without giving them the ability to censor content they dislike.

“The time has come for that free pass to end,” he said.

Wicker also criticized Twitter’s decision to block the New York Post stories about Biden’s son and Facebook’s move to limit their reach.

He and other senators such as Cory Gardner went after Twitter for not taking down tweets from world leaders that allegedly spread misinformation but going aggressively after Republican President Donald Trump’s tweets.

U.S. lawmakers are not the only ones pushing for reform. The European Union’s executive Commission is drafting a new Digital Services Act that, in addition to tackling market abuses by dominant platforms, would also address liability for harmful or illegal content. Competition Commissioner Margrethe Vestager is due to unveil her proposals on Dec. 2.

Reporting by Nandita Bose and David Shepardson in Washington; Additional reporting by Diane Bartz in Washington and Douglas Busvine in Frankfurt; editing by Kirsten Donovan and Lisa Shumaker

WASHINGTON (Reuters) – The U.S. Federal Communications Commission voted 3-2 on Tuesday to maintain its 2017 repeal of Obama-era net neutrality rules, even after a federal court directed a review of some provisions of the repeal.

The 2015 net neutrality rules barred internet service providers (ISPs) from blocking or slowing internet content or offering paid “fast lanes.” Under President Donald Trump, the 2017 FCC order granted ISPs sweeping powers to recast how Americans use the internet, as long as they disclose changes.

A federal appeals court in October 2019 largely upheld the FCC’s repeal of the rules, but ordered the agency to reconsider the repeal’s impact on public safety; regulations on attachments to utility poles; and the FCC’s ability to provide subsidies for broadband service. The FCC majority opted to leave the order unchanged.

The net neutrality repeal was effective in June 2018. ISPs have not changed how users access the internet, but consumer groups fear that they could move to raise prices or slow speeds selectively for some customers.

“It is patently obvious to all but the most devoted members of the net neutrality cult that the case against the (net neutrality repeal) was a sham,” FCC Chairman Ajit Pai said Tuesday.

ISPs and other advocates of the net neutrality repeal say the new rules have boosted investment. Consumer groups and other critics of the dispute the assertion that loosening net neutrality rules led to new investment.

FCC Commissioner Jessica Rosenworcel, a Democrat, said, “this agency is not interested in getting it right. Instead, it doubles down, rather than recognizing the realities of the world around us.”

Democrats have made net neutrality repeal a campaign issue. Presidential candidate Joe Biden, who was Obama’s vice president, is expected if he wins to designate an FCC chair who would move to would reinstate net neutrality.

Senator Ed Markey, a Democrat, said “without net neutrality protections, it’s just a matter of time before big broadband providers start raising prices, slowing down internet speeds, and making it harder for families, small business, and students to access the opportunities to recover and rebuild from this pandemic.”

Reporting by David Shepardson; Editing by David Gregorio

Pai’s parting gift

Fearing the potential of Joe Biden replacing Donald Trump as president in next month’s election, Federal Communications Commission chairman Ajit Pai will ram through a final vote to kill net neutrality while Republicans still have a majority on the Commission.

At the final commissioners’ meeting on Oct. 27, just days before the U.S. election, Pai intends to take up net neutrality once again, primarily to deal with a demand by the D.C. Court of Appeals to address outstanding issues that came up when Republicans rescinded net neutrality rules that were put in place by the FCC under the Obama Administration. To drive the final stake into the heart of a free and open internet, Pai plans to quickly dismiss three issues of concern to the Court:

• how net neutrality impacts public safety;
• if it affected how the FCC deals with pole attachment regulation;
• if it hurts the FCC Lifeline program’s ability to offer broadband to low-income Americans.

In Pai’s view, these are basically non-issues of concern and he intends to bring the matter before the Commission for a widely predicted party-line vote affirming the death of net neutrality policies under the Trump Administration.

Pai took to Medium.com to write a smug and condescending editorial about why the pro-corporate deregulation policies he and his Republican colleagues have supported over the last four years have made American broadband great again. He called net neutrality supporters a bunch of “Washington politicians, far-left special-interest groups, Hollywood stars, and Silicon Valley tech giants.” He blasted the media for “scaring the American people” about what would happen after Trump’s FCC killed the open internet order. He also claimed defeating net neutrality would lead to a renaissance of new investment in broadband.

In fact, many broadband providers elected to curtail investment even before the COVID-19 pandemic arrived. Charter, Comcast, AT&T, and Verizon have all reduced investment in residential wired broadband services, in part because of a lack of competitive marketplace. Pai, a former lawyer for Verizon, has spent the last four years making life very comfortable for the country’s largest internet service providers. He eliminated mandated competition in set-top boxes, did nothing to stop data caps, eliminated net neutrality protections, and helped enact new rules allowing mobile providers to place future cell towers and other equipment in places that have never been acceptable before.

Most broadband providers today only compete on price for new customers. Once those promotions expire, customers face punishing bills. Internet pricing drew renewed scrutiny during the early days of the pandemic when schools and employers moved to at-home study and work. Many found internet pricing of $70+ a month unaffordable, while other suburban and exurban employees discovered they could not get suitably fast internet service at any price.

Pai’s tenure as chairman has been four years of smug arrogance and a complete disinterest in the input of consumers. Millions have told the FCC to leave net neutrality policies in place. Pai and his Republican colleagues ignored them. The Republican commissioners have delivered speeches at some of the most partisan right-wing groups imaginable, but won’t respond to ordinary Americans looking for actual evidence of competition and consumer protection. For much of this year, Pai’s two Republican colleagues have spent much of their time on Twitter pursuing their own agendas. Commissioner O’Rielly has made closing down low power community pirate radio stations his obsession. At least that is covered under the FCC’s mandate. Commissioner Carr has spent his time on Twitter complaining about people being mean to President Trump on social media, his obsession with China and freedom of speech, and his suspicions about the World Health Organization (WHO).

This final attempt to destroy net neutrality just before the election is the ultimate insult, one that Democratic Commissioner Jessica Rosenworcel fumed about:

“This is crazy. The internet should be open and available for all. That’s what net neutrality is about. It’s why people from across this country rose up to voice their frustration and anger with the Federal Communications Commission when it decided to ignore their wishes and roll back net neutrality. Now the courts have asked us for a do-over. But instead of taking this opportunity to right what this agency got wrong, we are going to double down on our mistake.”

“The FCC is going to make it easier for broadband companies to block websites, slow speeds, and dictate what we can do and where we can go online. It’s insane that this is happening now, during a pandemic when we rely on internet access for so much of day-to-day life. It’s also cruel that this is our priority when this crisis has exposed just how vast our digital divide is and how much more work we have to do for broadband to reach 100% of us—no matter who we are or where we live.”

Telecom companies are cutting investment in their networks despite promises by Republican members of the FCC that repeal of net neutrality would inspire increased investment.

Charter, Comcast, AT&T, and Verizon have surprised Wall Street with dramatic cutbacks in spending and investment in their networks, with one provider admitting improving profit margins are now a bigger priority.

As a result, Wall Street analysts are revising down capital expenditure (Capex) estimates in reports to their investor clients.

“Comcast and Charter missed [third quarter] expectations for Capex and guided 2019 lower than previously planned,” reported Nomura in a note to investors. “We have lowered our combined 2019 Capex forecast for Comcast and Charter from $14.6 billion to $14.2 billion.”

AT&T’s drop in network spending was the most dramatic among the country’s top telecom companies. AT&T has declared an end to fiber broadband expansion and slashed spending forecasts from the $23 billion the company spent this year to as little as $20 billion next year, despite claiming it would dramatically expand its 5G service to over two dozen cities over the next 12 months.

In a recent conference call with investors, AT&T CEO Randall Stephenson said “now it’s time to reap the rewards of what we’ve been doing [and] begin to reward to shareholders these investments that we’ve been making over the last few years.”

Over the next three years, AT&T will pay shareholders $45 billion in dividends and spend $30 billion on buying back shares of AT&T stock to retire debt racked up buying Time Warner (Entertainment). In fact, AT&T will devote 50-75% of its free cash flow exclusively on retiring shares of AT&T stock, which is expected to benefit shareholders.

Verizon reported spending $4.4 billion in the third quarter on network upgrades, approximately $100 million less than expected. That is a concern because Verizon is trying to expand its costly 5G network, but is not devoting the investment dollars required to make such an upgrade happen without cutting investments elsewhere in the company. Verizon has told Wall Street analysts to expect stable Capex spending of $17-18 billion annually for 2019-2021. That will either mean Verizon’s 5G expansion will be modest or the phone company will have to slash investments in other areas, such as wireline, fiber to the home, or business services.

Many analysts expect 5G will be a top spending priority for AT&T and Verizon over the next several years, leaving little room in budgets for upkeep of the company’s legacy landline networks or its other products. Charter and Comcast have effectively stopped spending on large upgrade projects, also as part of improved profit-taking.

The spending realities are in direct conflict with the promises made by Republican members of the FCC. Trump-picked FCC Chairman Ajit Pai repeatedly claimed that banishing net neutrality would lead to significant increases in investment by the nation’s top telecom companies. In fact, the opposite has happened.

WASHINGTON (Reuters) – A U.S. appeals court on Tuesday rejected the decision of the Federal Communications Commission to declare that states cannot pass their own net neutrality laws and ordered the agency to review some key aspects of its 2017 repeal of rules set by the Obama administration.

The court, which upheld most of the FCC’s December 2017 order, said the agency “failed to examine the implications of its decisions for public safety” and must also review how its decision will impact a government subsidy program for low-income users.

The decision means the more than 10-year-old debate over net neutrality will continue to drag on for months or more likely years. The ruling is a setback to the Trump administration’s efforts to reverse rules adopted under former President Barack Obama in 2015 which barred internet service providers from blocking or throttling traffic, or offering paid fast lanes, also known as paid prioritization.

FCC Chairman Ajit Pai said the decision affirmed the FCC’s “decision to repeal 1930s utility-style regulation of the internet. A free and open internet is what we have today. A free and open internet is what we’ll continue to have going forward.”

Pai added that the FCC would address “the narrow issues that the court identified.”

Championed by large tech companies and consumer groups, net neutrality was formally adopted by the FCC in 2015. Major telecommunications companies argued it limited their ability to offer new services to content providers, and under the Trump administration, the FCC overturned the policy.

California passed sweeping state net neutrality protections but agreed not to enforce the measure pending the court challenge.

The court threw out the part of the order that barred all states from setting net neutrality rules and argued that states were preempted by federal law.

“The commission lacked the legal authority to categorically abolish all 50 states statutorily conferred authority to regulate intrastate communications,” the court said.

The FCC could still make “provision-specific arguments” to seek to block individual aspects of state net neutrality rules.

Judge Stephen Williams wrote in his dissenting opinion that “On my colleagues’ view, state policy trumps federal; or, more precisely, the most draconian state policy trumps all else.”

The Trump administration rules were a win for internet providers like AT&T Inc, Comcast Corp and Verizon Communications Inc but opposed by companies such as Facebook Inc, Amazon.com Inc and Alphabet Inc.

Reporting by David Shepardson; Editing by Paul Simao and Lisa Shumaker