Home » Net Neutrality » Recent Articles:

Republican FCC Commissioners Pai and O’Rielly Get Ethics Complaints, Investigations

Phillip Dampier March 2, 2018 Net Neutrality, Public Policy & Gov't, Video Comments Off on Republican FCC Commissioners Pai and O’Rielly Get Ethics Complaints, Investigations

FCC Chairman Ajit Pai is under investigation by the Inspector General of the Federal Communications Commission after being alleged of improperly taking actions to benefit Sinclair Broadcast Group, while one of his colleagues, Commissioner Michael O’Rielly, is the subject of an ethics complaint after allegedly violating the Hatch Act by openly advocating for the re-election of President Donald Trump.

Pai’s actions as head of the FCC under the Trump Administration have been under scrutiny by some members of Congress since last fall. Ranking Member of the House Energy & Commerce Committee, Rep. Frank Pallone, Jr. (D-N.J.) and Ranking Member of the House Committee on Oversight and Government Reform, Elijah Cummings (D-Md.) signed a joint letter addressed to FCC Inspector General James Hunt last November requesting an investigation after they claimed Chairman Pai “has repeatedly refused to adequately respond to Congressional inquiries” on the matter.

Pallone and Cummings noted press reports that Pai specifically timed certain FCC regulatory actions to directly benefit Sinclair, seen as politically friendly to the Trump Administration and Republicans. As evidence, they included multiple examples of suspiciously timed regulatory changes that seemed to coincide with Sinclair’s business deals and the company’s lobbying efforts in Washington:

Sinclair-Bonten License Transfer Application

Chairman Pai rescinded a guidance in February (2017), effectively loosening the scrutiny the FCC’s staff applied to deals that could skirt local TV ownership restrictions by using a sharing agreement (effectively allowing Sinclair to control stations owned by another company). The FCC approved a deal three months later where Sinclair used several of these sharing agreements, potentially to circumvent the rules.

Pai

Reinstatement of the UHF Discount Rule

Press reports indicated in March, 2017, Sinclair was in talks with Tribune Media Company about a potential merger, but analysts remarked the deal would likely require the FCC to reinstate an outdated rule called the “UHF discount.” This rule, left over from the days of analog television and finally rescinded in 2016, did not count UHF television stations above Channel 13 the same as VHF stations (Chs. 2-13) when defining how many TV stations a single company can own. The theory behind the discount was that analog UHF reception was more difficult and, as a result, such stations were less valuable than their lower channel counterparts. But digital television largely erased that distinction because UHF reception has improved, TV stations can be “mapped” by digital tuners to any channel number, and, in some areas, digital VHF stations suffer more reception problems than UHF stations do.

Chairman Pai suddenly announced his plan to reinstate the outdated UHF discount rule the same month Sinclair began talks with Tribune. Sinclair announced its proposed acquisition of Tribune’s TV stations just two weeks after the FCC reinstated the UHF discount. If approved, the transaction would solidify Sinclair as the country’s largest TV group owner with a potential to reach 70% of the country, which is far in excess of the current 39% limit.

LG’s Ultra High Definition (UHD) televisions support ATSC 3.0, and were demonstrated at the 2017 Olympic Games in PyeongChang, South Korea.

Next Gen TV (ATSC 3.0)

Sinclair has been one of the main proponents of the ATSC 3,0 (also known as “Next Gen TV”) transition, and its subsidiary holds patents that reports indicate could provide billions of dollars in licensing fees to Sinclair. Chairman Pai announced during his first full month in office a proposal to allow the TV industry to accelerate a transition to the new standard.

Since that time, the FCC has pushed ATSC 3.0 forward and the new technology has begun to be tested in the United States. Some consumer groups worry the new technology will be costly if consumers cannot afford or find converter boxes for existing televisions, although ATSC 3.0 proponents promise stations will continue to broadcast a Standard Definition version of existing TV stations for at least five years after the transition begins.

New televisions supporting the standard have already gone on sale in South Korea at prices ranging from around $900-$1,500US. The government is subsidizing TV station owners a minimum of $1.75 billion as part of a TV station repack that will precede the introduction of ATSC 3.0. But no subsidies will be given to consumers. Those buying ATSC 3.0 tuners or televisions will do so out of their own pocket if they wish to continue watching over-the-air stations. Sinclair will also get a royalty payment for each new television or tuner sold.

Main Studio Rule

The FCC voted last October to eliminate rules requiring a local broadcast station to maintain a physical presence in the market in which it operates. This means a station could deliver programming to a station’s transmitter from another city, with no local programming or personnel. This move would make Sinclair’s potential merger even more profitable by eliminating many of the costs of maintaining local stations, particularly labor and news-gathering costs.

Broadcast Ownership Rules

Chairman Pai plans to significantly change the existing broadcast media ownership limits. This would clear away virtually all remaining obstacles to Sinclair increasing its reach beyond the Tribune merger proposal and acquire still more television stations. Sinclair has carefully prepared for this eventuality by contractually obligating the new owner(s) of stations Sinclair is required to sell to remain under whatever ownership cap still exists to sell those stations back to Sinclair if and when Sinclair requests it.

According to the two Democrats, “all of these actions — when taken in context with reported meetings between the Trump Administration, Sinclair, and Chairman Pai’s office — have raised serious concerns about whether Pai’s actions comply with the FCC’s mandate to be independent.”

Pai’s critics are also concerned about the increased partisanship of the chairman and another Republican FCC Commissioner Michael O’Rielly. Both turned up at the Conservative Political Action Conference (CPAC) in Maryland last week.

The NRA’s “Charlton Heston Courage Under Fire Award” for Ajit Pai’s Assassination of Net Neutrality Includes a Kentucky Long Gun

Pai at CPAC

When Pai arrived on stage to deliver a short speech, Dan Schneider, executive director of the American Conservative Union, which sponsors CPAC, took the microphone to introduce the FCC chairman.

“Ajit Pai is the most courageous, heroic person that I know,” Schneider said. “He has received countless death threats. His property has been invaded by the George Soros crowd. He has a family, and his family has been abused in different ways. Chairman Pai, thank you for everything you’ve done.”

He then turned the podium over to Carolyn Meadows, second vice president of the National Rifle Association, who surprised Pai with the NRA’s “Charlton Heston Courage Under Fire Award,” a rare honor given only to firebrand conservatives willing to push through their political agenda regardless of criticism or voter backlash. Pai was being recognized for ignoring the comments of tens of millions of supporters of net neutrality and pushing through a complete repeal of the open internet rules, regardless of the possible political consequences.

Previous award winners include controversial former Milwaukee Sheriff David A. Clarke Jr., Undersecretary John Bolton, who once threw a tape dispenser at a female government contractor and chased her down a Moscow hotel hallway, conservative talk show host Rush Limbaugh, and Vice President Mike Pence.

The honor included a “Kentucky hand-made long gun,” said Meadows, who promised to store the gun for Pai at an NRA museum. That prompted a Tweet from the former director of the Office of Government Ethics, Walter Shaub, claiming Pai’s gun award likely violated federal ethics rules.

As criticism of the FCC chairman grew, Pai’s office sent letters on Thursday to both the NRA and the American Conservative Union declining the handmade weapon. Pai indirectly blamed the NRA, claiming his staff has asked at the event that the gun not be given to him. But the NRA came up with its own compromise, storing the gun until Pai left office.

“As you know, once my staff became aware of what was happening, they asked backstage that the musket not be presented to me to ensure that this could be first discussed with and vetted by career ethics attorneys in the FCC’s Office of General Counsel,” Pai wrote, an FCC source told Politico. “Therefore, upon their counsel, I must respectfully decline the award. I have also been advised by the FCC’s career ethics attorneys that I would not be able to accept the award upon my departure from government service.”

FCC Commissioner Michael O’Rielly Calls for the Re-Election of President Trump and Violates the Hatch Act

O’Rielly

At the same CPAC event, FCC Commissioner Michael O’Rielly also managed to find himself the subject of controversy in response to a question.

Q. What can the FCC do to stop the constant “ping pong” of issues, like net neutrality, every time the party in power changes in the nation’s capital?
A. “I think what we can do is make sure as conservatives that we elect good people to both the House, Senate and make sure that President Trump gets re-elected,” O’Rielly answered.

Experts claim O’Rielly violated the Hatch Act, a law that prohibits employees in the executive branch of the federal government, except the president, vice-president, and certain designated high-level officials from engaging in certain forms of political activity. Telling the public to re-elect President Trump counts as a violation.

The Office of Special Counsel (OSC) already warned government officials so steer clear of President Trump’s already announced 2020 re-election campaign. In short, the Hatch Act “prohibits federal employees, while on duty or in the workplace, from expressly advocating for or against his reelection in 2020,” the OSC wrote in a guidance memo distributed to all federal agencies.

American Oversight, a group that monitors ethics issues in Washington, filed a formal complaint with the OSC against O’Rielly on Feb. 23:

“American Oversight respectfully requests that the Office of Special Counsel (“OSC”) immediately open an investigation into whether Michael O’Rielly, Commissioner on the Federal Communications Commission (FCC), violated the Hatch Act during an appearance at the Conservative Political Action Conference today, February 23, 2018. We do not believe this presents a hard question.

“Appearing in his capacity as a commissioner of the FCC, Commissioner O’Rielly improperly engaged in partisan political activity by expressly advocating for the re-election of Donald Trump
and exhorting the crowd to “elect good people to the House [and] the Senate.” Specifically, during the panel discussion, Commissioner O’Reilly delivered the following remarks:

“‘I think what we can do is make sure as conservatives that we elect good people to both the House, the Senate, and make sure that President Trump gets re-elected. But there’s another thing you can do. We’re going to have a fight over the Obama internet rules in the next couple months in the U.S. Senate. And that’s going to matter and that vote matters, and so making sure people take the right course on that, really does affect what policies we’re able to keep in place moving forward. So we can certainly use everyone’s help along those lines.’

“These remarks, made in Commissioner O’Rielly’s capacity as a commissioner at the FCC, constitute prohibited partisan political activity under the Hatch Act. As you know, the Hatch Act generally prohibits federal officials from engaging in partisan political activity while on duty. Advocating for the election of a candidate in a partisan election is the classic example of such prohibited activity.”

“The FCC controls our airwaves, the internet, and so many of the things we interact with every single day,” said Austin Evers, the executive director of American Oversight. “It should be independent, it should not be partisan, and bottom line, it should obey the law.”

Another group, Citizens for Responsibility and Ethics in Washington (CREW) is also reviewing the event.

“This certainly raises Hatch Act issues,” spokesman Jordan Libowitz told the Chicago Tribune. “[O’Rielly] is prohibited from taking part in partisan political activity using his official title or position.”

“The Young Turks” explain Ajit Pai’s attack on net neutrality and the award the NRA gave him for killing it. (7:16)

AT&T’s Argument It Was Untouchable by Federal Trade Commission Fails in Court

Phillip Dampier February 27, 2018 AT&T, Net Neutrality, Public Policy & Gov't 1 Comment

AT&T’s attempt to avoid oversight and enforcement of consumer protection laws by the Federal Trade Commission (FTC) failed in a federal appeals court Monday, overturning a 2016 decision that agreed with AT&T the FTC could not oversee or punish AT&T for its business practices.

In a unanimous 11-0 decision by the Ninth Circuit Court of Appeals, the court found AT&T’s interpretation of a law it said gave the Federal Communications Commission exclusive authority to regulate and oversee “common carrier” telecom companies was overly broad and based on a misinterpretation of the law. The decision means the FTC will continue to pursue AT&T in court to secure relief for AT&T’s wireless customers that the FTC claims were misled by AT&T’s unlimited data plan that was not truly unlimited.

“The phrase ‘common carriers subject to the acts to regulate commerce’ thus provides immunity from FTC regulation only to the extent that a common carrier is engaging in common-carrier services,” the court ruled Monday. In laymen’s terms, the judges found that the FCC does have the regulatory authority to oversee common carrier services like basic telephone service, but the law does not prevent other government agencies like the FTC to oversee AT&T’s conduct in non common-carrier services.

The FTC and the FCC both argued that allowing AT&T and the 2016 lower court opinion to stand would create a regulatory loophole through which virtually any corporation with even the slightest ownership stake in a common carrier telecommunications company could escape all oversight and enforcement of consumer protection laws.

The dispute began in 2014, when the FTC sued AT&T in court for intentionally throttling wireless internet speeds of millions of AT&T customers hanging on to their legacy unlimited data plans.

The FTC’s complaint alleged that the company failed to adequately disclose to its customers on unlimited data plans that, if they reached a certain amount of data use in a given billing cycle, AT&T reduced – or “throttled” – their data speeds to the point that many common mobile phone applications – like web browsing, GPS navigation and watching streaming video –  become difficult or nearly impossible to use.

“AT&T promised its customers ‘unlimited’ data, and in many instances, it has failed to deliver on that promise,” said former FTC Chairwoman Edith Ramirez in 2014. “The issue here is simple: ‘unlimited’ means unlimited.”

According to the FTC’s complaint, AT&T’s marketing materials emphasized the “unlimited” amount of data that would be available to consumers who signed up for its unlimited plans. The complaint alleged that, even as unlimited plan consumers renewed their contracts, the company still failed to inform them of the throttling program. When customers canceled their contracts after being throttled, AT&T charged those customers early termination fees, which typically amount to hundreds of dollars.

The complaint accused AT&T of violating the FTC Act by changing the terms of customers’ unlimited data plans while those customers were still under contract, and by failing to adequately disclose the nature of the throttling program to consumers who renewed their unlimited data plans.

AT&T responded in court asking the case be dismissed, arguing that the FTC could not bring a case against AT&T because, as a common carrier, only the FCC has jurisdiction over the company.

The case was largely decided on whether Congress intended to exempt common carrier companies from FTC oversight based on their “status” or their “activities.” AT&T argued the law clearly gave companies deemed to be common carriers a blanket exemption from FTC oversight. The FTC argued Congress only intended to exempt the specific common carrier “activities” or services sold by a company from FTC oversight, not the entire company. The three-judge panel of the Court of Appeals agreed with AT&T’s view, affirming AT&T’s claim it was untouchable by the FTC and dismissed the FTC’s lawsuit.

Judge Kozinski, questioning AT&T: “I’m regulated by the FTC and I don’t like it. I go out and I buy a small, money-losing common carrier. Do I say, ‘bye bye FTC,’ under your reading of the statute?”

The decision was a stunner in D.C. regulatory circles and opened a chasm-sized loophole for almost any company to completely escape the FTC’s oversight and enforcement of consumer protection laws just by providing a single common carrier service (or acquiring a small phone company that does) to secure blanket immunity. The FTC appealed the decision before the Ninth Circuit Court of Appeals.

Both the FTC and at least one judge hearing the federal agency’s appeal saw the potential impact of the earlier 2016 decision immediately.

“I’m regulated by the FTC and I don’t like it,” Judge Alex Kozinski said to AT&T’s attorney. “I go out and I buy a small, money-losing common carrier. Do I say, ‘bye bye FTC,’ under your reading of the statute?”

The FTC warned if AT&T’s view was upheld, any company could buy a common carrier and violate federal consumer protection laws with no recourse for consumers and no available FTC enforcement action.

This week’s decision, called “common sense” by the judge who wrote the summary of the court’s finding, restores the FTC’s authority over non-common carrier services at companies large and small, including AT&T. It is also a relief to FCC Chairman Ajit Pai, who earlier argued the FTC had jurisdiction over abusive ISPs and would effectively oversee broadband providers without any need to continue the net neutrality policies of his predecessor. Had the court ruled in favor of AT&T, Pai’s policy would have transferred oversight of internet services to an agency legally prohibited from overseeing most broadband providers.

The FTC was pleased with the decision.

“It ensures that the FTC can and will continue to play its vital role in safeguarding consumer interests including privacy protection, as well as stopping anti-competitive market behavior,” Maureen Ohlhausen, acting Chairwoman, said in an emailed statement.

AT&T was not, and claimed the court ignored the merits of the case.

“We are reviewing the opinion and continue to believe we ultimately will prevail,” the representative said in an emailed statement, which did not definitively state whether AT&T intended to appeal the decision.

Trump’s FTC Nominees Signal Agency Will Take More Relaxed Approach to Consumer Protection

Phillip Dampier February 15, 2018 Competition, Consumer News, Net Neutrality, Public Policy & Gov't Comments Off on Trump’s FTC Nominees Signal Agency Will Take More Relaxed Approach to Consumer Protection

At a hearing Wednesday to question President Donald Trump’s nominees for the Federal Trade Commission, Democrats expressed concern about some signals from the three Republican and one Democratic nominees that they intend to enforce consumer protection laws as long as there is evidence they have the indisputable authority to act.

What happens when corporate interests and special interest groups insist the FTC’s regulatory powers are uncertain, limited by precedent, blocked by court opinions, or contrary to the wishes of Congress remained uncertain after the hearing.

The Senate Commerce Committee is facing some urgency to approve the nominations to fill a large number of vacancies at the FTC, which currently prevents the agency from taking votes on actions. If all four nominees are approved, the FTC will still have a single open commissioner’s seat on the Democratic side.

The nominated FTC commissioners are:

Simons

Joseph J. Simons, nominated for chairman for the FTC, is a Republican antitrust lawyer who has taken a few trips through Washington’s revolving door, serving as chief of the FTC’s Competition Bureau, investigating mergers and anticompetitive conduct from 2001 to 2003 under President George W. Bush. During his tenure, the FTC mostly pursued high-profile cases that brought clear evidence of antitrust harm. Under Simons, the FTC blocked Libbey, Inc. from acquiring its chief glassware rival Anchor Hocking. Vlasic Foods International and Claussen Pickle found an unreceptive FTC for their merger, eventually also blocked. Simons was noted for investigating pharmaceutical companies that applied for misleading drug patents designed to delay the entry of cheaper generic versions of brand name pharmaceutical products. After his tenure at the FTC, Simons accepted a lucrative $1.9 million partnership at the law firm Paul, Weiss, Rifkind, Wharton & Garrison LLP, which handles corporate mergers and acquisitions for corporate clients.

Wilson

Christine S. Wilson, a Delta Air Lines executive, is also a frequent flyer through D.C.’s revolving door. During the George W. Bush administration, she was chief of staff for then-FTC chairman Tim Muris. She also held three other significant corporate-public policy positions that advised companies and the U.S. government about antitrust matters. In 2011, Wilson accepted a high paying partnership at Kirkland and Ellis, a firm well-regarded for helping corporations successfully complete antitrust reviews of their mergers and acquisitions. Wilson’s latest employer was Delta Air Lines, which offered her an executive position in August 2016 as the company’s senior vice president for legal, regulatory, and international affairs. In addition to the $521,000 in distributions Wilson earned from her partnership at Kirkland and Ellis, Wilson accepted an undisclosed cash signing bonus, $136,000 in bonuses in 2017 from a management incentive plan, and a regular salary of $390,000. Wilson retains various amounts of unvested Delta stock and stock options that would normally be lost after leaving the company, but Delta apparently wanted to part with Wilson on the friendliest of terms, granting her pro rata compensation for the stock and waiving the usual requirement that an employee leaving so quickly after being hired should pay back 50% of their signing bonus.

Phillips

Noah Joshua Phillips served as chief counsel for Republican Sen. John Cornyn at the Senate Judiciary Committee. Before coming to Capitol Hill, Phillips was an associate at Steptoe & Johnson LLP in Washington and at Cravath, Swaine & Moore in New York. He focused on civil litigation.

Consumer Federation of America senior fellow Rohit Chopra is a Democrat and the only nominee with a long record of representing consumer interests and pushing for increased consumer protection and better oversight of financial services and products targeting consumers. Chopra was previously assistant director of the Consumer Financial Protection Bureau, where he oversaw the agency’s agenda on students and young consumers. He specialized in targeting the student loan industry for abusive practices and secured hundreds of millions of dollars in relief for student loan borrowers.

Chopra

Because of the unprecedented number of vacancies at the Commission, President Trump’s nominees could have an enormous impact on the direction of the FTC over the next several years. Traditionally, three of the commissioners belong to the current president’s political party and two belong to the other party.

Observers suggest the nominees are not atypical for a Republican president to nominate and some have served at the FTC before. None have attracted the kind of controversy that followed Makan Delrahim, Trump’s pick for head of the U.S. Department of Justice’s Antitrust Division. Most expect the Republican majority-led FTC will bend towards the interests of businesses unless there is clear and convincing evidence of significant consumer harm, especially in cases of mergers and acquisitions.

“Traditionally, Republican commissioners tend to be more lenient in merger enforcement on the marginal case, and we haven’t seen any evidence to indicate that [Simons] would depart from the traditional Republican posture,” said Mary Lehner, a partner with Freshfields and a former FTC attorney who also served as an adviser to two chairmen of the agency.

A major concern for some Democrats is that the FTC is now being tasked with protecting what remains of net neutrality, the open internet protocol that was swept away by the Republican majority at the Federal Communications Commission. The FCC reclassified internet service providers once again as “information services,” under Title 1 of the Communications Act. That transfers oversight back to the FTC — an agency not known for careful oversight of internet providers’ business practices.

At the hearing, Simons equivocated on how the FTC will deal with allegations of ISP abuse and signaled his concern that a Ninth Circuit court ruling found that telecommunications companies that also serve as common carriers (ie. telephone companies) are completely exempt from FTC authority.

Some Democrats interpreted Simons’ remarks as suggesting he could adopt a “my hands are tied” approach to ISP oversight, claiming that the FTC lacks the authority to keep an eye out for industry abuses.

Sen. Ed Markey (D-Mass.) seized on such comments, asking Simons to confirm if he believes the FTC specifically “lacks rulemaking authority” on net neutrality while the FCC, directly responsible for transferring net neutrality enforcement away from itself, “does have rulemaking authority to prevent blocking, throttling and paid prioritization by ISPs.”

Simons prevaricated in his answer, telling Markey, “We both have rulemaking, and they’re different types of rulemaking.”

Markey

“I’d want to talk to the general counsel’s office before I gave a specific answer to that, but I’m not entirely clear,” Simons said in response to a followup question pressing the issue.

“We are going to take the [statutory] authority we have and use it as best we can,” Simons told senators at the Senate Commerce Committee hearing. “I don’t know exactly what types of anti-competitive or deceptive and unfair practices may come up. If something comes up that we can’t reach under our statute, then I would certainly talk to you about a federal legislative fix.”

But observers note such a fix could take years, and the FTC often takes a year or more to complete investigations of alleged wrongdoing before starting to act.

Chopra, the lone Democratic nominee, agreed with Democrats that he also feared the FTC’s authority to act is uncertain, and that lack of certainty is likely to delay any enforcement actions. Chopra comments suggested the telecom industry is likely to use the Ninth Circuit court ruling to their advantage.

“I share a lot of the skepticism and concerns,” Chopra told the committee. “The FTC may face an unlevel playing field where some major market participants are exempt from the commission’s authority while others are subject to it.”

Blumenthal

Sen. Richard Blumenthal (D-Conn.) said that single Ninth Circuit court ruling could provide the telecom industry with a ready-made loophole to escape the FTC’s jurisdiction altogether. An ISP could acquire “a minor side business” like a small rural telephone company subject to common carrier rules and win blanket corporate immunity from FTC oversight. Although Simons said he would support striking the common carrier exemption from the Federal Trade Commission Act which defines the FTC’s authority, such a change could take several years to get through Congress and a well-funded telecom industry lobbying effort.

Phillips seemed impatient about the net neutrality debate which occupied a significant part of the hearing, characterizing it as a side issue worth sidestepping to focus on broader issues.

“We can’t allow contentious issues to distract us from the bread and butter of the agency […] looking out for children, veterans, the elderly and Americans generally,” Phillips said.

Aside from the net neutrality debate, the Republican nominees signaled their interest in the possibility of investigating large tech companies like Google, Amazon, and Facebook for antitrust activities. Republicans have been especially critical of Google, and some conservatives believe Twitter and Facebook exhibit political bias against them. The president has also frequently attacked Amazon and its CEO Jeff Bezos. Bezos owns the Washington Post, one of the many news outlets Trump said has been unfair to him. Trump has also accused Amazon of stiffing the government on sales taxes.

“Oftentimes companies get big because they are successful with the consumer, they offer a good service at a low price,” Simons said. “And that’s a good thing, and we don’t want to interfere with that. On the other hand, companies that are already big and influential can sometimes use inappropriate means — anticompetitive means — to get big or to stay big. And if that’s the case then we should be vigorously enforcing the antitrust laws.”

Another issue the FTC nominees promised to prioritize: online security/data breaches which expose consumers’ private information.

AT&T Scam of the Week: Advocating for Fake Net Neutrality

After spending millions to kill net neutrality, AT&T today called on Congress to pass a new national law protecting AT&T’s idea of a free and open internet by regulating internet websites like Facebook, Google, and Amazon.

Full page newspaper ads taken out in several nationally known newspapers proclaimed AT&T CEO Randall Stephenson’s support for the first “Internet Bill of Rights,” conceived by some of the same lawyers and lobbyists AT&T paid to destroy the FCC’s net neutrality rules put into effect during the Obama Administration.

“Congressional action is needed to establish an ‘Internet Bill of Rights’ that applies to all internet companies and guarantees neutrality, transparency, openness, non-discrimination and privacy protection for all internet users,” Stephenson wrote in the ad.

AT&T’s proposal would attempt to include content regulation of websites under the guise of fairness, claiming that while internet service providers are expected to treat all content fairly, large websites like Google and Facebook currently do not. Critics of AT&T’s proposal call that a distraction that has nothing to do with ISPs seeking the right to establish paid internet fast lanes and favoring partnered websites with exemptions from data caps or speed throttles.

AT&T doesn’t inform readers of its own complicity in the “confusion” over net neutrality policies that have faced constant legal and political challenges from AT&T and other telecom companies. The telecom industry has furiously lobbied Congress and regulators to keep net neutrality from taking effect. Once it did, AT&T took the FCC to court to overturn the rules.

AT&T wants their own law for their own version of net neutrality.

AT&T’s campaign comes with some urgency as the company works to block states from enacting their own net neutrality laws to replace the rules abandoned by the Republican majority controlling the FCC. Despite assurances from FCC chairman Ajit Pai that the Commission would sue to pre-empt any state law that would re-establish net neutrality, AT&T and other large cable and phone companies prefer the regulatory certainty available from the quick passage of a federal law that would establish AT&T’s definition of net neutrality indefinitely. AT&T is also trying to rush passage with support from Republican congressional majorities and President Trump before the midterm elections threaten a Democratic takeover of the House, Senate, or both.

AT&T attempted to assuage customers of its good intentions by claiming it doesn’t block websites.

“We don’t censor online content. And we don’t throttle, discriminate, or degrade network performance based on content, period,” AT&T wrote (emphasis ours). But that claim opens the door to important loopholes:

  1. Speed throttles, data caps, and zero rating do not impact network performance. They impact your ability to equally access internet content, something AT&T does not promise here.
  2. AT&T only claims it won’t interfere with websites based on their content, but that was never the premise ISPs have used to demand additional payments from content creators. It isn’t the content ISPs are concerned with — it is the traffic those websites generate and, in the eyes of many net neutrality supporters, whether those websites compete with an ISPs own offerings. AT&T could have said it doesn’t throttle, discriminate, or degrade websites, period. But it didn’t.

AT&T alarmingly suggests that without predictable rules, next generation applications like virtual reality, telemedicine, and the Internet of Things will be threatened. Except that is not the message AT&T gives shareholders, arguing AT&T has robust capacity both now and into the future for next generation applications. AT&T has long promoted how lucrative it expects the Internet of Things marketplace will be.

Allowing the telecom industry to write its own “Internet Bill of Rights” met with harsh criticism from the consumer groups AT&T claims it wants to enlist in its efforts.

“Zero real net neutrality supporters are fooled by this,” wrote Fight for the Future executive director Evan Greer. “We had an Internet Bill of Rights. It was called Title II and AT&T’s army of lobbyists did everything in their power to burn it down.”

“AT&T’s hypocrisy knows no bounds,” said Free Press policy director Matt Wood. “Its phony bill of rights argument makes no sense based on the law, the policies, or the politics in play. AT&T’s head fake towards one-size-fits-all rules for all websites and content providers should fool no one. As soon as AT&T wants to stop lobbying against net neutrality, broadband privacy, and the other rights it has worked to kill at the Trump FCC and in this Congress, maybe people will stop laughing at desperate tactics like this. For now, all we can do is point out the company’s audacity in pretending that this hyper-partisan Congress can step in to fill the void of the net neutrality repeal by writing a new law tailor-made for AT&T.”

U.S. Net Neutrality Move May Lead to Trade War with Chinese Internet Firms

Phillip Dampier January 17, 2018 Competition, Net Neutrality, Public Policy & Gov't Comments Off on U.S. Net Neutrality Move May Lead to Trade War with Chinese Internet Firms

BEIJING — A recent decision by the United States’ Federal Communications Commission to repeal net neutrality, which are rules designed to prevent the selective blocking or slowing of websites, has wide-ranging implications for China, which never believed in net neutrality and banned hundreds of foreign websites. The decision could result in a major trade war involving Chinese telecom and Internet companies, which are interested in accessing the U.S. market, analysts said.

The move will allow American telecom service providers to charge differential prices for various services and even examine the data of their customers. Though this aspect has stirred controversy in the United States, the situation there is still very different from the realities in China.

“In China, the government is monitoring and controlling the networks whereas [in U.S.] it is, at least so far, it is telecommunication companies. At this point, the government does not have access, we know it does not have access to manipulating the flow of traffic in the U.S. Internet,” Aija Leiponen, a professor at Cornell University’s Dyson School of Applied Economics and Management, said.

The FCC decision could help U.S. telecom service providers offer high-priced premium services.

Trade war

But this would also open up an opportunity for U.S. service providers to charge high rates from foreign customers. At present, foreign companies can easily access the U.S. cyber market without facing the kind of resistance American companies encounter in China and elsewhere.

“I think it (FCC decision) has an impact potentially for Chinese technology companies that want to do business in the U.S.,” said Benjamin Cavender, a senior analyst at the Shanghai-based China Market Research Group (CMR). “You are asking about companies like Alibaba or Tencent, what this means for them in the U.S. markets– and I could very possibly see this being used as a trade war tool–and the U.S. government saying, ‘Look, we are going to restrict access to companies to our ISPs and force them to pay a lot of money.”

U.S. telecom companies are getting increasing integrated with content providers and might look at foreign players as a source of serious competition. They might go further and even consider blocking some foreign players, including Chinese Internet giants, he said.

“I can also see this happening that they (Chinese Internet firms) just get completely blocked because of the U.S. using this more as a trade tool trying to get more access to the Chinese market because if you are a U.S. technology company you are working at a great disadvantage in the Chinese market. I do see this being used as a trade tool,” Cavender said.

The point is about applying pressure on China to open up its Internet market to American players in exchange for similar treatment in the United States. Washington has usually avoided this kind of tit-for-tat game, but the situation may be changing under the Trump administration, analysts said.

“They (U.S. telecom companies) could at some point say, ‘Look, if you want to have confidential, fast access to the U.S. you have to kind of allow us to do the same thing, allow us to invest more heavily in Chinese firms.’ I could see that happening,” Cavender said.

Moral high ground

China has been advocating the idea of ‘Internet sovereignty,’ which allows governments to create boundaries in cyber space and block foreign sites that it perceives as potential threats to security. Proponents of ‘open Internet’ have been protesting against the idea of ‘Internet sovereignty.’

The Obama administration lobbied and argued with China for nearly a decade to open up Internet access for American companies like YouTube, Twitter and Netflix. It was an important aspect of the annual strategic economic dialogue between the two countries.

The FCC decision coupled with the controversy over alleged cyber spying by Russia is a moral boost of support for China’s online restrictions, which include a ban on major sites like Google, YouTube and Twitter. The moral high ground enjoyed by the United States under the past administration may be at risk, analysts said.

“Even democracies are beginning to think about the need to regulate content. So the Chinese, you know, might take a little comfort in that,” James Lewis, senior vice president of the Center for Strategic and International Studies in Washington, said. “When you look at Europeans talking about blocking each other’s content, when you look at the U.S. talking about blocking Russian political warfare, the Internet cannot be the wild west that it’s been for a couple of decades. So, everyone’s moving in this direction and I guess the Chinese can take comfort from that.”

Meanwhile, Chinese experts are protesting a new bill introduced in the U.S. Congress that would prevent branches of the U.S. government from working with service providers that use any equipment from two Chinese companies, Huawei and ZTE, for security reasons.

“This (prejudice towards Chinese companies) seems like a problem that can’t be solved, at least not in the short term,” Liu Xingliang, head of the Data Center of China Internet, told the Global Times newspaper in Beijing.

At the same time, “Chinese firms can’t give up the U.S. market and just focus on smaller countries if they want to really achieve their global goals,” Liu Dingding, an independent tech expert told the paper.

Reported by: Saibal Dasgupta, VOANews

Search This Site:

Contributions:

Recent Comments:

Your Account:

Stop the Cap!