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Chairman Pai rescinded a guidance in February (2017), effectively loosening the scrutiny the FCC’s staff applied to deals that could skirt local TV ownership restrictions by using a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Media Company about a potential merger, but analysts remarked the deal would likely require the FCC to reinstate an outdated rule called the “UHF discount.” This rule, left over from the days of analog television and finally rescinded in 2016, did not count UHF television stations above Channel 13 the same as VHF stations (Chs. 2-13) when defining how many TV stations a single company can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.

Anyone care to explain to me why the FCC thinks that the ethics rules allow Ajit Pai to accept the gift of an expensive handmade gun from the NRA, an entity whose interests he can affect (and has affected) by the performance of his official duties? Am I missing something? https://t.co/S6ocyWIV7H

— Walter Shaub (@waltshaub) February 24, 2018

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 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.

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.”

Rep. Marsha Blackburn (R-Tennessee, but mostly AT&T and Comcast)

Rep. Marsha Blackburn, who claims to represent the interests of voters in Tennessee but generally prefers the views (and campaign contributions) from AT&T and Comcast, is the first Republican to propose a bait-and-switch “net neutrality” broadband bill she claims will protect a free and open internet, but will actually prohibit net neutrality as America has known it over the last two years.

“No blocking. No throttling. The Open Internet Preservation Act will ensure the internet is a free and open space,” Blackburn tweeted to her followers shortly after giving an exclusive interview introducing her bill to Breitbart News. An early copy was also furnished to TechFreedom, an industry-funded front group that has opposed net neutrality. “This legislation is simple, it provides light-touch regulation so companies can invest and innovate, and make sure our internet is up to 21st century standards.”

Congresswoman Blackburn hopes you will take her word on that and not bother to actually read and understand what her bill actually does to the concept of a free and open internet.

We did read the bill and are prepared to help you understand it.

No overt censorship but plenty of “reasonable network management”

Blackburn’s bill non-controversially forbids the censorship of “lawful content, applications, services, or non-harmful devices.” Virtually every ISP in the country has already volunteered they have no intention of censoring legal content on the internet. But Blackburn’s bill includes a safety clause that allows ISPs to avoid accusations of tinkering with traffic — “reasonable network management,” which in this case is vaguely defined in the bill as “a practice that has a primarily technical network management justification.” Blackburn also defines a network management practice “reasonable” if “it is primarily used for and tailored to achieving a legitimate network management purpose, taking into account the particular network architecture and technology of the broadband internet access service.”

Despite that word salad, there is nothing in her bill that clearly defines what is “legitimate” and what is not. Comcast, for example, has its own view about how it manages and prices traffic on its broadband service. Stream XFINITY content and it does not count against your Comcast cap. Stream Hulu and it does. Comcast claims that is fair if one considers the ‘particular network architecture’ that delivers Comcast’s own content is allegedly different from the public internet. Blackburn’s bill would treat data caps, zero rating, and Comcast’s version of “fairness” as all perfectly legal.

Large telecommunications companies have insisted there is no need to pass laws or enact regulations governing internet censorship because they would never contemplate blocking legal content,  making the need for legislation unnecessary. But they are strongly likely to favor her bill, creating a direct contradiction to their repeated insistence net neutrality was “a solution in search of a problem.” There is a reason for the sudden support among many Republicans for Blackburn’s concept of net neutrality — blocking regulatory agencies from oversight of internet service provider interference and abuse.

We need to ensure that the internet cannot block or throttle users. This comes from light-touch regulations from Congress, not unelected bureaucrats. https://t.co/Bzr0jstvsG

— Marsha Blackburn (@MarshaBlackburn) December 19, 2017

The “Specialized Services” Hindenburg-sized loophole

Blackburn’s bill covers all the bases for the telecom industry she routinely supports.

Most importantly, her bill creates an enormous loophole allowing internet service providers to offer “specialized services” to the public any way they choose, as long as they do not “threaten the meaningful availability of broadband internet access service or [offer services] that have been devised or promoted in a manner designed to evade the purposes of this section.”

Blackburn defines a “specialized service” as “services other than broadband internet access service that are offered over the same network as, and that may share network capacity with, broadband internet access service.’’

That effectively means any website, streaming service, cloud storage or app could qualify as a “specialized service.” Blackburn’s bill would allow an ISP to establish paid prioritization (fast lanes) for selected content, usage cap non-preferred content, or steer web users to preferred websites and services. It effectively makes all internet content open to ISP manipulation. Just to be certain ISPs are protected from net neutrality rules for next generation applications and services, her bill also permanently forbids regulatory agencies from expanding the definition of net neutrality.

Obliterating the concept of states’ rights

Republicans are usually strong proponents of limiting the power of the federal government, especially when it comes to preempting state laws, but that concept is turned on its head when Big Telecom campaign contributions are at stake. Blackburn completely abandons any pretense of a state being able to write its own laws governing internet openness by specifically banning that option:

“No State or political subdivision of a State shall adopt, maintain, enforce, or impose or continue in effect any law, rule, regulation, duty, requirement, standard, or other provision having the force and effect of law relating to or with respect to internet openness obligations for provision of broadband internet access service.”

Permanently assuring ISPs easy court victories if net neutrality violations are uncovered

Blackburn’s bill ignores several years of court rulings on net neutrality cases that have called out the flaw of the FCC’s earlier dependence on defining the internet as an “information service” subject to oversight under Section 706 of the 1996 Telecom Act. The courts have ruled this foundation is inadequate to enforce net neutrality. The foundation that has proved adequate and has so-far survived court challenge exists in Title II of the Communications Act, made applicable when the internet was redefined as a common carrier “telecommunications service.” Rep. Blackburn’s bill would return net neutrality enforcement to the same flawed authority courts have already ruled does not apply, neutering net neutrality in the courts.

Critics contend Rep. Blackburn’s real motive is to permanently end oversight of large cable and phone companies and prevent federal agencies from coming to the rescue of content providers and consumers.

“Blackburn’s legislation fails at the very thing it claims to accomplish. It prohibits a few open-internet violations, but opens the door to rampant abuse through paid-prioritization schemes that split the internet into fast lanes for the richest companies and slow lanes for everyone else,” said Craig Aaron, Free Press Action Fund President and CEO. “This bill’s true goal is to let a few unregulated monopolies and duopolies stifle competition and control the future of communications.”

“Congress must reject last week’s FCC ruling and restore Title II authority at the agency,” Aaron added. “The 2015 rules worked extraordinarily well from the get-go, with investment and innovation flourishing across the sector. That’s because they gave the FCC the authority to prevent paid prioritization and other forms of discrimination, while promoting competition, open markets, universal service and equal access.”

The two Democratic minority members of the Federal Communications Commission shared their strong sentiments today in remarks condemning the 3-2 vote to repeal net neutrality. Commissioners Mignon Clyburn and Jessica Rosenworcel appeared irritated at today’s Open Commission Meeting. They expressed concern that today’s vote appeared politically motivated and ignored more than 20 million comments filed by members of the public, most in favor of net neutrality.

FCC Chairman Ajit Pai did not reference any comments from the public in his remarks supporting net neutrality’s repeal, which the FCC website celebrated as, “Reversing Title II Framework, Increases Transparency to Protect Consumers, Spur Investment, Innovation, and Competition.”

Jessica Rosenworcel

“Net neutrality is internet freedom. I support that freedom. I dissent from this rash decision to roll back net neutrality rules. I dissent from the corrupt process that has brought us to this point. And I dissent from the contempt this agency has shown our citizens in pursuing this path today. This decision puts the Federal Communications Commission on the wrong side of history, the wrong side of the law, and the wrong side of the American public.

The future of the internet is the future of everything. That is because there is nothing in our commercial, social, and civic lives that has been untouched by its influence or unmoved by its power. And here in the United States our internet economy is the envy of the world. This is because it rests on a foundation of openness.

That openness is revolutionary. It means you can go where you want and do what you want online without your broadband provider getting in the way or making choices for you. It means every one of us can create without permission, build community beyond geography, organize without physical constraints, consume content we want when and where we want it, and share ideas not just around the corner but across the globe. I believe it is essential that we sustain this foundation of openness—and that is why I support net neutrality.

Net neutrality has deep origins in communications law and history. In the era when communications meant telephony, every call went through, and your phone company could not cut off your call or edit the content of your conversations. This guiding principle of nondiscrimination meant you were in control of the connections you made.

This principle continued as time advanced, technology changed, and Internet access became the dial tone of the digital age. So it was twelve years ago—when President George W. Bush was in the White House—that this agency put its first net neutrality policies on paper. In the decade that followed, the FCC revamped and revised its net neutrality rules, seeking to keep them current and find them a stable home in the law. In its 2015 order the FCC succeeded—because in the following year, in a 184-page opinion the agency’s net neutrality rules were fully and completely upheld.

So our existing net neutrality policies have passed court muster. They are wildly popular. But today we wipe away this work, destroy this progress, and burn down time-tested values that have made our Internet economy the envy of the world.

Rosenworcel

As a result of today’s misguided action, our broadband providers will get extraordinary new power from this agency. They will have the power to block websites, throttle services, and censor online content. They will have the right to discriminate and favor the internet traffic of those companies with whom they have pay-for-play arrangements and the right to consign all others to a slow and bumpy road.

Now our broadband providers will tell you they will never do these things. They say just trust us. But know this: they have the technical ability and business incentive to discriminate and manipulate your internet traffic. And now this agency gives them the legal green light to go ahead and do so.

This is not good. Not good for consumers. Not good for businesses. Not good for anyone who connects and creates online. Not good for the democratizing force that depends on openness to thrive. Moreover, it is not good for American leadership on the global stage of our new and complex digital world.

I’m not alone with these concerns. Everyone from the creator of the world wide web to religious leaders to governors and mayors of big cities and small towns to musicians to actors and actresses to entrepreneurs and academics and activists has registered their upset and anger. They are reeling at how this agency could make this kind of mistake. They are wondering how it could be so tone deaf. And they are justifiably concerned that just a few unelected officials could make such vast and far-reaching decisions about the future of the internet.

So after erasing our net neutrality rules what is left? What recourse do consumers have?

We’re told don’t worry, competition will save us. But the FCC’s own data show that our broadband markets are not competitive. Half of the households in this country have no choice of broadband provider. So if your broadband provider is blocking websites, you have no recourse. You have nowhere to go.

We’re told don’t worry, the Federal Trade Commission will save us. But the FTC is not the expert agency for communications. It has authority over unfair and deceptive practices. But to evade FTC review, all any broadband provider will need to do is add new provisions to the fine print in its terms of service. In addition, it is both costly and impractical to report difficulties to the FTC. By the time the FTC gets around to addressing them in court proceedings or enforcement actions, it’s fair to assume that the start-ups and small entities wrestling with discriminatory treatment could be long done. Moreover, what little authority the FTC has is now under question in the courts.

We’re told don’t worry, the state authorities will save us. But at the same time, the FCC all but clears the field with sweeping preemption of anything that resembles state or local consumer protection.

If the substance that got us to this point is bad, the process is even worse.

Let’s talk about the public record.

The public has been making noise, speaking up, and raising a ruckus. We see it in the protests across the country and outside here today. We see it in how they lit up our phone lines, clogged our e-mail in-boxes, and jammed our online comment system. It might be messy, but whatever our disagreements are on this dais I hope we can agree this is democracy in action—and something we can all support.

To date, nearly 24 million comments have been filed in this proceeding. There is no record in the history of this agency that has attracted so many filings. But there’s something foul in this record:

Two million comments feature stolen identities.

Half a million comments are from Russian addresses.

Fifty thousand consumer complaints are inexplicably missing from the record.

I think that’s a problem. I think our record has been corrupted and our process for public participation lacks integrity. Nineteen state attorneys general agree. They have written us demanding we halt our vote until we investigate and get to the bottom of this mess. Identity theft is a crime under state and federal law—and while it is taking place this agency has turned a blind eye to its victims and callously told our fellow law enforcement officials it will not help.

This is not acceptable. It is a stain on the FCC and this proceeding. This issue is not going away. It needs to be addressed.

Finally, I worry that this decision and the process that brought us to this point is ugly. It’s ugly in the cavalier disregard this agency has demonstrated to the public, the contempt it has shown for citizens who speak up, and the disdain it has for popular opinion. Unlike its predecessors this FCC has not held a single public hearing on net neutrality. There is no shortage of people who believe Washington is not listening to their concerns, their fears, and their desires. Add this agency to the list.

I, too, am frustrated. But here’s a twist: I hear you. I listen to what callers are saying. I read the countless, individually written e-mails in my in-box, the posts online, and the very short and sometimes very long letters. And I’m not going to give up—and neither should you. If the arc of history is long, we are going to bend this toward a more just outcome. In the courts. In Congress. Wherever we need to go to ensure that net neutrality stays the law of the land. Because if you are conservative or progressive, you benefit from internet openness. If you come from a small town or big city, you benefit from internet openness. If you are a company or non-profit, you benefit from internet openness. If you are a start-up or an established business, you benefit from internet openness. If you are a consumer or a creator, you benefit from internet openness. If you believe in democracy, you benefit from internet openness.

So let’s persist. Let’s fight. Let’s not stop here or now. It’s too important. The future depends on it.”

Mignon Clyburn

“I dissent. I dissent from this fiercely-spun, legally-lightweight, consumer-harming, corporate-enabling Destroying Internet Freedom Order.

I dissent, because I am among the millions who is outraged. Outraged, because the FCC pulls its own teeth, abdicating responsibility to protect the nation’s broadband consumers. Why are we witnessing such an unprecedented groundswell of public support, for keeping the 2015 net neutrality protections in place? Because the public can plainly see, that a soon-to-be-toothless FCC, is handing the keys to the Internet – the Internet, one of the most remarkable, empowering, enabling inventions of our lifetime – over to a handful of multi-billion dollar corporations. And if past is prologue, those very same broadband internet service providers, that the majority says you should trust to do right by you, will put profits and shareholder returns above, what is best for you.

Each of us raised our right hands when we were sworn in as FCC Commissioners, took an oath and promised to uphold our duties and responsibilities ‘to make available, so far as possible, to all the people of the United States, without discrimination… a rapid, efficient, Nation-wide, and world-wide wire and radio communication service with adequate facilities at reasonable charges.’ Today the FCC majority officially abandons that pledge and millions have taken note.

I do not believe that there are any FCC or Congressional offices immune to the deluge of consumer outcry. We are even hearing about state and local offices fielding calls and what is always newsworthy is that at last count, five Republican Members of Congress went on the record in calling for a halt of today’s vote. Why such a bipartisan outcry? Because the large majority of Americans are in favor of keeping strong net neutrality rules in place. The sad thing about this commentary, it pains me to say, is what I can only describe as the new norm at the FCC: A majority that is ignoring the will of the people. A majority that will stand idly by while the people they serve lose.

We have heard story after story of what net neutrality means to consumers and small businesses from places as diverse as Los Angeles’ Skid Row and Marietta, Ohio. I hold in my hand letters that plead with the FCC to keep our net neutrality rules in place but what is striking and in keeping with the new norm, despite the millions of comments, letters, and calls received, this Order cites, not even one. That speaks volumes about the direction the FCC is heading. That speaks volumes about just who is being heard.

Clyburn

Sole proprietors, whose entire business model, depends on an open internet, are worried that the absence of clear and enforceable net neutrality protections will result in higher costs and fewer benefits because you see: they are not able to pay tolls for premium access. Even large online businesses have weighed in, expressing concern about being subject to added charges as they simply try to reach their own customers. Engineers have submitted comments including many of the internet’s pioneers, sharing with the FCC majority, the fundamentals of how the internet works because from where they sit, there is no way that an item like this would ever see the light of day, if the majority understood the platform some of them helped to create.

I have heard from innovators, worried that we are standing up a mother-may-I regime, where the broadband provider becomes arbiter of acceptable online business models. And yes, I have heard from consumers, who are worried given that their broadband provider has already shown that they will charge inscrutable below-the-line fees, raise prices unexpectedly, and put consumers on hold for hours at a time. Who will have their best interests at heart in a world without clear and enforceable rules overseen by an agency with clear enforcement authority? A toothless FCC?

There has been a darker side to all of this over the past few weeks. Threats and intimidation. Personal attacks. Nazis cheering. Russian influence. Fake comments. Those are unacceptable. Some are illegal. They all are to be rejected. But what is also not acceptable, is the FCC’s refusal to cooperate with state attorney general investigations, or allow evidence in the record that would undercut a preordained outcome.

Many have asked, what happens next? How will all of this – Net Neutrality, my internet experience, look after today? My answer is simple. When the current protections are abandoned, and the rules that have been officially in place since 2015 are repealed, we will have a Cheshire cat version of net neutrality. We will be in a world where regulatory substance fades to black, and all that is left is a broadband provider’s toothy grin and those oh so comforting words: we have every incentive to do the right thing.

What they will soon have, is every incentive to do their own thing.Now the results of throwing out your Net Neutrality protections, may not be felt right away. Most of us will get up tomorrow morning and over the next week, wade through hundreds of headlines, turn away from those endless prognosticators, and submerge ourselves in a sea of holiday bliss. But what we have wrought will one day be apparent and by then, when you really see what has changed, I fear, it may not only be too late to do anything about it, because there will be no agency empowered to address your concerns. This item insidiously ensures the FCC will never be able to fully grasp the harm it may have unleashed on the internet ecosystem. And that inability might lead decisionmakers to conclude, that the next internet startup that failed to flourish and attempted to seek relief, simply had a bad business plan, when in fact what was missing was a level playing field online.

Particularly damning is what today’s repeal will mean for marginalized groups, like communities of color, that rely on platforms like the internet to communicate, because traditional outlets do not consider their issues or concerns, worthy of any coverage. It was through social media that the world first heard about Ferguson, Missouri, because legacy news outlets did not consider it important until the hashtag started trending. It has been through online video services, that targeted entertainment has thrived, where stories are finally being told because those same programming were repeatedly rejected by mainstream distribution and media outlets. And it has been through secure messaging platforms, where activists have communicated and organized for justice without gatekeepers with differing opinions blocking them.

Where will the next significant attack on internet freedom come from? Maybe from a broadband provider allowing its network to congest, making a high-traffic video provider ask what more can it pay to make the pain stop. That will never happen you say? Well it already has. The difference now, is the open question of what is stopping them? The difference after today’s vote, is that no one will be able to stop them.

Maybe several providers will quietly roll out paid prioritization packages that enable deep-pocketed players to cut the queue. Maybe a vertically-integrated broadband provider decides that it will favor its own apps and services. Or some high-value internet-of-things traffic will be subject to an additional fee. Maybe some of these actions will be cloaked under nondisclosure agreements and wrapped up in mandatory arbitration clauses so that it will be a breach of contract to disclose these publicly or take the provider to court over any wrongdoing. Some may say ‘Of Course this will never happen?” After today’s vote, what will be in place to stop them?

What we do know, is that broadband providers did not even wait for the ink to dry on this Order before making their moves. One broadband provider, who had in the past promised to not engage in paid prioritization, has now quietly dropped that promise from its list of commitments on its website. What’s next? Blocking or throttling? That will never happen? After today’s vote, exactly who is the cop of the beat that can or will stop them?

And just who will be impacted the most? Consumers and small businesses, that’s who. The internet continues to evolve and has become ever more critical for every participant in our 21st century ecosystem: government services have migrated online, as have educational opportunities and job notices and applications, but at the same time, broadband providers have continued to consolidate, becoming bigger. They own their own content, they own media companies, and they own or have an interest in other types of services.

Why are millions so alarmed? Because they understand the risks this all poses and even those who may not know what Title II authority is, know that they will be at risk without it.

I have been asking myself repeatedly, why the majority is so singularly-focused on overturning these wildly-popular rules? Is it simply because they felt that the 2015 Net Neutrality order, which threw out over 700 rules and dispensed with more than 25 provisions, was too heavy-handed? Is this a ploy to create a “need” for legislation where there was none before? Or is it to establish uncertainty where little previously existed?

Is it a tactic to undermine the net neutrality protections adopted in 2015 that are currently parked at the Supreme Court? You know, the same rules that were resoundingly upheld by the D.C. Circuit last year? No doubt, we will see a rush to the courthouse, asking the Supreme Court to vacate and remand the substantive rules we fought so hard for over the past few years, because today, the FCC uses legally-suspect means to clear the decks of substantive protections for consumers and competition.

It is abundantly clear why we see so much bad process with this item: because the fix was already in. There is no real mention of the thousands of net neutrality complaints filed by consumers. Why? The majority has refused to put them in the record while maintaining the rhetoric that there have been no real violations. Record evidence of the massive incentives and abilities of broadband providers to act in anti-competitive ways are missing from the docket? Why? Because they have refused to use the data and knowledge the agency does have, and has relied upon in the past to inform our merger reviews. As the majority has shown again and again, the views of individuals do not matter, including the views of those who care deeply about the substance, but are not Washington insiders.

There is a basic fallacy underlying the majority’s actions and rhetoric today: the assumption of what is best for broadband providers, is best for America. Breathless claims about unshackling broadband services from unnecessary regulation, are only about ensuring that broadband providers, have the keys to the internet. Assertions that this is merely a return to some imaginary status quo ante, cannot hide the fact, that this is the very first time, that the FCC, has disavowed substantive protections for consumers online.

And when the current, 2015 Net Neutrality rules are laid to waste, we may be left with no single authority with the power to protect consumers. Now this Order loudly crows about handing over authority of broadband to the FTC, but what is absent from the Order and glossed over in that haphazardly issued afterthought of a Memorandum of Understanding or MOU, is that the FTC is an agency, with no technical expertise in telecommunications; the FTC is an agency that may not even have authority over broadband providers in the first instance; the FTC is an agency that if you can even reach that high bar of proving unfair or deceptive practices and that there is substantial consumer injury, it will take years upon years to remedy. But don’t just take my word for it: even one of the FTC’s own Commissioners has articulated these very concerns. And if you’re wondering why the FCC is preempting state consumer protection laws in this item without notice, let me help you with a simple jingle that you can easily commit to memory: If it benefits industry, preemption is good; if it benefits consumers, preemption is bad.

Reclassification of broadband will do more than wreak havoc on net neutrality. It will also undermine our universal service construct for years to come, something which the Order implicitly acknowledges. It will undermine the Lifeline program. It will weaken our ability to support robust broadband infrastructure deployment. And what we will soon find out, is what a broadband market unencumbered by robust consumer protections will look like. I suspect the result will not be pretty.
I know there are many questions on the mind of Americans right now, including what the repeal of net neutrality will mean for them. To help answer outstanding questions I will host a town hall through Twitter next Tuesday at 2pm EST. What saddens me is that the agency that is supposed to protect you is abandoning you, but what I am pleased to be able to say is the fight to save net neutrality does not end today. This agency does not have, the final word. Thank goodness.

As I close my eulogy of our 2015 net neutrality rules, carefully crafted rules that struck an appropriate balance in providing consumer protections and enabling opportunities and investment, I take ironic comfort in the words of then Commissioner Pai from 2015, because I believe this will ring true about this Destroying Internet Freedom Order:

“I am optimistic, that we will look back on today’s vote as an aberration, a temporary deviation from the bipartisan path, that has served us so well. I don’t know whether this plan will be vacated by a court, reversed by Congress, or overturned by a future Commission. But I do believe that its days are numbered.”

Amen to that, Mr. Chairman. Amen to that.

Editor’s Note: In deference to journalism style books and the forthcoming introduction of several pieces of proposed legislation to enshrine the idea of an open internet into law, we are henceforth referring to “net neutrality” in lowercase. Since Stop the Cap! began, we have consistently referred to the concept as “Net Neutrality,” but because we will soon see various bills and policy proposals outlining different ideas about what that represents, it is more appropriate to refer to it as a general concept as opposed to a singular policy. The change should not suggest any editorial commentary about the principle of net neutrality or its importance. Most print publications began referring to net neutrality in lowercase more than a year ago. We now join them for the reasons referenced above.