It Took Four Million E-Mails to Get the FCC to Set Net-Neutrality Rules

by Todd Shields

Comedian John Oliver on Jan. 9, 2014 in Pasadena, California.

Photographer: Richard Shotwell/Invision/AP Photo

(Bloomberg) -- Spurred by President Barack Obama -- and 4 million public comments after a rant by TV comedian John Oliver -- U.S. government regulators are about to establish rules ensuring equal access to the Internet.
The Federal Communications Commission will apply utility-style regulations, like those used in the last century for telephone networks, to Internet service providers, according to people briefed on the agency’s plans.
The rules will set new requirements for how wireless companies handle Web traffic, and the agency plans to make sure that online providers like Netflix Inc. don’t face extra charges from Comcast Corp., AT&T Inc. or other companies that carry their videos to subscribers, said the people, who requested anonymity because the proposal hasn’t been made public.

The agency under Chairman Tom Wheeler is
seeking to settle a decade of debate about whether the Internet is to be a highway offered to all on equal terms, or whether broadband providers can levy fees and restrict access. Wheeler, who will present his recommendations to the FCC on Feb. 5, says he’ll protect an open Internet.
“This is a turning point,” said Kevin Werbach, an associate professor at the University of Pennsylvania’s Wharton School and a former FCC official. “For more than a decade the FCC has declined to classify broadband access under the legal category that applies to traditional telecommunications services.”

‘Strident’ Regulations

Internet service providers led by Comcast, AT&T and Verizon Communications Inc. say the strong, utility-style regulations to be proposed will discourage investment and slow innovation.
“I don’t know of anybody in the industry who really argues that we shouldn’t have net neutrality,” AT&T Chief Executive Officer Randall Stephenson told investors on Jan. 27. “But these really strident, heavy-handed regulations on wireless and broadband, if we go down that path, that’s what causes everybody some apprehension and uncertainty.”
Comcast, AT&T, Verizon and other network operators say only light regulation is needed, in part because competition will ensure they act fairly.
Other critics of stricter rules, which use a portion of the Communications Act known as Title II, warn that open-Internet advocates will press the FCC to use more and more of the law’s 1,000 regulatory requirements.
“Once you plant the little Title II seed, it will only grow,” said Robert McDowell, who opposed open-Internet rules in 2010 when he was a Republican FCC commissioner.

Replacing Rules

The rules will replace regulations the FCC adopted on a Democratic-led, party-line vote in 2010, which were stricken by judges who said the agency lacked authority -- a shortcoming addressed by Wheeler’s claim of utility-style power.
Wheeler is among three Democrats on the five-member agency, which is to vote on the rules on Feb. 26. “I will propose new open-Internet protections that do not allow blocking, throttling, paid prioritization and any other discriminatory practice,” he said on Jan. 29 at an agency meeting in Washington. He didn’t provide details.
He faces skepticism from his Republican colleagues. “We do not have rules today, and the Internet is functioning very well,” Commissioner Michael O’Rielly told reporters on Tuesday.
Net neutrality expresses the idea that network owners shouldn’t interfere with Internet traffic -- that data should flow without favor, and the choice for receiving it should rest with users rather than network operators.

‘Innovation Environment’

The term appeared in a 2003 article by Tim Wu, now a Columbia University law professor. In the article he forecast conflicts “between the private interests of broadband providers and the public’s interest in a competitive innovation environment centered on the Internet.”
The current debate began in earnest in April as Wheeler proposed allowing networks to let some data flow faster in return for payment -- so-called fast lanes, or paid prioritization. That idea is anathema to the neutrality ethos of giving all players equal access, and it sparked a furor.
Oliver, who has a comedy show on HBO, told his audience in a raucous 13-minute segment in June to contact the FCC and object.
“We need you to get out there and for once in your lives focus your indiscriminate rage in a useful direction,” Oliver said. “Turn on caps lock and fly, my pretties!”

4 Million Comments

The FCC’s website struggled under the volume of e-mails -- and the agency received 4 million comments, most in favor of tough net-neutrality rules. That was a record, after the 1.4 million comments in 2004 about entertainer Janet Jackson’s breast appearing for 9/16 of a second during a Super Bowl broadcast.
In November, Obama settled the main outlines of the debate, at least within the FCC’s Democratic majority. In a video, the president laid out his prescription: no blocking, no throttling, more information about how traffic flows, and no fast lanes.
Obama called on the FCC “to answer the call of almost 4 million public comments, and implement the strongest possible rules to protect net neutrality.”
The president and the millions of commenters have caught a moment in history, said Michael Copps, a former Democratic FCC commissioner who voted for the 2010 rules and backs strong regulations now.
“The technology’s catching on, and the people are catching on,” Copps said. “More and more people understand their ability to communicate is dependent on this.”

Sheep’s Clothing

Utility-style regulation has raised alarm in Congress, where Republicans have introduced net-neutrality legislation after opposing the FCC’s 2010 rules.
“It’s going to be done, right? The FCC’s going to do it. We’ve got to do it right,” Representative Greg Walden, an Oregon Republican who is chairman of the House communications subcommittee that oversees the FCC, said in an interview.
Democrats said the Republican proposal aims to prevent the FCC from using the strongest net neutrality rules -- “a legislative wolf in sheep’s clothing,” as Senator Ed Markey, a Massachusetts Democrat, said in a Jan. 16 e-mailed statement.
Republicans, who now have a majority in both houses of Congress, told Obama in a Feb. 2 letter that their legislation would put into law principles the president outlined in his November video and statement.
Lobbyists on both sides of the issue may continue to press their cases before the agency as its members consider Wheeler’s proposal. The FCC typically doesn’t release the text of its rules until after it votes them into force.
“Given that this decision seems driven by political considerations, I hold out little hope that the FCC will alter its course,” Hank Hultquist, vice president-federal regulatory for AT&T, said in a Feb. 2 blog post.