The gap between the public and the US Congress over net neutrality


 * This essay is on Wikiversity to encourage a wide discussion of the issues it raises moderated by the Wikimedia rules that invite contributors to “be bold but not reckless,” contributing revisions written from a neutral point of view, citing credible sources -- and raising other questions and concerns on the associated '“Discuss”' page.



There is a substantial gap between the positions of Republican members of the US Congress and the US public, if we believe the opinion poll published by Morning Consult, November 29, 2017, and the positions reported by BattleForTheNet.com, a consumer advocacy group focused on this issue; see the accompanying figure. Net neutrality supporters are asking the US Congress to overturn the December 14, 2017, decision by the US Federal Communications Commission (FCC) on “Restoring Internet freedom”. According to the Electronic Frontier Foundation and other sources, that's the freedom of Internet access providers like Comcast, Spectrum (formerly Chartered and Time Warner Cable), AT&T, and Verizon to block, throttle, alter, and redirect your requests for information from the Internet.

This new regulation was published on January 4, 2018. The 539 pages of this January 4 Restoring Order includes an extensive but selective review of the history of regulating telecommunications, especially the Internet, and the available data. If you believe the FCC majority, the 2015 Title II Order that made net neutrality enforceable created such "regulatory uncertainty" of an "undue burden" on Internet access providers that it depressed by 3.1 percent the USTelecom broadband capital expense (CapEx) investments or by 5.1 percent the CapEx not subject to the 2015 Title II Order among the 12 largest Internet Service Providers (ISPs) in the US in 2016 relative to 2014. However, these numbers are no where close to being statistically significant, and this January 4 Restoring Order downplays alternative perspectives.

Some of these alternative perspectives were discussed by FCC Commissioner Clyburn in her dissent. She wrote that with this Restoring Order's "reliance on broadband providers assertions of reductions in investment is highly-flawed. Nothing in this [Order] convinces me that investment has dropped as a result of our net neutrality policies. ... [T]he broadband capital expenditures trend articulated by those believing investment has dropped follows the capital expenditures trend in the nation more broadly. ... This suggests that any alleged decrease in investment by broadband providers could be due to macroeconomic factors that influenced the overall economy, rather than the 2015 Open Internet rules." The FCC majority is further misreading regulatory history. In the 1960s and 1970s "packet-switched precursors to internet access were uniformly considered Title II services. ... [T]he FCC majority is being disingenuous in its retelling of regulatory history, particularly as it relates to internet and packet-switched services. This majority is not 'returning' to a time where packet-switched networking ... were regulated as Title I services. Indeed, [this Order] is internally inconsistent since it admits that Digital Subscriber Line (DSL) services were regulated as Title II services until 2005. ... [P]ainting the FCC’s past approach to internet access as a deregulatory nirvana fails to grapple with the truth of our regulatory past. This Order may leave us "with no one to protect consumers. This Order loudly crows about handing over authority of broadband to the FTC, an agency with no technical expertise in telecommunications and one that may not have authority over broadband providers in the first instance. But don’t just take my word for it: even one of the FTC’s own Commissioners has articulated these very concerns. ... I asked my colleagues to delay the vote until we knew for sure whether the FTC could even exercise its limited role in the net neutrality space. Unfortunately, my request was denied". ... [In this Order the FCC is also] preempting state consumer protection laws ... without notice". In 2014 and 2015, then-Commissioner Pai and Commissioner O'Rielly vigorously opposed federal preemption of state and local "laws that unduly restricted municipal broadband". Now they seek to prevent states from enacting "broadband privacy protections, net neutrality protections, or other consumer protections ... . [Moreover, they gave zero notice of this preemption, which] is contrary to the Administrative Procedure Act, and a Reagan-era Executive Order that requires 'notice and an opportunity for appropriate participation in the proceedings' whenever federalism issues are presented.

For more background on this see, Net neutrality and 'Restoring Internet freedom' and Net neutrality in the United States.

Net neutrality supporters need only one more vote in the US Senate but 43 more in the US House to overturn this FCC action using the Congressional Review Act (CRA) of 1996. The CRA allows Congress to bypass some of the standard committee reviews within 60 legislative days after a new regulation is officially published. However, even if they get the votes in the US House and Senate, President Trump could still veto it. On November 12, 2014, then-presidential candidate Trump tweeted, "Net neutrality is the Fairness Doctrine. Will target conservative media."

There are at least three other paths to blocking this FCC action:
 * 1) The courts.
 * 2) Actions by individual states.
 * 3) Changes in Congress resulting from, e.g., the 2018 elections.

Courts
On January 16, attorneys general of 21 states and the District of Columbia filed a “protective petition for review,” asking the US Court of Appeals for the District of Columbia Circuit to overturn this FCC decision on the grounds that it was “arbitrary, capricious, and an abuse of discretion within the meaning of the Administrative Procedure Act” (APA) of 1946 and other grounds. The APA, in particular, says that courts can set aside agency actions for precisely these grounds, noting that agency decisions must be supported by “substantial evidence.”

This FCC decision was supported by an extensive but selective review and interpretation of the history of FCC regulations in this area, challenged immediately by FCC Commissioner Clyburn, who said it was “Destroying” not “Restoring Internet freedom”, as claimed in its title, and “there is no cogent economic analysis to be found [and] most Americans lack options for robust fixed broadband because most ... providers are not competing against each other.” On December 8 FCC commissioner Rosenworcel claimed that the FCC was withholding evidence of fraud due to irregularities its comment period.



The quantitative justification the FCC gave for this decision was a drop of almost a $1 billion in US Telecom capital expenditure (CapEx) investments in new telecommunications infrastructure in 2015, which they said was due in part to “regulatory uncertainty”. However, this drop of almost $1 billion is less than three quarters of the annual changes in US Telecom CapEx investments; see the accompanying figure.

Moreover, Ernesto Falcon, Legislative Council with the Electronic Frontier Foundation, said that the publicly traded companies in that market have not mentioned the Title II Order in their filings with the Securities and Exchange Commission (SEC), which is the only place with credible penalties for misleading comments. There, they've said that business is good. This claim is supported by an analysis by Turner of Free Press in a report that includes 26 figures and tables, 21 of which were extracted from SEC filings and three of the remaining five came from the U.S. Census Bureau’s Annual Capital Expenditures Survey. None of Turner's tables were accompanied by statistical tests, but two showed statistically significant positive results following the Title II Order, the change was negative for only 5 of the 24 tables, and the mean and median change over the 24 tables for which it seemed reasonable to extract a typical annualized percentage change were 8.1% and 5.2%, respectively.

Actions by individual states
Action on net neutrality has started in several states, in addition to the lawsuit just described.


 * The governor of Montana signed an executive order requiring all telecommunications services receiving contracts from the state to abide by net neutrality principles in all their dealings in Montana, not just in their business with state agencies.

. . . . Rhode Island, Tennessee, Virginia, and Washington state. Two bills on this have been introduced in the Washington House and one in its Senate. . . . Legislators in several other states are considering similar action. This includes North Carolina, Illinois, and Wisconsin.
 * At least 20 bills with some net neutrality impact is pending in at least 10 states as of 2018-02-02: Alaska, California, Massachusetts, Nebraska, New Mexico, New York, Two bills have been introduced into the New York Senate and three in the Assembly.  Four carry similar titles (S07175, S07183, A08882, and A09057, “An Act to amend the public service law and the state finance law”) but differ their contents.  This other is a general “Omnibus Telecommunications Reform Act of 2017”, A01958..


 * Oregonians for Net Neutrality have filed an initiative petitions with the Oregon Secretary of State.


 * In addition, the City of New York has issued a “Truth in broadband request for information [RFI] ... to gather input from industry and subject matter experts to help implement a system for monitoring the quality and performance of internet service providers. [It] seeks technical insight and policy guidance for monitoring net neutrality and other network performance issues through the use of regular diagnostic tests that would not require special authorization from the providers themselves. The data generated through these tests would be vital for consumers, planners and regulators interested in promoting fair and trustworthy broadband because it could reveal disparities between different neighborhoods, discrimination against certain kinds of content or among different providers, or a divergence between what a company has promised and what it delivers.”

Changes in Congress resulting from, e.g., the 2018 elections
If this becomes a major campaign issue in 2018 contributing to the Democrats taking control of the US House and Senate, they could pass legislation to restore net neutrality if the courts fail to overturn this FCC decision.

If that does not happen but a Democrat wins the Presidency in 2020, s/he could appoint people to the FCC, who would overturn this decision in the same way Trump's FCC overturned the 2015 Obama-era Title II Order that made net neutrality enforceable. If, in the meantime, the Supreme Court decides to support the December 14, 2017 FCC decision on this issue, it should provide a precedent with an extremely low bar for the “substantial evidence” required per the Administrative Procedures Act to change a regulation.

Impact on “regulatory uncertainty”
The FCC stated in their Notice of Proposed Rulemaking (NPRM) on “Restoring Internet Freedom”, published May 18, 2017, that “regulatory uncertainty” was a major problem, which they hoped to reduce with this NPRM. With the virtual certainty of at least one court challenge and with net neutrality bills introduced in January 2017 in New York, and February 2017 in California, months before this FCC NPRM was published, it should have been clear to the majority on the FCC that their decisions on this issue in May and December would increase, not decrease, regulatory uncertainty.