Privatizing the Public Good
On Tuesday, Jan. 14th, the D.C. Circuit Court of Appeals struck down the Federal Communications Commission’s (FCC) Open Internet Order. In its decision, the Court found that the FCC lacked the authority to implement and enforce the order it put forth in 2011.
The FCC’s order was intended to prevent broadband Internet service providers (ISPs) from blocking or interfering with data traffic on the web. This policy – if significantly watered down — is in keeping with the both the open access traditional of U.S. communications services since the 1930s and the spirit of the Internet since its inception three decades ago.
Verizon’s challenged the FCC’s authority to regulate digital communications. Historically, ISPs must treat all data equally and are barred from slowing down or blocking websites. Verizon claimed that FCC regulatory practice violates its 1st Amendment right to edit, prioritize or block its customers’ access to the Internet. Ironically, the Court’s decision comes after a 2010 ruling that the FCC could not stop Comcast from blocking BitTorrent’s video sharing program.
The Court found that the FCC, having deceptively reclassified the Internet as a “information” services, could not impose the same obligations as traditional “common carrier” telecom services like old-fashion “pots” (plain-old-telephone). Judge David Tatel wrote, “Given that the Commission has chosen to classify broadband providers in a manner that exempts them from treatment as common carriers, the Communications Act expressly prohibits the commission from nonetheless regulating them as such.”
The FCC’s effort to reclassify the Internet as an “information” services was part of Bush-era policy to privatize online services. Pres. Obama’s former FCC Chairman Julius Genachowski — in the face of considerable public, activists and high-tech corporate pressure — tried to “square the circle” and maintain net neutrality while classifying the Internet as an information service. The Court’s decision is a rejection this legal fiction.
Over the last decade-plus, there’s been an increasingly close relationship between the FCC and its corporate clients – to the detriment of the public good. This was most graphically displayed in 2011 when Commissioner Meredith Attwell Baker, shortly following her approval of Comcast’s acquisition of NBC Universal, took a well-paying position with the cable giant.
Similar revolving doors are evident in the career paths of some recent chairmen. Kevin Martin, a Bush-II appointee, is now with Patton Boggs, a leading Washington, DC, law firm and lobbyist. Michael Powell, Gen. Powell’s son and appointed by Clinton, now heads the cable industry trade association, NCTA. William Kennard, also appointed by Clinton, previously an executive with the banking firm, Carlyle Group, where he specialized telecommunications and media in investments; he now serves as the U.S. Ambassador to the European Union. And Genachowski took a position at the Carlyle Group.
In November 2013, Obama replaced Genachowski with Tom Wheeler, a true industry insider, long a water carrier for corporate interests. He served as head of the NCTA from 1979 and 1984, and ran the Cellular Telecom and Internet Association (CTIA) from 1992 through 2004. Most recently, was a managing director at Core Capital Partners, a venture-capital firm, and a longtime Obama fundraiser.
Wheeler is likely to continue the FCC’s pro big-telecom policies. Nevertheless, a few days before the Court’s ruling, he came out with a strong endorsement of net neutrality. “Public policy should protect the great driving force of the open Internet: how it allows innovation without permission,” he said. “This is why it is essential that the FCC continue to maintain an open Internet and maintain the legal ability to intervene promptly and effectively in the event of aggravated circumstances.”
However, in 2009, he took a more compromised position:
Rules that recognize the unique characteristics of a spectrum-based service and allow for reasonable network management would seem to be more important than the philosophical debate over whether there should be rules at all. … The wireless industry’s initial reaction to net neutrality was to question its need and warn of “unintended consequences.” Accepting the inevitability of the concept, however, and working to maximize its positive effects – from appropriate network management, to flexible pricing and even new spectrum – could be the opportunity for a big win.
Say goodbye to net neutrality.
Verizon’s challenge to the FCC’s Internet order is only one element of a multi-faceted campaign to further privatize U.S. telecommunication services. A second front is being pushed by AT&T and involves proposed Congressional legislation that would essentially end all regulatory obligations. It insisted, “AT&T believes that this [traditional] regulatory experiment will show that conventional public-utility-style regulation is no longer necessary or appropriate in the emerging all-IP ecosystem.”
A third front is taking place outside the Washington beltway. The American Legislative Exchange Council (ALEC) has been effectively promoting “model legislation” ending traditional telephone company accountability requirements. Such legislation has been adopted by at least 23 states. This legislation removed “carrier of last resort” requirements, thus telecoms no longer have to serve small rural communities.
Two decades ago, the telecom companies – phone and cable — promised to build Al Gore’s “Information Superhighway.” To incentivize these private conglomerates, the industry were deregulated, permitting increased pricing, decreased service requirements and nearly no public accountability. Since then, they’ve pocketed an estimated $350 billion to build a post-modern digital telecom system. What do we have today? A 2nd-rate communications system! Further deregulations – especially the killing of net neutrality – will only make things worse.
Last year, many within the broad tech, Internet and media communities organized to halt the Hollywood studios and record companies from pushing new “anti-piracy” laws through Congress. The battle against SOPA-PIPA is a model campaign for the next battle against Verizon, AT&T and ALEC to preserve net neutrality and an open Internet.