April 19, 2014

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Is There a Future for Net Neutrality after Verizon v. FCC?

In a decision that was widely predicted by those who have been following the case, the Court of Appeals for the D.C. Circuit has invalidated the FCC’s Open Internet Rules (so-called net neutrality regulations), which imposed non-discrimination and anti-blocking requirements on broadband Internet access providers. The rules were challenged by Verizon as soon as they were enacted in 2010. The court held that, given the FCC’s past (and never reversed or modified) regulatory choice to classify broadband providers under the Telecommunications Act of 1996 as “information services” rather than “telecommunications services,” it cannot now impose on them common carrier obligations that apply under the statute only to services classified as telecommunications. Verizon argued in the case that the Open Internet Rules were not common carrier regulations, but the court didn’t buy it.
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Arlington v. FCC: What it Means for Net Neutrality

[Cross-posted on my blog, Managing Miracles]

On Monday, the Supreme Court handed down a decision in Arlington v. FCC. At issue was a very abstract legal question: whether the FCC has the right to interpret the scope of its own authority in cases in which congress has left the contours of their jurisdiction ambiguous. In short, can the FCC decide to regulate a specific activity if the statute could reasonably be read to give them that authority? The so-called Chevron doctrine gives deference to administrative agencies’ interpretation of of their statutory powers, and the court decided that this deference extends to interpretations of their own jurisdiction. It’s all very meta, but it turns out that it could be a very big deal indeed for one of those hot-button tech policy issues: net neutrality.

Scalia wrote the majority opinion, which is significant for reasons I will describe below. The opinion demonstrated a general skepticism of the telecom industry claims, and with classic Scalia snark, he couldn’t resist this footnote about the petitioners, “CTIA—The Wireless Association”:

This is not a typographical error. CTIA—The Wireless Association was the name of the petitioner. CTIA is presumably an (unpronounceable) acronym, but even the organization’s website does not say what it stands for. That secret, known only to wireless-service-provider insiders, we will not disclose here.

Ha. Ok, on to the merits of the case and why this matters for net neutrality.
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The Next Step towards an Open Internet

Now that the FCC has finally acted to safeguard network neutrality, the time has come to take the next step toward creating a level playing field on the rest of the Information Superhighway. Network neutrality rules are designed to ensure that large telecommunications companies do not squelch free speech and online innovation. However, it is increasingly evident that broadband companies are not the only threat to the open Internet. In short, federal regulators need to act now to safeguard social network neutrality.

The time to examine this issue could not be better. Facebook is the dominant social network in countries other than Brazil, where everybody uses Friendster or something. Facebook has achieved near-monopoly status in the social networking market. It now dominates the web, permeating all aspects of the information landscape. More than 2.5 million websites have integrated with Facebook. Indeed, there is evidence that people are turning to social networks instead of faceless search engines for many types of queries.

Social networks will soon be the primary gatekeepers standing between average Internet users and the web’s promise of information utopia. But can we trust them with this new-found power? Friends are unlikely to be an unbiased or complete source of information on most topics, creating silos of ignorance among the disparate components of the social graph. Meanwhile, social networks will have the power to make or break Internet businesses built atop the enormous quantity of referral traffic they will be able to generate. What will become of these businesses when friendships and tastes change? For example, there is recent evidence that social networks are hastening the decline of the music industry by promoting unknown artists who provide their music and streaming videos for free.

Social network usage patterns reflect deep divisions of race and class. Unregulated social networks could rapidly become virtual gated communities, with users cut off from others who could provide them with a diversity of perspectives. Right now, there’s no regulation of the immense decision-influencing power that friends have, and there are no measures in place to ensure that friends provide a neutral and balanced set of viewpoints. Fortunately, policy-makers have a rare opportunity to preempt the dangerous consequences of leaving this new technology to develop unchecked.

The time has come to create a Federal Friendship Commission to ensure that the immense power of social networks is not abused. For example, social network users who have their friend requests denied currently have no legal recourse. Users should have the option to appeal friend rejections to the FFC to verify that they don’t violate social network neutrality. Unregulated social networks will give many users a distorted view of the world dominated by the partisan, religious, and cultural prejudices of their immediate neighbors in the social graph. The FFC can correct this by requiring social networks to give equal time to any biased wall post.

However, others have suggested lighter-touch regulation, simply requiring each person to have friends of many races, religions, and political persuasions. Still others have suggested allowing information harms to be remedied through direct litigation—perhaps via tort reform that recognizes a new private right of action against violations of the “duty to friend.” As social networking software will soon be found throughout all aspects of society, urgent intervention is needed to forestall “The Tyranny of The Farmville.”

Of course, social network neutrality is just one of the policy tools regulators should use to ensure a level playing field. For example, the Department of Justice may need to more aggressively employ its antitrust powers to combat the recent dangerous concentration of social networking market share on popular micro-blogging services. But enacting formal social network neutrality rules is an important first step towards a more open web.

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Net Neutrality: When is Network Management "Reasonable"?

Last week the FCC released its much-awaited Notice of Proposed Rulemaking (NPRM) on network neutrality. As expected, the NPRM affirms past FCC neutrality principles, and adds two more. Here’s the key language:

1. Subject to reasonable network management, a provider of broadband Internet access service may not prevent any of its users from sending or receiving the lawful content of the user’s choice over the Internet.

2. Subject to reasonable network management, a provider of broadband Internet access service may not prevent any of its users from running the lawful applications or using the lawful services of the user’s choice.

3. Subject to reasonable network management, a provider of broadband Internet access service may not prevent any of its users from connecting to and using on its network the user’s choice of lawful devices that do not harm the network.

4. Subject to reasonable network management, a provider of broadband Internet access service may not deprive any of its users of the user’s entitlement to competition among network providers, application providers, service providers, and content providers.

5. Subject to reasonable network management, a provider of broadband Internet access service must treat lawful content, applications, and services in a nondiscriminatory manner.

6. Subject to reasonable network management, a provider of broadband Internet access service must disclose such information concerning network management and other practices as is reasonably required for users and content, application, and service providers to enjoy the protections specified in this part.

That’s a lot of policy packed into (relatively) few words. I expect that my colleagues and I will have a lot to say about these seemingly simple rules over the coming weeks.

Today I want to focus on the all-purpose exception for “reasonable network management”. Unpacking this term might tell us a lot about how the proposed rule would operate.

Here’s what the NPRM says:

Reasonable network management consists of: (a) reasonable practices employed by a provider of broadband Internet access to (i) reduce or mitigate the effects of congestion on its network or to address quality-of-service concerns; (ii) address traffic that is unwanted by users or harmful; (iii) prevent the transfer of unlawful content; or (iv) prevent the unlawful transfer of content; and (b) other reasonable network management practices.

The key word is “reasonable”, and in that respect the definition is nearly circular: in order to be “reasonable”, a network management practice must be (a) “reasonable” and directed toward certain specific ends, or (b) “reasonable”.

In the FCC’s defense, it does seek comments and suggestions on what the definition should be, and it does say that it intends to make case-by-case determinations in practice, as it did in the Comcast matter. Further, it rejects a “strict scrutiny” standard of the sort that David Robinson rightly criticized in a previous post.

“Reasonable” is hard to define because in real life every “network management” measure will have tradeoffs. For example, a measure intended to block copyright-infringing material would in practice make errors in both directions: it would block X% (less than 100%) of infringing material, while as a side-effect also blocking Y% (more than 0%) of non-infringing material. For what values of X and Y is such a measure “reasonable”? We don’t know.

Of course, declaring a vague standard rather than a bright-line rule can sometimes be good policy, especially where the facts on the ground are changing rapidly and it’s hard to predict what kind of details might turn out to be important in a dispute. Still, by choosing a case-by-case approach, the FCC is leaving us mostly in the dark about where it will draw the line between “reasonable” and “unreasonable”.

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Android Open Source Model Has a Short Circuit

[Update: Google subsequently worked out a mechanism that allows Cyanogen and others to distribute their mods separate from the Google Apps.]

Last year, Google entered the mobile phone market with a Linux-based mobile operating system. The company brought together device manufacturers and carriers in the Open Handset Alliance, explaining that, “Together we have developed Android™, the first complete, open, and free mobile platform.” There has been considerable engagement from the open source developer community, as well as significant uptake from consumers. Android may have even been instrumental in motivating competing open platforms like LiMo. In addition to the underlying open source operating system, Google chose to package essential (but proprietary) applications with Android-based handsets. These applications include most of the things that make the handsets useful (including basic functions to sync with the data network). This two-tier system of rights has created a minor controversy.

A group of smart open source developers created a modified version of the Android+Apps package, called Cyanogen. It incorporated many useful and performance-enhancing updates to the Android OS, and included unchanged versions of the proprietary Apps. If Cyanogen hadn’t included the Apps, the package would have been essentially useless, given that Google doesn’t appear to provide a means to install the Apps on a device that has only a basic OS. As Cyanogen gained popularity, Google decided that it could no longer watch the project distribute their copyright-protected works. The lawyers at Google decided that they needed to send a Cease & Desist letter to the Cyanogen developer, which caused him to take the files off of his site and spurred backlash from the developer community.

Android represents a careful balance on the part of Google, in which the company seeks to foster open platforms but maintain control over its proprietary (but free) services. Google has stated as much, in response to the current debate. Android is an exciting alternative to the largely closed-source model that has dominated the mobile market to date. Google closely integrated their Apps with the operating system in a way that makes for a tremendously useful platform, but in doing so hampered the ability of third-party developers to fully contribute to the system. Perhaps the problem is simply that they did not choose the right location to draw the line between open vs. closed source — or free-to-distribute vs. not.

The latter distinction might offer a way out of the conundrum. Google could certainly grant blanket rights to third-parties to redistribute unchanged versions of their Apps. This might compromise their ability to make certain business arrangements with carriers or handset providers in which they package the software for a fee. That may or may not be worth it from their business perspective, but they could have trouble making the claim that Android is a “complete, open, and free mobile platform” if they don’t find a way to make it work for developers.

This all takes place in the context of a larger debate over the extent to which mobile platforms should be open — voluntarily or via regulatory mandate. Google and Apple have been arguing via letters to the FCC about whether or not Apple should allow the Google Voice application in the iPhone App Store. However, it is yet to be determined whether the Commission has the jurisdiction and political will to do anything about the issue. There is a fascinating sideshow in that particular dispute, in which AT&T has made the very novel claim that Google Voice violates network neutrality (well, either that or common carriage — they’ll take whichever argument they can win). Google has replied. This is a topic for another day, but suffice to say the clear regulatory distinctions between telephone networks, broadband, and devices have become muddied.

(Cross-posted to Managing Miracles)

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The Markey Net Neutrality Bill: Least Restrictive Network Management?

It’s an exciting time in the net neutrality debate. FCC Chairman Jules Genachowski’s speech on Monday promised a new FCC proceeding that will aim to create a formal rule to replace the Commission’s existing policy statement.

Meanwhile, net neutrality advocates in Congress are pondering new legislation for two reasons: First, there is a debate about whether the FCC currently has enough authority to enforce a net neutrality rule. Second, regardless of whether the Commission has such authority today or doesn’t, some would rather see net neutrality rules etched into statute than leave them to the uncertainties of the rulemaking process under this and future Commissions.

One legislative proposal comes from Rep. Ed Markey and colleagues. Called the Internet Freedom Preservation Act of 2009, its current draft is available on the Free Press web site.

I favor the broad goals that motivate this bill — an Internet that remains friendly to innovation and broadly available. But I personally believe the current draft of this bill would be a mistake, because it embodies a very optimistic view of the FCC’s ability to wield regulatory authority and avoid regulatory capture, not only under the current administration but also over the long-run future. It puts a huge amount of statutory weight behind the vague-till-now idea of “reasonable network management” — something that the FCC’s policy statement (and many participants in the debate) have said ISPs should be permitted to do, but whose meaning remains unsettled. Indeed, Ed raised questions back in 2006 about just how hard it might be to decide what this phrase should mean.

The section of the Markey bill that would be labeled as section 12 (d) in statute says that a network management practice

. . . is a reasonable practice only if it furthers a critically important interest, is narrowly tailored to further that interest, and is the means of furthering that interest that is the least restrictive, least discriminatory, and least constricting of consumer choice available.

This language — particularly the trio of “leasts” — puts the FCC in a position to intervene if, in the Commission’s judgment, any alternative course of action would have been better for consumers than the one an ISP actually took. Normally, to call something “reasonable” means that it is within the broad range of possibilities that might make sense to an imagined “reasonable person.” This bill’s definition of “reasonable” is very different, since on its terms there is no scope for discretion within reasonableness — the single best option is the only one deemed reasonable by the statute.

The bill’s language may sound familiar — it is a modified form of the judicial “strict scrutiny” standard the courts use to review government action when the state uses a suspect classification (such as race) or burdens a fundamental right (such as free speech in certain contexts). In those cases, the question is whether or not a “compelling governmental interest” justifies the policy under review. Here, however, it’s not totally clear whose interest, in what, must be compelling in order for a given network management practice to count as reasonable. We are discussing the actions of ISPs, who are generally public companies– do their interests in profit maximization count as compelling? Shareholders certainly think so. What about their interests in R&D? Or, does the statute mean to single out the public’s interest in the general goods outlined in section 12 (a), such as “protect[ing] the open and interconnected nature of broadband networks” ?

I fear the bill would spur a food fight among ISPs, each of whom could complain about what the others were doing. Such a battle would raise the probability that those ISPs with the most effective lobbying shops will prevail over those with the most attractive offerings for consumers, if and when the two diverge.

Why use the phrase “reasonable network management” to describe this exacting standard? I think the most likely answer is simply that many participants in the net neutrality debate use the phrase as a shorthand term for whatever should be allowed — so that “reasonable” turns out to mean “permitted.”

There is also an interesting secondary conversation to be had here about whether it’s smart to bar in statue, as the Markey bill would, “. . .any offering that. . . prioritizes traffic over that of other such providers,” which could be read to bar evenhanded offers of prioritized packet routing to any customer who wants to pay a premium, something many net neutrality advocates (including, e.g. Prof. Lessig) have said they think is fine.

My bottom line is that we ought to speak clearly. It might or might not make sense to let the FCC intervene whenever it finds ISPs’ network management to be less than perfect (I think it would not, but recognize the question is debatable). But whatever its merits, a standard like that — removing ISP discretion — deserves a name of its own. Perhaps “least restrictive network management” ?

Cross-posted at the Yale ISP Blog.

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Three Flavors of Net Neutrality

When the Wall Street Journal claimed on Monday that Google was secretly backtracking on its net neutrality position, commentators were properly skeptical. Tim Lee (among others) argued that the Journal misunderstood what net neutrality means, and others pointed out gaps in the Journal’s reasoning — not to mention that the underlying claim about Google’s actions was based on nonpublic documents.

Part of the difficulty in this debate is that “net neutrality” can mean different things to different people. At least three flavors of “net neutrality” are identifiable among the Journal’s critics.

Net Neutrality as End-to-End Design: The first perspective sees neutrality as an engineering principle, akin to the end-to-end principle, saying that the network’s job is to carry the traffic it is paid to carry, and decisions about protocols and priorities should be made by endpoint systems. As Tim Lee puts it, “Network neutrality is a technical principle about the configuration of Internet routers.”

Net Neutrality as Nonexclusionary Business Practices: The second perspective see neutrality as an economic principle, saying that network providers should not offer deals to one content provider unless they offer the same deal to all providers. Larry Lessig takes this position in his initial response to the journal: “The zero discriminatory surcharge rules [which Lessig supports] are just that — rules against discriminatory surcharges — charging Google something different from what a network charges iFilm. The regulation I call for is a ‘MFN’ requirement — that everyone has the right to the rates of the most favored nation.”

Net Neutrality as Content Nondiscrimination: The third perspective sees neutrality as a free speech principle, saying that network providers should not discriminate among messages based on their content. We see less of this in the response to the Journal piece, though there are whiffs of it.

There are surely more perspectives, but these are the three I see most often. Feel free to offer alternatives in the comments.

To be clear, none of this is meant to suggest that critics of the Journal piece are wrong. If Tim says that Google’s plans don’t violate Definition A of net neutrality, and Larry says that those same plans don’t violate Definition B of net neutrality, Tim and Larry may both be right. Indeed, based on what little is known about Google’s plans, they may well be net-neutral under any reasonable definition. Or not, if we fill in differently the details missing from the public reporting.

Which bring me to my biggest disappointment with the Journal story. The Journal said it had documents describing Google’s plans. Instead of writing an actually informative story, saying “Google is planning to do X”, the Journal instead wrote a gotcha story, saying “Google is planning to do some unspecified but embarrassing thing”. The Journal can do first-class reporting, when it wants to. That’s what it should have done here.