Wonkbook: Let Round 2 of the latest net-neutrality fight begin

May 16

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(Photo by Alex Wong/Getty Images)

Wonkbook’s Number of the Day: 297,000. That was the number of first-time claims for jobless benefits last week, the lowest since May 2007.

Wonkbook’s Chart of the Day: The rapidly evolving politics of same-sex marriage, in one map.

Wonkbook's Top 5 Stories: (1) Life in the Internet 'fast lane'; (2) housing trials and tribulations; (3) the latest GOP-backed Medicaid expansion; (4) same-sex marriage is winning; and (5) Democrats' millennials problem.

1. Top story: What comes next now that the FCC has advanced its latest net-neutrality proposal

FCC accelerates its Internet 'fast lanes' proposal. "U.S. regulators on Thursday advanced a 'net neutrality' proposal that would ban Internet providers from blocking or slowing down access to websites but may let them charge content companies for faster and more reliable delivery of their traffic to users....Dozens protested the vote at the FCC on Thursday as many consumer advocates have rejected FCC Chairman Tom Wheeler's proposal that may allow some 'commercially reasonable' deals in which content companies could pay broadband providers to prioritize traffic on their networks." Alina Selyukh in Reuters.

Primary source: The full text of the proposed rule and supporting documents.

Explainers:

Some facts about net neutrality. Bree Fowler in the Associated Press.

Everything you wanted to know about net neutrality. Amy Schatz in Re/code.

Now it's the public's turn to weigh in. "The plan is not a final rule, but the vote on Thursday is a significant step forward on a controversial idea that has invited fierce opposition from consumer advocates, Silicon Valley heavyweights, and Democratic lawmakers. The FCC will now open the proposal to a total 120 days of public comment. Final rules, aimed for the end of the year, could be rewritten after the agency reviews the public comments." Cecilia Kang in The Washington Post.

@binarybits: My inbox is half lefty groups attacking the FCC for killing net neutrality and half lefty groups hailing the FCC for moving toward it.

Video: Why you should care about net neutrality. Brendan Sasso and Reena Flores in National Journal.

The one quote from the meeting you must read. "'If a network operator slowed the speed of service below that which the consumer bought, it would be commercially unreasonable and therefore prohibited. If the network operator blocked access to lawful content, it would violate our no-blocking rule and therefore be doubly prohibited.' The term 'commercially unreasonable' is vital here. It's the test by which the FCC is proposing to determine whether an Internet service provider has violated net neutrality. Critics say the term...could allow ISPs to give the FCC the run-around. But Wheeler is saying that although his plan allows a tiered Internet with faster lanes, the floor will be set at whatever service a customer has bought." Brian Fung in The Washington Post.

@nycjim: FCC commissioner: “When my mother calls” about net neutrality “I know that there is a problem.” Live updates: http://on.mash.to/1jM6AoM

The FCC's huge dilemma. "Wheeler yesterday said 'the prospect of a gatekeeper choosing winners and losers on the Internet is unacceptable.' That’s what the FCC will be, no matter how it fashions final rules. If it adopts toughened rules as demanded by advocacy groups, some Democratic lawmakers and content providers including Google Inc. (GOOG) and Netflix Inc. (NFLX), Wheeler and carriers foresee years of litigation. If the FCC adopts the Wheeler proposal advanced yesterday to allow some priority arrangements as long as they aren’t 'commercially unreasonable,' it could determine winners and losers on a case-by-case basis." Todd Shields and Chris Strohm in Bloomberg.

How activists put tougher net-neutrality rules back on the agenda. "Under massive public pressure, the FCC has shown itself more responsive than Congress, opening up a legitimate debate over the rules. Tech firms have linked arms with the public against the Wheeler proposal. And what activists consider the only path to true net neutrality—reclassifying broadband Internet under Title II of the Communications Act as a common carrier service, allowing the FCC to regulate it like phone lines—has moved from an impossible dream to a more viable alternative." David Dayen in The New Republic.

Comcast to FCC: Don't you even think about it. "Comcast Corp. is applauding 'the first step' in the Federal Communications Commission’s rule-making process aimed at drafting a new set of rules to guarantee an open Internet. But the Philadelphia cable giant also warned the FCC not to go too far with the rules — or reclassify broadband Internet service as a telecommunications service — which would bring a higher degree of regulatory scrutiny." Meg James in the Los Angeles Times.

Explainer: The case against toughening the rules by reclassifying broadband. Timothy B. Lee in Vox.

The White House tries its best poker face. "It seems almost no one is neutral about the Federal Communications Commission’s latest net neutrality plan, though the White House, in a statement on Thursday, did its level best to keep its distance from the agency’s deliberations." Carol E. Lee in The Wall Street Journal.

There's nothing neutral about the FCC's partisan politics. "That may be not be surprising, considering the issue at hand pits large businesses against grass-roots consumer advocates. But the vote is also evidence of the internal frictions between the FCC's Democratic majority and Republican minority....Generally, the only time we get to see those members interact is when they appear before the public at the commission's monthly open meeting. In recent weeks, though, we've had brief glimpses of their behind-the-scenes relationship, thanks to unusually public statements about the inner workings of the agency." Brian Fung in The Washington Post.

Here's why Silicon Valley actually had a good day in D.C. "Despite all the hand-wringing statements about net neutrality that Silicon Valley companies were shooting out Thursday, tech actually had a pretty good day in D.C. While FCC Chairman Tom Wheeler’s fast-lane/slow-lane net neutrality proposal was taking a beating on all sides (even Wheeler took a few whacks at it), Internet companies sneaked through a huge victory when the agency agreed to set aside up to three channels of TV airwaves for unlicensed use. That doesn’t sound like a big deal, but it’s something that Google, Microsoft and other tech companies have spent years advocating." Amy Schatz in Re/code.

Other tech reads:

Bill to curb NSA spying looks like change, but isn’t really. David Lightman and Marisa Taylor in McClatchy Newspapers.

A year after Snowden, tech companies are more transparent. Danny Yadron in The Wall Street Journal.

Minnesota enacts nation's first smartphone kill-switch law. Abby Simons in the Minneapolis Star Tribune.

BRODSKY: FCC proves again that it is out to kill net neutrality. "Well, that meeting of the Federal Communications Commission earlier today was certainly a lot of sound and fury signifying next to nothing. FCC Chairman Tom Wheeler, despite weeks of backlash, still wants to allow Internet Service Providers like Comcast and Verizon to 'offer' different levels of service to internet companies, although he refused to call them a 'fast lane' and a 'slow lane' and refused to recognize how those arrangements up the food chain affect consumers and a neutral internet. He is refusing to recognize reality." Art Brodsky in Wired.

BALTO: Reclassifying broadband Internet as telecommunications service is a bad, outdated idea. "This bad idea would effectively treat broadband providers and a wide range of Internet firms as public-utility style 'common carriers,' along the lines of railroads and canal boats of centuries past. Applying a 19th century regulatory solution to a 21st century problem simply does not make sense." David Balto in Roll Call.

HILTZIK: Actually, don't shy from the reclassification option. "The one regulatory move that would restore the FCC's unquestioned authority to ride herd on these profiteers? The House GOP calls that 'turning back the clock.' Doing so, say these water-carriers for the cable and telephone companies, 'would be fatal to the Internet as we know it.' Advocates of the open Internet and net neutrality have long been aware that reclassification would be politically difficult, precisely because of the sentiments the GOP letter expresses....But that's not a reason to shy from it. Now that the Internet providers and their handmaidens in Congress have drawn the line, the FCC should step over it and let the battle begin." Michael Hiltzik in the Los Angeles Times.

Top opinion

LANE: Piketty identifies an ill of capitalism, but not the cure. "For Piketty and [Henry] George, the bottom line, both moral and economic, is to socialize 'rent' — rent, that is, not in the colloquial sense but in the economic sense of income disconnected from productivity. It’s an attractive vision: an egalitarian, productive society, purged of parasitical rent-seeking through the expedient of well-aimed taxes. Alas, Piketty’s global wealth tax and George’s single tax suffer from the same defect, and it’s not political impracticality....It’s the inherent difficulty of separating the productive, untaxed component of the return on land or capital from the unproductive, taxed part." Charles Lane in The Washington Post.

McARDLE: Why the U.S. isn't creating more small businesses. "America’s economy excels at creative destruction — the process of killing old enterprises and ideas and replacing them with newer and better ones. Or, at least, America’s economy had excelled at creative destruction. A recent report from the Brookings Institution suggests there is reason to worry that this is changing....What about Silicon Valley? I hear you cry.....Important as that sort of entrepreneurship is, however, it is not the only sort that matters. Small businesses of all kinds are good for the economy." Megan McArdle in Bloomberg View.

WHITMAN: GOP, my party, must wake up on climate change. "The modern environmental movement arguably began with Teddy Roosevelt, the Republican president who established the national park system. A Republican president, Richard Nixon, and a Democratic Congress created much of our landmark environmental legislation, including the Clean Air Act and the establishment of the [EPA]. But Republicans have gotten away from those values in recent years. The only way to return the GOP to its roots and, in turn, make headway on climate change is by ensuring that Republicans — and all Americans — recognize the very real economic costs of not protecting our environment." Christine Todd Whitman in Politico Magazine.

BOUIE: 60 years post-Brown v. Board, the troubling resegregation of schools. "Saturday is the 60th anniversary of Brown v. Board of Education....The following year the justices ordered that states end school segregation with 'all deliberate speed.' In the popular narrative, this is the beginning of American integration, a process that goes from Rosa Parks to Martin Luther King to the Civil Rights Act and eventually to President Obama. But for as much as we share an integrated culture, millions of Americans—and blacks in particular—live in segregated worlds, a fact illustrated by the persistence and retrenchment of school segregation." Jamelle Bouie in Slate.

KRASSA AND RADCLIFF: Does higher minimum wage make people happier? "The Congressional Budget Office recently provided its nonpartisan judgment of the consequences of the Obama administration’s proposed increase. Their analysis suggests that...a higher minimum wage will cost some jobs but will also raise the standard of living for many millions of people....But it hardly answers the question that we should ask of all changes in public policy: Do they make the world a better place when both costs and benefits are considered?...While we know that correlation is not causation...the evidence suggests that certain labor market regulations indeed work to better the happiness of all." Michael Krassa and Benjamin Radcliff in The Washington Post.

EDSALL: Piketty and his critics. "Many on the left see the popularity of Thomas Piketty’s new book, 'Capital in the Twenty-First Century,' as a sign of hope, but both optimists and pessimists share a belief more telling than Piketty’s success: the idea that the traditional Democratic economic agenda is dead. Piketty’s book reinforces the idea that the domestic policies liberals advocate for are palliative, not curative — that, in essence, inequality is here to stay." Thomas B. Edsall in The New York Times.

Heroism interlude: Heroic cat saves kid from attacking dog.

2. Housing's trials and tribulations, and why they matter

Missing in the housing market recovery: new houses. "More than five years after the crash, homebuilding is stuck at half its normal level. That's a big drag on the economy. And things aren't looking much better....This severe slump in single-family home construction has been going on across the country. We haven't seen anything close to this kind of a long-term construction slump since World War II....Homebuilding remains a kind of sleeping giant. If it wakes up, it could create a lot of good-paying construction jobs and manufacturing jobs at companies making everything from windows to dishwashers to lawn mowers. When housing really recovers it can offer a real boost to the economy." Chris Arnold in NPR.

Homebuilder confidence falls to lowest level in a year. "Confidence among U.S. homebuilders dropped in May to the lowest level in a year, showing the residential real estate market may be slow to recover after an unusually harsh winter. The National Association of Home Builders/Wells Fargo builder sentiment gauge fell to 45 this month, the weakest since May 2013, from a revised 46 in April that was lower than initially reported, figures from the Washington-based group showed today. Readings less than 50 mean fewer respondents report good market conditions." Michelle Jamrisko in Bloomberg.

Realtors have a long-term young-buyers problem. "The U.S. housing market is strengthening after a tough winter, according to economists at a Realtors convention in Washington. But even as the short-term outlook brightens, they remain worried about a long-term problem with 'missing' young buyers. 'There really are serious issues in the first-time-buyer market,' Eric Belsky, managing director of Harvard's Joint Center of Housing Studies, told the National Association of Realtors....He estimates that nearly 3 million more young adults are living with their parents compared with 2007 — before the Great Recession had settled in." Marilyn Geewax in NPR.

But foreclosures are down to near pre-crisis levels. "The U.S. housing market’s recovery is still a work in progress, but the problem that got us here in the first place — waves of foreclosures that decimated prices and neighborhoods — is steadily fading into the rearview mirror." Conor Dougherty in The Wall Street Journal.

Explainer: Housing segregation is holding back the promise of Brown v. Board of Education. Emily Badger in The Washington Post.

Don't get too excited about the Senate's housing reform bill vote. "A measure that would dismantle Fannie Mae and Freddie Mac won the approval of a Senate commitee Thursday but most likely won’t make it to the full chamber this year because it failed to attract a large enough majority of the committee’s lawmakers. The Senate banking committee passed the bill 13 to 9, with seven Republicans and six Democrats in favor of it. But despite weeks of negotiations, the bill’s proponents could not win over a key bloc of liberal Democrats. Without their support, Senate Majority Leader Harry M. Reid (D-Nev.) is unlikely to bring the bill to the Senate floor." Dina ElBoghdady in The Washington Post.

Explainer: So, the bill passed. What's next? Nick Timiraos in The Wall Street Journal.

Inflation is rising: Yay! "Rising prices are a sign of growing consumer demand — and that demand is the engine of the American economy. A little bit of inflation also helps reduce the cost of doing business, which means companies can hire more people. And inflation makes debt easier to pay off, which anyone with a student loan or a mortgage can appreciate. Indeed, one of the most puzzling aspects of the recovery over the past year has been why inflation has remained so low — not just in the United States but across the globe." Ylan Q. Mui in The Washington Post.

Related: Cleveland Fed’s expected inflation gauge stirs toward higher readings. Michael S. Derby in The Wall Street Journal.

Price increases show U.S. picking up as jobless claims keep falling. "The cost of living rose in April and fewer Americans filed claims for jobless benefits last week, showing the world’s largest economy is making progress toward the Federal Reserve’s unemployment and inflation goals. The consumer-price index increased 0.3 percent last month, the biggest gain since June, Labor Department data showed today in Washington. The number of applications for unemployment insurance payments dropped by 24,000 to 297,000 in the week ended May 10, less than any economist projected in a Bloomberg survey and the least since May 2007." Victoria Stilwell and Lorraine Woellert in Bloomberg.

Industrial production is down. Jonathan House in The Wall Street Journal.

Other economic/financial reads:

Wal-Mart says it won't oppose minimum-wage hike. Shelly Banjo in The Wall Street Journal.

Fast-food workers stage protests over minimum wage. Mark Niquette and Lindsey Rupp in Bloomberg.

There are some good jobs in manufacturing. Kids just aren't interested in taking them. Lydia DePillis in The Washington Post.

Astronomy interlude: Jupiter's Great Red Spot is shrinking before our eyes.

3. Why Indiana's Medicaid expansion is a big deal

Another conservative governor finds a way to expand Medicaid. "It looks as if Indiana is about to join the list of red states signing up for Obamacare's Medicaid expansion. Republican Gov. Mike Pence, after months of discussions with the Obama administration, is offering a new plan Thursday morning to expand coverage to low-income uninsured Hoosiers. As expected, he's doing it through an existing state insurance program for adults that's been championed by some conservatives. About two dozen states still haven't joined the Affordable Care Act Medicaid expansion, which extends coverage to low-income adults earning up to 138 percent of the federal poverty level." Jason Millman in The Washington Post.

Quotable: "There’s a lot that suggests that this bill is a pretty damn good idea." — Rep. Tim Bishop (D-N.Y.), a vulnerable House Democrat embracing Obamacare. Michael C. Bender in Bloomberg.

The rise in employer health costs is slowing only a bit. "Employer healthcare costs are expected to rise nearly 9% in 2014, a slight improvement over recent years, according to a new survey. However, that modest decline doesn't offer much relief to companies and their employees, who are seeing health insurance costs take a bigger bite out of their paychecks." Chad Terhune in the Los Angeles Times.

This cost-control plan may not prove to be too popular. "You just might want to pay attention to the latest health insurance jargon. It could mean thousands of dollars out of your pocket. The Obama administration has given the go-ahead for a new cost-control strategy called 'reference pricing.' It lets insurers and employers put a dollar limit on what health plans pay for some expensive procedures....Some experts worry that patients could be surprised with big medical bills they must pay themselves, undercutting financial protections in the new health care law...Other experts say reference pricing will help check rising premiums." Ricardo Alonso-Zaldivar in the Associated Press.

Another health care controversy is brewing, over veterans' care. "Veterans Affairs Secretary Eric K. Shinseki stared, at times impassively, at a panel of senators who repeatedly hammered him Thursday over long waits for veterans seeking care and reports of coverups at VA medical centers. When it was his turn to speak, Shinseki vowed to remain in office as long as he has President Obama’s support. He told the lawmakers that the allegations of impropriety made him 'mad as hell.'" Greg Jaffe and Josh Hicks in The Washington Post.

Explainer: A guide to the VA health care controversy. Josh Hicks in The Washington Post.

Other health care reads:

Minnesota's legislature OKs medical marijuana. Tim Pugmire in Minnesota Public Radio.

For some doctors, almost all Medicare patients are above average. Charles Ornstein and Ryann Grochowski Jones in ProPublica.

Cautions about interpreting the Massachusetts Obamacare study. Jim Manzi in National Review and Austin Frakt in The Incidental Economist.

Science interlude: What exactly is gluten, anyway?

4. Gay marriage is winning

Gay marriages are on in Arkansas, but paused in Idaho. "A judge cleared the way Thursday for gay marriages to resume in Arkansas, striking down all state laws that prevent same-sex couples from wedding....Pulaski County Circuit Judge Chris Piazza expanded his ruling striking down a constitutional ban to also include the prohibition on clerks issuing same-sex marriage licenses. Justices had ruled Wednesday that Piazza’s decision on the gay marriage ban did not change that license law....Meanwhile, in Idaho, residents planning to gather at courthouses across the state to celebrate same-sex marriages saw their plans put on hold Thursday by a federal appeals court." Andrew DeMillo and Christina Huynh in The Washington Post.

Chart: The rapidly evolving politics of same-sex marriage, in one map. Chris Cillizza in The Washington Post.

We're on the brink of a majority of gay Americans being able to marry. "Following a federal judge's decision that gay couples in Idaho can legally marry as of Friday, the number of states that allow same-sex marriage jumps to 19. But despite being fewer than half of the states, back-of-the-envelope calculations suggest that just about half of the U.S. gay population lives in a state that allows gay marriage. And if you consider states that have same-sex marriage decisions on hold, that percentage is poised to pass 60 percent. This is an imprecise but revealing calculation that's worth walking through in detail." Philip Bump in The Washington Post.

Only a couple of states don't have challenges pending. "After five couples filed a lawsuit in Alaska, just three states remain where gay marriages are banned but not being fought in court. And, soon, there will only be two. Gay marriages are illegal in 33 states....As of late April, bans in only four states were unchallenged, according to Lambda Legal, a pro-gay marriage advocacy group. Alaska on Monday became the 32nd state to have its marriage ban challenged....Another is expected any day in South Dakota, leaving just two bans — in neighboring Montana and North Dakota — unassailed in court." Niraj Chokshi in The Washington Post.

Other LGBT-rights reads:

New Md. law makes transgender discrimination illegal. John Clarke in Reuters.

Animals interlude: "Godzilla," cute puppy version.

5. Democrats have a big millennial problem

Young people for Obama aren't turning out for Democrats. "In case there was any doubt that the youth vote could hurt Democrats in 2014, the following two charts should just about kill it....Only half of young people who voted for Obama say there is even a chance that they'll vote in 2014 and that their vote would be for Democrats. Only 30 percent of young people who voted for Obama in 2012 say that they will 'definitely' vote for a Democrat for Congress in 2014, and only another 7 percent say they will 'probably' vote for Democrats. The remaining 13 percent are 'iffy.'" Aaron Blake in The Washington Post.

Another way to look at it: Millennials strongly back progressive policies, but most won't turn out. "The poll found strong support among millennials for progressive policies....A majority of millennials were also likely to say they favor a more involved government...While those results bode well for Democrats, the responses regarding turnout should give them pause. Less than one-third of millennials said they would definitely vote in the 2014 midterms." Stephanie Czekalinski in National Journal.

Older, whiter, righter in midterm elections. "Taken together, race and age help to explain why the Democrats face such a struggle in November. The party does comparatively badly with older, whiter voters, a vulnerability that is exposed in mid-term elections because of low turnout. When the presidency is up for grabs, many more Americans bother to vote. In mid-term elections, apathy reigns....What makes things truly difficult for Democrats is the addition of a third handicap: that one of their number is president." The Economist.

Other political reads:

Conservatives seek to regain control of Republican agenda. Robert Costa in The Washington Post.

Sports interlude: The shortest pre-game press conference ever.

Wonkblog roundup

A simple visualization of why it stinks to be uninsured. Jason Millman.

There are some jobs now in manufacturing. Kids just aren’t interested in taking them. Lydia DePillis.

Inflation is rising. Yay! Ylan Q. Mui.

Why the federal gas tax is way too low. Christopher Ingraham.

One bipartisan way to reduce national debt: immigration reform. Danielle Paquette.

America’s most gerrymandered congressional districts. Christopher Ingraham.

Another conservative governor finds a way to expand Medicaid. Jason Millman.

An economic defense of old buildings. Emily Badger.

Housing segregation is holding back the promise of Brown v. Board of Education. Emily Badger.

Is China’s housing bubble popping? Matt O'Brien.

Et Cetera

Report says fewer bees perished during the winter, but the reason is a mystery. John Schwartz in The New York Times.

Students paying a bigger share of public college costs. Adrienne Lu in Pew Stateline.

Tax extenders bill blocked by Republicans upset about process. Michael Catalini in National Journal.

Senate panel approves 6-year highway bill. Joan Lowy in the Associated Press.

Explainer: The most segregated schools may not be in the states you'd expect. Niraj Chokshi in The Washington Post.

EPA targets oil refineries' emissions into neighborhoods. Tony Barboza in the Los Angeles Times.

Got tips, additions, or comments? E-mail us.

Wonkbook is produced with help from Michelle Williams and Ryan McCarthy.

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