Two previous efforts over the last decade were rejected by federal courts, who held that the FCC had failed to make the case that Congress had ever authorized the agency to police broadband, regardless of the agency’s best intentions.
So Wheeler decided to turn back the clock to a time when Congress had given the FCC broad power over an earlier communications technology — the monopoly phone company of the early 20th century. Through a legal fiction the chairman referred to as “reclassification,” the Internet will be redefined as a telephone service. The agency can then regulate broadband using laws passed to oversee Ma Bell, treating it the way it does the old (and now nearly dead) copper phone network. Those laws, or some uncertain subset of them, will now apply to the Internet.
While the goal of preserving the remarkably free and open global Internet is one that no one disagrees with, I have great fears about both the intended and unintended consequences this unprecedented shift in policy will have on the perpetual motion machine of innovation that the Internet has long supported.
And I’m not alone. On Tuesday, for example, at an event sponsored by the Georgetown Center for Business and Public Policy, I asked David Farber, professor of computer science and public policy at Carnegie Mellon and the FCC’s chief technologist from 2000 to 2001, what he thought of the FCC’s proposal. Farber, a principal inventor of the government networks that ultimately became the Internet, didn’t mince words. “Title II,” he said, “is a catastrophe.”
On Wednesday, I testified before a House subcommittee at a hearing aptly-titled “The Uncertain Future of the Internet.” Uncertainty — of what the FCC intends to do, of how the courts will view their efforts, and how private investors in broadband infrastructure will respond — is now the order of the day.
That is both a significant and unfortunate course change. For most of the Internet era, as I told the committee, tech policy has been a bright spot in Washington. Not only has it been a rare example of bipartisanship, but also of regulatory wisdom.
Recognizing that the pace of technology change far exceeds that of lawmakers and regulators, the 1996 Telecommunications Act, passed by a Republican Congress and signed by Democratic President Bill Clinton, boldly announced that it was the policy of the United States “to preserve the vibrant and competitive free market that presently exists for the Internet and other interactive computer services, unfettered by Federal or State regulation.”
The governance of the Internet, for the most part, was left to the engineers who invented it, rather than to the whims of lawmakers and regulators.
For now, at least, that bipartisan view has been jettisoned, lost to an emotional and likely politically-motivated appeal by President Obama late last year. In a dramatic statement posted to the White House Web site, the president urged Wheeler to end the “light touch” era and replace it with one that would treat the Internet as governments treat other public utilities: as quasi-governmental industries like power, water, gas — and plain old telephone service.
While other witnesses at the hearing argued that the Title II gambit was simply the only way for the FCC to implement what the White House calls President Obama’s plan, the reality is that there were at least two alternatives that would have accomplished the president’s stated goals without the need for public utility regulation.
One was to follow the instructions of a federal appeals court, which early in 2014 threw out the FCC’s 2010 effort to pass Open Internet rules. Though the agency lost the case, the court instructed the FCC to reenact the rules under the authority of another provision of the law known as Section 706, indicating that had the agency done so the rules would have passed judicial muster.
And indeed, Wheeler was quick to embrace the court decision, announcing soon after that the court had provided him with both an “invitation” and a “roadmap,” the first of which he intended to accept and the second of which he intended to follow. Sure enough, in May of last year, the agency gave notice of its intention to re-enact the 2010 rules as the court had instructed, an approach that won wide if not universal approval.
But Wheeler’s plan was undone by activists who wanted Title II more than they wanted Open Internet rules. According to multiple reports, including an in-depth story from the Wall Street Journal, the president’s blindside intervention was the result of intensive interest group pressure from groups closely aligned with a few large content providers, who worked with a shadow FCC operating inside the White House.
For many of the activists, Open Internet rules were and always have been the tail wagging the dog. The true goal was reversal of the “light touch” policy and imposition of full public utility treatment for broadband, if not a fully nationalized broadband infrastructure. The rhetoric of preserving the open Internet, however, was easier than making the case to consumers for transforming broadband into a regulated telephone service. But with the threat that the FCC would implement the former without the latter, they apparently took their principal case directly to the president.
Congress is now investigating the extent of that influence. But in any event, the president’s personal urging proved too much even for the legally independent FCC.
Late last year, a frustrated Wheeler was reported to have changed course. The May version of his Open Internet rules were scrapped, and a new version, rumored to be over 300 pages long, was quickly drafted to implement President Obama’s public utility plan.
(The final version of Thursday’s order has yet to be made public, and may not be for weeks. After voting yesterday, a majority of FCC Commissioners also voted to leave the order open for further editorial changes, a signal that the document voted on wasn’t actually finished.)
The second alternative, discussed at length at the Wednesday hearing, appeared soon after the White House’s blindside. Republican leaders in both the House and Senate jointly released draft legislation that would have elegantly solved the long-running conflict over net neutrality once and for all.
First, it would enact the specific rules called for by the White House, making them a matter of federal law. And doing so as legislation from Congress would definitively establish the FCC’s authority to enforce them without the need to hack an 80-year-old law written for an entirely different technology. With the draft bill, the Open Internet rules would have been effectively immune from legal challenge.
At Thursday’s FCC meeting, however, Wheeler chose the weakest of the three options. The majority who voted for the rules claim they chose Title II because it provided the most secure legal foundation.
But the opposite is true. As every D.C. lawyer inside and outside the FCC knows full well, the case for redefining broadband as a telephone service will not only be the hardest to defend in court, it will also take the longest.
In part that’s because the FCC plans to pick and choose from among a thousand pages of existing Title II regulations still on the books, using a fraught legal technique known as forbearance. By choosing to rely on the blunt instrument of Title II, the FCC must first transform the Internet into a public utility, and then immediately begin the process of unraveling some or perhaps most of that decision.
While Congress has given the agency authority to forbear, the agency must make a strong showing that each decision is based on a clear need, proceedings that can and will be challenged by self-interested parties who like or dislike each provision in question.
A more potent legal uncertainty has to do with the fact that the agency has long maintained that broadband Internet is not a telephone service, including in a 2005 case where the U.S. Supreme Court upheld the agency’s interpretation of the law. While it is not impossible for an agency to convince the courts that a prior interpretation was wrong, the standards for doing so are quite high. And the more time that has passed in the meantime, the harder it is to make that case.
All this means that despite the cheering this week about a historic moment, the real verdict on Thursday’s vote won’t come for years. Multiple parties have already indicated their intention to challenge the agency’s Title II legerdemain once the final order is released and eventually published (which, as last time, could take up to a year). Legal challenges will likely take another two years. If the Supreme Court agrees to revisit its 2005 decision that broadband is not subject to Title II, add another year or two to that.
In the meantime, of course, elections could drastically change the equation. The chairman and a majority of FCC Commissioners are appointed by the president. So after the 2016 elections, if not sooner, there will be a new chairman, perhaps from a different party. A newly-reconstituted commission could decide an entirely different set of Title II provisions to apply, or not to apply them at all, or to drop objections to on-going court challenges.
It’s entirely possible that Thursday’s historic vote will end up a historic footnote. The legacy of the Title II order, in fact, may be little more than a period of costly and unnecessary uncertainty.
In the meantime, there’s still both time and hope for a return to the bipartisan policy that has made the Internet the greatest generator of innovation since the Industrial Revolution. At Wednesday’s hearing, Democrats were notably cool to the idea of collaborating with Republicans on the draft legislation. But as the clock begins to tick and the lawsuits begin their slog through the courts, the “light touch” coalition could spring back to life.
And if not a political solution, there’s always a chance at a technical one. The Internet has a long history of innovating around rules and regulations that slow it down, whether those rules were designed with the best of intentions, or otherwise.
Larry Downes is co-author with Paul Nunes of “Big Bang Disruption: Strategy in the Age of Devastating Innovation” (Portfolio 2014). He is a project director at the Georgetown Center for Business and Public Policy.