Talk for Article "With his new proposal, FCC chair Ajit Pai seeks to end net neutrality debate"

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  1. [ This comment is from a user you have muted ] (show)

    I wonder if we can get more detail on the position of ISPs / Pai about how specifically the Title II classification is harmful, particularly if telecoms say they will abide by principles of Net Neutrality anyway. “Regulatory overreach” or “heavy-handedness” isn’t very specific and doesn’t make it clear to me what problem this is intended to solve.

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      Hi Timothy,

      Thanks for the comment. As mentioned in the article, Commissioner Pai believes the “telecommunications” classification is the reason that “broadband investment has fallen for two years in a row.” His other argument, which he made in that NPR interview referenced above, was that the internet worked just well for 20 years without the regulation, so why build rules around what he thinks is a nonexistent issue? Would love your help refining the article, if you think it’s not clear.

      Also, I’ve reached out to Commissioner Pai’s office for comment. If I hear back, I’ll update the article.

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        I wouldn’t say that’s unclear per se, but I think it needs further detail.

        By way of comparison, the section on Facebook/Google links to a Lifehacker article detailing specifically what might go badly for them/consumers on a post-net-neutrality Internet.

        The position of Pai/ISPs on the other hand is that Title II regulations decreased investment, and per the “Restoring Internet Freedom” FCC Fact Sheet and the subsequent “Myth vs. Fact: Setting the Record Straight on Chairman Pai’s Restoring Internet Freedom Order”, that the regulations stifled innovation and burden small ISPs, but it doesn’t explain WHY or HOW Title II regulations do that.

        Is investment reduced merely because the companies don’t have the ability to charge extra for things that would make them want to invest more? (The docs also assert this won’t happen, so presumably that’s not the meaning.) What about the rules burdens small ISPs? Is there some high cost associated with complying with them? Unlike the throttling/blocking concerns, I don’t understand the mechanics here, and I don’t know if his assertions are accurate at all.

        It’s also worth noting that the position that the Internet worked just well without the regulations is a little odd given the FCC also enforced a form of Net Neutrality rules from 2010 through 2014, just not under Title II (which eventually led to those rules being struck down in Verizon Communications Inc. v. Federal Communications Commission).

        TLDR: the negative effects of repealing Title II are clear and supported, the negative effects of leaving it in place could use the same level of detail/evidence if possible.

        Also, full disclosure, I work at Google (although not in any kind of PR or lobbying capacity and all of the above is my own personal understanding written on my own time).

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          Appreciate the effort being put into this discussion. Don’t have the time to update the article at the moment, but Pai’s press secretary pointed me to pgs. 10 and 91 of the fact sheet for more detailed explanation of why he believes classifying ISPs as telecommunications under Title II are not justified. I’d actually start at pg. 81, if you’re interested in the full argument.

          Here’s a link to the document: http://transition.fcc.gov/Daily_Releases/Daily_Business/2017/db1122/DOC-347927A1.pdf

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            So, p.10 is the argument that Internet access is necessarily an information service rather than a telecommunications service. I would say that’s something of an aside to the question I’m asking since it’s a question about legal frameworks and such, although it’s worth discussing in the overall context of this article certainly.

            Regarding p.81-91, it seems to distill down to this:

            1. The FTC can’t regulate common carriers, so getting rid of Title II would put them back in charge of ISPs.
            2. Since Title II only applies to ISPs and not edge providers, it’s an un-level playing field where one set of companies is more regulated than another.
            3. The FTC’s authority to “prohibit unfair and deceptive acts or practices” could prevent net neutrality violations. They could also be considered antitrust violations, and, where companies make voluntary promises to uphold net neutrality, the FTC could enforce their promises.
            4. Case-by-case enforcement by the FTC would “allow new innovative business arrangements to emerge” and “miminiz[e] the costs of overregulation”.

            And then on p.91 it returns to questions of legal specifics.

            So, the above arguments have the same problem I was getting at with the original question, in that they are fairly non-specific. If the FTC would be able to bring enforcement action against all of the net neutrality violations people have pointed out, then what’s the difference between the FCC regulating them under Title II and the FTC regulating them under antitrust and consumer protection laws? How is it unfair to ISPs if they’re regulated by the FCC and edge providers are regulated by the FTC if both are similarly strong regulators? What types of “innovative business arrangements” are permissible under FTC rules but not under Title II? What’s the cost of “overregulation” and how does it result from Title II and not from FTC rules?

            My overall concern here is that without more specific answers to these types questions, we’re basically just relaying Pai’s opinion, uncritically, but in a form that suggests it’s more of a factual statement. Or at the very least, I’m not sure how a reader would evaluate any of his assertions without more clear explanations – I know I can’t.

            1. [ This comment is from a user you have muted ] (show)

              These are fantastic questions. I’ve sent them to Pai’s office, and will update accordingly when I receive a response. In the meantime, I’ve updated the article to provide more depth on Pai’s rationale, and the arguments presented in the proposal to support them. Also reaching out to ISPs to ask why get rid of these net neutrality regulations if they’re planning to abide by them anyway.

      2. [ This comment is from a user you have muted ] (show)

        Addressing the ‘broadband investment has fallen for two years in a row’ portion, Business Insider has a recent article looking into the data the Pai is referring to, which doesn’t show a decrease but a relatively flat trend. http://www.businessinsider.com/fccs-claim-that-broadband-investment-has-dropped-is-flawed-2017-11 There’s also a report out by the Free Press looking into the this claim. https://www.freepress.net/sites/default/files/resources/internet-access-and-online-video-markets-are-thriving-in-title-II-era.pdf and http://www.businessinsider.com/broadband-investment-up-after-new-net-neutrality-rules-2017-5

        Other than that, I have yet to be able to find any specific claim from an ISP that the 2015 regulation actually prevented them from expanding their networks. Verizon even mentions on its website that they’re in the works of researching to get the next infrastructure ready (see link below). But I think it is definitely worth mentioning that, according to their earnings reports for 2015 and 2016 Comcast, Verizon, Charter, and TMobile have spent more on infrastructure investment.

        In 2014, Comcast spent $6.1B on infrastructure http://www.cmcsa.com/releasedetail.cfm?ReleaseID=897872, in 2015 they spent $7B http://www.cmcsa.com/releasedetail.cfm?ReleaseID=897872 and in 2016, they spent $7.6B http://www.cmcsa.com/releasedetail.cfm?ReleaseID=1009218

        Verizon’s infrastructure spending has remained about the same since 2015, but they’ve spent 26% more on wireless-improvements. http://www.verizon.com/about/news/verizon-reports-high-quality-customer-additions-4q-caps-year-position-drive-continued http://www.verizon.com/about/news/verizon-caps-transformational-year-strong-balanced-4q-results http://www.verizon.com/about/news/verizon-grows-its-strong-customer-base-profitably-4q

        Charter’s went from $1.3B to $3.4B http://ir.charter.com/phoenix.zhtml?c=112298&p=irol-newsArticle&ID=2219119 in 2016

        T-Mobile’s went from $3.2B to $3.8B from 2015 to 2016 http://investor.t-mobile.com/Cache/1001215619.PDF?O=PDF&T=&Y=&D=&FID=1001215619&iid=4091145

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          that’s assuming I was reading the correct numbers, of course…I’m still kind of new to reading earnings reports. 🙂

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            I got it from a different set of links, but I concur with your numbers for Comcast:

            2016 – $7.596 billion
            2015 – $7.040 billion
            2014 – $6.156 billion

            From http://www.cmcsa.com/secfiling.cfm?filingID=1193125-17-30512, which also says:

            “An increase in capital expenditures of 7.9% to $7.6 billion primarily due to:

            – an increased investment in line extensions, primarily for the expansion of our business services
            – an increased investment in scalable infrastructure to increase network capacity
            – the continued deployment of wireless gateways
            – the continued deployment of our X1 platform, which is now available in all of the markets in which we operate, and our cloud DVR technology, which is now available in substantially all of our markets”

            I haven’t checked through the other ones. Might be interesting to do so, time permitting. If the freepress numbers check out, 80% of the investment is just AT&T, Verizon, Comcast, Charter/TWC/BHN, and T-Mobile. Add in Sprint and CenturyLink and you’ve got 90%. Add Frontier and Windstream and it’s 95%.

        2. [ This comment is from a user you have muted ] (show)

          The claim that investment trended down under Title II rules for two years in a row is based on data that the FCC Fact Sheet(http://transition.fcc.gov/Daily_Releases/Daily_Business/2017/db1122/DOC-347927A1.pdf) cites from https://www.ustelecom.org/broadband-industry/broadband-industry-stats/investment (actual PDF at https://www.ustelecom.org/sites/default/files/documents/Broadband%20Investment%20Trending%20Down%20in%202016.pdf). This is from USTelecom, a trade association representing various telecom/broadband companies (full list at https://www.ustelecom.org/who-we-are/ustelecom-members).

          Specifically, the FCC doc says “broadband investment has fallen for two years in a row—the first time that that’s happened outside a
          recession in the Internet era” which, based on the doc, apparently means 2006 – present, and claims capital expenditures are as follows:

          2014 – $78.4 bilion
          2015 – $77.9 billion
          2016 – $76.0 billion

          The freepress report you cite says those numbers are selective and uses the Census Bureau’s Annual Capital Expenditures Survey to come up with the following (from tables 4a and 4b at https://www.census.gov/data/tables/2015/econ/aces/2015-aces-summary.html, summing the categories “Wired telecommunications carriers, cable and other program distribution, broadband internet services providers”, “Wireless telecommunications carriers (except satellite)”, and “Telecommunications resellers, satellite, and other telecommunications”:

          2014 – $86.631 billion
          2015 – $87.184 billion

          The same report also has several quotes from industry execs that (the report asserts) show they’re saying to their investors that Title II doesn’t hurt investment, but I would want to chase down authoritative transcripts in context before I would necessarily assert that.

          As an aside, the investment numbers can’t really prove one way or the other whether Title II hurts investment, because there could be other factors, i.e. it’s just correlation not causation, which is part of the reason why I’m hoping (Pai, ISPs, etc.) will explain the *mechanics* of how it would hurt investment, since those are still fuzzy to me and I don’t want to entirely discount them based on vagueness, even if I am skeptical.

          1. [ This comment is from a user you have muted ] (show)

            They could get funds from businesses that rely more heavily on the infrastructure, right? Although if the ISPs aren’t planning to give anyone preferential treatment then I don’t see how that would happen.

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              Yeah, that’s basically the point of the question – Pai seems united with the ISPs in their claim that they won’t charge anybody extra for anything, but also that they need Title II gone to be able to expand, so either there’s some third thing I’m missing or those are inconsistent claims.

  2. [ This comment is from a user you have muted ] (show)

    I second that. Thanks Eric, a very useful and informative contribution.

    1. [ This comment is from a user you have muted ] (show)

      Thanks, Angela!

  3. [ This comment is from a user you have muted ] (show)

    Thanks for this balanced and extremely valuable explainer. Remarkably neutral given the issues at stake.

    1. [ This comment is from a user you have muted ] (show)

      Appreciated!

  4. [ This comment is from a user you have muted ] (show)

    When talking about Netflix and Google, it may be worth mentioning what percentage of bandwidth in the US is used by Netflix and YouTube (I believe it was around 50% two years ago, but not sure the best place to find updated numbers). Might also be interesting to discuss who will realistically be impacted by this (whether it’s just video streaming services) and if the possibility of legal content being blocked completely is realistic.

    1. [ This comment is from a user you have muted ] (show)

      That is a great idea – the most recent numbers I’ve found are from a couple of years ago, too. Looks like about 70% among Netflix/Youtube/Hulu/Amazon: https://www.recode.net/2015/12/7/11621218/streaming-video-now-accounts-for-70-percent-of-broadband-usage

      Will keep rooting around for updated numbers.

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