Many Small ISPs Support Real Net Neutrality

One excuse FCC Chairman Ajit Pai regularly offers to explain his effort to gut net neutrality protections is the claim that open Internet rules have harmed ISPs, especially small ones. During a speech earlier this year, he stressed that 22 small ISPs told him that the 2015 Open Internet Order hurt their ability to invest and deploy.

In reality, though, many more ISPs feel very differently. Today, more than 40 ISPs told the FCC that they have had no problem with the Open Internet Order and that it hasn't hurt their ability to develop and expand their networks. What is more, that they want the FCC to do its job and address the problem Congress created when it repealed the broadband privacy rules in March.

Why These ISPs Like Title II

The 2015 Order famously outlined clear net neutrality rules.  But those rules only passed muster because the Order also explicitly classified broadband service as a "common carrier" service, regulated by Title II of the Communications Act, rather than an "information service" regulated by Title I of the same Act. And that classification has several corollary effects, because Title II isn't just about net neutrality. It is also meant to curtail the anti-competitive conduct from incumbent monopolists like Comcast, AT&T, and Verizon. In essence, as common carriers, they are not able to use their power to control the Internet experience, and they are not able to directly harm their competitors in the broadband market.

That's why these small ISPs are worried. Chairman Pai wants to reverse the 2015 decision to reclassify broadband as a "common carrier" service, thereby eliminating the protections Title II offers. If he succeeds, not only are Section 201 and Section 202 -- the core provisions that support network neutrality -- on the chopping block, but also a whole host of other active provisions that protect competition in the broadband market. Small wonder the big cable and telephone lobbies are happy to pay lip service to net neutrality -- so long as the actual rules aren't based on Title II.

To start, Section 251 of the Communications Act requires broadband providers to "interconnect" with other broadband providers and related market players in order to prevent the possibility of a large player (back in the day that was AT&T) from denying access to the network by simply denying physical connectivity. While more clarity is needed from the FCC on how it intends to manage interconnection disputes, it was clear that the FCC had to play a role as problems began to arise. We saw this play out most notably with Netflix traffic, whether it is Comcast disputing the delivery of Comcast customer requested traffic to their homes, to the direct dispute between Comcast and Netflix before the 2015 FCC Order. Under the current rules, the FCC can intervene to prevent a major ISP with a vast network from leveraging its massive network size in an anti-competitive way to harm other networks. That oversight vanishes if Chairman Pai reclassifies broadband as an "information service," which undoubtedly Comcast would appreciate.

Another example of how Title II of the Communications Act promotes competition in broadband access is the relatively unknown issue of pole attachment rights under Section 224 of the Communications Act. Today, that section ensures that every broadband provider has the legal right to gain access to many of the poles that run along our roads. These poles, and other rights of way infrastructure, are the route that any broadband company must travel in order to get to your home or business. Google Fiber's deployment ran into snags in Austin, Texas when those poles were owned by AT&T, because the surest way to prevent competition is to just physically prevent their entry into your market. If a company the size of Google could be stifled without the law supporting them, what hope does a smaller ISP have in entering into a market where the incumbent broadband provider owns the poles that are a necessary component to deploying the network? The FCC Chairman's plan fundamentally ignores this problem and offers no clear solution to competitors. An incumbent broadband provider that owns a lot of the poles is going to have no federal legal obligation to share that access at fair market rates if broadband is no longer a common carrier service.

Lastly, Section 222 ensures that broadband users have a legal right to privacy when we use broadband communications. It has already taken a beating, thanks to  Congress' misguided decision to repeal the FCC's rules that had been based on Section 222, but the section itself is still the law today. The problem now is that ISPs do not know their legal obligations with consumer data and how they are supposed to operate without more FCC guidance. Undoubtedly, the large cable and telephone companies that spent millions to lobby Congress to repeal the rules intend to profit from the vast treasure trove of personal data that runs over their networks. But ISPs opposed to Chairman Pai's plan are not looking to make more money off of their customers by selling their personal data without permission. Almost all of them were strongly opposed to Congress repealing the privacy rules. None of them got into the business of providing access to the Internet so they could snoop on the activities of their customers. However, Chairman Pai's plan would outright remove the Section 222 privacy obligations for all broadband companies and as a result there would be absolutely no way to have broadband privacy rules absent a new law. In essence, Chairman Pai's plan would be the nail in the coffin for broadband privacy that Congress started with its privacy repeal earlier this year.

What is the FCC Plan for Smaller Competitors In the Broadband Market?

There is no plan. We have no alternative body of law beyond the Communications Act and the provisions of Title II to address the competition issues listed above. Antitrust is generally not a viable option as well. That is why Pai's plan is not about improving the investment opportunities for all broadband providers (a claim that has been thoroughly debunked twice now and now outright refuted by more than 40 ISPs themselves). Instead, it is a plan to radically enhance the market power of Comcast, AT&T, and Verizon in a way that no previous FCC Chair (both Republican and Democrat) ever entertained.

These ISPs are taking a stand for network neutrality because they know Chairman Pai's plan will hurt them as well as their subscribers. Contact the FCC and Congress today to tell them to oppose Chairman Pai's plan to empower major cable and telephone companies.