Via Time Magazine

Jan62015

Net Neutrality: Do Not Leave Issues Up To The Issuer

National • Politics

Net neutrality, the principle that the internet should be equally accessible and data should be treated equally, has recently received a lot of attention in domestic politics. While some believe that the FCC should regulate internet service providers (ISPs) to prevent these companies from giving affluent customers access to fast lanes, others strike it down saying that it is just a good attempt for government to regulate the internet thereby not upholding the principle of the “free” web. Whether the former argument or the latter, one of the most important pieces to understand about net neutrality is how these companies–Verizon, Time Warner, AT&T, Comcast, and Cox–have expanded into what can easily be referred to as an oligopoly.

 

In 1934, Title II of the Communications Act–“a set of laws that dictated American communications policy virtually unchanged for over 60 years”–was passed that labeled ISPs as “common carriers,” defining each ISP as “an organization that will deliver something from anyone to anyone else” (Popper); this law paved the way for ISPs to expand without worrying about the rise of competitors that were not “common carriers.” The law was first established because AT&T essentially controlled a monopoly in the years prior to the Act. AT&T’s control of the telephone market led to communication regulation by the government, and the concept was simple: “in exchange for an effective monopoly over a medium that was quickly becoming vitally important, AT&T was subject to a unique level of government oversight” (Ibid). This concept was organized into what would be called the “Communications Act.” AT&T was not the only ISP that was under this “unique government oversight” but Verizon also, when talking to local regulators, made it clear that it would “lay the fiber for its next-generation network as a ‘common carrier pursuant to Title II of the Communications Act of 1934’” (Ibid). Simply, Verizon vouched for regulation similar to the rules that AT&T was under to build its fiber network. But why would Verizon ask for more regulation? Ben Popper from the Verge gives a good explanation: “There are two reasons. First, Title II designation gives carriers broad power to compel other utilities — power, water, and so on — to give them access to existing infrastructure for a federally controlled price, which makes it simpler and more cost-effective for cables to be run. And that infrastructure adds up: poles, ducts, conduits running beneath roads, the list goes on. Second, Title II gave Verizon a unique opportunity to justify boosting telephone rates in discussions with regulators, arguing that these phone calls would run over the same fiber used by FiOS, Verizon’s home internet service. According to PULP’s report, Verizon raised traditional wired telephone rates in New York some 84 percent between 2006 and 2009, blessed by regulators in return for its ‘massive investment in fiber optics.’” Through regulation under Title II of the Communications Act, Verizon was able to build its network by establishing itself as a “common carrier” and thus given access to more cost-efficient infrastructure. It is not only clear that this regulation was beneficial for the ISPs to expand themselves but it is also clear in that it shows that corporations and the government have a track record of making laws that are more beneficial for the corporations than for the people.

 

About sixty years later, the Communications Act was updated in 1996 deeming that broadband providers would not be considered “common carriers” allowing the ISPs to be largely unregulated. This update was made to open the market to “more competition, more diversity, lower prices, more jobs and a booming economy” (Common Cause). This legislation, nonetheless, failed to deliver its expected results and instead helped the ISPs just like previous regulation under Title II. “Over 10 years, the legislation was supposed to save consumers $550 billion, including $333 billion in lower long-distance rates, $32 billion in lower local phone rates, and $78 billion in lower cable bills. But cable rates have surged by about 50 percent, and local phone rates went up more than 20 percent” (Ibid). Does this mean that the free-market did not work? Not necessarily. The update in the Communications Act was supposed to increase competition, but how can another company compete with these already established ISPs that do not want competition? The update was also supposed to add jobs, but that did not work either: “Industries supporting the new legislation predicted it would add 1.5 million jobs and boost the economy by $2 trillion. By 2003, however, telecommunications’ companies’ market value had fallen by about $2 trillion, and they had shed half a million jobs” (Ibid). From these two statistics, it seems like the bill helped the corporations out more than the people. It is not surprising, however, that this was the aftermath of the update of the Communications Act because while the FCC was in session to alter the original Act of 1934, “corporate special interests all had a seat at the table” and “the public did not” (Ibid). Under both Title II and 1996 Communications Act, corporate special interests have driven the legislation. It is clear that the government and corporations are more interested in enacting legislation for the corporations than listening to the people.

 

That the corporations were evidently involved in the FCC meeting begs the questions: Who runs the FCC and what connections do they have to the corporations? Before this question is broken down, it is important to note that “[a federal appeals] court gave [FCC Chairman Tom Wheeler] the option to declare the internet a public utility” (Krieger), so the decision is up to him. Even though the decision is up to Wheeler, who is behind the operations of the FCC? Lee Fang, a writer for the Vice, has written: “the FCC is stocked with staffers who have recently worked for Internet Service Providers (ISP) that stand to benefit tremendously from the defeat of net neutrality.” For example, Daniel Alvarez, “an attorney who has long represented Comcast through the law firm Willkie Farr & Gallagher LLP” (Fang), wrote to the FCC on behalf of Comcast “protesting net neutrality rules, arguing that regulators failed to appreciate ‘socially beneficial discrimination’” (Ibid). “Alvarez is now on the other side, working among a small group of legal advisors hired directly under Tom Wheeler, the new FCC Commissioner who began his job in November” (Ibid). The FCC may not technically employ Alvarez, but he definitely has influence. When Wheeler came into office, he also hired former Ambassador Philip Verveer as his senior counselor. Verveer’s records show that he worked for Comcast in the past year and was previously working for two industry groups that have worked to block net neutrality, the Wireless Association (CTIA) and the National Cable and Telecommunications Association (Ibid). Not only is Verveer a former employee of an ISP but Matthew DelNero, who was brought into the FCC to “work specifically on net neutrality,” also worked for an ISP, specifically TDS Telecom, which “has lobbied on net neutrality, according to filings” (Clifton). It is clear that several people either connected or working for the FCC have worked or done work for one of the ISPs, but what about Chairman Wheeler himself? Fang explains Wheeler’s past employment in his article: “Critics have been quick to highlight the fact that chairman Wheeler, the new head of the FCC, is a former lobbyist with close ties to the telecommunications industry.” Overall, many people connected or working at the FCC, especially Chairman Wheeler, who has been given the power to label the ISPs as “utilities,” are individually connected with the broadband providers. That the main organization that holds the responsibility to regulate such big companies from intruding on the free choice and affordability of their services to the people is so strongly tied to the corporations is a problem. Why should we argue for help by the Federal Government, the FCC specifically, as it relates to net neutrality when the top executives care more about the corporations than the people?

 

The main problem here is that the government officials have for too long sucked up to the corporations. Why? Money and donations. “The FCC is one of many agencies that have fallen victim to regulatory capture. Beyond campaign contributions and other more visible aspects of the influence trade in Washington, moneyed special interest groups control the regulatory process by placing their representatives into public office, while dangling lucrative salaries to those in office who are considering retirement. The incentives, with pay often rising to seven and eight figure salaries on K Street, are enough to give large corporations effective control over the rule-making process.” It is clear that the FCC is not passing legislation for the people and is more interested in accepting donations and salaries from the corporations. This is a problem that should be addressed.

 

When looking at the telecommunication industry, it is clear that regulation has helped the ISPs easily expand into enormous companies that make sure that the competition is very limited and thereby stifle innovation. On whichever side one may be as it relates to the net neutrality debate, one must realize that it was legislation by the government that led to this issue. Why would we leave such an important problem up to the regulators who were the result of this issue in the first place? Do they not seem to be more of a help to the corporations than to us, the people?

 

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