The storm before the calm on Net neutrality eve

Next week's FCC vote is likely to usher in a period of plenty for lawyers and Congressional campaign funds -- pretty much business as usual

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Next week it's expected that the FCC will vote to reclassify broadband as a Title II public utility in support of Net neutrality. Despite the more hysterical claims shoveled by opponents of this move, the sky will not fall -- indeed, little will actually change. AT&T, Comcast, and the rest will proceed to spend truckloads of money on lawyers and political influence to fight the FCC, but in the end any dreams of opening a new revenue stream charging for Internet fast lanes are likely to be thwarted -- for now.

Their entrenched monopolies, however, will remain intact. And hopes for bringing better Internet service to the United States will depend on the likes of Google and municipal broadband providers forcing the hand of telecom giants to -- grudgingly -- build out long-overdue fiber networks.

Among those clamoring against the FCC's proposal of reclassifying broadband is current FCC commissioner Ajit Pai, who has said that strict Internet regulation would harm U.S. credibility abroad and give authoritarian states like North Korea an excuse to strengthen their grip over the Internet. Pai refers repeatedly to "President Obama's plan" in a fact sheet that directly contradicts the agency's own fact sheet. Pai claims the proposal "will increase the prices American consumers will have to pay for broadband" and "will mean slower broadband speeds for American consumers."

It's hard to imagine such an event, given that the United States currently places 25th in a global ranking of average Internet download speeds --  behind such countries as Moldova, Latvia, and Estonia -- and Americans already pay far more for their service than other countries.  

Pai also warns the plan "will mean that many rural Americans will have to wait longer for access to quality broadband" -- because we all know how eager telecoms are to rush into those underserved rural areas.

Pai's warnings are not surprising, given that the former associate general counsel for Verizon is also a champion of ALEC, the legislative group that has destroyed telecom competition in the states that have passed its telecom-funded legislation.

No more surprising are AT&T CEO Randall Stephenson's assurances that "there will be litigation" if the FCC approves its Net neutrality proposal. Regulation of the Internet, Stephenson warned, would stifle growth and innovation. There's that pesky myth of growth and innovation again.

Bear in mind, this is the same Stephenson who threw a hissy fit in November -- after Obama came out swinging for Title II classification -- and threatened to stop investing in fiber rollouts. That remark brought a sharp retort from critics, who pointed out that beyond the deployment of fiber to 2 million homes as part of its deal to acquire DirecTV, AT&T's fiber plans have been exceedingly vague -- and mostly vapor.

"The carrier never has provided a detailed timeline or set of criteria to substantiate the purported deployments," said Gartner analyst Bill Menezes.

"[AT&T has] only promised in a press release to initiate conversations about possibly deploying fiber in the future," added S. Derek Turner, research director at Free Press.

Tim Wu, who first coined the term "Net neutrality," holds out slim hope that the threatened lawsuits over the FCC's rules will never materialize. He notes in an interview with the Washington Post that stock prices for ComcastVerizon, and AT&T have all risen since Tom Wheeler unveiled his proposal early this month. "If the stock prices keep going up … how do you defend suing to invalidate something which has added value to your company? Government does something, your stocks go up and you sue to reverse that -- I don't know how you justify that," Wu said.

But FCC officials clearly anticipate being taken to court, and legal experts expect the rules to withstand challenge. In fact a filing to the FCC from  Barbara Cherry, once an attorney for AT&T and now a professor at Indiana University, and Jon Peha, formerly the FCC's chief technologist and now a professor at Carnegie Mellon University, argues that the Telecommunications Act of 1996 requires the FCC to classify commercial Internet access as a telecommunications service. Their paper also presents the case for why commercial Internet access service is not an "information service," as ISPs like to claim.

Another recent filing to the FCC points out how companies like Verizon have tried to have it both ways, arguing that as an information service it should not be regulated as a public utility, while also claiming telecommunications rights and happily accepting truckloads of government money to build out fiber networks.

"Verizon has used Title II to get the state utility rights of way and charge customers for the FTTP, Fiber to the Premises, construction, which is used for Verizon's FiOS services. Verizon has never disclosed this fact in any of the Open Internet Proceeding or to the courts," the filing states.

Probably the best ISPs can hope for is to drag out proceedings in court and delay the implementation of new rules -- perhaps long enough to see the appointment of a new majority of FCC commissioners, more in line with their interests. Meanwhile, they will continue to bombard Congress with campaign contributions in hopes of neutralizing the FCC. Verizon, Time WarnerComcast, and AT&T sloshed around more than $51 million in 2014 and a whopping $374 million over the last seven years lobbying the federal government.

Draft open Internet legislation sponsored by Rep. Fred Upton (R-Mich.) and Rep. Greg Walden (R-Ore.) essentially aims to strip the FCC of its authority to impose Net neutrality rules. If you follow the money -- surprise, surprise -- Upton and Walden show up among the top five recipients of contributions from cable companies, according to MapLight.

Execs from Etsy and Amazon have testified before Congress that the draft legislation contains loopholes that "allow broadband/media conglomerates to give themselves preferential treatment, which is fundamentally no different from slowing down content from competitors."

One way or another, the circus that is the fight over Net neutrality will remain in town for years to come.

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