FCC vs. the people: The big ISPs are back in charge

Fresh off selling out consumer privacy, the FCC will next set out to repeal net neutrality

FCC vs. the people: The big ISPs are back in charge
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An overwhelming majority of Americans of all political persuasions thought broadband privacy rules should never have been repealed. But the FCC is not only doubling down on that decision, it's setting its sights on the next target, net neutrality -- another hugely popular set of regulations -- and bolstering its case with a set of alt-facts.

A poll by YouGov showed that 80 percent of Democrats, 75 percent of Republicans, and 69 percent of independents thought President Trump should have vetoed the repeal bill that was rushed through Congress.

In these divided states of America, it's cause to cheer when we can actually agree on something. So remind me again whose interests the FCC and Congress are serving? Because it sure looks like a handful of powerful telecom companies are calling the shots on matters that affect us all.

Just the alt-facts, ma'am

This week FCC Chairman Ajit Pai penned an opinion piece for the Washington Post that embraced a set of dubious claims in service of the telecom industry.

As Gigi Sohn, a former adviser to previous FCC chief Tom Wheeler, said in an interview: "[Pai]'s a great guy to have a beer with, but don't be fooled. He's in favor of dismantling net neutrality and other consumer-friendly policies, and he'll do it with a smile."

In his editorial, Pai couched the repeal as a pro-privacy move (not an April Fool's joke). He insisted it "simply cleared the way for us to work together to reinstate a rational and effective system for protecting consumer privacy." Stripping the FTC of jurisdiction over ISPs was "a mistake" that "weakened Americans' online privacy," he wrote.

Throwing privacy under the bus

This repeal had nothing to do with protecting consumer privacy. Telecom lobbyists -- and Pai himself -- argued earlier that the FCC's broadband privacy rules were unfair to ISPs because other internet companies were held to a less stringent set of privacy rules by the FTC. How exactly does returning authority to the FTC improve our privacy? It doesn't. Pai was ensuring the continued stream of data to telecoms' targeted-ad programs.

The FCC commissioner attempted to wrap his argument in a cloak of bipartisanship, writing that the double standard on privacy was criticized by the Obama FTC as "not optimal." Indeed, it wasn't. But more important is what that FTC comment on privacy said directly after "not optimal":

The FTC has repeatedly called for Congress to pass additional laws to strengthen the privacy and security protections provided by all companies, including through baseline privacy, data security, and data breach notification laws applicable to all entities that collect consumer data.

The FTC, which unlike the FCC cannot pass regulations itself, thought stronger privacy laws were needed, and it "commend[ed] the FCC's focus on transparency, consumer choice, and data security." A truly pro-privacy move would have been for Congress to pass a law that treated all internet companies equally, not repeal the FCC's attempt to enforce stronger rules.

The real goal is to gut net neutrality

Pai never mentions net neutrality by name in his editorial -- a smart move because outside of Congress, it's supported by Democrats and Republicans alike. But the real crux of the piece was his opinion that stripping the FTC of jurisdiction (code for re-classifying ISPs under Title II, which gave the FCC authority to pass net neutrality rules) was bad. "As we feared, this 2015 decision [to treat the internet like a public utility] has not turned out well for the American people," Pai wrote, equating the American people to telecom giants like AT&T and Verizon.

The mythical land of broadband competition

One alt-fact underpins the FCC chairman's oft-stated opposition to net neutrality: Regulations are unnecessary because the market will take care of things. "Others argue that ISPs should be treated differently because consumers face a unique lack of choice and competition in the broadband marketplace. But that claim doesn't hold up to scrutiny," Pai wrote. "Google dominates desktop search with an estimated 81 percent market share (and 96 percent of the mobile search market), whereas Verizon, the largest mobile broadband provider, holds only an estimated 35  percent of its market."

Does it really need explaining that dominant market share is not the same as a lack of competition? Raise your hand if you suffer from a lack of choice for desktop search. There's so much choice that 12 search engines promise not to track your online behavior.

While there is competition among wireless providers, when it comes to wired broadband how many of you have even two ISPs to choose between? If you lived in Nice, France, you'd have a choice of six internet providers -- Americans can't imagine such a scenario -- and your rates would be lower. That's what competition looks like, and American ISPs are determined to avoid it by carefully carving up the country. (Here's what that looks like in a map.)  

According to the FCC's own statistics, 76 percent of American households have either one ISP provider or none at all offering fixed broadband at speeds of 25Mbps. Pro-consumer Wheeler spoke out repeatedly about a broadband market essentially devoid of competition, but Pai spins an alternate fairy tale.

Then again, he lives in a rare, magical place where there actually is choice. "Pai's address [in the Virginia suburbs of Washington] is serviced by both Comcast and Verizon, with Xfinity download speeds up to 200Mbps, and Fios speeds up to 500Mbps," The Verge reports. That doesn't change the fact that the rest of "America is a still in a desert of competition for internet access."

This is what pro-consumer looks like

Wheeler, who like Pai came from the telecom industry, surprised us. He put the interests of American businesses and consumers first, passing net neutrality rules to keep an open internet and privacy rules that would have given consumers more control over the collection and use of their personal data. He tried to pre-empt telecom-funded state laws that forbid community-owned broadband from expanding services and competing against entrenched telecoms. He investigated zero-rating plans that violate net neutrality, and ran out of time in trying to open cable set-top boxes to competition.

It's clear that Pai intends instead to protect telecom players. Since being named commissioner he ended the investigation into zero-rating, took the open cable box plan off the table, revoked a condition of the Charter merger with Time Warner that would have required the cable giant to expand into areas where it would be forced to compete, and supported the repeal of privacy regulations.

In telecoms we trust

Next comes net neutrality. We're meant to trust in the (nonexistent) free market and ISPs' own pledges to behave. With regard to privacy rules, Verizon recently earnestly vowed: "Verizon is fully committed to the privacy of our customers. We value the trust our customers have in us so protecting the privacy of customer information is a core priority for us."

This would be the same Verizon that for two years operated a secret tracking program that injected undetectable, undeletable "supercookies" into customers' mobile traffic, without mentioning a word in its privacy policy or giving customers a way to opt-out. After being caught with its hand in the proverbial cookie jar, Verizon issued a statement, saying "[we] take our customers' privacy seriously." Now that's chutzpah.

Don't forget that it was Comcast's throttling BitTorrent traffic that started the FCC down the road to net neutrality 10 years ago. Or that two years ago AT&T filed a patent for an internet "fast lane." When telecoms talk about dismantling regulations to free up innovation, this is the kind of invention they have in mind.

Hold them accountable

It's unclear whether the FCC will try to repeal its own net neutrality rules -- which could be a lengthy process -- or urge Congress to gut them. But either way, the fight is coming.

In the days ahead, look for Pai to step up the chant that net neutrality rules hinder investment. Don't believe it. Business Insider looked at the state of investment in the two years since the rules passed and found that Comcast invested more in infrastructure; Verizon's infrastructure investment remained flat; AT&T's spending sank, "but a chunk of that was due to the completion of a network upgrade that was planned before Title II was a reality"; Sprint's networking spending fell; and both T-Mobile's and Charter's increased.

The notion that telecom companies will not invest in their own businesses if they are regulated doesn't hold water.

Vocal support by internet users helped to get net neutrality rules passed in the first place. It's going to be needed now to defend them.

The repeal of Obamacare looked like a sure bet before public protest gave politicians cold feet. Net neutrality supporters may soon need to remind them that while telecom companies have deep pockets full of lobbying dollars, internet users vote.

Update: Since this article posted, the FCC disclosed a proposal that would roll back the classification of broadband providers as common carriers, which was the basis for the agency's net neutrality rules, and would instead require ISPs to promise to preserve net neutrality principles.