Yes, MR. CHAIRMAN, there is a Santa Claus

The time between Thanksgiving and the end of December is all about one thing – anticipation.  (Cue Carly if you wish).  Through December, there’s only one topic on everyone’s minds.  It can’t be helped.  The familiar themes float through the consciousness.  If only that day would come, wishes that were born a year ago will be fulfilled.  Sigh.

Oh, wait.  You thought I was talking about Christmas?  Ha, ha, ha, ha, ha. Ha.  No, we’re talking about the Dec. 21 meeting of the Federal Communications Commission (FCC) meeting at which the Commission is expected to proceed with some sort of open Internet rule.

The FCC posted a tentative agenda and will circulate a draft order for consideration by the four commissioners who aren’t Chairman Julius Genachowski, whose staff prepared the proposed order.  Genachowski explained the basic concepts in a Dec. 1 speech.

One way to think of this order is as a Christmas miracle. Or a Hanukkah miracle.  Either way, ‘tis the season for such things.  The fact that leadership of the Commission even decided to go ahead with an Open Internet/net neutrality rule is worthy of song and praise, without even getting into the substance of what said rule contains.  Cue the Christmas lights and menorah candles. 

However, another way to think of the admittedly disappointing proposal from the FCC (see Gigi’s take on it here) is to compare it to a bill being introduced in Congress.  Except perhaps for the naming of a post office, bills aren’t passed as introduced.  This draft order will go through lots of revisions before a vote.  The two Democratic commissioners, Michael Copps and Mignon Clyburn, two forthright champions of an Open Internet, will hold the keys to how strong the order comes out in protecting consumers and protecting the Internet.  The Republican commissioners have already said they won’t back any rule, thus dealing themselves out of the discussions from the get-go.

But back to holiday cheer.  Part of the fun of this season is that everyone knows all of the songs of the season.  Radio stations go to “all Christmas 24/7” formats.  If you didn’t remember the words to “Jingle Bell Rock” before, you will now.  (Note: Jewish people only have to know the lyrics to “I Have A Little Dreidel.”  Much easier.)

Lessons From An Old Editorial

Much of the fun of the holidays comes from the stories and legends. It’s clear that the FCC leadership through their Open Internet proceeding so far has been guided by the most famous newspaper editorial of all time, the one printed Sept. 21, 1897, in the New York Sun.  It was headlined, “Yes, Virginia, there is a Santa Claus.”  Newsman Francis Pharcellus Church wrote, in part: “Yes, VIRGINIA, there is a Santa Claus. He exists as certainly as love and generosity and devotion exist, and you know that they abound and give to your life its highest beauty and joy. Alas! how dreary would be the world if there were no Santa Claus.”

Playing the part of Santa Claus in today’s fable is the mistaken notion that by proposing and adopting a mild open Internet rule based on the same legal theory as one adopted by former Republican FCC chairmen, which has elements supported by AT&T and Verizon in negotiations with Congress, that this FCC will proceed merrily on its way, basking in the praise it believes it deserves.  Not to go all Scrooge here, but let’s remember that the same Title I legal theory that the FCC is using to justify their actions now got tossed out with extreme prejudice by three judges on the U.S. Appeals Court for the D.C. Circuit on April 6 in the Comcast case. 

The FCC leadership has spent the past nine months dancing around the key issues, trying to find a way to please the big carriers and their in-house politicians of both parties, rather than trying to be forthright with the correct policy that may not please carriers and their political allies, but which would have the most benefit for the economy. And don’t blame the election results, either.  The Commission leadership wasted most of this year when Democrats had ( and have, for another couple of weeks, at least) a majority in the House and a numerical (if not actual working) majority in the Senate.

Traditions of The Season

Just like the traditions of the holiday season -- the eggnog, trees, presents, candles and carols, the memes of Blue Bells (Democrats who side with the big telecom carriers) and Republicans don’t change, regardless of the circumstance or reality.  Both the hysterical (“Internet takeover”) and the discredited (“Investment will be hurt”) will be proclaimed loudly and proudly. The chairman is going to get smacked regardless, and no amount of pretzel-logic legal needle threading would prevent it from happening.   It’s a pity to have to take such a beating over such a meager offering.  Knowing that criticism is coming, and that a timid rule won’t minimize it, the Commission should simply correct the 2005 reclassification mistake and take back jurisdiction over broadband services.  

Republican FCC Commissioner Robert McDowell said that the proposed rules meant the FCC “is ignoring the will of the elected representatives of the American people.”   Commissioner Meredith Attwell Baker said the FCC proposals “a direct rebuke of Congress.” 

AT&T, which should get frequent flier miles for all its trips to Genachowski’s office, and which got much of what it wanted, said, its “strong preference would be for the FCC to refrain from any regulation in the Internet space.   We feel the industry’s track record, the utter absence of any specific ongoing problem, and the state of the economy all argue for regulatory restraint.  We also believe, based on jurisdictional concerns, that the issue should rightly be deferred to the Congress, a view also expressed by a bipartisan majority of that body.”

The would-be chairmen of the House Energy and Commerce Committee are competing with each other in who can issue the strongest denunciations of the FCC’s rule.  Committee member Rep. Lee Terry (R-Neb.) said adopting a rule just before a new Congress would be “tantamount to an act of war.”  Another panelist, Rep. Marsha Blackburn (TP-Tenn.), said, “This is a hysterical reaction by the FCC to a hypothetical problem.”  The Competitive Enterprise Institute said, “The net neutrality regime proposed today by the FCC will endanger competition, innovation, network investment, and consumer welfare.”

Ghosts of Christmas Past

What the FCC has in common with Terry, Blackburn and the rest is the ability to believe in the rightness of their own thoughts and ideology (or lack thereof), regardless of reality.  For Genachowski the mistaken perception is that relying on past FCC legal theories coupled with a weak rule will help him escape criticism.  His industry allies will work to undercut him.  His political opponents will be unceasing in their criticism. As an object lesson, he should look to the savage attacks on “Obamacare”, which is nothing more than a Republican bill from a few years ago and now is seen by Republicans and their allies as an assault on the fundamental integrity of society – or some such.

For McDowell, Terry, Blackburn, and the rest whose comments are yet to come, the anti-government ideology overcomes reality, much like the classic “keep government out of my Medicare” Tea Party protest.  Without trying to sound like the ghost of Christmas past, it’s worth remembering that the Internet was created while the telephone network was governed by the evil “common carrier” regulation which prevented discrimination in traffic, and that the greatest percentage growth in Internet use took place then.  It’s worth remembering that phone companies have laid off tens of thousands of workers and decided to invest, or not, based on existing conditions and their bottom lines – even while the regulatory structure has remained unchanged.

It’s worth remembering that rural populations, like those in Nebraska and Tennessee, benefit from the Universal Service Program.  In 2008, Nebraska phone companies received Nebraska $127,339,000 and Tennessee companies collected $108,143,000 to support telephone service.  Want that subsidy to support broadband deployment?  It won’t unless the FCC has authority over broadband, which is exactly what Terry and Blackburn don’t want to happen.  It would be nice if there were a governmental agency with authority to settle these types of disputes in a legal process.  At the moment, it’s not at all clear that there is, and the ability to settle these types of things through legal jurisdiction is hardly the “takeover of the Internet” that many are portraying.

It's worth remembering the Small Business Administration (SBA) found in a study last month that today’s broadband is inadequate.  Their report found that:



•    “Almost one-third of businesses indicate a need for broadband speeds that require greater- capacity networks than currently exist in many locations in the United States. (And where this high-capacity access is available, it is extremely expensive—typically more than $1,000 per month.)
•        The existing broadband infrastructures (cable modem, wireless, and DSL, respectively) have significant limitations when compared to fiber-to-the-premises (FTTP), which reaches only a small fraction of the United States.

 

Anti-Net Neutrality zealots got their jollies a couple of weeks ago when the European Union and the U.K. declined to issue Net Neutrality rules.  What they ignored was the context.  The EU and UK have the regulatory structure we ditched.  Want to see what Internet competition looks like?  Check out this chart from a British magazine.  They rate more than 20 Internet Service Providers (ISPs) and more than 100 broadband deals from major companies. How many Americans have this many choices?  In those countries, telecom providers are required to open their networks to competitors.  They have more competition.  The FCC knew that, because the study from Harvard's Berkman Center almost a year ago presented the same conclusions -- the European regulatory structure fosters competition.  The FCC ignored the study.

Even the new Conservative Communications Minister Edward Vaizey mocked the U.S. in a November speech:



“Unlike in the UK, in some parts of the US consumers have no choice which ISP they use because only one offers a service in their area. So the debate has particular resonance there. ISPs could have total control over which services and applications a consumer has access to, and could give preferential treatment to those they favour.”


 

Yet even with that competition, Open Rights Group warned of potential problems if big carriers tried to restrict Internet access for market advantage.


In the end, there is this observation from Church, the editorialist, which could be applied to those who don’t want to believe in an open Internet:  “They do not believe except [what] they see. They think that nothing can be which is not comprehensible by their little minds.”

Happy Holidays.



















 

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