Monthly Archives: January 2010

The White House’s New Internet Policy, and thoughts on Comcast v. FCC

I published the first of two pieces on CNET today about interesting and even encouraging developments in Washington over Internet policy. (See “New Year, New Policy Push for Universal Broadband”)

In short, I believe that over the past year the Obama administration has come to see Internet products and services as one of the best hopes for economic recovery and continued competitiveness for U.S. businesses.  At least as a matter of policy, this is the first administration to see digital life as a source of competitive advantage.

Tomorrow’s piece concerns the “spectrum crisis” and what the federal government hopes to do to solve it. (The federal government “owns” the radio waves, after all.)

Cut due to the length of the piece was a longer analysis of the arguments a few weeks ago in the U.S. Court of Appeals for the D.C. Circuit in Comcast v. FCC, in which cable provider Comcast challenged a sanction the FCC issued in 2008 for the company’s attempts to limit use by some customers of peer-to-peer applications including BitTorrent.

Depending on how the court rules, the commission’s proposed Net neutrality rules could be dead in the water for lack of authority to regulate in this space.

Here’s the longer version of that section:

The fate of net neutrality may depend on the outcome of important development that took place during CES, but at the other end of the country. This involved litigation over the one notorious instance of non-neutral behavior that largely reawakened the net neutrality debate in 2008.

Comcast admitted that it has used some fairly clumsy techniques to limit the speed or sometimes the availability of peer-to-peer Internet services that allowed users to share very large files, notably using the BitTorrent protocol. In the wake of that revelation, Comcast agreed to change its practices and to make them more transparent, and made peace with BitTorrent developers. (They are also in the process of settling a class-action lawsuit brought by Comcast customers affected by the limits.)

The FCC issued a non-monetary sanction against the company, claiming that the techniques violated net neutrality principles which, while not formally enacted by the FCC, nonetheless applied to Comcast. Comcast challenged the sanctions in the U.S. Court of Appeals for the D.C. Circuit, which hears all challenges to FCC rulings.

On Jan. 8th, hours before Chairman Genachowski took the stage at CES, the D.C. Circuit heard oral arguments in Comcast’s appeal. As was widely reported, the three-judge panel considering the appeal questioned government lawyers severely.

Some statements from the judges suggested they were skeptical at best about the Commission’s authority to sanction Comcast. Chief Judge Sentelle, who sat on the panel, complained about the Commission’s view of its own authority. “You can’t get an unbridled, roving commission to go about doing good,” he was reported to have said. Judge Randolph, another panelist, complained that the lawyers for the FCC could not “identify a specific statute” that authorized the sanction.

The case is certainly important, though too much was read into the tone of the arguments by a number of mainstream media sources. As a former circuit court law clerk, I can attest to FCC Commissioner McDowell’s warning at CES not to draw conclusions about the outcome of the case from comments or even the appearance of hostility by appellate judges at an oral argument. (McDowell, notably, was one of the Commissioners who dissented from the Comcast sanction, on the grounds that the FCC did not have the authority to issue it.)

Wired, for example, ran the extreme headline: “Court to FCC: You Don’t Have Power to Enforce Net Neutrality.”

The accompanying article was a little less hyperbolic, but still misleading: “A federal appeals court gave notice Friday it likely would reject the Federal Communications Commission’s authority to sanction Comcast for throttling peer-to-peer applications.” That was an interpretation of the arguments echoed in many publications.

There is, however, no way to predict from the oral arguments how appellate judges are “likely” to rule. They may have just been in a bad mood, or annoyed with the government’s lawyers for reasons unrelated to the merits of the appeal. Unlike political office holders, federal judges are appointed for life, and do not measure their questions or comments at oral arguments to signal how they are likely to rule in a case.

Indeed, the judges may have objected not so much to the conclusion urged by the FCC as much as the line of reasoning the Commission followed in its briefs. The Commission may have relied too much on its general authority to regulate communications companies, for example, rather than citing more specific regulatory powers that Congress and the courts have already recognized.

Still, the outcome in this case could have serious repercussions for the proposed net neutrality rules. Why? Most of the FCC’s rulemaking authority comes from longstanding regulatory power over telephone companies, classified as “common carriers” who must follow nondiscriminatory practices overseen closely by the Commission.

But cable Internet providers are not common carriers, and indeed the FCC itself argued that point successfully in a 2005 Supreme Court case. The FCC later determined that traditional phone companies, when offering broadband Internet service, were also not subject to common carrier regulations.

So if broadband Internet services are not subject to common carrier rules, where does the FCC get the authority to propose net neutrality rules in the first place?

The Commission argued both in the Comcast case and in its proposed net neutrality rules that its jurisdiction comes from “traditional ancillary authority,” that is, from authority that is implicit in the governing statute that defines the FCC’s power. The skepticism expressed at oral argument seemed to be focused on the argument that ancillary jurisdiction was all the FCC needed to sanction Comcast’s behavior.

The D.C. Circuit could rule that such authority does not extend so far as to allow the FCC to create or enforce net neutrality. It could also rule more narrowly, and reject the sanctions only on the grounds that they were not issued pursuant to a formal rulemaking–that is, the kind of rules now being considered. Or, of course, the court could agree with the Commission that ancillary authority is sufficient both to issue the sanctions and to enact formal rules.

The proposed rules are not directly at issue in the Comcast case. Even if the court rules that ancillary jurisdiction is insufficient to make net neutrality rules (as, among others, the Electronic Frontier Foundation has argued, see “FCC Perils and Promise”), the FCC could technically still go ahead with its rulemaking. But the court would surely hold the new rules exceed the agency’s power, and pretty quickly.

Rather than pass rules that would be dead on arrival, the Commission would likely head back to Congress for explicit authority to define and enforce net neutrality regulations. Since 2007, there have been several bills floating around committees that would grant precisely that power (and, indeed, mandate that the FCC use it) but none of them has yet to be reported out. There are also bills explicitly forbidding the FCC from enacting net neutrality rules, also sitting in committee.

The Post-CES Hangover

It’s taken me all week to recover from the information and sensory overload of the 2010 International Consumer Electronics Show in Las Vegas. I want to give particular thanks to the staff of Tech Policy Central, which put on a superb program of speakers and content.

Boiling down my notes from all the sessions, I’ve just finished a long article on what looks to be a dramatic new policy toward the Internet emerging from the White House and the Federal Communications Commission.   More on that early next week.

In the meantime, I strongly recommend Steve Wildstrom’s recent article, which reaches many of the same conclusions I do, in far fewer words and with much greater clarity.  See “Why We Need Telcom Reform and Won’t Get it.”

My post from the show itself , “Why the White House is Backing Away from New Neutrality,” was published last Friday on CNET–indeed, just a few hours after I finished it. Given the controversial nature of the FCC’s Notice of Proposed Rulemaking issued in October, it’s probably no surprise that the article proved provocative. Several articles and blog posts praised the piece, and several more were critical of both my analysis and, unfortunately in a few cases, my motivation for writing it. (On the latter point, see the addendum CNET added to the piece that makes clear there was no conflict of interest.)

Oddly enough, this was one article where I wasn’t actually offering an opinion on the wisdom of the proposed rules, as I have of course done elsewhere.

In any case, the initial public comment period on the proposed rules has now closed. It remains to be seen how the FCC will proceed from here (some dates are already given), but for now it’s time to wade through what were undoubtedly a mountain of filings.  For a good start, see Cecilia Kang’s timely post from today.

More to come.

Speaking today at Google

I’ll be at Google’s Mountain View campus today, giving a talk on LoD and some of the most important legal developments since the book’s publication, including Net Neutrality, the Google Books settlement, the Facebook privacy flap and patent reform.

For those on campus, please come by!

Net Neutrality: Back Away Slowly

genachowskiMy analysis on recent developments in the FCC’s proposed net neutrality rulemaking, based in part on comments I heard yesterday at a conference being held as part of the Consumer Electronics Show in Las Vegas, was posted this morning on CNET.

To me, these and other information crumbs suggest a more measured approach to keeping the Internet open after early comments from the FCC and the White House suggested dramatic expansion of the government’s regulation of ISPs.

The reason for the about-face, as I say in the article, is the growing realization in Washington that the best solution to anti-consumer practices would be more competition rather than micromanaging the network.

As part of the National Broadband Plan being developed by the FCC, the White House is hoping to see universal access at high speeds–anywhere in the United States.

Unlike previous administrations, the Obama government recognizes that information technology is now the driver of economic activity, and a better U.S. infrastructure would not only help with recovery but also keep the U.S. competitive in a global innovation market.

Rattling the neutrality sabre doesn’t fit that agenda, especially when the vast majority of necessary investments in fiber will have to be made not by the feds but by the carriers. The Administration is looking for ways to cooperate, not antagonize, private investment.

Today, FCC Chairman Genachowski takes the stage. It will be interesting to see if there’s any detectable change to his rhetoric on the subject. I’m betting there will be. Stay tuned.

Net Neutrality Doublespeak: Deep Packet Inspection is a Bad Idea, Except When it Isn’t

An interesting tempest in a teapot has emerged this week following some overblown rhetoric by and in response to celebrity causemeister Bono. There’s a deeper lesson to the incident, however, one with important implications for the net neutrality debate. (More on that in a moment.)

In a New York Times op-ed column on Jan. 2, 2010, Bono provided “10 ideas that might make the next 10 years more interesting, healthy or civil.” These include the salvation of the entertainment industry from the clutches of peer-to-peer file sharers, who are just a few turns of Moore’s Law away from being able to “download an entire season of “24” in 24 seconds.”

“Many will expect to get it for free,” Bono laments, apparently unaware that in the U.S., we don’t have a mandatory television license for television content as they do in the U.K. (U.K. residents pay £142.50 a year tax, the principal source of income for the BBC.) So long as you watch 24 when Fox broadcasts it, you will expect to and indeed will get it “for free,” without breaking any laws whatsoever. Hooray for America.

Bono’s proposal to solve this problem, also factually challenged, is to force ISPs to clean up the illegal sharing of copyrighted content:

We’re the post office, they tell us; who knows what’s in the brown-paper packages? But we know from America’s noble effort to stop child pornography, not to mention China’s ignoble effort to suppress online dissent, that it’s perfectly possible to track content. Perhaps movie moguls will succeed where musicians and their moguls have failed so far, and rally America to defend the most creative economy in the world….

As several commentators have already pointed out, America’s “noble effort to stop child pornography” has almost nothing to do with looking inside the broken up pieces of Internet transactions, known as  “deep packet inspection.”  Indeed, as I write in Law One (“Convergence”) of The Laws of Disruption, most federal and state efforts at solving that scourge at least in the online world have been so broad and clumsy that they instantly fail First Amendment scrutiny. (Another feature of American law that Bono may not fully appreciate.) Congress has tried three times to pass laws on the subject, two of which were declared unconstitutional and the third reigned in to be almost meaningless.

State efforts have been even more poorly-crafted. I write in the book about Pennsylvania’s Child Sexual Exploitation Unit, formed in 2008 by act of the Pennsylvania legislature. Staffed by three former state troopers, the CSEU “analysts” surfed the web looking for sites they felt contained child porn, then wrote letters demanding that ISPs block access to those sites for all their Pennsylvania customers. (The easiest way for large ISPs including AOL and Verizon to do that was simply to block the sites, period.)

Aside from the lack of any training or standards by the regulators, the sites that made the list included several host sites with hundreds or thousands of private websites that had nothing to do with pornography of any kind. By the time the courts put the CSEU out of business a year later, Pennsylvania had banned 1.19 million websites, only 376 of which actually contained content the troopers deemed offensive. (An official geographic survey of Spain and the International Philatelic Society made the banned list.) There was also no mechanism for getting a web address off the list, even if the ownership and contents changed hands.

But that’s a mere quibble, as is the fact that Chinese censorship of content, hardly a “best practice,” apparently includes some 30,000 Internet police and perhaps millions of servers—and even then, the surveillance appears to be on the back-end, after the packets have already been reassembled. (Not surprising, China hasn’t exactly published its processes in the Harvard Business Review.)

Regular readers of this blog will be expecting the twist ending, and here it comes. I’m less interested in the misinformed opinions of a musician and humanitarian than in the response it drew from Internet activists. Gigi Sohn of Public Knowledge characterized Bono’s proposal as “mind-bogglingly ignorant” both as to what really caused the fall of the music industry and the technology that would be required for ISPs to become the content police on behalf of copyright owners. Packet filtration, Sohn points out, would lead to “blocking lawful content and encouraging an encryption arms race that would allow filesharing to proceed unabated.” And anyway, the real problem here is overprotective IP laws. (I agree.)

Somewhat less hyperbolic, Leslie Harris of the Center for Democracy and Technology (CDT) wrote today on The Huffington Post that ISPs are taking concrete and responsible steps stop to reduce child pornography that don’t include deep packet inspection, and reiterated Sohn’s point about an encryption arms race.

More interesting, however, Harris notes the danger of mandating ISPs to exert “centralized control over Internet communications.” Harris writes:

In this country, ISPs do not control what their users send to the Internet any more than a phone company controls the topics of someone’s phone call. Does the U.S. really want to move in the direction of the Chinese model of always-on surveillance? Once we begin to break into all Web traffic to search for copyright violations, evaluating content for its “decency” or appropriateness for children, then analyzing each user’s search habits to determine buying habits and government surveillance without lawful process (remember the NSA warrantless wiretapping) will follow close behind.

The U.S. has the most vibrant, free and innovative Internet because we don’t have gatekeepers in the middle of the network.

Well, at least we don’t yet.

As I’ve pointed out before (see, for example, “Zombieland – The Return of Net Neutrality”) my principal concern with net neutrality is not the idea that information should flow freely on the Internet. That’s a fine principle, and central to the success of this largely unregulated, non-proprietary infrastructure.

Rather, I worry about the unfortunate details of implementation. If net neutrality also means that ISPs are forbidden from offering premium or priority routing within the back-end segments of the network they control (that is, the last mile to the consumer), then it will necessarily fall to the government to monitor, audit, and investigate the flow of packets across the network, if only in response to complaints by consumers of real or perceived non-neutral behavior.

Under the rules proposed in the fall, the FCC has said only that it will investigate complaints of non-neutrality on “a case-by-case basis;” under the proposed Internet Freedom Preservation Act, any consumer would have the right to complain directly to the FCC, which would be required to investigate all complaints within 90 days.

How else can the FCC determine whether some packets are being given priority in defiance of neutrality rules without intercepting at least a random subset of those packets and opening them up?

Very quickly, the enforcement of net neutrality would lead us  into the “model of always-on surveillance,” not by ISPs but, worse, by federal regulators. The opportunities for linking the FCC’s enforcement powers with “government surveillance” will be even more irresistible than if would be if the ISPs were the ones exerting the “centralized control.”

This, of course, is a worst case scenario, but that is not to say that the risk of the worst case scenario becoming reality is particularly low. Indeed, the history of FCC interference with broadcast TV content, a long a sad story that persists to this day, suggests that the worst case scenario is also the most likely.

(On enforcement, Public Knowledge says only that it “supports a Network Neutrality system that can be enforced through a simple complaint process managed by the Federal Communications Commission, where the network operator must bear the burden of demonstrating that any interference with traffic is necessary to support a lawful goal.” Simple for whom? The complainant, not the investigator.)

I agree that the U.S. has the most free and innovative Internet because we don’t have “gatekeepers in the middle of the network.” So why do groups including Public Knowledge and the CDT, who clearly understand the risks of private and–even worse–of public interference with the flow of packets, advocate so strongly in favor of neutrality rules?

Perhaps because, like Bono, they haven’t thought through the implications of their rhetoric.