FCC – Sheila Kennedy

Is The Internet A Common Carrier?

When we think of enterprises categorized as common carriers, we tend to think of those that transport–that “carry” passengers or goods for a fee, and that serve the general public. But the term applies to services other than transportation.

Pointing out that the Internet is a common carrier is critical to discussions of net neutrality, as Tom Wheeler–a former head of the FCC–has written in an article for the Brookings Institution.

As far back as England’s emergence from feudalism around 1500, there has been a common law concept that essential services have a “duty to deal.” The operator of the ferry across the river, for instance, could not favor one lord’s traffic over another’s; everyone had access, and everyone had to pay. When the telegraph was introduced in the United States 350 years later, the concept was applied to that new essential service. The Pacific Telegraph Act of 1860 provided, “messages received from any individual, company, or corporation, or from any telegraph lines connecting with this line at either of its termini, shall be impartially transmitted in the order of their reception.” When the telephone came along, the same concept was applied to it as a common carrier.

The Communications Act of 1934, under which the FCC operates today, established in Title II’s statutory language, “It shall be the duty of every common carrier engaged in interstate or foreign communication by wire or radio to furnish such communication service upon reasonable request therefor.” The Communications Act also established the concept that the actions of Title II carriers must be “just and reasonable.”

Wheeler says that today’s Internet Service Providers, or ISPs, want to be allowed to make their own rules– without any review as to whether those rules or their actions are “just and reasonable.”

The ongoing debate about net neutrality is usually focused on specific behaviors by ISPs–behaviors that privilege the delivery of messages that are financially beneficial to them, while slowing or even blocking those that aren’t.

As Wheeler reminds us, the term “net neutrality”– coined in 2003 by Columbia professor Tim Wu–should be understood as more expansive.

It was an innovative nomenclature that picked up on the ability of the ISPs to discriminate for their own economic advantage. Net neutrality became commonly described as whether the companies could create “fast lanes” and “slow lanes” for internet traffic. That such a problem was not hypothetical was demonstrated five years later when the Republican FCC fined Comcast for slowing the delivery of video content that could compete with cable channels.

But as Wheeler argues, limiting the conversation to blocking, throttling, and paid prioritization is misleading. The real issue pending before the FCC is “whether those that run the most powerful and pervasive platform in the history of the planet will be accountable for behaving in a “just and reasonable” manner.”

It is the conduct of the ISPs that is in question here. Because telephone companies were Title II common carriers, their behavior had to be just and reasonable. Those companies prospered under such responsibilities; as they have morphed into wired and wireless ISPs, there is no reasonable argument why they, as well as their new competitors from the cable companies, should not continue to have public interest obligations.

Don’t be misled by the all-too-convenient framing that net neutrality is all about blocking and throttling. The real issue is why such an important pathway on which so many Americans rely should be without a public interest requirement and appropriate oversight.

The public interest and the common good are two concepts that have lost considerable ground over the past few decades–and nowhere is the absence of those considerations more harmful than in the Wild West that is the current Internet. We can trace a majority of the political and social problems we face to the fragmented and un-policed nature of the global information environment we inhabit. It’s ironic–and incredibly worrisome– that a platform invented to facilitate communication has morphed into a primary source of misinformation, conspiracy theories and algorithmic sorting.

The Communications Act of 1934–still in effect–established the duty of “every common carrier engaged in interstate or foreign communication by wire or radio” to serve all comers “upon reasonable request.” The Act also established the rule cited by Wheeler, obliging such common carriers to act in ways that are “just and reasonable.”

According to Wheeler, the ISPs want to continue to make their own rules without any review as to whether their actions pass the “just and reasonable” test.

Given the disproportionate impact on society of social media and internet platforms, imposing some oversight would seem to be “just and reasonable.”

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Saving Net Neutrality?

In the days and weeks following the midterm elections, the news has gotten steadily better. Undecided House races have been called for the Democrats; statehouses across the country have turned blue; and according to a couple of tweets from Nate Silver, the Democrats got as many votes in the midterms as Trump got in the Presidential election.

According to Silver, that’s unprecedented.

The news may also be good for Net Neutrality. According to the Brookings Institution, a combination of the Democrats’ win and a Supreme Court decision may restore non-discrimination rules to the Internet.

On November 5, the Supreme Court declined to review the decision of the D.C. Circuit Court that twice upheld the 2015 Open Internet Rule. The industry groups that had long opposed non-discriminatory access to broadband networks had previously stopped such regulation at the D.C. Circuit. When they attempted the same thing with regard to the 2015 decision of the Federal Communications Commission (FCC), a three-judge panel ruled the FCC’s favor. The industry then appealed the panel’s decision to the entire D.C. Circuit and lost again. The industry then appealed that loss to the Supreme Court. The Supreme Court voted 4-3 (with Chief Justice Roberts and Justice Kavanaugh abstaining) to deny a writ of certiorari for the appeal. As a result, the lower court’s decision upholding the 2015 Open Internet Rule stands.

The FCC’s 2015 Open Internet decision declared broadband providers to be Telecommunications Services subject to the common carrier requirements of Title II of the Communications Act. Just like the telegraph and telephone companies that preceded them, internet service providers could not discriminate among those using the network. They could not, for instance, break the internet into fast lanes and slow lanes depending on how much a content provider such as Netflix paid them.

It will not surprise you to learn that in 2017, Trump’s FCC repealed the Open Internet Rule, and ruled that the agency had only minimal authority over internet networks. Under Trump’s FCC chief, former Verizon honcho Ajit Pai, the Commission announced it would exercise no oversight over internet access.

As former FCC chair Tom Wheeler explains, not only did the agency created by Congress to oversee the nation’s networks walk away from that responsibility, it joined the plaintiffs in asking the Supreme Court to overrule the D.C. Circuit’s 2015 decision.

The High Court declined to do so.

Add to that encouraging development the fact that Democrats will control the House of Representatives.

House Democratic leaders from presumptive Speaker Nancy Pelosi (D-CA,) to the new Chairman of the Energy and Commerce Committee Frank Pallone (D-NJ), to the new Chairman of the Telecommunications Subcommittee Mike Doyle (D-PA) have all been vocal supporters of strong net neutrality rules.

Reps. Pallone and Doyle will be able to conduct oversight hearings into the activities of Trump’s FCC, and on the effect of eliminating the Open Internet Rule.

Since meaningful new legislation is highly unlikely, given the GOP Senate and Trump’s threatened veto, the Supreme Court’s refusal to overturn the Open Internet Rule means non-discrimination might survive anyway.

I say “might” because the D.C. Circuit will hear arguments in February in the lawsuit challenging the FCC’s elimination of the Open Internet Rule. If the Circuit Court rules against the FCC, the 2015 Open Internet Rule is reinstated—and the Supreme Court has declined to consider the matter, at least for now.

In their zeal to gut oversight of their activities, the internet networks and their Trump FCC allies may have shot themselves in the foot. There is a strong case that the Trump FCC acted in an arbitrary and capricious manner when it repealed the 2015 Open Internet Rule and walked away from any responsibility over the most important network of the 21st century. If the D.C. Circuit makes such a finding, net neutrality would once again be the law of the land. Although the Trump FCC would probably spitefully ignore its enforcement and even force adoption of a new rule to free the broadband companies, that action would simply bolster the Democrats in the House.

Research suggests that an overwhelming majority of Americans favor retention of Net Neutrality.

I favor neutering Ajit Pai.

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Hard Cases And Bad Law

Lawyers have a saying: hard cases make bad law. A couple of pending cases over Net Neutrality offer a good illustration.

A bit of background: One of the many outrages perpetrated by the Trump Administration was the cynical elimination of net neutrality rules by Ajit Pai of the FCC, despite the fact that a huge majority of Americans supported those rules. Pai came to the agency from Verizon, where he’d been an executive; Verizon and other large telecom interests don’t want to be restrained by pesky regulations requiring that they treat internet users equally.

When the FCC eliminated Net Neutrality, more than 20 states filed lawsuits, arguing that the agency had acted arbitrarily. Those lawsuits are supported by companies like Mozilla, trade associations representing Amazon, Facebook and Google, and consumer groups like Free Press and Public Knowledge.

For its part, California responded to the elimination of Net Neutrality by passing a version of its own. On September 30th, The Washington Post reported

California on Sunday became the largest state to adopt its own rules requiring Internet providers like AT&T, Comcast and Verizon to treat all web traffic equally. Golden State legislators took the step of writing their law after the Federal Communications Commission scrapped nationwide protections last year, citing the regulatory burdens they had caused for the telecom industry.

That same Sunday, the Trump Administration announced that it would sue California to block that law, setting up what the Post characterized as a high-stakes legal showdown over the future of the Internet. The administration will argue that only the federal government has the authority to regulate the Internet, and that the reason Congress gave the federal government exclusive authority was to ensure that all 50 states wouldn’t write their own conflicting rules governing the web.

Fair enough. Fifty different regulatory approaches would be a nightmare for ISPs, and arguably impossible to enforce. On the other hand, the federal government’s actions weren’t just bad policy that ignored the great weight of both expert and public opinion–its nullification of the net neutrality rules arguably constituted yet another gift by the administration to moneyed interests.

When the Justice Department announced that it would sue California, it set up a “lose-lose” “hard cases” scenario. In a sane world, the U.S. would have one comprehensive set of policies governing Internet practices–not 50. But in a sane world, the administration wouldn’t have repealed rules that were widely seen as necessary, reasonable and equitable.

If all this wasn’t bizarre enough, a couple of days ago, the FCC submitted its defense of the repeal in the lawsuit brought by the states by arguing that it had no authority to pass net neutrality rules in the first place.

Chairman Ajit Pai’s FCC argued that broadband is not a “telecommunications service” as defined in federal law, and therefore it must be classified as an information service instead. As an information service, broadband cannot be subject to common carrier regulations such as net neutrality rules, Pai’s FCC said. The FCC is only allowed to impose common carrier regulations on telecommunications services.

That argument would be a tad more convincing if the DC Circuit appeals court hadn’t ruled in 2016 that the rules were legal.

The argument also would seem to complicate the administration’s threatened preemption suit against California; lawyers defending the ability of states to pass rules say the FCC can’t preempt state laws that regulate conduct over which the FCC has no regulatory authority.

Does your head hurt yet? (Mine does.)

The various entities suing the FCC have until November 16 to file reply briefs. Final briefs are due November 27, and oral arguments are scheduled for February 1.

Oh what a tangled web we weave when trying to enrich an administration’s cronies.

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Sinclair Media Encounters A Roadblock

In late July, the Washington Post ran a story that was tantalizing by virtue of what it omitted.

The paper reported that the FCC had raised substantial questions about Sinclair Broadcasting’s proposed merger with Tribune Media. In prior years, “substantial questions” by the FCC have been enough to derail proposals, and I was particularly surprised because up to this point, Ajit Pai, Trump’s appointee to head the FCC, has conducted himself precisely as one would expect a Trump appointee to behave, which is to say he has been a total tool of big telecom. For example, Pai engineered the repeal of Net Neutrality–despite the fact that his predecessor had strongly supported the policy (as do huge majorities of Americans) and despite the huge number of public comments protesting the move–an “accomplishment” that undoubtedly pleased Verizon, where he had been an executive before moving to the FCC.

Trump, of course, took to Twitter to express his disagreement, tweeting in his usual peevish and childish prose:

Trump said Tuesday that it was “So sad and unfair” that the FCC, an independent agency, did not approve the merger, a $3.9 billion transaction that would create a conservative television giant that originally hoped to reach roughly 70 percent of U.S. households.

In his tweet, the president stressed how the deal would provide a “conservative voice for and of the People,” though politics are not supposed to factor into merger considerations.

“Liberal Fake News NBC and Comcast gets approved, much bigger, but not Sinclair. Disgraceful!” the president tweeted.

Sinclair–dubbed the worst media company you never heard of by John Oliver--is a lesser known clone of Fox News; if it were allowed to become the country’s largest broadcaster, that would vastly increase the influence of its reactionary programming by adding millions of homes to its nationwide network. (Its original proposal had the company reaching 233 stations in 108 markets.)

So far, Pai has been a reliable Trump lackey, consistently siding with big business over the consumers whose interests his agency is charged with protecting.

Pai moved to allow more consolidation among TV stations last year by restoring an FCC accounting method known as the UHF discount. Under the discount, broadcast companies can own more stations before bumping up against a national audience cap limiting their reach to 39 percent of U.S. households. On Wednesday, a federal appeals court dismissed an effort by consumer advocacy groups challenging Pai’s decision.

That court ruling is a victory for Sinclair, even as its deal undergoes legal review. The company’s merger proposal depends on the UHF discount to stay compliant with the FCC’s national audience cap; after factoring in the discount, Sinclair has said, the combined company will reach 38.9 percent of U.S. households.

Some of Pai’s critics, including Democrats in Congress, have highlighted these and other policy moves in questioning the chairman’s relationship with the conservative broadcasting giant.

Sinclair has close ties to the Trump administration. During the campaign, according to Politico, the company made a deal with Trump in which it promised positive media coverage for preferred access. (Reputable journalists they are not.) Boris Epshteyn, who worked for Trump in the White House, is a company executive.

The FCC’s sudden concern about the merger raises two questions, one of which is: why? Has Pai suddenly discovered that the purpose of the FCC is not the empowerment of Big Telecom? Is he less of a pawn than he has heretofore seemed? Is there some history between him and Sinclair that might emerge to suggest a quid pro quo that would smear his reputation if he simply rubber-stamped the proposed merger?

Inquiring minds want to know!

When the “substantial concerns” were first announced, several media outlets asked: will the clear disapproval of the twit in chief cause Pai to back off? That question is now moot; yesterday, Tribune Media called off the merger and announced a lawsuit against Sinclair.

A good result, but a very, very curious chain of events….

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Our Very Own Pravda

Tom Wheeler headed the Federal Communications Commission during the Obama Administration. From all indications, he took his responsibilities seriously; he was a vocal defender of Net Neutrality, for example, unlike his replacement, a former Verison executive whose decisions have been reliable wins for big telecom companies.

So when Wheeler sounds an alarm, that alarm is worth heeding.

Wheeler has indeed sounded an alarm. In a report for The Brookings Institution, he highlights a recent, blatant effort at propaganda from Sinclair Broadcasting (aka the Fox News of “local” television–or, as John Oliver dubbed it, “the most influential media company you never heard of”).

“Many members of the media and opponents of the president have used this issue [separation of children from immigrant families] to make it seem as if those who are tough on immigration are somehow monsters. Let’s be honest: while some of the concern is real, a lot of it is politically driven by liberals in politics and the media.”

The above is the conclusion of a two-minute “must run” that Sinclair Broadcast Group forced its over-100 local television stations to air. Read by Sinclair political director (and former Trump White House advisor) Boris Epshteyn, the attack on the media and those who might disagree with the president is no great surprise.

Wheeler has been following the activities of the agency he headed, and he reports that under Trump, the Commission has been diligently working to assure that Sinclair is able to expand the reach of its partisan political messaging.

By rewriting the rules governing local broadcasting, the Trump FCC is allowing Sinclair to turn supposedly “local” television operations into a coordinated national platform for the delivery of messages such as the one cited above.

When television was a relatively new communications medium dependent upon use of publicly-owned airwaves, the licenses of locally owned and operated stations were conditioned on undertakings to operate in the public interest, as local outlets for local news and information. In order to protect that localism, the law forbid national media companies from acquiring them.

However, the Trump FCC effectively allows a company to exceed the ownership limit. The agency replaced the rule prohibiting “sidecar agreements,” where a company claims not to own a station’s license despite collecting all the revenue, making all the hiring and programming decisions, and forcing the station to carry “must-run” content. Sinclair lawyers originally conceived these legal fictions to skirt the rules protecting localism, and the FCC rubber-stamped the charade.

While ordinary Americans are responding–haphazardly–to the White House’s daily, highly visible assaults on democratic norms and the rule of law, Trump’s appointees are working behind the scenes to dismantle the rules and regulations that have been put in place to keep plutocrats from raping the rest of us. What gets lost in all the anti-regulatory rhetoric is the fact that we owe clean air and water, safe food, and honest news reporting, among other important things, to good regulations.

Good regulations ensure that “level playing field” we all claim to support. I’ll be first to concede that not all regulations are good, but the answer is not a wholesale dismantling of the rules–if a regulation is outdated, or counterproductive, that particular regulation can be changed. That, of course, takes work–not to mention subject-matter knowledge and a commitment to the common good.

It is impossible to overstate the damage that has been done by propaganda arms like Fox News and Sinclair Broadcasting. There are plenty of other propaganda outlets on both the Left and Right, preaching to their respective choirs, but none have the reach and influence of Fox and Sinclair. Sinclair’s propaganda is particularly potent because it is unrecognized– cloaked in the pretense of independence and localism.

When Mike Pence was Governor of Indiana, he made a much-derided attempt to establish an “official” state news bureau. Genuine news sources immediately dubbed it “Pravda on the Prairie.”

Thanks to Sinclair and Trump’s FCC, we now have Pravda for the whole country.

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