The FCC’s “half-pregnant” plan for net neutrality, and why it won’t work

The FCC’s in a tough place as it rewrites rules for the internet: the public wants a ban on “fast lanes” — the idea of letting ISPs charge websites for priority service — but the powerful telecom industry is determined to create those lanes anyways. In response, the agency is reportedly planning a “hybrid approach.” That phrase rings of compromise and good sense but, in reality, will produce the same legal train wreck that placed the FCC in this mess in the first place.

If you’re catching up, the “hybrid” news comes via a detailed leak to the Wall Street Journal in which the agency appears to be setting the table for its impending final rules:

Caught in the middle, Mr. Wheeler is close to settling on a hybrid approach, people close to the chairman say (…)

The plan now under consideration would separate broadband into two distinct services: a retail one, in which consumers would pay broadband providers for Internet access; and a back-end one, in which broadband providers serve as the conduit for websites to distribute content. The FCC would then classify the back-end service as a common carrier, giving the agency the ability to police any deals between content companies and broadband providers.

This approach echoes a scheme floated by the Mozilla Foundation in May that would supposedly let the FCC ban fast lanes without reclassifying consumers’ ISPs as public utilities (or “common carriers” in telco parlance)  — a notion that is radioactive to companies like [company]Verizon[/company].

The Mozilla trick is based on a legal slight-of-hand that redefines just who net neutrality involves in the first place.

Rather than treating consumers as the beneficiaries of net neutrality obligations (as the idea has always be understood), the Mozilla definition would instead treat websites (or, “edge providers”) as the customers. This would have the effect of applying the public utility provision to a different set of actors at a deeper layer of the internet, rather than to the “last mile” at which the ISPs come into people’s living rooms.

If that sounds complicated and hard to follow, that’s because it is. It also won’t work. As Stanford professor Barbara Van Schewick explains, ideas like Mozilla’s “were put forward in good faith and with great creativity” but obvious legal deficiencies “would sink sender-side proposals in court.”

Van Schewick, who made the comments in a filing spotted by National Journal, is a leading authority on this subject and correctly predicted that the FCC’s earlier Rube Goldberg legal fixes for net neutrality would come crashing down. And she’s right that this latest Hail Mary won’t work either; most websites (or “edge providers”) don’t obtain service from ISPs “for a fee” — and that “for a fee” language is a central to identifying the services over which the FCC can flex its public utility power.

Fail, fail again

If the FCC does try to impose net neutrality through any way other than by reclassifying consumers ISPs as public utilities, the agency will get sued, and it will get spanked all over again. In its bombshell decision in January, the DC Appeals Court made it perfectly clear that other legal gimmicks won’t work. The FCC will just embarrass itself if it tries to push its luck once again with another far-fetched plan.

The agency, of course, is likely get sued no matter what it does — the WSJ leak story contains a nasty shot across the agency’s bow to that effect from Verizon:

One industry official admitted the hybrid plans could be more tolerable “at the margins,” but predicted they would prompt the same legal challenge from the broadband providers as full reclassification.

Reclassification “could not withstand judicial review,” Verizon Communications Inc. Deputy General Counsel Michael Glover wrote in a white paper submitted to the FCC on Wednesday.

But at least the agency can win its legal case if it follows the DC court’s clear suggestions.

Having a strong legal case, though, is only half the battle for the FCC. It also needs a strong political case too. And on that front, FCC Chairman Tom Wheeler may not have the clout to fight the telecom industry as well as ascendant Republicans who, sources say, will make the rest of his tenure “hell” if he defies the industry on this.

And that’s why the FCC is preparing to offer a “hybrid approach” that will spare it the wrath of industry, and may also confuse consumers into believing it has not sold them out. But in this case, “hybrid” sounds a lot like “half-pregnant” – it’s a useful concept, but doesn’t exist in reality.