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Obama tells the FCC to implement real net neutrality. And he’s serious.

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Proving himself the policy nerd who pundits deride, President Obama has issued a comprehensive statement on network neutrality that covers all of the points left uncovered in his generic praise for the policy a few weeks back. The president is calling for the FCC to implement Title II rules from the Telecommunications Act of 1996, which is what the ISPs view as the nuclear option when it comes to network neutrality rules. Such rules would seek to prevent ISPs from blocking or slowing lawful content on both their last mile networks and at interconnection points.

The president also called for network neutrality rules to apply to wireless networks, something that the original Open Internet Order from 2010 didn’t even do. These are some pretty big calls for actions, and so far the ISPs aren’t impressed. The CTIA issued a statement that found the president’s plans “inappropriate” and said it would threaten investment, while Verizon went so far as to say that Title II wouldn’t stand up in court. Since Verizon sued the FCC over the 2010 network neutrality rules, one can imagine that it would gladly do so again if the agency tried to implement Title II.

Wall Street also seemed to react with a bit of initial shock to the statement, sending the price of shares of the five top ISPs down a bit in morning trading, before they mostly recovered.

T Price Chart

T Price data by YCharts

The problem so far

But it’s clear from the statement and accompanying video that the president understands that the broadband market in this country isn’t competitive. He’s putting his (albeit limited) political capital behind the FCC as it seeks to implement rules to ensure that ISPs won’t turn the internet into something that requires companies to pay in order to reach the end consumer. The FCC has received almost four million comments on the issue of network neutrality since it opened proceedings to figure out how to salvage rules that the courts gutted at the beginning of this year.

It began with a plan that would have allowed for paid prioritization and was roundly criticized when it was leaked. That plan was tweaked a little bit, but most legal scholars said the agency really didn’t have the legal authority to implement network neutrality rules that would prohibit paid prioritization unless it chose to regulate ISPs under Title II.

Other plans were thrown out there, including a plan from Mozilla to implement Title II-like authority at interconnection points to solve some of the persistent peering issues. The FCC recently adopted elements of this plan as it tried again to come to a compromise on network neutrality between the internet companies, consumers and ISPs. But with the president’s statement, it’s possible that the agency will now be able to forge ahead with what many internet companies and consumer groups say they want — for ISPs to be regulated much the way telephone providers were.

The details so far

Of course, the regulations would have to be tweaked through a process called forbearance to eliminate issues such as rate regulation. And should this go through, that’s actually where I would watch the ISPs. They have the patience and lobbying muscle to ensure that in the process of forbearing them from certain practices that are irrelevant for a broadband era, they can get concessions that may make Title II less onerous for them.

But before we get to that, we have to get to Title II. So here’s the president’s statement. First, the generic mission statement we’ve heard from him before:

[blockquote person=”” attribution=””]We cannot allow Internet service providers (ISPs) to restrict the best access or to pick winners and losers in the online marketplace for services and ideas. That is why today, I am asking the Federal Communications Commission (FCC) to answer the call of almost 4 million public comments, and implement the strongest possible rules to protect net neutrality.

And here is a rundown of the specific policy points that the president has focused on so as to avoid any confusion about where he and the 4 million real Americans stand:

  • No blocking. If a consumer requests access to a website or service, and the content is legal, your ISP should not be permitted to block it. That way, every player — not just those commercially affiliated with an ISP — gets a fair shot at your business.
  • No throttling. Nor should ISPs be able to intentionally slow down some content or speed up others — through a process often called “throttling” — based on the type of service or your ISP’s preferences.
  • Increased transparency. The connection between consumers and ISPs — the so-called “last mile” — is not the only place some sites might get special treatment. So, I am also asking the FCC to make full use of the transparency authorities the court recently upheld, and if necessary to apply net neutrality rules to points of interconnection between the ISP and the rest of the Internet.
  • No paid prioritization. Simply put: No service should be stuck in a “slow lane” because it does not pay a fee. That kind of gatekeeping would undermine the level playing field essential to the Internet’s growth. So, as I have before, I am asking for an explicit ban on paid prioritization and any other restriction that has a similar effect.

It’s a strong list that includes several things that weren’t even included in the original network neutrality order, such as the commentary about the interconnection fights. Those fights played out earlier this year, most notably between Netflix and the major ISPs that wanted Netflix to play them for a direct peering relationship, which Netflix and its transit providers argued was a violation of network neutrality.

The throttling aspect of the rules also becomes interesting in light of the president asking to apply these rules to wireless networks, where certain carriers throttle connections after a customer surpasses a certain data threshold. The FTC recently fined AT&T for this practice and the FCC sent letters to Verizon after it said it would start throttling its unlimited customers.

The FCC’s response

There’s a lot to digest in the president’s message, which may be why the FCC chairman’s response to the statement is decidedly lackluster. After welcoming the president’s contribution and emphasizing where they see eye to eye on the issue, Chairman Wheeler’s comments can be summed up as “this is complicated and we have to please a lot of people so this is going to take a while.” Here are his exact words from the statement:

[blockquote person=”” attribution=””]The more deeply we examined the issues around the various legal options, the more it has become plain that there is more work to do. The reclassification and hybrid approaches before us raise substantive legal questions. We found we would need more time to examine these to ensure that whatever approach is taken, it can withstand any legal challenges it may face. For instance, whether in the context of a hybrid or reclassification approach, Title II brings with it policy issues that run the gamut from privacy to universal service to the ability of federal agencies to protect consumers, as well as legal issues ranging from the ability of Title II to cover mobile services to the concept of applying forbearance on services under Title II.

I am grateful for the input of the President and look forward to continuing to receive input from all stakeholders, including the public, members of Congress of both parties, including the leadership of the Senate and House committees, and my fellow commissioners. Ten years have passed since the Commission started down the road towards enforceable Open Internet rules. We must take the time to get the job done correctly, once and for all, in order to successfully protect consumers and innovators online.[/blockquote]

In other words, don’t hold your breath.

13 Responses to “Obama tells the FCC to implement real net neutrality. And he’s serious.”

  1. I generally agree with Obama’s points except these: Why shouldn’t a company be allowed to pay more for priority access or higher speeds? I don’t want the ISP to block or slow down legal content, or force users (companies, etc.) to have to pay to get baseline access. But if someone wants to pay to give me better service than I pay for, or if the ISP wants to give extra priority to a domain, why is that a problem?

  2. Rann Xeroxx

    Maybe Obama should focus on reigning in the NSA and their unlawful spying on the American people and companies before taking on other technical issues. He is the POTUS and has 100% say (with oversight from congress which by all accounts did not occur). He could gut the whole department and their policies if we wanted, he had 6 years to build them up. US tech companies are now loosing billions with overseas customers as they (for good reason) no longer trust their data with them.

    But no, lets not take about that, in fact ignore that completely. Who needs privacy?

  3. Scott Patton

    As optimistic as this headline is, I’m very concerned that there is already too much water under the bridge. President Obama has waited to weigh in on this while private companies have struck lucrative ‘fast lane’ deals. The technology to monitor, load, and balance network traffic has also gotten to the point where the financial incentives are not in the favor of an open net. These incentives and the beachhead that companies have already staked out will be very difficult to reverse. President Obama’s words sound like political cover that may just enshrine the current stratification of service. Having a new public utility created would exciting and I hope to see it happen.

  4. Richard Bennett

    I understand the President is hurt and angry about the sound repudiation of his administration that voters delivered in last Tuesday’s election, but punishing the American people by destroying the policy framework that has allowed us to develop the world’s most vibrant Internet ecosystem is beyond the pale. It’s also completely inappropriate for the White House to meddle in the affairs of the FCC, which by law is an independent agency.

    The arrogance and cluelessness of the president’s statement is breath-taking.

    • The US internet ecosystem (of services and websites) is great despite its lackluster internet infrastructure, which is falling way behind other industrialized, and even developing nations. Common carrier status will actually improve the situation, at least regarding data caps, high prices, and anti-competitive fast lanes.

    • RFO Jefferson

      Well, Richard, between you and the Prez, I’d have to say you’re the winner on cluelessness. What the cable companies want is to CHANGE the system, make it closed; the Prez wants to KEEP it just as it is, open. Reading your post, I’m somehow reminded of a plate umpire’s call: “Steeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeee!!!!”

  5. Obamas video released today is the height of meaningless drivel.

    He’s doing what he’s done his whole presidency. Say one thing, and do the exact opposite.

    Perhaps if he was so concerned about Net Neutrality as he pretends to be, then maybe he should have followed through on one of his core campaign promises – to end the revolving door between government and industry lobbys – and NOT have appointed Tom Wheeler, cable industry scumbag, to run the FCC. (Or former VP of monsanto to run the FDA… but thats just more bullshit from Obama)

    Judge men by their actions, not their words. Obama is a 2 faced liar.

    The Goob hath ruled on this issue.

    • Reality: this is bad for small business. It gives free internet to large companies, while small and medium business have to pay the cost of the large companies.

      This is the worst thing for the internet. Those trying to protect what we have will be the ones to destroy it.

      Please think, netflix is forcing everyone to share the cost of service for a few.