Title II Net Neutrality Economic Data Seen Key as Major Comments Are Submitted

The FCC had posted 251,183 comments as of late Monday, pushing the cumulative total to at least 8.4 million in docket 17-108 (see here for nonexpress comments to date). The agency's electronic comment filing system seemed to be slowed somewhat by the comment crush. Between 400,000 and 800,000 comments were posted each day last week.

Proponents of keeping the 2015 regime in place made a major push last week to raise a giant red flag on net neutrality (see 1707110019). That push continued Monday. “Public servant @AjitPaiFCC looking for ways to ignore over 8 million comments filed regarding #NetNeutrality,” Free Press tweeted.

The Internet Association made an economic case in its filing for keeping the current rules. Proponents of an overhaul said the group’s comments will have to be addressed by the FCC in its final order. “Investment in the cloud economy has been booming since 2015,” IA said in comments. “Clear rules of the road have given edge-based apps and services the certainty needed to attract investment and growth without being concerned about ISPs acting as gatekeepers, and the growth of these services has driven demand among consumers for faster and better broadband access, leading to continued growth in ISP investment and broadband subscriptions.”

Public interest lawyer Andrew Schwartzman said the millions of smaller comments in favor of the rules matter. “Contrary to what some have said, it is not irrelevant when millions of Americans speak out,” he said. “They may not be particularly useful in fashioning the legal and factual findings, but they inform the decision-makers on how people value and use the internet.” Comments on the economic effects of reverting to Title I regulation for broadband are also likely to get FCC attention, he said. “One other area where comments may well be important is in establishing whether end users think they are buying Internet access or a bundle of services, including email, DNS lookup, etc.,” Schwartzman told us. “This has important legal implications.”

The short comments will have little effect on the FCC’s final order, said Gus Hurwitz, co-director of the Space, Cyber and Telecom Law Program at the University of Nebraska College of Law. Hurwitz sees “comments introducing new empirical data or analysis of that data into the record, comments raising serious methodological concerns about other analyses of data and comments introducing new but sound legal theories” as getting the most traction. The NPRM solicits input on a legal basis for rules other than Title II and Section 706 of the Communications Act, he said. “I've heard a couple of interesting theories floating around in the past couple of weeks," he said. "I'd say that those are the comments to keep an eye out for.”

Comments that help the FCC perform a cost-benefit analysis of the effects of reclassification will be the most important to the regulator, agreed Larry Downes, senior fellow at the Georgetown Center for Business and Public Policy. “Given the requirements of the Administrative Procedure Act and the court rulings so far, that will be key in the event of a legal challenge to the rulemaking once it’s completed,” he said.

Not a Plebiscite

The FCC is “overrun” with comments and 99 percent will have no effect, said Phoenix Center President Lawrence Spiwak. If 8 million people were doing legal analysis that would be one thing, he said. “This isn’t a plebiscite,” he said. The FCC will find probably 20 or 30 comments “tops” to be useful in developing the order, he said.

“There is now a significant and growing body of evidence that the Title II order has, in fact, caused a decline in investment,” said Randolph May, president of the Free State Foundation. “This is obviously relevant to the commission’s decision.” May predicted that the cost-benefit analyses filed, including one by his group, will play an important role in the agency’s final policy call. “I think they will add rigor to the commission’s analysis that not only will be valuable in this case but in pointing the way for further such analysis going forward.” Pai and Republican Mike O’Rielly “have made it abundantly clear that the most salient record filings will contain hard data pertaining to the economic effects that Title II has had on the provision of internet service,” said a former FCC spectrum official.

FTC Acting Chairman Maureen Ohlhausen and key staffers supported the FCC's proposal to return broadband internet access jurisdiction to the trade commission by undoing the Title II classification, but Commissioner Terrell McSweeny filed opposition (all here).

Comcast's filing called for returning broadband to a Title I information service classification and instituting a "light-touch" regulatory framework that scrapped the general internet conduct standard. The FCC nevertheless has "multiple paths" for ensuring "strong" open internet protections while promoting broadband investment and innovation, the cable provider commented.

Americans for Tax Reform and other groups hit the FCC's Title II classification and regulation. "No government agency should be trusted with such vast powers -- but especially not the FCC, an agency so prone to politicization and regulatory capture," said a filing by ATR President Grover Norquist and 64 others, including state politicians.

Parties urging the FCC to follow through on its proposed move from Title II to Title I broadband classification or a similar less-burdensome framework included Free State Foundation (here), Technology Policy Institute (here), Information Technology & Innovation Foundation (here), the Telecommunications Industry Association (here), U.S. Chamber of Commerce (here), the Small Business & Entrepreneurship Council (here), the National Association of Manufacturers (here), and an ad hoc group of 17 small and midsize broadband network manufacturers (here).

But others urged the FCC to keep the 2015 order's Title II net neutrality regulation. Broadband internet access service is a Title II telecom service; the current commission's proposed legal analysis is "fatally flawed;" and broadband providers have the "power, incentives and technical and economic ability to curb competition and harm consumers," commented Incompas. "The Commission should maintain its existing net neutrality rules and must not weaken their firm legal basis," the Internet Association said.

The Open Media and Information Companies Initiative backed Title II network neutrality. "Investment in broadband Internet networks has increased" since the 2015 FCC order was adopted, commented OpenMIC, which said it was a group of investors representing $190 billion in assets. The current FCC proposal would "result in the end of the public’s nondiscriminatory access to the online content, services and applications of their choice," commented Writers Guild of America, West. "If enacted, the proposal will reverse the Commission’s bipartisan policy to protect the rights of consumers to use the Internet free from censorship by [ISPs]."

Washington Gov. Jay Inslee (D) also backed a Title II net neutrality framework (here). The FCC should keep a "light-touch" Title II framework, commented NTCH and Flat Wireless. Measurement Lab commented that "significant, detectable congestion episodes have declined" since the 2015 order was adopted.

Net Neutrality Notebook

Longtime wireless lawyer Mitchell Lazarus of Fletcher Heald offered his personal perspective on the net neutrality rules. “They fail to give clear guidance, leaving ISPs to ‘guess at what they are permitted and not permitted to do,’” Lazarus wrote. “This is no fault of the draftsmen. To craft a net neutrality rule that plainly and consistently demarcates permitted from forbidden behaviors may not be feasible.” The FCC instead should develop rules that “foster a competitive market for ISPs, in which a subscriber dissatisfied with an ISP’s blocking or throttling or prioritizing content can go elsewhere,” he said.

White House Press Secretary Sean Spicer was asked Monday about net neutrality, but didn’t bite. “The FCC is an independent agency and I would refer you to them,” he said. “I’m not addressing net neutrality.” In 2014 President Barack Obama’s weighed in during the last net neutrality debate, pushing the FCC, in effect, to reclassify broadband under Title II (see 1411100035).