But plans stalled as Gigi Sohn, President Biden’s nominee to the FCC, was subject to an intense lobbying effort from the telecom industry to block her seat at the commission. The former FCC staffer, longtime consumer broadband advocate, and first openly LGBTIQ+ nominee for commissioner eventually withdrew her consideration for the post in March 2023. Democrats finally regained majority control of the FCC when a new nominee, Anna Gomez, was confirmed by the US Senate on September 7, 2023.[1]

Pending Internet Policy Issues

– More, better, and cheaper broadband access and connectivity through mobile, satellite, and wireline facilities, especially in rural areas.
– Antitrust concerns about cable and telco ISPs, including net neutrality.
– Privacy and the collection of behavioral data by platforms to predict, guide, and manipulate online user actions.
– Section 230 reform for Internet platforms and content producers, including assessing social media companies’ legal responsibilities for user-generated content.
– Security issues, including ransomware and other threats to infrastructure, including Border Gateway Protocol (BGP) security between countries.
– Deep fakes, memes, and other issues of misrepresentation, including fake news.
– eGovernment and digital money, particularly the role of blockchain, CBDCs, and cryptocurrencies.
– Formation of Web 3.0, where services are monetized but ownership democratized with new trust-based protocols using blockchain technologies, the core technologies of crypto and nfts.

Addressing Net Neutrality

FCC Chairwoman Jessica Rosenworcel has scheduled October 19 for a vote on how to proceed with new rulemaking and address some issues that have come to the forefront of public scrutiny. With two other Biden appointments, the FCC is poised to act on the party’s priorities, including restoring net neutrality regulations. Such rules barred broadband providers from interfering with web traffic but were gutted by Republican commissioners during the administration of President Donald Trump. Chairwoman Rosenworcel’s speech:

Net neutrality is the legal principle that Internet Service Providers (ISPs) should treat all data and online content equally. It derives from commercial law that strives to treat all customers equally. For example, a hotel should not be able to restrict certain people from lodging at their facilities. It was applied to railroad law to ensure towns along a train route would not be excluded from sending their goods, such as cattle or wheat, to market. The common carrier precendent was applied to telegraph and later to telephone regulation. The principle has been bandied back and forth in the FCC for many years, reflecting different philosophies and sympathies for lobbying arguments.

My previous posts reviewed the issues dealing with wired broadband net neutrality based on FCC’s rulemaking based on the Communications Act of 1934 that emphasized common carriage, the commercial obligation to serve all customers equally and fairly. Historically, these legislated guidelines allowed the US telecommunications system to dramatically expand voice communications from the 1930s through the 1970s.[2]

The FCC later decided that data communications and computer processing service providers operating on top of the telco infrastructure would be better served as lightly regulated Title I “enhanced” companies. This designation allowed the Internet to take off in the 1990s and fostered the growth of thousands of Internet Service Providers (ISPs). For example, it allowed dial-up phone users to connect to ISPs to connect to the Internet for long durations without paying extra toll charges. This dynamic would change as competition heated up to provide “broadband” for the Internet and interactive television.

Consolidation Under Deregulated “Information Services”

Under GOP-leaning Michael Powell’s FCC chairmanship, the ISP market structure consolidated dramatically with deregulation for both cable TV companies and Plain Old Telephone companies (POTs), allowing them to enter new markets. Cable television companies had developed broadband capabilities in the late 1990s with cable modems and coaxial cables to connect to the Internet. Likewise, the Regional Bell Operating Companies (RBOCs) that had carved up America’s telecommunications after the breakup of AT&T in the 1980s, developed Asymmetric Digital Subscriber Lines (ADSL or DSL) broadband technologies to provide high-speed services to households over copper lines. This service uses faster coaxial or fiber optic lines to transmit to a local node or curb and then copper lines into the premise. These companies had envisioned developing joint “information highways” going back to the Bell Atlantic/Tele-Communications, Inc. (TCI) deal that was announced in October 1993. That deal died in 1997 but was finally consummated by AT&T on March 9, 1999, in an all-stock deal worth about $48 billion.

AT&T wanted those cable lines from TCI to expand their local phone service, which it was already doing in another agreement with Time Warner. The merger would allow them to extend their markets and combine infrastructure for cost savings and efficiencies. This combination could provide a significant competitive advantage against other telephone providers and new entrants like satellite or wireless providers. It would also allow them to offer a broader range of services, including bundled packages. But AT&T and RBOCs were limited by the FCC’s ruling on the Telecommunications Act of 1996 that distinguished between Title II common carrier services and Title I deregulated information services. FCC decisions in 2005 facilitated significant changes in the market structure of the Internet.

In 2005, both cable and phone companies suddenly became deregulated ISPs. This change allowed significant consolidation as telephone and cable companies, competing to provide “triple play” (TV, broadband, and voice) services to households, frantically merged with other telecommunications companies to dominate “broadband.” AT&T and Verizon, traditional telephone companies, merged with cable companies (and mobile) to create telecom behemoths. The road kill included thousands of smaller ISPs that eventually were no longer able to compete or even interconnect with the larger companies.

Two things led to sweeping deregulation. First, a U.S. Supreme Court decision (National Cable & Telecommunications Association v. Brand X Internet Services) upheld the FCC’s 2002 ruling that providing cable modem service (i.e., cable television broadband Internet) is an interstate information service. This decision meant that cable companies were confirmed in June of 2005 as subject to the less stringent Title I of the Communications Act of 1934. Two months later, Powell’s FCC allowed former Bell telephone companies to become Title I “information services” during George W. Bush’s administration. The Regional Bell Operating Companies (RBOCs), companies that had carved up America’s telecommunications after the breakup of AT&T in the 1980s and developed Asymmetric Digital Subscriber Lines (ADSL) broadband technologies for “information highways” suddenly became deregulated ISPs.

Although there are currently 2940 Internet service providers in the United States, the top 8 companies have over 90 percent of the subscribers. These are the top 8 Internet providers in the U.S. as of June 2023:

– AT&T 22%
– Spectrum 20%
– Xfinity 19%
– Verizon 6%
– Cox 5%
– T-Mobile 5%
– Century Link 2%
– Frontier 2%

The Internet and its World Wide Web were designed to allow devices like PCs, laptops, and mobile phones to talk to each other without much interference from the intermediate network that moves their data. Net neutrality strives to ensure that all online content, services, and applications running through that network are treated equally, regardless of their source. This equality promotes free access to information and prevents ISPs from blocking or throttling (slowing down) specific websites or services. Net neutrality allows users to choose which websites and services they access, without interference from ISPs. Users can explore a diverse range of content and make their own decisions about what to consume. It also ensures that nonprofit organizations, activists, and community groups have equal access to the Internet, allowing them to advocate for social and political causes without discrimination. The danger is that ISPs could examine and manipulate users’ Internet traffic, compromising their privacy and secure communication.

However, the current reality is that net neutrality is not being enforced. It was defeated in the 2017 FCC decision by another vote of 3-2. Pai’s FCC was concerned that net neutrality regulations would discourage ISPs from investing in network infrastructure and improving Internet speeds since they cannot charge content providers for prioritized access. Many net neutrality critics argued that without paid prioritization, the quality of some services would suffer, particularly during peak times when networks become congested.

Big ISPs argued that without the ability to create tiered service plans or charge content providers for faster access, they would struggle to manage network traffic and recoup the costs of infrastructure investments. They suggested that net neutrality rules limit an ISPs’ ability to manage and optimize network traffic efficiently, potentially affecting all users’ service quality. The general argument was that government regulation of the Internet stifles innovation and imposes unnecessary bureaucratic burdens on ISPs that hinder user performance.

It’s important to note that net neutrality is a complex policy principle, and its impact on underserved and economically disadvantaged communities depends on effective enforcement and regulatory oversight. Additionally, while net neutrality works to ensure equitable access to the Internet, broader efforts, such as affordable broadband access programs and digital literacy initiatives, are critical to addressing the digital divide and promoting digital inclusion for all, including those with lower incomes.

Notes

[1] The Federal Communications Commission (FCC) is meant to be an independent agency of the United States government responsible for regulating communications by wire and radio in the United States. It is designed to operate independently of partisan politics. The FCC comprises five commissioners appointed by the President of the United States and confirmed by the Senate. No more than three commissioners can be members of the same political party by law. The political affiliation of FCC commissioners can vary depending on the presidential administration in power during their appointments. As a result, the FCC’s policies and priorities may shift with changes in leadership and the political makeup of the commission. Therefore, the FCC’s stance on various issues, including telecommunications, broadband regulation, net neutrality, and media ownership, can change over time based on the views and priorities of the commissioners appointed by the current administration. It is important to recognize that a combination of legal mandates, policy considerations, public input, and the political environment at the time influences the FCC’s actions and decisions.

Citation APA (7th Edition)

Pennings, A.J. (2023, Oct 9). US Internet Policy, Part 7: Net Neutrality Discussion Returns with New FCC Democratic Majority. apennings.com https://apennings.com/telecom-policy/us-internet-policy-part-7-net-neutrality-discussion-returns-with-new-fcc-democratic-majority/

[2] List of Prevous Posts in this Series

Pennings, A.J. (2022, Jun 22). US Internet Policy, Part 6: Broadband Infrastructure and the Digital Divide. apennings.com https://apennings.com/telecom-policy/u-s-internet-policy-part-6-broadband-infrastructure-and-the-digital-divide/

Pennings, A.J. (2021, May 16). US Internet Policy, Part 5: Trump, Title I, and the End of Net Neutraliy. apennings.com https://apennings.com/telecom-policy/us-internet-policy-part-5-trump-title-i-and-the-end-of-net-neutrality/

Pennings, A.J. (2021, Mar 26). Internet Policy, Part 4: Obama and the Return of Net Neutrality, Temporarily. apennings.com https://apennings.com/telecom-policy/internet-policy-part-4-obama-and-the-return-of-net-neutrality/

Pennings, A.J. (2021, Feb 5). US Internet Policy, Part 3: The FCC and Consolidation of Broadband. apennings.com https://apennings.com/telecom-policy/us-internet-policy-part-3-the-fcc-and-consolidation-of-broadband/

Pennings, A.J. (2020, Mar 24). US Internet Policy, Part 2: The Shift to Broadband. apennings.com https://apennings.com/telecom-policy/us-internet-policy-part-2-the-shift-to-broadband/

Pennings, A.J. (2020, Mar 15). US Internet Policy, Part 1: The Rise of ISPs. apennings.com https://apennings.com/telecom-policy/us-internet-policy-part-1-the-rise-of-isps/

Related Posts

Pennings, A.J. (2023, May 6). Deregulating US Data Communications. apennings.com https://apennings.com/how-it-came-to-rule-the-world/deregulating-telecommunications/

Pennings, A.J. (2021, Sep 22). Engineering the Politics of TCP/IP and the Enabling Framework of the Internet. apennings.com https://apennings.com/telecom-policy/engineering-tcp-ip-politics-and-the-enabling-framework-of-the-internet/

Pennings, A.J. (2019, Nov 26). The CDA’s Section 230: How Facebook and other ISP became Exempt from Third Party Liabilities. apennings.com https://apennings.com/telecom-policy/the-cdas-section-230-how-facebook-and-other-isps-became-exempt-from-third-party-content-liabilities/

Pennings, A.J. (2018, Oct 17). Potential Bill on Net Neutrality and Deep Pocket Inspection apennings.com https://apennings.com/telecom-policy/potential-bill-on-net-neutrality-and-deep-pocket-inspection/

Pennings, A.J. (2016, Nov 15). Broadband Policy and the Fall of the ISPs. apennings.com https://apennings.com/global-e-commerce/broadband-and-the-fall-of-the-us-internet-service-providers/

Pennings, A.J. (2011, Jan 31). Comcast and General Electric Complete NBC Universal Deal. apennings.com https://apennings.com/media-strategies/comcast-and-general-electric-complete-nbc-universal-deal/

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Anthony J. Pennings, PhD is a Professor at the Department of Technology and Society, State University of New York, Korea. From 2002-2012 was on the faculty of New York University starting programs in Digital Communications and Information Systems Management while teaching digital economics and policy. He also helped set up the Digital Media Management program at St. Edwards University in Austin, Texas, where he lives when not in the Republic of Korea.

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Category: science and technology studies, telecom policy and net neutrality
Tags: Communications Act of 1934 > Federal Communications Commission > Gigi Sohn > Michael Powell > Title I of the Communications Act of 1934 > Title II of the Communications Act of 1934

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