In strong endorsement of net neutrality, President Obama says FCC should reclassify broadband Internet providers under Title II

As a candidate, Senator Barack Obama said on November 14, 2007 that “I will take a back seat to no one in my commitment to network neutrality, because once providers start to privilege some applications or websites over others, then the smaller voices get squeezed out and we all lose. The Internet is perhaps the most open network in history, and we have to keep it that way.” Over the past six years, however, his voice has often been missing from the debate over how the providers of broadband Internet service should be regulated. This morning, however, President, Barack Obama came out much more strongly in favor of net neutrality.

In his statement (video embedded above, text linked) the president outlined 4 “bright line rules” that he wants the Federal Communications Commission to adopt for how consumer broadband Internet providers should behave (no blocking, no throttling, no paid prioritization, more transparency) and a rationale for how they should be regulated.

On that count, the biggest news comes further down in President Obama’s statement: “…the time has come for the FCC to recognize that broadband service is of the same importance and must carry the same obligations as so many of the other vital services do. To do that, I believe the FCC should reclassify consumer broadband service under Title II of the Telecommunications Act — while at the same time forbearing from rate regulation and other provisions less relevant to broadband services.”

That position is unquestionably a big win for activists, who are thrilled about the news this morning. If you’re unclear about what “forbearance” means, beyond the dictionary meaning of “holding back,” here’s a good article by Nancy Scola and and here’s a much longer post, by Harold Feld, which has more on the topic, and why it’s contentious among telecom lawyers and policy wonks. Should this plan actually make into Open Internet rules and be voted in, how forbearance is handled what Stacey Higgenbotham suggested watching in her excellent analysis of this net neutrality proposal.” 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,” she wrote.

Forbearing from rate regulation, or artificially controlling the price for a set level of service, would address one of the most significant objections to Title II that have been raised by American telecommunications companies. Other countries, like Argentina, are going a different route.

That didn’t stop Verizon from warning that reclassification under Title II would cause “great harm to an open Internet, competition and innovation. The National Cable and Telecommunications Agency released a statement that (former FCC chairman) CEO Michael Powell was “stunned” by the president’s statement on net neutrality and that the matter belongs in Congress.

“There is no substantive justification for this overreach, and no acknowledgment that it is unlawful to prohibit paid prioritization under Title II,” he said. “We will fight vigorously against efforts to impose this backwards policy.”

In a tweeted statement that was subsequently posted to Comcast’s blog, David L. Cohen, an executive vice president at Comcast Corporation, similarly said that President Obama’s policy stance would “jeopardize this engine for job creation and investment as well as the innovation cycle that the Internet has generated” and suggested that reclassification this was a matter for Congress to decide:

To attempt to impose a full-blown Title II regime now, when the classification of cable broadband has always been as an information service, would reverse nearly a decade of precedent, including findings by the Supreme Court that this classification was proper. This would be a radical reversal that would harm investment and innovation, as today’s immediate stock market reaction demonstrates. And such a radical reversal of consistent contrary precedent should be taken up by the Congress.

The other key detail in the policy position on net neutrality the White House published today was picked up over at the Verge: President Obama asked the FCC to apply these rules to mobile broadband internet providers as well. In his statement, he said that “the rules also have to reflect the way people use the Internet today, which increasingly means on a mobile device. I believe the FCC should make these rules fully applicable to mobile broadband as well, while recognizing the special challenges that come with managing wireless networks.”

As the president also noted, that “the FCC is an independent agency, and ultimately this decision is theirs alone,” but there’s no question that the President of the United States has put his thumb on the scale here, finally, and that it will put some pressure on the two Democratic commissioners, along with the man he nominated to lead the FCC, chairman Tom Wheeler.

Here’s the statement released by Wheeler this morning, in response to the President’s position:

The President’s statement is an important and welcome addition to the record of the Open Internet proceeding. Like the President, I believe that the Internet must remain an open platform for free expression, innovation, and economic growth. We both oppose Internet fast lanes. The Internet must not advantage some to the detriment of others. We cannot allow broadband networks to cut special deals to prioritize Internet traffic and harm consumers, competition and innovation.

As an independent regulatory agency we will incorporate the President’s submission into the record of the Open Internet proceeding. We welcome comment on it and how it proposes to use Title II of the Communications Act.

In January, a federal court struck down rules that prevented Internet Service Providers from blocking and discriminating against online content. In May, the Commission sought comment on how to best reinstate these rules to protect consumers and innovators online while remaining within the parameters of the legal roadmap the court established. The goal was simple: to reach the outcomes sought by the 2010 rules. We sought comment on using Section 706 of the Telecommunications Act, as discussed by the court to protect what the court described as the “virtuous circle” of innovation that fosters broadband deployment and protects consumers.

The purpose of the Commission’s Notice of Proposed Rulemaking proposal was to elicit comments. In the past several months, we’ve heard from millions of Americans from across the country. From the beginning I have pledged to finally bring to an end the years-long quest for rules that are upheld in court. In May we sought comment on both Section 706 and Title II and I promised that in this process all options would be on the table in order to identify the best legal approach to keeping the Internet open. That includes both the Section 706 option and the Title II reclassification. Recently, the Commission staff began exploring “hybrid” approaches, proposed by some members of Congress and leading advocates of net neutrality, which would combine the use of both Title II and Section 706.

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.

Whether this very public position by the White House leads the FCC to act any differently will be open to debate over the next month, as the deadline to get rules made and circulated to the commissioners before the last open meeting on December 11th grows near. It certainly gives them more political cover.

If the FCC does reclassify, expect the incoming 114th Congress and Republican majority to seek to shape that regulatory choice, perhaps by legislation, and that regulatory wrangling over net neutrality to end up in the courts. Again. (Conservatives concerned about the impact of applying Title II to the Internet may find this post by James Heaney of considerable interest.) Speaker of the House John Boehner was unequivocal in a statement released in response to President Obama’s position, asserting that “net neutrality hurts private-sector job creation“:

“It’s disappointing, but not surprising, that the Obama administration continues to disregard the people’s will and push for more mandates on our economy. An open, vibrant Internet is essential to a growing economy, and net neutrality is a textbook example of the kind of Washington regulations that destroy innovation and entrepreneurship. Federal bureaucrats should not be in the business of regulating the Internet – not now, not ever. In the new Congress, Republicans will continue our efforts to stop this misguided scheme to regulate the Internet, and we’ll work to encourage private-sector job creation, starting with many of the House-passed jobs bills that the outgoing Senate majority ignored.”

Evidence for the Speaker’s assertion regarding the impact of net neutrality laws on jobs is scant, as Carl Brooks, an IT analyst with 451 Research, noted: “Connection markets are robust and competitive in [the European Union] for business; for consumers, prices are dramatically lower.” (The European Parliament enacted a strong net neutrality law earlier this year.) “Net neutrality in the EU is explicit policy to encourage competition [and] benefit consumers on the backs of state telecom,” he went on.

Regardless of the political outcome in Congress, close observers of the FCC expect the rules to be delayed until 2015. What the American people get for a holiday present online is — reclassification or some form of tiered services — remains, for now, something only St. Nick knows.

This post has been updated with more statements, links, media and analysis.

One thought on “In strong endorsement of net neutrality, President Obama says FCC should reclassify broadband Internet providers under Title II

  1. Pingback: Net Neutrality Updates | MEDIA IMPACT FUNDERS

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