Broadband industry to American public: “Who needs open Internet rules when you can just take our word for it?”

by Kyle Reynolds and Art Neill

Hundreds of thousands of concerned citizens recently asked the FCC to protect the open Internet, but broadband providers filed comments that are the hundreds of pages equivalent of “take our word for it, everything will be fine” or “move along, nothing to see here.” In preparing our reply comments to the FCC’s open Internet proceeding, we’ve been examining the most recent comments of the big fixed and mobile broadband providers like Comcast, Verizon, and AT&T.

What we found could be striking or completely obvious, but is probably both at the same time. Broadband providers primarily occupy themselves with aggressive posturing and finger-pointing aimed at content providers like Netflix and backbone providers like Cogent and Level 3. The big industry players’ comments also make clear that the big broadband providers apparently do live in an alternate universe to most Americans.  In this universe, the vast majority of Americans can easily switch between an ample number of broadband providers on a whim, and where any real rules to protect the open Internet as we know it are unnecessary because… well, because… just take our word for it.

Here are some of the lowlights:

Comcast:

"If a provider were to block or degrade Internet applications or content, the provider would incur substantial subscriber losses and reputational harm. Thus, in order to undertake such a strategy, a broadband provider would first need to conclude that any theoretical benefits of the strategy outweigh these very real costs." (pg. 6)

• Ok, a couple points here. First, the basic assumption that this argument relies on is that subscribers actually have another provider to switch to, which many people who live in Comcast territory know is simply fantasy. That said, the point about reputational harms also seems to ignore the fact that broadband providers are already considered the worst companies in America. Subscriber bases and profits are maintained due to these companies entrenched, excessive market power, not customer service. But then, I suppose you can’t blame Comcast for trying: They were neck and neck with Monsanto this year (http://consumerist.com/2014/04/08/congratulations-to-comcast-your-2014-worst-company-in-america/).

After discussing at length the importance of a mercurial, end-around category of “specialized services,” and why the FCC should properly leave them beyond the scope of Open Internet rules, Comcast states, “While it is unnecessary to impose additional mandates on specialized services, the Commission should clarify the definition of specialized services to provide increased certainty regarding the scope of its open Internet rules.” (pg. 30, emphasis added)

• Comcast’s argument here can best be summed up as follows: “Specialized services are perhaps the greatest thing we have ever thought of, and the FCC has wisely chosen to not regulate them. By the way, what are specialized services anyway?” If you’re confused, you’re not alone.

Who’s next?

Verizon:

“A policy of impeding access [instituted by a broadband provider] to services customers wish to access would only push those customers to other providers. Other ISPs face the same incentives. Under these – in which users demand access to all lawful content and ISPs are committed to fulfilling customers’ needs – there is no need for a prescriptive no-blocking rule.” (pg. 26)

• Verizon asks that we set aside any silly preconceived notions we may have about the lack of alternative providers (discussed above) and how poorly broadband providers have been known to respond to their subscribers (Matt Stone and Trey Parker may have summed it up best already: http://southpark.cc.com/clips/qblqju/the-cable-company-runaround), and then essentially says that we hardly need rules in place when we can just take their word for it.

"Just because the Commission could prohibit such practices [such as blocking or degrading content] in some contexts, does not mean that it should do so at the present time and instead could wait to see whether any such theorized harms actually materialize." (pg. 37)

• Translation: Just because the Commission could stop us from experimenting in ways that break the open Internet to extract more money from both content providers and our subscribers does not mean they should do that. Instead, why don’t we wait to even think about doing anything until we’ve locked in business practices that ensure the open Internet as we know it disappears?

"Applying Title II to the American broadband industry would be like tying a cinder block to the ankle of an Olympic sprinter in the midst of a race and then wishing her luck." (pg. 50)

• You should first know that Verizon spent a fair amount of time making accusations that proponents of Open Internet regulations are “sensationalistic”, “superficial”, and spouting “politically motivated fantasy.” Sadly, the only “fantasy” here is that Verizon likens the American broadband industry to an Olympic sprinter. It is more akin to Godzilla: more prone to simply crush the competition than to race against them.

AT&T:

“To engage in end-to-end prioritization of Internet traffic across connecting networks, it would be necessary to have a system coordinated among edge providers, backbone providers, and ISPs to mark certain packets for priority and to handle them accordingly. No such system exists today.” (pg. 18)

• AT&T may be right that no such system of coordination between edge providers, backbone providers, and ISPs exists today, but that overlooks the reality that broadband providers have already found a better way to achieve this goal while also cutting out backbone providers: Directly connecting to edge providers, like Comcast has done with Netflix. Not only that, but cutting out the middle man (backbone providers) has an added benefit for last-mile providers (like Comcast and AT&T) in that it cuts off revenue sources for backbone providers (as edge providers rely on their data transport services less often), weakening them and making them more susceptible to increasing demands from the last-mile broadband providers like Comcast, Verizon, AT&T and others.

The FCC has an opportunity here to spur competition and innovation, but it starts with recognizing that “take our word for it” and “move along, nothing to see here” are not the cornerstones of a framework to protect an open Internet.