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Who’s Next? Sexual Harassment Charges Shake Up Television

Trump Tweets FREE THE Could Bolster AT&T-Time INTERNET Warner Case As FCC looks to scrap its net-neutrality rules, edge providers such as Facebook and Google draw scrutiny

A protester in Los Angeles rallies against the FCC’s proposed rollback of net-neutrality rules.

1204_Cover1.indd 1 12/1/17 5:48 PM COVER STORY New Balance of ’Net Power FCC gets ready to abolish rules on ISPs as edge providers such as Facebook, Netflix draw more scrutiny

BY JOHN EGGERTON @eggerton

It will be at least the fourth attempt to get net neutrality right (see timeline, page 10), and it re- flects the difficulty the FCC faces in using such archaic rules to harness a 21st century platform. Because the future may have outstripped the FCC’s ability to interpret and reinterpret the will of Congress, factions on both sides are calling for both Republicans and Democrats to pass forward-thinking legislation and provide some badly needed regulatory certainty. On the scorched earth of the Beltway, though, common ground will be hard to find.

New Rules Won’t End the Fight Despite all the chatter — both sides are Protesters gather outside of a launching massive public digital ad campaigns federal office building in Los — one thing is clear: the Dec. 14 vote will be the Angeles on Nov. 28 to protest beginning of more protests, lawsuits and a new FCC chair ’s plan to roll regulatory view of cable companies, telcos and ANALYSIS back the agency’s Title II-based other ISPs, as well as so-called “edge providers,” network neutrality rules. websites such as Google, Facebook, Twitter or Netflix, which need ISPs to reach end users. Pai made it clear that the gatekeeper mantle WASHINGTON — Should the federal government regulate the Internet? was shifting from ISPs (under terms set by his predecessor, Democrat Tom That single, simple question is spawning arguably a more voluminous response Wheeler, in 2015) to edge providers when he accused social-media firms of discrimi- from American citizens than any other issue in the history of the Federal Commu- nating on the basis of viewpoint. He said that Twitter, not broadband providers, was a nications Commission. bigger threat to internet openness, and that he was trying to level the playing field. And yet, for all the attention given net neutrality, from the record number of It’s a fascinating turn of perspective for big cable operators, who once were comments to the commission to John Oliver’s ratings-smashing, FCC site-crash- considered the most lethal monopolies in media during the height of their power ing rant — few beyond the big corporate interests fully understand what network in the 1990s, but are now overshadowed in reach by Netflix, Facebook and other neutrality means. edge providers. Advocates for net neutrality rules — operators of social-media platforms, Pai’s deregulatory leveling drew many cheers from industry, but it also created a advocacy groups and others — have said bright-line rules are needed to prevent vacuum Congress will need to fill, if lawmakers can stop fighting long enough. internet-service providers from restricting or controlling web access for business Pai signaled it was high time the government relinquished the rules from the purposes, or perhaps even political ends. previous administration after a couple of years of common carrier status that he, Fans of deregulation, led by Republican FCC chairman Ajit Pai, have said such and those ISPs, say has depressed investment and innovation, but he has also long rules have heretofore not been needed. Their argument: They hurt investment and suggested he would welcome direction from Congress. innovation and are unnecessary because antitrust laws and enforceable pledges of After all, Pai’s approach could be undone by the next chairman, whose approach good conduct by ISPs are sufficient protections. could be undone again depending on the political will and winds. Most agree that In just 10 days, the FCC will vote on Pai’s sweeping deregulatory order, which the internet has become too central to the life of the country, and world, to be essentially abolishes “net neutrality” regulations (still an ambiguous term for most). subject to a game of regulatory Ping-Pong. It’s just the regulator’s latest attempt to figure out how to approach a transformative Republican FCC member Michael O’Rielly suggested that the best course of ac- technology that reaches into every corner of our lives, and to do so based on rules tion for the agency, and what it was doing in the order, was to “put things back the that were originally written in the days of the telegraph. way they were and let Congress decide whether any further actions are justified.” Ronen Tivony/NurPhoto/Sipa USA Tivony/NurPhoto/Sipa Ronen

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1204_CoverSt.indd 1 11/30/17 4:03 PM The “Restoring Internet Freedom” order was overtly billed as a back to the future moment, returning Internet regulation to the pre-Wheeler days of a light regulatory “ touch. But with the rise of connected Internet of Things If you look at who makes the most (IoT) decvices, net-neutrality activists saw Pai’s plan as turning the keys to that new and expanding broadband money out of the internet ecosystem, it kingdom over to ISP gatekeepers. ” Title II fans were understandably apoplectic, given is obviously the edge providers. that rules explicitly prohibiting blocking, throttling and — Tom Larsen, SVP of government and public relations, Mediacom paid prioritization will be gone, replaced by a regime based on disclosure of network practices. If an ISP’s practices are deemed anti-competitive, enforcement would be handled by the Justice Department or the Federal Trade children by name and saying their dad was murdering democracy in cold blood. Commission, not by the FCC. In May, John Oliver, host of the HBO satirical comedy series Last Week Tonight, ISPs, led by cable giant Comcast, are promising not to block or throttle, but paid had also “joked” that Pai looked like a weed whacker-wielding serial killer. prioritization is still very much on the table. Early on, Pai reversed the FCC’s find- Several activist groups were quick to condemn the hate speech, saying protestors ing that sponsored data plans — which allow providers to charge firms to “sponsor” needed to stick to the issues. a subscriber’s data use in specific cases — were likely a violation of net neutrality. The FCC chairman pointed out that such plans reduced prices for consumers, who Opponents Marshal Forces get to access that content for free, and are a way to differentiate services. Certainly the web denizens who flew to the command of Oliver the last time It is hard to argue that Google does not prioritize access to content for a price, around are looking for a reprise of the SOPA/PIPA backlash and will again take to for example. the internet to push back, as they did when they drove millions of comments to the FCC net neutrality docket. Activists plan to protest at Verizon retail stores this week — Pai is a former lawyer for the telecom — and Evan Greer, campaign director at Worcester, Mass.-based digital-rights advocacy group Fight for the Fu- ture, said more than 200,000 calls were generated to Congress within the first 24 hours after the order was announced. “We’ve never seen numbers like this when it wasn’t part of a coordinated day of action,” Greer said. But the chairman has two solid votes in Republican commissioners Michael O’Reilly and Brendan Carr, a former Pai aide. Pai’s proposal was sufficiently sweeping that it prompted speculation that it was actually meant to spur action in Congress, where work on a bipartisan bill to clarify just what the FCC’s regulatory authority is has been slow. Those talks were said to be stalled over Democrats’ refusal to back off Title II as the requisite authority; the Republicans being just as dead set against Title II; and the general distrust among the political players in a toxic D.C. atmosphere. MoffettNathanson principal and senior analyst Craig Moffett said the draft order “went much further than we ever could’ve imagined in not only reversing Title II, but in dismantling virtually all of the important tenets of net neutrality itself. “ But perhaps it should not have been so surprising. The move also The net-neutrality rollback proposed by FCC chairman Ajit Pai (l., at a confirmation hearing this summer) has divided members like Democrat (c.) and newly named Republican Brendan Carr (r.) along partisan lines. squares with Pai’s long-held regulatory philosophy, as well as an ap- proach to regulation proposed by President ’s transition team, where the Federal Trade Commission and Justice Department assume authority over areas formerly overseen by the FCC. Some see the coming Dec. 14 vote on a final order as a SOPA/PIPA moment, a Though consistency has not been a particular hallmark, Trump is on the record reference to the Internet backlash in 2012 that famously killed a bipartisan online as saying Title II should be repealed. And Pai has long complained that Title II privacy bill, the Stop Online Piracy Act (SOPA)/PROTECT IP Act (PIPA). was the handiwork of former President Barack Obama more so than Wheeler, who Passions certainly seem to be running as high around the issue today, but there’s initially proposed a non-Title II approach. also much more confusion, as both sides claim the position of Internet “freedom” — and define the concept differently. Leveling the Field The debate has already turned ugly. Pro-Title II activists slammed Pai as out to While some Senate Democrats — notably the beleaguered Al Franken of kill the internet and cast him as a lackey for big telcos and cable companies. Then Minnesota — have been calling for net neutrality regulations to be applied to edge some extreme elements started tweeting death threats to his family, filling Reddit providers like Google and Facebook, Pai has instead leveled the playing field in the

Ron Sachs/SIPA Ron with posts attacking him, and protestors posted signs on his street calling out his other direction.

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“Ultimately, it’s hard to clamp down on ISPs while gray-area corporations like power over what web surfers see, in terms of content and advertising, means they Google and Facebook continue to operate with relatively little oversight or restric- will not be able to escape the scrutiny of a Pai FCC. tion,” said Jameson Zimmer, operator of website BroadbandNow, which provides Former FCC chairman Wheeler’s forward, and fallback, position was that it was data on ISPs, their plans and prices. Zimmer said he thinks ISPs will take a page ISPs who were the big threat. Even presented with the size and scale of a Google from those edge providers. — whose goal is to amass all the information in the world — the argument is that Pai’s order, to some, felt much like a seminal moment in the history of network there is little competition for access, while web surfers don’t have to use Google or regulation. He appeared to make that clear last week, saying it was edge providers be on Facebook. like Twitter who were discriminating based on viewpoints, citing conservative ones. Pai clearly sees it very differently. Edge providers have gotten a virtual pass, He said edge providers were a bigger threat to the open internet than ISPs and critics have said, because of the veneer of the garage startup hagiography and partly talked about the need to level the playing field. because of powerful edge provider lobbying at a time — over the past eight years Edge providers, once the garage-startup darlings, have become the power players — when the web was morphing into the transformative force it has become. The result has been that while Amazon and Google and Facebook together dwarf the ISPs, Washington has not seemed Mileposts on the Road to ‘Restoring Internet Freedom’ to catch on, at least from the vantage of the providers. 1999: FCC chair William Kennard tells the San Francisco Chronicle the government must exercise “vigilant restraint” Putting ISPs and edge providers on the same general regula- toward internet regulation. tory, or deregulatory, footing, as the FCC has done, will make it 2000: FCC chair Michael Powell classifies cable modem service as an information service. harder to treat them so differently. 2003: Law professor Tim Wu coins the phrase “net neutrality.” Tom Larsen, senior vice president of government and public 2004: FCC chair Michael Powell introduces his four internet freedoms. relations at MSO Mediacom Communications, expressed what 2005: In Brand X decision, the Supreme Court upholds information service classification is a general industry frustration with that bifurcated view in an for cable broadband service; FCC extends classification to phone broadband. interview for C-SPAN’s The Communicators series. “I tend to 2005: New FCC chairman Kevin Martin essentially codifies Powell’s freedoms as FCC look at things very simply,” he told C-SPAN’s Peter Slen. “I fol- guidance. low the money. If you look at who makes the most money out 2005: AT&T CEO Ed Whitacre signals edge providers are freeloaders on networks that his company built and of the internet ecosystem, it is obviously the edge providers.” needs to monetize. Travis LeBlanc, the Wheeler FCC’s Title II enforcer who is 2008: The FCC, with Republican Martin joining Democrats, says Comcast violates now a partner at Washington, D.C., law firm Boies Schiller Flex- guidance by slowing BitTorrent traffic; Comcast appeals. ner LLP, agreed that more regulation of edge providers is in the 2010: Comcast sues FCC over BitTorrent decision. FCC loses, with court saying cards. “Do I think we will reach a point where the U.S. realizes it guidelines were unenforceable. needs to regulate ISPs as well as very substantial platforms that 2010: F CC chairman Julius Genachowski strikes a deal with most ISPs over are virtual pipes [the Googles and Facebooks and Amazons] as compromise Open Internet rules that are not based on Title II. opposed to the actual pipes? Yes, we are likely to see that.” 2011: Verizon sues FCC over rules. He said the recent hearings around Russian election meddling 2014: Court overturns 2010 order, but signals FCC can come up with different approach to regulate the internet. signal that Washington is gearing up to have that conversation 2014: FCC chairman Tom Wheeler signals a non-Title II “different approach” to reinstating the rules. about the degree free-market principles should be able to control 2014: President Barack Obama posts an online video saying the FCC should reclassify ISPs the rules around the Internet. He said some edge platforms can under Title II of the Communications Act. communicate with “way more people” than any ISP has access 2015: Wheeler says Title II it is. to. But LeBlanc said he would not “begin to suggest” that ISPs 2016: Title II-based Open Internet order passes; ISPs sue; court upholds FCC’s decision; and edge providers should get equal regulatory treatment. He appealed to Supreme Court. said it was more a case of two distinct entities that need to be 2017: In April, Pai announces plan to roll back Title II. regulated, but not necessarily with the same rules. 2017: FCC circulates November order to both roll back Title II and eliminate most net neutrality rules. Schedules For instance, he said, there are a lot of differences between Dec. 14 vote. Facebook and Comcast. First and foremost, he said, no con- SOURCE: Multichannel News research sumer pays a monthly subscription to Facebook. Facebook also only has a window on a user’s online activity, while an ISP has a window into all of a subscriber’s apps and services. no longer immune from talk of reigning in that power through government action. It would be a mistake to assume that Congressional Democrats are simply falling Revelations about how advertisements on social-media platforms were used by in line behind edge providers and for a continued bifurcated regulatory approach. Russia to interfere in the 2016 election put an even brighter spotlight on edge pro- A top Hill Democratic aide, speaking not for attribution, said of a cancelled vider conduct. But ISPs and others had already been trying to refocus the govern- network neutrality hearing where Republicans wanted to hear from the CEOs of ment’s attention on those power players. Google, Amazon and Facebook, that those companies don’t speak for Democrats. Pai’s sweeping deregulation will put ISPs and edge providers on a similar regula- That might be the reason Democrats offered their own list of witnesses that fea- tory footing, free to adopt various models for monetizing their businesses as long as tured smaller players, rather than “a bunch of rich white guys,” he said. the government does not conclude they are anticompetitive. If Republicans and Democrats get serious about net-neutrality legislation — That means that any efforts to legislate new rules on how content will be treated and Republicans have been sounding like they are willing to talk — look for edge will be hard-pressed not to include firms such as Google and Facebook. providers to be part of the conversation. In the meantime, ISPs will be free to ex- They may have started in garages or dormitories, but the combined market capi- periment with new business models, as have edge providers, under the presumably n talization of edge providers dwarfs that of ISPs, and the degree to which the wield watchful eye of the FTC and Justice Department. Helen Sloan/courtesy of HBO; Jackie Brown / Splash News/Newscom of HBO; Jackie Brown Helen Sloan/courtesy

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