A Summer Reading Recommendation for FCC Commissioner Rosenworcel

If FCC Commissioner Jessica Rosenworcel is still looking for some late summer reading, I have a recommendation, and one that ought to give her pause – a pause at least long enough to prod her to do some rethinking. I have in mind the Wall Street Journal's article, "The Truth About Faster Internet: It's Not Worth It," published on August 20.

The gist of the article is this: Most broadband consumers are using only a small portion of the bandwidth that they purchase from their Internet service providers, even when they are simultaneously streaming multiple videos from Netflix, Amazon Prime, and the like. The article reviews the marketing practices of the ISPs, which currently advertise speeds in the range of 250, 500, and 1000 megabits per second, and concludes: "But for a typical household, the benefits of paying for more than 100 megabits a second are marginal at best, according to the researchers."

The Journal article was based on a study conducted by 53 of its own journalists, in coordination with researchers at Princeton University and the University of Chicago. So, the sample was not large, and I'm not vouching for the reliability of the study or suggesting it should be considered the "last word" on the subject. In the still rapidly evolving, technologically dynamic broadband world, we are far from a "last word," and will be for a long time. Nevertheless, some of the conclusions are interesting and perhaps surprising – and warrant consideration by Commissioner Rosenworcel and other policymakers. 

The WSJ reports:

"Our panelists used only a fraction of their available bandwidth to watch streaming services including Netflix, Amazon Prime Video and YouTube, even simultaneously. Quality didn't improve with much higher speeds. Picture clarity was about the same. Videos didn't launch quicker."

And this:

"We found similar results across our 34 testers who ran five, six or seven streams at once. The eight users with speeds 100 Mbps or higher who had seven streams going used only about 7.1 Mbps of capacity, on average."

Now back to Commissioner Rosenworcel. As you may know, for many years she has urged that the FCC's general threshold for defining "broadband" – now 25 Mbps for downloads – be increased to 100 Mbps.

Here is only a small sampling of her statements:

2016: "I think we need to go big and be bold.  I think our new threshold should be 100 Megabits—and Gigabit speed should be in our sights." 2016 Broadband Progress Report, GN Docket No. 15-191, released January 29, 2016.

2018: "It’s past time for the FCC to go big and update its national broadband standard from 25 Megabits to 100 Megabits." 2018 Broadband Deployment Report, GN Docket No. 17-199, released February 2, 2018.

2019: "It's time for the FCC to adopt a 100 Megabits per second standard and set Gigabit speeds in our sight." 2019 Broadband Deployment Report, GN Docket No. 18-238, released May 29, 2019.

Most of these statements and others to like effect by Commissioner Rosenworcel are accompanied by a claim that adoption of anything less than a 100 Mbps definition of broadband by the Commission "shortchanges our children." Of course, making broadband deployment and availability as ubiquitous as possible and reducing any remaining digital divides is an important goal for federal and state policymakers. Under FCC Chairman Ajit Pai's leadership, the agency has undertaken important initiatives to further this goal. Indeed, in the first paragraph of its 2019 Broadband Deployment Order, the Commission reiterated that "it has made closing the digital divide between Americans with, and without, access to modern broadband networks its top priority."

And many Internet service providers themselves have undertaken their own private sector initiatives to address the goal of ubiquitous availability of broadband. In this regard, I recently took note of another significant expansion of Comcast's "Internet Essentials" program that subsidizes broadband service for low income families, seniors, and veterans, as well as providing support for computers and digital literacy to these groups.

The WSJ report makes clear that a family – including children in the family – can stream six or seven videos simultaneously using a fraction of the 100 Mbps definitional threshold that Commissioner Rosenworcel, for years, has advocated. I don't know with any certainty, but I suspect that Commissioner Rosenworcel doesn't believe children are being "shortchanged" because they can't stream enough videos – because clearly, even with 25 Mbps service, they can.

So, you might wonder what's behind Commissioner Rosenworcel's advocacy to raise the threshold definition of broadband to at least 100 Mbps. It's pretty simple, really. With a higher 100 Mbps threshold in place, she wants to bolster her claim, wrongful in my view, that broadband is not being deployed on a "reasonable and timely" basis, a determination that the Commission is required to make periodically pursuant to Section 706 of the Telecommunications Act of 1996. Moreover – voila! – by applying a 100 Mbps standard rather than 25 Mbps, there would be fewer competitors offering "broadband" service under the revised definition, although the differential between the two in terms of service offerings is decreasing rapidly.

In other words, the redefinition of what constitutes "broadband" service almost certainly would be used by Commissioner Rosenworcel to claim that it is necessary to regulate broadband as a public utility in order to ensure its reasonable and timely deployment. And it would be used to claim, with the move to the higher threshold, that any reduction in the number of "competitors," however magically derived, justifies more regulation.

To be sure, the way to deployment of ever more ubiquitous broadband, at ever faster speeds, is not down the road marked "More Regulation," especially public utility-like regulation of broadband like Commissioner Rosenworcel consistently has advocated. The evidence shows that path only discourages more investment and innovation.

I don't begrudge Commissioner Rosenworcel touting her own boldness or urging her colleagues to be "bold," as she does in each of her statements above. There is nothing wrong with expressing hortatory aspirations about the future, and, in fact, it's admirable for policymakers to look ahead in attempts to account for the future. What's wrong is to suggest that, in the here and now, nothing less than 100 Mbps qualifies as broadband service.

The WSJ report should give Commissioner Rosenworcel some pause in that regard because I don't think she wants to be in the position of advocating that consumers should be cajoled into purchasing more broadband than they need to satisfy their present demands.

And when you get right down to it, shouldn't it be actual consumer demand as expressed in the marketplace, rather than aspirational expressions by government officials touting the fastest possible service, that frames the way public policymakers think, realistically, about broadband regulatory policy?

Regulation (or Not) of Social Media

With all the current discussion regarding whether and, if so, how social media might be regulated, I want to point you to a resource with a  website with various resources on the subject. You'll see the home page features a proposal for a FINRA-like largely self-regulatory model. And it contains a number of other resource materials on the subject.

The CRE site is run by Jim Tozzi, someone with a lot of regulatory expertise and policy chops, so if you're interested in the discussion and debate regarding regulating social media, Jim's website is certainly worth checking out, regardless of your current views.

Congress Should Disregard Internet Bill for Regulation Overkill

Rep. Mike Coffman has just introduced the "21st Century Internet Act" – a bill that would put the Internet under harmful heavy regulation. The new bill is a bureaucrat’s dream, as it would empower the FCC to enforce restrictive controls over how broadband Internet networks operate. Congress should disregard this bill and its call for Internet regulation overkill. 

Rep. Coffman’s bill seeks to revive the FCC’s short-lived experiment in imposing public utility regulation on Internet access services. It would even re-impose the vague and legally dubious “general conduct” or “catch all” standard that gave the FCC seemingly unfettered power over broadband ISP network management practices. There is solid evidence that public utility regulation harmed investment in broadband Internet networks, including mobile wireless networks. In late 2017, FCC wisely repealed its unjustifiable and harmful public utility regulation. 

Importantly, the Internet remains open without public utility regulation. There is no evidence that consumers are being harmed by broadband ISP network management practices. And consistent with the FCC’s Restoring Internet Freedom Order, the Federal Trade Commission is available to take enforcement actions against any broadband ISP management practices that are unfair or deceptive. 

Unfortunately, there is plenty of evidence that major online content companies known as “edge providers” are lobbying hard and waging PR campaigns for legislation to benefit their bottom line by regulating broadband ISPs. This might explain the introduction of Rep. Coffman’s regrettable Internet regulation bill. But members of Congress should resist the temptation to assert economy-harming controls over our most advanced technologies, particularly where there is no consumer protection case for doing so. 

It is almost certain that this new Internet regulation bill will live a short and isolated existence in 115th Congress. Members of Congress should instead focus their efforts on legislation to promote economy-enhancing deployment of next-generation fiber-optic, satellite, and 5G networks to all Americans.

What's at Stake in the Restoring Internet Freedom Order

The date for the FCC’s consideration of the draft Restoring Internet Freedom order is fast approaching. It is fair say that there has not been a more momentous vote since the Wheeler Commission voted to impose the Internet regulations that are now proposed to be undone.

While there are obviously important underlying legal and policy issues, at bottom, what is at stake can be simply stated: Should broadband Internet access service be regulated like a public utility?

Based on my experience in the communications law and policy field going back forty years, I agree completely with former Clinton Administration FCC Chairman Bill Kennard when he said, in 1999, that it would be a mistake to “go to the telephone world” and “pick up this whole morass of regulation” and dump it on broadband. That is essentially what the 2015 Open Internet Order did. And that is what the leading advocates of new Internet regulation asked the FCC to do.

Susan Crawford, one of the leading pro-regulatory advocates, argued explicitly in her book Captive Audience that, for broadband, “America needs to move to a utility model.” No bones about it. Ms. Crawford stated, “like water and electricity,” broadband is a natural monopoly that must be subject to utility regulation.

As I and other Free State Foundation scholars have explained for many years, broadband is not a natural monopoly. Absent a demonstrable market failure and evidence of consumer harm, it should not be regulated like a public utility.

I was very pleased that on December 4, the Free State Foundation published “Reactions to the FCC’s Restoring Internet Freedom Draft Order” from ten members of our Board of Academic Advisors. These prominent scholars make a convincing case for changing course – for reversing the 2015 order’s imposition of public utility regulation.

I urge you to read their entire statements. But here I want to highlight a very brief excerpt from each one that is useful in helping to appreciate what’s at stake – and that, hopefully, spurs you to read them all.

BABETTE BOLIEK

The second serious problem created the 2015 Order was the FCC’s creation of the Internet General Conduct Rule. By the FCC’s own edict, the FCC can (i) articulate new, unpermitted business practices, (ii) judge when these previously unarticulated violations of the rule have occurred and (iii) punish violators. The FCC is lawmaker, judge, and executioner – a tri-partite government buried deep in the bowels of the FCC.

TIMOTHY BRENNAN

The previous FCC should never have gone down the 2015 OIO path. Simply, and with modesty, it should have proposed that, because of the general importance of the Internet as a communications medium, it would codify established industry practices regarding delivery of standard quality content, and leave the rest to the market – including paid prioritization to foster innovations requiring higher quality service.

MICHELLE CONNOLLY

The current FCC intends to reverse an order imposed in 2015. I do not see how anyone can argue that the Internet, content, and services on the Internet, and freedom of speech were not flourishing before 2015.

ROBERT CRANDALL

Supporters of the FCC’s decision to repeal Title II (“public utility”) regulation of broadband carriers applaud the decision in large part because they believe that such regulation suppresses capital investment. Recent studies show a substantial slowdown in capital expenditures by broadband carriers since 2014 when the FCC began considering some form of public-utility regulation of broadband.

RICHARD EPSTEIN

All network industries are difficult to organize and regulate. The Wheeler rules underestimated the complexity of the broadband market that the Pai order fully acknowledges, Professor Wu’s overwrought critique notwithstanding.

JUSTIN (GUS) HURWITZ

The new Order, however, is better – factually better, legally better, and better reasoned – than the previous one. It is sufficient on its own terms to survive judicial review – and it is more sufficient than the previous Order to survive review on the terms the D.C. Circuit applied to that Order.

DANIEL LYONS

I also applaud the Commission’s focus on transparency. For competition to work, consumers must make informed choices between providers, which means understanding what each provider offers. Through this order, the FCC can improve the quality of broadband markets by assuring consumers get the information they need to make an informed choice among providers.

JAMES PRIEGER

Those who foresee dire consequences for the future of the American Internet from rolling back the 2015 Title II regulation ignore the great success and continued growth of the Internet over the past two decades – growth that occurred (until 2015) in the absence of net neutrality regulation. I look forward to the lighter-touch regulation of ISPs to, as the draft order states, “advance our critical work to promote broadband deployment in rural America and infrastructure investment throughout the nation, brighten the future of innovation both within networks and at their edge, and move closer to the goal of eliminating the digital divide.”

CHRISTOPHER WALKER

Last week Chairman Ajit Pai announced his intention to roll back the FCC’s 2015 Open Internet Order. I leave it to experts in the telecommunications field to debate the legal and policy merits of the proposed order. As a scholar of administrative law, however, I applaud Chairman Pai’s decision to make public the draft text of the Restoring Internet Freedom Order in advance of the FCC’s consideration at its next public meeting.

CHRISTOPHER YOO

The Federal Communications Commission is poised to adopt the proposed order on Restoring Internet Freedom. The network neutrality debate has always struck me as having a backward-looking quality, calling for preservation of certain features that are claimed to have been critical to the Internet’s past success. As the FCC’s proposed order discusses at length, the record before the agency tells a different story. The existing rules have deterred investment and innovation and worsened the digital divide by making service in rural and low-income areas and service by small ISPs more costly.

So, there is much at stake when the Commission votes on December 14. Here, I’ll let Christopher Yoo have the last word, not only because he fell last in alpha order, but because in this, as in so much else, he is profoundly correct:

“Returning to the light-touch policy that has served the Internet so well represents the best way to foster innovation in a changing environment. If not, the U.S. risks remaining stuck on the innovation-stifling path that has served other countries so poorly.”

A Comment on the FCC Net Neutrality Comments

This comment regarding the FCC’s comment process in the agency’s Restoring Internet Freedom proceeding is not about the merits of the proceeding. Rather it’s about administrative law and, more specifically, the proper conduct of rulemaking proceedings at the FCC and the agency’s institutional integrity.

It’s no secret that, on the merits, I favor the repeal of current Internet service provider regulations adopted by the FCC in 2015. But I write now based on my experience and expertise as a former FCC Associate General Counsel, a former Chair of the American Bar Association’s Section of Administrative Law and Regulatory Practice, a former Public Member and current Senior Fellow of the Administrative Conference of the United States, and a Fellow of the National Academy of Public Administration. In other words, I write from an administrative law and public administration perspective.

Perhaps it is not surprising that in conjunction with the FCC’s release of the draft of its Restoring Internet Freedom order on November 22 proposing to repeal the current Internet regulations that the pro-regulatory forces would renew their attacks on the FCC’s rulemaking process. Not surprising, but disappointing nevertheless.

Witness the November 24 article by the Washington Post’s Brian Fung which begins this way: “[A] mounting backlash from agency critics is zeroing in on what they say are thousands of fake or automated comments submitted to the FCC that unfairly skewed the policymaking process.” The article reports that New York Attorney General Eric Schneiderman alleges that the process “has been corrupted by the fraudulent use of Americans’ identities.” I wouldn’t be at all surprised if General Schneiderman calls for Special Counsel Robert Mueller to investigate.

But let’s get real – and be frank – for the sake of a proper understanding the FCC’s rulemaking process and the agency’s institutional integrity.

Over 22,000,000 “comments” have been filed since the Restoring Internet Freedom proceeding was initiated in May. The vast majority – surely 99% – of these are computer-generated short form conclusory comments, and there are literally many millions of them both favoring and opposing repeal of the current rules. Virtually none of these conclusory comments address the Commission’s legal authority, a central issue in the proceeding. All of this – that is, the “war of the comments” – follows the effort by then-Chairman Tom Wheeler, and his staff, to mount an all-out political-style campaign in 2015 to generate as many short form comments as possible favoring his pro-regulatory proposal. Naturally, the other side responded in kind.

These are indisputable facts.

And this too, as I put it in a July 2017 Washington Times op-ed, ought to be indisputable as a proper understanding of the law: “[T]he fundamental point – an important one relating to maintaining the Commission’s institutional integrity – is that the agency’s ultimate determination should be based primarily on the application of its expertise regarding the facts and the law, not on a campaign-style plebiscite.”

The correctness of this point is widely acknowledged. The Administrative Conference’s Recommendation 2013-5, adopted in December 2013, regarding the use of social media in conjunction with rulemaking, states: “Another concern is that the use of ranking or voting tools may mislead some to believe that rulemaking is a plebiscite…” In her article, “Should Mass Comments Count?”, administrative law scholar Nina Mendelson states: “All agree that public comments cannot serve as a plebiscite on the issue before the agency. But large volumes could, as I argued, trigger more thoughtful consideration and evaluation by the agency.”

I don’t disagree that a large volume of comments should serve as a “trigger.” Indeed, in my Washington Times op-ed, I acknowledged that “an extraordinary number of public comments submitted in a Commission proceeding is an indication of heightened interest that should cause the agency to take notice and pay extra special attention to the facts and the law that should inform its decision.”

Now, no one can read, even casually, the FCC’s 200-page draft order, with its 1318 footnotes, and contend that the agency has not seriously evaluated and given thoughtful consideration to all the issues. And perhaps more to the point here, no one can contend that the draft order does not seriously evaluate and pay special attention to the issues raised by those opposing repeal of the current public utility Internet regulatory regime. Indeed, the draft order cites the comments and responds to the points raised by the groups most notable for opposing the repeal many, many times throughout the draft: Public Knowledge 70 times; OTI America 55 times; and Free Press 54. These commenters, and other pro-regulatory entities, filed lengthy comments, which deserved to be considered seriously, and they were. No one can credibly argue otherwise.

As I said in the Washington Times piece back in July:

[I]n the case of the FCC’s current rulemaking, there are important economic and technological considerations, often involving complex cost-benefit calculations and tradeoffs, that should carry more weight than a count of comments. For example, there is empirical evidence showing that public utility-like regulation deters investment and that rigid prohibitions on “discrimination” deter innovation because ISPs are discouraged from differentiating their offerings. Highly technical network operations impact determinations as to whether practices, such as prioritization of certain kinds of traffic, constitute reasonable network management techniques or instead attempts to disadvantage competitors. And, finally, there are serious questions relating to the FCC’s legal authority to regulate ISPs as public utilities.

Under a proper understanding of the law, it is incontestable that the rulemaking process is not a plebiscite. If Attorney General Schneiderman and others want to continue to focus on the “count” of computer-generated comments that may be their prerogative. But I suggest that this diversionary tactic is quite telling – that is, telling us quite a lot about their lack of confidence in the substantive arguments opposing the restoral of Internet freedom.