FirstNet's "Priority and Preemption" Secures Public Safety Communications

On April 26, FirstNet and the AT&T Policy Forum hosted an event titled "Looking Back – The Ultimate Stress Test for FirstNet." The event included a conversation with Congressman Bob Latta and a panel event discussing public safety communications and FirstNet's operations over the past year. The discussion highlighted the importance of FirstNet's "priority and preemption" feature that ensures public safety users have solid connections to communicate in emergencies or for other public safety purposes. 

Paragraph 24 of the FCC's October 2020 Restoring Internet Freedom Remand Order spotlighted FirstNet and its dedicated public safety service:

The record reflects that many public safety entities have access to and make use of dedicated public safety-specific and/or prioritized, specialized enterprise-level broadband services for data communications between public safety officials Perhaps the most important example of a dedicated network is the Congressionally-created First Responder Network Authority (FirstNet). In 2012, Congress passed the Middle Class Tax Relief and Job Creation Act, which in part directed "the establishment of a nationwide, interoperable public safety network" to "ensure the deployment and operation of a nationwide, broadband network for public safety communications" —a resilient network capable of supporting both data and voice communications. The law granted 20 megahertz of spectrum to be used for the network and allocated $7 billion of funding. FirstNet offers service priority and preemption, which allow first responders to communicate over an "always-on" network… The record reflects that "[m]ore and more, public safety is relying on the FirstNet core and public safety’s own dedicated network for critical public safety communications – one that offers faster performance than commercial networks."  

In the next paragraph, the FCC's order offered additional insights into the public safety communications and dedicated or prioritized broadband Internet services: 

"[O]ther service providers have recently begun offering or enhanced their public safety services to compete with FirstNet." For example, Verizon offers services designed for first responders and public safety entities through its public safety private core that include the ability to prioritize public safety communications to ensure that they stay connected during emergencies. Such services also provide an extra layer of assurance that public safety communications will continue to operate during peak times. In addition, public safety users "have access to several … enhanced services" from Verizon, including Mobile Broadband Priority Service and data preemption. These services "provide public safety users priority service for data transmissions" by giving users priority over commercial users during periods of heavy network congestion and "reallocat[ing] network resources from commercial data/Internet users to first responders" if networks reach full capacity. 

The view expressed by the FCC's order are consistent with comments filed in the proceeding by Free State Foundation President Randolph May and I. As FSF's comments stated: "Paid prioritization arrangements offer a valuable option for government agencies responsible for public safety to use communications services that feature higher quality and improved reliability compared to traditional best-efforts broadband networks."

Prepared Remarks of FTC Chairman Joseph Simons at FSF's Telecom Policy Conference

The Free State Foundation's Eleventh Annual Telecom Policy Conference was on March 26. This year's conference included a keynote address by Federal Trade Commission Chairman Joseph Simons. His remarks focused on "how the FTC's two missions—competition and consumer protection—apply to the internet ecosystem."

Chairman Simons offered an overview of how the FTC can reach broadband Internet service provider behavior such as blocking, throttling, and paid prioritization under its antitrust and consumer protection jurisdiction. He also discussed the FTC's authority to address alleged deceptive and unfair privacy and security practices by ISPs. According to Chairman Simons, "the FTC will remain active in Internet commerce… we will be able to protect consumers from anticompetitive and unfair or deceptive conduct by ISPs and other firms in this fast-paced industry."

The prepared version of Chairman Simons' remarks is available at the FTC's website here.

California Governor Jerry Brown Should Veto Net Neutrality Bill

California Governor Jerry Brown has until September 30^th to sign or veto SB 822, the “California Internet Consumer Protection and Net Neutrality Act,” which would impose even more burdensome net neutrality regulations on broadband ISPs than the FCC’s 2015 Title II Order. If he does not sign or veto SB 822 by September 30^th, the legislation becomes law.

As Randolph May and I stated in a recent Perspectives from FSF Scholars titled “California Net Neutrality Bill Would Stifle Network Investment,” SB 822 would prohibit or heavily restrict consumer-friendly innovations, like paid prioritization and zero-rated services. SB 822 also would contribute to the creation of a "patchwork" of differing state net neutrality regulations, hindering the delivery of interstate communications services for broadband providers and discouraging network investment throughout California.

In summary, Governor Brown should veto SB 822.

Paid Prioritization: The "Third Rail" of the Net Neutrality Controversy

At the Free State Foundation’s Tenth Annual Telecom Policy Conference last week, the speakers discussed a wide range of topics, including net neutrality, 5G and advanced fiber deployments, spectrum policy, universal service and Lifeline, and more. We’re grateful that C-SPAN-2 covered the conference from start to finish, and you can find the entire C-SPAN broadcast here.

Over the next few weeks we will be recounting some of what we learned at the conference. Here I want to highlight some of the discussion relating to so-called paid prioritization, what Comcast Senior Executive Vice President David Cohen called the “third rail” of the net neutrality controversy. Mr. Cohen said that he is amenable to considering a ban on paid prioritization if there is a limited exception for provision of specialized services. Harkening back to the FCC’s 2010 Open Internet Order, he suggested that “something might come along that is not anti-competitive, that is pro-consumer, and that is a specialized service that is not available to every user of the Internet that would be in the public interest.”

My longstanding position has been that there should not be an absolute ban on paid prioritization arrangements, but rather a presumption that such arrangements between Internet service providers and Internet users should be deemed lawful absent convincing evidence that a particular arrangement causes either consumer harm or is anti-competitive. This position acknowledges the possibility that a particular arrangement may be anti-competitive or harmful to consumers, but it places the burden on those challenging the arrangement to demonstrate this. In my view, if the burden is placed otherwise – or certainly if an absolute ban exists – there is a substantial risk that experimentation by Internet service providers with beneficial new services will be chilled and that investments that otherwise would be made in modernizing broadband networks will be foregone. Neither result benefits consumers.

Regardless of my own views, because paid prioritization is such a key part of the net neutrality controversy, it is worth considering the comments of a few of the other conference speakers.

Here’s Jeff Campbell, Cisco’s Vice President, The Americas of Global Affairs:

“Paid prioritization, or prioritization in general, is one of the most misunderstood issues out there. I wish the press would stop writing fast lanes, slow lanes. The Internet has no lanes. They do not exist! Traffic either goes or it does not go. It moves at the speed of electrons, or the speed of light. When there’s congestion, you either drop packets randomly or you drop them intelligently by using some sort of prioritization scheme. Now I would posit that there are a lot of benefits to intelligently deciding what traffic has better quality of service than other things. I am going to give you two examples - one which is crucial and one which is mundane but very important too. The first is – I guarantee you that all the people who are against paid prioritization are hugely in favor of paid prioritization the minute we start having remote surgery occurring across electronic networks. You want those packets to be prioritized. You want them to get through and you want everything to work right. There’s a benefit to doing that. It’s not an inherently bad thing. It’s good technology.”

“Rather than banning the technology, because that’s what a ban on paid prioritization is - you’re essentially banning the use of this technology, we should talk about whether the technology is being used for good or for bad. If it’s being used anti-competitively, we can write rules or use the existing law or both to address those situations. But there are a lot of benefits that can come from the use of prioritization and quality of service technology and I think that it would be a real mistake for our country to walk away from that because the rest of the world isn’t walking away from it.”

Michelle Connolly, Duke University Professor of Economics and a Member of FSF’s Board of Academic Advisors said this:

“And I don’t want [paid prioritization] to be swept under the rug because simply people are so happy to be getting rid of Title II regulation that they forget that paid prioritization is a very important thing about keeping this market free and allowing people to have services - that they may want to have certain quality of services and they are willing to pay for it. They should have that right to do that. As an economist, this is about a market and this is about intervention in a market and that should not be forgotten.”    

And then Professor Connolly, as she had at last year’s conference, related what she calls the “waterbed effect” to a ban on paid prioritization:

“Essentially this amounts to a subsidy that is paid to certain types of content providers who want the quality of service but don’t want to pay for paid prioritization. And so if we think about a waterbed, if any of you in the 70s went on a waterbed, if you push down on one side – and you say that the price is going to be lower here for something, it’s going to go up somewhere else. So the idea was that in terms of the digital divide, the Open Internet Order of 2015, by creating this inability to charge for something, was inherently pushing up the price of the average service to the average consumer. And to the extent that we think that their income is large component of when people are not adopting, you are going to be exacerbating the digital divide when you have the no paid prioritization.”

Immediately following this statement by Professor Connolly, Christopher Yoo, also a Member of FSF’s Board of Academic Advisors and Professor of Law at the University of Pennsylvania suggested this regarding a paid prioritization ban: “By reducing the ability to raise revenue, you’ve raised the breakeven number of consumers, you’ve made it harder for them to be viable and you’ll see fewer areas built out. It’s quite simple.”

Finally, when asked about paid prioritization, Commissioner Michael O’Rielly answered: “I don’t think there should be a ban on paid prioritization. I disagreed with that point. I’ve testified to that fact that I don’t think that it should be part of a legislative package that goes forward. We’ll just see what the Congress does with that suggestion.”

As the ongoing net neutrality controversy continues, with paid prioritization at or near the forefront, I hope this recounting of some of the conference discussion is helpful. And over the years, we’ve spilled an awful lot of ink – and worn out a lot of keyboards – addressing paid prioritization. If you wish to explore the issue in more depth, here are just two Perspectives from FSF Scholars that are worth reading:

·         Theodore Bolema, Allow Paid Prioritization on the Internet for More, Not Less, Capital Investment, May 2017.

·         Daniel Lyons, Title II Reclassification Is Rate Regulation, February 2015.

Don’t forget the C-SPAN video is here.

Paid Prioritization Arrangements Improve Telemedicine Prospects

Telemedicine is an emerging Internet application that requires a very high level of end-to-end reliability. It includes telesurgery, which now allows specialized surgeons in one location to operate on patients in completely different locations. Telemedicine can offer patients in small hospitals or remote areas access to highly-skilled specialists who otherwise would not serve those areas. Telesurgery, as well as certain other telemedicine applications, can only become viable if the providers have access to extremely reliable, high-speed Internet connections.

In contrast, many other Internet uses do not require the same level of reliability or speed. Email traffic, most file downloading, and many other uses lose little of their value if their transmission is delayed somewhat, although too long a delay could diminish their value. These types of Internet applications simply do not require the same type of highly reliable, high-speed access that telemedicine and other applications require.

Telemedicine is an example of an Internet application that could benefit from receiving a prioritization arrangement. Prioritization arrangements are agreements between broadband providers and providers of content over the Internet that allow the content provider to receive priority access in a so-called “fast lane” to avoid congestion on the Internet. As FCC Commissioner Michael O’Rielly pointed out in April 2017: “Even ardent supporters of net neutrality recognize, as I've said before, that some amount of traffic differentiation or ‘prioritization’ must be allowed or even encouraged.”

The 2015 Open Internet Order contained a “bright-line” ban on paid prioritization arrangements, which was eliminated when the FCC adopted the December 2017 Restoring Internet Freedom Order (RIF Order). Free State Foundation scholars have argued that the new 2017 Order will lead to more capital investment, making better and more reliable Internet connections available to more Americans, and will also allow for innovative prioritizations and other arrangements that can have significant economic benefits. Telemedicine, with its need for highly reliable, high-speed Internet access, is likely to be one of the applications that benefits most from this increased investment and potential for more flexibility in access arrangements.

Some, however, have suggested that the 2017 RIF Order may threaten the future development of telemedicine. For example, Mei Wa Kwong, Interim Executive Director and Policy Advisor for the Center for Connected Health Policy, wrote:

At the December 14, 2017, open commission meeting of the Federal Communications Commission (FCC), commissioners will vote on whether to repeal current net neutrality rules. Such action may have wide-reaching impacts on the use of telehealth. Community health clinics, such as federally qualified health centers (FQHCs) and rural health centers (RHCs), could see higher rates for connectivity that may reduce, eliminate, or discourage them from using telehealth to deliver health care services, especially in rural areas. Additionally, telehealth in the home could be severely curtailed as consumers may face higher prices for connectivity that would be sufficient for a telehealth interaction. To allow practitioners and patients to provide and access care anywhere would require reliable and adequate connectivity that could be priced out of the users' range with removal of net neutrality. 

The concerns described above are entirely, even by their own terms, conjectural, and are unlikely to occur in any way that is harmful to the development of telemedicine. Paid prioritization was not prohibited before the 2015 Order, and in any event such arrangements were never implemented in any significant way. More importantly, however, experience with paid prioritization arrangements in other markets provides strong evidence that Internet providers will not have the incentives to engage in conduct likely to harm the emerging telemedicine market.

In my May 2017 Perspectives from FSF Scholars, I described how paid prioritization arrangements are very common throughout the economy. For example, the U.S. Post Office has long offered priority delivery, airlines make priority boarding available to customers, grocery stores allow for priority placement of certain products, and highways all offer priority toll lanes to drivers. In all of these various markets where paid prioritization arrangements have regularly been used, the result is more capital investment and more benefits for consumers. When such arrangements are put in place, the result is not to price the priority service out of the range of the users with the greatest need, but rather, to price in such a way that both the priority and non-priority customers are served, usually with both groups better off than they otherwise would have been.

Indeed, Virginia Governor Terry McAuliffe last year explained how the current I-395 expansion project in Alexandria, Virginia, is using an optional toll system to attract private investment for highway construction that would not have otherwise occurred. As McAuliffe correctly pointed out, this toll system will relieve congestion and improve access for all travelers, not just the ones who choose to pay the toll to be in the fast lane.

We can expect the same with telemedicine following the 2017 Restoring Internet Freedom Order. FCC Chairman Ajit Pai recently explained how the RIF Order will help, not harm, the prospects for telemedicine in rural areas by promoting more investment and allowing for more flexibility in priority arrangements for services like telemedicine:

One of the biggest drags on investment in faster, better, cheaper broadband has been the FCC’s 2015 decision to scrap the tried-and-true, light-touch regulation of the Internet and replace it with heavyhanded micromanagement. In two weeks, we’ll vote on a plan to restore Internet freedom and bring back the same legal framework that was governing the Internet three years ago today and that has governed the Internet for most of its existence. This will result in increased investment in infrastructure and more digital opportunity for seniors, especially in rural and low-income urban areas.

One aspect of this proposal I think is worth highlighting here is the flexibility it would give for prioritizing services that could make meaningful differences in the delivery of healthcare. By ending the outright ban on paid prioritization, we hope to make it easier for consumers to benefit from services that need prioritization—such as latency-sensitive telemedicine. Now, we can’t predict exactly which innovations entrepreneurs will come up with. But by replacing an outright ban with a robust transparency requirement and FTC-led consumer protection, we will enable these services to come into being and help seniors.

As Commissioner O’Rielly summarized in his statement supporting the Restoring Internet Freedom Order:

Clearly, there are cases today and many more that will develop in time in which the option of a paid prioritization offering would be a necessity based on either technology needs or consumer welfare. I, for one, see great value in the prioritization of telemedicine and autonomous car technology over cat videos. 

In sum, the real threat to the emergence of telemedicine is not, as Mei Wa Kwong suggests, the removal of the ban on paid prioritization. Rather, the threat to telemedicine is from prohibiting innovative access arrangements and suppressing capital investment that would otherwise increase capacity, allow greater access, and improve reliability of Internet connections. Telemedicine is likely to benefit from an acceleration in capital investment and from allowing more flexible arrangements that make priority access available where it is needed the most. And, to be sure, there are other emerging innovative Internet applications that will as well.

Priority Communications Services for Governments: Lessons for Private Prioritization

The Federal Communication Commission’s 2015 Open Internet Order contains a ban on “paid prioritization,” or agreements that allow a content provider to pay an Internet service provider for priority treatment in a “fast lane” to jump around congestion on the Internet. I described in a May 2017 FSF Perspectives how paid prioritization arrangements are very common in many markets and usually lead to pro-consumer benefits.

While the Open Internet Order prohibits Internet Service Providers (ISPs) from charging for prioritization, other FCC policies encourage prioritization arrangements, so long as other government agencies are the ones given access to the fast lane. There is a lesson here for the government that it ought to recognize with regard to private sector prioritization arrangements on the Internet.

Prioritization arrangements can have benefits for consumers and the general public, and it is entirely appropriate for the FCC to provide for favorable access for government emergency and disaster responders. But the same logic applies to at least some private services on the Internet, which are likely to be delayed or deterred so long as the rigid prohibition against paid prioritization remains in place.

The FCC majority in the 2015 Open Internet Order argued that having a fast lane for those willing to pay for it would place their competitors in the “slow” lane at a disadvantage. Moreover, they asserted that without this ban, ISPs would have the incentive to make the slow lane even less attractive by avoiding investing in it, so that firms in the slow lane would eventually be forced to pay to move to the fast lane. Thus, the 2015 FCC adopted the following prohibition:

No Paid Prioritization. Paid prioritization occurs when a broadband provider accepts payment (monetary or otherwise) to manage its network in a way that benefits particular content, applications, services, or devices. To protect against “fast lanes,” this Order adopts a rule that establishes that:

A person engaged in the provision of broadband Internet access service, insofar as such person is so engaged, shall not engage in paid prioritization. “Paid prioritization” refers to the management of a broadband provider’s network to directly or indirectly favor some traffic over other traffic, including through use of techniques such as traffic shaping, prioritization, resource reservation, or other forms of preferential traffic management, either (a) in exchange for consideration (monetary or otherwise) from a third party, or (b) to benefit an affiliated entity.

As then-Commissioner Ajit Pai pointed out  at the time, the FCC adopted this blanket ban on paid prioritization even though ISPs had not adopted paid prioritization in any meaningful way. The effect on capital investment of the 2015 order, which included the paid prioritization ban, has been the opposite of what the 2015 FCC majority predicted, because broadband investment is down significantly since the Open Internet Order was implemented. Indeed, Free State Foundation Research Associate Michael Horney has estimated that in 2015 and 2016 investment declined by $5.6 billion.

On a page titled “Priority Telecommunications Services,” the FCC website explains how it views the importance of certain prioritization programs:

Often times, it is necessary to either prioritize the provisioning of new communications services or prioritize the restoration of services that have been damaged or otherwise are not functioning. This is especially true in disaster situations when numerous outages may occur at once or systems become overloaded by demand. This topic introduces three major priority service programs that have been established by the Federal government in order to provide prioritized system access for designated users or to allow for prioritized installation/restoration of services. The Federal government administers these priority communications services that are provided by the wireline and wireless telecommunications carriers and are necessary to promote the nation's security and emergency preparedness (NS/EP) functions.

One of the three programs described above by the FCC is the Telecommunications Service Priority (TSP) program, which is authorized by the FCC and administered by the Department of Homeland Security (DHS) Office of Emergency Communications. The TSP program is a paid prioritization arrangement. According to DHS:

TSP is a fee-based program and organizations pay their telecommunications vendor for the services. TSP set-up and recurring costs vary depending on 1) the type of service requested (provisioning or restoration), 2) the telecommunications vendor providing the service (e.g. AT&T, CenturyLink, Sprint, Verizon, etc.), and 3) the geographic location requested for the provisioning or restoration service.

Prioritization arrangements can have benefits for consumers and the general public, and nothing herein is intended to be criticism of the current FCC policies giving favorable access to government emergency and disaster responders. As emergency services and public safety evolve, government agencies may want to have even greater access to paid prioritization available to them for government functions such as Amber alerts, severe weather alerts, and Homeland Security warnings.

But the same logic applies to at least some other services on the Internet, which are less likely to be widely available so long as the rigid prohibition against paid prioritization remains in place.

For example, telemedicine is an emerging private application that may require prioritization in order to become widely available and accepted as reliable. Telesurgery now allows specialized surgeons in one location to operate on patients in completely different locations. The emerging market for telesurgery can give patients in small hospitals or remote areas access to highly-skilled specialists who otherwise would not serve those areas. According to a recent medical journal article:

The ultimate goal of telerobotic surgery is to replicate the normal process of surgery from a distance. The success of telesurgery (or any aspect of telemedicine for that matter) depends largely on how faithfully and without incident remote activities duplicate their on-site equivalents. Because of its direct impact on surgeon performance, a frequent metric in real-time telesurgery research is that of system delay (citations omitted).

Autonomous vehicles and interactive e-learning are other examples of applications in their early stages of development that require a high level of end-to-end reliability. Investors may be unwilling to take the risk of investing in these applications if they cannot be assured of reliable prioritized broadband connections. The FCC’s prohibition against charging for paid prioritization may well prevent these services from developing, as well as other new applications that no one is yet anticipating.

As FCC Commissioner Michael O’Rielly recently stated, “Even ardent supporters of net neutrality recognize, as I've said before, that some amount of traffic differentiation or ‘prioritization’ must be allowed or even encouraged.” Moreover, to the extent the Open Internet Order is suppressing capital investment broadband infrastructure, that is infrastructure that is not available for government first responder needs. 

Whatever policy the FCC adopts as part of its present proceeding, it should not be a rigid ban against paid priority arrangements for private Internet uses, which precludes arrangements that offer tremendous potential health, safety, and economic benefits. The government actually authorizes priority arrangements, and recognizes their value, in various emergency, public safety and related contexts. It should not adopt a blanket ban on such arrangements that would prevent their development in other contexts that would prove valuable to consumers.

Title II Would Not Ban Paid Prioritization

Paid prioritization might be the most discussed topic in the Net Neutrality debate. The problem is that many of the people discussing it do not actually understand it. Paid prioritization is the act of edge providers paying Internet Service Providers (ISPs) for priority delivery over last-mile broadband networks. (For example, Netflix could pay Verizon a fee so high-definition video traffic is given a higher priority over other traffic on Verizon’s network.) However, there is no evidence that paid prioritization is occurring at this time.

Last week, FCC Commissioner Ajit Pai led the “Forum on Internet Regulation” at Texas A&M University’s Bush School of Government and Public Service. One of the panelists, Stewart Youngblood, an Ambassador at the Dallas Entrepreneur Center, said he primarily supports imposing Title II regulation on ISPs because Title II would ban paid prioritization. But this is not actually the case. I do not want to pick on Mr. Youngblood specifically because the view he expressed is a common misconception among Title II advocates. But I do wish to make a point so that this issue is better understood.

Daniel Lyons, a member of FSF’s Board of Academic Advisors, published a helpful article about this topic in July. The semantics of the issue come from Section 202 of Title II which prohibits common carrier telecommunications providers (as ISPs would be classified under Title II but currently are not) from engaging in “unreasonable discrimination.” While Mr. Youngblood and other Title II advocates almost certainly would describe paid prioritization as unreasonable discrimination, Professor Lyons argues that they should not do so:

[Section 202] does not require that the telecommunications provider offer only a single class of service to all people. Rather, it only prohibits discrimination among ‘like’ services – services that a customer may view as ‘functionally equivalent.’ In other words, we need to separate differentiation (offering different products at different prices) from discrimination (offering the same product at different prices).

Because priority delivery is a different product from traditional “best efforts” delivery, it can be provided under Title II so long as the price for such prioritization is the same for all edge providers choosing the same option. In his article, Professor Lyons makes an apt, easily understandable comparison to a modern-day common carrier: 

The Postal Service is required to offer first-class delivery to any interested shipper, at the same price. But this does not prohibit it from offering priority delivery or express mail at a premium to those shippers who need their packages delivered more quickly than traditional first-class mail would permit (or to charge less for those willing to accept longer delays).

Just as price differentiation is permitted for mail delivery services, it likely would be permitted under Title II for data delivery services, as long as each delivery service and corresponding price is the same for all takers of the service.

The price differentiation of delivery services allows for data to be delivered to the Internet users who value it the most. With or without Title II regulations, consumer welfare likely would increase if some edge providers offered some forms of paid prioritization that consumers value. At the moment, consumers who do not use applications that require low latency or high bandwidth such as Skype and Netflix, respectively, are subsidizing the consumers who do use them. This is because ISPs sometimes give priority to these types of applications as a means of network management in order to avoid congestion and ensure quality service to their subscribers. But since subscribers are not charged by per megabit use, the low-use subscribers generally are subsidizing the high-use subscribers. Therefore, if edge providers, whose content requires low latency or high bandwidth, paid for the priority delivery, the higher costs they impose could be levied on users of those applications, as opposed to ISPs levying the costs on all consumers.

If ISPs were classified as common carriers under Title II, paid prioritization presumably would not be considered “unreasonable discrimination” if the priority service were offered to all edge providers on the same terms. And more importantly, it is likely that, overall, consumers would benefit from such prioritization because ISPs would increase economic efficiency by responding to consumer demands through price differentiation.