Miscellaneous

Big names weigh in on FCC’s net-neutrality rules

by on May 16, 2017 · 0 comments

Guest post from Joe Kane, R Street Institute

We seldom see a cadre of deceased Founding Fathers petition the Federal Communications Commission, but this past week was an exception. All the big hitters—from George Washington to Benjamin Franklin—filed comments in favor of a free internet. Abraham Lincoln also weighed in from beyond the grave, reprising his threat “to attack with the North” if the commission doesn’t free the internet.

These dead Sons of Liberty likely are pleased that the FCC’s proposed rules take steps to protect innovation and free the internet from excessive regulation. But it shouldn’t surprise us that politicians have strong opinions. What about some figures with a broader perspective?

Jesus weighed in with forceful, if sometimes incomprehensible, views that take both sides on the commission’s Notice of Proposed Rulemaking, which seeks comment on scaling back the FCC’s 2015 decision to subject internet service to the heavy hand of Title II of the Communications Act of 1934. Satan, on the other hand, was characteristically harsher, entreating the commissioners to “rot in Florida.”

Our magical friends across the pond also chimed with some thoughts. Harry Potter, no doubt frustrated with the slow Wi-Fi at Hogwarts, seems strongly in favor of keeping Title II. His compatriot Hermione Granger, however, is more supportive of the current FCC’s efforts to move away from laws designed to regulate a now defunct telephone monopoly, perhaps because she realizes the 2015 rules won’t do much to improve internet service. Dumbledore used his comments to give a favorable evaluation of both Title II and the casting of Jude Law to portray his younger self in an upcoming film.

A few superheroes also deigned to join the discourse. Wonder Woman, Batman and Superman joined a coalition letter which made up with brevity what it lacked in substance. The same can’t be said for the FCC’s notice itself, which contains dozens of pages of analysis and seeks comments on many substantive suggestions designed to reduce regulatory burdens on infrastructure investment and the next generation of real time, internet-based services. Another, more diverse, coalition letter was joined by Morgan Freeman, Pepe the Frog, a “Mr. Dank Memes” and the Marvel villain (and Norse trickster god) Loki. It contained a transcript of Jerry Seinfeld’s Bee Movie.

Speaking of villains, Josef Stalin made known his preference that no rules be changed. But Adolf Hitler attacked Stalin’s position like it was 1941.

Then there are those with advanced degrees. Doctor Bigfoot and Doctor Who filed separate comments in support of net neutrality.

In a debate too often characterized by shrill and misleading rhetoric, it’s heartening to see the FCC’s comment process is engaging such lofty figures to substantively inform the policymaking process. I mean, it sure would be a shame if taxpayer money supporting the mandatory review of the 1,500,000+ comments in this proceeding was wasted on fake responses.

This post was originally posted at the R Street blog.

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The FCC’s Misguided Paid Priority Ban

by on April 13, 2017 · 0 comments

There is reporting suggesting that the Trump FCC may move to eliminate the FCC’s complex Title II regulations for the Internet and restore the FTC’s ability to police anticompetitve and deceptive practices online. This is obviously welcome news. These reports also suggest that FCC Chairman Pai and the FTC will require ISPs add open Internet principles to their terms of service, that is, no unreasonable blocking or throttling of content and no paid priority. These principles have always been imprecise because federal law allows ISPs to block objectionable content if they wish (like pornography or violent websites) and because ISPs have a First Amendment right to curate their services.

Whatever the exact wording, there shouldn’t be a per se ban of paid priority. Whatever policy develops should limit anticompetitive paid priority, not all paid priority. Paid prioritization is simply a form of consideration payment, which is economists’ term for when upstream producers pay downstream retailers or distributors for special treatment. There’s economics literature on consideration payments and it’s an accepted business practice in many other industries. Further, consideration payments often benefit small providers and niche customers. Some small and large companies with interactive IP services might be willing to pay for end-to-end service reliability.

The Open Internet Order’s paid priority ban has always been short sighted because it attempts to preserve the Internet as it existed circa 2002. It resembles the FCC’s unfounded insistence for decades that subscription TV (ie, how the vast majority of Americans consume TV today) was against “the public interest.” Like the defunct subscription TV ban, the paid priority ban is an economics-free policy that will hinder new services. 

Despite what late-night talk show hosts might say, “fast lanes” on the Internet are here and will continue. “Fast lanes” have always been permitted because, as Obama’s US CTO Aneesh Chopra noted, some emerging IP services need special treatment. Priority transmission was built into Internet protocols years ago and the OIO doesn’t ban data prioritization; it bans BIAS providers from charging “edge providers” a fee for priority.

The notion that there’s a level playing field online needing preservation is a fantasy. Non-real-time services like Netflix streaming, YouTube, Facebook pages, and major websites can mostly be “cached” on servers scattered around the US. Major web companies have their own form of paid prioritization–they spend millions annually, including large payments to ISPs, on transit agreements, CDNs, and interconnection in order to avoid congested Internet links.

The problem with a blanket paid priority ban is that it biases the evolution of the Internet in favor of these cache-able services and against real-time or interactive services like teleconferencing, live TV, and gaming. Caching doesn’t work for these services because there’s nothing to cache beforehand. 

When would paid prioritization make sense? Most likely a specialized service for dedicated users that requires end-to-end reliability. 

I’ll use a plausible example to illustrate the benefits of consideration payments online–a telepresence service for deaf people. As Martin Geddes described, a decade ago the government in Wales developed such a service. The service architects discovered that a well-functioning service had quality characteristics not supplied by ISPs. ISPs and video chat apps like Skype optimize their networks, video codecs, and services for non-deaf people (ie, most customers) and prioritize consistent audio quality over video quality. While that’s useful for most people, deaf people need basically the opposite optimization because they need to perceive subtle hand and finger motions. The typical app that prioritizes audio, not video, doesn’t work for them.

But high-def real-time video quality requires upstream and downstream capacity reservation and end-to-end reliability. This is not cheap to provide. An ISP, in this illustration, has three options–charge the telepresence provider, charge deaf customers a premium, or spread the costs across all customers. The paid priority ban means ISPs can only charge customers for increased costs. This paid priority ban unnecessarily limits the potential for such services since there may be companies or nonprofits willing to subsidize such a service.

It’s a specialized example but illustrates the idiosyncratic technical requirements needed for many real-time services. In fact, real-time services are the next big challenge in the Internet’s evolution. As streaming media expert Dan Rayburn noted, “traditional one-way live streaming is being disrupted by the demand for interactive engagement.”  Large and small edge companies are increasingly looking for low-latency video solutions. Today, a typical “live” event is broadcast online to viewers with a 15- to 45-second delay. This latency limits or kills the potential for interactive online streaming services like online talk shows, pet cams, online auctions, videogaming, and online classrooms.

If the FTC takes back oversight of ISPs and the Internet it should, as with any industry, permit any business practice that complies with competition law and consumer protection law. The agency should disregard the unfounded belief that consideration payments online (“paid priority”) are always harmful.

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Remember What the Experts Said about the Apple iPhone 10 Years Ago?

by on January 9, 2017 · 0 comments

Today marks the 10th anniversary of the launch of the Apple iPhone. With all the headlines being written today about how the device changed the world forever, it is easy to forget that before its launch, plenty of experts scoffed at the idea that Steve Jobs and Apple had any chance of successfully breaking into the seemingly mature mobile phone market.

After all, those were the days when BlackBerry, Palm, Motorola, and Microsoft were on everyone’s minds. Perhaps, then, it wasn’t so surprising to hear predictions like these leading up to and following the launch of the iPhone:

  • In December 2006, Palm CEO Ed Colligan summarily dismissed the idea that a traditional personal computing company could compete in the smartphone business. “We’ve learned and struggled for a few years here figuring out how to make a decent phone,” he said. “PC guys are not going to just figure this out. They’re not going to just walk in.”
  • In January 2007, Microsoft CEO Steve Ballmer laughed off the prospect of an expensive smartphone without a keyboard having a chance in the marketplace as follows: “Five hundred dollars? Fully subsidized? With a plan? I said that’s the most expensive phone in the world and it doesn’t appeal to business customers because it doesn’t have a keyboard, which makes it not a very good e-mail machine.”
  • In March 2007, computing industry pundit John C. Dvorak argued that “Apple should pull the plug on the iPhone” since “There is no likelihood that Apple can be successful in a business this competitive.” Dvorak believed the mobile handset business was already locked up by the era’s major players. “This is not an emerging business. In fact it’s gone so far that it’s in the process of consolidation with probably two players dominating everything, Nokia Corp. and Motorola Inc.”

Continue reading →

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The Politics of the ICANN transition

by on August 11, 2016 · 1 comment

One would think that if there is any aspect of Internet policy that libertarians could agree on, it would be that the government should not be in control of basic internet infrastructure. So why are Tech Freedom and a few other so-called “liberty” groups making a big fuss about the plan to complete the privatization of ICANN? The IANA transition, as it has become known, would set the domain name system root, IP addressing and Internet protocol parameter registries free of direct governmental control, and make those aspects of the Internet transnational and self-governing.

Yet, the same groups that have informed us that net neutrality is the end of Internet freedom because it would have a government agency indirectly regulating discriminatory practices by private sector ISPs, are now trying to tell us that retaining direct U.S. government regulation of the content of the domain name system root, and indirect control of the domain name industry and IP addressing via a contract with ICANN, is essential to the maintenance of global Internet freedom. It’s insane.

One mundane explanation is that TechFreedom, which is known for responding eagerly to anyone offering them a check, has found some funding source that doesn’t like the IANA transition and has, in the spirit of a true political entrepreneur, taken up the challenge of trying to twist, turn and spin freedom rhetoric into some rationalization for opposing the transition. But that doesn’t explain the opposition of Senators Cruz and other conservatives who feign a concern for Internet freedom. No, I think this split represents something bigger. At bottom, it’s a debate about the role of nation-states in Internet governance and the state’s role in preserving freedom.

In this regard it would be good to review my May 2016 blog post at the Internet Governance Project, which smashes the myths being asserted about the US government’s role in ICANN. In it, I show that NTIA’s control of ICANN has never been used to protect Internet freedom, but has been used multiple times to limit or attack it. I show that the US control of the DNS root was never put into place to “protect Internet freedom,” but was established for other reasons, and that the US explicitly rejected putting a free expression clause in ICANN’s constitution. I show that the new ICANN Articles of Incorporation created as part of the transition contain good mission limitations and protections against content regulation by ICANN. Finally, I argued that in the real world of international relations (as opposed to the unilateralist fantasies of conservative nationalists) the privileged US role is a magnet for other governments, inviting them to push for control, rather than a bulwark against it.

Another libertarian tech policy analyst, Eli Dourado, has also argued that going ahead with the IANA transition is a ‘no-brainer.’

Assistant Secretary of Commerce Larry Strickling’s speech at the US Internet Governance Forum last month goes through the FUD being advanced by TechFreedom and the nationalist Republicans one by one. Among other points, he contends that if the U.S. tries to retain control, Internet infrastructure will become increasingly politicized as rival states, such as China, Russia and Iran, argue for a sovereignty-based model and try to get internet infrastructure in the hands of intergovernmental organizations:

Privatizing the domain name system has been a goal of Democratic and Republican administrations since 1997. Prior to our 2014 announcement to complete the privatization, some governments used NTIA’s continued stewardship of the IANA functions to justify their demands that the United Nations, the International Telecommunication Union or some other body of governments take control over the domain name system. Failing to follow through on the transition or unilaterally extending the contract will only embolden authoritarian regimes to intensify their advocacy for government-led or intergovernmental management of the Internet via the United Nations.

The TechFreedom “coalition letter” raises no new arguments or issues – it is a nakedly political appeal for Congress to intervene to stop the transition, based mainly on partisan hatred of the Obama administration. But I think this debate is highly significant nevertheless. It’s not about rational policy argumentation, it’s about the diverging political identity of people who say they are pro-freedom.

What is really happening here is a rift between nationalist conservativism of the sort represented by the Heritage Foundation and the nativists in the Tea Party, on the one hand, and true free market libertarians, on the other. The root of this difference is a radically different conception of the role of the nation-state in the modern world. Real libertarians see national borders as, at best, administrative necessary evils, and at worst as unjustifiable obstacles to society and commerce. A truly classical liberal ethic is founded on individual rights and a commitment to free and open markets and free political institutions everywhere, and thus is universalist and globalist in outlook. They see the economy and society as increasingly globalized, and understand that the institution of the state has to evolve in new directions if basic liberal and democratic values are to be institutionalized in that environment.

The nationalist Republican conservatives, on the other hand, want to strengthen the state. They are hemmed in by a patriotic and exceptionalist view of its role. Insofar as they are motivated by liberal impulses at all – and of course many parts of their political base are not – it is based on a conception of freedom situated entirely on national-level institutions. As such, it implies walling the world off or, worse, dominating the world as a pre-eminent nation-state. The rise of Trump and the ease with which he took over the Republican Party ought to be a signal to the real libertarians that the Republican Party is no longer viable as a lesser-of-two-evils home for true liberals. The base of the Republican Party, the coalition of constituencies and worldviews of which it is composed, is splitting into two camps with irreconcilable differences over fundamental issues. Good riddance to the nationalists, I say. This split poses a tremendous opportunity for libertarians to finally free themselves of the social conservatism, nationalistic militarists, nativists and theocrats that have dragged them down in the GOP.

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New Article at Harvard JLPP: The FCC’s Transaction Reviews May Violate the First Amendment

by on June 8, 2016 · 0 comments

The FCC’s transaction reviews have received substantial scholarly criticism lately. The FCC has increasingly used its license transaction reviews as an opportunity to engage in ad hoc merger reviews that substitute for formal rulemaking. FCC transaction conditions since 2000 have ranged from requiring AOL-Time Warner to make future instant messaging services interoperable, to price controls for broadband for low-income families, to mandating merging parties to donate $1 million to public safety initiatives.

In the last few months alone,

  • Randy May and Seth Cooper of the Free State Foundation wrote a piece that the transaction reviews contravene rule of law norms.
  • T. Randolph Beard et al. at the Phoenix Center published a research paper about how the FCC’s informal bargaining during mergers has become much more active and politically motivated in recent years.
  • Derek Bambauer, law professor at the University of Arizona, published a law review article that criticized the use of informal agency actions to pressure companies to act in certain ways. These secretive pressures “cloak what is in reality state action in the guise of private choice.”

This week, in the Harvard Journal of Law and Public Policy, my colleague Christopher Koopman and I added to this recent scholarship on the FCC’s controversial transaction reviews. Continue reading →

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Assessing Broadband Subsidies and Lifeline Reform

by on March 16, 2016 · 1 comment

The FCC has signaled that it may vote to overhaul the Lifeline program this month. Today, Lifeline typically provides a $9.25 subsidy for low-income households to purchase landline or mobile telephone service from eligible providers. While Lifeline has problems–hence the bipartisan push for reform–years ago the FCC structured Lifeline in a way that generally improves access and mitigates abuse (the same cannot be said about the three other major universal service programs).

A direct subsidy plus a menu of options is a good way to expand access to low-income people (assuming there are effective anti-fraud procedures). A direct subsidy is more or less how the US and state governments help lower-income families afford products and services like energy, food, housing, and education. For energy bills there’s LIHEAP. For grocery bills there’s SNAP and WIC. For housing, there’s Section 8 vouchers. For higher education, there’s Pell grants.

Programs structured this way make transfers fairly transparent, which makes them an easy target for criticism but also promotes government accountability, and gives low-income households the ability to consume these services according to their preferences. If you want to attend a small Christian college, not a state university, Pell grants enable that. If you want to purchase rice and tomatoes, not bread and apples, SNAP enables that. The alternative, and far more costly, ways to improve consumer access to various services is to subsidize providers, which is basically how Medicare the rural telephone programs operate, or command-and-control industrial policy, like we have for television and much of agriculture.

Because the FCC is maintaining the consumer subsidy and expanding the menu of Lifeline options to include wired broadband, mobile broadband, and wifi devices, there’s much to commend in the proposed reforms. Continue reading →

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Court Stay Signals Loss for FCC on Prison Payphone Reform

by on March 7, 2016 · 0 comments

This article originally appeared at techfreedom.org.

Today, the D.C. Circuit Court of Appeals stayed, for the second time, an FCC Order attempting to lower prison payphone phone calling rates. Back in 2003, Martha Wright had petitioned the FCC for relief, citing the exorbitant rates she was charged to call her incarcerated grandson. Finally, in 2012, the FCC sought comment on proposed price caps. In 2013, when Commissioner Mignon Clyburn took over as acting chairman, she rushed through an orderthat implemented rate-of-return regulation, a different approach on which the FCC had not yet sought public comment.

“Once again, the D.C. Circuit has reminded the FCC that good intentions are not enough,” said Berin Szoka, President of TechFreedom. “The FCC must follow basic requirements of administrative law. When it fails to do so, all its talk of protecting consumers is just that: empty talk.”

When the FCC issued its 2013 order, TechFreedom issued the following statement:

If justice delayed is justice denied, the FCC has once again denied justice to the millions of Americans and their families who pay far too much for prison payphone calls. The FCC’s elaborate system of price controls was not among the ideas on which the FCC sought comment last December, nor is it supported by the record. Thus, today’s long-overdue order will very likely be struck down in court — and the Commission will have wasted nine years sitting on Martha Wright’s 2003 payphone justice petition, nine months proposing an illegal solution, and who-knows-how-long litigating about it — only to wind up right back where we started, with payphone operators paying up to two-thirds of their revenue in kickbacks to state prisons, in exchange for the monopoly privilege of gouging a truly captive audience.

This is just the latest example of the FCC’s M.O. of “Ready, Fire, Aim.” The FCC consistently dawdles, then suddenly works itself up into a rush to regulate in ways that are either illegal or unwise — and usually both. Once again, good intentions, the desire to make headlines, disregard for basic principles of legal process, and a deep-seated ideological preference for returning to rate-of-return price controls, have triumphed over common sense, due process and, sadly, actually helping anyone.

In January 2014, the appeals court stayed key provisions of the order. The FCC then went back to the drawing board and, in October 2015, issued a second report and order and third NPRM that, among other things, established price caps for inmate calling services. Affected service providers challenged the order and sought a stay from the D.C. Circuit, which is granted only if, as the court said here, “petitioners have satisfied the stringent requirements for a stay pending court review,” which means showing a strong likelihood of success on the merits.

“The stay issued by the D.C. Circuit isn’t a certain death knell for the inmate calling order, but it certainly casts a grim pall over the order’s future,” said Tom Struble, Policy Counsel at TechFreedom. “This FCC has proven more than willing to tout noble goals to justify its procedural shortfalls, but the courts are less willing to bless such an outcome-driven approach. The rules for administrative procedure are there for a reason, and agencies can’t simply disregard them when it suits their interests. If something is worth doing, they should take the time to do it right.”

“It’s worth noting that Judge Tatel was among the three judges voting for today’s stay,” concluded Szoka, noting that Tatel also sits on the D.C. Circuit panel hearing challenges to the FCC’s Open Internet Order. “Even though today’s stay order addresses unrelated issues, it may suggest that the D.C. Circuit is taking a harsher look at the FCC’s procedure, and while the court didn’t grant an initial stay in the challenge to the Open Internet Order, the FCC could still lose on the merits of that case when it comes to the threshold question of whether it provided adequate notice of Title II reclassification, and rules that went well beyond ‘net neutrality.’ If so, the court might simply kick the matter back to the FCC and set the stage for a fourth court battle over the key legal questions. It’s anyone’s bet as to which issue, prison payphones (started in 2003) or net neutrality (started in 2005) the FCC will actually manage to resolve first, after more than a decade of heated fulmination exceeded only by the FCC’s incompetence.”

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Dan Brenner: An Appreciation 

by on February 16, 2016 · 6 comments

Dan BrennerI was shocked and saddened to hear tonight that L.A. Superior Court Judge Dan Brenner was struck and killed in Los Angeles yesterday. I am just sick about it. He was a great man and good friend.

Dan was an outstanding legal mind who, before moving back out to California to become a judge in 2012, made a big impact here in DC while serving as a legal advisor to FCC chairman Mark Fowler in the 1980s. He went on to have a distinguished career as head of legal affairs at the National Cable & Telecommunications Association. He also served as an adjunct law professor in major law schools and wrote important essays and textbooks on media and broadband law.

More than all that, Dan Brenner was a dear friend to a great many people, and he was always the guy with the biggest smile on his face in any room he walked into. Dan had an absolutely infectious spirit; his amazing wit and wisdom inspired everyone around him. I never heard a single person say a bad word about Dan Brenner. Even people on the opposite side of any negotiating table from him respected and admired him. That’s pretty damn rare in a town like Washington, DC.

And Dan was a great friend to me. Continue reading →

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The 10 Most-Read Posts of 2015

by on December 30, 2015 · 0 comments

Another year in the books for the Technology Liberation Front. Many developments unfolded in 2015 in the technology world and we covered much of it (on TLF and in other outlets). The most popular posts this year revolved around the Internet of Things, privacy, unlicensed spectrum, and municipal and public broadband networks. Thanks for reading, and enjoy the year in review. Continue reading →

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Unexpected and Expected Moments during the Open Internet Order Oral Arguments

by on December 8, 2015 · 0 comments

The FCC’s Open Internet Order is long and complex and the challenge to it is likewise difficult to untangle. The agency regularly engages in ad hoc rulemaking that results, per Judge Posner, in “unprincipled compromises of Rube Goldberg complexity among contending interest groups viewed merely as clamoring suppliants who have somehow to be conciliated.” The Open Internet Order is no exception and therefore faces several legal vulnerabilities.

In my view, the soft underbelly of the Order is the agency’s position that ISPs are not First Amendment speakers. While courts are generally very deferential to agencies, they are not deferential on constitutional questions. Further, the court panel (two Democrat appointees, one Republican appointee), unfortunately, was not in the carriers’ favor. The major carriers, however, have focused their arguments on whether the agency should receive deference in classifying Internet access as a telecommunications service.

That said, it’s possible the major carriers could get at least a partial win with their arguments. That likelihood is increased because Alamo Broadband and Dan Berninger raised the First Amendment problems with the Order. Given the strength of the First Amendment arguments, the Court might shy away from reaching the issue of whether ISPs are speakers. Below, some thoughts on the moments during oral arguments that surprised me and what went according to predictions.

The Unexpected

A receptive ear in Judge Williams re: the First Amendment arguments. (Good for: ISPs) The First Amendment arguments went better than I’d expected. Alamo and Berninger’s counsel, Brett Shumate, argued the First Amendment issues well and had good responses for skeptical questions. Shumate found a receptive ear in Judge Williams, who seemed to understand the serious First Amendment risks posed by the Order. Williams repeatedly brought up the fact that MetroPCS a few years ago tried to curate the Internet and provide its customers free YouTube, only to face resistance from the FCC and net neutrality activists.

The other two judges were more skeptical but Shumate corrected some misconceptions. The biggest substantive objection from Srinivasan, who sounded the most skeptical of the First Amendment arguments, was that if the Court reaches the First Amendment issues, it has determined that the FCC has reasonably classified Internet access as a common carrier service. He suggested that this means the First Amendment issues mostly disappear. No, Shumate explained. Congress and the FCC can call services whatever they want. They could declare Google Search or Twitter feeds a common carrier service tomorrow and that would have zero effect on whether filtering by Google and Twitter is protected by the First Amendment. Tatel asked whether Section 230’s liability protections suggest ISPs are common carriers and Shumate corrected that misconception, a subject I have written on before.

A major FCC concession that ISPs have to option to change their offerings and escape common carrier regulation. (Good for: ISPs) Title II advocates are spinning the terse First Amendment exchanges as a victory. I’m not convinced. The reason the arguments didn’t generate more heat was because the FCC lawyer made a huge concession at the outset: ISPs that choose to filter the Internet are not covered by the Open Internet Order.

FCC lawyer: “If [ISPs] want to curate the Internet…that would drop them out of the definition of Broadband Internet Access Service.”

Judge Williams: “They have that option under the Order?”

FCC lawyer: “Absolutely, your Honor. …If they filter the Internet and don’t provide access to all or substantially all endpoints, then they drop out of the definition of [BIAS] and the rules don’t apply to them.”

This admission seriously undermines the purposes of the Order. The FCC is stating outright that ISPs have the option to filter and to avoid the rules. That seems to mean that Comcast’s Stream Internet protocol television service, where it is curating streaming TV programs, is not covered by the rules. If Facebook’s Free Basics or a similar service launched in the US giving free, limited access to the Web, that is not covered by the Order. Finally, this means that the many broadband packages that offer family-friendly filtering are outside of the FCC’s rules. It’s not clear how much remains to be regulated since all ISPs reserve the right to filter content and each filters at least some content.

Judge Tatel directing most questioning. (Good for: wash) Many view Judge Tatel as the “swing vote” but I was surprised at the relative quiet from Williams and Srinivasan. Tatel was the most inquisitive, by my listening. He was much more skeptical of some of the FCC’s arguments regarding interconnection than I expected but also more skeptical of the First Amendment arguments than I expected.

Little discussion of Chevron Step 0. (Good for: FCC) Many on the free-market side wanted to make this case about Chevron Step 0 and the notion that Title II is too economically and socially significant to warrant deference. Unfortunately, at oral argument there was very little discussion of Chevron Step 0.

The Expected

Focus on agency discretion. (Good for: FCC) The judges generally seem to see this as a straightforward Chevron case and the questions focused on Chevron Step 1, whether there is ambiguity in the statute about “offering telecommunications” for the FCC to interpret. As expected, the FCC did fairly well in their arguments because these technical issues are very hard to untangle.

On Chevron Step 2, whether the reinterpretation of “telecommunications service” to include Internet access was reasonable, the US Telecom attorney was strong. He leaned heavily on the fact that in Section 230, which amends the Communications Act, Congress announces a national policy that the Internet and specifically Internet access services, should remain “unfettered by Federal regulation.” That would seem to preclude the FCC from using, at the very least, its most powerful regulatory weapon–common carriage–against Internet access providers. Even if “telecommunications service” is ambiguous, he stated, it was unreasonable to include Internet access in that definition.

Focus on whether mobile broadband can be properly classified under Title II. (Benefit: ISPs) As many commentators have noted, the idea that the traditional phone network and the mobile broadband network can be classified as the same interconnected network is far-fetched. Each judge seemed very skeptical of the FCC’s argument and Tatel suggested there was a lack of adequate notice.

Srinivasan pointed out that striking down the wireless rules and maintaining the wireline rules would mean that using the same tablet in different areas of your house would lead to different regulatory treatment, depending on whether you’re on the cellular broadband network or Wifi. Title II supporters think this is pretty clever gotcha but communications law already abounds with seemingly absurd FCC- and court-created legal distinctions. (The FCC invents its own absurd distinction and offers vastly different regulatory treatment for DNS operated by an ISP v. DNS operated by literally anyone else.)

Conclusion

Predictions about major regulatory cases are notoriously difficult. I’ve read (and made) enough predictions about big court cases to know that prognosticators almost always get it wrong. If that’s the case, at least consider one thought-provoking outcome: the rules are largely struck down because the FCC provided inadequate notice on most of the major issues of classification.

If the rules, in contrast, were sustained under Chevron and judged to have had adequate notice, the Court would likely need to confront the First Amendment issues. I don’t think Tatel and Srinivasan, especially, want to rule on these hard constitutional questions. The judges must know the Supreme Court has, as Prof. Susan Crawford says, an “absolutist approach” to the First Amendment that protects speakers of all kinds. Sustaining the rules means the FCC risks a loss on First Amendment grounds on appeal that would nearly eliminate the ability of the FCC to regulate the Internet. For that reason, and because of the notice problems, the Court may strike down the rules on notice and comment grounds, thereby preserving the ability of the FCC to take a fourth bite at the apple.

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