The FCC Issues its Proposal On Net Neutrality; Protesters Are Tossed from Hearing

Tyler Durden's picture

Submitted by Mike Krieger of Liberty Blitzkrieg blog,

As spring unfolds here in the Northern Hemisphere, the future of the free and open Internet hangs in the balance. As such, I strongly believe everyone should have at least some understanding of what is at stake. When most people hear or read the words “net neutrality” their eyes glaze over with a feeling of confusion and despair: “I can’t remember, am I supposed to be for or against this?” This is exactly how the lawyers and lobbyists in D.C. want it, but unless the citizenry is informed we could lose the most important weapon of free speech in the history of mankind.

Recognizing the convoluted nature of the subject, I did my best to lay out what “net neutrality” is and what is at stake with the current FCC rule-making process in my recent post: Say Goodbye to “Net Neutrality” – New FCC Proposal Will Permit Discrimination of Web Content.

Well the FCC voted on its proposal yesterday and it passed with a 3-2 vote. More on that later, first I want to share an article I recently read on The Verge, which is extremely important to understand before you form an opinion on what should be done.

The first buzzword you need to familiarize yourself with is “Title II regulation.” Title II refers to a key section of the Communications Act, which has to do with the classification of telephone providers as “common carriers,” and subjects them to increased regulation and oversight. When the Communications Act was updated in 1996, it appears that broadband providers would not be deemed “common carriers,” which would allow them to be largely unregulated. Yet, Verizon decided it wanted to be regulated under Title II when building out its broadband network. Why would it do this?

It turns out that building a huge broadband network isn’t cheap, and being more “regulated” actually gave Verizon a tremendous cost advantage. Verge notes that: “Title II designation gives carriers broad power to compel other utilities — power, water, and so on — to give them access to existing infrastructure for a federally controlled price, which makes it simpler and more cost-effective for cables to be run.

Here’s the really despicable thing. Now that Verizon has used Title II to build out much of its network, it now wants to turn around and play unregulated entity when it comes to pricing services that it built out under the guise of it being a heavily regulated business. You can’t make this stuff up. More from The Verge:

At issue is how (or if) the FCC will protect the internet’s openness, free of special treatment and data “fast lanes” offered to the highest bidders. And while Verizon, Comcast, AT&T, and others have been clamoring to prevent heavy regulation from being considered this week, it turns out that communications providers have actually been working the system for years, using exactly this kind of regulation to their advantage. In fact, strict FCC rules have helped Verizon build a largely unregulated network — a network that’s valued in the tens of billions of dollars.


Today New York’s Public Utility Law Project (PULP) published a report, authored by New Networks, which contains previously unseen documents. It demonstrates how Verizon deliberately moves back and forth between regulatory regimes, classifying its infrastructure either like a heavily regulated telephone network or a deregulated information service depending on its needs. The chicanery has allowed Verizon to raise telephone rates, all the while missing commitments for high-speed internet deployment.


In submitting to regulation, AT&T was designated a “common carrier” — in broad terms, an organization that will deliver something from anyone to anyone else — under a critical section of the Communications Act called Title II. When the Communications Act was updated in 1996, it appeared that broadband internet providers might fall under the same strict rules, but after a series of hearings, the FCC ultimately ruled in 2002 that cable modems were “information services,” a far less restrictive designation. In 2005, it ruled that DSL fell into the same category; today, effectively all internet connections are beyond the reach of Title II.


When Verizon talked about this broadband infrastructure with local regulators, however, it made clear it would lay the fiber for its next-generation network as a “common carrier pursuant to Title II of the Communications Act of 1934.” In other words, Verizon was making a move that, at a glance, seems counterintuitive: it asked for more regulation by building its fiber network under the same tight rules as the old telephone lines.


Why would Verizon — which, like all big telecom companies, is generally averse to government regulation — make a point of repeatedly noting that its fiber network fell under the same strict rules as the telephone system?


There are two reasons. First, Title II designation gives carriers broad power to compel other utilities — power, water, and so on — to give them access to existing infrastructure for a federally controlled price, which makes it simpler and more cost-effective for cables to be run. And that infrastructure adds up: poles, ducts, conduits running beneath roads, the list goes on. Second, Title II gave Verizon a unique opportunity to justify boosting telephone rates in discussions with regulators, arguing that these phone calls would run over the same fiber used by FiOS, Verizon’s home internet service. According to PULP’s report, Verizon raised traditional wired telephone rates in New York some 84 percent between 2006 and 2009, blessed by regulators in return for its “massive investment in fiber optics.”


Of course, telephone service isn’t the real reason Verizon has spent billions on fiber: landlines have long been a dying business, expedited on their trip to the grave by the smartphone revolution of the past decade. Rather, the fiber was laid to carry data — the very data Verizon doesn’t want subject to Title II regulation. It’s for FiOS in the home and for wireless backhaul, the backbone that connects cellular towers (including Verizon Wireless’ own) to the internet.


And as landline telephones lose ground to newer, better, and faster technologies, the folks left on these copper wires disproportionately skew toward low-income populations and the elderly — the demographics least likely to be able to take advantage of broadband. Yet it was their rate increases that were being used to subsidize the investment in Verizon’s fiber network. The PULP report estimates these rate increases have generated $4.4 billion in additional revenue for Verizon in New York alone, money that’s funneled directly from a Title II service to an array of services that currently lie beyond Title II’s reach.


Still, the tactic strikes many as hypocritical. “The network has to be built as a common carrier network, because there is no way to get that infrastructure in place without it,” says Earl Comstock, a lawyer at Eckert Seamans specializing in net neutrality who helped draft the Telecommunications Act of 1996. “Verizon knows it needs to offer just enough basic voice services on its fiber to claim that designation. But it doesn’t live up to those promises when it’s done building it out.”


With broadband internet’s anemic competitive landscape, this lack of regulatory accountability becomes even more troubling. According to a 2012 FCC report, roughly 27 percent of US households had only one choice to get a wired connection of 6Mbps or greater. Uncompetitive markets are the ripest for regulation; the dominant players in those markets, of course, would disagree. And while we wait to see whether the FCC will move to bring the internet under Title II to codify it as the public utility that is has become, Verizon and others are playing a regulatory shell game, spinning in and out of Title II rules at their leisure.

So always bear that in mind when you hear arguments from internet service providers (ISPs) about how devastating regulation is. As usual, it’s all about the money, and when it was profitable to be “regulated” Verizon had no issues playing that role.

Moving along to the FCC proposal vote, it is important to bear in mind that this is just the very beginning of the entire process and nothing has been decided yet. In fact, we have now entered into a 120 day public comment period. Specifically, the public will have until July 15 to submit initial comments on the proposal to the commission, and until Sept. 10 to file comments replying to the initial discussions.

To me, the most interesting aspect of the run-up to the proposal vote was a group of hardcore activists who camped outside of the FCC for a week in order to get their points across. I strongly recommend checking out the site OccupytheFCC and suggest signing their petition. When I signed it yesterday, it had over 200,000 signatures.

It appears this group had a meaningful impact and should be congratulated. For instance, the DailyDot reported that:

Wheeler has since amended his proposed rule changes, which will go before a vote Thursday, to be friendlier to net neutrality, though he still faces significant criticism.


“What’s exciting is seeing this mounting public pressure having a huge impact at the FCC,” Evan Greer, campaign manager at Fight For the Future, one of the groups organizing the protest, told the Daily Dot.


“A culture shift has happened here in the last week alone. This is a building almost no one goes to unless they’re an AT&T, Comcast, or Verizon lobbyist. Now it’s filled with flyers for net neutrality, carried in by employees handed them on their way to work,” she said.


But those activists, like most, want the Internet to be classified as a utility, like water and electricity, saying that would both give the FCC more regulatory control and accurately describes the reality of how important the Internet is to people’s everyday lives.

As a reminder, when you hear activists call for the Internet to be classified as a utility, they are essentially talking about Title II regulation discussed earlier.This is an extremely complicated subject, and I don’t have all or any of the answers. That said, from my research I would say that fast and slow lanes for web content based on who pays more or less money is completely and totally unacceptable.

I’m also not sure if regulating the Internet under Title II makes the most sense, but what I can say is that if a company like Verizon built out it’s network under a regulated environment then it should be responsible financially to contribute in a major way financially toward whatever solution makes the most sense to maintain a free and open Internet.

Finally, I want to highlight the following video of protesters being thrown out of the FCC hearing yesterday. It’s short and already has  over 125,000 views.

A Liberty Blitzkrieg commenter summarized the scene witnessed above perfectly when replying to a post yesterday by stating:

“The FCC meeting today, this 30 second video says EVERYTHING YOU NEED TO UNDERSTAND.




I know the lawyers , I am one, I can pick them out. This is a room full of lawyers.”

No wonder the Republic is in the state it’s in.

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LetThemEatRand's picture

Mises of Canada would tell us that we should let the oligarchs decide.   What role is it of We The People to decide what we can read on the internet, by force?

Spastica Rex's picture

They out-competed everyone else, that's why they're the oligarchs.

Game over - they won.

duo's picture

Future History:

The third industrial revolution ended as the Age of Fraud began, starting with the decoupling of all currencies from gold by 1971. During the Age of Fraud, the wealth created by the second industrial revolution was siphoned off into the bank accounts of a small minority and the politicians they supported.

The Age of Fraud ended when the Information Age became the Disinformation Age, as the former middle class were convinced by the media that their newfound poverty was the natural order of things and that no other economic system was possible. Those who questioned the political and economic system were marginalized or met with a violent end.

The Disinformation Age ended in the worldwide energy crisis and famine of 2025.

chumbawamba's picture

Here’s the really despicable thing. Now that Verizon has used Title II to build out much of its network, it now wants to turn around and play unregulated entity when it comes to pricing services that it built out under the guise of it being a heavily regulated business. You can’t make this stuff up. More from The Verge:

Oh, for fuck's sake.  Like it isn't obvious by now that this is how the game works?  Seriously, if this is new to you then consider your cherry popped and welcome to the de-virginized mob of the jaded.

Now, what are you going to do to change the status quo?

I am, as always, Chumbawamba.

TeamDepends's picture

Ha ha FCC, NSA, PRISM, CIA, Banksters, Rothenfellers, whatever you want to call you, THE CAT IS OUT OF THE BAG.  Go ahead and neuter the net, you are way too late!  You will only amplify the message you are trying to conceal.

James_Cole's picture

This insanity is dangerous in the short term, but long term they're shooting themselves in the foot. Reminds me of napster, rather than find a way to a compromise the music industry fought tooth and nail. How'd that work out? There are lots of potential alternatives for open networks and the harder they try to clamp down the more incentive for people to move to another system.  

But in the short term three words apply to comcast, fcc et al: fuck these guys. Pathetic old dinosaurs. 

GetZeeGold's picture




The Mao channel is blazing fast it's freaky.

MeMadMax's picture

Whatever dude...


Regulations are the reason why there are no small startup companies that got going to challenge the big telecom companies...


And now you want to regulate them because they have gotten too big?


Whatever dude, all ur gonna do is create "piggyback" internet companies that use the big internet companies for network use.


An example would be MetroPCS uses Sprints network for phone calls, metro doesn't have its own network to speak of...

11b40's picture

One of the key points of the article, if you read it all, was that Title II needs to be applied to the Internet providers, which is exactly why MetroPCS CAN piggyback onto Sprints telephone network.  Otherwise, what do you think Sprint would tell MetroPCS when asked permission to use their lines?

MeMadMax's picture

Sprint allows shitty no name cellphone providers to use their shitty network because if they didn't then nobody would use their shitty service and they would go out the door...

wolfnipplechips's picture've said it well, Chumba. What are we going to do about it? With Fast & Furious, Benghazi, IRS, NSA, EPA, mercs in Ukraine...the list goes on. What the fuck has to happen for this fuse to finally light!

Wake up shit heads, the wolves are at the door. To make things worse, they don't even care to try to disguise themselves any longer. They don't have any fear of us and our republic.

bunnyswanson's picture  American Spring video of the people who showed up.  Your everday American, trying his and her best to save their country.  I am touched beyond tears as a Canadian that these people went, knowing the potential for a violent reaction to their assembly.

They are trying.

medium giraffe's picture

Good of the guy with the camera to explain to the kids.  And the guy with the 'Don't drone us Barry' sign, I lolled.  You're right though, spirit still burning.

BigJim's picture

The cat is only 'out of the bag' for some of us.

The vast majority of people are still sleeping... and unless they can read alternative views, will remain that way.

'What are we going to do about it?' - the only thing we can do... inform as many people as we can and hope to turn the tide. No revolt will work if the bulk of the people regard the existing regime as legitimate; if we can get enough people to regard it as illigitimate, than no revolt will be necessary.

11b40's picture

CNN is about to cover this story right now.  11:47 Sunday morning.  The promotional clips show protesters being taken out of the room.


mccvilb's picture

Actually they didn't, Rex, but you knew that, just forgot the /s tag. For example DC law firms line up at the front door of the FCC to be first to secure licensing rights for cell towers located all over the country as the FCC issues them. Today we live in a closed corporatocracy gifted through the generosity of our government leaders.

jeff montanye's picture

generosity as in you give me a million of your money (campaign contribution) and i will give you a billion of their money (corporate subsidy).

wish the politicians would have a nice strong wave of "suicides" like the bankers.

The Wizard's picture

In true competition there are rules established for fair play. Taking over the rules and manipulating them as the game is being played does not represent "out competing".

free_lunch's picture

But they have lots of well payed little helpers...

Now that's a salary:   ( @27 minutes 7sec )

Crash Overide's picture

The advance of technology will allow for dark or under nets to be created free from regulation, it's already happening. The more governments and corporations try to control something a funny thing happens, people get creative and come up with a workaround...

The bastards will not win this one.

11b40's picture

No - it is not over.  In fact, the battle is just begining.  Screwing around with the Internet just might be their downfall by awakening the slumbering masses.

Plus, there are some very smart, technologically savvy folks  operating from their basements who are not going to be hapy with this.  Check out:

"Webhost Protests FCC's Net Neutrality Proposal By Limiting FCC Access To 28.8mbps."

I have no idea if whoever made and posted this video has had any effect in slowing broadband delivery to the FCC, but it really is an interesting idea.  Who knows what other creative ways an arroused citizenry can devise, but there are far more of us commoners than there are Oligarchs.

James's picture

Just what does one expect from the Mises Institute when their funding comes from the Rockefeller Foundation???????

jeff montanye's picture

i'm a bit of a stranger in these woods but there seems some smoke and maybe fire to what you say.  this seems to treat the rockefeller interests with some objectivity bordering on distaste though:

James's picture

"this seems to treat the rockefeller interests with some objectivity bordering on distaste though"


Yes Jeff, That is their attempt to maintain anonymity after taking that cash.

Easily found links show a decade of giving and then none for a time, another length of time giving then none. Rinse/Repeat

Don't you see that their marching orders are given and then donor falls back until objectives are met and then repeated over and over.

Your link given was only the second time I ever went to site. Place gives me the creeps.

Buckaroo Banzai's picture

"Just what does one expect from the Mises Institute when their funding comes from the Rockefeller Foundation???????"

Can you provide some links to back this up?

BigJim's picture

 Mises of Canada would tell us that we should let the oligarchs decide.   What role is it of We The People to decide what we can read on the internet, by force?

Your reflexive hatred of all things Mises Canada appears to be leading you to jump the gun. I can't find any mention of the FCC's net neutrality deliberations on their site; however

seems pretty even handed.

My biggest gripe with many of my libertarian brethren is that many of them don't appear to consider that some services (in an economy that allows outright land ownership) can only have been established through government intervention seizing land via eminent domain; and thus the usual (excellent) arguments about markets and competition don't apply to them.

Krieger's article here is the best on the subject I've seen.

Buckaroo Banzai's picture

"My biggest gripe with many of my libertarian brethren is that many of them don't appear to consider that some services (in an economy that allows outright land ownership) can only have been established through government intervention seizing land via eminent domain; and thus the usual (excellent) arguments about markets and competition don't apply to them."

It's all a trade-off, isn't it? All organized crime syndicates do at least some good, if for no other reason than the positive public relations it generates. So, the organized crime syndicate that is called "government" does indeed provide some benefit. But-- at what cost? I can easily imagine a world without railroads, public roads, electrical utilities and water utilities. It would simply be a much more decentralized world, and one where prosperity and power is much more easily lodged at the local level, instead of being concentrated massively.

Would society, overall, be less prosperous without government? I'm not at all sure it would be.

Meat Hammer's picture

Buck, I thoroughly enjoyed reading that.

BigJim's picture

Say we ignore all the issues with the notion of private land ownership - like who decided it was OK to grant monopolistic ownership/use of a parcel of land to whomever.

There still remains the problem that predatory groups will arise and attack and seize others' property. This leads people to gang together and appoint as 'protectors' those with the greatest martial prowess... who then become predators themselves.

I'm VERY sympathetic to anarchism but I suspect it's a brief state that happens after kingdoms/states turn into empires and then collapse.

I'm very open to dissuasion on this matter, because I'd like to be proven wrong; but history - and the workings of human nature - do seem to support my beliefs.

Steve in Greensboro's picture

You can be 100% certain when a decision is made to increase the power of government and no mention is made by the press of party affiliation that the party driving the government power grab is the Democrats.

If you want to understand American party dynamics, read "The Ruling Class" by Angelo Codevilla.

q99x2's picture

Great post. Long live Larry Lessig. I'll repost the video on some sites.

williambanzai7's picture

What was he doing at Bilderbooger last year?

LetThemEatRand's picture

Sir?  Thank you.  May I have another?

ZerOhead's picture

Verizon is run by some smart and unscrupulous motherfuckers.

I expect it to continue to outperform over the long term

mt paul's picture

net neutrality... not

the boys are fishing 

mouth of the Copper river

first red salmon of the season..

Joe A's picture

A Frankenstein salmon

wolfnipplechips's picture

Copper River salmon are of the wild variety. Frankenstein salmon generally refer to the farmed versions.

chapaev's ghost's picture

Irridated Fukushima wild salmon = genetically modified farmed salmon. I once was a commercial fisherman in Bristol Bay. There is no difference between the sick fucks who allowed nuclear energy and the sick fucks at the FCC. There are some sick fucks who work with their hands on the ocean or on the land, but the proportion doesn't approach 100%, like it does in the boardrooms or in the legislative chambers.

Woe unto them that call evil good, and good evil; that put darkness for light, and light for darkness; that put bitter for sweet, and sweet for bitter!

Isaiah 5:20

LetThemEatRand's picture

Qu'ils mangent de la brioche.  De préférence la Rand.

navy62802's picture

Did we even have internet service providers in the early days of the internet? I thought that it used to simply be run directly through the phone lines without any kind of ISP intermediary.

ebear's picture

From your modem down a conventional phone line to an ISP, who leased bandwidth from a Telcom or other network provider.

So yeah, ISP's were there from the beginning.   Many, but not all, were bought out by the telcoms or cable co's, but the original ISP's were a seperate enterprise.

sleepingbeauty's picture

That's not the way I remember it. I might be wrong but when we were starting out we got onto the boards. We would direct dial into the board and then we would download or upload files or chats. There was no ISP (I don't think). Maybe that technically wasn't part of the internet but it was group communication without an ISP. After that I remember that the local university had a way to jump online. It was back when you needed to know the ip address of the site you were going to. It was fun but had no where near the information that google has today. And slow, oh so painfully slow.

umdesch4's picture

Yeah, that's mostly correct. We had dial-up BBS's. Then we had the internet, which was only really accessible through universities, research labs, and government/military. Pre-web, it was all ftp sites, telnet, usenet news, and some document-linkage with gopher, archie, veronica. It was true at first that you needed to know IP addresses, but DNS was fairly established by (at latest) 1990. Once html standard was finalized, and the whole 'www' came to life, people wanted to get online. That, and university graduates who wanted to keep their access once they left, were the first real market for ISPs. The first ISPs I knew of were little hole-in-the-wall places that managed to connect you up to the main "trunk" by leasing some of the traffic from the universities' clusters of T1-T3 lines.

Then AOL came along, and the internet has kinda sucked ever since... :P