Dec. 30, 2015
The Federal Communications Commission spent most of 2014 on a net neutrality roller coaster. This year, it charged ahead with a series of bold moves that demonstrate the 81-year-old agency is more relevant than ever—especially if you care about the future of the Internet.
February: A Landmark Achievement for Internet Freedom
The commission’s biggest move came in February, when Chairman Tom Wheeler announced that “the time to settle the net neutrality question has arrived.” On Feb. 26, the commission adopted the strongest net neutrality protections in American history: the Open Internet Order of 2015. This historic order established basic “rules of the road” for online traffic to prevent broadband providers from splitting the Internet into two tiers: a fast service for the deep-pocketed, and a slow, degraded service for everyone else. The rules apply to both wired and wireless connections, closing a loophole from an earlier order and ensuring that consumers are protected whether they access the Internet from a desktop computer, tablet, or smartphone.
Perhaps most boldly (or blandly, depending on one’s zeal for telecom law), the FCC invoked its authority to regulate “common carriers”—a legal term for a company that transports goods or people for a fee. Although telephone companies have been regulated as common carriers for decades, the FCC had not previously treated broadband providers as such.
This legal maneuver was important for two reasons. First, it was necessary to ensure that the courts don’t strike down the FCC’s rules—again. Two years ago, a federal court overturned an earlier order on net neutrality because the agency failed to invoke its common carrier authority; the commission didn’t make that mistake this time around. Second, common carriage is a political powder keg. Verizon, Comcast, and other big broadband providers resisted the common carrier classification for years. Losing this battle ensured that these powerful companies would ignite a legal and political firestorm to reverse the decision—which is exactly what happened as the year progressed.
The FCC’s decision was celebrated by many. President Obama said the order “will protect innovation and create a level playing field for the next generation of entrepreneurs.” The Internet Association, which includes Google and Facebook, called the order “a welcome step.” Netflix summed it up succinctly: “Consumers win.”
Of course, not everyone was happy. Comcast said the decision was “certain to lead to years of litigation,” while Verizon opted for snark, issuing a statement in Morse code that decried “antiquated regulations.” Michael Powell, who chaired the FCC during the George W. Bush years—and is now a top lobbyist for the cable industry—said the agency’s decision was among “the most regulatory steps in its history.”
The Feb. 26 vote also confirmed the staying power of online activism as a political force. Building upon the defeat of the SOPA/PIPA legislation in 2012, a broad coalition of grassroots advocates, tech companies, and everyday Americans flooded the FCC with calls to protect net neutrality—putting an end to the question of whether the SOPA/PIPA groundswell was an isolated incident. From online comment systems to viral videos, net neutrality supporters used the Internet itself to defeat one of Washington’s most powerful industries.
February: Standing Up for Local Broadband Choice
The Open Internet Order wasn’t the only major action on Feb. 26; shortly after adopting the strongest net neutrality protections in U.S. history, the FCC also voted to overturn two state laws that made it difficult for local governments to build their own broadband infrastructure.
The ruling came in response to petitions from the cities of Chattanooga, Tennessee, and Wilson, North Carolina, which asked the agency to overturn their states’ restrictions. Both cities are examples of a growing number of municipalities, often in rural areas that incumbent Internet providers won’t serve, that decide to take matters into their own hands by building their own networks. These locally grown networks typically offer plans that are faster and cheaper than anything available in larger cities, where incumbents like Time Warner Cable and Comcast dominate. They also help combat the brain drain of younger people and jobs from rural America. In Chattanooga, a locally owned fiber-optic network offers gigabit connections for $70 per month and has helped spark a burgeoning startup scene.
Despite the successes of places like Chattanooga, 19 states have laws that restrict local broadband investment. The telecom industry lobbied heavily for these laws in an effort to protect their services from community-led competition. Chattanooga and Wilson argued that these state laws are in conflict with the FCC’s federal mandate to promote broadband deployment throughout the country. The commission agreed, and in doing so handed consumers another victory.
April: Comcast Loses, Competition Wins
When Comcast announced its bid to acquire Time Warner Cable last year, the company treated the merger’s regulatory approval as a fait accompli. But as the government’s review of the deal dragged into 2015, that narrative of inevitability became less and less credible.
In reality, the proposed merger of the nation’s two largest broadband providers faced major headwinds. The FCC and the Department of Justice asked lots of questions about what the deal would mean for consumers and innovation, and Comcast’s answers were not reassuring. Meanwhile, thousands of angry customers asked the FCC to reject the merger, citing the company’s notorious customer service and frustrations with the lack of competition.
On April 22, Comcast CEO Brian Roberts met with Chairman Wheeler to try to save the deal. Wheeler told Roberts that he would recommend an administrative hearing—a lengthy process that is often a merger’s death knell. Two days later, Comcast announced it was pulling the plug on the deal.
Consumer advocates, frustrated customers, and industry competitors were jubilant. Former FCC Commissioner Michael Copps said it was “spectacularly good news for consumers.” Attorney General Eric Holder called it a victory for innovation.
The collapse of this megamerger was hardly a foregone conclusion at the beginning of 2015, but the deal’s myriad problems were there from the start. Comcast argued that the two companies didn’t compete in any ZIP code. But the FCC astutely recognized that Comcast and Time Warner Cable don’t just sell bundled packages to residential customers; they also compete as buyers of video content, equipment, and backbone Internet services. By eliminating this competition—and by controlling half of the broadband market—the merged company would have gained unprecedented power to stifle innovation and increase prices.
April to December: The “Big Dogs” Fight Back
In the aftermath of these defeats, the telecom industry quickly regrouped.
AT&T and multiple industry groups confirmed Chairman Wheeler’s prediction that “the big dogs are going to sue regardless of what comes out” when, in April, they filed a lawsuit to overturn the Open Internet Order. In response, several technology companies and public interest groups formally joined the case to defend the order. Both sides argued their cases before a panel of judges on Dec. 4. Meanwhile, some members of Congress tried to use the FCC’s funding legislation to block the rules, but that effort failed in December after an outcry from net neutrality supporters.
And while Comcast retreated to lick its wounds from its failed merger, Time Warner Cable wasted no time in finding a new suitor; on May 26, the company announcedplans to be acquired by Charter Communications, pending regulatory approval.
The FCC’s pre-emption of local broadband restrictions also quickly drew a lawsuit. North Carolina and Tennessee sued the FCC in the spring, prompting Chattanooga and Wilson to join the case to defend the agency; the court has yet to rule on the matter. In February, Rep. Marsha Blackburn, R-Tennessee, and Sen. Thom Tillis, R–North Carolina, sponsored a bill to overturn the FCC’s pre-emption, which hasn’t moved since its introduction.
Looking Ahead to 2016
At the end of a blockbuster (if front-loaded) year, the FCC still has much on its plate. The legal and political firestorm over net neutrality rages on, with a ruling on the telecom industry’s lawsuit expected early next year. Meanwhile, the commission is examining data-exemption plans from Comcast, T-Mobile, and AT&T that could test the boundaries of net neutrality. The commission is also expected to modernize the Lifeline program, a Reagan-era telephone subsidy for low-income Americans that could be updated to include broadband. All of this will occur amid a presidential election in which the Internet is poised to be a major issue.
This article originally appeared on Future Tense, a collaboration among Arizona State University, New America, and Slate. Future Tense explores the ways emerging technologies affect society, policy, and culture. To read more, visit the Future Tense blog and the Future Tense home page. You can also follow Future Tense on Twitter.