Net Neutrality’s Achilles Heel

Last week, elected officials, tech companies, and consumer advocates gathered on Capitol Hill for hearings on a controversial bill that would put a legislative straitjacket on the Federal Communications Commission -- just weeks before the agency is expected to adopt net neutrality rules. The bill itself does more harm than good, but the hearings were an important reminder that the FCC needs flexibility to protect consumers from future problems. Several Members of Congress voiced concern about an evolving problem that has become the achilles heel of the Open Internet: interconnection abuse. If left unchecked, this issue threatens to unravel any effort to preserve net neutrality.

Here’s the problem: the FCC’s first attempt at net neutrality rules, the 2010 Open Internet Order, contained a loophole that Internet service providers like Comcast and Verizon have brazenly exploited. The 2010 rules prevented discrimination within the Internet’s “last mile” (the networks that ISPs operate to reach their customers), but said nothing about the entrance into the last mile, commonly referred to as interconnection. As the primary gateway to all broadband customers, interconnection points are a vulnerable part of the Internet’s architecture. Yet the 2010 order did not explicitly prevent abuse at this location. Despite looking disfavorably on access tolls, the order nonetheless allowed a loophole that encouraged ISPs to simply shift abusive behavior to interconnection. A federal court vacated the order last year, but this loophole remains a problem.

The interconnection loophole is a serious threat to consumers and innovation. Recent data collected by the Measurement Lab (a research consortium that includes the Open Technology Institute) revealed that ISPs have taken advantage of this loophole. M-Lab determined that the nation’s four largest ISPs allowed congestion to build up at interconnection points throughout 2013 and 2014, harming millions of their customers. For many, connection speeds slowed so much that higher bandwidth traffic, particularly online video, was unable to get through. Tellingly, the congestion stopped once Netflix agreed to pay fees to the ISPs, suggesting that the congestion was deliberately created to pressure Netflix into paying an access charge.

But Netflix subscribers weren’t the only ones harmed. By allowing interconnection points to congest, the ISPs effectively blocked lots of traffic that had nothing to do with the company from which they were trying to extract fees. The collateral damage was widespread: telecommuters had difficulty connecting to their employers, businesses had trouble conferencing with their clients, and online video subscribers couldn’t access the content they’d paid for. The ISPs used their own customers as unwitting pawns in a business dispute, and what’s worse, they left consumers in the dark. Millions of Americans had no way of determining that interconnection abuse was to blame for their slow connections -- and, in most parts of the country, no alternative provider to switch to for better service.

M-Lab’s research demonstrates that consumers need protection at the point of last-mile interconnection. Without explicit protections in the 2010 order, ISPs seized an opportunity to extract access fees. Interconnection agreements often require non-disclosure, so it is difficult to know if other companies have been targeted. Officials from Amazon and Etsy, two online retailers with very different business models, told Congress last week that interconnection abuse threatens both of their companies. Indeed, any business that needs to reach an ISP’s customers is at risk. For example, cable subscribers eager to cut the cord in favor of Dish’s upcoming Sling TV service may need to think twice if the FCC doesn’t close the interconnection loophole. Broadband providers could subject Sling TV to the same blunt tactics they used against Netflix, resulting in higher costs that fledgling companies often cannot afford. These costs could become an insurmountable barrier for many startups.

In comments recently filed with the FCC, the Open Technology Institute suggested a path forward: the FCC can create an oversight regime consisting of (1) transparency requirements, (2) congestion measurement tools, and (3) light-touch rules that ban access fees. This three-pronged approach would give the agency a robust toolkit to protect consumers and companies from interconnection abuse. The consumer harms uncovered by the M-Lab study underscore why the FCC needs to adopt such a regime as soon as possible.

With new net neutrality rules on the horizon, the FCC has an opportunity to build upon the 2010 order’s successes while fixing its flaws, starting with interconnection. It’s time for the FCC to close this loophole.