1. JohnIvory's Avatar
    Warning: This is a very long post. If you care about net-neutrality and want to find out what it's really about read on.


    title-ii-jane-640x479.png

    Today the FCC voted (predictably) to reclassify ISPs in the United States as common carrier. Hardline conservatives and an unusual amount of commenters on this site have been decrying this as the end of the internet since Obama came out in support of the issue last year. Ted Cruz famously called the rules (which hadn't even been drafted at the time) "Obamacare for the internet". And with that a technical issue became political. Everyone and their mother that didn't like Obama or the big bad gubmint telling them what to do came out against the reclassification. Hidden rules were going to be inserted. Taxes were going to levied. Your internet bill was going to increase by 5000% and the government was going to come into your house and monitor every last bit of your web usage. All of this from simple Title II reclassification.

    To show how completely asinine this entire thing is all one has to do is look at the proposed remedies. Shortly after Obama came out in support of reclassification, Republicans in Congress wanted to preempt the FCC and implement all the FCC rules that Title II reclassification would achieve. They were going to make a law that essentially achieved the FCC's end goal of Title II reclassification so that the FCC wouldn't have to reclassify the ISPs. This tells you that the real sticker is Title II. What is in Title II that makes it so bad for ISPs and all the Republicans that receive campaign donations from them?

    Title II, according to the FCC, is reserved for entities that are telecommunications services. First applied to phone companies almost a century ago it gives the FCC a broad range of powers over what these entities can and cannot do. With the telephone monopolies in the United States back in the 1930's the government had to regulate them very heavily in order to prevent abuse of their powers. Title II comes with a lot of regulations and impositions, and a lot of them are quite frankly not relevant and may be damaging to ISPs in the 21st century. However there is this neat little thing called "forbearance" which allows the FCC to classify a company as Title II and still pick and choose what they wish to impose on them. In fact the FCC's executive summary on the regulations they wish to impose show that very little if any of the ancient Title II regulations will be imposed on the ISPs with today's reclassification.

    But they could be in the future! Maybe that's what the hullabaloo is all about, right? Well yes and no. Technically the FCC could come in 10 years from now and implement local-loop unbundling, or rate regulation, and it would be well within its rights since the ISPs are now Title II. But see how none of those things include spying on you? Or raising your taxes? Or requiring you to get a license to operate a website or visit Google.com? Even the most onerous Title II rules did not allow the government to do any of those things. Wiretap laws exist in the U.S. for a reason. After Title II was implemented in 1934 the only people that noticed were the phone companies. Regular people going about their business saw their bills drop in some places (due to rate regulation) and saw an increase in number of phone providers in others. That didn't last long and eventually the government had to disband AT&T the largest phone monopoly in the country. This is another example of government stepping into a market and I'm sure the same people that oppose Title II would throw a fit if they heard that Obama was trying to disband a company, no matter how much sense it made and how beneficial it was to the country at large.

    Now why is the FCC pushing for Title II? Because in 2010 it issued an Open Internet Order that called for all the things it's calling for now, like no throttling and no blocking of legal services. Verizon sued because it felt the FCC did not have the authority to tell them not to slow down the connection you paid for, or block whatever services they felt like blocking for the "intergrity of their network". The courts agreed with Verizon, saying that in order for the FCC to impose such rules the ISPs had to be Title II common carriers. Now a lot of other companies didn't mind the rules (Comcast already had to do stick with the rules in order to be allowed to buy NBC), but they really didn't think their buddies in the FCC were going to go all Title II on them. Well Verizon's double-dare has back-fired and now they're all Title II. Needless to say, a lot of ISP executives are not really happy with Verizon for rocking the boat.

    But why should we accept more government regulation in our lives? The government is too big. It needs to stay out of the free market. These are all the classic objections to anything the government does.

    First of all the FCC is not growing the size of government. It is doing exactly what it was created to do. Congress can still disband the FCC tomorrow or limit it's purview, but somehow I doubt that's going to happen, not with the Democratic filibuster in the Senate and the veto pen of the president. But to the pressing question: Why is the FCC regulating a free market?

    There are certain markets that are by nature not free and offer large unchangeable advantages to the first mover. Such markets include building rails and roads, delivering electricity and water, telephone services, and since the late 20th century internet service. Think about it. It costs untold amounts of money to build a rail line. These businesses take up substantial physical space and are essentially install-once-charge-forever services. The owners might have to do a few upgrades now and again, but those cost pennies when compared to installation. Now if these services are not essential to everyday life no one would care. When phones were first invented only the richest businesses could afford them and the phone companies could do whatever they wanted. Phones were a luxury. But they grew to the point that you could not function in modern society without having a phone. This made the phone companies very profitable. But new companies couldn't come in. To come into a city, you would need to tear up street and install your own copper lines. You would need to build new towers near people's houses. But most of all you would need to either do all of this at the same time everywhere in the country, or you would need to connect to another phone company in another town. Now if that company already has wires in your city they have zero incentive to connect with you. Without a connection your customers cannot call anyone. Your business is dead before it's even off the ground. The established phone companies knew this and so they raised their prices on the customers, knowing they couldn't go anywhere. When a price point remains the same regardless of supply and demand, we have a monopoly. And this isn't counting all the government bribes that established companies pay to prevent new people from even installing anything in a city where they're already entrenched.

    Now take everything in the paragraph above and apply it to ISPs. In fact a lot of todays ISPs were born from phone companies back in the day (e.g. Verizon and AT&T). Like phones the internet started off as a luxury for universities and businesses. Like phones the internet today is essential to functioning in modern society. Like phones it costs a lot of money to install fiber in a city, especially with how dense many cities are today. It's even less profitable for small towns out in the country side. The ISPs know this, which is why they essentially do what they want. Have you looked at your bill lately? Let me know if you know how/why half the charges on there apply. They charge what they want and hide it behind silly excuses. Comcast recently upped it's modem rental fee from $8 to $10. Modems are cheap. They cost nothing to maintain. They simply sit there and convert analog data into digital data for your router 24/7. And yet Comcast charges you to rent it, and threatens to charge you even more if you don't and something happens to your connection. They charge you for data caps, when any network engineer will tell you that data is not a consumable resource, bandwidth is. And there are much better ways to manage a network than a blanket cap on downloaded data. There are no more profitable ways though, so guess what they pick. And to show how much bull it is, your cap suddenly isn't counted when the data is coming from Comcast, or when someone has paid them for it. If the network really couldn't take the strain no amount of money would make it okay. The physical wires don't listen to money; they listen to physics. But they can take the strain; your ISP just wants to gouge you for the privilege of watching some good Netflix.

    In a true free market the moment these guys abuse their position like this you'd up and go to another company. But for more than 75% of Americans, there are only one or two choices for providers. To show the influence of competition, when Google showed up in cities like Kansas City and Austin a lot of people got mails that their bills were miraculously dropping. Once again if there were legitimate, physical reasons for the size of your bill or the amount of data you were allowed to have, no amount of competition would change that.

    If you cannot guarantee competition you have to make sure that those that provide services are under enough oversight that they do not abuse their market position, and the ISP market (like the phone market in the 20th century) is one that is severely under-competitive. There are only so many areas in a city that can be torn up for laying wires. There are only so many parts of your house that can be exposed for every networking provider to install their equipment. This is why regulation of those currently installed is required.

    The FCC is also taking other steps, liking trying to remove laws that prevent municipal broadband from serving areas not in their municipality, thus bringing MORE competition to those areas. Guess who's against that as well? ISPs and Republicans. This time the argument is about state rights and their prerogative to allow people go without internet because ISPs don't want to serve them. Seems like anything that changes the immensely profitable status quo for these companies has some dark future implications for all of society.

    So to recap, Title II reclassification is not the end of the world. The government is not going to increase your taxes to get it done; it's not going to spy on you (no more than the NSA is currently doing right now without Title II btw); it's not going to require a license for you to look at information on the internet. If that were the case those on DSL (a phone technology) would already be going through all this stuff now. Everyone with a phone would be experiencing exorbitant fees and taxes and mass spying, because those services are already Title II and have been for decades. If Title II were the end of freedom a good chunk of us would already be in prison.

    If you oppose Title II on the principle that ALL government regulation is bad then let me get a little nerdy with you: Only a Sith deals in absolutes. Sometimes the government does over-reach (NSA, Patriot Act, etc). Sometimes it doesn't (Title II, roads, utilities like electricity and water). You have to make informed decisions on a case by case basis, not based on how much you like the person behind the rules, or the letter beside his name. Don't cut your nose to spite your face.

    Whew. That was a typeful. I hope that cleared some things up
    02-26-2015 07:02 PM
  2. Legoboyii's Avatar
    Thanks for straightening things out, and love the KotOR II reference :)
    JohnIvory likes this.
    02-26-2015 07:17 PM
  3. JohnIvory's Avatar
    Thanks for straightening things out, and love the KotOR II reference :)
    Haha. I actually got it from Revenge of the Sith (blasphemy, I know).
    02-26-2015 07:49 PM
  4. a5cent's Avatar
    There's a lot of drama in the front page comments section over this. Almost all of it reads as though it was transcribed directly from a Verizon/Comcast talking-points memo. It's far too easy to whip people into a frenzy with simplistic anti-government one-liners.

    This was the opposite of that. Thank you. Very well written and informative.
    Laura Knotek likes this.
    02-26-2015 07:57 PM
  5. JohnIvory's Avatar
    There's a lot of drama in the front page comments section over this. Almost all of it reads as though it was transcribed directly from a Verizon/Comcast talking-points memo. It's far too easy to whip people into a frenzy with simplistic anti-government one-liners.

    This was the opposite of that. Thank you. Very well written and informative.
    I was honestly amazed by the flat-out lies and fear mongering going on. Made me wonder whether I had stepped into a corporate shill forum.
    a5cent likes this.
    02-26-2015 08:24 PM
  6. Legoboyii's Avatar
    Haha. I actually got it from Revenge of the Sith (blasphemy, I know).
    Kreia talks alot about that stuff. It's cool anyway thanks for making my day. xD
    JohnIvory likes this.
    02-26-2015 08:25 PM
  7. PepperdotNet's Avatar
    Interesting read. Now I'm not so sure about my opinion on all this and shall have to do some more research.

    My main objection to those who oppose it on 'free market' principles are that no living person has actually seen a free market, and my local cable company's exorbitant rates and anti-competitive position as the only broadband available to me are just about as far from 'free market' as you can get.

    My main objection to those who support it for 'fairness' are the taxes, fees and other charges on my phone bill for 'universal service' and 'network access' and 'regulatory compliance.' I fully expect to see similar charges on my Internet bill.

    I vividly remember the days when there was only one phone company, if you had more than one phone connected to the wire it cost more because you had to rent the phone from the phone company, and you paid long distance charges to call somebody in the next town five miles away.

    If my bill goes down, the data cap is removed, and the service is more reliable, then I will be pleasantly surprised. I may even go so far as to admit that Obama did something right.
    Last edited by PepperdotNet; 02-26-2015 at 10:16 PM.
    a5cent likes this.
    02-26-2015 09:55 PM
  8. JohnIvory's Avatar
    Interesting read. Now I'm not so sure about my opinion on all this and shall have to do some more research.

    My main objection to those who oppose it on 'free market' principles are that no living person has actually seen a free market, and my local cable company's exorbitant rates and anti-competitive position as the only broadband available to me are just about as far from 'free market' as you can get.

    My main objection to those who support it for 'fairness' are the taxes, fees and other charges on my phone bill for 'universal service' and 'network access' and 'regulatory compliance.' I fully expect to see similar charges on my Internet bill.

    I vividly remember the days when there was only one phone company, if you had more than one phone connected to the wire it cost more because you had to rent the phone from the phone company, and you paid long distance charges to call somebody in the next town five miles away.

    If my bill goes down, the data cap is removed, and the service is more reliable, then I will be pleasantly surprised. I may even go so far as to admit that Obama did something right.
    That's the funny thing about today's reclassification. The rules put forth by the FCC are actually quite modest. They didn't even ban data caps! They simply did this so that ISPs wouldn't be able to make fast lanes and slow lanes, and so that they had to treat all data on their network equally regardless of its source. However making them Title II does set the stage for more beneficial regulations in the future.

    I have to ask who your phone provider is. All those charges are bunk and in today's current phone market you can easily switch to a carrier that doesn't have any of those. My bill with Straight Talk is $45 flat with unlimited talk text and web and none of that universal carriage nonsense. This is only possible because they lease lines from AT&T under Title II. If I went with AT&T when I was buying my phone I would have paid at least $70 for 200 MB of data. Title II is the reason MVNOs exists in the phone market today. Unfortunately today's reclassification doesn't mean that Verizon has to open it's lines to competing ISPs and honestly that's a good thing. In the current climate the FCC would not have been able to get it passed, and I doubt whatever version they ended up with would have been good for consumers.
    a5cent likes this.
    02-26-2015 10:36 PM
  9. PepperdotNet's Avatar
    The charges I am referring to are on the bill for a landline from at&t. $25 a month ends up near $40 once they tack on the fees.

    I can see a downside about the equal access for everything. Would the ISP be prevented from throttling a ddos botnet, for example? Or blocking inbound SMTP from known spam hosts?
    02-26-2015 11:51 PM
  10. JohnIvory's Avatar
    The charges I am referring to are on the bill for a landline from at&t. $25 a month ends up near $40 once they tack on the fees.

    I can see a downside about the equal access for everything. Would the ISP be prevented from throttling a ddos botnet, for example? Or blocking inbound SMTP from known spam hosts?
    I would be very shocked if that were the case as your examples are either illegal (botnet) or demonstrably injure the network and its subscribers (spam). Equal access means that the ISP cannot throttle your Netflix connection because they'd rather you were using Comcast OnDemand. It means they can't block BitTorrent because you're using the bandwidth you paid for. Legal services cannot be prioritised over each other because that would mean that companies that provide services over the internet would essentially succeed based on which ISP they've paid, not how good their service is.

    And believe me ISPs are not fighting for their God-given right to throttle ddos botnets (assuming they even allow you to run a server with your home connection) or protect you from spam. They're fighting for their right to control what you view and when you view it by fudging with your connection. Hell when Verizon issued statements opposing net neutrality they compared themselves to a newspaper, saying they should have the ability to feature content they liked over those they didn't. Of course they also lobbied very heavily for Safe Harbour status, so that when their subscribers do illegal activity over their networks they won't get sued for carrying the bad data.
    a5cent and PepperdotNet like this.
    02-27-2015 12:36 AM
  11. a5cent's Avatar
    If my bill goes down, the data cap is removed, and the service is more reliable, then I will be pleasantly surprised. I may even go so far as to admit that Obama did something right.
    Possibly, but I'd be surprised if Obama deserved any of that credit.

    Search for the reasons why a law is enacted and you'll almost never find a principled politician.

    I've been told by friends who work in silicon valley that Obama was pretty much undecided, right up until some of the big hedge fund managers started making their case. Their position is that the inability for ISPs to chose winners and losers (a.k.a net neutrality, but not necessarily title II, although in this case that seems to be the same thing), is absolutely essential to the dot com startup culture. They need the internet to be a level playing field, where startups have the same level of access as the big players. These hedge funds have billions of dollars invested in internet startups, and their viability depends on them having the same bandwidth as anyone else's services. I think that's a solid point.

    That is what some allege made up Obama's mind. I have no idea if it's true, but to me it sounds far more plausible that multi billion dollar investment funds made the deciding play, rather than a politician taking a stand on principle. It's a bit abstract, but it's not a complicated topic. That's why if this was based on principle rather than moneyed interests, I'd also have expected him to take a public stand far sooner than he did.
    Last edited by a5cent; 02-27-2015 at 05:32 AM.
    02-27-2015 03:51 AM
  12. a5cent's Avatar
    Some in the comments section are having difficulty imagining that some government regulation now, could ultimately mean overall far less regulation latter. It's being painted as an "obvious" logical fallacy, which is just too cute considering it's nothing more than a play on words (more regulation = less regulation, not).

    Apparently it's not obvious that regulated markets are always less free, independent of who does the regulating. In free markets corporations don't have the power to regulate anything, but that's economic theory that just doesn't apply to ISPs.

    The broadband industry is anything but a free market, and we wouldn't even be discussing this if ISPs hadn't set out to introduce their own regulations, defining how the internet should work, who should be charging consumers more money on ISP's behalf, and which information people will be provided easy/quick access to.

    All of these regulations are decidedly more "far reaching" than anything the FCC proposed, not to mention that their only purpose is to bolster ISPs bottom lines and shape public opinion in their favor.

    That sort of regulation we really don't need. If we require laws to prevent that sort of regulation, then we desperately need those laws.
    Last edited by a5cent; 02-27-2015 at 03:36 PM.
    theefman and JohnIvory like this.
    02-27-2015 04:47 AM
  13. JohnIvory's Avatar
    Possibly, but I'd be surprised if Obama deserved any of that credit.

    Search for the reasons why a law is enacted and you'll almost never find a principled politician.

    I've been told by friends who work in silicon valley that Obama was pretty much undecided, right up until some of the big hedge fund managers started making their case. Their position is that the inability for ISPs to chose winners and losers (a.k.a net neutrality, but not necessarily title II, although in this case that seems to be the same thing), is absolutely essential to the dot com startup culture. They need the internet to be a level playing field, where startups have the same level of access as the big players. These hedge funds have billions of dollars invested in internet startups, and their viability depends on them having the same bandwidth as anyone else's services. I think that's a solid point.

    That is what some allege made up Obama's mind. I have no idea if it's true, but to me it sounds far more plausible that multi billion dollar investment funds made the deciding play, rather than a politician taking a stand on principle. It's a bit abstract, but it's not a complicated topic. That's why if this was based on principle rather than moneyed interests, I'd also have expected him to take a public stand far sooner than he did.
    I agree. For a politician to do something based on his own principles the amount of public pressure behind it would need to be outstanding, and net neutrality is way too niche and technical for that. Then again Obama is done with all the campaigns he's ever going to run so it's possible he thought "What the heck" and decided to go for it. It's no coincidence that he came out in support of net neutrality and Title II right after the midterms were over.
    a5cent likes this.
    02-27-2015 10:12 AM

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