Wheeler Defends Net Neutrality, Privacy Proposal, as Verizon Backs Some Neutrality Rules

“Critics howled that the rules would be devastating for network investment -- that broadband deployment would screech to a halt,” Wheeler said. “So how are those predictions working out?” he asked. “Investment continues pouring into startups, whose ability to reach users requires unfettered Internet access. In 2015, venture investment in Internet-specific businesses was up 35 percent over the previous year.”

Wheeler cited two examples of increased investments by major ISPs. AT&T predicts $22 billion in capital expenditures this year, a $2 billion increase over the previous year, he said. “Comcast says it plans ‘increased investment in network infrastructure’ in 2016, and, just last week, Comcast began rolling out gigabit service in Atlanta, with plans to expand to additional markets later this year,” Wheeler said.

The FCC imposed only light-touch regulation, Wheeler said. “That means no rate regulation and no forced unbundling of networks,” he said. The choice is not between rules and investment, he said. “The real choice at the heart of the net neutrality debate is whether those who build the networks should make the rules by themselves or whether there should be a basic set of rules and a referee on the field to throw the flag if they are violated,” Wheeler said. “To me, the choice remains clear.”

Wheeler also defended the FCC’s controversial proposal to impose privacy rules on ISPs (see 1603100019), teed up for a vote at the agency’s March 31 open meeting. People should be able to opt for broadband, while also protecting their privacy, he said.

“Your ISP handles all of your network traffic,” Wheeler said. “That means it has a broad view of all of your unencrypted online activity -- when you are online, the websites you visit, and the apps you use.” For those with mobile phones, carriers are able to track location throughout the day in real time, Wheeler said. “Even when data is encrypted, your broadband provider can piece together significant amounts of information about you -- including private information such as a chronic medical condition or financial problems -- based on your online activity.” FCC rules limit a carrier’s ability to repurpose and resell what it learns about a subscriber’s phone activity without consent, he said. “The same should be true for information collected by your ISP.”

The FCC proposal won’t apply to edge providers like Twitter or Uber and also doesn’t “wade into government surveillance, encryption or other law enforcement issues,” Wheeler said. “This is about ISPs and only ISPs.” Wheeler said critics are aiming the same criticism at the privacy rules as they did at the net neutrality order. “We’ve seen that movie before,” he said. “We know to be wary of false choices. We can protect consumer privacy, while preserving innovation and investment in our broadband infrastructure.”

Verizon said it's “committed to an open Internet” because it has invested billions of dollars in digital media and continues to invest $17 billion a year in its own network so consumers can consume content. “It is important that policymakers both catalyze innovation in over-the-top services and encourage investment in networks that serve as their platform,” said General Counsel Craig Silliman Monday on a company blog.

Noting the U.S. Court of Appeals for the D.C. Circuit could rule “soon” on the court challenges to net neutrality rules, Silliman said Verizon wants to make its position clear: “No Blocking: we support rules that prevent providers from blocking lawful content, applications or services. No Throttling: we support rules that prevent providers from intentionally slowing down or throttling Internet traffic based on the traffic’s source, destination or content. No Paid Prioritization: we support rules that prevent providers from charging content providers a fee to deliver their Internet traffic faster than the Internet traffic of others. General Conduct Standard: we support a general conduct rule that would prevent unreasonable conduct by broadband providers where there is actual harm to consumers or to competition.” That appears generally in line with the commission’s current rules, though there was no mention of Title II -- or IP interconnection, over which the FCC asserted jurisdiction without setting rules.

Verizon's emphasis on needing open Internet rules for its digital media content seemed to be new as did its explicit support for rules against paid prioritization and for a general conduct standard, a telecom industry lobbyist said. Verizon had no further comment.

While Verizon can’t predict the court outcome, it expects more conflict and uncertainty after the ruling. “The only way to avoid this depressing redux is for Congress to act,” Silliman said. “In the past we have criticized the FCC for applying outdated rules to the fast-moving Internet ecosystem. We still think that’s true, but let’s be fair: Congress hasn’t updated the FCC’s toolbox for over 20 years, so the FCC is working with the only tools it has, however inadequate. Congress can give the FCC the tools it needs to do this properly and on a legally sustainable basis. It should do so.” He said there is a “real chance” Congress could act soon, given “strong bipartisan interest” and “strong leadership.”

A broadband ISP provider source emailed: “It’d be easier for us to get advice from Verizon if they’d not filed the lawsuit that got us all into this mess.” Although Verizon didn't challenge the 2015 net neutrality and broadband Title II order, it did challenge the 2010 order, which had softer net neutrality rules and didn't reclassify broadband under Title II. That earlier order was partially reversed and remanded to the FCC by the D.C. Circuit, leading to last year's agency action.

In a blog post Monday, Tech Knowledge Director Fred Campbell questioned the proposal to impose privacy rules on ISPs while ignoring edge providers. “Let’s be clear: Wheeler’s plan would let Silicon Valley’s big data companies keep collecting and selling the same types of consumer information that his proposed rules would prevent ISPs from using,” wrote Campbell. “Google and other online marketing companies would still know which websites consumers are visiting and how often, and these companies would still be able to share that information with the government and a host of third-party advertisers. So far as Silicon Valley’s big data companies are concerned, the same data that Wheeler claims is ‘yours’ is actually theirs to do with as they please.” Wheeler’s argument that the FTC should oversee the privacy rules of non-ISPs “undermines” the claim that ISP-specific rules are needed, Campbell said.