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Here's Pai in Your Eye

Alan Breznick
12/11/2017

Is FCC Chairman Ajit Pai trying to play the bad cop with Congress on the net neutrality issue?

That's what some keen observers of the net neutrality debate like Craig Moffett, principal analyst at MoffettNathanson LLC , suspect may be happening. In a recent note to investors and again in comments at our Future of Cable Business Services event in New York late last month, Moffett suggested that Pai is positioning himself as the bad cop in the debate to make Congress play the good cop and resolve the thorny issue with a compromise that would appease both sides.

Here's the way that argument works. At the Commission's next regular meeting on Thursday, Pai gets the Republican-controlled Federal Communications Commission (FCC) to pass his draft "Restoring Internet Freedom Order," which would eliminate both the core principles of the Commission's current net neutrality rules and the Title II regulatory regime set up to enforce those rules. Then, faced with the inevitable angry public backlash that has already erupted, the Republican-led Congress swiftly rides to the rescue by enshrining the net neutrality concepts into law without reinstating the Title II regime.

As a result, consumers, public interest groups and online content providers get the federal prohibitions they crave against such bad behavior as blocking, throttling and degrading Internet traffic and prioritizing some online content over others for profit. And the big ISPs like Comcast, AT&T, Charter and Verizon get rid of the Title II utility-style regulations that they scorn.

"Had legislation trading net neutrality for Title II been proposed before [the] FCC reversal, it would almost certainly have been viewed as dismantling net neutrality, and would therefore have been painted as anti-consumer," Moffett argues in his note to investors. "Now, in the wake of the FCC's draconian draft order, precisely the same legislative language can be recast as 'coming to the rescue.' " Moffett credits the idea to NCTA President Michael Powell, a former Republican FCC chairman himself.

If that indeed is Pai's clever (some might say devious) plan in stripping net neutrality to the bone, it could actually work. As if on cue, several leading House and Senate Republicans have already called for enacting "permanent net neutrality rules through the legislative process” while many leading Democratic legislators have lashed into Pai's draft order. So that all-too-rare bipartisan consensus in Congress may now be developing to hit the sweet spot on net neutrality.

Of course, compromise and bipartisanship are almost dirty words in Washington these days. Stranger things have happened in DC, though, like the House and Senate passing huge tax cuts for the rich and powerful that most Americans don't want.

Bu let's get back to Pai. If the rookie FCC chairman is truly intent on playing the bad cop, then he's doing an awfully good job of it. First -- unlike at least four of his immediate predecessors at the Commission, both Republican and Democratic, who at least paid lip service to net neutrality -- his proposal basically calls for ripping net neutrality to shreds and letting the free market reign supreme over the Internet, no matter what the consequences. ISPs would pretty much be allowed to do whatever they want so long as they are "transparent about their practices."

Most of the little federal regulatory oversight left would be turned over to the Federal Trade Commission , whose jurisdiction over the Internet is still being sorted out in the federal courts. Meanwhile, the states would be prohibited from doing anything to police bad actors. That goes a long way toward explaining why many net neutrality proponents are now taking to the streets (and Verizon stores) to protest Pai's draft order.

Second, with his rants against today's allegedly "heavy-handed" regulation of the Internet, the former Verizon lobbyist has been peddling the highly questionable narrative that large US ISPs have been cutting back on domestic broadband capital expenditures since the net neutrality rules went into effect two years ago. But there's no solid evidence of that, as my colleague Mari Silbey showed in her post about recent capital spending trends by Comcast, AT&T and Verizon, three of the four largest US ISPs, a few months back. So, at best, Pai is playing with the facts to suit his radical deregulatory agenda. (See The Title II Capex Argument Is Ridiculous.)

Further, Pai has dismissed the overwhelming support for net neutrality rules from the unique, human-authored comments the FCC has received from the public, ignored calls from fellow commissioners for public hearings around the country and shrugged off the fact that more than 1 million of the comments against net neutrality were probably fake. When New York State Attorney General Eric Schneiderman called for an investigation into "a massive scheme that fraudulently used real Americans' identities" to "drown out the views of real people and businesses" late last month, the chairman's office said no thanks and refused to cooperate.

Finally, in almost Trump-like fashion, Pai has started getting personal with those who dare to oppose his drastic deregulatory proposal, with his office deriding net neutrality supporters last week as "getting more desperate by the day." That denouncement came after more than 40 groups appropriately asked him to delay the planned December 14 FCC vote on his draft order until the federal courts make a final ruling on the FTC's actual authority to protect consumers from "unfair, deceptive and anti-competitive practices" on the Internet. Maybe Pai should just start calling his critics "sad," "crazy" and "losers" now, like the man who appointed him to his post.

In other words, the publicly affable Pai appears to be trying to piss off as many people as he can. So, if he's not just playing the heavy here to get Congress to pass compromise legislation, his strategy is puzzling, to say the least. It certainly doesn't seem like the best way to make friends and influence people, even in today's highly polarized political climate.

— Alan Breznick, Cable/Video Practice Leader, Light Reading

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kq4ym
kq4ym
12/28/2017 | 9:26:40 AM
Re: Net Neutrality(AKA The NWO of the Mid 1990's)
Whether Pai is clever or devious, we may never know. The machinations of politicians and their apointees will generally be left to speculation absent written evidence of such maneuvering going on. But the neutrality issue will be interesting to see what ultimately happens after the FCC vote moves it out of the way.
brooks7
brooks7
12/13/2017 | 11:59:42 AM
Re: Alternate Explanation
Duh!,

Would seem to me that they are about the same.  The older rulings were that you can't claim to not regulate something then regulate it.  If the FCC says that all regulation of the Internet disappears, then they would seem to meet that requirement.  My view is that the imposition of Title II seemed to be as capricious as its removal.

seven

 
Duh!
Duh!
12/12/2017 | 9:03:23 PM
Re: Alternate Explanation
Two separate issues: the law tells the court what it MUST do when considering this case, i.e., IF it finds that the Order is any of (A-F), set it aside. It will be up to the public interest groups to convince the court that the Order is (A-F), and the FCC's attorneys to convince the court that the Order is NOT (A-F). The FCC would appear to have the harder task. 

[Again, IANAL, and don't play one on the Internet, but I developed an unhealthy facination with Adminstrative Law in my IDCMA days.]
brooks7
brooks7
12/12/2017 | 7:53:37 PM
Re: Alternate Explanation
You answered my first question...you are trying to say that your list applies if a court wants to back them.  My view is this is more like the play "stands" in the NFL.  The 2015 ruling told them what they have to do IF they want to regulate.  IF they don't want to regulate, that would relate to the courts previous rulings about reversing the light orders.

awcwn

 
Duh!
Duh!
12/12/2017 | 6:03:37 PM
Re: Alternate Explanation
Not sure what you mean by your first question. If it means what it seems to mean,  the DC Circuit Court of Appeals will handle the inevitiable lawsuit against the Order.

The answer to your second question: The DC Circuit Court upheld the 2015 Open Internet Order on its merits. Which isn't too surprising, since the court pretty much told Wheeler what he had to do in order to make the rules stick: reclassify. As to this order... I'm not going to try to do the lawyers' jobs for them. Suffice to say, they have plenty of ammunition.
brooks7
brooks7
12/12/2017 | 4:38:39 PM
Re: Alternate Explanation
Duh!,

 

Do you mean if the Court Rules against the FCC?

 

Its not clear to me that any of those clauses actually apply to either applying or repealing the implementation of Title II.  For exampke, what evidence exists that Title II SHOULD be implemented?

seven

 
Duh!
Duh!
12/12/2017 | 2:59:12 PM
Re: Alternate Explanation
No sooner will the ink dry then a coalition of public interest groups will be on the doorstep of the DC Circuit Court of Appeals, bearing a Petition for Review.

Here's what the Law directs the court to do:

To the extent necessary to decision and when presented, the reviewing court shall decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning or applicability of the terms of an agency action. The reviewing court shall—
(1) compel agency action unlawfully withheld or unreasonably delayed; and
(2) hold unlawful and set aside agency action, findings, and conclusions found to be—
(A) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law;
(B) contrary to constitutional right, power, privilege, or immunity;
(C) in excess of statutory jurisdiction, authority, or limitations, or short of statutory right;
(D) without observance of procedure required by law;
(E) unsupported by substantial evidence in a case subject to sections 556 and 557 of this title or otherwise reviewed on the record of an agency hearing provided by statute; or
(F) unwarranted by the facts to the extent that the facts are subject to trial de novo by the reviewing court.
In making the foregoing determinations, the court shall review the whole record or those parts of it cited by a party, and due account shall be taken of the rule of prejudicial error.

I am not a lawyer. But within the common meaning of the words, it's hard to see that the Order they're going to vote on is anything other than abitrary, capricous, an abuse of discretion, unsupported by the evidence and unwarrented by the facts. Whether they observed the procedures required by law is questionable.
Austin Idol
Austin Idol
12/12/2017 | 1:32:48 PM
Re: Broadband market is an oxymoron
NWO!!! HALL, NASH, AND HOGAN ARE COMING TO DESTROY!!! BE LEARY OF THE OUTSIDERS!!!
brooks7
brooks7
12/12/2017 | 10:15:09 AM
Re: Broadband market is an oxymoron
@James,

Except that Cable has over a 60% share of broadband in the US.  So replace Verizon and AT&T with Comcast and Charter.

@Austin,

Well that made no sense at all.  Net Neutrality - Common Carriage - has been part of Telephony for a very long time.  There are tradeoffs with societal needs and corporate needs that require a balance.

seven

 
Austin Idol
Austin Idol
12/11/2017 | 9:49:22 PM
Net Neutrality(AKA The NWO of the Mid 1990's)
Net Neutrality AKA The NWO of the Mid 1990's Hall/Facebook, Nash/Netflix, Hogan/ Google, Bagwell/Amazon etc...They aim to take over the Internet just like WCW. We simply can't let this happen.

https://www.youtube.com/watch?v=OSoMw4dz7mE

 
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