The FCC’s War On The Internet Targets Facebook

June 1, 2015

Larry Downes

Forbes

Why was Silicon Valley so unenthusiastic about the FCC’s February net neutrality order?

Despite the oft-repeated goal of the FCC to pass rules that would protect content providers from “potentially” discriminatory practices by powerful ISPs “picking winners and losers on the Internet,” major Internet content companies were conspicuously absent from this year’s bruising open Internet free-for-all.

Some publicly opposed the rulemaking, especially after the FCC’s meandering proceeding, launched in May of 2014, was hijacked in November by net neutrality extremists operating from inside the White House.

In the end, a simple agency action aimed at correcting legal errors in the FCC’s 2010 effort to enact open Internet rules devolved into a 400-page ordertransforming wired and mobile Internet providers into public utilities using 1930’s era regulations known as Title II. All in the name of prohibiting conduct that was almost surely illegal already—which explains why the FCC could find almost no examples of it to cite.

internet.org

The unease of the tech community, with the notable exception of Netflix, was both vocal and clear-headed. Silicon Valley companies recognized the risks of a self-appointed “referee” for the dynamic Internet, especially one that came in the form of a slow-moving, increasingly politicized federal regulator with a track record for disastrous unintended consequences.

Could it be that tech companies also saw through the new rules to the wide-ranging new powers the FCC granted itself to enforce them—powers that extended across the Internet ecosystem and, perhaps soon, to them as well?

If so, they were right. With the newest version of the rules already the subject of multiple federal legal challenges, the FCC and its political allies are wasting little time opening new fronts in their war on the Internet.

In the latest attack, leading content providers including Facebook, Wikipedia and Opera stand condemned for violating rapidly-expanding net neutrality principles.

The dangerous anti-consumer conduct at issue?

Believe it or not, their crime involves charitable programs that offer free or subsidized Internet access aimed at closing the global digital divide, in what is known as sponsored or “zero rated” data plans.

Programs that indisputably bring more users online, in the strange logic of neutrality absolutists, are secretly denying access, muzzling free speech, destroying user privacy and generally wrecking the “Internet as we know it.”

Neutrality Extremists and the Tech Resistance

More on that in a moment. First, a refresh on the growing depth of tech anxiety surrounding February’s Title II decision and the reasons for it.

Recall that

- As early as December, sixty leading tech companies, including Cisco, IBM and Qualcomm, publicly urged the FCC to reject what the White House had in November brazenly called “President Obama’s Plan” to turn the open Internet proceeding into a bait-and-switch on transforming ISPs into public utilities. Consumers, tech and the economy overall, they said, were certain to be “hurt by the reduced capital spend in broadband networks that would occur if broadband is classified under Title II.”

- Influential trade groups outside the communications industry, notably theConsumer Electronics Association, were unequivocal in their dissatisfaction with the public utility “solution.” CEA said that “reclassifying broadband as a Title II public utility service takes us in the wrong direction on the information superhighway.”

-  The Internet Society, the engineering association that has brilliantly regulated the Internet’s architecture and protocols all along, also expressed concern “with the FCC’s decision to base new rules for the modern Internet on decades-old telephone regulations designed for a very different technological era.”

- Google, which led the charge for the 2010 rules, was reported to be actively lobbying against the plan, with CEO Eric Schmidt saying soon after passage that he was “worried that we’re now on a path starting to regulate an awful lot of things on the Internet.”

- Even late-arriving Title II enthusiasts such as theElectronic Frontier Foundation and Netflix itselfquickly developed second thoughts. “We are deeply concerned,” EFF wrote just before the vote on the public utility plan, “that the FCC’s new rules will include a provision that sounds like a recipe for overreach and confusion: the so-called ‘general conduct rule.’”

EFF urged the agency to rethink that rule. But the Commission’s majority instead made it worse.

The February rulemaking now heads to court for what is certain to be years of litigation the agency has little chance of winning outright. (I wrote about the legal case against the public utility order in an earlier post, “Six Ways the FCC’s Public Utility Order Will Lose in Court.”)

But even before the courts have had a chance to rule on anything, the reticence of Silicon Valley to support a proceeding that supposedly protected their interests is proving far-sighted.

For one thing, as tech entrepreneurs knew, this was never a proceeding aimed at protecting conduct companies. It was, rather, a Trojan Horse launched from within by veteran beltway insiders. Its architects were self-styled consumer advocates who have long used net neutrality as a populist red herring, masking a radical agenda aimed at turning the Internet into a 21st century retcon of last century’s regulated telephone monopoly, micromanaged from top to bottom by federal, state and local regulators.

Their true objective was not rules that ensured such lofty goals as freedom of expression or even the dubious technical hack of “neutral” handling of dissimilar Internet traffic (an engineering principle long and best honored only in the breach, in any case). The goal has always been the abolition of any business arrangement or temporary competitive advantage that reflected shifting consumer preferences—at least when those preferences didn’t match their own.

The best-funded of the advocacy groups, rather, were particularly unhappy with bi-partisan policies embraced during the Clinton administration, at the dawn of the commercial Internet, to deregulate much of the U.S. communications and computing industries. Over the last decade, these groups have ramped up their efforts to reverse that decision. That campaign, according to public filings, has been funded in large part by two main sources–the Ford Foundation and billionaire George Soros.

The Ford Foundation alone, according to research by Watchdog.org, has provided at least $50 million since 2007 to groups advocating the broadest possible regulation of Internet businesses, constituting 60% of the total budget for the most vocal groups.

The absolutist world view of these groups goes far beyond the pre-emptive prohibition of “Internet fast lanes” for some of the most requested traffic. It alsodemands neutrality in search, social media, apps and other content. It condemns the use of traffic management technology that prioritizes sensitive video and voice packets over data, and of non-neutral engineering and business practices that ensure the most frequently-accessed video traffic doesn’t needlessly clog the network.

That includes turning the clock back before the invention of such essential optimizing technologies as co-located servers and content delivery networks (whether proprietary, such as Netflix’s intentionally misnamed “Open Connect,” or which, like services from Limelight and Akamai, are open to any content provider but not free).

These services, after all, create hardware fast lanes and prioritize some Internet traffic over others—even if that traffic happens to account for a large percentage of what consumers most want to see.

The express goal of the neutrality extremists is to reduce the network to a truly dumb pipe even as exploding demand, especially for mobile access and high-definition video, requires smarter pipes all the time to keep the network humming.

Not to mention emerging disruptors, some of which, including tele-health, autonomous vehicles and the Internet of Things, will need very different kinds of traffic management technologies to work at all.

But that’s just the side-show. For many of the advocates, the real fight has little to do with the media-friendly rhetoric of “net neutrality” and “fast lanes.”

Indeed, it only peripherally involves the commercial Internet at all.

Their final solution is nothing less than a return to a single fully-regulated communications infrastructure, with federal and state control over rates, access, and infrastructure deployment. (You know, when it took years to get a second –and very expensive–phone line installed).

As early as 1999, for example, these same groups and their predecessors argued that unless the FCC immediately forced the full unbundling of the cable infrastructure, the “boundless innovation and free expression” of the Internet would soon disappear.

The FCC rejected that call, and the results speak for themselves. According tothe latest data from venture capital giant Kleiner Perkins’ resident expert Mary Meeker, 11 of the 15 most valuable Internet companies, with a combined market cap of nearly $2.5 trillion, are U.S. companies (the rest are Chinese; heavily regulated Europe accounts for zero). Only one of them even existed in 1999.  None are a cable or mobile access provider.

Market Cap - Meeker

So much for “monopolistic control and information bottlenecks” destroying the Internet.

But if the chicken littles have their way this time, not just the pipes will be dumb. For the founders of at least one of leading pro-utility advocacy groups,the best future is the worst past: a nationalized communications industry, in which the government builds, owns, and operates not only the Internet but newspapers and television as well.

“At the moment, the battle over network neutrality is not to completely eliminate the telephone and cable companies,” the founder of one of the groups said in 2009. “But the ultimate goal is to get rid of the media capitalists in the phone and cable companies and to divest them from control.”

The War on Zero Rating

Well, one misstep at a time. Armed with an untested order in which the FCC grants itself nearly limitless power over the entire Internet ecosystem, and with the absolutists still holding the till at both the agency and the White House, it wasn’t long before that deeper—and deeply troubling—agenda became explicit.

In their latest jihad, net neutrality absolutists have now taken their crusade directly to the content providers. Their target, of all things, are charitable programs aimed at providing basic Internet access to the two-thirds of the world’s population who don’t have it.

The particular objective for now is to destroy Facebook’s Internet.org, which works with local ISPs to provide free basic Internet service to hundreds of millions of new users who can’t otherwise afford it. Content offered over Internet.org, including Facebook and Opera, is not counted by the ISP, a business model known as zero-rating.

Similar programs have been offered—and praised–for years by Wikipedia and local government services. In the U.S., mobile carrier T-Mobile offers a zero-rated music service, giving users free access to leading music streaming services, including Pandora, iTunes and Spotify. In developing nations, Google offers a similar service called Google Free Zone which zero-rates search, mail, and Google+.

The goal of zero-rating is to close the digital divide. How? By giving free access to those who remain offline, new users can discover the potential value of the Internet to their lives and, as they become financially able, move up from the subsidized plans.

In some cases the content providers provide the subsidy, in others it is the network operator, or a combination. In the case of Internet.org, as Facebook makes clear, the content providers do not cover the cost of the user’s zero-rated data, but instead provide marketing and technical support to help local ISPs operate the program. For its part, the company places no ads on Facebook pages seen by Internet.org users.

These services don’t literally give preferential treatment to some Internet traffic over others, but, the absolutists argue, they have the effect of preferring the sponsored content over everything else. So, in the interests of “real” net neutrality, they must go. No Internet at all, apparently, is better than some Internet initially offered for free with the rest available at market rates.

As the American Enterprise Institute’s Roslyn Layton noted last year, resistance to zero rating has been bubbling under the surface for some time.

The same groups that pushed the public utility order, for example, appeared in force at last year’s Internet Governance Forum in Istanbul, where they cheerfully told representatives of developing nations who praised the programs that their interests needed to be sacrificed for the greater good of the neutrality agenda. (Both Layton and I attended the sessions in question.)

But attacks on Internet.org and other zero-rated programs have boiled over since the FCC’s February order, which expressed grave doubts about whether zero rating would violate the latest incarnation of net neutrality rules.

The final report, for example, quoted extensively from the extremists, who dismissed sponsored data in all forms: “[T]he power to exempt selective services from data caps seriously distorts competition, favors companies with the deepest pockets, and prevents consumers from exercising control over what they are able to access on the Internet.”

In the end, the public utility order deferred a decision to ban zero rated services outright. But the FCC coyly encouraged the haters to ramp up their campaign, using coded language immediately understood by beltway insiders. “We will look at and assess such practices under the no-unreasonable interference/disadvantage standard,” the majority concluded, “based on the facts of each individual case, and take action as necessary.”

Message received. On May 18th, a coalition of 60 organizations, many of them supporters of the FCC’s Title II order, denounced Internet.org in an “open letter” to Facebook CEO Mark Zuckerberg that condemned the service as one that “violates the principles of net neutrality, threatening freedom of expression, equality of opportunity, security, privacy, and innovation.”

The letter includes an expansive or, to as the signatories call it, a “true” definition of net neutrality, one that should give all content providers pause.   On the Open Internet, the authors says, net neutrality “requires that the internet be maintained as an open platform on which network providers treat all content, applications and services equally, without discrimination.”

Zero rating, they explain, violates that requirement “by letting service providers decide which Internet services will be privileged over others, thus interfering with the free flow of information and people’s rights vis-a-vis networks.”

They are even offended by the fact that Internet.org refers to the program, which has brought nine million new users online in less than a year, as having anything to do with the Internet (“Nomenclature”). “The project acts as a ‘walled garden’ in which some services are favored over others — again, a violation of net neutrality.”

The authors make multiple demands on CEO Mark Zuckerberg personally, including that Facebook abandon zero rating, which is “inherently discriminatory.” Facebook, for its sins, is likewise ordered to recant and publicly “assert its support for a true definition of net neutrality.”

A Coordinated Campaign, Again

Echoing the Title II fight’s final months, even organizations that have historically taken a more nuanced view of Internet policy are now piling on the zero-rating attack.

The Electronic Frontier Foundation, which did not sign the open letter, nonetheless echoes many of its most outlandish complaints against Internet.org, often using the same language.

In a post published the same day as the open letter,  for example, the organization insisted Internet.org is “not neutral, not secure, and not the Internet.”

“[T]here’s a real risk,” EFF writes, “that the few websites that Facebook and its partners select for Internet.org (including, of course, Facebook itself) could end up becoming a ghetto for poor users instead of a stepping stone to the larger Internet.”

A program that provides free access to content, and which is open to any content provider to join, in the Orwellian logic of EFF’s neutrality absolutists, constitutes a frontal attack on the open Internet.

Worse, EFF argues that by giving free access to those still on the wrong side of the digital divide, users will wind up with less, not more, access. “By setting themselves up as gatekeepers for free access to (portions of) the global Internet, Facebook and its partners have issued an open invitation for governments and special interest groups to lobby, cajole or threaten them to withhold particular content from their service.”

“In other words,” EFF concludes, “Internet.org would be much easier to censor than a true global Internet.”

Got that?  By providing the poor with any access to the Internet, Facebook will encourage repressive governments and “special interests” to limit that access–a worse form of censorship than no access at all.

But even EFF’s pretzel logic pales in comparison to the verbal tap-dancing of the Mozilla Foundation, the organization that coordinates development of the Firefox browser.

Mozilla, recall, was itself the subject of a hostile Internet mob last year when its new CEO Brendan Eich was revealed to be personally supporting initiatives to ban gay marriage, a fact Mozilla’s board knew when it hired him. Eich was awkwardly forced out after less than two weeks as CEO.

Perhaps to draw attention away from its own human rights record, Mozilla took on a leading role in the effort to hijack the FCC’s open Internet proceeding into President Obama’s Title II public utility plan, cautiously at first and then full-throated as momentum grew.

Only a month after Eich was hired despite his actively campaigning to deny some individuals fundamental rights in the real world, the organization was back on its high horse, arguing that Title II was “central to our individual growth and our collective future.”

The Foundation and its taxable subsidiary have now joined the chorus objecting to zero-rating, in principle if not in practice. A post in early May by Mozilla Corporation’s head of legal affairs notes that while the practice “does not at first pass invoke the prototypical net neutrality harms,” it could still have the effect of blocking access to some content “if a user has no available data left in a billing period.”

So on balance does Mozilla agree with calls for legislation at the national level to ban zero-rating? “The truth is we don’t know.”

Well, of course they do—Mozilla itself participates in zero-rating programs of its own, including subsidized phones that come pre-loaded with the company’s own operating system and six months of limited access.

In another partnership with a local ISP, new users get 20 MB of free and unrestricted data each day, in exchange for viewing “an advertisement.”

So that’s Mozilla’s innovative solution to the digital divide. Ad-supported access. Like, you know, broadcast television, which is nearly dead as a standalone model.

And who is going to pay to advertise to the poorest of the unconnected—the group Internet.org is working to connect? That’s something else Mozilla apparently doesn’t know.  But have no fear.  ”[M]maybe solutions will come from academia and think tanks, through research driven white papers.”

The Neo-Colonialism of Neutrality Absolutists

Facebook, for its part, disputes the idea that giving free access to some content forces new users into a “walled garden,” let alone a “ghetto.”

Facebook, which has committed to spending “billions” to bring Internet access to underserved communities, recently hired former FCC Chairman Kevin Martin to help fulfill that mission.  And, no doubt, to help traverse the dangerous waters of Title II regulations.

According to a company spokesperson, one participating ISP in India already reports that of 800,000 new users signed up through Internet.org, only 7% of their data use was for Internet.org content (including Facebook).

On average, the new users are viewing more than 100 MB of data per month outside of Internet.org content. They are “moving to the broader Internet and paying for data,” Facebook says, as they come to see its value—the goal of both Internet.org and, one presumes, the anti-zero-rating advocates.

Facts aside, there’s something depressing about lawyers and academics free associating on the future of the Internet’s technical and business architecture. No need, it seems, to include the engineers, entrepreneurs or venture capitalists in the conversation. Surely some “research driven white papers” will tell us what we need to know.

It’s also disappointing to hear the same empty rhetoric attacking Facebook borrowed from last year’s open Internet donnybrook, especially when it comes from organizations who should know better.

How soon they forget that in much of the developing world, Facebook, Twitter and other social media are the tools of choice for political activists, particularly where governments control traditional media outlets (and attempt to suppress the Internet as well). That is, for real freedom of speech and social change.

Not too long ago, Facebook was the venerated darling of democratic uprisings in the Arab world and elsewhere. But in the binary world of net neutrality purists, the company’s accelerated efforts to make the Internet even more accessible to more users will instead make it easier for governments to censor the “true” global Internet.  Zuckerberg go home.

That attitude translates to an insidious new form of colonialism, this time of a virtual variety. The fate of a continued stream of disruptive innovations that make the Internet such a valuable platform in the first place, the argument goes, is too important to be left in the hands of non-users, or their corrupt governments.

In true western civilization fashion, neutrality absolutists are mansplaining to the developing world why it is they can’t appreciate the nuanced policy implications of the Internet.

Better to let the U.S. government and its think tanks figure it out for them, even if it means they continue to be left out of the digital conversation, at least until the white papers are written and the lawyers finish drafting “true” net neutrality rules.

Hypocrisy on the Side

Aside from grossly mischaracterizing how Internet.org actually works, there’s also more than a whiff of condescension to these and other objections to zero-rating.

And to even more absurd suggestions that if Facebook is sincere in its pledge to help those who can’t afford Internet access, than it should simply pay the phone bills of billions of new users. “[I]f Facebook really wants to help the poor,” as one advocate put it recently, “it can do so by using Internet.org to fund access to the ‘real Internet,’ not some bastardized version of the Internet that lets Facebook and select ISP partners play god.”

Funding access, it seems, is the Tech Innovator’s Burden.

That jeremiad and more like it have appeared recently on the website Techdirt, which last year expressed ambivalence about even Wikipedia’s zero-rating program. “[P]erhaps there should be an exception to net neutrality for non-profits,” another Techdirt writer mused.

“But that would still produce the same tilting of the playing field in favor of one supplier, making it hard for a new rival to Wikipedia, say, to compete. Tricky stuff this net neutrality…..” And then the post simply trailed off.

The advocates’ strategy follows a known path of least resistance, at least so far.  Invoking “freedom of expression” or even “individual growth and our collective future” have proven to be the easiest ways to provoke the libertarian instincts of Internet users.

Until, that is, the users figure out it’s all just words, often mouthed in the interests of competitors or shadowy funding sources for whom the Internet is just the proving ground for more extreme anti-business policy goals.

Such calls, in any case, sound increasingly hollow when they are applied selectively. And when those wagging their fingers ignore more obvious violations that don’t otherwise play to their larger agenda.

Take just one timely example. Just one day after the anti-Zuckerberg “open letter” and EFF’s supportive post were published, social news giant Reddit, via its new interim CEO Ellen Pao, announced that the site was instituting new policies to restrict user comments the site considered offensive.

(Pao made news earlier this year with a failed sexual discrimination lawsuit against Kleiner Perkins. A jury found against Pao on all counts.)

The new policy is wrapped in the flag of fighting harassment, but its negative impact on free speech is irrefutable. Reddit, which last month had over 169,000,000 unique visitors, has redefined harassment to include any conduct that would make a reasonable person “conclude that Reddit is not a safe platform to express their ideas or participate in the conversation.”

Based on user complaints, company employees will now evaluate the behavior of users against that standard and, if in the employee’s judgment another user is violating the policy, take unspecified action.

If this sounds like an arbitrary limitation on “freedom of expression,” Pao is happy to make that implication explicit. “It’s not our site’s goal to be a completely free-speech platform,” she told an NPR reporter. “We want to be a safe platform and we want to be a platform that also protects privacy at the same time.”

These are admirable goals which may indeed require weighing free speech against other values. And of course private enterprises are under no legal obligation, unlike the U.S. government, to uphold the First Amendment.

But even as Internet.org faces condemnation for (at best) hypothetical and indirect violations of free speech, Reddit’s explicit new limits are given a pass.Or even praise.

In any case, the neutrality absolutists, the self-appointed champions of “true” free speech, have so far said nothing.

They are, it seems, otherwise engaged. The FCC and its political masters have opened the floodgates of an expansive and unsustainable definition of “neutrality” that, taken to its logical extreme, would make any Internet-based business impossible. As the attacks on zero-rated services make clear, it is an extreme the absolutists are determined to plumb.

Their growing witch hunt may soon demand regulatory action against any number of non-neutral technical and business models that not only fund the continued development of the Internet and the networks that deliver it, but which keep it a useful tool, both for users and future entrepreneurs.

No one will be spared, not even the generals of today’s policy armies. Google, Facebook and Twitter have already joined the ranks of Microsoft, Blackberry and IBM in the short trip from innovation hero to totalitarian heel. Netflix, Mozilla and Apple, with plenty of non-neutral strategies of their own, could easily be next.

Today the mob has come for zero-rating. Tomorrow, well, maybe you.

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