FCC Lumbers Along with Net Neutrality

If net neutrality didn’t exist, would it be necessary to invent it? Doubtful. It’s not like tech policy makers don’t have a host of pressing issues begging for resolution. Off the top of my head:

  1. Putting radio frequency spectrum to its best and highest uses
  2. Enabling poor people to enjoy the Internet’s benefits through ACP and other means
  3. Closing the broadband coverage gap through the BEAD program or other means
  4. Protecting Internet users from identity theft through privacy regulations and other means
  5. Stemming the tide of intentionally harmful disinformation undermining public health
  6. Curbing the Internet’s propensity to form concentrations of market power through unchecked mergers and acquisitions
  7. Effectively unregulated marketplaces for illicit goods and services
  8. Rampant theft of intellectual property
  9. Ransomware and other forms of black-hat hacking
  10. Malicious gatekeeping

…et alia and et cetera.

So why does the FCC majority seem to think that it needs to spend a good chunk of its time on a twenty year old open issue that has never made a positive difference anywhere at any time? This is one of tech policy’s most mysterious conundrums.

It’s Hard to Admit You Were Wrong

The FCC does have time on its hands due to the Biden Administration’s decision to task NTIA with the BEAD program, a gratuitous insult to the FCC’s history and expertise in managing grant programs. The first group of the administration’s tech policy advisors apparently aren’t good at their jobs.

The BEAD program is structured like welfare programs Medicaid and TNAF: block grants to states for state-designed programs conforming to loose federal guidelines. This means some states will administer the money well and others won’t.

In particular, the state programs don’t display deep knowledge the tradeoffs between fiber-based xPON, coaxial DOCSIS, fixed and mobile 5G, alternative fixed wireless access technologies, and LEO and GEO satellites. Some states will burn through their grant money without solving the coverage problem, as Chair Rogers and Chairman Latta have pointed out.

BEAD is in Trouble

My state, Colorado, is oversubscribed by a factor of four. A program intended to bring broadband everywhere can’t pay for xPON everywhere. BEAD has a twentieth century bias, a preference for a vastly over-touted technology.

The FCC’s National Broadband Plan broke new ground by including wireless in its analysis; it was the first such national plan of the iPhone era. But NTIA and the laggard states are pretending that wireless is an altogether unsavory technology.

This sentiment is driven by the long-standing tendency to evaluate broadband based on raw capacity alone, giving no credit for meeting genuine needs with a reliable and cost effective technology.  In the early 2000s, this norm elevated fiber to the status of the only true broadband.

Consumer Sentiment Meets Government Mandates

Consumers don’t see it that way. According to the latest J. D. Power survey, wireless Internet subscribers are more satisfied with their services than those who subscribe to completely wire-based offerings:

Overall satisfaction among wireless internet customers (5G or 4G LTE home internet) averages 748 (on a 1,000-point scale), while overall satisfaction among wired (fiber and cable) and satellite internet customers averages notably lower—712 and 577, respectively, according to the J.D. Power 2023 U.S. Residential Internet Service Provider Satisfaction Study released today. These differences are primarily driven by gaps in satisfaction with cost of internet service, with cost satisfaction among wireless customers averaging more than 90 points above that of wired customers and nearly 190 points above that of satellite internet customers.

It’s close, but consumers clearly don’t regard FWA as some sort of makeshift, backward tech. Coverage for the best 5G is still spotty today, but it’s already much better than it was just two years ago.

This is to say that a program administered by the FCC would have avoided NTIA’s rookie mistakes, not that fiber is obsolete or 5G is over-hyped. We now know that the killer app for 5G is residential broadband.

Malicious Gatekeeping

Returning to my list of pressing issues, I identified malicious gatekeeping. When Biden policy wonk Tim Wu invented net neutrality, its primary rationale was prevention of gatekeeping by ISPs.

This was weak, as ISPs have never demonstrated anything more than a passing interest in gatekeeping. It costs a lot of money to do, and ultimately makes the ISP offering less appealing.

We do see gatekeeping-as-a-service on social networks and on website prophylactics such as Cloudflare. Social networks use content moderation to give their services a unique vibe, setting them apart from competitors.

Good Gatekeeping

If you want family-friendly you go to Facebook.  For smart professional discourse, you go to LinkedIn. To let your freak flag fly, you’ve got X and X-rated services OnlyFans and Pornhub.

But every user who has a post censored sees malice in the moderation that makes these platforms what they are. So gatekeeping isn’t always – or even typically – bad, and malice is in the eye of the beholder.

Net neutrality has proven to be nearly impossible to codify because there are so many exceptions to the blindness rule Wu imagined. Net neutrality is a classic example of the simple, neat, and tidy answer that happens to be completely wrong. But who knew that 20 years ago?

Making the FCC Great Again

The FCC’s power peaked during the Tom Wheeler tenure. The agency controlled nearly all broadband subsidy programs, it brought ISPs under its wing by classifying them as Title II service providers, and it enacted severe privacy regulations on ISPs.

The privacy regulations were completely off base because the gatekeeper services had, and still have, greater visibility into user activity than ISPs do. Encrypting Internet data between users and services made ISPs blind and deaf. Congress revoked the privacy regulations and said the FCC couldn’t do such a thing ever again.

FCC is no longer the broadband sugar daddy now that NTIA controls the purse. So all the FCC has left of its former glory is the chance to hamstring ISPs with picky, mostly aesthetic, regulations on how they manage traffic.

No matter how strict the FCC gets, companies like Amazon, Cloudflare, Google, Facebook, Microsoft, and Apple who own their own networks will always be stronger. They’ve bought prioritization by bypassing the long haul side of ISP networks, perfectly legal under the FCC’s proposed rules.

The Institutional Problem

The FCC’s net neutrality fact sheet makes it clear that the purpose of Title II net neutrality is to empower the FCC. The agency believes it needs more power because the Internet is important and, who knows, bad things might happen some day. It’s an argument for a term life insurance policy.

It’s crystal clear that the US broadband infrastructure is in better shape today than anyone imagined it could be during the Wheeler era. Telecoms are replacing copper with fiber; cable is rolling out semi-symmetrical multi-gigabit networks and selling mobile for sweet prices; 5G providers are the fastest-growing players in residential broadband, and no less than three players are launching LEO networks.

The USA is drowning in competition for residential broadband. Competition beats regulation every time.

A Path Forward for the FCC

The one thing that the FCC can do to make this rosy picture even better is allocating more mid-band spectrum to commercial operators. But it is hampered in this pursuit by NTIA’s chief client, the Defense Department. Putting all spectrum in the hands of the FCC would be a step in the right direction.

I would much rather see the FCC spend its free time on the spectrum problem than fooling around with Title II. But that takes the agency focusing more on what the country needs and less on its institutional self-esteem.

I’m proposing a simple swap: NTIA can have the FCC’s grant-making authority in perpetuity as long as the FCC can have NTIA’s control over government spectrum. Both of these activities need to performed by a single agency.

In the meantime, we need to demand an answer from the FCC to the question of making the Internet even better. The progress we’ve seen toward a competitive marketplace for consumer broadband since 2017 is unparalleled in human history. How on Earth can the majority’s proposed, antique and inappropriate, regulatory framework possibly help?