There’s a lot of net neutrality stuff going on right now, and since that’s an issue I’m rather interested in, there might be two or three posts about it over the next few days. For now, just a quick li’l reminder:
The cable companies (not to mention FCC Chairman Pai) are screaming right now that the FCC never, ever dared regulate Internet Service Providers during the early days of the Internet. They claim that the modern free Internet grew up on top of an equally free infrastructure market where ISPs benevolently expanded their networks and increased speeds in order to earn a bigger profit–the perfect capitalist love story–until the Evil Obama Administration released the first-ever ISP regulations mandating net neutrality in 2015. You may even see this story repeated in outlets like the Wall Street Journal, which could never resist such a perfect free-market fable.
Well, I say “fable.”
The more accurate word is “lie.”
Remember that. The cable companies are lying to your face on this one, and they’re hoping you don’t know enough about the ISP regulatory regime of the ’90s and ’00s to gainsay them. So let me give you a quick refresher on what we discussed in these pages a few years ago:
The FCC has taken action to compel Internet Service Providers (ISPs) to comply with some form of net neutrality regulation for 23 out of the 28 years ISP’s have existed.
15 of those 28 years have been spent under the so-called Title II regime–the strictest form of regulation available to the FCC.
This is not new. And the telecoms know it.
In 1934, Congress passed the Communications Act, which created the FCC. Title II of the Communications Act placed phone companies (among others, such as radio operators) under a scheme of comprehensive regulation.
The first commercial ISP launched in 1989, 28 years ago. Back then, the Internet operated on phone lines. Accordingly, ISPs were regulated by the FCC under Title II of the Communications Act. Since the Internet communicated across phone lines, many ISPs were actually phone companies… although they had far more competitors back then than they do today.
In 1996, the “Republican Revolution” Congress under Newt Gingrich passed a massive update to the Communications Act in light of the new Internet Age. The Republican bill was called the Telecommunications Act of 1996, and it modernized the 1934 Communications Act to make sure that it wouldn’t interfere with the development of the infant Internet. Congress created a new category of regulation for online “information services”–that is, content providers like Google or Reddit or my blog (although back in ’96 they were more thinking about “your local library and maybe Yahoo!”). These information services were in fact exempt from Title II regulation. (And still are today!)
However, the Gingrich Congress left regulation for ISPs (that is, the phone companies) completely intact. Since ISPs did not provide content (where competition made sense) but rather provided infrastructure (where natural monopolies prevailed), ISPs continued to be subject to strict FCC oversight of many aspects of their operation, particularly their interconnection agreements (for example, the FCC forced big ISPs to exchange data with small ISPs at non-monopolistic prices) and their development of internet infrastructure for rural customers. This is exactly how phone companies had been regulated for 60 years, and nobody batted an eye. This regulatory regime prevailed for the rest of the dial-up era.
You may also notice that it is exactly the type of regulation the cable companies insist the Internet never ever had back in the day.
A few years after the Telecommunications Act of ’96, DSL was invented. This was cool. The FCC examined DSL and declared that it fell under Title II regulation, because it was (for all legally relevant purposes) identical to the dial-up system — just faster and occasionally on a different wire. A DSL provider was still emphatically a common carrier, which is the key test for Title II regulation. Again, nobody batted an eye.
Finally, cable broadband internet began rolling out to consumers. The FCC examined it… and a remarkable thing happened. In 2002, the FCC ruled that cable broadband was neither a “telecommunications service” nor a “cable service.” (If cable broadband internet were either of those things, it would subject to Title II regulation.)
Instead, the FCC decreed, cable broadband was solely an “information service,” with no telecommunications or cable element included. (As I have written before, this was an insane decision which the Supreme Court upheld only narrowly, and then only by accepting an extreme standard of deference to executive agencies that is becoming rightly disfavored. The Telecommunications Act, properly read, grants the FCC no legal authority to stop regulating cable broadband providers under Title II). Since information services can not be regulated as common carriers under Title II, this freed cable broadband providers from all those regulations.
This lasted until 2007, when the net neutrality wars began in earnest. That happened because of the Sandvine BitTorrent controversy. Because of the anti-consumer nature of that action, the Bush FCC ordered Comcast to stop. Comcast did stop voluntarily, but sued the FCC, saying that the FCC did not have authority to give that order to Comcast since Comcast was officially an “information service” and not a “cable service” or “telecommunications service.” In 2010, the courts agreed, and Begun The Neutrality Wars Had.
I’ll spare you the details, but over the next several years there was a series of lawsuits between the FCC and the cable companies. Of course, throughout that 8-year period of court fights, all ISPs more or less stopped violating net neutrality. Whether for fear of being found liable, or just for fear of angering the courts, or because of a temporary injunction or similar court order, the FCC’s net neutrality regulations prevailed in practice from 2007 to 2015. Comcast even tried to get publicity credit when it “voluntarily” suspended its cap-meter-and-throttle program on its customers’ data.
In the final lawsuit, Verizon v. FCC (2014), the court pretty near straight-up told the FCC, “Look, you can just officially reclassify broadband as a telecommunications service, and then you can use Title II regulation. But you can’t claim it’s an information service and then regulate it like it’s a telecom. Stop it.” They then vacated yet another FCC net neutrality order.
The FCC spent all of 2014 trying to work around that–they wanted to get net neutrality without reclassification, exactly what the courts said they couldn’t do–and they ended up releasing a half-measure policy that would have knee-capped net neutrality. That was what caused the gigantic online protest in mid-2014 over net neutrality.
The FCC (and, perhaps more importantly, the White House) heard that outcry and decided to change course and just do what the court had been telling them to do all along: they reclassified cable broadband under Title II and commenced net neutrality regulations in 2015. That brings us up to today: ISPs are still regulated under Title II, as they have been for most of their history, and FCC Chairman Ajit Pai is trying to change that… while claiming (he has to know this is a lie, doesn’t he?) Title II regulation is somehow a new thing for ISPs.
So, in reality, ISPs were regulated by the FCC from the birth of the Internet until 2002.
They were unregulated from 2002 to 2007, when abuses led the FCC to reassert itself.
From 2007 to 2015, the regulations were legally disputed but more or less effective because the lawsuits kept the ISPs from stepping much out of line.
And from 2015 to 2017, ISPs have been regulated the same way they were before 2002.
So, actually, over the 28-year history of the World Wide Web, ISPs have been under some form of FCC net neutrality regulation for 23 of those years. The 5-year unregulated period from 2002 to 2007 was an anomaly… and it ended in exactly the kinds of abuse we are going to start seeing again if the new FCC order isn’t stopped in court.