Internet Competitive Without Neutrality Rules, DoJ Tells FCC

Neutrality supporters have given the FCC “scant evidence” that Internet service provider behavior in the U.S. harms consumers, DoJ said. It said the only such case to be cited by supporters was the blocking of Vonage service by ISP Madison River. Justice noted that YouTube users streamed 2.5 billion videos in June 2006, and by May 2007 they were downloading “hundreds of millions” of videos daily. Meanwhile, e-commerce and Internet advertising are booming, the department added. Internet service subscriptions jumped 65 million June 2006 to May 2007, Justice said. Providers increased high-speed lines 52 percent from June 2006 to June 2007, and now fiber lines are growing exponentially, it said. In a footnote, the agency said fiber and DSL growth came as the FCC “relaxed” wireline broadband regulation.

Neutrality supporters have ambiguous definitions of conduct to ban, increasing the chances of harmful behavior and of prohibiting useful conduct, Justice said. For example, proponents disagree on “which pieces” of the Internet to regulate, such as the last mile or the backbone.

Justice said consumers likely don’t want a “one-size-fits-all uniform level of service… leaving some unhappy with the low quality and others unhappy with the high price,” especially if consumer prices rise because ISPs can’t charge content and application providers premium prices for premium service. The department cited Akamai, Limelight Networks and Internap Network Services -- which ISPs hire to host and speed content delivery and route traffic around bottlenecks -- as proof of the “benefits to treating certain content differently.” Supporters of net neutrality don’t want to block such services. The rules they endorse could deter investment in alternatives to wireline Internet service, such as wireless, WiMAX, Wi-Fi, BPL and satellite service, the filing said. Justice said it will watch for potentially anticompetitive conduct in Internet services and bring enforcement action when necessary.

An AT&T spokesman said the Justice filing “joins a long and growing list of expert and independent voices” warning of the perils of neutrality, including the Federal Trade Commission and Organization for Economic Cooperation and Development. The “real issue of the broadband era” is to secure for consumers “affordable rates” for broadband, he said.

Critics panned the agency as ignoring market failure in the broadband service industry. Public Knowledge President Gigi Sohn said Justice’s promise to police for antitrust violations by service providers is “at odds with reality,” considering the agency’s approval of the AT&T-BellSouth merger “with a mere press release.” The Justice filing is full of “mischaracterizations” of neutrality’s effects. Cable and phone companies would be allowed to offer whatever services they want under neutrality rules, but in a “nondiscriminatory fashion,” Sohn said. The Open Internet Coalition said the FCC’s latest broadband market study found that the average residential market is three times more concentrated than Justice’s own definition of “highly concentrated.” The group said “after-the-fact policing” doesn’t serve consumers as well as “preemptive safeguards.”

The Bush administration supports corporations over “everyday Americans,” so its opposition to neutrality is no surprise, a MoveOn.org spokesman said. The liberal group asked presidential candidates to push for “reinstatement” of neutrality in their first year in office, so providers will be barred from choosing “which websites work properly on people’s computers.”

Next in the Neutrality Arsenal: Surveillance

First Amendment groups are increasing the prominence of an argument for neutrality that had flown under the radar. Harold Feld, senior vice president at the Media Access Project, said the White House and Justice “cannot do enough for AT&T and the other parties that agreed to spy on the American people.” Companies can turn over user information without a warrant, in the absence of neutrality rules, he said.

The privacy angle in neutrality goes back to 2005, but it has played second fiddle to antitrust and free-speech concerns, Feld said in an interview. When wireline broadband service was moved out of Title II and into Title I, as an information service, consumers lost any claim to privacy protections under common carrier regulations, he said. Nothing can stop a service provider from engaging in deep- packet inspection; the only “modicum of protection” is the provider’s privacy policy. Packet inspection is usually considered in the context of blocking or degrading content and applications, but it applies equally to spying on communications, he said. “Certainly for this Justice Department, having the ability to do data mining… without a warrant is an important consideration on their position” against neutrality.

The extension of the Communications Assistance for Law Enforcement Act to broadband providers last year (WID June 12/06 p3) spurred privacy activists to see neutrality as a bulwark against spying, Feld said. Prior to an appeals court’s upholding the FCC’s extension of CALEA requirements to broadband service providers, activists had “something of a sense that information services were better for privacy.” And without recent efforts by the White House to give the Bells retroactive immunity from lawsuits for their role in warrantless surveillance, “I don’t know that we would have zeroed in” on privacy as a prominent argument for neutrality, Feld said.

“We haven’t accented [privacy] in most of the things we've been saying” on neutrality, ACLU Legislative Counsel Marv Johnson said in an interview. The group has emphasized that providers can censor the speech of Internet users without neutrality, he said. It’s now looking at deep-packet inspection, which is “rapidly coming as a result of the new Cisco routers” and their quality-of-service features, he said. “Once you start doing that, you get into collecting content essentially,” not just routing traffic by its signature. “Undoubtedly” the government will want access to such data if not a direct link to communications, as AT&T reportedly gave the National Security Agency, Johnson said.

Congress hasn’t examined the privacy implications of neutrality, groups said. But as lawmakers consider a Foreign Intelligence Surveillance Act overhaul, eliminating the privacy “loophole” for information services -- used increasingly for non-data traffic -- should be a priority, Feld said. The newness of packet inspection explains the absence of privacy provisions in neutrality legislation, but that’s likely to change as consumers increasingly learn that their presumably private communications are open to government review, and ISPs feel the heat in the form of dropped customers, Johnson said.