Net neutrality’s last life kept intact by Supreme Court

The Supreme Court has rejected attempts by the telco industry and the Trump administration to completely erase net neutrality rules from the lawbooks.

With petitions filed by AT&T and various industry lobby groups to quash a ruling made in favour of the Obama-era net neutrality rules in 2015, a ruling which is the only glimmer of hope for net neutrality’s survival, the Supreme Court offered a lifeline. It seems rolling back net neutrality is not enough for FCC Chairman Ajit Pai, as the Republican is seemingly attempting to destroy any future attempts to reinstate the rules, which the 2015 District Court ruling holds.

While Pai and his cronies have effected taken the US back to the light-touch regulatory playing field of 2015, moves made by his predecessor Tom Wheeler to reclassify the internet service providers still stood. In passing net neutrality rules, Wheeler classified ISPs in the same league as telephony providers, and therefore under stricter regulation. This decision was upheld by the US Court of Appeals for the District of Columbia Circuit, which AT&T, NCTA, CTIA, USTelecom, and the American Cable Association were challenging here.

The presence of this case might not have any impact on the telcos today, though it would offer any future administration, who might be pro-net neutrality, a foundation to rebuilt the walls of regulation. Pai doesn’t just want to remove the rules, he wants to drive the concept of net neutrality to extinction with no prospect of return.

This ruling however, is a win for the net neutrality camp, a rare one which just might add enough momentum to sustain life until a change in administration.

“This is good news for net neutrality supporters,” said John Bergmayer, Senior Counsel at Public Knowledge, a pro-net neutrality lobby group which is also suing the FCC for the initial roll back. “The DC Circuit’s previous decision upholding both the FCC’s classification of broadband as a telecommunications service, and its rules prohibiting broadband providers from blocking or degrading internet content, remains in place.

“While the current FCC has repealed those rules – a decision Public Knowledge is currently challenging in court – this means that the previous decision is binding on the current FCC, and on the DC Circuit panel that hears the current challenge. Much of the current FCC’s argument depends on ignoring or contradicting the D.C. Circuit’s earlier findings, but now that these are firmly established as binding law, the Pai FCC’s case is on even weaker ground than before.”

The NCTA, the Internet and Television Association, is unsurprisingly miffed with the decision.

“It is not surprising that the Supreme Court declined to hear this case dealing with the Wheeler FCC’s 2015 Order,” the NCTA said in a statement. “Once the current FCC repealed the 2015 Order, almost all parties – including NCTA – agreed that the case was moot. Today’s decision is not an indication of the Court’s views on the merits but simply reflects the fact that there was nothing left for the Court to rule on.”

It seems the absence of two Republican Supreme Court judges was the deciding factor here. The newly, and controversially, appointed Justice Brett Kavanaugh removed himself from the process, having participated in the judgement of the original appeal, while Chief Justice John Roberts supposedly owns shares in AT&T.

For the pro-net neutrality supporters this was a critical win in the courts. Firstly, for the rules to be reinstated the classification as telcos as common providers is a must, though momentum was gathering for Pai and his cronies in the blood-thirsty mission.

This is not to say net neutrality camp is not without its support, but with President Trump adding his weight to the hunting trip, the pressure was starting to build. Another factor is precedent. The legal community use decisions made elsewhere in the industry for guidance, and there were a lot of decisions going against net neutrality over the last few months. Momentum was building and the issue is becoming increasingly politicised. The light was fading, though the 2015 decision being upheld is a win.

Whether this decision acts as a catalyst for net neutrality momentum and support remains to be seen, though California’s challenge to the FCC is still hanging in the balance. After signing its own net neutrality rules in State Law, despite contradictions with federal agency positions, California has decided to put the implementation of the rules on-hold until it has resolved its own lawsuit with the Department of Justice which argues the state has acted unconstitutionally.

Elsewhere around the US, various states are lining up their own, local, net neutrality rules. Washington State has already signed its own into law, while states such as Hawaii and New York are seemingly waiting for various rulings. While the approach might be broadly similar, there will be differences in each state. This patch-work of regulatory environment is something the US government is very keen to avoid, and it would turn into an operational disaster for the telcos.

In a separate lawsuit, 23 Attorney Generals throughout the US, including Maine, North Carolina, Rhode Island and Delaware, led by New York Attorney General Eric Schneiderman, are challenging the original 3-2 decision made by the FCC to roll back the net neutrality rules. The criss-cross of lawsuits, each of which relies somewhat on another decision and precedent, is starting to become complicated.

The dominos are certainly lining up across the US, each decision may send the entire stack into freefall. The weight of each ruling is getting heavier and heavier.

FCC modifies frequency policy to encourage 5G investment

Changes to licence regulations on 3.5 Ghz have been approved by the FCC in an effort to encourage the 5G rollout.

The 150 MHz wide spectrum on the 3.5 GHz (3550MHz to 3700MHz.) band, or Citizens Broadband Radio Service (CBRS), is very busy. Following the rules of the FCC established in 2015, three tiers of users are sharing this band. There are the Incumbent Access Users, in particular the US Navy Radar Operators; the Priority Access Licenses (PALs) which are mainly commercial users like the telcos; and dinally, General Authorized Access (GAA) users which are permitted to use any portion of the 150 MHz frequency so long as it has not been granted to the other two tiers.

FCC Commissioner Michael O’Rielly, who was tasked to lead the review of current regulations and deliberation of new policies with special focus on PALs, claimed the old rules “would not support large-scale deployments, such as mobile or 5G networks… The rules in place favored small-scale, fixed networks, by making it unattractive for any other type of deployment. Basically, the rules were designed so that a select group could get licenses on the cheap.”

The Report and Order published by the FCC on Tuesday October 23 has kept the three tiers in place, but has made modifications to the specific implementations, including:

  • Changes the size of PAL license areas from census tracts to counties;
  • Extends the PAL license term to ten years and makes these licenses renewable;
  • Establishes end-of-term performance requirements;
  • Ensures seven PALs are available in each license area;
  • Allows the use of bidding credits for rural and Tribal entities;
  • Permits partitioning and disaggregation of PALs;
  • Updates information security requirements to protect registration information; and
  • Facilitates transmission over wider channels while maintaining protections for other services

In addition to extending the license term from three years to ten years and changing it from unrenewable to renewable, the new rules also did away with the limitations on the number of PALs a single applicant can have in one licence area (currently capped at four) and the bandwidth a PAL can use (currently limited to 10 MHz).

Ajit Pai, Chairman of FCC, admitted there has been debate on the new size of PAL licence, with different entrenched interest either arguing for maintaining the current census tract-sized licence, or demanding vastly enlarged areas. He had to cite support from Rural Wireless Association and Competitive Carrier Association, which represents smaller carriers, to defend the Commission’s  decision to opt for county-size license.

“We find that county-based licenses are just right,” said Pai. “This compromise will allow most interested parties, large and small, to bid on 3.5 GHz spectrum in order to provide 5G services. License sizes aside, we make other necessary changes today to promote investment and innovation in the 3.5 GHz band, including extending the license terms and giving an expectancy of license renewal.”

Pai also reassured the GAA users that “even after PALs are granted, General Authorized Access users can provide service in the PAL spectrum until licensees deploy. Taken together, these reforms will help make this band a sandbox for 5G and represent another aspect of our comprehensive 5G FAST plan to secure American leadership in the next generation of wireless connectivity.”

The rule modifications might not look revolutionary, but they should prove positive for more aggressive 5G rollout in the US. With the extended licence term and the possibility of renewal the new regulations provide more confidence to investors looking at long term. Meanwhile, it also strikes a balance both to encourage scale and to protect operators with local ambitions only.

Vermont follows Califorina into the dock over net neutrality

The State of Vermont has been hit with a net neutrality lawsuit after passing a Senate Bill and signing an Executive Order forcing ISPs to follow the banned principles for government contracts.

The lawsuit, filed by the CTIA, cable industry lobby NCTA, telco lobby USTelecom, the New England Cable & Telecommunications Association, and the American Cable Association (ACA), calls into question requirements for ISPs to follow net neutrality rules should they want to be considered for government contracts. The lawsuit follows the same argument as the California case; it contradicts the Communications Act, the ‘Restoring Internet Freedom’ rules and two clauses in the US Constitution.
“This case concerns two interrelated attempts by the State of Vermont to unconstitutionally regulate the provision of broadband Internet service” the filing states.
“As the FCC has repeatedly recognized, Internet traffic flows freely between states, making it difficult or impossible for a provider to distinguish traffic moving within Vermont from traffic that crosses stateborders. Both the Supremacy Clause and the dormant Commerce Clause protect broadband Internet service providers from a patch work of inconsistent regulations that are impossible for them to comply with as a practical matter. The Court should declare that the Executive Order and S.289 are preempted and unconstitutional, and should permanently enjoin the Defendants from enforcing or giving effect to them.”

Senate Bill 289 was signed by Governor Phil Scott on May 22, while the Executive Order from Scott was signed in February. The telco lobbyists might be a bit slow off the mark, but this is a bit more of a complicated matter.

In California, and Washington State for that matter, net neutrality rules are being applied to the ISPs in every context. This is a much easier position for the telcos to push back against, though in the Vermont case it is only conditions for public sector contracts. The argument here is relatively nuanced; organizations should be allowed to apply their buying power to place requirements on vendors competing for lucrative contracts, but it does contradict rules set forward by the FCC.

Because this is not a blanket approach to net neutrality regulations, as is the case in California and Washington State, there is a better chance of the rules standing. The rules are being applied to specific relationships which lean on conditional approval and benchmarks for applicability. These are not unusual concepts in the world of procurement, but the net neutrality seems to be too contentious for any exceptions to be considered. The court will be interferring with market dynamics in Vermont, it is a delicate matter.

Another interesting idea is that of precedent. States such as Hawaii, New Jersey, Montana and Rhode Island have all passed similar rules, dictating ISPs wanting to compete for public sector contracts would have to adhere to net neutrality principles, and will be watching the outcome of this case closely. If Vermont wins there is precedent to maintain their position, however a win from the telco coalition will destroy the foundations.

Both cases, California and Vermont, come down to the old state versus federal battle ground and the interpretation of clauses in the Communications Act and the US Constitution. This is the bueaty and beast of the legal world, interpretation of the law and its implications means so much. The telco lobbyists do have a strong position though, especially considering the potential for a constitutional crisis.

Finally, perhaps the most interesting aspect of this on-going saga are the lawsuits themselves. In searching for a more light-touch regulatory landscape, the telco lobbyists are, ironically, seeking state intervention to maintain their position.

FCC drafts in external opinion to figure out the T-Mobile-Sprint conundrum

Perhaps realising the gravity of the situation, the FCC has drafted in outside help to assess the impact of the T-Mobile-Sprint merger on the US economy.

David Sibley will help the team as an outside consultant reporting into David Lawrence, who is leading the merger taskforce. This should not be seen as an unusual move from the FCC, though perhaps such external opinions should have been brought in earlier considering the impact this merger will have on the telco landscape and competition.

“We are fortunate that Professor Sibley is bringing his considerable economic experience and expertise to bear in this review,” said FCC Chairman Ajit Pai. “Rigorous economic analysis plays an important role in all of the Commission’s work and will be essential to a thorough investigation into whether approval of this transaction would be in the public interest.”

This is the big question. The merger will bring the number of national telcos down from four to three, but is this a good or bad move. There are arguments on both sides.

The bad side of the argument is a simple one. Removing one of the major telcos from the ecosystem will reduce competition and hurt the consumer through higher pricing due to a lack of choice. This is not a complicated point to make and a genuine concern, especially in a country like the US which where telcos do not operate everywhere. The risk of monopolies or duopolies in certain areas increases.

On the positive side, while the number of massive telcos decreases, competition increases as the merged entity would offer a more valid threat to AT&T and Verizon through the combined scale. T-Mobile US CEO John Legere often refers to AT&T and Verizon as the duopoly, and while this is an exaggeration, they are miles ahead of T-Mobile and Sprint in third and fourth place. T-Mobile and Sprint are not at the right scale to compete with the leaders individually, but together the merged organization would offer greater scale. The theory here is reducing competitors would make the market more competitive, therefore better for the consumer.

This is the conundrum which the FCC needs to decide on. Evidence and experts will be aplenty on both sides of the argument, though Sibley certainly adds some expertise to the team.

Sibley is currently the John Michael Stuart Centennial Professor of Economics at the University of Texas at Austin. Prior this role, Sibley worked Head of the Economics Research Group at Bell Communications Research, as well as the Deputy Assistant Attorney General for Economic Analysis in the Antitrust Division of the US Department of Justice. He also represented the US in OECD discussions.

As it stands, the merger shot clock is currently on pause, with the FCC deciding it does not want to be rushed. The approval or rejection of mergers and acquisitions are targeted to be completed within a 180-day window, though the FCC is offered the luxury of taking longer if it is a particularly complicated case. This is proving to be one, with the FCC requesting input from competitors of the pair recently, most notably from players outside the mobile ecosystem, suggesting it is investigating the impact on such segments as broadband.

FCC lays out the FAST track to 5G

The FCC has unveiled the grand plan for 5G, outlining the strategy it will put in place to place the US at the top of the technology league table.

Facilitate America’s Superiority in 5G Technology (the 5G FAST plan) strategy takes into account three areas; spectrum, infrastructure policy and modernising outdated regulations. The objective is a simple one to envisage, but more sticky to complete; how can the US ensure it does not lose its leadership position in the technology world to China?

As you can see from the video below, FCC Chairman Ajit Pai is clearly excited about ‘claiming the 5G future for America’.

Starting on spectrum, the FCC highlighted it is critical to ensure there is as much available to the telcos as possible. In the high bands, the 28 GHz and 24 GHz bands will be available in auction later this year, while the upper 37 GHz, 39 GHz, and 47 GHz bands will hit the lots in 2019. These auctions will release almost five gigahertz of 5G spectrum into the market, while the FCC is attempting to free up another 2.75 gigahertz in the 26 and 42 GHz bands. In the mid-bands, the FCC is working to find more available assets in the 2.5 GHz, 3.5 GHz, and 3.7-4.2 GHz bands. Changes are also on the horizon for the lower-end bands (600 MHz, 800 MHz, and 900 MHz), while unlicensed spectrum is getting some attention for next generation wifi cases.

Looking at the infrastructure policy side of things, the FCC has adopted new procedures to review applications on a federal level, while also forcing local authorities to accept similar rules. Removing red-tape and speeding up the lethargic public sector is not something we will attempt to criticise, though there has been resistance to the new rules at state and county levels, with some suggesting there is too much of a burden on the public offices. It would not surprise anyone to see some form of legal challenge to these rules from a sow-moving coalition of local authorities.

Finally, modernising regulations across the communications industry is likely to be a contentious claim, especially considering some believe the eradication of net neutrality to be a backwards step. The pompously named ‘Restoring Internet Freedom’ act is only one factor here though. Other areas which have received attention include ‘One-Touch Make-Ready’, rules governing the attachment of new network equipment to utility poles, and Business Data Services, an initiative to remove certain rate regulation. The theory here is the less barriers to launch new services, the more incentive to invest in future-proofed fire networks.

While some will certainly object to some of the moves made by the FCC, you can’t argue with the US approach in combatting the leadership threat from China. Various governments around the world have boasted about the desire and critical need to take a leadership role in the digital economy of tomorrow, though few actions support the rhetoric (have a look at most of what the UK government does). The US is not going to let its leadership position in the technology world be taken away easily.

State versus federal battle looms as California signs net neutrality into law

California Governor Jerry Brown has been busy; 31 state bills vetoed and 34 signed into law, including the controversial net neutrality rulings, kicking off another state versus federal battle.

State Bill 822, claimed to be the strongest net neutrality laws in the country, has officially been signed into law in the State of California, but it only took the US Department of Justice a few minutes to throw a wobbly. Before the army of busybodies and privacy advocates could even get their own press releases out, the Justice Department filed a lawsuit alleging that Senate Bill 822 unlawfully imposes burdens on the Federal Government’s deregulatory approach to the Internet.

“Under the Constitution, states do not regulate interstate commerce – the federal government does,” said Attorney General Jeff Sessions in the filing. “Once again the California legislature has enacted an extreme and illegal state law attempting to frustrate federal policy. The Justice Department should not have to spend valuable time and resources to file this suit today, but we have a duty to defend the prerogatives of the federal government and protect our Constitutional order.  We will do so with vigour. We are confident that we will prevail in this case – because the facts are on our side.”

Democrat FCC Commissioner Jessica Rosenworcel is clearly excited despite the legal complications:

After being passed back in February 2015, the appointment of FCC Chairman Ajit Pai saw a Republican led assault, with the telcos playing a supporting roles in the wings, on the rules. It didn’t take long for Pai to dismantle net neutrality, the vote to repeal the rules was won on 14 December 2017, though the backlash was almost immediate. Washington State was the first to pass local net neutrality rules, though with 23 Attorney Generals throwing their weight behind the cause it was only going to be a matter of time before other got involved. California is a different beast however, a worthy opponent of the US government.

With a population of roughly 39 million and a gross state product (GSP) of roughly $2.6 trillion, it is the largest in the US in terms of population and economic output. Globally, the economy is only smaller than the GDP of the US, UK, China, Germany and Japan. It is also home to Silicon Valley and the lobby power of the likes of Facebook, Google and Twitter.

While we do have sympathy with California and the internet giants, we do not feel net neutrality is the right way to go. Pai’s approach, reinstating the wild-west internet with the telcos as the tyrants of terror, is equally wrong. Both approaches are too extreme, the right answer lies in the middle, with the telcos afforded the opportunity to make money but still held accountable ensuring the consumer and businesses are not held to ransom. Taking the sensible, middle-ground is the logical approach, but set against the backdrop of such a combative political environment, it will be some time before fairness sets in.

But why is this such an important battle?

In its law suit, the Department of Justice is completely correct in stating California has overstepped its jurisdiction. No state should have the right to impose its own rules on another and the internet by definition is an interstate (international would be more accurate) playground. For these rules to be accepted on a legal basis in the US, California would have to ensure it was only applying the rules to traffic which originated, remained and terminated in California. Not only would this be pretty much impossible, but it would likely only account for a very small percentage of the total.

The stickiness is the clauses in the Communications Act, the piece of legislation which acts as the foundation of all communications orientated rules and precedents in the US. One clause dictates a state is entitled to draft its own rules, assuming it does not contradict that of the federal government. This is the very scenario which California has crafted. If SB 822 is allowed to stand it undermines the whole Communications Act; who is to say other states, businesses or advocacy groups could not use this example as a means to ignore other clauses, aspects of the Communications Act or precedent which has been set. In legalising the contradiction, the risk is to undermine the very basis of the communications industry across the country.

With California retaliating against the FCC’s decision to reverse net neutrality, the consequences are much more significant than they appear on the surface. This is now much more than a battle of technology regulations.

FCC moves forward with small cell plans despite backlash

The FCC has officially given new small cell deployment rules the thumbs up, despite protest from municipal leagues and local governments.

Earlier this month the FCC outlined plans to remove barriers for small cell deployment. The new rules focused on reducing fees the authority or government can charge telcos applying for permission to deploy the small cells, and secondly, reducing the ‘shot clocks’ for small wireless facilities, being the time in which the organization has to either approve or deny the application.

Following the proposals from the FCC, a number of local authorities and governments protested the rules, declaring too much of a burden was being placed on the public service. While it is understandable for employees to kick up a fuss over increased workloads, these are the same organizations which will complain over poor connectivity and the telcos ignoring smaller communities.

“New physical infrastructure is vital for success here,” said FCC Chairman Ajit Pai. “That’s because 5G networks will depend less on a few large towers and more on numerous small cell deployments – deployments that for the most part don’t exist today.

“But installing small cells isn’t easy, too often because of regulations. There are layers of (sometimes unnecessary and unreasonable) rules that can prevent widespread deployment. At the federal level, we acted earlier this year to modernize our regulations and make our own review process for wireless infrastructure 5G fast. And many states and localities have similarly taken positive steps to reform their own laws and increase the likelihood that their citizens will be able to benefit from 5G networks. But as this Order makes clear, there are outliers that are unreasonably standing in the way of wireless infrastructure deployment.”

Pai is condemning the attitudes of some of the local governments, and has even gone as far as to suggest these authorities were actively seeking to maximise revenues from the telcos. With the telcos being held accountable to deployment timetables and connectivity commitments, in some cases they would be forced to pay what some would call unreasonable fees. This is an conflict which we have also seen in the UK, though the new Electronic Communications Code is supposed to remove these hurdles as well.

Of course, what is worth noting is the majority of local authorities are working effectively with the telcos and the federal government to remove administrative hurdles and smooth the road to deployment. These new rules, which limit the power and influence of the local governments, are only directed at the troublemakers who demonstrate short-sighted ambitions in laying out a troublesome path for the telcos.

FCC says new material means it needs more time to assess TMUS/Sprint merger

The US Federal Communications Commissions has indefinitely extended the amount of time it will take to sign off the country’s operator mega-merger.

Referring to an ‘informal shot clock’ of 180 days in which to assess the pros and cons of T-Mobile US and Sprint permanently hooking up, the FCC announced in a letter that it is being paused. The only stated reason is the submission of new material from TMUS that significantly alters the criteria by which the FCC will make its assessment, thus requiring more time.

“Today we are pausing the Commission’s informal 180-day transaction shot clock in this proceeding,” opens the letter. “Additional time is necessary to allow for thorough staff and third-party review of newly submitted and anticipated modeling relied on by the Applicants.

“Each of three separate developments require more time. First, on September 5, 2018, the Applicants submitted a substantially revised network engineering model… The newly-provided network engineering model is significantly larger and more complex than the engineering submissions already in the record.

“Further, in an August 29, 2018 exparte meeting, T-Mobile executives Mike Sievert and Peter Ewens described T-Mobile’s reliance on a business model, titled Build 9,’ which apparently provides the financial basis for the projected new network buildout. The Commission did not receive Build 9, and third parties did not have access to it, until September 5. Build 9 therefore requires further review.

“Finally, T-Mobile recently disclosed that it intends to submit additional economic modeling in support of the Applications, beyond that strictly responsive to the various economic analyses in the Petitions to Deny. This new economic modeling will also require additional time for review.”

So, in essence, TMUS recently decided to offer up a bunch more material in support of the merger and the FCC needs more time to review it. Seems fair enough. “The clock will remain stopped until the Applicants have completed the record on which they intend to rely and a reasonable period of time has passed for staff and third-party review,” concludes the letter. How long that reasonable period of time will be is unclear.

FCC Commissioner eyes up 5.9 GHz for next-generation wifi

With yesteryears plan for driverless cars offering zero progress, FCC Commissioner Jessica Rosenworcel has suggested a rethink of how to use the 5.9 GHz band, toying with unlicensed spectrum for next-generation wifi.

Back in 1999, the US government set aside 75 megahertz of spectrum in the 5.9 GHz band for dedicated short range communications, DSRC, designed for cars to talk to each other in real time to help reduce accidents. Of the 260 million cars on US roads, only a few thousand are DSRC compatible as autonomous vehicles have moved beyond DSRC to operate and communicate with other vehicles. Some might suggest this initiative has been nothing short of pointless.

Failure is not necessarily a bad thing, but recognising this failure and adapting is critical. This is one of the reasons the internet players are hoovering up cash everywhere. The National Transportation Safety Board estimates it could be up to three decades before the majority of vehicles on the road have DSRC capability, so you have to wonder whether this is a case of flogging a dead horse. Other aspects of the technology world are progressing with genuine ambition, Rosenworcel is suggesting this 75 megahertz of spectrum could be better used elsewhere.

“Earlier this year, it [Congress] asked the FCC to identify 100 megahertz of spectrum below 8 GHz for unlicensed use,” said Rosenworcel. “To meet this threshold, we need to take another look at the 5.9 GHz band.

“It’s the ideal place to explore wifi expansion because it’s adjacent to an existing unlicensed band. That means we have the opportunity to introduce new wideband channels – channels that will be able to take advantage of new standards and deliver speeds even faster than 1 Gbps. In other words, this is where we can develop next generation gigabit wifi.”

Spectrum is an incredibly scarce resource, and there is little room to accommodate technologies and projects which have offer little return. This is the situation the US has found itself in with DSRC. With little to no prospects on the horizon for DSRC to make an impact, you have to wonder how long it can hold onto the precious asset.

This is of course in comparison to wifi. Right now, there are over 9 billion wifi enabled devices, a number possibly increasing by 50 billion by the end of the decade, while nearly 70% of smartphone data is carried over wifi networks. Perhaps even the telcos will support such a move to offer more spectrum for wifi. The telcos are battling against network strain, and more effective wifi could be a means to relieve some of this pressure.

Sometimes decisions are incredibly obvious, and this seems to be one of the cases.

“There is no shame in correcting course,” said Rosenworcel. “And I think it’s time to be ambitious and find a way forward that puts the 5.9 GHz band to fuller use.”

FCC Chairman attacks social media giants calling for transparency laws

Ahead of this week’s interrogation of the social media giants by Senators, FCC Chairman Ajit Pai has penned his thoughts including the introduction of transparency laws to squeeze out explanations on how algorithms work.

While we do not agree with a lot of the dribble Pai spews onto the industry, here he does have a point. The operations of the social media giants have been shrouded in mystery for years, with most recent scandals demonstrating a need for more transparency. So many aspects of our lives are entwined in social media nowadays, the public interest case for transparency exceeds the protections afforded to private sector organizations.

“Consumers interact with these digital platforms on a daily basis,” Pai writes. “We get our news from them. We interact with our family and friends on them. But how do these companies make decisions about what we see and what we don’t? And who makes those decisions? We still don’t know.”

News, online expression, protection of freedom of speech and the sensitivities of users are all contentious issues. This is a very complicated topic as drawing a line on what can or cannot be said brings out a huge number of opinions, many of which are biased by experience or current situation. There is no right answer and there isn’t a wrong one either, but the argument is a moot point if no-ones understands how these decisions are being made. Transparency is key to informing the debate, and people do need to know how these algorithms work.

Of course, there is a sense of irony around Pai weighing in here. Firstly, let us not forget the FCC is responsible for regulating the networks which facilitate the digital economy. Cables in the ground, cell towers on hills and satellites in the sky. The agency is not responsible for regulating content or the social media giants. While Pai may consider himself an important man in the telco world, his influence on social media regulation and governance should be no greater than yours or mine.

Secondly, let’s not forget Pai has been working to remove the same transparency rules which are imposed onto the telcos. During the Obama administration, former FCC-Chairman Tom Wheeler imposed rules stating the telcos would have to seek explicit permission, an opt-in, to use personal information obtained from various records, including web browser history, to generate additional revenues. These rules were immensely unpopular with the telcos and one of Pai’s first jobs was to set out reversing the culture of transparency Wheeler had enforced.

Inconsistencies from the Trump regime and the puppets it commands is hardly news, but Pai is trying his best to push his luck here. Another brilliant example is criticising Twitter for violating net neutralities rules when banning content. Firstly, net neutrality rules are written for the companies who transport data, not those who own content platforms. And secondly, these are rules he supposedly disagrees with on a fundamental level and is trying to erase from the rulebook. Pai either doesn’t understand net neutrality or believes the people reading the post don’t.

A final irony to Pai’s intervention here is the actual intervention itself. As mentioned before, Pai is not responsible for regulating the social media giants, but seems to be seeking more of an active role in contributing to the debate. Since taking office, Pai has seemingly been on a mission to reduce the workload of the FCC, perhaps worrying his staff are overworked, creating a more light-touch environment and even suggesting some powers should be moved over to other agencies. Seeking additional responsibilities does not align with our experience of Pai.

Perhaps this is a strategic move from the White House as it is finding which puppets are most responsive. Pai has been instrumental in creating the light-touch regulatory environment sought by the Trump administration as well as battling the evil China treat. Perhaps orders from above are pushing the FCC towards new shores as Trump ramps up his battle with the social media giants.

Ultimately, we agree with Pai, just disagree with the way he has approached the argument. The social media giants do need to be held more accountable and offer greater levels of transparency. Social media is critical in numerous aspects of our lives from education on current events to authentication, these organizations can no longer hide behind the curtain, manically pulling levers, sending data to unknown corners of the web. More transparency is needed on how the business actually works.

The hearings with the House Energy and Commerce Committee start today, and we hope the Senators have done a bit more research for this interrogation. The last thing we need are rule-makers being outed as the technology-ignorant elitists they probably are. Let’s hope we don’t get another ‘Senator, we sell ads’ moment.