Takeaways from Senate net neutrality hearing; & proposed FCC framework on network management

The big surprise of the hearing was that Chairman Martin was a last minute witness. The Committee created a new first panel for just Chairman Martin, which ended up consuming about 60% of the allotted time for the whole hearing, and which was also the prime time when most of the Senators and press were in attendance. This surprise testimony practically relegated the other panel, which was expected to be the main event, to more of sideshow status.

Overall, this hearing was slightly more balanced than its House counterparts. Chairman Innouye continued his very measured and balanced approach, in that he said things that each side wanted to hear.

• Given that the Senate Commerce Committee is historically quite bipartisan, and that this committee remains split largely down the middle, I doubt if we will see much real movement on Dorgan-Snowe's net neutrality bill this session.
• If Chairman Inouye actually thought net neutrality legislation should make progress, he wouldn't have waited fifteen months since the introduction of the Dorgan-Snowe bill to hold the first hearing on it.
• It appears the real purpose of this hearing was basically to let off steam and throw the net neutrality activists a bone. 

The real import of the hearing was two-fold: 

• Chairman Martin's discussion of his work-in-progress "framework" for reasonable network management given the FreePress petition against Comcast, and
• Democratic Senators' pleading with Chairman Martin about whether he had sufficient authority to enforce the FCC's net neutrality principles in the FCC's policy statement. 

It seemed as if Chairman Martin was trying to walk a tightrope between the opposing sides on the Comcast complaint.

• One one hand he said networks need to be open, but on the other he wants to encourage broadband deployment.    
• On one hand he said, "no new regulations were needed at this time" but also said the FCC needed to enforce its principles.

In offering that the FCC needs a "framework" to decide if a particular network management practice is reasonable, Chairman Martin offered four points.

• First, he drew a bright line that net neutrality protections did not apply to any illegal content or practices.
  • Nothing but kudos here for that point.
  • While this seems like it should be an obvious bright line, it isn't necessarily to net neutrality proponents. FreePress and many net neutrality proponents adocate for an information commons, creative commons, and copyleft, which all basically oppose most private ownership of content on the Internet and is often tolerant/supportive of p2p illegal file-sharing because they believe digital content should be free in cost and also freed from any usage restrictions.
  • Since as much of 90% of all p2p traffic is thought to be illegal, a bright-line by the FCC here, that net neutrality principles do not apply to illegal activities, is another important step to bringing the Internet under societal and legal norms.
  • This is strong body blow to the information commons movement, which would rather the FCC stay on the sidelines on the matters of copyright and illegal file-sharing.
• Second, he asked if the ISP is adequately disclosing its network management practices? Another bright line the Chairman appeared to be drawing is that to be a reasonable practice, a practice needs to be disclosed.
  • In principle I doubt there will be much quibble from the industry on this, given that in a free market -- market relevant information is good and important -- clearly Comcast does not quibble with it, because it now has the the most open disclosure of network management practices in the industry.
  • Where this could become a thorny legal problem is if before the FCC has made clear what it considers to be adequate disclosure, the FCC decides to legally punish Comcast with a fine or an injuction, for not having read the FCC's mind specifically enough in advance. 
    • It's important to note here, that the FCC's Madison River precedent was a consent decree, meaning Madison River, voluntarily gave its consent to a negotiated outcome.  
• Third, the Chairman indicated that broadband providers should deliver the speed and service they advertise. Again, this is something most of the industry won't quibble with.
  • Ironically where this framework principle would push the industry is to even more tiered pricing and/or more usage based pricing on the high-end, in order to address the way-out-of-the-norm bandwidth hogs that are causing all the problems with network congestion.
    • This is ironic because FreePress, which pressed the Comcast complaint, has opposed a move toward more usage pricing. Oops!
    • FreePress: Can you say "unintended consequences?"
• Fourth, is an ISP's network management characterized by selective of differential treatment? On the surface this gets to the heart of the FCC's net neutrality principles. 
  • However, my eyebrows were raised when, the Chairman said he thought it was the ISP's burden to prove its network management has a legitimate purpose.
  • The FCC has to be careful here to not adopt the guilty-until-proven innocent stance of FreePress and the net neutrality movement. 
    • It's one thing to have a clear expectation that consumers are entitled to use the content, applications and devices of their choice and quite another to assume up front that the network operator is a bad actor that has to justify as legitimate it's basic everyday management responsibiities to its customers. That would be a "fettered" assumption rather than an "unfettered" one.
    • The whole concept of reasonable network management already assumes that network management is legitimate, what is not legitimate is "unreasonable" network management.
    • The FCC has to be careful in being overly inclusive in its framework here. 
      • It would seem that filtering harmful traffic, spam, viruses, bot-nets, child pornography, pirated materials would be assumed to be legitimate reasons for network management.
      • It would seem that network management to maintain quality of service and preventing network congestion by the few at the expense of the many would also be assumed to be legitimate reasons for network management. 
      • It would seem that network management in times of emergency to help first responders and public safety would be another legitimate reason for network management. 
      • I believe there are more legitimate reasons.
      • My point here is that the FCC has to be very careful to not make the burden to prove that network management is legitimate. It is. It always has been. To assume network management is illegitimate if any person ever challenges it, is to turn the the whole concept of network management for the benefit of the many -- completely upside down.
      • The FCC needs to focus on addressing exceptions, and not make an overly assumptive rule. 

On the question of whether the FCC has authority to enforce net neutrality authority, Chairman Martin said under the Supreme Court Brand X ruling the FCC has authority under Title I.

• What was humorous at the hearing was how many different times and ways Democratic Senators asked Chairman Martin the same exact question: if he needed Congress to give the FCC more authority -- grasping for any rationale to jumpstart and give purpose to the moribund Dorgan-Snowe net neutrality bill.