How Google May Have Accidentally Undermined Net Neutrality Rules

Judges had tough questions about a last-minute change to the FCC’s regulations—one that came largely at Google’s behest.

This Oct. 20, 2015 photo shows signage outside Google headquarters in Mountain View, Calif.
AP Photo/Marcio Jose Sanchez
Dec. 9, 2015, 8 p.m.

Just days be­fore the Fed­er­al Com­mu­nic­a­tions Com­mis­sion was set to fi­nal­ize its con­tro­ver­sial net-neut­ral­ity reg­u­la­tions, Google scrambled to lobby for a last-minute tweak. In a series of phone calls, which were later dis­closed in a reg­u­lat­ory fil­ing, three Google law­yers pressed top FCC of­fi­cials to re­tool the leg­al au­thor­ity un­der­ly­ing an im­port­ant part of the reg­u­la­tions. The FCC agreed to the change and en­acted the sweep­ing new In­ter­net reg­u­la­tions on Feb. 26.

At the time, Google’s re­quest seemed like an ar­cane foot­note in the much-broad­er fight over net neut­ral­ity. But now, more than nine months later, that tiny tweak is caus­ing big head­aches for the FCC in fed­er­al court.

Last Fri­day, the three judges on a pan­el of the D.C. Cir­cuit Court of Ap­peals grilled Jonath­an Sal­let, the FCC’s gen­er­al coun­sel, on the leg­al clas­si­fic­a­tion that Google re­ques­ted. Peter Keisler, the law­yer for the cable and tele­com com­pan­ies su­ing to re­peal the reg­u­la­tions, also fo­cused a por­tion of his ar­gu­ment on the is­sue.

The dis­pute doesn’t threaten to cripple the core of the FCC’s net-neut­ral­ity rules, which re­quire In­ter­net pro­viders to treat all traffic equally. But the late change could lead the court to throw out the FCC’s au­thor­ity over traffic con­ges­tion at the back end of the In­ter­net. That would be a ma­jor blow to com­pan­ies such as Net­flix, which have com­plained that In­ter­net pro­viders are ex­tort­ing them by de­mand­ing pay­ments to re­lieve con­ges­tion at in­ter­con­nec­tion points. That con­ges­tion can lead to grainy video qual­ity and lengthy buf­fer­ing times, Net­flix says.

“It looks as if the com­mis­sion is in trouble on in­ter­con­nec­tion,” said Ran­dolph May, the pres­id­ent of the Free State Found­a­tion, a con­ser­vat­ive think tank that op­poses the FCC’s rules. “To the ex­tent that Google is re­spons­ible [for the change] … I think it does present a prob­lem for the com­mis­sion.”

The pur­pose of net neut­ral­ity is to en­sure that In­ter­net pro­viders such as Com­cast and AT&T can’t act as “gate­keep­ers” and con­trol what on­line con­tent people can ac­cess or which web­sites suc­ceed. The FCC first en­acted net-neut­ral­ity rules in 2010, but the D.C. Cir­cuit struck them down in 2014. The prob­lem, the court said at the time, was that the agency was try­ing to treat In­ter­net pro­viders like “com­mon car­ri­ers” (es­sen­tially, pub­lic util­it­ies) without clas­si­fy­ing them ac­cord­ingly. So in the new rules, the FCC clas­si­fied In­ter­net pro­viders as com­mon car­ri­ers, grant­ing it­self the same broad powers over the In­ter­net that it already used to reg­u­late tra­di­tion­al phone com­pan­ies.

In their 2014 de­cision, the judges de­scribed the In­ter­net in two halves: there’s the front-end ser­vice, where In­ter­net pro­viders of­fer Web ac­cess to cus­tom­ers; and there’s the back-end ser­vice, where the In­ter­net pro­viders pick up and de­liv­er traffic for Web com­pan­ies.

That’s not how the FCC ori­gin­ally viewed the In­ter­net, but in the new rules, the agency’s law­yers tried to bend over back­wards to ap­pease the D.C. Cir­cuit judges. In an ini­tial draft of the reg­u­la­tions, the FCC would have defined the In­ter­net as two halves and clas­si­fied both as com­mon-car­ri­er ser­vices.

Google, at least pub­licly, was fine with the cus­tom­er-fa­cing half get­ting reg­u­lated like a util­ity. But at the last minute, the Web gi­ant urged the FCC not to im­pose util­ity-style reg­u­la­tion on the re­la­tion­ships between Web com­pan­ies and In­ter­net pro­viders.

“This sup­posed ad­di­tion­al ser­vice does not ex­ist,” Aus­tin Schlick, a Google law­yer (and a former FCC gen­er­al coun­sel) wrote in the reg­u­lat­ory fil­ing sum­mar­iz­ing his phone calls with agency of­fi­cials. (Google de­clined to com­ment for this story, al­though the com­pany has pre­vi­ously em­phas­ized its sup­port for net neut­ral­ity.)

Web com­pan­ies do some­times ne­go­ti­ate with In­ter­net pro­viders to en­sure there’s no con­ges­tion as they ex­change traffic, but that doesn’t mean In­ter­net pro­viders of­fer Web com­pan­ies a dis­tinct ser­vice that needs a spe­cial leg­al clas­si­fic­a­tion, Schlick ar­gued. De­fin­ing the In­ter­net in two halves “could do ser­i­ous, long-term harm to the vir­tu­ous circle of In­ter­net in­nov­a­tion,” he warned.

Al­though he ac­know­ledged that the FCC ap­peared to be craft­ing its rules to try to ad­dress the court’s con­cerns, he urged the agency not to “as­sume that the D.C. Cir­cuit’s pri­or view will be the last word in fu­ture lit­ig­a­tion.” The Su­preme Court, he noted, may view the In­ter­net dif­fer­ently.

Google wasn’t the only group to ar­gue against the the­ory of a two-sided In­ter­net. Free Press, a lib­er­al ad­vocacy group and staunch net-neut­ral­ity sup­port­er, made the same case in the days be­fore the FCC is­sued the new reg­u­la­tions. Demo­crat­ic FCC Com­mis­sion­er Mignon Cly­burn agreed and asked Chair­man Tom Wheel­er to make the change. 

But Keisler, the broad­band in­dustry’s law­yer, ar­gued in court Fri­day that fail­ing to clas­si­fy the back end of the In­ter­net as a util­ity leaves the agency without au­thor­ity to po­lice in­ter­con­nec­tion con­ges­tion. “That’s like the Cheshire Cat. The body dis­ap­peared—the whole leg­al ra­tionale was sud­denly gone in a mat­ter of days. But the smile was still there—the as­ser­tion of jur­is­dic­tion over our in­ter­con­nec­tion ar­range­ments. And with the body re­moved, there really was no basis for this at all,” he said.

And the judges didn’t seem to ap­pre­ci­ate the FCC ig­nor­ing their court’s in­ter­pret­a­tion of the In­ter­net as in­clud­ing two ser­vices. Judge Steph­en Wil­li­ams called the FCC’s leg­al the­ory “totally an­om­al­ous,” while Judge Sri Srinivas­an asked how the FCC could over­come the “obstacle” of the court’s pre­vi­ous rul­ing. The FCC’s Sal­let re­spon­ded that in­ter­con­nec­tion is­sues are just “de­riv­at­ive” of the In­ter­net ac­cess provided to con­sumers, which is now clas­si­fied as a util­ity. 

Matt Wood, the policy dir­ect­or of Free Press who made the same ar­gu­ment as Google, said he doesn’t re­gret ask­ing the FCC to tweak its rules. “I would pay more at­ten­tion to the an­swers than the ques­tions,” he said in an in­ter­view. “I think [the FCC law­yers] answered them well.”

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