AT&T CEO: There’s an ‘Apathetic Tone’ on Revisiting Net Neutrality Legislation

John Stankey, CES of major internet service provider AT&T, thinks revisiting net neutrality is a waste of time.

Speaking Dec. 5 at the UBS Global Media & Communications Conference in New York, he referred to the Federal Communications Commission’s decision to revisit restoring open internet protections (i.e., net neutrality) for consumers and businesses — first enacted during the Bush/Obama Administrations, subsequently scuttled during the Trump Administration, and now revived during the Biden Administration.

John Stankey

“I think there’s kind of an apathetic tone on the issue right now because there isn’t an issue,” the executive said.

Net neutrality became a hot button issue during the Obama Administration when Netflix, which was transitioning away from DVD rentals to streaming video, voiced concerns about third-party ISPs, such as Verizon, Comcast and AT&T, among others, throttling data speeds due to limited bandwidths at the time.

Specifically, Netflix and other streamers worried ISP network operators could use traffic-management tools to give preferred treatment to certain data streams as well as their own streaming platforms.

Stankey said that with myriad ISPs operating in the market, consumer access to streaming sites has never been better.

“Nobody is walking around saying there was a website I couldn’t get to recently,” he said, arguing there is greater public concern about social media platforms doing something to restrict free speech. “They’re not wondering whether or not the pipe did it; it’s whether or not the person who owns the platform did it.”

The FCC, in its move to restore net neutrality, or re-classifying the internet as a telecommunications entity under Title II of the Communications Act of 1934, now argues the issue is not about internet streaming access, but, instead, national security.

The FCC says reclassification of the internet would enhance the government’s ability to respond to national security threats by subjecting ISPs to authorization requirements under Section 214 of the act. The section ensures that the U.S. market is protected against potential anti-competitive behavior by a carrier with market power in a foreign country. The FCC has used this authority to ban several China-affiliated online services from operating in the United States for national security reasons.

Stankey argues the real issues facing ISPs revolve around spectrum capacity for wireless communications.

“Pricing is going to go up because [spectrum] becomes a scarce resource,” he said, arguing that the best way to get a market to operate efficiently is for the government to expand access to wireless spectrum.

“That’s where time and energy should be spent,” Stankey said. “I think we should work on closing the digital divide.”

A Divided FCC Votes to Start Proceeding on Re-Establishing Obama-Era Net Neutrality Guidelines

The Federal Communications Commission Oct. 19, in a 3-2 vote along political lines, agreed to launch a new proceeding on restoring open internet protections for consumers and businesses —  first enacted during the Bush/Obama Administrations, and subsequently scuttled during the Trump Administration.

The federal government will seek comment on proposals to ensure broadband services have effective oversight. If the proposals are adopted after the public comment period and review of that record, the FCC would once again be permitted to regulate internet access and competition among internet service providers (ISPs) such as Comcast, Verizon, and AT&T, among others, protect broadband networks from national security threats, and address public safety needs like internet outages.

The “notice of proposed rulemaking” seeks comment on classifying fixed and mobile broadband internet service as an essential “telecommunications” service under Title II of the Communications Act. The proposal also seeks to restore clear, nationwide open internet rules that would prevent ISPs from blocking legal content, throttling speeds, and creating fast lanes that favor those who can pay for access.

“The pandemic made it crystal clear that broadband is no longer nice-to-have, it’s need-to have for everyone, everywhere,” Jessica Rosenworcel, who was named FCC Chairwoman by President Biden, said in a statement. “It is not a luxury. It is a necessity. It is essential infrastructure for modern life. No one without it has a fair shot at 21st century success. We need broadband to reach 100% of us — and we need it fast, open, and fair.”

FCC Commissioner Brendan Carr, who voted against restoring net neutrality guidelines, contends the internet did not implode after the FCC in 2017 during the Trump Administration voted (along party lines) to overturn net neutrality.

“The decision to return the internet to the same successful and bipartisan regulatory framework under which it thrived for decades, broadband speeds in the U.S. have increased, prices are down, competition has intensified, and record-breaking new broadband builds have brought millions of Americans across the digital divide,” Carr wrote in a release.

In reality, internet service costs have increased significantly, upwards of 167% in the past 10 years. A 2023 Consumer Reports report found that the median cost of high-speed internet service is $74.99 per month. About half of the households were paying between $60 and $90 per month for broadband — with pricing often driven by consumer zip codes and lack of local competition. High-speed internet cost about $28 a month in 2013.

Separately, the FCC contends that designating the internet as a telecommunications service will safeguard the nation’s broadband network against domestic and foreign security threats.

Without Title II jurisdiction, the government cannot issue national security authority to high-speed internet, or broadband. Restoring broadband as a telecommunications service would empower the FCC to use its Section 214 authority against national security threats to the nation’s broadband networks.

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No federal agency can monitor or help with broadband outages that threaten jobs, education, health, and safety without Title II authorization, according to the FCC. While the agency can address phone service outages following natural disasters and work to ensure the resiliency of those networks before disasters strike, the FCC lacks authority over broadband networks, which can leave communities across the country without recourse when the internet service fails, according to the agency.

FCC Chair Announces Plans to Restore Obama-Era Net Neutrality Rules

The Federal Communications Commission Sept. 26 announced plans to restore so-called “net neutrality” guidelines first established under the Obama Administration and aimed at regulating the nation’s high-speed internet providers, including Verizon, Comcast and AT&T, among others.

The Open Internet Order was repealed during the Trump Administration, which claimed that mandate stifled private investment because of utility-style regulation on the internet.

FCC Chair Jessica Rosenworcel

In a speech at the National Press Club, FCC chair Jessica Rosenworcel said she would seek to change all that and formally introduce a “Notice of Proposed Rulemaking” at the agency’s Open Meeting on Oct. 19.

“I believe the repeal of net neutrality put the FCC on the wrong side of history, the wrong side of the law, and the wrong side of the American public,” Rosenworcel said.

The rulemaking change would restore the FCC’s authority under Title II of the Communications Act to oversee broadband providers and enforce open-internet protections, including restricting internet service providers from blocking or throttling third-party streaming services, or selling faster streaming access for a premium.

“To allow a handful of monopoly-aspiring gatekeepers to control access to the internet is a direct threat to our democracy,” Michael Copps, former FCC Commissioner and special advisor to Common Cause, a liberal public advocacy organization, said in a statement.

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Rosenworcel said that Title II gives the FCC the authority to serve as a watchdog over the communications marketplace and look out for the public interest. She said the pandemic made it clear the value of broadband to the average American household.

“Broadband is essential infrastructure for modern life,” Rosenworcel said. “Access to the internet is now access to everything, and common sense tells us [that] the nation’s leading communications watchdog should have the muscle it needs to protect consumers, and make their internet access if fast, open, and fair.”

Indeed, the FCC Chair claims that after net neutrality was reversed by the Trump Administration, broadband distribution fell under the control of private companies. Rosenworcel claims that firefighters in Santa Clara, Calif., found their wireless connectivity on their command vehicle had been throttled.  She said that during the pandemic, Hope Village, a suburb of Detroit, found itself without internet access for 25 days.

“When the FCC backed away from overseeing broadband, it meant that the only mandatory outage reporting system we could have in place is focused on long distance voice outages,” Rosenworcel said. “Let me submit to you, in a modern economy, and during the pandemic, collecting only Day 25 [intel] when the voice system goes down, just doesn’t cut it.”

She said repeal of net neutrality reduced the FCC’s ability to stop foreign countries through Section 214 authority, which didn’t cover broadband.

“This is a national security loophole that needs to be addressed,”  Rosenworcel said.

South Korean ISP Wants Netflix to Pay More for Broadband

On the heels of Netflix’s global hit “Squid Game,” a legal battle between the world’s largest subscription streaming operator and a South Korean ISP has reignited the debate over net neutrality laws in the country.

Specifically, SK Broadband, the high-speed internet distributor of SK Telecom in South Korea, recently filed a countersuit against Netflix demanding the streamer pay for increased usage put on the network by its programs such as “Squid Game,” “Kingdom,” “#Alive,” “Itaewon Class,” “Sweet Home” and “D.P.,” among others.

In late June, the Seoul Central District Court dismissed Netflix’s claim and ruled that SK Broadband had the legal right to seek compensation — an amount to be determined through negotiation between the two companies.

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Currently, Netflix doesn’t pay for its 3.8 million subscribers using upwards of 10% of South Korea’s broadband capacity streaming “Squid Game,” the horror-themed dystopian game show that has been watched by more than 142 million Netflix households since launching Sept. 17.

The debate has also ushered in political action within the government regarding tax payments and other expenses foreign companies generate doing business in the country.

In an Oct. 24 blog post, Dean Garfield, VP, global public policy at Netflix, argues SK Broadband’s fiscal demands would stifle Netflix’s ability to make a profit in the region, in addition to the streamer’s ongoing investment in local content production — it values at more than $1 billion.

“‘Squid Game’ is just the beginning,” Garfield wrote. “We appreciate what Koreans have long understood. There is so much more where this story came from. But, unfortunately we have come to a crossroads … where internet gatekeepers could get to decide if the next great Korean story can be watched, and loved, by the world. Why would anyone want that? That is the question.”

To counter claims worldwide that Netflix’s popularity puts strains on local ISP networks, the streamer has long advocated ISPs employ its free open-connect cache servers to help alleviate the strain its subscriber’s usage. It enables Netflix content to be stored as close as possible to subscriber homes, avoids clogging up the internet, saving ISPs upwards of $1.2 billion in related usage costs, according to the streamer.

“The overwhelming majority of our ISP partners around the world use Open Connect, because why wouldn’t they?” writes Garfield. “We deliver it to them for free. It’s proven to reduce at least 95% of network traffic, leaving lots of room for other content to go through.”

Meanwhile, some South Korean lawmakers allege Netflix has shifted much of its localized revenue to a Dutch holding company to reduce its tax burden. Netflix in 2020 generated about 415.4 billion won ($355 million) in revenue, realizing a profit of $7.5 million. Lawmakers contend Netflix reduced its tax burden to 2.1 billion won ($1.8 million) through its offshore accounting maneuver.

AT&T to Start Capping Unlimited HBO Max Data Use

AT&T quietly announced it would begin capping data use for its wireless subscribers — a move that would affect some HBO Max subs from unlimited streaming. The telecom cited recent legislative action California supporting statewide net neutrality for the decision.

“California has enacted a ‘net neutrality’ law banning ‘sponsored data’ services that allowed companies to pay for, or ‘sponsor,’ the data usage of their customers who are also AT&T wireless customers,” the company wrote in a blog post. “Unfortunately, under the California law we are now prohibited from providing certain data features to consumers free of charge.”

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After President Trump’s FCC rescinded a federal net neutrality law that treated the Internet as a utility prohibiting ISPs from charging for higher bandwidth and streaming speeds, California, among other states, enacted its own net neutrality law. A federal judge last month upheld the move.

Prior to California’s law, AT&T said sponsored data subscribers were able to browse stream apps (i.e. HBO Max) from devices without using their monthly data allowance. The telecom said video providers utilized sponsored data enabling subscribers to stream movies and TV shows over their wireless service without it counting against their wireless data plan.

“Since it began, our sponsored data service, and competing offers from other wireless providers, have delivered significant benefits and saved consumers money,” AT&T wrote. “Consumers also have enjoyed an explosion of video streaming services.”

AT&T said the Internet does not recognize state borders, and thus the new law not only ends its ability to offer California customers free data services, but also similarly impacts customers nationwide.

AT&T is calling Congress to adopt federal legislation that would provide “clear, consistent and permanent” net neutrality rules for everyone to follow.

“A state-by-state approach to ‘net neutrality’ is unworkable,” wrote the telecom. “A patchwork of state regulations, many of them overly restrictive, creates roadblocks to creative and pro-consumer solutions. We have long been committed to the principles of an open internet. We deliver the content and services our customers want because it’s what they demand, not because it’s mandated by regulation.”

FCC Chairman Ajit Pai Departing Position on Jan. 20, 2021

As expected, FCC Chairman Ajit Pai, who was appointed to the position by President Donald Trump, Nov. 30 announced he would leave his position on Jan. 20, 2021 — Inauguration Day.

While Pai touted the agency’s work implementing rollout of 5G wireless technology nationwide, he will be best remembered for orchestrating a reversal of so-called “net neutrality” guidelines supposedly aimed at leveling the playing field for over-the-top video providers across the nation’s broadband networks.

Heading into 2021, Pai was reportedly working with the Trump Administration to impose restrictions on Twitter and Facebook, which the president has repeatedly criticized as the platforms have targeted Trump by tagging his social media posts as “misinformation.”

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“It has been the honor of a lifetime to serve at the Federal Communications Commission, including as Chairman of the FCC over the past four years,” Pai said in a statement. “I am grateful to President Trump for giving me the opportunity to lead the agency in 2017, to President Obama for appointing me as a commissioner in 2012, and to Senate Majority Leader McConnell and the Senate for twice confirming me. To be the first Asian-American to chair the FCC has been a particular privilege. As I often say: only in America.”

Charter/Spectrum Wants to Charge Netflix, Others Interconnection Fees

Charter Communications, owner of Spectrum cable, has petitioned the Federal Communications Commission to allow it to charge interconnection fees (or peering) to over-the-video services such as Netflix, Amazon Prime Video, HBO Max, Disney+ and Hulu broadband.

The fees were in part the genesis behind the Obama-era Net Neutrality guidelines, which specifically prohibited Internet Service Providers from up-charging streaming video services for faster access into subscriber homes.

Charter has been prohibited from charging fees as part of an anti-trust agreement with federal regulators when it acquired Time Warner Cable and Bright House Networks in 2016.

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The cable operator now claims that with online video booming and the FCC under new authority, it should be allowed to charge fees to third-party platforms delivering content on its broadband network similar to the interconnection fees charged by Comcast, Verizon and AT&T. Charter also wants the FCC to do away with its ability to impose data caps on subscribers.

“The online video marketplace has become extremely competitive,” Charter said in the June 17 petition. “Online video distributors have seen record-shattering growth and increased strength across all performance indicators, including number of subscribers, amount of content available, number of platforms, streaming hours, and revenue. In fact, the online video distribution marketplace is almost unrecognizable compared to what existed in 2016.”

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Charter contends that to ensure efficient allocation of its resources to accommodate the “explosive growth” in broadband usage, many Internet providers have incorporated data caps. It claims data caps imposed by companies such as Comcast, AT&T, Cox and Altice8 has not stifled the growth of SVOD services.

“In fact, the opposite is true: OVD services are thriving and growing at an unprecedented rate. In other words, the market is working,” Charter wrote.

Federal Appeals Courts Upholds Net Neutrality Deregulation

The U.S. Court of Appeals for the D.C. Circuit Oct. 1 affirmed the basic principles of Republican-led efforts to deregulate net neutrality guidelines established during the Obama Administration.

The three-judge panel did rule against the FCC superseding state efforts to impose local guidelines where the federal government did not.

“We uphold the 2018 order, with two exceptions,” the court wrote. “The order failed to examine the implications of its decisions for public safety; the order does not sufficiently explain what reclassification will mean for regulation of pole attachments; and the agency did not adequately address petitioners’ concerns about the effects of broadband reclassification.”

Dubbed “2017 Restoring Internet Freedom,” the bill reclassified the Internet under less restrictive Title I provisions of the Communications Act of 1934 under President Franklin Roosevelt.

Under Title II provisions of the Communications Act approved by the FCC under Obama, commerce and video distribution on the Internet, including ISP distribution of broadband to consumers, was regulated more rigorously as a utility.

Conservatives argued net neutrality guidelines would negatively impact business investment, among other issues.

 

House Approves Restoring Net Neutrality

As expected, the Democrat-controlled House of Representatives April 10 voted to restore net neutrality guidelines established by the Federal Communications Commission in 2015 and repealed in 2017 under the direction of President Trump’s appointed FCC chairman Ajit Pai.

The 232-190 vote (along party lines) on the Save the Internet Act would – if approved by the Senate and signed by Trump – restore guidelines prohibiting Internet service providers such as AT&T, Comcast and Verizon from throttling consumer access to online video services and enforce regulation characterizing the Internet as a utility similar to electricity and the telephone.

“With the Save the Internet Act, Democrats are honoring the will of the people,” House Speaker Nancy Pelosi (D-CA) said in a statement last month.

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Despite bipartisan support in the Senate, which passed (52-47) a Congressional Review Act in 2017 to overturn the FCC’s decision, approval of the House measure by the GOP-controlled Senate now seems slim.

Due to the rules of governance, passage of the CRA required a simple majority of votes. Passage of the Save the Internet Act requires 60 Senate votes (a supermajority), which the Democrats don’t have.

Indeed, Senate Majority Leader Mitch McConnell told the media the House measure would be “dead on arrival” once it is sent over.

And the White House April 8 issued a statement saying that if the bill was presented to Trump, he would be advised to veto it.

Trump Administration Pledges to Veto Net Neutrality Bill

As expected, White House officials April 8 said they would recommend President Donald Trump veto House Democrats’ efforts to revive net neutrality guidelines enacted in 2015 by the Federal Communications Commission under President Obama.

The current FCC, under Trump-appointed chairman Ajit Pai, reversed the guidelines, favoring so-called “light touch” regulation.

Following the 2018 midterm elections, Rep. Mike Doyle (D-Pa.) introduced H.R. #1644 (Save the Internet) that would reinstate net neutrality classifying the Internet as a utility under Title II of the Telecommunications Act of 1934.

The bill, which has 197 co-sponsors, seeks to stop Internet service providers from enacting speed lanes for higher-paying Web traffic and throttling third-party competitive services.

The legislation is up for possible vote in the Democrat-control House as early as April 9. If passed, it would be reconciled in the Senate and then sent to Trump for his signature or veto.

The White House (and many Republicans) argue that the current FCC last year sought to “restore Internet freedom” by adopting so-called “light-touch” regulation that it said enabled the Internet and entrepreneurs to “thrive” for nearly two decades.

In a tweet, the Office of Management and Budget said that since the FCC reversed its position on net neutrality, the United States has risen to sixth from 13th in global fixed broadband download speeds.

It said ongoing rollout of fiber technology benefited from a change in the law, underscored by an increase in capital investment by $2.3 billion.

“H.R. 1644 would undermine this success by repealing the FCC’s current rule,” the OMB tweeted. “If H.R. 1644 were presented to the President, his advisors would recommend that he veto it.”