Federal Preemption Coming in Internet Access Business?

Communications that cross state lines generally have been regulated differently than communications that are confined within a single state, or parts of a state. In the internet era--even if data communications tend not to be regulated very much--there has been a “hands off” approach, which fits the generally highly-distributed nature of modern computing.

In more recent times--in the wake of the Telecommunications Act of 1996--there was a perhaps-necessary clarification of state and federal roles, mostly in the area of federal preemption of state and local rules.

The logic has been that, for clear efficiency reasons, it does not make sense to have potentially 50 sets of rules for communications that are, almost exclusively, interstate or global in nature.

It seems almost inevitable that we will have some form of the federal preemption debate as policy on internet access potentially fractures with imposition of state rules on internet access. AT&T, for example, already has started calling for federal rules to re-establish or preserve a single national policy.

That comes as some states and localities create their own policies for internet access, once again raising the issue of fractured policies across the nation. As those of you who work in tariff and taxation areas know, it is devilishly-complex to comply with all local and state regulations when you are running a nationwide business.

That, in fact, is behind the whole European Union project: ending the friction that comes with multiple regulatory and currency regimes within what increasingly is a single market.

“It is time for Congress to end the debate once and for all, by writing new laws that govern the internet and protect consumers,” AT&T says.

Given the obscurity of network neutrality in general, and its weaponization, it might be reasonable simply to point out the areas where nearly everybody continues to agree.

We all agree that people and consumers must be able to use all lawful services and applications. There cannot be blocking of lawful applications.

Such applications cannot be throttled or downgraded based solely on the ownership of specific sites and content.

Everyone has agreed on these principles for more than a decade. So, even if most seem not to understand, do AT&T and other major internet service providers.

“We don’t block websites; we don’t censor online content. And we don’t throttle, discriminate, or degrade network performance based on content. Period,” AT&T says.
But “Congressional action is needed to establish an ‘Internet Bill of Rights’ that applies to all internet companies and guarantees neutrality, transparency, openness, non-discrimination and privacy protection for all internet users.

“Legislation would not only ensure consumers’ rights are protected, but it would provide consistent rules of the road for all internet companies across all websites, content, devices and applications,” AT&T argues.

At this point, and ironically, it is as much the major app providers--not just ISPs--that probably have to worry about what that means. If the objection to changing the “best effort only” level of consumer internet access is about preventing the emergence of gatekeepers, we have problems far beyond “who owns the access pipe.”

Actual instances of “commercial blocking” have been happening, but by Amazon and Google, for instance, not ISPs.

In the coming debate, the need for predictable rules, across the whole country, will be stressed, as we have seen in the past, and for the same reasons. To be sure, AT&T’s concern is about future services whose performance does matter, and which might clearly benefit from optimization, as do consumer apps whose performance is assured by use of content delivery networks.

Ironically, most larger content and app providers already use content delivery networks, precisely for the purpose of optimizing performance of their consumer apps.


“In the very near future, technological advances like self-driving cars, remote surgery and augmented reality will demand even greater performance from the internet,” AT&T says. “Without predictable rules for how the internet works, it will be difficult to meet the demands of these new technology advances.”

To be sure, the issue all along has not been “lawful use of apps” and “no blocking” but the development of quality-assured or other services whose costs are defrayed by an enterprise.

Some ISPs and app providers have argued for the freedom to offer “toll free” services--offered at no charge to end users--alongside the for-fee models. Internet.org, for example, has tried to create no-charge internet access programs for mobile customers in developing markets.

Some ISPs want the freedom to create toll-free or tariff-free services that provide internet access in the same way that toll-free calling is offered.

To be sure, business services are not covered by network neutrality rules. The problem is that the line between enterprise and consumer services increasingly is blurred. Virtual private networks, for example, can be used by business or consumer end users.

The fear in some quarters, perhaps logically, is that, eventually, quality-assured internet access becomes high-definition to standard definition video; or 4K instead of HDTV, a “better” level of service that eventually forces app providers to upgrade, possibly with the implication that app providers pay money to a transport provider, as already happens with content delivery network payments.

The point is that CDNs are lawful and routinely used. Why are CDNs "to the end user" not lawful? And if so, does that business require uniform national rules, given that CDNs almost intrinsically operate across state lines?
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