Tom Wheeler Says His Proposal Will Protect Net Neutrality. Here’s Why It Won’t.

On Wednesday night, the Wall Street Journal broke the news that Federal Communications Commission Chairman Tom Wheeler was readying a new set of rules in response to the January court decision that tossed out the agency’s Open Internet Order.

The Journal’s report, later confirmed by the New York Times and others, indicated that these new rules would allow Internet service providers to implement so-called paid-priority schemes. These would allow ISPs to charge extra fees to content companies to guarantee their content reaches end-users ahead of those that don’t pay. The proposal would also allow ISPs to favor their own content.

Needless to say, the Internet went ballistic.

Wheeler kicked into full damage-control mode and released a statement claiming that these reports were “flat-out wrong.” He insists his proposal would “restore the concepts of Net Neutrality.”

On Thursday morning, Wheeler expanded on this defense on the FCC’s blog. Let’s take a closer look at a few choice passages:

First, after clearing his throat about all the supposed misinformation out there, Wheeler added to the confusion. He explained that his plan:

Proposes the reinstatement of the open Internet concepts adopted by the Commission in 2010 and subsequently remanded by the D.C. Circuit. The Notice does not change the underlying goals of transparency, no blocking of lawful content, and no unreasonable discrimination among users established by the 2010 Rule. The Notice does follow the roadmap established by the Court as to how to enforce rules of the road that protect an open Internet and asks for further comments on the approach.

Note how “concepts” morphs into “goals” and then enforceable “rules” in this paragraph, with no explanation of how to actually make those rules work. This is important since the FCC has already lost twice in court trying to enforce Net Neutrality, and the most recent decision was pretty clear about what the FCC could and could not do to achieve that goal.

Wheeler asserted that “the proposal would establish that behavior harmful to consumers or competition by limiting the openness of the Internet will not be permitted.”

That sounds great (setting aside for a moment the importance of Net Neutrality beyond commercial concerns). In fact, it sounds a lot like the rules the court threw out. So how does the chairman plan to prevent ISPs from “limiting the openness of the Internet”?

Wheeler stated that the court “made it clear that the FCC could stop harmful conduct if it were found to not be ‘commercially reasonable.’ Acting within the constraints of the Court’s decision, the Notice will propose rules that establish a high bar for what is ‘commercially reasonable.’”

But the judges were pretty clear here: Unless the FCC reclassifies ISPs as common carriers, it can’t impose any rules that stop ISPs from discriminating against content or favoring their own content.

The FCC simply cannot prohibit discrimination (i.e., protect Net Neutrality) by using the “commercially reasonable” standard. The court’s ruling says that “commercially reasonable” means the ISPs must have substantial room to make individual deals with Internet content providers and be free to discriminate among them. That’s the opposite of the free and open Internet.

So if the FCC ever tried to use its new theory to prevent online discrimination, it would run straight into a legal brick wall. If the FCC sets this “reasonableness” bar high enough to actually resemble real Net Neutrality, the court will strike it down. The only way this approach can survive in court is if it’s completely toothless — or never enforced. In other words, the FCC will either fail to protect the open Internet or lose in court again.

Of course, the FCC has a better path available to it: It can reclassify broadband under Title II of the Communications Act. For years Free Press and others have pushed the agency to abandon its piecemeal and half-baked proposals for rules that actually rest on solid legal footing.

Perhaps anticipating the argument that Title II is the only way to preserve Net Neutrality, Mr. Wheeler writes: “Even Title II regulation (which many have sought and which remains a clear alternative) only bans ‘unjust and unreasonable discrimination.’”

But this is sleight-of-hand. Title II’s “unreasonable discrimination” and the court’s “commercially reasonable” standard are two completely different standards. That’s why the court struck down one but upheld the other. The ruling even said that if the FCC makes “commercially reasonable” standards that are too strong, ISPs could and should come in and challenge them.

The 2010 rules the court overturned found that the practice of paid prioritization would likely be considered unreasonable discrimination. But the court specifically said ISPs couldn’t be prohibited from engaging in payola schemes unless they were classified as common carriers.

Wheeler’s post ends with a promise that his rules will not permit ISPs to favor their own content. But nowhere in the legal history is there any suggestion that such moves would run afoul of the “commercially reasonable” standard. What’s more commercially reasonable than a company looking out for its own best interests?

Nowhere in his post does Wheeler suggest that his rules will bar paid prioritization. And unless the FCC reclassifies ISPs as common carriers, it can’t legally prohibit this practice. So instead of fighting for real Net Neutrality, the FCC instead has chosen to bless online discrimination.

If you can follow that logic, you will love this proposal. But if this sounds backwards and possibly crazy, then tell the FCC to scrap this plan.

The bottom line: No matter how much lipstick you put on this pig, it still stinks.