‘Big Cable’s’ hubris could be Its downfall

Last week, President Obama came out in support of strong Net Neutrality, calling for the reclassification of broadband services under Title II of the Telecommunications Act. This means phone and cable companies like Comcast, Verizon, Time Warner, and AT&T would be barred from creating fast and slow lanes on the Internet.

In the wake of the president’s announcement, phone and cable companies threatened to sue the Federal Communications Commission if it followed Obama’s lead and reclassified under Title II. When the president decided to take the plunge on Title II, he had to know the fulminations and threats were imminent. Phone and cable companies had twice brought lawsuits to overturn FCC rules that took a much lighter regulatory approach to Net Neutrality. After Verizon got those lighter-touch rules struck down in court, the companies again threatened to sue when a compromise “hybrid” proposal was floated last month that would classify only some services under Title II. “Big Cable’s” habit of taking legal action or threatening it in the face of even moderate Net Neutrality rules has been a constant over the past seven years.

{mosads}Obama probably took a look at the hyperactive history of these companies’ legal teams, and their repeated threats to sue over even watered down Net Neutrality rules, and thought, “Enough is enough.” If they couldn’t be appeased, why not go full-bore on Title II and strong rules, which was something he had supported as a presidential candidate in the first place? 

And so it is the cable and phone companies’ hubris—their consistent push for less and less when it comes to Net Neutrality regulation—that could be their downfall in this fight. These powerful companies, who rank among the top spenders in Washington, might be accustomed to getting their way. But by continually pushing for weaker Net Neutrality regulations, they effectively sued their way into the position they now find themselves. They forced Obama’s hand and made it easier for the President, who once promised as a candidate that he would “take a backseat to no one” on Net Neutrality, to embrace Title II.

To understand the president’s decision on Title II, it’s helpful to understand the flurry of Net Neutrality lawsuits that have been brought by the phone and cable companies in recent years. In 2010, after Comcast brought a suit, a DC court ruled that the FCC did not have the authority to prevent Comcast from blocking certain activities online. In the aftermath, cable and phone companies leaned on the FCC to adopt weak Net Neutrality rules. Under pressure, the FCC cut a deal, opting not to classify broadband under Title II. Then in 2011, Verizon  decided to push the boundaries and challenge the FCC’s compromise rules in court. This January, a court sided with Verizon and struck down the rules. Importantly, the court noted that if the FCC wanted to enforce Net Neutrality, it would have to reclassify broadband under Title II. In retrospect, the suit appears to have been a tactical error for Verizon and its industry.

The FCC, now headed by Chairman Tom Wheeler, has been left to put the pieces back together. In May, the FCC issued yet another Net Neutrality proposal that would allow phone and cable companies to discriminate among traffic and cut special deals. After outcry from the public, including 3.7 million comments submitted to the FCC, the proposal was quashed. Next, the Chairman floated an unworkable “hybrid” proposal that drew the ire of both Net Neutrality proponents and Big Cable.

The industry’s latest anti-Net Neutrality actions took place this week, when AT&T announced it had decided to halt investments to bring fiber connections to 100 cities. In its announcement, which was issued just two days after President Obama came out for strong Net Neutrality, the telecom giant said it could not make the investment with the FCC rules up in the air. But the announcement appears to be politically motivated: The truth is that AT&T’s “investment” here was nothing more than a promise to explore future investments.  So AT&T hit “pause” before it ever hit “play.” In a move that may have surprised AT&T, the FCC responded by telling the company it had to provide specifics about its fiber deployment plans by November 21. If AT&T is bluffing, it could mean trouble.

What happens next remains uncertain. The FCC is an independent agency, and it does not have to follow the President’s orders. Chairman Wheeler now finds himself in a place where he must choose between the President that appointed him, backed by millions of Americans who have spoken out for an open Internet, or side with the powerful phone and cable industry whose unwillingness to live with even moderate Net Neutrality rules is what got us here. Now let’s hope Wheeler and the FCC make the right choice and embrace strong Net Neutrality under Title II.

Stanley is director of Operations at Demand Progress, an Internet-activist organization.