Pondering “loss of net neutrality” and Masterpiece Cakeshop — the underlying debates are similar

There are useful parallels in the issues behind both the network neutrality debate (that is, the Trump administration’s determination to end it all on Dec. 14) and the Masterpiece Cakeshop case regarding (in over-simplified rhetoric) balancing anti-discrimination (against gay couples) with free speech and property rights (the latter may be more relevant in the end).  True, net neutrality isn’t back in court yet, but it probably soon will be.

I’ll walk this plank starting with the net neutering (pun?) first.  I have to admit, I personally would feel more comfortable if telecom companies were forced to keep the legal designation as utilities (common carriers), which will end some time after Dec. 14.  But regulating the designation category of any business can have unintended consequences.

So, first, we have to ask ourselves:  may we regulate very large businesses more closely than some small businesses?  Libertarians may not like the idea, but in practice the need to do that is very well established in our system.  We needed “better regulation” after 2008 of large financial institutions to prevent massive Ponzi setups.  Likewise, we’ve long had some regulation in broadcast television.  We’ve had rules that prevent movie studios from owning theaters (they seem to be circumvented sometimes), supposedly to prevent too much power in which films consumers see staying with the largest studios. It’s easy for me to imagine extensions of these rules that would prevent me from producing a film literally from my own books, in order to enhance employment opportunities for union writers. Ajit Pai is correct in opposing too much regulation.  But – it’s true – with big companies, we have different concerns, like anti-trust laws.  The FTC and DOJ can still enforce these against anti-competitive practices by the Comcasts of the world.  As a single author and micro-business person, I can’t monopolize an industry or threaten it.

So then we ask, what is a “utility”.  A telephone company (Ma-Bell in the past) is a utility, but a TV network is not – the later is a content company (and it is regulated because airwave space, like real estate, is finite).  A cable company, however less regulated than a legacy airwaves network, is a content company.  A telecom company offers Internet, digital voice phone, and cable, so it is a hybrid of common carrier and content company.  A social network like Facebook is a content company (and that gets into Section 230 as to whether Facbook is really a “publisher”).  A hosting provider like Blue Host functions like it was a utility for Internet content publishers, but it’s possible imagine that such a company has some influence over content (look at what happened after Charlottesville and the Daily Stormer problem). Most of these companies have fiduciary responsibilities to investors, so regulation is a sensitive issue.  Where does the public interest fit in?  There seem to be competing interests and various ideological scenarios that can play out.  For example, I could imagine (after Charlottesville) some day winding up with a system where no one self publishes until he/she demonstrates some “community engagement”.  But it’s also hard to imagine how such a rule could comport with economic self interest (even if the abrogation of net neutrality would let it happen legally).

I do think that over time small business has reason to worry, if Congress and the courts don’t force some sort of regulatory balance.  Small business could be forced into franchising to afford the branding that large favored websites have.  They could have new requirements for security (https everywhere), website rating, or “pay your own way” reportability some day.  And hurting “really small business” in favor of the oligarchs will not promote local manufacturing; it will not “make America great again” as Trump wants.  So the “Dems” have some reason to want to regulate.  Yet, I have no right to demand that the regulatory environment protect me from more accountability myself, even if that means that a couple years from now many consumers might not be able to access this posting through their own Internet Service provider (which I still doubt will really happen).

I’ll interrupt myself for a moment – and note the PBS interview where one speaker notes that in Portugal, there is no net neutrality and only one provider, and consumers have to pick “bundles”.  Can ordinary sites be accessed in Portugal, like on a hotel’s broadband?  (I was there in 2001 and could.)   The important thing from my perspective is that a consumer be able to get access to everything as today in one package, still reasonably priced if at the high end (as with cable offering all possible channels).

A quick check of Godaddy and other hosting companies still shows inexpensive hosting and an expectation that their business would continue as usual.

I’m left grasping for straws on what the principled answer to Aji Pai’s libertarian-leading claims should be.  You need some regulation, but where do you draw the line?

So then, we circle back to “gay rights” and “marriage equality”  — where we’ve made so much progress even as the safety of the country is threatened (previous post) and as tribalism frays the political process (as with Trump’s election and his horrible appointments in some areas, even if Trump is all right on gay people himself). And we come to the Masterpiece Cakeshop case, argued before the Supreme Court Tuesday.

There are three areas at issue:  property rights, free speech (as connected to religion), and discrimination.  Although I sympathize with the libertarian focus on private property rights (as Jacob Hornberge explains on Intellectual Takeout), civil rights law with respect to public accommodations (retail businesses open to the public) is well established.  The owner can’t rightfully refuse to sell a cake to a gay couple.  Saying we don’t serve “gay weddings” is a bit more ambiguous. I am sympathetic to the idea that the cakeshop owner shouldn’t have to design a cake showing a same-sex couple as décor – but what if his business is based on made-to-order cakes?  What if an artist at a county fair refuses to draw black people, or even transgender people?  The artist has made himself a public accommodation.

How all these things could affect me – it’s all pretty distal.  I could, for example, start a small press (I’ve thought about it) or a small movie production company – because I’m aware of a few projects around the country that could use help that have something in common with what I do.  As a small business – yes, unfettered Internet access from the public would matter (so net neutrality could matter). But the right to chose my own content to promote would matter.  Publishers, and movie studios, like any content-oriented business, pick the content that they want to promote. “Property rights” is what allows them to do that (which they can’t do the same way in places like Russia and China, where the government demands the content producer serve some higher statist common good, just like movie studios had to during WWII). It’s all too easy, though, once I start selling to consumers with a store – what about providing for other kinds of consumers – like blind ones – that I don’t have the scale to serve. I’ve been pestered quite a bit in the past few years to become more involved with scalable operations – to the point that it jeopardizes my time to spend on content and research.

Supplementary legacy posting in network neutrality ending.

Supplementary legacy posting on Masterpiece Cakeshop and legally married same-sex couple in Colorado.

(Posted: Friday, December 8, 2017 at 11:30 AM EST)

Activists warn users about FCC vote Dec. 14 to reverse net neutrality rules; will telecom companies really do anything drastic?

Here we go again.  Yesterday, shortly before boarding a plane to return from a long weekend in “Paradise” (the south Florida beaches – and the Keys, not in such good shape), I got a coercive email form FTFF (Fight for the Future) urging donations and “taking action” for a call-in (link)  The FCC, if you haven’t heard, will vote on suspending Obama’s network neutrality rules, taking the vote on Thursday Fec. 14, 2017.  It’s a little unclear how long the “unchanges” would take to happen.  Expect more litigation.  Ajit Pai gives us his own words on this PDF.

The Washington Post this morning produced a brief article by Brian Fung almost as menacing, hinting that the FCC will soon allow the cats into the refrigerator, with telecom companies dictating which sites readers can have.  (More details in Post here).

Back around the time of the July 12 protest more moderate sites like Vox had opined, and warned on a slower, less equal Internet as probably inevitable.  Indeed, panicky protests from activists scaring readers with sensational emails aren’t

Kate Cox from the Consumerist has an analysis of NCTA’s informal promise (June 30 here) to honor free speech from the small fries. “18 cable companies promise to honor net neutrality; none will guarantee you in writing.”   Along these lines, Comcast had made a lukewarm reassurance to users in this blog post. And see “broadbandforAmerica” weigh in here.

Bloomberg, with its modestly libertarian leanings, has several articles.  The first one I found is a bit muddy, but the Tyler Cowen offers a reassuring perspective here.

Along these lines, it’s important to remember that the regulatory authority would move from the FCC back to the FTC, which cannot make rules about throttling content, but can enforce rules about “transparency.” The FCC would also abandon its classification of backbone telecom companies as “Title II” utility providers.

But a formal editorial in Bloomberg suggests Congress intervene, and require what sounds like common sense: that telecom companies not interfere with normal access to legal websites as it works today, but allow paid fast lanes when the scope is limited (like for medical services, enhancements for gaming or streaming, etc).  Speculation in the past has suggested that doing so would degrade ordinary service, but not if bandwidth in a geographical area has enough capacity (which it doesn’t in some poorer areas). Bloomberg mentions the incidents after Charlottesville this summer when Cloudflare and then other major Internet companies denied Daily Stormer the capacity to be connected or register through their services, so you can make the argument that private companies already have the ability to control what their users are allowed to see based on somewhat arbitrary grounds.  (Daily Stormer’s content was called “immoral”, but not, compared to child pornography or perhaps sex trafficking ads, illegal). While the Stormer content seems quite extreme and unprecedented in the minds of average users, this does sound like a slippery slope.  But Comcast, at least, has promised it would never block lawfully permitted (even if offensive) content (NYTimes article 11/22) and hopefully other major companies like Cox and Verizon will say the same thing.

Bloomberg is hinting, however, that the threat that activists perceive that the loss of net neutrality (which we didn’t have until 2015) to small business or to small websites face, needs to be viewed in the context of other problems, such as erosion of Section 230 (with the Backpage controversy), and concerns over terror recruiting and fake news.  Companies in both telecom transmission and content hosting or service businesses have to wonder about their fiduciary responsibilities to investors, and it could get harder to serve users whose content doesn’t pay its own way. So, yes, the editorial suggests a sensible compromise, which needs Congress.

I would add that DOJ’s litigation to hinder merging of Time Warner with ATT does suggest that “even” the Trump administration is concerned  (in the anti-trust sense) about monopoly and lack of competition.  So, if there is any competition at all, will large telecom companies have any reason to hinder consumer access to all legal content?  I would think not – but we do wonder about incidents like Stormer and rising extremism.

I noticed when on a Southwest flight yesterday that the airlines do their own version of withdrawing net neutrality.  They offer free wifi to passengers, but only to show their content.  You can pay $8 for regular access.

The Wall Street Journal has a fairly balanced perspective by John McKinnon Nov. 20 here.

Wired has a comprehensive story (leading to other links) by Klint Finley explaining that the Administrative Procedure Act, design to prevent capricious regulatory policy changes following partisan administration change, could form the basis to a legal challenge to Pai’s intentions.

“Leftist” Truthout gives this analysis, getting into the regulatory environment pretty well.  Trickle down doesn’t trickle?   Think Progress also talks about erosion of a program giving poor people phone service — and I can recall in my early days of retirement job hunting that distribution of phone cards came up as a possibility.

On Nov. 14, I had posted a legacy blog summary of Pai’s reappointment, and on Oct. 28 this one about his recent testimony in House hearings.

(Posted: Tuesday, Nov. 21, 2017 at 6 PM EST)

Update: Wednesday, Nov. 22, 2017 at 1 PM

The Wall Street Journal weighs in heavily again today, as with Ajit Pai’s own libertarian op-ed that says that loosening regulations will help most users and consumers.  Yes, Reagan-style Republicanism (not Trump) is good for a lot of more sentient consumers.  MacKinnon and Knutson have a newer piece predicting that telecom companies will make deals with large content companies like Facebook and Google to speed up their content.  That worries me because small businesses and niche bloggers who have their own separate hosted sites need to set themselves up this way to “brand” themselves rather than depend on “somebody else’s free service”.  Ajit Pai probably believes that hosting companies (like BlueHost) can set up deals with the large providers (Comcast, Cox, Verizon, etc) and pass the benefits (for slight increases in hosting prices) on to customers who have their own sites.  I suspect it would take some time for all of these changes to happen, maybe most of 2018.

It’s interesting that FCC Commissioner Clyburn has his own piece opposing Pai’s move on the FCC site, here. It’s noteworthy that he thinks telecom companies could disrupt small site access “on a whim”, which sounds unlikely in a real world. There were few such disruptions before 2015 (although I do remember a controversy about BitTorrent).

Could undoing Network Neutrality rules really mean smallfry sites would have to pay off telecomm providers to be connected? Really?

Let’s imagine an entrepreneur invents some new superfast FIOS or cable technology that would be very effective for long high-definition videos, perhaps 3-D, perhaps even holographic or virtual reality.

A telecommunications company like Verizon, ATT or Comcast wants to offer it to some residential customers. It invites high profile, high-volume content distributors like some major movie studios, some (perhaps selected) cable channels, Amazon, and social media giants like Facebook to sign on and pay extra for the more efficient streaming of their content to largely more affluent consumers in some urban communities. Furthermore, these companies give price breaks for connecting to content that they own (for example Comcast has direct ties to NBC and Universal Pictures and Focus Features).

This sounds like it would not be allowed now under Obama’s network neutrality (after the FCC ruled that telecommunications companies were the legal equivalent of telephone companies of the monopolistic past, even after the breakup of “Ma Bell”, which, by the way, gave me more than a few job interviews when my own adult career started around 1970). It sounds as though the new FCC chairman, Ajit Pai, appointed by Donald Trump, wants this to be allowed.

Is this really a problem? If the service were available to home consumers (even only in certain locations) as an add-on to normal service, I don’t see a problem. Ordinary internet sites, including those owned by small businesses and free commentary blogs like mine, would work for consumers the same way they always had. However, a consumer who wanted to watch a 3-D comics-based movie on her home entertainment center when it first came out and wanted to pay for it this way with extra service would be able to.

Where I would be more concerned is if the hypothetical new service replaced the old one, and because of the physics of how it is offered, ordinary sites were no longer available. Only high-volume sites from large companies (especially those owned by one of the telecoms) that had paid to be connected to this service would be available on this hookup to some consumers. Such a consumer might believe that her smart phone with ordinary 4G LTE wireless provides adequate access to “ordinary” sites, which need to be mobile friendly anyway. That’s not so much of a problem for bloggers any more, because WordPress and Blogger make sites mobile-easy automatically anyway.

How probable this scenario really is, would depend on looking at how the hardware works.   I remember community college courses on the OSI model back in the 1990s. It’s that kind of stuff.

The reason I paint this scenario is largely that a number of advocacy organizations have been publishing veiled warnings that ISP’s might actually charge individual sites to be connected to their networks. This would obviously be devastating to small businesses, especially those that depend on niche blogs (the way Ramsay Taplan, the Australian “Blog Tyrant”) says the way they should be marketed. That lays aside rogue independent journalists like me who offer our blogs “free” in order to be noticed, and more about that later. In fact, the “DearFCC” petition letter promoted recently by the Electronic Frontier Foundation seems to pander to this idea (legacy post). Even “mainstream” news sites like the Washington Post have dropped these hints. Sometimes I wonder if this does border on “fake news” and if Donald Trump could actually be right.

An environment where every domain had to pay every company to be connected could favor “free service” publishing services: that is, Blogger, WordPress, Tumbler, etc., which are predicated on there being just one domain to connect. There’s the interesting side observation that it is already much easier to make “free service” blogs encrypted under SSL and “https everywhere”, because that works by domain name.  That goes against conventional wisdom that a blog is much viewed as much more “professional” when it is tied to a domain named and paid-for domain name. BlueHost and other vendors have developed ways to equate these to “add on” subdomains, so the SSL issue may change in the relatively near future. That would imply, to me at least, that in a non-net-neutral world of the future, hosting companies (like BlueHost) would take care of the connection fees.  It’s also important to note that “free service” platforms don’t offer direct support and can terminate users wrongfully and capriciously (the “spam blog” problem).  And will the business model for free services hold up forever?  It’s always “risky” to put all your marbles on someone else’s free service, so conventional wisdom goes.  You have to add that people use Facebook (especially fan pages as opposed to “friends”, along with controversial news aggregation), Myspace (in the more distant past — the way Ashton Kutcher used it), Instagram and Twitter to supplement self-publishing, and these mega-rich services would always be able to pay for special treatment in a non-neutral environment.

Other sites have noted that Ajit Pai claims he will secure pseudo-voluntary compliance promises from big telecoms that they will not interfere with ordinary operation of the Internet for ordinary content providers and consumers. There is some question as to how “voluntary” these promises would remain and whether the FTC (not FCC) could enforce them with fines. If Pai is credible, then the net neutrality scare talk (not all of it from the Left) is indeed “hot air”, about a problem that doesn’t exist.

Another observation is that we have had years of Internet service, from the late 1990s until 2015, when net neutrality became formal under Obama, without any of these rumored consequences. Frankly, the world in which I started writing online, around 1997, with 56K modems through AOL, wasn’t all that bad. I actually stood out more then than I do now! But, as Timothy B. Lee recently wrote in Vox, ISP’s have tended to “voluntarily” stay on good behavior since about 2008 because they expected Net Neutrality to come about, even before Obama was elected.

It’s a fair question, too, to wonder what happens in other western countries – Europe, UK, Australia, and Canada especially. My impression is that they have some strong neutrality rules.

Furthermore, it seems relevant that some companies have already tried super-fast Internet in some local areas, like Google FIOS, which I thought had been set up around Kansas City, Chattanooga, Austin, Atlanta, and a few other places, but has a clouded future. Could the specifics of hookup to these networks affect the way any new innovative services want to charge for providing fast lanes for their content?

Finally, I’ll add a remark that some pundits seem to think that people shouldn’t give away content “for free” on the Internet at all, that everything published online should carry its own weight, as I noted on a legacy blog post yesterday. I would like to see Reid Ewing’s little film “It’s Free” become available again. But the details of that are for another day.

(Posted: Thursday, May 11, 2017 at 1 PM EDT)