Monday, September 15, 2008 - The Progress & Freedom Foundation Blog

Does Disclosure Trump Net Blocking?

The FCC's recent Network Management Order concerning Comcast's broadband network management practices purported to establish rules of "reasonable" network management in the context of an "adjudication" of an advocacy group's "formal complaint" concerning Comcast's treatment of P2P traffic on its network. I have written elsewhere about the legal and procedural defects of the Commission's approach that I believe will doom the action's chances on appeal. Here I discuss one relatively unexamined feature of the Order, which is the FCC's conclusion that "a hallmark of whether something is reasonable" is whether a provider discloses the practice to its customers. What will this mean in terms of future FCC enforcement actions?

The bulk of the FCC's analysis of reasonable network management in the Order was focused on whether the practice in question interfered with a consumer's ability to run applications of their choice, access lawful content of their choice, and attach lawful devices of their choice over their broadband Internet connection. After finding that Comcast's practices concerning P2P traffic violated so-called "federal Internet policy" by discriminating among applications and protocols in a manner that interfered with its subscribers' P2P uploads (and relatedly, according to the FCC, their downloads), the FCC rejected the company's arguments that its practices constituted reasonable network management. The practices used (DPI and RST injection) were faulted as non-standard in the industry, according to the FCC's analysis of the views of "experts in the field," and as posing "significant risks of anticompetitive abuse" that could be justified only if they "further a critically important interest and be narrowly tailored or carefully tailored to serve the interest." In Comcast's case, the FCC assumed, without deciding that "easing network congestion" is a "critically important interest." Comcast's methods flunked this strict scrutiny-like test, according to the FCC, because they were both under inclusive, by missing some congested times and areas, and over inclusive, by interfering with traffic during times of no network congestion. The FCC intimated, without either citing record evidence of otherwise providing serious competitive analysis, that anticompetitive motive was behind Comcast's practices. In the agency's "expert judgment," therefore, "Comcast's practices do not constitute reasonable network management."

Although the FCC previously had not mandated general disclosure requirements for broadband network providers, it claimed that "the anticompetitive harm perpetuated by discriminatory network management practices is clearly compounded by failing to disclose such practices to consumers." The FCC was apparently referring to subscriber use of P2P protocols to access on-line video programming services offered by, Vuze, whose petition for declaratory ruling was part of the docket in which the FCC ruling was homed. The FCC reviewed Comcast's prior terms of service disclosures and found them wanting, without addressing the adequacy of Comcast's revised (and current) disclosures. It was in this context that the FCC stated that "the hallmark of whether something is reasonable" is whether a provider discloses it to customers, and directed Comcast that if it wished to employ capacity limits, "it should disclose them to customers in clear terms." But the FCC failed utterly to articulate the reasonship between this "hallmark" of reasonableness, and its strict scrutiny test for network management practices that would find a practice reasonable only if it furthered "a critically important interest and be narrowly tailored or carefully tailored to serve the interest." In other words, can a network management practice that has the purpose and effect of limiting a subscriber's ability to access certain Internet content or use a particular Internet protocol-based service such as VoIP, be immunized if the provider simply discloses beforehand that it will not permit its network to be used for this particular purpose? Admittedly, the FCC did not say that disclosure is "the hallmark" of a reasonable practice, but it did imply that a provider could limit end user access if such limitations were disclosed.

This lack of clarity is not surprising, given the FCC's decision to enforce "federal Internet policy" in an adjudicatory proceeding against a single broadband network provider rather than through an industry-wide rulemaking. It is easy to declare, after the fact, that inadequate disclosure of network management practices in a particular case "compounded" harm, but it tells us little about the outcome of case number two.

Why does this matter? In the Sunday edition of The New York Times, Joe Sharkey penned an essay entitled "Internet in the Sky: Surf but Don't Call." American Airlines has decided to offer the Aircell in-flight broadband Internet access service, called "Gogo." Both the airline, which, in this case, arguably is acting as a network provider, and Aircell, the ISP and application provider, have determined to block use of the Internet connection for VoIP services, even though the technological capability is there, to protect the rights of airline passengers who do not want to fly across the country in the equivalent of a jammed-packed flying phone booth. As the article noted, "[w]orried about the in-flight equivalent of road rage, airlines have been less enthusiastic about any form of voice-call capability," and have reacted by imposing the most restrictive solution: blocking voice call capability rather than narrowly tailoring their network management practice by say, permitting first and business-class customers to use their laptop connections for VoIP, while prohibiting it in the more densely-packed "economy" sections of the airplanes, or simply setting aside "quiet" sections in each fare class.

Does the "federal Internet policy" newly articulated by the FCC apply to American Airlines and/or Aircell as broadband ISPs? Should a complaint be filed against the airline and Aircell at the FCC? Does American's upfront publication of the VoIP ban to potential customers render the practice reasonable even though American chose the most restrictive method of achieving its aims? We don't know! But now we all have to think a about it. And that is just one of the many, many problems with the FCC's ad hoc approach to broadband network management issues.

posted by Barbara Esbin @ 12:29 PM | Broadband , Internet , Net Neutrality , VoIP