Today, Explained - Internet fist fight

Episode Date: October 1, 2018

California passed the strongest net neutrality law the country’s ever seen this weekend. The Department of Justice immediately sued. Who’s gonna win this broadband spat? ******************************** Tap here to find out more about Vox Media's new podcasts: https://www.voxmedia.com/about-vox-media/2018/9/24/17882894/vmpn-fall-2018-slate Learn more about your ad choices. Visit podcastchoices.com/adchoices

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And then the Department of Justice immediately turned around and sued them. Yeah, we're going back to court once again to talk about the future of the Internet. And all of this has to do with net neutrality. Why do we care about net neutrality? Because this is a decision that is going to affect websites that we all have access to. And it is also going to be affecting how quickly we can access many of those websites. Now, we should define what that is, right? For the folks at home, sure.

For the folks at home. And net neutrality is the idea that an internet service provider like AT&T and Comcast and Verizon must treat all web traffic equally. So they can't slow down your internet connection in an arbitrary way. They can't block you from viewing the websites you want to view. And they can't charge companies for faster delivery of their music, their movies, and their other content, which are known as online fast lanes. The idea was that a company could say, like, AT&T, you know what? I've got to deal with Netflix.

So you know what? I'm going to slow down Hulu. Yes. What are, like, the standing rules here on net neutrality? What's still on the books? Nothing really is on the books. Yeah. Essentially, what the Trump administration had done

is removed most of the Obama administration's rules. The FCC voted along party lines three to two to repeal what's known by the god-awful name as net neutrality. And under Obama, you couldn't block or slow down access to websites, as we said. You couldn't create online fast lanes. You had to tell consumers what your network management principles were. And the government could come after you and punish you if you broke any of those rules. Yeah.

Under the Trump administration, basically, it's all about transparency. If you're an AT&T or a Verizon, you got to tell users what you're doing with your network. And if you break your promise or you act in an anti-competitive way, it's another agency that doesn't even normally touch telecom that's the sole regulator there. And they're pretty limited in what they can do. And that's? And that's the Federal Trade Commission. The FTC. The FTC.

And it's a very different approach from Obama. It's not as heavy-handed in the eyes of telecom companies, but it's not aggressive enough. It's not good enough in the eyes of net neutrality advocates. As one of the dissenting FCC commissioners put it today, what saddens me the most today is that the agency that is supposed to protect you is actually abandoning you. How did states respond when the Trump administration and the FCC made this change? Well, states were pretty angry and about 22 U.S. states sued the Federal Communications Commission after it voted to reverse net neutrality. There's now this brewing litigation around whether the Trump administration had the authority to repeal the rules in the first place. And that lawsuit has the support of major tech companies and consumer advocates and will play out in the court system

over the next few months. But some states even then went about writing their own rules or pursuing executive orders signed by their governors to try to put some open internet protections back on the books. And California was pretty much the most aggressive among them. Beginning earlier this year, it put together a piece of legislation that became a law over the weekend that went even further than the Obama administration did on net neutrality. So for the eyes of advocates, this was like the gold standard when it came to protecting the open internet. But that sort of set up a bit of a conflict with the US government. Because if you rewind the clock and look at what the FCC actually did when it repealed its rules under the Trump administration, it wrote in that order that states couldn't do anything on net neutrality. It preempted them. This is a normal thing you see happen from the time to time when the federal government wants to assert its authority.

And in this case, it's because the U.S. government didn't want to see 50 states writing 50 different rules on the internet, which really doesn't know any boundaries. So it said no state action on this issue. California said, you know what? We're going to do it anyway, as California sometimes is apt to do. It wrote its laws. It passed this weekend. And how did those laws go further than what the Obama administration had done? It said that internet service providers couldn't block or throttle or tamper with your internet

connection, but it did some other things around the issue of zero rating, as it's called. So if you're an internet service provider and you want to give a special promotion to your customers, you say maybe the music that you stream on one of our services doesn't count to your data cap. Oh, interesting. That's called zero rating. Or like Netflix, for example. Or like Netflix, for example. That's called zero rating. That's a bit of a controversial issue.

Some people don't see that as a net neutrality violation. And some people say it's actually anti-competitive because it gives your service or your, you know, allied services a bit of a leg up. One media over another, whatever it is. Yeah, one company over another, potentially. Yeah. And it steers consumers in the direction of the thing that's probably going to be free for them at the end of the day. California said, you can't do that for the most part, especially if it's anti-competitive. The U.S. government under Obama didn't go that far. They sort of left it as an open question. That's just one of the areas in which California was stronger than the Obama administration.

They were willing to go a step further. But at the end of the day, it may not have mattered a great deal. The Justice Department was probably going to sue them anyway. Okay, so California passes this law this weekend, and the Justice Department sues California yesterday. Yeah, the governor signed it. Everyone's working on the weekend, apparently. We're all working on the weekend. So Sunday it's signed into law about midday Pacific time.

A few hours go by and the Justice Department says, absolutely not. They filed the suit in California federal court. Did everyone see this lawsuit coming the second they passed it? Was it only a matter of time? We all knew that something was going to happen. Telecom companies had made their threats. The Federal Communications Commission chairman, Ajit Pai, had spoken with me and sort of talked about the fact that preemption is written into the order. They told states they weren't allowed to do this.

Something was going to happen when California or somebody else really tried to go at it. So the signs were all there that the Justice Department or somebody was going to take action. But it was mere hours after the thing had gotten signed. And is it as simple as, we said you couldn't take any action here, you're taking action, we're going to sue you? That's essentially the thrust of it. The order says that the federal government has the exclusive power to regulate debt neutrality. California did that despite the fact they were preempted. And so they're going to go to court to say it's the power of the federal government to do this, because they want to ensure that other states don't do the same thing in the future. So you've got California being sued by the Department of Justice. Is this,

I mean, the Supreme Court's first day of its new session is today. Is this likely to go there? Oh, well, so, you know, so I asked us department officials this and they sort of tap dance their way around the question. It really depends because this isn't the only case we have right now. As we talked about, there's an entire effort to challenge the whole of the FCC's net neutrality order, everything that Ajit Pai did with respect to repealing the Obama administration's rules. The Justice Department has a lot at stake here when we're talking about the future of internet regulation and the federal government's powers versus the state's powers. I mean, you should even zoom out. It's not even just about the internet.

This is the third time that this Justice Department has gone to war with California because it's done something that the Trump administration has not. It's gone a step further on things like immigration and climate change and now net neutrality regulation. And the Trump administration sees that as sort of a violation of federal and state breakdown. Up next, Tony breaks down the complicated path ahead for net neutrality. This is Today Explained. About three things I was certain. First, Edward was a vampire. Second, there was a part of him, and I didn't know how dominant that part might be, that

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desire and danger. Deeply sensuous and extraordinarily suspenseful, Twilight captures the struggle between defying our instincts and satisfying our desires. This is a love story with bite. And you can find it at Audible where you can get a 30-day trial and your first audiobook for free when you go to audible.com slash today explained or text today explained to 500500. Has this argument evolved at all? We've got the FCC on one side saying, you know, transparency is paramount. And then you've got states like California saying we clearly need to legislate this. Is everyone still on the same sides or has the sort of Obama era net neutrality conversation sort of changed over time? I feel like I've been having the same conversation about net neutrality for like over a decade.

That's sort of where we stand. And the players maybe are sometimes different, but really it just comes down to the nature of regulation. There are people, and a lot of them are in the telecom industry, that just don't believe that regulation is the solution here. They argue that they don't have the incentive to block your access to webpages or sites or services because you might just run off to another carrier, another ISP, if you don't like what your current one is doing. But the folks on the other side of this issue,

the hard net neutrality advocates, they say that most people don't have a choice. You know, you go home to your apartment building, you're tired of your Comcast, what are you going to do about it? You don't have potentially another choice of a broadband provider so that if you had been affected in some way

by a company's decision that you could just defect to them, so to speak. And so that's really what this comes down to. People generally believe in the principle of net neutrality, that guiding idea that you should treat all internet traffic equally. But how you do that is really where the fault lines begin to take shape. Is there like a real chasm here between like, I need the internet, so I have it. And like, I fully understand what net neutrality is and what will do to affect my internet usage. It certainly feels at times that people maybe don't know exactly what they're advocating for. And I know that's going to get me in so much trouble later for saying that.

But you look at some of the comments that people file to the FCC, and what it reflects is just an overwhelming frustration with their cable provider or their phone provider. Right. Like, spectrum sucks. Yeah, like, I don't get good service, or I'm angry that my Comcast box doesn't have this particular app that I want to use, which aren't really net neutrality things. But then you look at the fact that folks like John Oliver will do primetime segments on net neutrality. We bought the URL gofcseyourself.com. And if you simply go there, it will land you straight on this page, where all you have to do is hit express and comment, telling Agent Pi that you specifically support strong net neutrality

backed by Title II oversight of ISPs. And millions of people will see that. And crash their website. And crash their website. And crash their website. And they'll say, please keep these protections in place. It definitely touches a nerve. How about the California law? Did any of these tech companies or service providers that have taken clear stances on net neutrality come down on a surprising side of the law? It was a really weird breakdown when it comes to California, because at the heart of it, tech companies agree with the Justice Department that there shouldn't be 50 standards

across the country on everything in tech policy. You can't have one rule on what to do in a data breach in one state and another, and you can't have one rule about privacy in another, because if you're a company like Google, you've got to serve all 50 states and the rest of the world. So you didn't hear a whole lot from companies like Facebook and Google and Twitter, who you might expect to hear from when California started legislating because of that issue. But you did hear from smaller companies like an Etsy, like a Vimeo. Etsy is obviously the craft site. Vimeo is a video streaming platform that certainly felt this was necessary to protect startups. And their hope was that California's law would be so strong that companies

wouldn't abide by 50 different state standards. They would meet the strong California standard and that would just sort of work elsewhere in the country. We've seen this happen on a lot of issues, whether it's car emissions or car safety standards or even things like data breaches where California sets a very, very tough rule. And then other states either follow suit or the federal government steps in. So it has this forcing mechanism sort of effect. Did California write this legislation with the whole country in mind, thinking this could be the standard that we approve for the entire country? Oh, certainly. They recognize where they stood in the political process and that California has a history of doing this when it comes to tech policy issues, that it prompts then the federal government to act. And there was a lot of frustration that the federal government hasn't acted. I mean, we've been here since the 90s

talking about net neutrality. I think that there was a lot of frustration. They felt they had to do something not just for their own residents, but potentially for others, too. Is there a chance that there might be some compromise that the FCC changes its rules based on California's new legislation? Well, they don't have to. They think that they were in the right, that they handled this appropriately. Xi Pai thinks that by removing the last round of net neutrality rules, they've unleashed investment. You know, when I travel around the country, what I've heard from Michigan to Mississippi,

Washington State to Washington, D.C., is that there are a lot of rules that are on the books that are keeping companies from investing and innovating in high-speed internet access. And that's one of the things that we want to take a look at. And they're going to go to court to defend their order as vigorously as possible. This situation with California, it's not going to change the way the FCC thinks about it. So we're in like an all-or-nothing situation pretty much. But it always ends up like this. It's like the same process.

The FCC does something. Some corporate actor is very upset with it. They go to court. The court generally tosses it back to the FCC for one reason or another. And this has just been repeating itself for years and years and years. Has the FCC's argument that they were freeing up all these companies to invest in infrastructure and technology or whatever it is, has that borne out? Well, it's hard to tell because, remember, the repeal only went into effect a few months ago. So you can't really look at capital expenditures of these companies and really derive too much meaning. But if you talk to net neutrality advocates,

what they say is that the numbers were cooked. They think that the telecom companies did invest pretty well. They point to statements that some of these executives made on calls with their shareholders, where they talked about rising investments and more spending to improve their network and so forth. So they think that the whole premise of the argument is flawed. It seems a bit like if you boil it down to its essential components, this is sort of like a state's rights issue or it's turning into one. Is it making for any like interesting political alliances here, like conservatives siding with California despite it being sort of a bastion of progressive politics.

More Republicans were interested in what California was contemplating earlier in the process than we've seen in some other parts of the country, especially with the federal debate over net neutrality. But this one really broke down on very typical battle lines between tech companies who believe you have to regulate net neutrality and telecom giants who think that those rules don't need to be as tough and potentially even on the rule books at all. And then in terms of states' rights, you're right, this is actually bigger than just net neutrality.

It's what do the states have the power to do with respect to tech companies, the internet and interstate commerce. And if you really want to get nerdy about it, the whole issue here isn't just that the FCC's order said, hey, states, you can't do anything on net neutrality. It's that on the flip side, the rule has always been whatever the federal government doesn't touch, the states can do. Yeah. So there's a huge argument here with respect to

what the states can do with the future of internet regulation at stake. If this goes to the Supreme Court and California wins, what happens? It's too hard to say, because not only are we fighting here over whether the federal government can tell states hands-off net neutrality, we're also fighting over whether the repeal in the first place was legal. So we could end up in a world where this whole thing is just kicked right back to the FCC, and they have to start all over again. We could also end up in a world in which California prevails. And that finally serves as the forcing mechanism to get federal members of Congress to start talking seriously about net neutrality. Realizing that the rule that California put into place just isn't workable.

And that 50 standards, as we talked about before, just isn't really a good way to handle the internet or anything in internet policy, much less net neutrality. And if the Department of Justice wins if this goes to the Supreme Court, do states have less license to try new things? I think the most we can say right now is that if DOJ wins this case, the states are pretty much neutered when it comes to regulating net neutrality. It's going to really mean that the federal government is the only place where any of this can happen. I feel like I only ever hear two arguments in this debate, totally free internet, don't destroy it, and then let the providers do whatever they want,

trust industry. Is there a middle ground? I certainly don't think people are willing to have a conversation about a middle ground right now. That's the really interesting part about this. There are people who believe that you need to treat telecom providers, these internet service providers, as utilities, essentially. They should be treated by the government much like old school telephone companies and electric utilities and so forth. And then there are people who absolutely abhor that and will do everything in their power to fight it and go to court to stop it. And the folks among that include the telecom companies who don't want to be regulated that way. And every fight over this, every attempt to create a compromise comes down to that.

And since this politically mostly comes down to your party affiliation, is there a chance that a strong swing in the midterms could shift the debate? It's not going to get people out to vote, but the results of the election are going to have a great effect on this debate. Democrats across the board pretty much believe in net neutrality regulation. It'll be interesting to see what happens if Democrats end up taking one or both houses of Congress because you know the Democrats are going to push for addressing net neutrality and undoing what the FCC did. And then if we end up in a situation come 2020 where there's Democratic control of Congress and potentially Democratic control of the White House, they are most certainly going to undo all the repeal stuff

that we just spent a bunch of time talking about. And that's how this has been for many years now. The party that's in power ends up making the decision on net neutrality. A whole bunch of litigation and political infighting ensues. And then when party power flips, they try a new approach altogether. Tony Rahm is a reporter for The Washington Post. I'm Sean Ramos for him. This is Today Explained. Irene Noguchi is our executive producer.

Bridget McCarthy is our editor. Noam Hassenfeld and Luke Vanderplug produce the show. Afim Shapiro is our engineer and the unregulated Breakmaster Cylinder makes music for us. Anna Altman and Elisa Escarce have been pitching in the past few episodes and Catherine Wheeler is our fall intern. It's October.

You can find Today Explained on Twitter and I'm pretty sure every tweet you see there has been caringly crafted by Julie Bogan. Julie's moving on up and out, and we will miss her a lot. Thank you for everything, Julie. You really left an impression. Today Explained is produced in association with Stitcher, and we are part of the Vox Media Podcast Network. Before we go, one last reminder that you can get a 30-day trial and your first audiobook free when you go to audible.com slash today explained or just text 500500 to today explained all one word again audible.com slash today explained a u d i b l e or text today explained one word to 500 500 and if you're looking for a new podcast to listen to check out out Pivot from the Vox Media Podcast Network.

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