ISPs Lobbying California Lawmakers In Bid To Weaken State's Looming Net Neutrality Law

from the if-at-first-you-don't-succeed... dept

More than half the states in the nation now pursuing individual net neutrality rules, either in the form of executive orders (banning state contracts with net-neutrality violating ISPs) or new state laws. And while ISPs have been whining about the unfairness of having to adhere to independent requirements in each state, that's probably something their lobbyists should have thought more deeply about when they worked to kill what, despite all the prattle about heavy-handed regulation, were probably some of the more modest net neutrality rules worldwide.

ISPs first tried to stop states from protecting consumers by lobbying the FCC to include language in its "Restoring Internet Freedom" repeal attempting to ban states from doing so. But in the process of gutting their authority over ISPs Ajit Pai's FCC may have also, amusingly, completely neutered its ability to tell states what to do.

As such, ISP lobbyists have been forced to run, state to state, trying to convince state lawmakers that giving consumers, small businesses and internet competition a giant middle finger is the smart political play here with midterms looming. Verizon, AT&T and Comcast are working extra hard to weaken a bill in California, that is actually a bit tougher than the FCC rules it's intended to replace. As the EFF notes, ISPs are particularly worried that California will ban "zero rating," or the practice of using usage caps and overage fees anti-competitively:

"California’s legislature has so far opted to ban discriminatory users of zero rating and prevent the major wireless players from picking winners and losers online. But new and increased resistance by the ISP lobby (led by AT&T and their representative organization CALinnovates) unfortunately has legislators contemplating whether discriminatory zero rating practices should remain lawful despite their harms for low-income Internet users. In fact, AT&T and their representatives are even going so far as to argue that their discriminatory self-dealing practices that violate net neutrality are actually good for low income Internet users.

AT&T (and even Facebook) have been pushing this idea that zero rating "helps poor people" for a while. Basically, they're trying to argue that because some users get content that doesn't count against the cap, they're somehow providing added value to low-income Americans. Of course that ignores the fact that it's only an incumbent ISP's own content (or content from the biggest, wealthiest partners) that's usually exempt, raising all kinds of anti-competitive questions.

You'd also have to ignore than American consumers pay more money for LTE mobile data than a laundry list of developed nations, and that usage caps and overage fees on these lines are arbitrary, unnecessary and meaningless constructs in the first place. Still, AT&T has spent a few years now trying to falsely conflate arbitrary caps and penalties with things like "1-800" numbers or "free shipping," successfully convincing many consumers they're getting something for free.

You'll recall that initially, the FCC didn't want to act on usage caps, overage fees and zero rating for fear of being accused of stifling carrier innovation and creativity. As a result, the 2015 rules were crafted with pretty ambiguous guidance on zero rating, something we warned would be a problem. Only at the tail end of its tenure did the Wheeler FCC start to realize caps and overage fees were being used anti-competitively to favor an ISPs' content over smaller competitors, at which point Donald Trump and Ajit Pai had already come to power--and quickly set to purging the rules entirely. You know, for freedom.

California's net neutrality law doesn't ban zero rating if an ISP wants to exempt an entire class of content (say, video) from usage caps and overage fees. But it does prohibit ISPs from striking deals that give specific companies cap-exempt status, preventing companies from buying an unfair advantage for themselves or a competitor. Given AT&T just gobbled up Time Warner and HBO with zero rating specifically in mind (HBO is free on our network but costs money if you use a competitor), you can understand why AT&T's so opposed to these rules.

This all comes to a head this Wednesday with a vote and hearing before the California Assembly’s Communications and Conveyance Committee. And while the majority of that committee say they support net neutrality, net neutrality activists say that major ISP lobbyists have succeeded in getting some lawmakers (like Committee head Miguel Santiago) to waffle on the whole zero rating part of the equation. After all, nothing quite says "restoring freedom" like letting AT&T give its own horse a half-mile lead in the streaming video wars to come.

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Filed Under: broadband, california, competition, lobbying, net neutrality

Companies: at&t, comcast, verizon