Net neutrality rules unnecessary because ISPs will do the right thing, Pai says.

Federal Communications Commission Chairman Ajit Pai has consistently argued that FCC regulation of net neutrality is "a solution in search of a problem."

Pai's claim is frequently countered with the actual history of Internet service providers blocking or throttling Internet traffic or applications. The most prominent example is Comcast's throttling of BitTorrent peer-to-peer file sharing. Pai thus had to contend with these real-world examples in his new proposal to eliminate net neutrality rules.

Pai's solution has been to argue that these blocking and throttling incidents stopped after public pressure, that they haven't happened much since, and likely won't happen again. Of course, the most obvious reason that net neutrality violations have been rare since the Comcast/BitTorrent kerfuffle is that the FCC has enforced net neutrality rules since 2010 (aside from a year-long interlude without rules caused by a Verizon lawsuit).

But to Pai, this just proves that the rules aren't necessary.

"Because of the paucity of concrete evidence of harms to the openness of the Internet, the [2015 net neutrality] Order and its proponents have heavily relied on purely speculative threats," Pai's proposal says. "We do not believe hypothetical harms, unsupported by empirical data, economic theory, or even recent anecdotes, provide a basis for public-utility regulation of ISPs."

A break with previous FCC Republicans

Pai is breaking with previous FCC Republicans with his attempt to downplay the importance of Comcast/BitTorrent.

In 2008, the FCC—then led by Bush appointee Kevin Martin—argued in its decision to punish Comcast that BitTorrent file sharing has "become a competitive threat to cable operators such as Comcast because Internet users have the opportunity to view high-quality video with BitTorrent that they might otherwise watch (and pay for) on cable television." The threat was particularly acute to Comcast's video-on-demand service, the 2008 FCC also said.
When Comcast customers noticed trouble with BitTorrent downloads, Comcast "misleadingly disclaimed any responsibility for the customers' problems," Martin's FCC said.

"Although Comcast asserts that its conduct is necessary to ease network congestion, we conclude that the company's discriminatory and arbitrary practice unduly squelches the dynamic benefits of an open and accessible Internet and does not constitute reasonable network management," the FCC said, while requiring Comcast to take steps to prevent it from happening again.

Comcast sued the FCC and was able to get the commission's order overturned. That, in turn, led to the FCC's 2010 decision to impose specific net neutrality rules against blocking, throttling, and paid prioritization.

What’s different now

Pai's proposal disputes the FCC's 2008 finding, saying in a footnote that "there are strong arguments that Comcast interfered with BitTorrent in an attempt to manage its network, rather than to disadvantage OVDs [online video distributors]."

A footnote in Pai's plan cites Public Knowledge Senior VP Harold Feld as writing that Comcast apparently "did not block for anticompetitive reasons.” But Feld's argument didn't stop there. He also wrote that Comcast appeared to be throttling BitTorrent traffic regardless of how much capacity users were consuming. "Rather than invest in upgrading its network, Comcast opted for the cheapest solution from its perspective without waiting for significant congestion to occur," he wrote.

Pai argues that ISPs will voluntarily stop bad behavior once it is exposed. "As public access to information on ISP practices has increased, there has been a shift toward ISPs resolving openness issues themselves with less and less need for Commission intervention," Pai's anti-net neutrality proposal says. For example, "In 2008, Comcast reached a settlement with BitTorrent months before the Commission issued [the] Comcast-BitTorrent [order]."

Of course, that only happened after research by the Associated Press and Electronic Frontier Foundation confirmed Comcast's BitTorrent throttling. (BitTorrent now uses the μTP protocol to utilize unused bandwidth without overloading broadband networks when other applications need to send and receive.)

Pai's current proposal acknowledges that the allegations against Comcast were true. "Comcast... admitted that it interfered with about a 10th of BitTorrent TCP connections, and independent investigations suggested that Comcast interfered with over half of BitTorrent streams," it says. Comcast failed to disclose this practice "and initially denied that it was engaged in any throttling," the plan states.

But Pai says this doesn't prove the FCC's rules are needed. Comcast's interference with BitTorrent "could have been pursued either as an antitrust or consumer protection case" by other agencies, his plan says.

But that didn't happen—the Federal Trade Commission didn't step in to stop Comcast, even though it still had regulatory authority over broadband providers at the time. In fact, then-FTC Commissioner J. Thomas Rosch, a Republican, argued in 2008 that any antitrust claim against Comcast for throttling BitTorrent would be "on even shakier ground than that of an outright refusal to deal under the Supreme Court's prevailing interpretations of the Sherman Act." By contrast, the FCC's existing rules against throttling prevent such behavior with a flat ban as long as the throttling isn't determined to be reasonable network management.

Despite that, Pai claims that one of the main benefits of his proposal is that it would return regulatory authority over broadband to the FTC by eliminating the classification of ISPs as common carriers.

Other violations similarly dismissed

Pai's proposal dismisses other examples of net neutrality violations in a similar manner. Besides Comcast/BitTorrent, there was Madison River Communications, "a small DSL provider accused in 2005 of blocking ports used for VoIP applications, thereby foreclosing competition to its telephony business."

Pai's order continues:

Madison River and Comcast-BitTorrent—the anecdotes most frequently cited in favor of Title II regulation—demonstrate that any problematic conduct was quite rare. The more recent incidents discussed in the [2015 net neutrality] Order also show that since 2008, few tangible threats to the openness of the Internet have arisen. First, in 2012, AT&T restricted customers on certain data plans from accessing FaceTime on its cellular network for three months. AT&T contended it did so due to network management concerns, while application developers argued the restriction limited consumer choice. Regardless of the merits, AT&T ultimately reversed its decision within three months and the decision did not affect consumers who had data caps.

If there have been fewer net neutrality violations in recent years, Pai does not appear to think that the core net neutrality rules that outlaw blocking and throttling played much of a role in preventing them.

Instead, Pai attributes ISPs' supposed good behavior to the FCC's related transparency rules that require ISPs to reveal network management practices. Pai's plan would eliminate some of those transparency requirements, but still require ISPs to disclose any blocking, throttling, paid prioritization, congestion management, limits imposed on specific types of applications, limits imposed on specific devices, and security measures.

The transparency requirements are what has stopped bad behavior in recent years and what will stop it in the future, Pai argues. His proposal says:

History demonstrates that public attention, not heavy-handed Commission regulation, has been most effective in deterring ISP threats to openness and bringing about resolution of the rare incidents that arise. The Commission has had transparency requirements in place since 2010, and there have been very few incidents in the United States since then that plausibly raise openness concerns. It is telling that the two most-discussed incidents that purportedly demonstrate the need for conduct rules, concerning Madison River and Comcast/BitTorrent, occurred before the Commission had in place an enforceable transparency rule. And it was the disclosure, through complaints to the Commission and media reports of the conduct at issue in those incidents, that led to action against the challenged conduct.

There will be no blocking, Pai claims

Transparency rules and net neutrality rules have been in place simultaneously for most of the past seven years, so it's not clear why only the transparency requirement would have had a positive effect.

But Pai is certain that ISPs won't degrade consumers' Internet experiences after the FCC rules are gone. Today, Pai's office released a "Myth vs. Fact" sheet that says there will be no blocking of content after the rules are repealed.

The idea that "Internet service providers will block you from visiting the websites you want to visit" is labeled as a "myth" in this sheet. The "fact," according to Pai's office, is as follows:

Internet service providers didn't block websites before the Obama administration's heavy-handed 2015 Internet regulations and won't after they are repealed. Any Internet service provider would be required to publicly disclose this practice and would face fierce consumer backlash as well as scrutiny from the Federal Trade Commission, which will have renewed authority to police unfair, deceptive, and anticompetitive practices.

The "Myth vs. Fact" sheet makes no mention of throttling. Despite Pai's proposal to lift the ban on paid prioritization deals, the document claims this won't divide the Internet into "fast lanes" and "slow lanes."

"Restoring Internet freedom will lead to better, faster, and cheaper broadband for consumers and give startups that need priority access (such as telehealth applications) the chance to offer new services to consumers," Pai's office argues.

Consumer complaints playing little role in repeal

Net neutrality advocates have urged the FCC to conduct a fuller examination of possible net neutrality violations before proceeding with the repeal. The National Hispanic Media Coalition (NHMC) pressured the FCC to release the text of tens of thousands of net neutrality complaints the commission has received since the 2015 version of the rules took effect. Pai's proposal dismisses these complaints by saying that most of them "have not been verified."

Pai's first anti-net neutrality proposal, in April, claimed that "no formal complaints have been filed" under the net neutrality rules. That was incorrect, as there was one formal complaint against Verizon that the FCC hasn't ruled on. Later, a revised version of Pai's proposal corrected the mistake and noted that there was "only one formal complaint."

Advocacy group Free Press keeps a list of net neutrality violations that happened in the past and predicts that more will come if the rules are repealed.

"In reality, many providers both in the United States and abroad have violated the principles of net neutrality—and they plan to continue doing so in the future," Free Press says.