Net neutrality, Obama, FCC, Title II:Your ESSENTIAL guide to WTF is happening

A law on publishing collides with TCP/IP

Analysis President Obama ploughed into the net neutrality debate on Monday by demanding reclassification of "internet service under Title II of a law known as the Telecommunication Act."

What does that actually mean? And why are some for and some against this as a solution? First, some very quick history:

The Telecommunications Act [PDF] was created in 1934 as a way of dealing with the phone system monopoly Bell Systems, run by AT&T. The law was detailed and prescriptive and very much of its time. It also created the Federal Communications Commission (FCC), which oversees telecoms policy in the United States to this day.

There were six parts or "titles" to the act: the first was a general overview; the third was for radio; the fourth was administrative; fifth was penalties; and the sixth was miscellaneous.

The key part of the whole legislation was Title II, called "common carriers". It basically told Bell Systems that it was running a public utility and so wasn't allowed to abuse its unique position to discriminate against people.

There are an enormous number of restrictions in Title II over what Bell Systems was allowed to do and not do. For example, minimum and maximum charges were set, and if the telco wanted to change them, it had to hold public hearings. Copies of all contracts signed had to be lodged with the FCC. If the company wanted to extend an existing phone line, it had to get prior permission from the FCC. If it wanted to add new poles in the ground, it had to get permission. And so on.

The law stood unchanged for 50 years. Then, in 1984, a new section was added to deregulate the cable market following the breakup of Bell Systems in 1982. This section was tweaked in 1992.

The Internet era

It wasn't until 1996 and the Clinton Administration that telecoms policy was given an overhaul [PDF]. It had two major impacts: first, references to old telephone tech were pulled out, reflecting modern realities; and second, an emphasis was placed on reducing regulation.

The shakeup also added a few rules for the "rapidly developing array of interactive computer services" – the internet, in other words. The tweaked policy acknowledged that light government regulation was crucial to the success of the 'net, and discouraged things like filtering.

In a sign that this was the mid-1990s, the internet was promoted as "a forum for a true diversity of political discourse, unique opportunities for cultural development, and myriad avenues for intellectual activity." It's hard to imagine anyone could write that with a straight face in 2014.

The resulting Telecommunications Act of 1996 did not really address how people gained access to the internet, however, or how companies that make that access to the web possible should be viewed.

There was one very small part – literally one paragraph – in the 128-page text that defined a new term, "advanced telecommunications capability", as "high-speed, switched, broadband telecommunications capability that enables users to originate and receive high-quality voice, data, graphics, and video telecommunications using any technology."

This is the Section 706 that is held up as the alternative to Title II for how to fit broadband providers into the law.

Just how out of date is Title II?

Well, those pushing for cable companies to be "reclassified" as common carriers openly acknowledge that large parts of the law would have to be effectively ignored (or "forebeared"). How much? Um, about 90 percent of it.

There are 76 sections to Title II, and those wanting to reclassify broadband under it want to retain just six sections. They are:

  • 201: Services and charges – companies have to charge a reasonable sum for the service
  • 202: Discrimination – you can't discriminate over the service
  • 208: Complaints – people can complain
  • 222: Privacy – people's privacy has to be respected
  • 254: Universal service – you have to provide the service across the country
  • 255: Disability access – make it possible for people with disabilities to use it

Put together, these six sections are pretty light on regulation, although parts of them are still horribly outdated. For example:

There is specific reference in 201 to the law not impacting the ability of common carriers to "furnishing reports of positions of ships at sea to newspapers of general circulation." Quite how much revenue Verizon realizes from providing ship positions to the New York Times, we don't know but we suspect it's not something that it worth protecting by law any more.

Then there are the penalties from breaking any of the rules. Section 202 reveals the startling sum of "$6,000 for each such offense and $300 for each and every day of the continuance of such offense." At those rates, AT&T won't exactly be trembling in its boots. In today's currency, the legislation should read $100,000 for each offense and $5,000 per day.

What about the parts that wouldn't be included?

Section 210 concerns itself exclusively with "Franks and Passes". What are franks and passes? They were developed in 1887, and were used by railroad and steamship companies to offer special rates to certain customers, such as employees.

While cable companies may think about discounting services to their employees, it's hard to imagine why that would need to be written in law these days.

And there are many other examples of sections that have almost no relevance to the modern world of telecommunications.

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