A year later, FCC is still working out kinks in net neutrality policy

As T-Mobile squabbles with the Electronic Frontier Foundation over allegations its Binge On streaming service may violate a provision on throttling video, the FCC faces challenges from Internet companies about the scope of its regulations.

Nearly a year after the Federal Communications Commission (FCC) approved comprehensive regulations on net neutrality after a more than decade-long battle, the regulator is still working out the kinks of its plan.

The regulator is trying to navigate an increasingly fraught environment, as various companies and advocacy groups debate the impact of the new rules.

Along with a court challenge from Internet providers questioning the regulator’s authority to oversee how Internet service is provided to consumers, the FCC is also facing questions about why it has not extended an exemption to transparency guidelines for small Internet providers.

The regulations overburden small companies – who serve 21 million Americans in small or rural towns across the country – one company head told lawmakers from a subcommittee of the House Energy and Commerce Committee at a hearing Tuesday.

The FCC has also found itself in the middle of a conflict between T-Mobile and a watchdog group over allegations that the carrier was throttling video from a new streaming service, a charge that would appear to violate net neutrality.

Last week, the Electronic Frontier Foundation accused the carrier of throttling the content available through its Binge On streaming service in order to ensure the video doesn’t count against a customer’s data plan. Ostensibly, this would seem to go against the net neutrality rules, which say Internet providers, including mobile carriers, may not impair or degrade lawful Internet traffic on the basis of content, applications, services, or non-harmful devices," with some exceptions, such as to ease network congestion.

But if consumers have the right to opt-out of the service, which is enabled by default on all of the company’s plans – including those that offer unlimited data – does it still violate the FCC’s rules?

T-Mobile, which is expected to meet with the FCC this week to discuss the program, is making the case that since it can be turned off, it’s not a violation, Ars Technica reports.

John Legere, the company’s chief executive officer, wrote in an open letter to customers on Monday that “Binge On is like an economy button built into a new car to save gas, and it’s a benefit that customers got the minute we launched, to use it as much as they want to."

Last week, Mr. Legere struck a different tone, instead going on the offensive and blasting the watchdog group, which found that Binge On slowed video downloads to about 1.5 megabits per second, meaning the videos appeared on customers’ mobile devices as 480p, or the resolution of a DVD, well below HD resolution. Without Binge On enabled, download speeds were nearly 5 Mbps, according to EFF.

“Who are you, anyway, EFF?” he said in a YouTube video, adding an expletive for emphasis. “Why are you stirring so much trouble, and who pays you?”

In a ironic twist, some noted, his video message was available only in a high-quality 1080p video on YouTube, which wouldn’t be available via BingeOn on a mobile device because YouTube is not one of the companies partnering with the carrier to make its content available.

In Monday’s letter, Legere was more conciliatory, describing himself as a “vocal, animated, and sometimes foul-mouthed CEO.”

“I don’t filter myself and you know that no one at T-Mobile filters me either,” he added, saying he wouldn’t apologize for starting a “social media riot” but would apologize for offending the watchdog group and its supporters.

“Just because we don’t completely agree on all aspects of Binge On doesn’t meant I don’t see how they fight of consumers," he wrote. "We both agree it is important to protect consumers’ rights and to give consumers value."

Previously, Tom Wheeler, the FCC Chairman, had described Binge On as “highly competitive and highly innovative” at the agency’s meeting in November, though he later asked for more information about the service.

But as the regulator works to address such issues, the “regulatory uncertainty” it creates is harming small Internet providers, Elizabeth Bowles, president of Aristotle Inc., an Internet provider headquartered in Little Rock, Ark., told the lawmakers on Capitol Hill Tuesday.

“My company has never throttled, never capped usage, nor required anyone to pay to prioritize [Internet] traffic,” said Ms. Bowles, who testified on behalf of industry group the Wireless Internet Service Providers Association.

Many lawmakers and Internet providers expressed support for a House bill that would prohibit the FCC from regulating the rates users pay for broadband services. Obama and Chairman Wheeler have also said the FCC shouldn’t regulate broadband rates.

But buried in that bill, and a related effort to create a permanent exemption from the FCC’s transparency requirements for small businesses, is language that could curb other actions by the FCC, some Democratic lawmakers argued.

"[U]nder the guise of not unduly burdening small broadband providers, the bill would exempt companies with hundreds of millions in annual revenue from complying with the enhanced transparency requirements included in the FCC’s 2015 Open Internet Order," said Rep. Anna Eshoo (D) of California, the ranking member of the committee’s Communications and Technology subcommittee.

The bill would increase the definition of a “small business” to those with under 1,500 employees or 500,000 Internet subscribers, said Harold Feld, senior vice president of Public Knowledge, a watchdog group, expanding the providers covered under the bill to include mid-size firms.

Because the definition of regulating “rates” for broadband could cover activities such as the FCC’s Universal Service Foundation, which attempts to expand affordable broadband access to rural parts of the US – after all, who decides what is “affordable” – the bills are too broad, he argued.

“Bluntly, before Congress strips millions of people of protections against fraud and abuse, it should have clear evidence of a real need, and narrowly tailor the bill to meet that need,” Mr. Feld told lawmakers.

Passing these bills in their current form, he said, employing an analogy for faulty software, “will create bugs in our legal code that bad actors can exploit and will crash FCC efforts to bring affordable broadband for ordinary Americans.”