There are at least two competing regulatory models for the FCC to adopt.

One is a model being pushed by AT&T and Verizon –also known as key opponents of network neutrality. This model derives from an attempted compromise offer from Congressman Henry Waxman to congressional Republicans. The proposal, never introduced, failed to gain Republican support–but the FCC Chairman does not need congressional Republican support on a Commission that is majority Democrat. AT&T has been meeting repeatedly with top FCC staff to push this option, after spending five years and hundreds of millions in lobbying fees to oppose real network neutrality protections.

The other model comes from an agency controlled by President Obama, called the NTIA (or National Telecommunications and Information Administration), which is less well known than the FCC, an ”independent” agency not under the president’s direct control. Early in this administration, the Obama NTIA implemented tough rules to ensure Internet freedom on all private Internet networks under that agency’s jurisdiction–those networks were those receiving even a penny of stimulus money under the NTIA stimulus program.

The FCC could choose rules favored by AT&T and Verizon … or those adopted by the Obama’s own agency, in keeping with Obama’s campaign promises and the public declarations by the FCC itself.

So, for the benefit of all of you who have not spent much of the last five years thinking about (and lawyering on) network neutrality, I figured I’d include a primer on the two potential models–the Obama NTIA model and the other, weaker model, urged by AT&T.

Network Neutrality Models–Generally

Any “network neutrality” rule should be designed to forbid phone or cable companies from controlling the Internet. Evidence and economic theory suggests that control of the Internet by the phone and cable companies would lead to blocking of competing technologies (as in the Madison River case), blocking of innovative technologies that may not even compete with the phone/cable cartel (according to Comcast itself, the Comcast/BitTorrent case would be an example), and increased spying on Internet users. It would have major effects on speech by raising the costs of speech for campaigns, individuals, and organizations, as well as the blocking of “controversial” speech by religious groups or abortion-rights activists.

There are many models (and factors) for implementing a network neutrality rule, but we will discuss two. For completeness, some of the other models include: the Republican FCC’s 4-principle Policy Statement, the Republican FCC’s “strict scrutiny” elaboration in the Comcast, the principles found in the Democratic dissents-and-concurrences to Republican FCC orders, the Obama campaign promises and presidential pledges, the NTIA rule, the somewhat unspecified Genachowski NPRM proposal, the Verizon-Google pact, the Henry Waxman proposal, the French rule, the Canadian rule, and others.

We’re only discussing two here: the NTIA rule (because it represents the Obama position) and the “Waxman proposal” (because AT&T is pushing this proposal hard at the FCC).

The key factor for such models is whether they actually preserve an open Internet or whether they have gaping loopholes. The main loopholes would be

• exceptions for wireless Internet, an exception unjustifiable based on consumer preferences or technology, especially while the FCC is betting on wireless technologies to expand broadband access,
• defining unlawful discrimination in a narrow way that would let AT&T and other carriers charge companies for priority treatment, even though a ban on paid priority is generally considered a basic principle for any meaningful net neutrality rule,
• defining unlawful discrimination to forbid targeting only those technologies that already compete with services offered by phone and cable carriers; this would allow carriers to target non-profits, political speech, and technologies too new to compete with the carriers’ services;
• a blanket exception for still undefined “private Internet” services,
• and an exception for “network management” that swallows the rule.

In addition, a network neutrality rule could result in mere “slaps on the wrist” or involve such expensive and difficult litigation procedures that no small company or consumer could ever bring a case. Finally, it could rest on clearly flawed jurisdictional grounds.

Model I:

After many years of studying, practicing, and teaching the law of telecommunications, media, and Internet law, it’s still tough to explain.

I spent years as a consumer advocate, sometimes trying to explain why obscure communications laws affect the daily lives of Americans–their ability to participate in our democracy, their job prospects, and our national future. You have to explain clearly to get people to care about something that could be described as special access rates or false resets.

And I’ve spent a few years as a law professor, trying to teach these subjects to law students. It’s not at all impossible to explain these things, but doing so simply has some major challenges. I figured, since I’ve been thinking about the challenges, I’d explain a few. (And I’ll say, as an aside, I’m in awe of professors like Larry Lessig, Tim Wu, and the many excellent journalists (and other experts) in this field who can explain these concepts so clearly so often.)

So, why is teaching Internet law hard?

First, three fields are involved at least.

To study telecom or Internet law, you need some familiarity with (1) law (which you learn in law school), but also with (2) economics and (3) technology. I think I can count on one hand (actually one finger) how many people are experts in law, economics, and technology. (Barbara van Schewick, of Stanford–law professor, computer science phd and professor, expert in innovation economics…) For the rest of us mortals, we’re experts in one field at best.

Second, even non-experts need more than a passing familiarity with all three.

Take economics. Beyond the basics of supply and demand, economies of scale, transaction costs, marginal and average costs, oligopolies, you come across network effects, network externalities, natural monopolies, theories of price regulation, vertical foreclosure theory, one monopoly rent/Baxters’s law/internalizing complementary externalities (and the exceptions to it), Ramsey pricing, cross-subsidies, some innovation theory (disruptive vs incremental innovation, Schumpeterian creative destruction) , two-sided markets, termination access monopolies, and even property rights theory for spectrum. Let me try to say that simply: it’s a lot of shit.

Third, you have to know a lot of different areas of the law.

Telecom and Internet laws involve areas of law set out in statutes, FCC and other administrative regulations, cases, and even important consent decrees. First-year law students read a lot of judicial cases in contracts and property law classes, but they read few administrative regulations (from, say, the FCC or even the SEC or FDA, etc.) and few statutes (like the 1964 Civil Rights Act). So, you might want to have taken administrative law and statutory interpretation. It might also help to take antitrust law and copyright law. You’ll put some tort, property, and contract law to good use. And don’t forget the First Amendment or federal courts. But, since nobody has taken all those classes, a telecom or Internet law class will have to cover the basics of those laws to explain the basics of telecom and Internet law.

Fourth, the law is totally fucked up.

The communications laws, taken together, don’t make sense any more, if they ever did. The law doesn’t make sense because it’s outdated–the Internet is our basic communications infrastructure and the FCC has interpreted the existing Communications Act not to cover Internet access. The FCC has now made a somewhat confusing jurisdictional authority called ancillary jurisdiction central to communications law courses. And the law doesn’t make sense mainly because it’s dictated by phone, cable, and broadcast companies (who, for example, urge the FCC to misread the Communications Act). Those companies, of course, dictate the law to serve their shifting interests rather than to make rational policy for the nation. So you get a mess of special-interest regulations largely protecting incumbents.

Fifth, it’s another language.

The concepts of telecom law are draped in an obscure foreign language of acronyms, like (a) MVPDs and (b) ILECs and (c) CPEs (meaning roughly (a) pay-TV companies, (b) local phone companies, and (c) devices like phones and faxes and computers).

What’s a law Prof to do?

I’m still wondering. I’m using the clearest book I could find as the course text, though it’s a few years old (I can supplement easily). So thanks to those authors (Jon Nuechterlein and Phil Weiser) for a great book. And I assign Wikipedia and Ars Technica and other popular writings that clarify and simplify, as supplements to the cases and statutes where relevant.

I also make assignments like, “Make a Skype call today.”

But I don’t think I’d assign: “Please cancel your Verizon smart phone a little early and see what happens.” That would be educational, but could make me an unpopular professor.

Cross-posted at ammori.org.

Today, the trade publications report a potentially new development in the jurisprudence of First Amendment and media/Internet regulation: Cablevision willl apparently ask the Supreme Court to revisit (or narrow) a key Supreme Court case that casts a shadow over communications law–the second Turner Broadcasting v. FCC case, decided in 1997, and known to some as “Turner II.”

Cablevision likely has a decent gamble based on court composition. Turner II was a 5-4 decision. Two Justices have since been replaced, O’Connor and Rehnquist. O’Connor wrote the principal dissent for Justices Thomas, Scalia, and Ginsburg; but Rehnquist was in the majority. If the new Justices, Roberts and Alito, vote with Justices Thomas and Scalia (as Cablevision hopes) , the decision flips 5 to 4 the other way.

Here, I will make only a few points about the potential import of this challenge. (I hope to add a few more words later about Turner II itself, which I believe problematic for various reasons.)

My main points are (1) this challenge reminds us that media & Internet cases are among the most important, though often overlooked, First Amendment cases for their impact on our democracy and American’s lives, and (2) changes to Turner II‘s holdings have a potentially wide scope, covering hugely important media regulations.

1. The First Amendment’s application to 21st Century speech technologies is a question of central importance for our democracy. There are other important areas of First Amendment speech doctrine–indecency, hate speech, flag burning, incitement, campaign finance. But electronic media are often overlooked. Americans engage in/receive probably most of their speech through phone, TV, and Internet–getting most of their news and doing much of their political organizing through these technologies, rather than through paper newspapers, leaflets, or offensive street corner speech and burning flags. Yet free speech casebooks usually devote very few pages to key First Amendment cases involving media ownership rules (like FCC v NCCB regarding ownership of newspapers and broadcasters) and access rules (like Turner II itself, giving access to cable lines for broadcasters, or CBS v FCC, giving access to broadcast stations for politicians). These ownership and access laws, however, are centrally important to promoting the “basic tenet” of the First Amendment–fostering the widest dissemination of information from diverse and antagonistic sources.

Far worse, traditional First Amendment teaching treats such cases as “exceptional,” “narrow,” somehow “special”–rather than as integral to understanding the underlying structure of First Amendment doctrine. (Some scholars have demonstrated how media ownership and media access cases inform First Amendment theory, like Jack, Ed Baker, Yochai Benkler, Monroe Price, and Mark Tushnet.)

A decision like Turner II, which affects numerous ownership rules and access rules for major communications industries, is important for how Americans can speak to one another in our society–for what they hear and how they communicate about the health care bill, the financial bailout, global warming, reforming the Senate rules, and what’s for dinner. It might not be as sexy as “bong hits for Jesus,” but it matter greatly.

2. Turner II, which Cablevision hopes to challenge, has a wide (though uncertain) scope. So upending Turner II could raise questions about a lot of regulation.

That Turner II case sets of the test for whether the government has abridged the speech rights of giant cable corporations when it subjects those companies to ownership or access rules. Turner II upheld an access rule, namely a must-carry law requiring cable operators (like Comcast) to carry over-the-air broadcasters (like CBS, NBC, ABC, and Fox).

Turner II did so not by applying strict scrutiny for “content-based” rules (a wise choice), nor by applying a lower scrutiny (such as the scrutiny in FCC v. NCCB and Red Lion), but by adopting the content-neutral intermediate scrutiny test from US v. O’Brien, with an additional requirement of “substantial evidence.” This intermediate test is known as the Turner test. (Cablevision’s appeal would re-challenge the same must-carry rules, though a particular application of them.)

The long and short of it: a heightened scrutiny applies to access and ownership rules. Applying this heightened scrutiny to media regulations, rather than some lower level, makes courts more likely (if inclined) to strike down an ownership cap or an access rule. But … those these rules foster wide dissemination of information from diverse and antagonistic sources, and should be encouraged by courts rather than undermined. These rules are at the heart of the Obama tech agenda. They’re common throughout all of media and telecom regulation–pervading the Communications Act. So the Turner test could, if widely applicable, require heightened scrutiny for basic communications regulation.

The scope of Turner II is debatable. It applies to TV transmitted over cable lines, and maybe over phone lines too. It doesn’t apply to TV delivered through terrestrial broadcasting or (in the DC Circuit, at least) to satellite broadcasting. Nor does it apply to phone service over mobile, phone, or cable lines–for example, common carriage regulation is not subject to heightened scrutiny for limiting phone companies’ ability to block calls. No appellate court has applied the Turner test to Internet access services. net neutrality is an access rule because it provides “access” to all Americans who could otherwise be blocked by phone or cable companies in their speech. I assume regulating Internet access is subject to the same low scrutiny as common carrier regulation for phone calls.

Further, even though the Turner test applies for cable TV, the strictness of its application and the types of rules affected (price regulation? cable franchising?) are both subject to debate.

The debate wouldn’t stop the most powerful media and telecom companies–and their many lawyers–from arguing that the Turner test applies to everything, that the test is actually very very strict (which the cable industry argues, though losing Turner II), and trying to expand that test to all business rules and to all Internet based technologies. You hear that the Turner test would invalidate network neutrality and even rules enabling you to use whatever cell phone or computer you want on a wireless network. The Turner test protects Comcast’s right to buy NBC, Time Warner Cable’s right to interfere with peer to peer technologies, etc.

If the Supreme Court takes the case, I’ll have more to say. I’d also look forward to the broadcasters, who often disagree with me on the scope of their First Amendment rights, being in complete agreement with me in this case on the First Amendment rights of their competitors.

For now, that’s what’s at stake here if Cablevision convinces the Supreme Court to revisit or narrow the Turner II case. A reversal by the new Court could cast a different, darker, shadow on regulations regarding media conglomerates and those conglomerates’ ability to control of speech.

Cross posted at Balkinization and ammori.org.

Thirty years from now, if Americans are still tied to their local cable companies, we will look back to yesterday as a pivotal moment in the history of television. In the last year, consumers have seen the potential of canceling their cable TV and watching TV, in their living rooms, through competitive Internet services like Roku or Hulu. Canceling cable would save Americans thousands a year they would spend on bloated cable TV bills. But Xfinity is meant to lock Americans into cable TV subscriptions for the forseeable future, as the Wall Street Journal wrote yesterday.

Here’s the business plan for “TV Everywhere.” Fancast Xfinity is a site that looks like Hulu but has different TV shows. You go to the Xfinity site to watch (on only three authorized devices) some shows and movies available on cable TV. Rather than making all these shows available to everyone on the Internet–like Hulu does, and like just about everything else online–the service is available only to Comcast subscribers in Comcast regions who subscribe to Comcast cable TV.

You’ll notice two things.

First, you can only watch Xfinity on the Internet if you pay your cable TV bill. This is totally new. It’s like saying you have to pay for cable TV to see pictures of funny cats online. Why can’t you just pay for the Internet service? The point of is to keep you from canceling cable and sticking with just Internet service. It’s to keep you paying two bills.

Second, Comcast and Time Warner Cable are rolling out their services only in their own regions. They’re doing so because they (naturally) don’t want to compete with one another. They like the cable model–where each city has one monopoly cable operator. You usually have the “choice” of one provider in any town–like Comcast,Time Warner Cable, Cablevision, or Cox. And they’d rather not have to compete with each other on the Internet. In a Time Warner Cable region–you have to pay TWC for a cable TV subscription there. Without competition from Comcast, which won’t provide you Xfinity.

So, in short, Comcast and Time Warner are trying to impose the cable TV model on the Internet. And to keep you paying those high cable bills.

If they succeed, then we’ll look back on this moment years from now as the moment the cable industry stifled competition from online TV–and imposed the cable TV model on another generation.

Photo by hartman045