The nuclear option: FCC reclassifies broadband under Title II

I can’t be impartial and unbiased on this one: we just won the internet.

Four million Americans — and a few people from other countries who felt strongly enough about the matter to pitch in — wrote to the Federal Communications Commission, called their congressperson, spoke up online or in town hall forums, and made their viewpoints known. Not all of them agreed, but most of them were very clear about one thing: they did not want a small handful of massive companies controlling, throttling, and denying access to the internet content of their choice. This was an unprecedented number of responses, and it made perfectly clear how important the issue was to the American public: clear to the FCC, to Congress, and to the President himself.

Net Neutrality

Today, about half an hour ago at 1 pm EST on Feb. 26, the FCC voted to reclassify mobile and fixed broadband providers under Title II of the Telecommunications Act. This reclassification vote would have been unthinkable just a year ago, when Title II was still “the nuclear option,” and the FCC really had little contact with the millions of people it served. But we have come a long way in a short time, and it’s worth a quick recap.

As I’ve explained before, in greater detail, the whole Net Neutrality discussion started in 2005, when the FCC proposed four (later expanded to six) basic principles to guide its governance of internet providers. These were:

  • Consumers are entitled to access the lawful Internet content of their choice;
  • Consumers are entitled to run applications and use services of their choice, subject to the needs of law enforcement;
  • Consumers are entitled to connect their choice of legal devices that do not harm the network;
  • Consumers are entitled to competition among network providers, application and service providers, and content providers;
  • A provider of broadband Internet access service must treat lawful content, applications, and services in a nondiscriminatory manner; and
  • A provider of broadband Internet access service must disclose such information concerning network management and other practices as is reasonably required for users and content, application, and service providers to enjoy the protections specified in this rulemaking.

These seem like very reasonable ideals that would be hard to argue with. However, of course, providers argued, and were caught violating these principles. So, since 2005, the FCC has tried and tried to appease broadband providers with watered down versions of its Title I authority, while still trying to enforce them, and providers have just…sued the FCC.

Every time the FCC has gone to court, the courts have said, essentially, “These principles are great, but you can’t enforce them under your Title I authority. However, you’re welcome to reclassify, because you could totally enforce them using your Title II authority.”

The nuclear option

For many years, Title II reclassification was called “the nuclear option.” When the internet was still in its infancy, the FCC agreed that it would use Title I, which offered as little regulation as possible on the new industry, to encourage growth and competition. Over time, it was generally agreed — by the FCC and the large broadband providers — that this worked well enough, and it would be very dangerous to change it: no one knew what could happen to the industry if the FCC pushed the big red Title II button.

But the FCC had practically no power under Title I, and the providers knew it. So they kept pushing, and the American public felt the harm of their constant push. Comcast was caught throttling traffic. Verizon was caught downgrading Netflix at its interconnections during business negotiations. To the American public, Title II — which allowed the FCC to prevent these shenanigans — didn’t look like a nuclear option, it looked like the only way to provide protection.

When finally given access to the FCC — when the matter was opened up to public comment — the public commented en masse, on a level the FCC had never seen and could not really comprehend. Four million voices said: reclassify.

What changes now?

If you aren’t Comcast, Verizon, or AT&T…not much.

The important things to take away today:

  • These rules only affect broadband internet providers. This isn’t the government regulating The Internet, or the content on it. This has nothing to do with what you can or can’t watch or download. It’s about the companies that run the tubes.
  • These rules have been in place at the FCC since 2005. Nothing changes, from the FCC’s position. They’ve just been trying to find a way to make them enforceable for ten years. Things like accessing lawful content of your choice, using devices you want to use, and receiving content in a nondiscriminatory manner…these have been the goals of the FCC for a decade.
  • Other laws still apply. A provider can’t suddenly say that because the Open Internet rules allow it to only permit lawful internet content, it’s going to block all unlawful internet content, therefore it’s going to scan all email looking for evidence of unlawful content. This ruling does not give ISPs new powers.
  • We do not know yet how ISPs are going to react, or what their implementations of the new rules will be. Some major providers have already come out in support of reclassification. Some are certainly still against it, and will have to adjust to the new rules. Prepare for some growing pains.
  • There are going to be court cases over this. AT&T has already said it plans to sue. Courts have already said the FCC’s net neutrality principles are enforceable under Title II. So we’ll see.

This is an historic change: there should be no doubt about that. This is a grand experiment in broadband regulation, and a massive moment in internet history. You’re here for it, and if you were one of those four million voices, congratulations: you helped make it happen.

Aereo declares “NOT DEAD YET” in the most awesome way possible

Aereo Invaders

Today, in an absolutely hilarious stunner, internet television broadcaster Aereo declared to the world that it’s not dead yet. Its attorneys sent a letter to U.S. District Judge Alison Nathan announcing that since the Supreme Court declared that Aereo was a cable system, Aereo should be eligible for the statutory compulsory license offered to cable systems in the Copyright Act. They then collectively dropped the mic and strutted off whatever stage they happened to be on at the moment.

To me, this is the kind of balls-out crazy-genius move that keeps me loving my job, but I know that a lot of my friends don’t get why I’ve been laughing all day. So let’s talk about how we got here.

Aereo’s day in court

Two weeks ago in ABC v. Aereo, the Supreme Court handed Aereo a nasty 6-3 defeat. The Supreme Court’s decision was a strange one, though — it didn’t have a very clear holding, other than that the Justices really thought that Aereo looked awfully like a cable system, and seemed to be very unhappy with the fact that neither Aereo nor the TV networks suing it wanted to call Aereo a cable system.

But there was something else going on in that case…something really important. Scalia called it out in his excellent dissent: the majority seemed to think Aereo was doing something shady, exploiting a loophole, and for that reason it needed to be squashed. This is extremely important, but we need to figure out why first.

Story time!

Okay. So why isn’t Aereo a cable system? More importantly, what exactly was it that Aereo did that upset the Supreme Court majority?

(Side note: No one has ever written a better, more thorough recap of all the crazy twists and turns the law has taken, and the confusing, screwed up precedents it has created, than Professor James Grimmelmann in his excellent ArsTechnica article, Why Johnny can’t stream. Go read it. I’m not going to go into that much detail.)

Let’s start easy. An unlicensed public performance infringes copyright. So we know that you need a license to broadcast songs on the radio. You need a license to show movies in a theater. You don’t need a license to listen to songs, nor do you need one to watch a movie. When it comes to cable TV, things get complicated (because the viewer might be involved in the transmission). If a work is transmitted by any device or process, and the public receives it (and the public may receive it either in the same place or in separate places, and at the same time or at different times), it needs to be licensed. So now the question becomes whether or not the public is receiving it. You’ll be amazed at how hard a question that can be.

Long, long ago, video stores (both the family-friendly and adult kind) tried to figure this out. They tried to offer a service where they offered private theater rooms, and patrons could rent a video, go into a room, and watch a video in peace. A court ruled that that was actually a public performance…because once the movie was done, it went back into the store’s library, and could be watched by someone else. The same copy was shown to each member of the public at different times, so it was ultimately performed to the public.

Well, back up a second. Let’s talk about videos to begin with: the mighty VCR. When VCRs were invented, TV networks sued because clearly people would be using them to infringe. But the Supreme Court said that VCRs were fine, because they were “capable of substantial noninfringing uses.” One of those noninfringing uses was “time-shifting,” or recording live TV to store or play back at a more convenient time. The Court also found that playing recorded content in your home was a private performance, so that was also noninfringing. That decision is why we have technology like VCRs, and DVDs, and so on. Thanks, Supreme Court!

Okay. But what about DVRs? DVRs have mostly been under the VCR rule, but then Cablevision made a DVR that wasn’t at the viewer’s home. It was at Cablevision’s facility. Users could select which program they wanted to record, and it would make a unique stored copy for the user, and delete it when the user was done. That’s important, because when the TV networks sued (and they did), the court held that these unique copies, played just for an individual viewer, weren’t public performances. They were private. You couldn’t aggregate them together.

Why does that matter? Because remember what I said about video stores? They couldn’t show the same copy to the public. But unique copies for each individual? That was fine.

Aereo’s solution

Okay, so now we know what is allowed and what isn’t allowed, right?

Not allowed:

  • Re-broadcasting the same copy of a work to multiple people

Allowed:

  • Private, home viewing of TV shows
  • Individual copies of TV shows
  • Centralized technology that allows streaming of those individual copies of TV shows to private home viewers

With that complex road map of copyright precedents set out, Aereo built a business model that…created a centralized technology that allowed streaming of individual copies of TV shows to private home viewers.

And the Supreme Court got mad because they thought that Aereo was exploiting loopholes in the law.

Fair enough: obviously it was…because the law was poorly written, was written forty years ago, and doesn’t take into account changes in technology. Lower courts have created badly-written, loophole-filled precedents as they’ve tried to cope with shifting technologies in the intervening decades. As Scalia’s dissent pointed out, the right thing to do in this case wasn’t to create another badly written, loophole-filled precedent. The right thing to do was to ask Congress to fix the law.

In the wake of the Court

Many of my colleagues in internet and technology law have written excellent articles about what the Supreme Court’s decision in Aereo may mean for technology. I don’t think the Aereo decision necessarily harms current technology directly. I do, however, think the Aereo decision is very dangerous, because it tells technology innovators and disruptive start-ups (you know: you guys, my friends and clients) that if they work hard to obey the law, and step astutely into the gaps created by new technology and old statutes, they’re going to be seen as thieves and criminals. It sends the message to new geniuses that they shouldn’t try to enter the market in a clever way, because the law will assume that their attention to precedent means they’re trying to cheat. And I think that is devastating.

That, more than anything, is why I have been laughing all day at Aereo’s letter to Judge Nathan. Aereo isn’t dead yet. It’s still innovating. It’s still finding clever new moves, and smart ways to hack the law.

Good for you, Aereo.

Net Neutrality: A History

Edit, Feb. 26, 2015: The FCC voted today to regulate broadband providers under Title II. More information here!

 

Today, news went out that the FCC is drafting a Notice of Proposed Rulemaking to reinstate its Open Internet rules…just in modified form. The new, modified rules would, in short, propose

  1. That all ISPs must transparently disclose to their subscribers and users all relevant information as to the policies that govern their network;
  2. That no legal content may be blocked; and
  3. That ISPs may not act in a commercially unreasonable manner to harm the Internet, including favoring the traffic from an affiliated entity.

Since FCC Chairman Tom Wheeler announced the proposed rulemaking, a lot of articles have been written expressing concern about these new principles, and many in the tech industry have seen them as a very dire sign for the future of the internet.

However, let’s be honest: net neutrality is a hard concept to grasp, and while we should be concerned about these rules, it’s not easy to understand exactly why, or what changed, or what’s so dangerous about the new situation. So let’s take a look at how we got here and where we’re going.

The regulation of the internet

First: I’m going to skip over a whole lot of history, and I’m going to simplify a lot here. Let’s just say that there’s a lot of history, and it predates the internet, and it’s mostly AT&T’s fault, and it’s actually way more interesting than you’d think: if you’d like to learn more, I recommend Tim Wu’s excellent book The Master Switch, and Cybertelecom.org‘s fantastic Federal Internet Law & Policy resource.

The Telecommunications Act of 1996 governs the internet. The Telecommunications Act is broken down into a few sections, but the important ones for our purposes are Title I and Title II. Title I regulates “information services” (like email and web pages: the stuff that runs over the tubes) and Title II regulates “telecommunications services.” So let’s look at what the differences between those are.

Chart of FCC regulations

Chart of FCC regulations

We’ll come back to all that, I promise, but it’s nice to have a chart, because it gets way more confusing, but I want to stress one more thing first: Title II regulation is much more stringent than Title I, and allows the FCC to impose many more rules than Title I. However, the FCC has a really important power called forbearance: it’s allowed to choose which rules it wants to impose and which rules it doesn’t. It can just ignore any provision that it doesn’t think is in the public interest.

So back to 1996, when nobody really knew what “the internet” was going to be. Congress knew it was going to be important, but it also knew the internet was going to change a lot, so it decided not to specify where the internet fit: whether it was supposed to be regulated under Title I or Title II. It let the FCC decide, depending on where technology and competition needed it to be, and also let the FCC change its mind if a change was necessary.

The advent of Title I regulation

The FCC did a lot of work on this, and I’m not going to go into the whole history (but I swear it’s pretty interesting). Ultimately, in 2002, it decided that because internet access providers did not offer access as a stand-alone product (at the time, you got your email, your web page hosting, and your news group access through your ISP, and ISPs were also the only organizations handling DNS services), internet access was not purely “transmission of information without change,” so it had to be an information service. In other words, because internet access providers did not only provide access, they had to be regulated under Title I.

The FCC also chose Title I because Title I had the least regulations and would allow the internet to grow and flourish unrestricted, and all the ISPs were very nice and said they’d be good, and said “please.” This was important to the FCC at the time, because 2002 — the height of the Bush years — was a period of deregulation in a lot of industries, and a firm belief that if left alone, the market would take care of itself. That worked out well across the board, right?

The results of Title I, and the rise of Net Neutrality

No, deregulation didn’t work out well across the board, and it didn’t work out well on the internet. Left alone, the big players in the free market  ate up all the small players pretty quickly. While, in 2002, the FCC had relied on new companies entering the market to create competition, and expected new innovations such as broadband over powerline, WiMAX, and satellite broadband to spur competition, these failed to flourish. Today, 96% of the United States has at most two options for broadband internet service (meaning that there may be two options in their area, but the two options may not actually compete with one another or be accessible by the same customers).

To its credit, the FCC quickly realized that there was a problem. Because it wanted to use as light a regulatory hand as possible on the thriving internet, it started by proposing some guidelines for ISP conduct in 2005. Those guidelines would be the first Net Neutrality / Open Internet rules. But the problem was,  they were just guidelines, really: no one had any real reason to follow them.

Cut to the chase: what are the rules?

  • Consumers are entitled to access the lawful Internet content of their choice
  • Consumers are entitled to run applications and use services of their choice, subject to the needs of law enforcement
  • Consumers are entitled to connect their choice of legal devices that do not harm the network
  • Consumers are entitled to competition among network providers, application and service providers, and content providers.
  • A provider of broadband Internet access service must treat lawful content, applications, and services in a nondiscriminatory manner
  • A provider of broadband Internet access service must disclose such information concerning network management and other practices as is reasonably required for users and content, application, and service providers to enjoy the protections specified in this rulemaking

Let slip the lawyers of war

So in  2009, the FCC decided to turn those four principles into six actual rules instead of guidelines, adding two new ones: a nondiscrimination rule and a transparency rule (see above). This became the “Open Internet” rulemaking, so if you hear people talk about “Open Internet” and you’re like, but wait, I thought we were talking about net neutrality…it’s the same thing, but god forbid the government use the same words everyone else is using.

Around this same time, Comcast got caught throttling peer-to-peer traffic. The FCC ruled that Comcast’s throttling was in violation of its net neutrality principles, and was unlawful. Comcast sued the FCC, and in 2010, the FCC lost. It was a fairly simple ruling: the DC Circuit Court told the FCC, look, you can’t regulate internet access because you classified it as an “information service,” as Title I, not a “telecommunications service.” You did it wrong, used the wrong magic words, and Title I doesn’t give you the kind of regulatory power you need. But you totally have the power to reclassify it, and then you can regulate it all you want, because Title II does exactly what you want it to.

Go on, scroll back up to the chart. I’ll be here when you get back.

The FCC reclassifies internet access under Title II and we all live happily ever a…oh, wait

As it had been before, the FCC was very skittish about imposing Title II regulation on the internet…and apparently it had totally forgotten that it was allowed to ignore the provisions it didn’t want to impose. It met with Comcast, AT&T, and Verizon, who of course begged them not to reclassify, promised to self-regulate responsibly, and probably even said “please” a few times.

So the FCC, who knew it was powerless, finished writing its Open Internet rules in 2011. But everybody else also knew that the FCC was powerless (the court had already said the rules weren’t going to work), so as soon as the rules were released, Verizon sued. The court case dragged on for three years, and then in February the DC Circuit told the FCC, look, you can’t regulate internet access because you classified it as an “information service,” not a “telecommunications service.” You used the wrong magic words, and Title I doesn’t give you the kind of regulatory power you need. But you totally have the power to reclassify it, and then you can regulate it all you want, because Title II does exactly what you want it to.

So now we’re here.

And now the FCC is, again, refusing to reclassify. We’ve been here before. The FCC is trying one more time to revive its Open Internet rules, and this time, they’re letting the service providers charge extra for access and use, as long as it’s not “commercially unreasonable,” and as long as they’re transparent about it. This time the FCC isn’t as toothless as before — those are things that the court said they could regulate without reclassifying — but that’s it.

And that transparency would be awesome, if you had any choice about your online access provider (which you don’t, because the FCC’s deregulation of the internet destroyed competition in the internet industry, which necessitated the net neutrality rules in the first place). It’s not a solution, it’s just the FCC’s attempt to strip down “net neutrality” until the Comcasts of the world are so unaffected by it that they stop suing to crush it. This ham-fisted compromise will harm small business owners, even further wreck competition and innovation, raise barriers to entry for new start-ups, and drain money from users both individual and corporate.

But I bet the ISPs said “please” again.

Okay, fine, what do I do about it?

  • Contact the FCC Commissioners. The FCC has just established an email address specifically for public feedback about the Open Internet rulemaking: openinternet@fcc.gov. You can also submit comments officially through the FCC’s comment procedure, under proceeding #14-28.
  • Call your Senators and Representatives and ask them to urge the FCC to reclassify broadband access under Title II. This is not something Congress can do — it’s the FCC’s responsibility — so don’t ask them to do it, but if Congresspeople start pounding on the FCC’s door, it’s likely to get a response.
  • Go to FreePress’s Save The Internet site and show your support.

 

Trademarks for Copyright Aficionados

The internet is filled with people who create copyrightable content, from blog posts like this one to YouTube videos to photographs. Many of the people who create content on the internet are familiar with good old copyright law, which seems so easy and straightforward (protip: it isn’t, but it’s good at pretending). On first approach, we expect trademark law to be the same: basically just copyright law with a business suit on.

It isn’t. Trademark law has a completely different goal and intent. Let me lay out the basics in a handy comparison chart, and then I’ll get to the hard stuff.

Readers Digest Version: Trademark law isn’t like copyright law. Copyright law protects the creator / owner. Trademark law protects the consumer / buyer. When trying to decide if something infringes or not, copyright asks, “Oh, is it similar to John Doe’s work?”. Trademark asks, “Would consumers think that this product comes from that source?”.

Okay, so that’s the easy part. Now we have to look at the really difficult part – the stuff that always throws people about trademarks.

When you create a work of authorship, like a painting, that work is covered. Full stop. It doesn’t matter what state you live in. It doesn’t matter whether you’re using that painting for your awesome lolcat website or for your grandmother’s birthday present. It’s covered.

When you create a brand name, a logo, a symbol, or any other mark, it matters how and where you choose to use that mark. If I create the “WhoaToes” brand of fuzzy socks and I am the first person to sell fuzzy socks under the name “WhoaToes,” I will immediately have a trademark for “WhoaToes” in my geographical area. I can register “WhoaToes” with the Trademark Office, and then I will have the right to use the mark nationwide. So that’s the where part.

The how part is more confusing. When I register my trademark, I have to indicate what kind of goods I intend to protect. I’m selling fuzzy socks. This means that when I register my trademark, I can register “WhoaToes” in clothing, and I can keep people from using that mark for clothing. So I could stop someone from making some awesome “WhoaToes” sweaters. However, if I’ve only claimed my mark in the clothing class of goods, I can’t stop someone from making “WhoaToes” potatoes or “WhoaToes” toys. I also can’t prevent non-commercial uses…

Except (you had to know there would be an except). I can prevent certain uses that harm the distinctiveness or the reputation of my brand. If my brand is famous, I get some extra protections on it: once practically everybody knows what WhoaToes is, I can stop people from making products in different classes. Basically, I can stop other people from cashing in on my famous mark, because if I don’t, then consumers won’t be able to tell what goods are really endorsed by WhoaToes and what goods are just some random person trying to ride my fuzzy WhoaToes coattails. After a while, consumers might just stop trusting the WhoaToes name, and that would be bad.

These are the basics. Of course, I am summarizing, and I am leaving a lot out (and some of the things I’ve left out are pretty important). If you have specific questions about getting trademark protection for your brand or logo, please talk to an attorney.

 

Side note: The chart above is CC0 public domain, to the extent of applicable law. Have at. I’d love a link back if you feel like it, but I don’t require it.