Broadband industry lobby groups want to stop individual states from investigating the speed claims made by Internet service providers, and they are citing the Federal Communications Commission’s net neutrality rules in their effort to hinder the state-level actions.
The industry attempt to undercut state investigations comes a few months after New York Attorney General Eric Schneiderman filed a lawsuit against Charter and its Time Warner Cable (TWC) subsidiary that claims the ISP defrauded and misled New Yorkers by promising Internet speeds the company knew it could not deliver.
NCTA-The Internet & Television Association and USTelecom, lobby groups for the cable and telecom industries, last month petitioned the Federal Communications Commission for a declaratory ruling that would help ISPs defend themselves against state-level investigations. The FCC should declare that advertisements of speeds “up to” a certain level of megabits per second are consistent with federal law as long as ISPs meet their disclosure obligations under the net neutrality rules, the groups said. There should be a national standard enforced by the FCC instead of a state-by-state “patchwork of inconsistent requirements,” they argue.
Another cable lobby group, the American Cable Association (ACA), asked the FCC to approve the petition in a filing on Friday. An FCC ruling in favor of the petition wouldn’t completely prevent states from filing lawsuits, but such a ruling would make it far more difficult for the states to protect consumers from false speed claims.
Consumer advocacy groups urged the FCC to reject the petition, arguing that the commission doesn’t have authority to preempt states in this matter and that the state investigations are important for protecting consumers. If the FCC “allow[s] providers to make unrealistic claims with an asterisk,” then “services with vastly different peak performance characteristics may be advertised as equal with true differences in performance revealed only on a web page somewhere that explains the actual inferiority of their service,” the Institute for Local Self-Reliance (ILSR) said in a filing on Friday.
Attorneys general from New York, 33 other states, and the District of Columbia also urged the FCC to reject the petition, which they said is “nothing more than the industry’s effort to shield itself from state law enforcement.” Representing liberal states such as Massachusetts and conservative states such as Texas, the 35 attorneys general described themselves as a “bipartisan group” that seeks to enforce consumer protection laws in their states.
Net neutrality’s role
The broadband lobby groups argue that states should not investigate ISPs’ speed claims because the ISPs already follow speed disclosure rules set down by the FCC as part of its 2010 net neutrality order. These network transparency rules are the only major portion of the FCC’s 2010 net neutrality order that remained in place after Verizon’s lawsuit against the FCC eliminated the core net neutrality rules in 2014.
The FCC’s transparency rules “created a specific safe harbor for [broadband] providers that disclose their average downstream and upstream speeds during the period of peak demand,” the lobby groups argued. “The Commission should prevent this framework from being undermined by issuing a declaratory ruling confirming that a broadband provider’s description of speeds based on this average peak-hour metric complies with the Commission’s transparency requirements.”
Disclosures on the providers’ websites are enough to meet the federal standard, the petition said. The FCC’s treatment of broadband as an interstate service should also preempt state actions, the petition argued.
The lobby groups also cited the FCC’s 2015 net neutrality rules and classification of ISPs as common carriers—even as FCC Chairman Ajit Pai is planning to eliminate the 2015 rules that have been consistently opposed by these same lobby groups. For as long as the 2015 order remains in place, the FCC should declare that ISPs’ current disclosures meet the order’s standard that providers’ practices must be “just and reasonable,” NCTA and USTelecom argued.
The FCC’s ongoing deliberations on what the existing net neutrality rules should be replaced with provides another reason to hinder state lawsuits, the groups claim.
“Protecting the Commission’s authority to establish national, uniform rules is particularly important at this time, as the Commission is about to launch a proceeding to put in place a national ‘light-touch framework’ to govern [broadband] providers and preserve a free and open Internet,” they wrote.
States cry foul
The 35 attorneys general say the industry petition “ignores the Federal Communications Act’s preservation of concurrent state authority over unfair and deceptive practices,” as well as the history, purpose, and text of the FCC’s transparency rule. There is also nothing in the Communications Act that “preempts state anti-fraud or consumer-protection claims or reflects any intention by Congress to make federal law the exclusive means of bringing such claims against broadband providers,” the states’ law enforcement officials said.
Disclosures made to comply with federal law do not alter companies’ obligations under state law, the attorneys general wrote.
“[I]t appears that the petition is really seeking to alter disclosure obligations under state law, including state consumer protection laws’ prohibitions on false and misleading statements and material omissions in consumer-facing advertisements,” they wrote. “Such a ruling would plainly exceed the scope of the Commission’s authority granted by Congress, and would be improper.”
There is also “no factual basis” to determine that ISPs’ speed disclosures meet the FCC’s “just and reasonable” standard, they argued. “The request is plainly seeking a factual finding, despite the complete lack of any factual record to support such a conclusion,” they wrote.
ISPs say states’ speed tests are redundant
State-level speed tests aren’t necessary, the cable and telecom lobby groups argued, because the FCC runs the Measuring Broadband America program to verify whether the largest ISPs’ in-home broadband speeds match the providers’ speed claims.
“The New York Complaint, however, relies on different, unofficial measurement tools as its basis for alleging that TWC subscribers “received speeds that were consistently well below the speeds that they paid for,” NCTA and USTelecom wrote. “Such state-level actions are causing significant uncertainty, confusion, and potential unwarranted liability.”
ISPs that follow the FCC’s guidance should not be subjected to “inconsistent standards” applied in each state, the lobby groups wrote. The lobby groups are worried about states holding ISPs to their promises that speeds will be “up to” a certain amount, since Internet speeds are often slower than the maximum level. The NCTA and USTelecom petition said:
These state investigations have sought to determine, among other things, whether the typical advertising practice of offering ‘up to’ a particular speed threshold (e.g., ‘download speeds up to 50Mbps’) accurately describes the ‘actual’ performance of the service.
As litigation proceeds in New York, there is a significant risk that other jurisdictions will commence their own parallel actions, arguing that state law mandates the disclosure of broadband speeds measured under approaches that diverge from those approved and encouraged by the Commission.
The FCC “should confirm that it is consistent with federal law for broadband providers to advertise the maximum (‘up to’) speeds available to subscribers on a particular tier, so long as the provider otherwise meets its obligations under the Commission’s transparency rules,” they wrote.
The ACA, which represents small and medium-sized cable operators, told the FCC that lawsuits filed by states could disproportionately harm small ISPs.
“The action brought by the New York State Attorney General is already problematic for [broadband] providers, particularly smaller providers, who reasonably fear their states may follow New York’s lead,” the ACA wrote. “Defending oneself in such an enforcement action incurs significant costs, which would be especially burdensome for smaller providers with limited staff and resources.”
Consumer advocates weigh in
Consumer advocacy group Public Knowledge urged the FCC to reject the industry petition in a filing last week, saying that states have the authority and the expertise to regulate ISPs’ speed claims. Although broadband network traffic is interstate, ISPs’ communications with consumers are intrastate and can thus be regulated by individual states, the group argued.
Moreover, Congress has not clearly authorized the FCC to preempt the ability of states to prevent fraud and misrepresentation, Public Knowledge said.
“The marketplace needs honest information to work”
“[T]he federal measurement scheme can coexist with state consumer protection laws,” and “states are equipped with the expertise and personnel to police fraudulent and deceptive business practices carried out within the state,” Public Knowledge wrote.
The ILSR argued that the FCC “does not have authority to simply remove states’ ability and authority to protect their [broadband] subscribers from misleading or potentially dishonest claims about advertised services.”
State actions are important because FCC rules require that ISPs post average speeds, “but national averages may not be particularly useful for a given state,” the ILSR wrote.
“The marketplace needs honest information to work—some networks use technologies that are capable of consistently delivering advertised speeds whereas others use technologies more likely to have bottlenecks during high demand,” the ILSR wrote. “A fundamental question is whether some providers mislead customers by advertising rates that are not achievable under common conditions, regardless of whether providers make some additional information available at a location unlikely to be visited by someone shopping for broadband.”
Disclosure: The Advance/Newhouse Partnership, which owns about 13 percent of Charter, is part of Advance Publications. Advance Publications owns Condé Nast, which owns Ars Technica.