Municipal Net Neutrality? New York City as Customer and Regulator
Net neutrality is a principle promoting an equal and open internet. Without net neutrality, an internet service provider (“ISP”) could, for example, discriminate [1] against traffic from video sites, slowing access to Netflix and Hulu in an attempt to encourage you to use their streaming services or buy a cable package instead. [2] The goal of net neutrality regulation is to prevent this fate – to stop the internet from being divided into ‘fast lanes’ for those who can afford it, and ‘slow lanes’ for everyone else. [3] Net neutrality regulation does so by preventing ISPs from discriminating based on the source of traffic they are carrying. [4]
After years of strident opposition, the Federal Communications Commission successfully mandated net neutrality in 2015. [5] However, after the 2016 election, President Trump appointed a new FCC chairman, Ajit Pai. [6] Pai is a Republican, and became the tie-breaking vote between the two Democrat FCC commissioners and the two Republican FCC commissioners. [7] Under the new Republican majority, the FCC reversed course and repealed their net neutrality regulations, which Pai denounced as “heavy handed.” [8]
The Uncertain Fate of State Net Neutrality Laws
After the repeal of federal net neutrality, several states passed their own net neutrality laws. [9] However, the FCC argued that because the federal government was actively working in the area of net neutrality, state governments had to defer to them and not enact their own competing net neutrality laws. [10] Several of these states joined the ongoing legal fight between internet rights organizations and the FCC, arguing that the FCC was not entitled to preempt state regulation on the basis of repealing federal regulations. [11] While the D.C. Circuit held in Mozilla (The post-repeal net neutrality case) that the FCC is not justified in seeking an absolute preemption of all state net neutrality laws [12], the Mozilla court still allowed the FCC to preempt individual state net-neutrality laws, and it is currently unclear how the FCC will act towards specific state laws. [13]
The Non-FCC Approach: Net Neutrality by Agreement and Contract
In the absence of formal FCC net neutrality regulation, the federal government has turned to other, non-FCC-based approaches to mandate net neutrality. One notable tactic has been to require that ISPs follow net neutrality as a condition for allowing a merger. When NBCUniversal and Comcast merged in 2011, for example, they entered into an agreement requiring that they uphold net neutrality principles until at least 2018. [14] However, the Comcast agreement exemplifies the problem with this approach. One-off agreements are hard to enforce (because of a lack of dedicated resources to enforce net neutrality), and Comcast was accused of violating its agreement multiple times. [15] And even when companies aren’t actively violating their merger agreements, they still attempt to avoid or end their obligations early. [16]
However, state and local governments have other effective ways to get enforceable agreements with the ISPs, because state and local governments are customers of ISPs. These governmental contracts are incredibly lucrative for ISPs. For example, New York City will spend an estimated 500 million dollars on various internet services in the next few years. [17] The size of these government contracts gives state and local government power during negotiations with ISPs. New York and a few other states have taken advantage of their market-power, requiring that all state agencies only use ISPs that respect net neutrality. [18] New York City has also followed suit, requiring that city agencies only use ISPs that respect net neutrality. [19] While this approach has successfully utilized the large market-power of the government-as-consumer to require net neutrality, this only directly impacts ISPs that work with the government, doing little to mandate net neutrality in the non-governmental market.
Extending Net Neutrality to Everyone: New York City as a Regulator
New York City’s commitment to not buy service from ISPs that violate net neutrality follows a history of policies by the mayor and the city council [20] to promote net neutrality. However New York City’s newest approach to promoting net neutrality seems to be more ambitious, drawing upon a previously unused tool in the net neutrality fight. Rather than approaching the issue as a customer of ISPs, New York City is now calling upon its power to grant and regulate franchises.
New York City’s franchising power is found the city charter, which permits the city to enter into agreements allowing the use of city property by private companies in order to provide public services (typically utilities).[21] Franchises are enacted using a specified procedure. Franchise agreements start when a city agency proposes a needed type of franchise (and rough parameters for agreements) to the mayor, who presents the need to the New York City Council. [22] Once the New York City Council approves the agency’s proposal, the agency is free to enter into franchises of that type with various companies. [23] An agency negotiates specific details with individual companies, and finalized agreements are presented to the mayor and the Franchise and Concession Review Committee for approval. [24] Once the agreement is in place, an agency is required to monitor their franchisees and enforce all terms and conditions of the agreement. [25]
Internet service franchises are in the purview of the Department of Information Technology and Telecommunications (“DOITT”) under the City Charter. [26] DOITT is in a position to negotiate and grant many new franchise agreements as the city undertakes Mayor de Blasio’s Internet Master Plan, which expands broadband access to all residents of New York City. [27] The first stage of the Internet Master Plan calls for private companies to detail how they would take advantage of currently unused city property to expand internet access. [28] Later stages of the plan include the construction of additional internet infrastructure for ISPs to use in providing service. [29] Both the use of current city assets and the use of future city property requires DOITT franchising, and the agency is designated as the administrator of this plan, “coordinat[ing] and facilitat[ing] private-partner use of the City’s real property assets as a pathway to expanding broadband infrastructure in New York City.” [30] This not merely an administrative role, as the Internet Master Plan views DOITT’s role as providing oversight of the private partners, ensuring that the private partners uphold net neutrality and open internet principles. [31]
Using DOITT’s franchising authority to compel ISPs to uphold net neutrality and open internet principles should broadly provide net neutrality protections to most consumers of internet services. Not only is the aim of the Internet Master Plan to build infrastructure in areas that do not currently have service (meaning all future internet services providers there would be bound by franchise agreements mandating net neutrality), the plan will deploy infrastructure of various types throughout the city to improve internet access and quality generally. [32] This means as the Internet Master Plan proceeds, the most widely available and best internet services will be provided by ISPs that are required, by their franchise agreements, to uphold net neutrality.
Adler is a legal services intern at The Surveillance Technology Oversight Project (S.T.O.P.) at the Urban Justice Center and a third-year student at the Fordham University School of Law.
[1] See, Jon Brodkin, Cable Lobby Asks For Net Neutrality Law Allowing Paid Prioritization, Ars Technica (Feb. 7, 2019, 4:20 PM), https://arstechnica.com/tech-policy/2019/02/cable-lobby-asks-for-net-neutrality-law-allowing-paid-prioritization/(discussing the major types of internet traffic discrimination: throttling is slowing the speed of certain types of content, blocking completely denies access to content, and paid prioritization creates a ‘fast lane’ of more quickly delivered content that the ISPs charge websites to be delivered over).
[2] Klint Finley, The Wired Guide to Net Neutrality, Wired (May 5, 2020, 7:00 AM), https://www.wired.com/story/guide-net-neutrality/.
[3] Id.
[4] Id.
[5] See generally, John Brodkin, Goodbye, Net Neutrality- Ajit Pai’s FCC Votes to Allow Blocking and Throttling, Ars Technica, (Dec. 14, 2017, 1:12 PM), https://arstechnica.com/tech-policy/2017/12/goodbye-net-neutrality-ajit-pais-fcc-votes-to-allow-blocking-and-throttling/; Marguerite Reardon, Net Neutrality: How We Got From There to Here, Cnet (Feb. 24, 2015, 4:00 AM), https://www.cnet.com/news/net-neutrality-from-there-to-here/(In 2002, the internet was classified as a Title I Information Service by the FCC. In 2005, the FCC published internet principles companies should try to follow. These included net neutrality, but they were not formal regulation. The FCC’s attempts to formalize these principles over the next few years were met with lawsuits from ISPs. Every attempt to enact net neutrality while broadband was a Title I service failed. In 2014, after another defeat, President Obama directed the FCC to reclassify broadband under Title II, after which net neutrality was successfully enacted).
[6] Andrew Rice, This is Ajit Pai, Nemesis of Net Neutrality, Wired (May 16, 2018, 6:00 AM), https://www.wired.com/story/ajit-pai-man-who-killed-net-neutrality/.
[7] Id.
[8] John Brodkin, Goodbye, Net Neutrality- Ajit Pai’s FCC Votes to Allow Blocking and Throttling, Ars Technica (Dec. 14, 2017, 1:12 PM), https://arstechnica.com/tech-policy/2017/12/goodbye-net-neutrality-ajit-pais-fcc-votes-to-allow-blocking-and-throttling/.
[9] Heather Morton, Net Neutrality Legislation in States, Nat’l Conf. of St. Legislatures (Jan. 23, 2019), https://www.ncsl.org/research/telecommunications-and-information-technology/net-neutrality-legislation-in-states.aspx (describing the relevant laws in the first five states to respond: California, Oregon, New Jersey, Vermont and Oregon).
[10] Mozilla Corp. v. FCC, 940 F.3d 1, 74 (D.C. 2019).
[11] See id, at 23 (explaining the argument by petitioners that the FCC was not justified in reclassifying broadband as a Title I information service).
[12] Id.
[13] Recent Cases: Mozilla Corp. v. FCC, Harv. L. Rev. Blog: Admin. L. (Oct. 24, 2019), https://blog.harvardlawreview.org/recent-case-_mozilla-corp-v-fcc_/.
[14] Jon Brodkin, A Comcast Net Neutrality Commitment from the NBC Merger Just Expired, Ars Technica (Jan. 22, 2018, 3:37 PM), https://arstechnica.com/tech-policy/2018/01/a-comcast-net-neutrality-commitment-from-the-nbc-merger-just-expired/.
[15] Jon Brodkin, Comcast Accused of Violating NBC Merger Commitment and Net Neutrality Rule, Ars Technica (Mar. 3, 2016, 12:03 PM), https://arstechnica.com/information-technology/2016/03/comcast-accused-of-violating-nbc-merger-commitment-and-net-neutrality-rule/.
[16] Jon Brodkin, Charter Seeks FCC OK to Impose Data Caps and Charge Fees to Video Services, Ars Technica (June 23, 2020, 12:27 PM), https://arstechnica.com/tech-policy/2020/06/charter-seeks-fcc-ok-to-impose-data-caps-and-charge-fees-to-video-services/ (“Charter wants TWC merger conditions to expire in May 2021, two years early.”).
[17] Nicole Flatow, Cities Launch Plan to Protect Net Neutrality, City Lab (March 12, 2018), https://www.citylab.com/equity/2018/03/net-neutrality-executive-orders-fcc-mayors-bill-de-blasio/555344/.
[18] Colin Lecher, New York Governor Signs Executive Order to Keep Net Neutrality Rules After the FCC’s repeal, Verge (Jan. 24, 2018, 12:52 PM), https://www.theverge.com/2018/1/24/16928494/new-york-governor-net-neutrality-cuomo-executive-order.
[19] Flatow, supra note 17.
[20] Miranda Neubauer, Council Revives A Net Neutrality Resolution, Politico (Feb. 12, 2015, 12:00 PM), https://www.politico.com/states/new-york/city-hall/story/2015/02/council-revives-a-net-neutrality-resolution-086903.
[21] N.Y.C., N.Y., Charter ch. 14 §363(b).
[22] Franchise Process, NYC:DOITT, https://www1.nyc.gov/site/doitt/business/franchise-process.page (last visited June 26, 2020).
[23] Id.
[24] Id.
[25] N.Y.C., N.Y., Charter ch. 14 §365(c).
[26] N.Y.C., N.Y., Charter ch. 48 § 1072(c).
[27] Laura Hautala, NYC Internet Plan Aims to Provide all New Yorkers with Broadband Access, cnet (Jan. 7, 2020 12:10 PM) https://www.cnet.com/news/nyc-internet-plan-aims-to-provide-all-new-yorkers-with-broadband-access/.
[28] Jason Plautz, NYC’s New Internet Master Plan Aims to Close Digital Divide, Smart Cities Dive (Jan. 9, 2020), https://www.smartcitiesdive.com/news/new-york-city-internet-master-plan-digital-divide/570096/.
[29] Id.
[30] The Mayor’s Office Chief Technology Officer, The New York City Internet Master Plan, 61 (Jan. 2020), https://tech.cityofnewyork.us/wp-content/uploads/2020/01/NYC_IMP_1.7.20_FINAL-2.pdf.
[31] Id, at 59.
[32] Id, at 65.