Net Neutrality 2017 Thanksgiving madness

The FCC decided to bury the news about its plan to end the Net Neutrality rules in the middle of Thanksgiving week here in the US. But that won't stop Nilay, Paul, and Dieter from doing a Vergecast. This was originally broadcasted live on YouTube on November 24th, 2017. Learn more about your ad choices. Visit podcastchoices.com/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:03Nilay Patel?

  Hello and welcome to The Vergecast, the flagship podcast of theverge.biz. But here's what I'm going to tell you. This is a completely renegade episode of The Vergecast. Our producer, Andrew Moreno, is not here. We are live foolishly on hangouts on YouTube, which may or may not be working. And there's a live audience here chatting at us. But I am at my parents' house in Wisconsin. Hi, Dieter, where are you?

• 0:32Speaker 01

  I'm in a little town called Magnolia, Arkansas, which is a lovely town. And it has meh internet. Interestingly enough, I think it's the only internet option here is this meh internet.

• 0:44Nilay Patel?

  Yeah, that's about right. I also have meh internet. That's the only option at my parents' house here in Racine, Wisconsin. Paul, where are you?

• 0:51Speaker 02

  I am at the New York office and I'm literally the only person here other than some guy who's going around cleaning stuff.

• 0:57Nilay Patel?

  How's the internet in the office?

• 0:59Speaker 02

  Well, that's exactly why I'm here. When I am at home, I think my router is misconfigured and whenever, especially Google Hangouts is the worst. It just chokes and it just sits there and it doesn't work for a little while.

• 1:12Nilay Patel?

  So as you might be guessing, as you may have surmised from our internet banter, we're here, emergency renegade broadcast for one reason, which is that the HomePod has been delayed. And none of us know what.

• 1:28Speaker 01

  We're berated. We're a homepod.

• 1:31Speaker 02

  Wait, no, I got one right here. I got one. I have like a 2004 product called HomePod by a company called MacSense. It's basically a HomePod, like an internet radio.

• 1:45Nilay Patel?

  All right, all right, Paul, put the HomePod down. No one wants your 2004 internet radio here. All right, but here's why we're actually doing it. On Wednesday, which is the day before Thanksgiving, we're recording this on the blackest of Black Fridays. On Wednesday, Ajit Pai and the FCC put out their proposed order to completely rescind all net neutrality rules in the United States. So Tom Wheeler, the former commissioner, former chairman of the FCC, in 2015, reclassified internet service, broadband service, as a Title II common carrier service,

• 2:23Nilay Patel?

  which let him put rules on it, like no blocking, no locking, no paid prioritization, no throttling, transparency rules. Ajit Pai and the Republicans thought this was a terrible idea. They thought it would reduce broadband investment. Pai has been- And a Republican? Oh, yeah. Okay, I'm with you. I'm with you. He's a Republican. What are you gonna do? Pai became the chairman of the FCC when Trump became president. He has spent, I would say, the past year making his case that investment has been lowered. He has not, and I think this is an important point, he has not taken any interviews with anyone who disagrees with him. He's only insisted that he's right. I think this is a point I want

• 3:05Nilay Patel?

  to come back to a whole lot as we talk about this on this Vergecast. And he put out his notice to proposed rulemaking a few months ago, which we read and reacted to. And he put out his proposed order on Wednesday. There's gonna be a vote, he's pushing a vote, on December 14th. So there's, he's, he's all about like, look, I put out the rules, you know, the public gets to see them. That's not what Tom Wheeler did, but he put them out the day before Thanksgiving, and he's holding a vote in two weeks. So it's like six of one, half of the other, right? Yeah. People are mad. I'm mad. Dieter, I think you're mad. Paul, probably not so mad. I'm pretty mad. I'm glad. Paul's glad. But people are, right now, today, protesting at Verizon stores.

• 3:50Nilay Patel?

  They spent all day yesterday protesting. There, there are, the battleforthenet.com is running huge call-in campaigns. We're writing posts on the site. And because we talk about the Vergecast so much, Paul said to me and Dieter, why don't we have an emergency rogue session? So everyone else is on vacation, except for the poor people covering Black Friday deals on The Verge. And we are basically at our parents' houses, except for Paul, who's in the office. The Verge is my parent.

• 4:16Nilay Patel?

  Do an emergency session. So here's what I will start, I will start with. I think this is the important thing.

• 4:21Speaker 01

  I want to point out that Neil is like lightning fast overview. It lies over like a million points that we would have previously spent the entire verge cast on.

• 4:31Nilay Patel?

  Yeah.

• 4:32Speaker 01

  Like a million points. Uh, there's just so much history and pain and sorrow and like actually very interesting like debates that we have had that are embedded in that little story that Neil I told. And so like, if you like, see us like pause and like have a well of feelings during this podcast. It's because like, oh man, you just said that thing. I could talk for an hour about that, but I have to shut up now. So I just want to point that out.

• 5:00Nilay Patel?

  There's a lot. So I think there's, I mean, this is just long history. Uh, this is, uh, you know, in 21. I'll start with the, the main thing.

• 5:10Speaker 02

  Let's start with that. With the railroads.

• 5:12Nilay Patel?

  Let's start with the railroads. No, the, the main thing is we now have a document from Pi, a legal document in which he makes his legal argument. And it's so we don't have to have, uh, like a moral debate about this, right? We're not having a, how do we think the internet should be regulated? We have.

• 5:32Speaker 01

  Guess what we're gonna have?

• 5:34Nilay Patel?

  I know. But there's, there's like a foundation under it and there's an argument under it that we can, I can at least refer to because I've opened it. I'll slack it to you guys so you can see it. I realize it's a good idea. Uh, but it's here. I can just read you. There's like a, there's like a summary, uh, over the top, right? So it says, this is the fact sheet, um, doc number 17 dash 108. Over 20 years ago, President Clinton and Republican Congress established the policy of the United States to preserve the vibrant and competitive free market that presently exists for the internet unfettered by state or regulation, um, federal state regulation. That's great. That's a great line. And then it's, you know, it goes on to say, "This declaratory ruling report in order would return to the bipartisan consensus on light-touch regulation,

• 6:18Nilay Patel?

  ending utility-style regulation of the Internet, promote future innovation and investment, and more investment in digital infrastructure will create jobs, increase competition, and lead to better, faster, cheaper Internet access for all Americans, especially those in rural and low-income areas."

• 6:31Speaker 02

  So that's... Okay.

• 6:32Nilay Patel?

  Right? Like, that is Pi's, like, moral argument, and then he's got all the stuff he wants to do. So the stuff he wants to do, he wants to restore the classification of broadband Internet access service as an information service, which is... It's a lot.

• 6:50Speaker 02

  Okay.

• 6:50Nilay Patel?

  What's happening?

• 6:51Speaker 02

  I just, I just breathing, just like...

• 6:54Nilay Patel?

  Just taking a couple of deep breaths.

• 6:56Speaker 02

  Yeah.

• 6:56Nilay Patel?

  Uh, he wants to reinstate the private mobile service classification of mobile broadband Internet access service. Uh, this is, this one, these two work together in a particularly hilarious legal way. So I'm just, I'm just gonna explain the information service thing. So right now, the Internet, under net neutrality, is classified as a telecommunications service, because the definition of that is a telecommunications service provides point-to-point connections without any additional layers over the top. An information service, which is what the courts and the FCC called the Internet before, is like, you get additional things. So like,

• 7:38Nilay Patel?

  think about, uh, America Online in the 90s. You would dial into America Online, it would present you an interface, that interface would have lots of bits and pieces, like an email client, and forums, and like AOL shopping, or whatever, and then you could, like, take a right turn out of that interface onto the main Internet. That's an information service.

• 7:58Speaker 02

  Does that have anything to do with the common carrier designation?

• 8:02Nilay Patel?

  So if, as an information service, it's Title I, which is not a common carrier. As a telecommunications service, it's Title II, which makes it a common carrier. So they're saying America Online, under that definition, in like, in that way of AOL, where you would dial into an AOL server, and then it would like, mediate everything and present you with applications and whatever, is an information service. And what I have always thought of as broadband, which is I have a cable modem, I plug my Wi-Fi router into it and I just use a web browser. That has been classified as a telecommunications service for the past two years. Pi is now classifying that as an information service.

• 8:41Nilay Patel?

  And his argument for that, his like legal argument for that is based on the fact that internet service providers. This is true. This is his argument. They provide DNS servers and caching equipment. And that is equivalent to AOL's like AOL chat in like user groups in AOL shopping. Like, I'm not kidding. That's his argument that those things are information services that mediate your your internet experience. And it, you know, you also get, you might get an email client from your broadband provider, or you might get like a custom web browser or any of the other garbage that you don't actually want. And because of that, it's an information service. This is literally his argument in this document.

• 9:24Speaker 01

  I mean, if I wanted, if I wanted to actually start an information, like a more modern equivalent, not AOL, might be what, like the Bloomberg Terminal? Like that, to me, sounds like an information service. You are free to do whatever the hell you want on that information service. So I want to pay you to get access to the news that you provide in the terminal. I will just do it. Everything will be fine. But nobody does that on the internet. And so the, this idea that was DNS and caching counts as an information service, it's like,

• 9:56Speaker 01

  no, no, it doesn't, right? Like, I'm trying to, I'm trying to approach the argument on like his, his terms. If he's setting the rules of the, of the debate and the rules are that counts as a, you know, bespoke, I am directly giving you a thing, information service and not a telecommunications service.

• 10:17Speaker 01

  I don't know, like that's. Like, they, that seems odd to me. That seems like, it seems like a fig leaf. It seems like not true at all.

• 10:26Nilay Patel?

  Right.

• 10:26Speaker 01

  If we are going to accept the argument on his terms, like, play devil's advocate and make the case to me that a caching server is equivalent to AOL Online, or CopyServe, or the Bloomberg Terminal, or whatever.

• 10:39Nilay Patel?

  So that, 100% the argument. And so like, when I say like, there's a document here that we can refer to, the argument you just made is referred to in the document.

• 10:52Nilay Patel?

  Right. I mean, this was an argument that happened. There was a court case called Brand X. And Brand X argued that it was an information service, and the FCC argued it wasn't, and Brand X won. All that's fine. But the, the point here is, paragraph 29, "We begin by evaluating the information service definition and conclude that it encompasses broadband internet access service." Of, of course you do. But, "The commission has looked at dictionary definitions and found the term capability to be broad and expansive, including the potential ability and the capacity to be used, treated, and developed for a particular surface."

• 11:28Speaker 01

  Because- Wait, wait, wait, wait, wait. They, they pulled high school freshman, like, term paper shit on this thing?

• 11:34Nilay Patel?

  Sure did.

• 11:35Speaker 01

  We looked it up at the dictionary?

• 11:36Nilay Patel?

  Sure did. "Because broadband internet access service necessarily has the capacity, or potential ability, to be used to engage in the access, in the activities within the information service definition, which are generating, acquiring, storing, transforming, processing, retrieving, utilizing, or making available information via telecommunications, we conclude it is best understood to have those capabilities." So, this is about as wacky of a legal argument as it gets, right? They have this word, they can define the word, as they're saying, as expansively as they want. It has nothing to do with your experience using the internet.

• 12:18Nilay Patel?

  They've just defined it as, can you generate, acquire, store, transform, process, retrieve, utilize, or make available information via telecommunications? Well, that's an information service. So we'll just stick broadband internet under that. And the- The, you know, they go on to say, "The record reflects the fundamental purposes of broadband internet access service are for generating and making available information, for example, through social media and file sharing," which is not what you do with what you get from your internet service provider, but that's what they're saying you do. So, that's the first piece. It's the, it is the foundation upon which this entire argument rests. Is the internet a telecommunications service, broadband internet access from your provider?

• 13:00Nilay Patel?

  Is it a telecommunications service or an information service? And all the stuff that we will talk about, competition and whether you have one provider or two, all of that comes down to, um, what do we do once we, how do we define it once we know, um, what competition is like? Right? Does that make any sense?

• 13:19Speaker 02

  Yeah, absolutely. What, one of his, one of Pi's points is that this is how broadband providers were originally classified. So 2015 was the anomaly to move it to telecommunications and we're just reverting back to what the internet always was.

• 13:34Nilay Patel?

  So that is, that, that is his argument, but it is not, I don't think it's backed up. Um, because for the longest time, the way people got on the internet was with dial-up modems. And so you have to do the mental exercise of separating out the phone line, which was always a Title II common carrier service. So your, your phone company could not restrict or throttle whatever was happening on your phone line. And then there, you had ISPs. So here in, uh, literally my parents' house, which is the first place I ever got on the internet, our phone company at that time was called Ameritech. You might guess that it is now part of AT&T. It's all things inevitably are.

• 14:19Nilay Patel?

  Um, but our phone company at that time was called Ameritech. I had, there was like 15 different little ISPs in Racine, Wisconsin, right? I actually worked at one of them. It was called Core.net. I was like in middle school and my job was to go and reset the Supra V dot 92 modems every day, because they would all crash. So I would walk into a room and like reset 200 modems. Um, that was one competitor. You could get internet access by calling Ameritech's bank of modems. You could call AOL's bank of modems. You could call Prodigy's bank of modems. And Ameritech, running the line, couldn't stop you.

• 14:56Nilay Patel?

  Right? They couldn't say you can only call Ameritech to get internet access. So that allowed competition to flourish because Ameritech, which controlled the Title II phone line, wasn't allowed to tell you who you could call. Simple. So there was like this huge range of ISP providers. The ISP providers at the time, the internet was new. They were running dial-up modem. They were doing all kinds of stuff to make the internet work better and they were competing. And the FCC was like, we're gonna leave that alone because fundamentally it's Title II on the phone line. Does that make any sense, Paul? So like, there's an argument to be had about when the information service classification showed up. And the opposition to Pi would say it showed up with the Brand X case.

• 15:40Nilay Patel?

  When the court made an affirmative decision that the internet was Title I.

• 15:48Nilay Patel?

  Right? So there's this weird period where like, you know, net neutrality proponents say, we got it wrong. Right? And so then we fixed it because the early part of the internet that everyone talks about, where it was like this explosion of providers and service and there was like free internet providers that showed you ads and blah, blah, blah, blah, blah. The backbone of that was Title II phone lines. And so now I think you can get to a place where you say, okay, well, the backbone, because I didn't have a lot of phone company providers, the backbone of that is now broadband providers. Because I only have one broadband provider in this house in Wisconsin. And I should be able to go to all these other competing services on it.

• 16:24Speaker 01

  But you can't do that. Like, that's the thing is when, if, and when you had a bunch of different ISPs all going over the phone line, you could pick one. And we don't have that now. And so we have to, you know, the provider and the service provider are collapsed into the same thing, the broadband provider. It's like, look at cell service in like the UK. Like, you can pick from a bunch of different providers, but they all kind of use the same backhaul, is my understanding. It's all like, you can switch, right?

• 16:53Nilay Patel?

  Oh, if you want to go down that rabbit hole. So in many, well, I've been ready to talk about this for two days.

• 17:02Nilay Patel?

  So in like many European countries, the UK is one, I think the Netherlands is another. They have what's called local loop unbundling, which is super boring. But they, there's one set of fiber to everybody's home. And anybody can lease that fiber and start an internet company because there's tons of capacity. So people in the UK can generally pick between like 45 broadband providers. In some countries in Europe, there's no, there's not like a lot of, you know, the EU has net neutrality rules, but the countries themselves allow different things to happen. Because you have so many providers to choose from that you can switch. You have. And that's where the competition piece of this comes in. You have, there's like.

• 17:43Speaker 02

  A ton of like, you have earth links and AOLs, you have all the, the ISPs like you had in the dial-up days. But you have a government granted monopoly or government owned infrastructure.

• 17:55Nilay Patel?

  Yeah. So like BT generally owns the fiber. I'm not completely up to date on how it works in, in, in, in the UK.

• 18:04Speaker 02

  I thought we were agreed that like the Ma Bell era where AT&T had a legal government granted monopoly on telecommunications infrastructure was like a bad phase and we're glad we're over it.

• 18:17Nilay Patel?

  So.

• 18:19Nilay Patel?

  Right. So. Yeah. So we've arrived at a place where we still have government granted monopolies, right? We, the, I think the, the local loop unbundling piece that a lot of European countries do is a recognition of the fact that digging a hole in the ground is hard. Right? And you should probably only dig a hole and put an infinite capacity fiber line down once. Right? So yes, the, the United States has philosophically chosen what they call facilities based competition. I mean, this is like just nerdery at its finest.

• 18:53Speaker 02

  It explains facilities based competition. I haven't heard that term.

• 18:55Nilay Patel?

  Oh God. Okay. So the best example of this is 3G standards, which is. If you remember then, the UK used UMTS, they used GSM for 3G. Um, and the United States, Verizon used CDMA. Sprint was like, fuck it, YMAX. And LTE was like, we're gonna use.

• 19:15Speaker 01

  That was for, yeah, right. Sprint was also CDMA, but then, yeah.

• 19:19Nilay Patel?

  So we decided that we would, we would allow all these providers to do what, to basically not have standards. Right. We're going to allow different kinds of competition. In some cases that worked, so, uh, the one competition that you could have back then was Ameritech ran copper wild to your house to get phone service, MCI was doing microwave transition, uh, transmission. So I don't remember what MCI stands for completely, but it used to be like microwave communications infrastructure, whatever. And that was, Sprint used to do a thing and, you know, they had HD voice. So like, the idea was the physical infrastructure would be competitive and provide a different kind of end user service to you. And so the United States is like built on that model.

• 19:59Nilay Patel?

  The Europeans generally have said, what if we had a giant government, like a meta government? And like, we pick standards for competitors. So like, this is why in Europe, you can buy any phone you want, put any SIM card in it you want. Everybody uses GSM. You have like different kinds of competition, but there's not, there's not YMAX versus LTE or whatever. Everyone just has to use LTE. So like.

• 20:24Speaker 01

  We gotta get, we gotta get out of these weeds.

• 20:26Nilay Patel?

  But it's, these are the weeds. This is what I mean, like, these are the deep, deep weeds. And the, the, the deepest weed of this is that Ajit Pai is saying, because your internet service provider, when you access the internet through your broadband modem, provides DNS and caching, it is providing an information service. And if it, if it supplies anything else to you, if it applies a Comcast.net email service, it is definitely not a telecommunications.

• 20:55Speaker 02

  Maybe we can move to an adjacent weed with this. One thing that has been kind of a big controversy in this whole debate, and I'm not really sure where we're at with it, is, is peering, like paid peering. So something like an ISP, like Time Warner Cable, is that still a company? I don't even know.

• 21:14Nilay Patel?

  It's not, it's called Spectrum now.

• 21:15Speaker 02

  Spectrum, Spectrum can say Netflix, hey, you can host your movies in our, in our data center. Uh, you know, and you can just link right into our customers and you don't have to go. Over, you know, regular pipes to get to our customers, you can just get straight to them and just pay us, pay us some money.

• 21:32Nilay Patel?

  Right. So that is, again, I, I, I think where I keep coming back to is the consumer experience, right? That's basically what we cover. It's basically who we talk to. Hopefully that's who's in the chat, right? The consumer experience of the internet is that you have one provider or two potentially that take like eighty six percent of Americans only have two providers. And you get what you get and it's really hard to switch away. Then there's the backhaul portion of the internet where Netflix is like making deals for data centers or like network companies like level three are making deals with other network companies like Comcast to like trade traffic back and forth. That originally was not, what you're talking about paid peering, was originally not in like the net neutrality order.

• 22:17Nilay Patel?

  It was all about the consumer line. The FCC put it, part of it in the net neutrality order and that was a big win for Netflix. But it's not, I don't think that's what people are mad about. I don't think people give a shit about paid peering arrangements on the backhaul part of the network. I think they care about the fact that they don't have many choices for internet access. And if their ISP does something stupid, they have very little recourse. And the recourse most people would want is not to file a lawsuit, which is what Pi is saying you can do, but they want to switch providers to somebody else.

• 22:50Speaker 01

  Let me, let me back up just a minute. So like, we can talk about the peering stuff. We can talk about whether or not DNS and caching counts as an information service. But like, I don't, I hear these legalistic arguments and I don't feel like they're being made in good faith. Like, do you really think that like Ajit Pai and his fellow FCC commissioners are sitting and, you know, you know, getting high and talking about the philosophy of what's the difference between this and that? Or is it what I actually think is happening is he wants to do this thing? And he's finding, you know, a legal reason to do the thing that he wants to do.

• 23:30Speaker 02

  But isn't that what happened in the first place?

• 23:32Speaker 01

  No. Well, so hang on, let me, let me, that's, that's possibly true. But this is the thing I was tweeting about the other day. Why does he want to do the thing is the, the, the question like the, the, the philosophical argument that I think like we've had before, Paul said, we want to try and avoid, I don't think we can, is whatever like we decide we want to do to like run the internet the best way possible, we're going to find a legal fiction to make that possible. Like, we're going to like, you know, look up a definition of the dictionary, find a word in that definition to make it the thing. Fine. But why is pulling these regulations away the thing that is so important for him to do?

• 24:13Speaker 01

  And like, I, I, I genuinely, truly want to hear like the freshman dorm room explanation of why these net neutrality regulations actually hurt innovation. Because the explanations I've heard, uh, regulation bad, like, okay, uh, it actually hampers investment and innovation. I kind of don't believe that, and I don't think there's good evidence for that. I feel like there's another reason, uh, and I don't want to go full, you know, anti corporate conspiracy and say it's just about varieties of profits, but I feel like that might be on the table. But there's got to be another reason I'm not thinking of because I'm dumb to justify this thing. And then I've later on, towards the end of this, we, we need to talk about the definition

• 24:56Speaker 01

  of arbitrary capricious, but let's, let's get, let's like, yeah, step out and be like, why, just why?

• 25:02Nilay Patel?

  So Paul, I'm sure you have an answer, but I'll give you a very simple one. I can't look into Ajit Pai's heart. Hmm. I can't.

• 25:10Speaker 01

  I mean, you, you could, you could get yourself a chest saw.

• 25:13Nilay Patel?

  Wow. So someone's been in Arkansas too long.

• 25:19Nilay Patel?

  Uh, I can't look in the man's heart, um, but what he says is that since the net neutrality rules were passed, overall investment in broadband infrastructure is down. And so if you, if you take the rules away and the rules are costly or whatever, uh, the investment will go back up and what you want is more investment in broadband infrastructure because everyone knows infrastructure investment. That's his argument. Now, there's a lot of argument about whether his numbers are right, just a lot of argument. And one of the main things to argue with is AT&T is so huge, they tipped the scale. So AT&T finished its LTE rollout, it finished a huge network investment, it bought DirecTV

• 26:03Nilay Patel?

  for one period of time, it, it, it paused investment on its network. And so over the period that Pi is claiming, AT&T alone is enough to say, over the year ago period, broadband investment has fallen $200 million. But that's just AT&T. Every other company is out there saying, we're going to keep investing in our network. So you can look at the total, you can slice it, you can have all kinds of fights, but that's like the main argument over his metric. Well, I'm sure you have another answer.

• 26:32Speaker 02

  Yeah, in his Wall Street Journal piece, he said that growth had slowed. It wasn't, and it's not like net down, but it's.

• 26:40Nilay Patel?

  Well, it's a net down if you count AT&T and the reason you, you count it, right? It's, it's net down if AT&T is allowed to say, we bought DirecTV and, and hit, and hit pause on infrastructure.

• 26:50Speaker 02

  So here's my freshman dorm, I didn't go to college, so most of my conversations are just freshman dorm conversations that I'm not aware of. If you think of what the FCC was like originally, it's like the US government is going to own the airwaves and lease them to companies. The airwaves are going to be private or, or a public good and therefore no company will be allowed to own them. We will.

• 27:19Nilay Patel?

  Yeah, I would, I would, I would say that like the fun, the fundamental like debate that we'll have with that, that start, the start of this explanation is, uh, whether or not the US government is an effective proxy for the people. Like the people own the airwaves, the US government regulate, manages them for the people.

• 27:34Speaker 02

  But the, the people don't own Google, the people don't own Twitter.

• 27:39Nilay Patel?

  That's correct. That's correct.

• 27:41Speaker 02

  So, so, so you have the airwaves. But this, the FCC making all the pipes dug underground a public good is, is in a sense almost like asset seizure. The government's saying that because this is so important to people, and obviously the internet is very important for people, and it is a good for people, it now needs to be a public good so that we can make rules for it. And this is a very baseline life, liberty, property kind of a thing. I think that is the government

• 28:21Speaker 02

  overstepping its role, and I think it's the FCC overstepping the role that was, was assigned to it by Congress. And, you know, Ajit Pai, a lot, was always talking about the FEC, or sorry, the FTC, like, they can manage this if there's an anti-competitive practice of one of these companies. We have agencies for that to solve that. But we shouldn't protect internet companies from monopoly status and then make a bunch of rules that actually manage how they're allowed to implement their property.

• 29:00Speaker 01

  Right. So Paul, real quick, it sounds like the, the end of that argument is you don't think that back in the day, the FCC should have even like regulated, had Title II in the first place. Like, it should not have regulated telephone lines and, you know, kept, you know, AT&T from like, you know, blocking me from calling you and changing prices and like the kind of stuff that they wanted phone companies to do.

• 29:20Speaker 02

  I don't think the government should be in the role of protecting monopoly. Like, when monopolies really hurt consumers, it's when the government is propping them up. And I think that's what happened with AT&T. And even like with, with the train, the whole common carrier concept for trains, it was, it's just very unimaginative. It didn't imagine a world where maybe trucks would also deliver goods and trains would almost be, you know, a bit of an afterthought.

• 29:48Nilay Patel?

  Right. I think the philosophical debate you're having there is how much does the government assume the future will be better if the market is left to operate? Right? Like, digging a hole in the ground is difficult. Like, it's just a hard thing to do. So the easiest way to dig a hole in the ground is to, to connect to everybody, is to do it on public streets. So the government does own the streets and you can say, okay, you have access along the street to dig a hole. And the main thing they did, Paul, and I agree with you, this is, this is the heart of the problem, is they granted monopolies to some companies to put pipes in the streets. So in Philadelphia, Comcast sued the government for providing public wifi and killed public wifi because they didn't want competition with Comcast.

• 30:33Nilay Patel?

  Right. And the government sort of like let that happen and let it die. But the ability for a competitor to come in and put another private pipe in the ground is restricted just by reality. That's an enormously costly thing to do. It's restricted by throughout the country, all of these restrictive agreements that local governments have entered into with private enterprise for short, short-term capital. So your little, I have a house in upstate New York, like Mid Hudson Cable in upstate New York, like has the deal with the county government to provide internet access. There, there is just not enough, like

• 31:15Nilay Patel?

  market saturation up there for another competitor to come in. It's just never going to happen. And like, you can tell me 5G wireless will come in one day, but like, I can't get a 3G signal. So like, the, the ability for in some of these places for that competition to happen is very low. And I think you have to just decide how either pragmatic you are or how idealistic you are when it comes to is, is, are these pipes in the ground part of a public infrastructure that we all rely on, or are they absolutely private property that we can't touch? And the, the phone company example, the reason AT&T was granted that monopoly is because the government decided the better outcome was for everyone in America to have a phone connection. Right?

• 31:58Speaker 01

  The, the other thing I'll point out, the, with the train common carrier thing, it's like, you're not wrong. Like, yes, the government is bad at forecasting future disruptive innovations. However, it's a very complicated story because with trains in particular, they got out innovated by trucks, you'd say, but like, that was only possible because the government built the national National highway system. It's like, it's always like this, this interplay between like what the government as ostensibly the voice of the people is doing to try and like create the great, greatest public good and balance that against personal freedom and like, like, you know, the, the invisible hand of the capitalism is always more complicated than it seems strictly in principle because

• 32:40Speaker 01

  the things that cause that disruptive innovation are often also the result of government action. One might suggest that the internet itself is the result of, you know, DARPA and DARPA Net and ARPANET, which was government funded. So like, it's always more complicated. We like, the, the reason that like, I don't find the regulation bad argument compelling is I feel like it doesn't address the realities of like what the actual market is doing.

• 33:08Nilay Patel?

  Well, I, I think it just comes down to common sense. And I, I want to switch to one thing, but Paul, I think it comes down to, we have these laws in the book. The FCC is not writing laws. It's, it's deciding which of these two regulatory schemes we should use for the internet. Um, you know, Congress could write a law if you believe that this Congress can do anything, but Congress could write a law. Um, it has two schemes. In 2015, it picked one scheme to broad public acclaim, right? The FCC is supposed to work in the public interest. A lot of people supported that scheme. Only big internet companies didn't support that scheme, right? So only Verizon and AT&T were making the argument

• 33:48Nilay Patel?

  that they shouldn't be regulated. And they're out there, you know, Comcast is like tweeting crazy things today, like, we'll never block anything. We don't, these rules, don't worry, we're going to follow them anyway because we love you. Like, fine, right?

• 34:02Speaker 01

  So the best, the best commentary I saw on that, by the way, was Comcast also promises to be at your house between one and five.

• 34:08Nilay Patel?

  Yeah. So like, right, like, so the, the internet companies know what the public wants, right? There's just no market force. If Comcast decides to break all of its promises, it's very hard for a lot of people to leave Comcast. By the way, disclosure, Comcast through its NBC unit owns a minority stake in Vox Media, which owns The Verge. There's your disclosure.

• 34:30Nilay Patel?

  So that's like, Paul, I think that's the problem. You can have competition. This is Craig Aaron from Free Press told me this in 2014. It's a quote in a piece I wrote. You can have competition or you can have regulation. Comcast is trying to have neither, right? So it it does a lot of lobbying work to make sure it's the exclusive internet provider in the markets it's in, and it's doing a lot of lobbying work to say, we shouldn't be regulated. You can't have both. You gotta have both.

• 34:54Speaker 02

  Absolutely dislike the lobbying against competition. And that's one of the reasons why it terrifies me that the FCC has this much power. Because let's say the roles were reversed, right? Let's say the status quo was the 2015 internet, like the internet had been classified under Title II this whole time. And then 2015 comes along, or let's say 2017 right now. You've got a president who was, you know, elected but didn't win the popular vote. He nominates one person who was already on this commission to be the leader of this commission. And now the

• 35:39Speaker 02

  whole internet changes. And that's why I think I understand that the Congress makes a law, and then you get a regulatory agency to sort of enact that role that the Congress created for it. But this is basically one person being the deciding vote of what billion dollar companies and billions of dollars worth of infrastructure, how that's actually used. Like if somebody if somebody like showed up in some regulatory agency and said, you need to like, go home and deflate all your footballs and basketballs for some reason. It's like, well, that's my property. Like, I understand that you made a law, and then there's an agency, and then there's this guy

• 36:20Speaker 02

  who drinks coffee out of a Reese's mug, thinks I should deflate all but it's like, I own those. I can decide how I want to use.

• 36:26Nilay Patel?

  Yeah, but I can make those laws all day long, Paul. I can tell you how fast to drive your car. I can tell you, if you want to, I'm in Wisconsin, so it's like, I've seen a lot of these folks around. If you want to go hunting, you got to wear blaze orange, right? Like, if you build a house, it's got to be up to these codes. Like, we make those rules all of the time, literally all of the time. It's illegal for you to show up at my house and punch me in the face. Like, that's your body. Like, I can't tell you what to do with your body. Yes, I can. I can absolutely tell. I can tell you not to put drugs in your body. Like, there are All kinds of rules we make, and I think this is where you're either super philosophical and idealistic, or you're just pragmatic about reality. And I think where I come down is there's not enough competition

• 37:09Nilay Patel?

  to be that philosophical and idealistic, right? If there was more competition, I would be absolutely fine saying, and I think this is true in mobile, right? In mobile, you have at least four competitors, and T-Mobile is a disruptive competitor, and AT&T and Verizon are having to react to it. I think there should be more competitors. I think that would be even better. But you can at least see how that market is working. People are switching to T-Mobile. They're doing binge on. T-Mobile CEO is like making videos. He's like middle fingers in the air. He's like throwing bombs. AT&T and Verizon are now doing things that look a lot like T-Mobile. And what's really interesting about that cycle is they're all starting to do unlimited plans because they all have to layer on more and more services.

• 37:52Nilay Patel?

  So T-Mobile started with free music streaming, and then AT&T started doing free music streaming. So then T-Mobile started doing free video streaming, and now they're all just doing unlimited plans. Right? And it's like, when the market speaks, when people actually have a free market choice, the thing that they want looks an awful lot like net neutrality. Right? When they don't have a market choice, the thing they want is regulation that gets them net neutrality. So either way, what people are saying is, don't monkey with my internet connection. And they have, what they need is recourse if you start monkeying with their internet connection.

• 38:24Speaker 02

  But the recourse is one person appointed by a president who's elected every four years.

• 38:30Nilay Patel?

  Sure, but like, that's the people's recourse is the state.

• 38:35Speaker 01

  No, but Paul's making a really good point, that the whiplash of the rules around how the internet gets served to humans in America, changing every time there's a new administration, there's a new group of people in the FCC. It goes from three to two to two to three, is crazy making. And, uh, yes.

• 38:53Nilay Patel?

  But like, hold on.

• 38:54Speaker 01

  No, no, no, no, no, let me finish. I'm finished. I'm making a point.

• 38:57Nilay Patel?

  All right.

• 38:59Speaker 01

  It would be great if Congress would make a law. Um, you know, I, my personal politics, I think that if this Congress could actually pull that off, I don't know if I would like that law, but at least then we would have less whiplash.

• 39:08Nilay Patel?

  No, we wouldn't.

• 39:09Speaker 01

  About the law. And let me finish. I'm, let me finish.

• 39:12Nilay Patel?

  All right.

• 39:12Speaker 01

  I'm gonna, I'm like, I'm setting, I'm putting the ball on the tee for you, Neil.

• 39:16Nilay Patel?

  Ah, but I, the ball is stupid.

• 39:18Speaker 01

  I just, I hate the tee. I, I'm walking over to the tee with the baseball. You've got the big giant plastic bat. It's a wiffle ball. You're gonna hit it. It won't go very far. Isn't one of the rules around the way the FCC is supposed to work that we're not supposed to have this whiplash, that they have to have good legal justifications and it can't be, I think the phrase is arbitrary and capricious?

• 39:40Nilay Patel?

  Right. Okay. Thank you for the ball and the tea.

• 39:42Speaker 01

  Wow.

• 39:43Nilay Patel?

  Yeah. It is a slightly different ball and tea than I thought was coming. And also, I think, I think I'm playing hockey. It's very confusing. So, wait, for just to Paul's point, his narrow point, which is we had an election and everything's different. Yes, it actually doesn't matter how that, the mechanics of that don't matter. So like, we had an election, we elected Obama, there's Obamacare, we had an election, we elected Trump, and they're furiously trying to undo Obamacare. That happens all the time. Like, you can't stop it. The, the, the endpoint of that is we should have a king. Right? And the king will just never change his mind.

• 40:18Speaker 01

  I'm saying that the policy- I'd vote for a queen, actually.

• 40:21Nilay Patel?

  The policy- Right. Wait, so Paul, let me finish this thought. So the, the check on that, which is what you want, which is you can't elect somebody new, have them appoint some new people in regulatory agencies who weren't actually elected, is what Dieter is saying, which is the FCC has to, like, provide stability to the market. They understand that it needs, the market needs stability, and they are not allowed to change their mind in an arbitrary and capricious way. That's in the administrative law of our country. So, Pi has to make a case that since the time of net neutrality passing in 2015, something has changed so much that

• 41:01Nilay Patel?

  provides him a reason to undo it. Right? And his argument is that broadband investment has slowed. That's his argument. So, we passed net neutrality. If broadband investment had, like, everything was going great, then he wouldn't be allowed to change it. There'd be a lawsuit and they would sue him and the court would say, this is just an arbitrary change, you're not elected, you can't do that. He's saying, well, broadband investment has slowed, that law was obviously bad, that regulatory interpretation was obviously bad, so I'm changing it, it's not arbitrary. And that's where the fight is going to be. So the information service thing, the broadband, um, the broadband investment thing, all of that stuff is what people are going to fight about. So like-

• 41:44Nilay Patel?

  Also, I think the court, just based on what I'm seeing today, I think it would be foolish for a future court. So I know Free Press is going to sue the FCC. The ACLU is going to sue the FCC. The EFF is going to sue the FCC. He's going to take this vote on the 14th, and he will immediately face a lawsuit that says this is arbitrary and capricious, and you can't do it. Right? And that, somebody in our chat right now is, "The FCC doesn't answer anyone. It's beyond the people's reach." No, it's not. You can just file a lawsuit. And I think Pi is walking into a lawsuit that says his decision is arbitrary and capricious. And so you just, the EFF has a Twitter thread here that I'm looking at.

• 42:19Speaker 01

  Yeah. Well, actually, before, just like, the thing you didn't say in that rant is that we just, we just know that this is going to pass, that the FCC is going to vote to undo net neutrality rules and convert it to Title I. Like, it's, it's three to two. You can call your congressman to put pressure on the FCC people on the board. You can call Ajay Pi, you can call whomever, but like, we know this thing is going to pass, right? It's going to happen.

• 42:42Nilay Patel?

  Yeah.

• 42:43Speaker 01

  And then the lawsuit starts.

• 42:44Nilay Patel?

  And the lawsuit starts. So.

• 42:45Speaker 01

  Okay.

• 42:46Nilay Patel?

  And this is like, are you enough of a single-issue voter to vote Democratic or Republican based on broadband regulation? It, who knows, right?

• 42:54Speaker 01

  Yeah.

• 42:54Nilay Patel?

  But it seems.

• 42:56Speaker 01

  Ask R slash the Donald, because that's an exciting place right now.

• 42:59Nilay Patel?

  Right. So yeah, the, the Donald Trump subreddit on Reddit is like torn asunder, because, right, because that wouldn't exist but for net neutrality. If, if, if your ISP could have slowed down Reddit in the early days, or they could have looked at the Donald Trump phenomenon and Russian interference and decided to start blocking certain kinds of content, you wouldn't really be able to stop them, and you wouldn't really be able to switch.

• 43:22Speaker 02

  Reddit existed before 2015.

• 43:25Nilay Patel?

  Right, but the argument.

• 43:27Speaker 02

  And people lobbied for net neutrality before 2015 in the run-up to the FCC's decision.

• 43:32Nilay Patel?

  Right, because the Brandex decision was bad, is like, a piece of this in the background. And people really wanted net neutrality because they started switching in huge numbers from dial-up internet to broadband internet and realizing they had no competition.

• 43:50Speaker 02

  They were pretty far down that road by 2015, and Comcast wasn't blocking Reddit because Reddit did a blackout.

• 43:56Nilay Patel?

  I, I think you're, you're over, I think you're, you're, you're. You're being over

• 44:03Speaker 02

  Well, these are the

• 44:04Nilay Patel?

  optimistic about broadband penetration in the United States.

• 44:07Speaker 02

  These are the fears that were sold to me like going into 2015 like you don't want to get like a $10 bill because you decided to use Twitter that month or something like that, or you don't want to pay extra for Netflix, or you'll have a slow lane or something like that. And I am arguing that broadband companies should have the right to do any of that stuff.

• 44:28Speaker 02

  But I really don't. Most companies don't do something that their customers will absolutely hate. We end up disliking a lot about what companies do. But you can definitely push it too far.

• 44:43Nilay Patel?

  I mean, I would just, again, there's like philosophy and there's realism and there's like the the reality is Comcast is the most hated company in America. They do things their customers hate all day long. Right? AT&T is like, they're around, people don't love them, they have enormous number of customers.

• 45:03Speaker 02

  But they clearly realize that there's a line that they shouldn't push past, that there's such a thing as too much hate.

• 45:09Nilay Patel?

  And Comcast pushes past that line all of the time. Comcast blocked BitTorrent. There's another company called, what was it, Madison River Systems that blocked Vonage. Comcast prioritizes its own TV service to to various devices. Like AT&T wants to buy Time Warner. The main thing AT&T wants to do with Time Warner content is give it to you for free versus, you know, non-Time Warner content. Like, this is the future, right? It's coming at us and they want to do these things that people don't want them to do. And what people want is a rule preventing them from doing those things. Or you could start all over and build more competition. But the world in which, you know, the

• 45:52Nilay Patel?

  So Comcast bought NBC, right? They signed a consent decree saying they would basically abide by net neutrality until next year. Next year, that consent decree goes away. There's no net neutrality. And suddenly NBC programming, Universal movies will come to you for free over to Comcast lines. And everyone else will hit the cap. So the minions will be free and I don't know, Moana won't be. Right? Like, that's not an outcome that people want.

• 46:17Speaker 01

  And we all know that the phrase "the minions will be free" is a contradiction in terms. Because by definition, by the dictionary definition, they're minions. They're not supposed to be free.

• 46:26Speaker 02

  I'm not saying everybody gets everything they want, no matter what the rules are. I'm saying-

• 46:31Speaker 01

  But you have a choice. Try sometimes, you just might find.

• 46:34Nilay Patel?

  No, but Paul, you don't have a choice.

• 46:35Speaker 02

  Get what you need.

• 46:36Nilay Patel?

  These companies, these companies can do things you hate. And they do them all the time because you can't leave. Right?

• 46:44Speaker 01

  I mean, the, the philosophy question here is, Paul doesn't believe these companies are going to do bad things. Uh, but maybe they will, but who knows? But should we make a law preventing a company from doing a bad thing before they've done the bad thing?

• 46:57Nilay Patel?

  Okay, so this goes, this goes to the other thing that Pi brings up and, and Paul had been talking about, which is, maybe the FCC doesn't need this power because the FTC, the Federal Trade Commission, or the Consumer Protection Agency will be able to do this stuff either. So I'm just going to read more from Pi's document because I think it's important to keep referring to his actual argument. So he says, "Most of the examples of net neutrality violations discussed in the net neutrality order could have been investigated as antitrust violations," which is where the DOJ or the FTC comes in. Madison River Communication blocked access to voice-over IP to foreclose competition with its telephone business. An antitrust case could have focused on whether the company was engaged in anti-competitive foreclosure. "Whether one regards Comcast's behavior towards BitTorrent as blocking or throttling,

• 47:42Nilay Patel?

  it could have been pursued as an antitrust or consumer protection case. The FCC noticed a BitTorrent service allowed users to view a video that they might otherwise have had to purchase through Comcast's video-on-demand service, a claim that would have been considered anti-competitor, anti-competitive. Comcast also failed to disclose this network management practice and initially denied that it was engaged in throttling potentially unfair or deceptive acts or practices." So, he's saying, "Okay, Comcast is throttling BitTorrent. If we discover it, and they haven't disclosed it..." Someone can sue them, very unclear who. If you, if the DOJ wants to make the case that throttling BitTorrent unreasonably preferences Comcast's like video on demand service, they can bring a lawsuit too.

• 48:25Nilay Patel?

  So instead of a rule, what you have is the hope of more lawsuits.

• 48:31Speaker 02

  And to be clear, the one thing that this new, this removal of net neutrality is leaving in place is the rule for transparency about actions.

• 48:41Nilay Patel?

  Sure, yes, that probably would like the, the, the companies to say what they're gonna do. Now, how much transparency and the form of that transparency is not, i- i- it's not mandated, right? Because how can you possibly tell a private company what to do ever, except be transparent? So if they could bury it in a small print, and this is the important, an important loophole, they don't have to be transparent about anything they define as a reasonable network management practices. So if throttling a bunch of Netflix at 8:00 PM is a reasonable network management practice, because everyone's using Netflix, they want to preserve some service or some bandwidth for Hulu, they don't have to tell you that. You have to discover it, then you have to sue them to say, this isn't a reasonable network management practice,

• 49:26Nilay Patel?

  and then you have to further win a lawsuit saying this is anti-competitive. So like, that's a lot of lawsuits. So what you had was a rule, and now Pi is saying, well, we can just have a bunch of lawsuits that get us back to the rules. Which seems like, if what you're worried about is costs, you have just created the opportunity for legal costs to skyrocket.

• 49:45Speaker 02

  Well, I, I, so here's a straw man situation for the reduced investment, right? I'm Verizon. I want to do this kind of crazy thing, but I'm not sure if the FCC will allow me to do it under the 2015 rules. So I do it, and then the FCC says, no, I can't. And then I need to argue in court that the FCC was wrong to ever even have these rules? Or, outside of these 2015 rules, I do it.

• 50:18Speaker 02

  And then the FTC says that's anti-competitive. And then I can argue whether or not it's anti-competitive. I don't have to argue that the FCC has overstepped its bound. Like, I don't have to argue against the entire existence of a government agency. I just need to decide what it helped or argue in front of the court whether or not what I've done is anti-competitive. And there's a lot more literature in legal, like, my lawyers, before I do that, that potentially anti-competitive thing. My lawyers can look at this great body of legal argument about what ends up qualifying as anti-competitive.

• 50:58Speaker 02

  Where with the FCC, I'm not quite sure what they're gonna decide. And it's up to them.

• 51:06Nilay Patel?

  I don't really track. I think there's a body of law for everything, right? The country is very old. Well, it's not that old. But the country is like, you know, a couple hundred years old. There's literally every word in Ty's document here. There's a body of law undergirding every single word, right? That's how precedent works. There's like branching precedent and your lawyers do lawyer stuff. I think what you're asking is like, are we making, are we making rules where you have to fight against the rules? Or are we making rules where you're free to do something and somebody else can come in and fight to enforce the rules? Right? Or, right? Is the burden on the company or is the burden on the consumer that might be harmed? I generally think the burden is on the company. And I think only for this reason.

• 51:49Nilay Patel?

  The best way for a consumer to address a harm is to stop paying you. Right? That's what we want. Like, Paul, I think you and I are actually far more aligned on like the basic free market principle there than anybody would suspect. Like, if you, if I don't like what I'm getting, if I don't like the value I'm getting from you when I pay you for a service, I should just take my money away. You'll react to that.

• 52:12Speaker 02

  Yes.

• 52:13Nilay Patel?

  The problem is that 51% of Americans have nowhere else to spend that money. So they're stuck. So you you now have this like incredible leverage as an internet service provider to do anything that you want. And there's there's no immediate redress for me. I have to spend more money to pay a lawyer to address your behavior. So if we pass that cost back to that that set of internet service providers and say, here are the rules, like this relationship is not equal. The rules are you can't do X, Y, and Z because the people have spoken and through some complicated set of government processes, you've created rules. I I think that's fine, right? That's that's the difference that keeps coming back to between idealism and like pragmatism like

• 52:58Nilay Patel?

  that's fine. If there were like 500 competitors.

• 53:03Nilay Patel?

  Okay, I'm just gonna take my money away. We do that all the time.

• 53:06Speaker 02

  There's two slightly different things here then. There is what FCC rules will lead to the most investment. And what FCC rules will lead to a a a certain minimum of internet service. And and I would argue that the new no net neutrality rules are designed to lead to the most investment, which will hopefully foster space internet and Project Loon and whatever, so we can actually have competition, right?

• 53:40Nilay Patel?

  So right. So but if you have enough money to do space internet, right, like the the marginal cost of your lawyer applying for the waiver to the rules, so you can build a new technology is like pretty low. Like, it's not gonna stop you. You're not gonna like, oh, my God, I've got to bill a lawyer $10,000.

• 53:56Speaker 02

  Well, like you need you need the you need the money from what exists right now to fund your space internet.

• 54:04Nilay Patel?

  Sure, but I'm saying that the percentage cost of the leak, like if you have the ability to put rockets into space, you probably have the ability to pay for a lawyer because you can't do that without lawyers to begin with. So like, there you are. But like, Paul, you and I are talking in hypotheticals. I'm just gonna read this. It's from the EFF, so it's obviously a biased list. But here's their list. More than 1,000 small businesses, investors, and technology startups in all 50 states have publicly opposed the rollback to net neutrality. More than 900 online video creators who produce content for more than 200 million viewers oppose the FCC plan. 52 social justice, civil rights, and human rights organizations have filed support of net neutrality.

• 54:46Nilay Patel?

  Dozens of ISPs across the country have told the FCC to leave the rules in place. 120,000 libraries in total across the United States want net neutrality. Privacy organizations want it. State attorneys general from Illinois, California, Connecticut, Hawaii, Iowa, Maine, Maryland, Massachusetts, Mississippi, Oregon, Vermont, Washington, and DC support retaining net neutrality rules. 60 mayors, the National Association of Realtors just wandering in the door at the last minute.

• 55:14Speaker 02

  What are we talking about, guys?

• 55:18Nilay Patel?

  Right, like.

• 55:22Nilay Patel?

  And then there's like a lot of argument about the comments, but it's like millions of comments and support. So you do have this extreme amount of public support for these rules. And at some point, you just have to deal with it. I don't think you can just say, we'll have more innovation if we let companies do whatever they want. People have deep relationships with their internet service providers. They understand the parameters of that relationship. And they think that those relationships are unfair, and they want some rules in place. I think, however you feel about government, you have to respect that in some way, and I think Pi is aggressively ignoring it. In fact, we know he's aggressively ignoring it.

• 56:05Speaker 02

  His, like, at least his Wall Street Journal piece, it seems like what he mostly paid attention to was small providers who claimed that it was burdensome on them. And, you know, the numbers about investment. I feel like there was one other thing that he pointed out, but...

• 56:22Nilay Patel?

  Those are his two things, for sure. And he brought up, again, the opening of this document, he brings up rural and... Rural broadband access. So that's interesting, right? It's interesting because what small broadband providers care about is not having to do a lot of like record keeping, because they have to hire accountants and bookkeepers and whatever. That's a cost. And if you're like a two-person ISP, that's a big cost.

• 56:50Nilay Patel?

  But he waived those requirements. So the original order in 2015 waived those requirements for like some number of subscribers. And then Pai came into office and waived them for an even huger number of subscribers. So most small ISPs with like 200,000 people, 200,000 customers, they don't have those costs anyway. And Jake Kastenakis actually talked, we have a great story on The Verge. He talked to a father-daughter ISP in Colorado that were like, "We completely support Title II." Like, "This is fine for us. Don't worry about it." So there's, again, there's a lot to litigate there. He's not... Pai is not the only person speaking for small ISPs. The ISPs are fully capable of seeking for themselves, and a huge number of them are saying they want Title II.

• 57:33Nilay Patel?

  And then on the investment piece, this is, I think, where the arbitrary and capricious, where the argument is going to be made whether or not this is arbitrary and capricious. Ars Technica has an amazing series of articles about this. In public, the broadband companies, Verizon, AT&T, Comcast, whatever, all claim Title II is killing us. And then on their own earnings calls, they say to investors, "Title II isn't a problem. Our investment's going up. We're going to be the best and win everything." So there's a staggering disconnect between what Pai is saying and what these companies are saying to their own investors. And they, they, they're not, I mean, they're not allowed to lie to their investment on earnings calls. Like, those are, they have a fiduciary duty to those people to tell the truth.

• 58:16Nilay Patel?

  And they could get sued a lot if they're lying. So one presumes that they are telling the truth on those calls versus what they're saying in public. So that's like, that's the whole argument, right? Like, whether or not you believe broadband investment has fallen because of net neutrality, whether or not you believe the internet... Is an information service, which is like broadband internet access. Oh, by the way, can I, can I just say that the, I said this at the very top of the podcast, but um, he's also wants to switch wireless from being a commercial radio service to a private mobile service. And a commercial radio service is anything that connects to a common carrier service, basically.

• 58:59Speaker 01

  Yeah.

• 59:00Nilay Patel?

  So like, if you say the internet is, so like, think about telephones. So your copper landline telephones are common carrier cellphone, voice calls over cellphones connect to that network. By definition, it's a commercial radio service and can be regulated this way. So they switched the broadband internet service to Title II. And they said LTE is now a commercial radio service because it connects to a common carrier. So we can regulate it this way. Then they, now, now Pi wants to switch broadband internet access from, sorry, I think this is hilarious.

• 59:32Speaker 01

  Mobile broadband.

• 59:33Nilay Patel?

  No, he wants to switch, he wants to switch broadband internet access, the, the internet from telecommunications to information service. So he does that. And then he's allowed to say, oh, well, this LTE network doesn't connect to a, a telecommunications service. Now, now it's a private mobile service. They could do whatever they want. It's like, it's a shell game. Uh, I mean, it's, and I say that in like a kind way, but it's a shell game because that's what lawyers do. Right? They like line up all the definitions and they push the domino over and they're like, see, I was right all along. Uh, and that's a hundred percent what he's doing. But fundamentally, the question is, do you have the market power, you yourself, to take your money away if your ISP doesn't, does something you don't like? And just, most Americans don't.

• 1:00:14Nilay Patel?

  That's the answer. And so most Americans are saying, I would prefer the government to mediate this relationship.

• 1:00:19Speaker 01

  Okay, okay. So like, what's gonna happen? So on December fourteenth, they're gonna have this vote, it's gonna pass, a bunch of like organizations are gonna sue the FCC. When do I have to pick my internet package, uh, the super premium plus version with HBO now Hulu plus and Netflix?

• 1:00:37Nilay Patel?

  So what's amazing about this-

• 1:00:38Speaker 01

  With the bonus extra stuff for like Reddit and Twitter.

• 1:00:41Nilay Patel?

  So what's amazing about this, amazing, is that the Trump administration is such chaos. They can't even get it all right. Right? So the FCC is saying, okay, AT&T, do whatever you want. Get out there, go crazy. And at the same time, the Department of Justice is saying, hold up, AT&T. You are not allowed to buy Time Warner. So I think if it was different and the DOJ was letting the Time Warner deal go through, you would see in short order, the Time Warner deal close, AT&T now owns HBO and CNN and whatever. You would immediately see AT&T customers get free access to those services.

• 1:01:20Nilay Patel?

  And then you would immediately see Comcast respond in next year when its consent decree expires. You would immediately see Comcast start to prioritize NBC services on its network. And you'll immediately see Verizon start to prioritize Oath services from AOL and Yahoo and Go90. And you already are starting to see some of that stuff, right? Go90, through a complicated arrangement of payments, Verizon's Go90 unit pays Verizon for sponsored data and Verizon customers get it for free. That is actually just a shell game that is stupid, but.

• 1:01:54Speaker 02

  Wait, that's happening right now?

• 1:01:56Nilay Patel?

  It's happening right now.

• 1:01:57Speaker 02

  How is that possible?

• 1:02:00Nilay Patel?

  Because Verizon offers sponsored data. So if you're a startup or whatever, you can pay, nobody uses it. But Verizon's own Go90 buys data from Verizon and then gives it to Verizon customers for free.

• 1:02:12Speaker 02

  I mean, so doesn't that, does that mean that the current regulations are toothless? And aren't any, doing anything for anybody?

• 1:02:20Nilay Patel?

  It means that the, Tom Wheeler's FCC, right before he left, did an analysis of these schemes and it found that T-Mobile scheme of binge on of music freedom of whatever was acceptable because it was not, it was not discriminatory. So like any music service could sign up for it and you just get it for free. And there was no costs associated with it. And AT&T and Verizon schemes probably violated net neutrality because they had this price discriminatory element. Then Tom Wheeler like flipped the table, left the building and no one did anything about it. That's where he had gotten to, right? He did this long investigation about it. And I interviewed him right before he left and I asked him about it. And he was pretty clear that that's what he was gonna do.

• 1:03:03Speaker 01

  Yeah, I mean, so this guy, when when T-Mobile first started its binge on stuff and I like stood up in the room and asked John Ledger about neutrality and he got real mad at me. Uh, then he started cursing the verge, uh, and, uh, made fun of my title, uh, actually, which was really funny. Um, anyway. People were like, why are you mad at T-Mobile for giving something to for free to its customers? That doesn't seem like a problem for net neutrality. And it's because we knew at the end of this story was Verizon having the legal justification to offer, you know. Oh, go 90 to its customers for free and and AT&T having the legal justification to give CNN for free, but charge you more for, uh, you know, something that isn't on Time Warner's networks.

• 1:03:47Nilay Patel?

  Right. And Paul, I think that comes down to the the real, at the end of it, the real problem here, which is you do not want to be in a place where Comcast owns MSNBC. And MSNBC streams to your phone and Fox News costs you extra money, right? You just don't want to be in that place. As much as I hate Fox News, you don't want to be in a place where your broadband provider is now making price differentiation based on points of view that it holds that promotes that. So like, there's a, that that's why Free Press, which is a speech, a free speech organization is like after this so hard, right? They're they're saying, leave the internet alone. This isn't about startups or whatever.

• 1:04:29Nilay Patel?

  This is about core private regulation of speech. So like, there's just layers and layers and layers of this. I just brought up the fact that I interviewed Tom Wheeler. I interviewed Tom Wheeler, the former former chair of the FCC twice. I wasn't easy on him. I interviewed, uh, Michael Powell, who runs NCTA during the run up to neutrality in 2014 and 15. He was the former chair of the FCC. He is a Republican. He now runs the largest cable company lobbying group. It's basically Comcast lobbying group. He answered hard questions with me. We've, I mean, basically, we've interviewed, uh, Jessica Rosen, we're still, we've asked her hard questions, like down the line, Mignone Clyborne, uh, who's another FCC commissioner. Uh, we've interviewed her and asked hard questions. Down the line, we have interviewed these people who are public servants

• 1:05:14Nilay Patel?

  and asked hard questions about their policies and they've given their answers and like, whatever, we agree with them or don't agree with them, but they're willing to take the questions. Pi is not. And I think that if I, if I want to come to one thing, we've gone way over here. But if I want to come back to one thing most clearly, is it elected or not? These people are public servants and Pi is facing this huge backlash. And he is not being responsive to it in any way. He won't take hard questions in any forum. He won't come, if you think we're his opposition, if you think I'm his opposition, he won't talk to me. But he won't talk to, I've seen, I don't know, I've seen probably a dozen people who host podcasts tweeted him over the past two days saying, hey, will you come on a podcast? He's not going to any of those.

• 1:05:56Nilay Patel?

  He is just doing this without doing the associated work of justifying his plan in the face of hard questions. And I think if anything's the most dangerous piece of this, it's that. But he's not answering to the people through the channels that we traditionally expect our politicians to answer to the people. And I think if you would just start doing that, like I would actually calm down a whole lot, right? If you would start saying, if you would, so Steve Kovac, who works for Business Insider, FCC announced its plan. Kovac gets on the press call and he says, hey, you keep saying this thing about broadband investment, but according to the numbers I'm looking at, you're wrong. Like, can you, can you justify the discrepancy? Which is a great question to ask, right?

• 1:06:38Nilay Patel?

  Like, well thought out question from a good reporter. They just said, next question and moved on. They just refused to answer his question. He's so mad about it. Yeah, he and I were talking about it. And a lot of other people noticed it. It's, they're at that level, right? Where the fundamental question that they need to answer, that they will have to answer in front of a court, they're just not even acknowledging. They're just saying this is the right thing to do and they're moving on. And I think that's the mess, like, whatever, policies are policy. Elections come in, you know, in four years, there'll be another one. Maybe, maybe it'll get even crazier in one direction or maybe it'll swing all the way back. Like, that is the nature of elections. But once you take the office, once you're doing the job, I think you, you have to be responsible to the people. And Pi is definitely not doing that.

• 1:07:24Nilay Patel?

  Stunned silence from Paul. Eli wins again.

• 1:07:26Speaker 02

  I wish, yeah, I really wish he'd get on the podcast. It would be really nice to talk to him.

• 1:07:32Nilay Patel?

  I will say, there is something. Well, he has a standing invite to come on the show.

• 1:07:35Speaker 02

  Yes, he does.

• 1:07:36Speaker 01

  Yeah, in fact, we should, if you're, we should, we should ask our listeners to ask him.

• 1:07:40Speaker 02

  Just send him my Hangouts link on Twitter, Dieter.

• 1:07:43Nilay Patel?

  He's at Ajit Pai FCC, A J I T P A I FCC. Tweet at him. I think, if you've been listening to this, wait, if you've been listening to this, Paul and I have known each other for a long time. We obviously disagree about this, but we are also friends, like, and I think if you've been listening to the show, we are very nerdy. We are very willing to get into the weeds of this argument with him. This is a great show for him to come on and make these arguments. It's not actually a hostile space. It's not an opposition space.

• 1:08:10Speaker 01

  It's just, please don't, don't, don't, don't like tweet offensive crap at him. I've seen like, like, I made a joke about the ratio on his Happy Thanksgiving tweet, and I was right. A bunch of people tweeted nasty things at him to just say Happy Thanksgiving. Please be kind, but like, and we intend to be kind and fair to him on this show. But we do want him to answer the questions that he's refusing to answer.

• 1:08:31Nilay Patel?

  Yeah, he just won't do it. I think, again, and he's racing this through, right? He put out the plan the day before Thanksgiving. He's pushing a vote on December 14th. Like, the amount of time the American people have to react to this is just very low.

• 1:08:44Speaker 02

  But you gotta give him credit. It's more time than there was in 2015. We at least get to read the full text.

• 1:08:50Nilay Patel?

  In, no, I disagree. I disagree in a, in a serious way. In 2015, what had happened was that was a five years after the FCC tried to do something in 2010. They finally did the thing that the courts told them to do. So there was a huge run up, right? That the FCC originally tried to put net neutrality regulations in place under Title I. And Verizon sued them and won. If Verizon hadn't sued them, it would be fine. We would have net neutrality rules under Title I. We wouldn't have all this burdensome additional regulation. But Verizon decided they didn't like it and they sued them and they won. Great. And the court said to them, if you want these regulations, you have to use Title II.

• 1:09:32Nilay Patel?

  So then there was a massive run up again and.

• 1:09:38Nilay Patel?

  Tom Wheeler's first instinct was to not do Title II. It was to try to shoehorn them into yet another statute and go to court again. And basically, the public pressure was put on him to use Title II. So there was like that huge run up. I mean, it was just an endless process where Verizon, they did the rules, Verizon won the case years later. And then Tom Wheeler was made to use Title II with a combination of like a court ruling and public pressure. So like, I, that's not the same as this. Like, that process was so long. It might not have been out, out as in front. And it might not have been like this document, like here's what the FCC is voting on. But the process that was going through, like, we covered the hell out of it, like, every month for four years.

• 1:10:23Nilay Patel?

  So I just don't, I don't see that argument. Like, I get what he's doing. Like, I'm more transparent. You can't read the, like, whatever. No human can read this document.

• 1:10:31Speaker 02

  I will say, in just that abstract sense, I want it to be as easy for an agency to devolve power as it is to, to grab power. And I really do think of 2015 as a power grab by the FCC. Constitutional or not, it really bugs me. I'm really happy to see Ajit Pai trying to devolve power. And I hope that he has correct legal arguments to do that. And I, I, I see how they're a little, little tenuous, but I hope, hope he makes it through. And I'm sorry, I know, I know a lot of people hate that I even open my mouth to disagree with net neutrality. Uh, but, yeah, it, it worries me. And I really do think it puts speech more in the hands of the government.

• 1:11:16Speaker 02

  If you're gonna make a free speech argument.

• 1:11:17Nilay Patel?

  Yeah.

• 1:11:18Speaker 02

  I understand that it's scary for private companies to have so much control over our speech, and that bugs me. But it worries me even more.

• 1:11:25Nilay Patel?

  Yeah, I mean, that's.

• 1:11:25Speaker 02

  That the FCC would have that.

• 1:11:27Nilay Patel?

  To me, Paul, that's like fundamentally like.

• 1:11:30Speaker 01

  This is like, the question about this regulation is, do you trust the government to like, do the right thing about it, or do you trust these private corporations to do the right thing about it?

• 1:11:41Nilay Patel?

  Especially if you don't have a choice.

• 1:11:42Speaker 01

  No, right, normally with private corporations, you can say, I don't have to trust them or not, I could just choose not to give them my money. And in this case, I don't think we have that option, or 51% of Americans don't have that option. And yes, I'm like, I'm with you that the idea that I would, you know, put more power into the government seems scary, but I also like, who am I more afraid of? Big giant, you know, corporations or a big giant government? Well, in theory, at least, if we're talking about philosophy, I can, I can vote for the people in the big giant government in a way that I can't in the big giant corporations.

• 1:12:17Nilay Patel?

  Yeah, Paul, I mean, like, I think this is why I like, this is why we wanted to do an emergency podcast. You and I disagree, I think it's interesting to talk about the parameter of that disagreement, but to me, it's, I don't, I'm stuck at what power did the FCC grab? I couldn't tell you, right? Like, the FCC did a thing that the people of the United States were very vocal about wanting, which is restricting the ability of private internet companies to block speech, basically. And if you don't have a choice, like, I think that's a totally acceptable function for the government. Like, the government needs to do things, otherwise your mind is not going to have one. And I think, right at the end of that again, is like, are you an idealist or are you a pragmatist? Like, do you live in this world, or do you want to live in a world that doesn't exist?

• 1:13:02Nilay Patel?

  Well, Neil, I am a narco-capitalist, I'm glad you asked.

• 1:13:08Nilay Patel?

  Yeah, I'm just, I'm just not, like, yeah, look, we're home, I'm in my parents' house, right? Like, we're home for the holidays, like, their relationship to this technology is not, and they're very smart, they're doctors, there's a model of a heart back here somewhere, I was an MBA, like, their relationship to technology is not as sophisticated as to understand what AT&T U-verse is doing to their connection. They don't give a shit, they have better things to do, right? And like, that's the slippery slope of danger, right? Where Netflix is buffering and they just are like, fuck it, and they use U-verse. Well, they're not gonna, they're not gonna file a consumer protection lawsuit. They're not gonna investigate whether that's a reasonable network management practice.

• 1:13:49Nilay Patel?

  So the, the, the scope of potential harm, unless like we sit around doing our job and like investigating what every company is doing, and you believe the press when they find out, or consumer advocacy organizations, which are not like well-funded, are doing the work. Like, you've just moved the cost. You've moved the cost from the company to this diffuse set of other actors, and they're not gonna win as the companies get bigger and bigger and bigger and collect more profits. Like, that, that to me is the reality. So, all right, we've gone way over. Dieter, did we miss anything?

• 1:14:18Speaker 01

  Probably. I could, I could make more points about being afraid of like, you know, normal, non-tekky Americans not seeing the, the point here, or not seeing the danger here, but we definitely need to stop. But, okay, I'll, I'll say it, I'll say it real quick. Like, I, I, like, yes, last night, like, we were gonna watch a movie, and it was like, well, okay, I'm, I'm just gonna find something good to rent. But everybody else wanted to like, find something free on Netflix to save the four bucks that it would cost to stream something. And if the, it's built into the internet service that you can get CNN for free and Fox News costs two bucks, people will definitely just watch CNN. And like, that's the danger. If the network gets to give you something, uh, and gets to preference content, then it

• 1:15:03Speaker 01

  is the network choosing what you're watching, because people have a very, very, like, lizard brain desire to just take the cheaper thing.

• 1:15:12Nilay Patel?

  Yeah. Okay. Did anybody get anything good for Thanksgiving?

• 1:15:16Speaker 02

  Are you supposed to get presents?

• 1:15:17Nilay Patel?

  Is that what you do on Thanksgiving?

• 1:15:20Nilay Patel?

  It's Black Friday. By the way, I will say, okay, we're gonna end the show, I'm gonna promote some things. It's Black Friday.

• 1:15:24Speaker 01

  Yeah.

• 1:15:25Nilay Patel?

  Um, this, the, the Verge website is full of Black Friday news, so go look at that stuff, uh, you're, if you're listening to this live. On Monday, Paul, you're hosting Gadget Emotional Support.

• 1:15:35Speaker 02

  Yeah, emotional, emotional tech support. So, any emotional problems that you have dealing with Cyber Monday, you can call us live. It's gonna be in the morning, Eastern Time morning.

• 1:15:50Speaker 02

  So get ready for that.

• 1:15:51Nilay Patel?

  It's you, Ashley and Hyam, right?

• 1:15:54Speaker 02

  Hyam is our deals expert and Ashley and I will be providing the emotional support.

• 1:15:59Nilay Patel?

  Yeah, so if you see a hot Cyber Monday deal, you don't know what to do, call Paul and Ashley and Hyam on the Circuit Breaker show, so that's happening. The Vergecast is, I won't be on it next week, I'm out of town, the Vergecast is back next week. And then Ashley and Caitlin are back with Why'd You Push That Button next week. You can also listen to Too Embarrassed to Ask with Lauren Good, who is wonderful. She hosts that show with Kara Swisher. Kara Swisher, equally wonderful, hosts Recode Decode. And then Peter Kafka hosts Recode Media. And I am sure that Recode Media is going to have some net neutrality and AT&T stuff on it coming up because it's two biggest stories in tech policy happening right now. Thank you very much, everybody on the chat here for joining our Renegade Black Friday net neutrality podcast.

• 1:16:43Nilay Patel?

  I know it's the hottest thing going right now, but it's important to us. I will just say this, I think it's cool if three of us can have a conversation, which we disagree about something this fundamental and like have it be cool. So please take that into your heart, try to have cool conversations.

• 1:16:58Speaker 02

  I appreciate that too. And assuming that if I wasn't here and it's just the two of you and you all agree, what is your like call to action? What are people supposed to do?

• 1:17:11Nilay Patel?

  There's a couple of ways. The thing you should do is you should call Congress, right? Congress can put a pressure on the FCC. I saw some well-meaning, let's all tweet it, Ajit Pai and Michael O'Reilly. They're not going to change their mind. Call Congress, you can go to battleforthenet.com, the EFF has a tool. Just make that phone call. Like it's easy to do, you should do it if you believe in it. If you don't believe in it, you can make the phone call too. But our government needs to hear from us and maybe something will change. So like make that first move. It might feel like nothing, but it adds up in the aggregate and it will turn into something. And then when it's lawsuit time, we'll all just, I don't know, we'll huddle for warmth together. It'll be fine. Yeah, that's the Vergecast, Renegade style. Thank you for joining us. Rock and roll.

• 1:17:55Speaker 02

  Promo code.