Mea Culpa Follows Double Blow to Verizon PR on Net Neutrality, Public Safety; New California Bill in Works

“We’re introducing a new plan that will feature unlimited data, with no caps on mobile solutions and automatically includes priority access,” said Verizon Senior Vice President-Public Sector Mike Maiorana. Public safety can upgrade for free; Verizon will release more details when the plan comes out next week, he said. “In supporting first responders in the Mendocino fire, we didn’t live up to our own promise of service and performance excellence when our process failed some first responders on the line, battling a massive California wildfire,” Maiorana said. “We are truly sorry. And we’re making every effort to ensure that it never happens again.”

The Santa Clara incident could lead to another California bill. The Assembly Select Committee on Natural Disaster Response, Recovery and Rebuilding probed Verizon on the event at a Friday hearing. “There is a concern that providers will respond to net neutrality with increased data throttling of customers,” said committee co-Chair Marc Levine (D) in a statement before the hearing. “This is problematic on many fronts. We must ensure first responders have the data speeds necessary in disaster situations. Furthermore, the telecommunications industry must not use these events to maximize profits. I am considering introducing legislation to protect this from happening.” Co-Chair Monique Limon (D) wants best practices for all telecom providers, not just Verizon, she said at the hearing. "While there were mistakes, it was also very evident that our public safety can't live without the product."

Verizon is eliminating the "human side" of the process for removing speed caps during disasters, so first responders won't have to worry about future throttling, testified Verizon Vice President-Business Sales David Hickey. The carrier won't wait for emergency declarations but will work with former first responders within Verizon and consultants to qualify what are disasters, he said. "This issue is not about net neutrality," said Rudy Reyes, Verizon associate general counsel for the western U.S. They are "apples and oranges," he said.

House Minority Leader Nancy Pelosi and Rep. Anna Eshoo, both D-Calif., led a Friday push with 11 other Democratic members of California’s House delegation for the FTC to investigate Verizon’s throttling action for potential violations of FTC Act Section 5’s ban on “unfair or deceptive” practices. “It is unacceptable for communications providers to deceive their customers, but when the consumer in question is a government entity tasked with fire and emergency services, we can’t afford to wait a moment longer,” they said in a letter to FTC Chairman Joseph Simons. “The FTC must investigate whether Verizon and other communications companies are being unfair or deceptive in the services they’re offering to public safety entities, and if so, to determine what remedies are appropriate to ensure our first responders have adequate service when lives are on the line.” The FTC must “protect consumers from unfair or deceptive acts or practices stemming from this incident’ given the FCC’s order rescinding its 2015 net neutrality rules, which “abdicated its jurisdiction over broadband communications,” the lawmakers said.

“It is a wake-up call for public safety agencies, who should review their wireless data contracts carefully and understand what type of data plan they have, before an emergency occurs,” emailed Bay Area Regional Interoperable Communications Systems Authority General Manager Barry Fraser.

“It’s a big PR problem” for Verizon’s public safety business, in addition to the carrier’s fight against California net neutrality legislation, emailed 556 Ventures analyst Bill Ho. With substantial public safety market share, Verizon is fighting to prevent public safety accounts from going to AT&T FirstNet, he said. The timing with Hurricane Lane is significant, with the statement a sharp departure from the carrier’s typical “ready for the hurricane” news releases, he said.

“This reinforces the need for FirstNet, which does not throttle subscribers anywhere in the country," an AT&T spokesperson said. “FirstNet is designed with and for first responders to meet their needs in ways that other providers clearly aren’t."

Jamie McLeod-Skinner, the Democrat challenging House Commerce Committee Chairman Greg Walden, R-Ore., seized on Verizon’s throttling as a campaign issue in a Friday tweet claiming it was evidence the FCC’s net neutrality rescission order had “real consequences.” McLeod-Skinner cited Walden’s past acceptance of campaign donations from Verizon as a precursor to his support for the rescission order. Walden’s Hill and campaign offices didn’t comment.

Violation?

Verizon claims the throttling wasn’t a net neutrality violation because the carrier didn’t discriminate among content; it happened because the firefighters had a plan that reduced speed after a certain amount of data is used. Conservative think tanks agreed with Verizon but supporters of the 2015 open internet order said it’s still problematic.

Probably nobody at Verizon wanted to see this happen, but “it takes policy to keep it from happening again,” said Public Knowledge Senior Vice President Harold Feld in an interview. Metered plans may be allowed, but the old rules set up a process in which Santa Clara could have filed a complaint at the FCC. Even if the FCC didn’t find a net neutrality violation, it still then could have cited the incident to make rules to prevent it from happening again, Feld said.

It happened because of a localized customer-service mistake, not a broad Verizon policy, so it seems unlikely any rules could have prevented the incident, said Information Technology and Innovation Foundation Director-Broadband Policy Doug Brake. It’s a “real issue” that looks bad for Verizon, but not a net neutrality or Title II issue, he said. The 2015 order explicitly allowed metered data plans, said Brake, citing paragraph 122 that says the no-throttling rule “does not address a practice of slowing down an end user’s connection to the Internet based on a choice made by the end user.” It also says the plan must be transparent, and if the FCC “were concerned about the particulars of a data plan, it could review it under the no-unreasonable interference/disadvantage standard.”

Brake and Feld agreed the controversy is a double blow for Verizon public relations. It’s “terrible optics” during a historic fire, especially as California mulls net neutrality rules, and “doesn’t look good” for Verizon as AT&T and FirstNet pitch their dedicated network, Brake said. The situation hurts Verizon as it competes with FirstNet and boosts California net neutrality legislation heading into its final week to clear the legislature, said Feld, saying history is “full of ISPs putting their foot in it at a critical time.”

The Santa Clara event has “everything to do with net neutrality,” Georgetown Law Institute for Technology Law & Policy fellow Gigi Sohn wrote Friday in an NBC News commentary. Even if “not technically a violation of the 2015 net neutrality rules’ express prohibition against throttling internet traffic, the company’s actions may still have violated the 2015 rules,” she said. Firefighters could have complained under the order’s general-conduct rule and “made a persuasive case that Verizon was unreasonably interfering with its ability to use broadband internet access service,” she said.

Verizon “intentionally misses the point” when it argues it didn’t discriminate on content, blogged Electronic Frontier Foundation legislative counsel Ernesto Falcon. “The 2015 order, by reclassifying ISPs under Title II of the Federal Communications Act, would have likely made what happened with the fire department illegal.” Chairman Ajit Pai’s FCC didn’t just kill net neutrality rules but “declared federal laws that would be directly applicable to Verizon’s conduct to no longer apply.” Under the 2015 order, “the FCC could investigate the issue, [penalize] Verizon for its conduct, and subsequently adopt a regulation stating ISPs cannot throttle public safety agencies during the time of emergency.” While the FTC could punish Verizon “after the fact,” the FCC could have made a rule to stop it from happening again, Falcon said.

With a comprehensive net neutrality bill awaiting a floor vote in the California Assembly, the Privacy Committee voted 7-3 Thursday to send its companion to the Appropriations Committee. SB-460 would restrict California government agencies from making contracts with ISPs that don’t follow net neutrality rules in SB-822. If the bills pass the Assembly by Aug. 31, they would need Senate concurrence with Assembly changes and signature of Gov. Jerry Brown (D). Litigation is expected if the bills pass the legislature by an Aug. 31 deadline (see 1808230034).