How Verizon Tricks You Into Paying for the Privilege to Pay More

Earlier this month, the FCC voted in favor of a pretty thoroughly terrible proposal that would kill net neutrality as we know it. A proposal that would give broadband companies an absurd amount of powers that they themselves delineated. And a proposal that would give Verizon (and broadband carriers in general) the ability to act as internet gatekeeper—playing favorites and charging whatever the hell they damn well please.

Now, thanks to some illuminating leaked documents from New York's Public Utility Law Project, we know for a fact that Verizon is taking an advantage of a little loophole in the law that gives them all the benefits of regulation without any of the obligations. To be perfectly clear, it's likely that every broadband provider plays this particular shell game. Verizon's just the one that got caught in the act.

It's important to note, too, that even though Verizon pulled the trigger, it's our very broken regulatory system that supplied the gun. When our laws prove ineffective, it's hard to be surprised when corporations start fulfilling every terrible, money-mongering stereotype there is.

Verizon's maneuvering really is a complicated little bit of duplicity. Let's break it down.

What do I need to know?

Let's start with the basics. Verizon's trickery takes advantage of the fact that there are both national and state-level telecom laws, each of which comes with its own quirks and levels of oversight. The FCC has jurisdiction over telecom services on an interstate level, while state governments have jurisdiction on an intrastate level. In other words, communications that cross state lines have to follow FCC regulations, while those traveling within state boundaries have to answer to the state itself.

Within each these levels of law, we're also dealing with two distinct types of service. There's something called Title I, an information/data service and the category that covers broadband, as well as something called Title II, traditional voice/telephone services that will often be referred to as "common carrier" services. While the term common carrier actually encompasses a whole range of services, for our purposes, we just need to know that common carriers are required to serve the general public without any discrimination whatsoever.

Ok, so what does that have to do with Verizon?

When you provide two distinct classifications of services (voice and broadband), you also have to adhere to two distinct sets of benefits and drawbacks that go along with either class. But Verizon (and pretty much every other major telecom player) injects your home with both voice and broadband, through it arguably falls under both jurisdictions. Or, as happens in practice thanks to some clever dodging and weaving, neither.

Isn't it kind of impossible to follow two conflicting sets of rules at the same time?

It sure is! Which is why Verizon is doing no such thing. Instead, it's carefully plucking out all the various benefits that both Title I and Title II have to offer, while leaving the unsavory obligation bits untouched. And it's been getting away with it, too, because while it's in Washington trying to kill net neutrality and avoid reclassification, Verizon is also happily taking advantage of the very common carrier status it's supposedly fighting against.

At a state level, Verizon has every reason to want to classify itself as a common carrier, since common carriers are afforded some pretty sweet benefits wherever their wires are physically located. Derek Turner, Research Director at the Free Press, explains:

If you own a wired network, you have to have access to public rights of way. Your wires have to exist on public property. You can't just go around digging up the streets to lay your fiber cables. Someone owns the utility poles, and that means they can make you pay huge fees to use those poles for your fiber cables. That's bad for the public interest overall, and since the poles are on public property, the rates are regulated.

As a telecom carrier, you get a specific rate that is usually lower than the rate a cable or private carrier could get.

Meanwhile, on a federal level, Verizon's simultaneously lobbying Congress to keep national common carrier status as far away from its fiber optic network as possible. Because if the FCC classifies Verizon as such, Verizon would be forced to offer broadband according to the same strict, federal (not to mention fair and equal opportunity) regulations to which our telephones abide. If Verizon escapes that Title II classification, though, it's free to hike rates however it sees fit.

All of which is pretty damn sneaky, sure, but as far as the law is concerned, 100 percent legal.

Ok, so Verizon is being shady. How does this affect me?

What's a win-win for Verizon is a lose-lose for the consumer (read: you). As Verizon is making deals to roll out its FiOS network across the country, it's been busy classifying it as a Title II service. Which means that it can charge its plain ol' copper-based phone customers for the actual development and installation of FiOS, since it is, presumably, just a replacement for the Title II service they're already providing you.

Except that it's not. Because while Verizon is charging you to lay down its FiOS line as a Title II, it's also fighting the fed to simultaneously enjoy the benefits of a Title I. Benefits that, specifically, would allow Verizon to charge you even more for using the damn line than it might otherwise.

So Verizon is describing itself as one thing to Congress and the opposite thing to states, both of which end up giving Verizon more freedom at the expense of the internet's own. And that sticks with the bill for an installation that you a) didn't ask for and b) will cost you even more once its installed.

…Yep. That's pretty miserable. How do we fix it?

What this—not to mention the net neutrality debate in its entirety—boils down to is one big, egregiously glossed over problem: reclassification. Without reclassifying broadband providers as common carriers, Verizon's underhanded game is free to continue with the full support of the law.

We've reached out to Verizon for comment and are waiting to hear back, but as far as semantics goes, there is every reason to classify Verizon's broadband as a telecom service. It offers a service to the public that enables them to send the information of their choosing, between points of their choosing, without change in the form or content of the information. In other words, the exact, legal definition of a telecom service. According to Turner:

Broadband is a telecom service. Common carriage is essential to our ability to speak freely and connect and communicate. It's insane that under the law, Verizon's FiOS broadband service is treated the same way as Gizmodo.com; but they are, because they are both "information services."

It's important to note that Verizon is by no means the only culprit here. Most big ISPs who also offer voice (i.e. most of them) are pulling the same stunt—because the law allows it. We're never going to convince giant corporations to stop making ludicrous sums of money. But now that we're aware of how bad we're actually getting screwed, we can—and should—do everything in our power to keep the internet fair and the law on our side. After all, "a government of the people, by the people, and for the corporate special interests" just doesn't have quite the same ring.