Broadband's Impact

Building a Legal Case for Net Neutrality Rules, FCC’s Wheeler Hopes Courts Will Look Favorably on His Logic

WASHINGTON, May 19, 2014 – The D.C. Circuit Court of Appeals struck down the Federal Communications Commission’s last two efforts to enshrine network neutrality. So what makes current chairman Tom Wheeler feel as though he can succeed where two of his predecessors failed?

The answers lie in the details of the 85-page order – called a “Notice of Proposed Rulemaking” in the legalese of Washington telecommunications bureaucrats – released late on Thursday.

At its core, Wheeler aims to regulate broadband providers without having to treat them as regulated entities. […]

Published

9 years ago

May 19, 2014

Drew Clark

Editor’s Note: Federal Communications Commission Chairman Tom Wheeler is attempting to craft legally unassailable rules promoting net neutrality. But he’s run into trouble from all sides. Communications providers aren’t happy. His fellow commissioners aren’t happy. And the “netroots” activists aren’t happy, either.

BroadbandBreakfast.com posts three articles on Thursday’s action at the FCC. First, the scene at 12th Street SW. Second, the reaction from interested parties. Third, what the details of the agency’s order says.

The answers lie in the details of the 85-page order – called a “Notice of Proposed Rulemaking” in the legalese of Washington telecommunications bureaucrats – released late on Thursday.

At its core, Wheeler aims to regulate broadband providers without having to treat them as regulated entities.

There are three conceptual building blocks for this maneuver: (1) the transparency requirement in his proposed network neutrality rules; (2) a “no blocking” requirement; and (3) enforcing a “commercially unreasonable” standard against potentially discriminatory practices by internet service providers.

The First Building Block

The transparency requirement was upheld by the court in its January 2014 decision in Verizon v. FCC. In Wheeler’s mind, the transparency requirement will give the agency insight into the possibility that “a network [might] take an action that would affect a content provider’s access.”

The agency seeks to enhance the transparency rules put in place when former FCC Chairman Julius Genachowski introduced it as part of the Open Internet Order of 2010.

The Second Building Block

The “no blocking” requirement is largely uncontroversial: almost all broadband providers are publicly committed to the proposition that they will not block access to a content service, even if it they are competitively adverse to such a service – for example, Comcast hasn’t blocked access to Netflix, even though the cable company’s movies-on-demand feature competes with the internet streaming video company.

Yet finding legal grounds for that rule has been challenging.

While the court struck down the “no blocking” ban, the FCC said that the court accepted the FCC’s reasoning for its “no blocking” ban, if only the agency had justified the rule on firmer legal grounds.

Here’s the FCC’s logic on what the court meant in Verizon v. FCC:

On January 14, 2014, the D.C. Circuit ruled on Verizon’s challenge to the Open Internet Order. …[T]he court upheld the Commission’s reading that sections 706(a) and (b) of the Telecommunications Act grant the Commission affirmative authority to encourage and accelerate the deployment of broadband capability to all Americans through, among other things, measures that promote competition in the local telecommunications market or remove barriers to infrastructure investment. The court further held that the Commission could utilize that section 706 authority to regulate broadband Internet access service. It concluded that the Commission had adequately justified the adoption of open Internet rules by finding that such rules would preserve and facilitate the “virtuous circle” of innovation, demand for Internet services, and deployment of broadband infrastructure and that, absent such rules, broadband providers would have the incentive and ability to inhibit that deployment.

If the D.C. Circuit is so open to the FCC’s reasoning, why did the agency lose in the Verizon case? Because the FCC made the argument that broadband providers were, effectively, a common carrier.

If it were a common carrier, a broadband company would have to provide internet service in a non-discriminatory manner; common carriers aren’t allowed to discriminate. Private communications providers are permitted to differentiate in their service offerings.

Moreover, in the last decade, prior to struggle for net neutrality rules, the FCC has been moving to deregulate rather than to regulate the provision of broadband.

Historically, telephone connections were classified as “telecommunications services” under Title II of the Communications Act. Broadcast television and radio services were classified under Title III of the law, and cable television services were lumped into yet another section, Title VI.

The 1996 revisions to the Telecommunications Act put telecommunications services subject to regulation under Title II; and information services not subject to such regulation. The agency chose to make fiber-optics exempt from common carrier regulation; then it took the same path for cable-modem service, and for digital subscriber line (DSL) service over copper wires The section is largely deregulatory, if ambiguous in its direction to the FCC.

The 1996 law also added an unusual new section, referred to as Section 706, regarding “advanced telecommunications incentives.”

If the agency determines, as a result of its regular inquiries into the deployment of broadband, that Americans are not being adequately served by high-speed internet, the law stipulates that “it shall take immediate action to accelerate deployment of such capability by removing barriers to infrastructure investment and by promoting competition in the telecommunications market.”

What is this “immediate action” that the agency proposes? The “no blocking” provision of the net neutrality rules.

The Third Building Block

The third pillar on which the agency builds its new net neutrality rules is a new standard, that of “commercially unreasonable.”

Overcoming this hurdle will be Wheeler’s biggest obstacle in sustaining the legality of Thursday’s proposed rules.

Previously, Genachowski had attempted to ban all “unreasonable” discriminatory actions of broadband providers. The court didn’t look kindly on this argument, saying that the FCC was now treating broadband providers as common carriers. This it was not allowed to do.

Now, instead of barring “unreasonable discrimination,” the agency seeks to bar only “commercially unreasonable” discrimination. The agency stumbled into this standard in a most accidental manner: in a separate 2012 case, the D.C. Court of Appeal upheld the agency’s data-roaming rules on the grounds that to violate them would constitute “commercially unreasonable” discrimination.

So here’s how, in his remarks on Thursday, Wheeler contends that the building blocks would work:

I want to get to rules that work like this:

If the network operator slowed the speed below that which the consumer bought (for reasons other than reasonable network management), it would be a commercially unreasonable practice and therefore prohibited,

If the network operator blocked access to lawful content, it would violate our no blocking rule and be commercially unreasonable and therefore doubly prohibited,

When content provided by a firm such as Netflix reaches the consumer’s network provider it would be commercially unreasonable to charge the content provider to use the bandwidth for which the consumer had already paid and therefore prohibited,

When a consumer buys specified capacity from a network provider he or she is buying open capacity, not capacity the network can prioritize for its own profit purposes. Prioritization that deprives the consumer of what the consumer has paid for would be commercially unreasonable and therefore prohibited.

Simply put, when a consumer buys a specified bandwidth, it is commercially unreasonable – and thus a violation of this proposal – to deny them the full connectivity and the full benefits that connection enables.

Will the argument work? Legally, it’s closer than the FCC has ever been to sustaining net neutrality rules. But politically, that’s another story entirely.

Drew Clark is the Chairman and Publisher of the Broadband Breakfast Club, the premier Washington forum advancing the conversation around broadband technology and internet policy. You can find him on Google+ and Twitter. He founded BroadbandCensus.com, and he brings experts and practitioners together to advance Better Broadband, Better Lives.

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Critics on Both Ends of the FCC’s Net Neutrality Rules, With a Few Supporters in the Middle

Drew Clark

Breakfast Media LLC CEO Drew Clark has led the Broadband Breakfast community since 2008. An early proponent of better broadband, better lives, he initially founded the Broadband Census crowdsourcing campaign for broadband data. As Editor and Publisher, Clark presides over the leading media company advocating for higher-capacity internet everywhere through topical, timely and intelligent coverage. Clark also served as head of the Partnership for a Connected Illinois, a state broadband initiative.

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Broadband's Impact

Tech Trade Group Report Argues for USF Funding from Broadband Companies

Consulting firm Brattle Group said in a report the move would be economically sound.

Published

7 days ago

September 19, 2023

Jake Neenan

Screenshot of Chip Pickering, INCOMPAS CEO

WASHINGTON, September 19, 2023 – Tech company trade group INCOMPAS and consulting firm Brattle Group released on Tuesday a report arguing for adding broadband providers as contributors to the Universal Service Fund.

The USF spends roughly $8 billion each year to support four programs that provide internet subsidies to low-income households, health care providers, schools, and libraries. The money comes from a tax on voice service providers, causing lawmakers to look for alternative sources of funding as more Americans switch from phone lines to broadband services.

The Federal Communications Commission administers the fund through the Universal Service Administration Company, but has left it to Congress to make changes to the contribution pool.

The report argues that broadband providers should be one of those sources. It cites the fact that USF funds are largely used for broadband rather than voice services and that broadband adoption is increasing as phone line use decreases.

“The USF contribution base needs to change to account for the fact that connectivity implies not just voice telephone services, but predominantly broadband internet access,” the report says.

It also rebuts arguments for adding tech companies like INCOMPAS members Google and Amazon to the contribution pool, saying they represent a less stable source of income for the program and that added fees for services like streaming could affect .

The report is the latest salvo in an ongoing dispute between tech companies and broadband providers over who should support the USF in the future, with broadband companies arguing big tech should be tapped for funding as they run businesses on the networks supported by the fund.

Sens. Ben Lujan, D-N.M., and John Thune, R-S.D. established in May a senate working group to explore potential reforms to the program. The group heard comments in August from associations of tech and broadband companies, each outlining arguments for including the other industry in the USF contribution base.

Broadband's Impact

Florida Broadband Grants, Support for Microsoft-Activision, IQ Fiber Investment

Comcast, Conexon, and Cox received $247 million in Florida broadband grants.

Published

1 week ago

September 18, 2023

Ryan Barba

Photo of fiber-optic installation from 2018 by CTA

September 18, 2023 – Service providers Comcast, Conexon, and Cox are receiving the biggest awards totaling $247 million in Broadband Grants in the state of Florida, Telecompetitor revealed Thursday.

Cox is receiving $80 million for 11 projects, Comcast is getting $60 million for 34 projects, and Conexon is receiving roughly $40 million. Additional companies receiving funding include, Charter Communications, AT&T, CenturyLink, Suwanee Valley Electric Cooperative, Consolidated, TDS, IBT, and Myakka, Telecompetitor noted.

The state announced the $247 million in broadband grants this July, but did not include the names of the providers who would be providing the services.

The grants were made possible through Florida’s Broadband Infrastructure Program, which received funding through the Treasury’s Capital Projects Fund.

Nine Amicus briefs filed in support of Microsoft’s purchase of Activision Blizzard

Nine amicus briefs were filed Thursday in support of Microsoft’s $68.7 billion purchase of Activision-Blizzard by a group of parties that included the U.S. Chamber of Commerce and Communications Workers of America among others.

The briefs come in response to the Federal Trade Commission’s attempt to appeal its loss against Microsoft to prevent the sale in the United States, alleging that Microsoft’s acquisition of Activision-Blizzard would allow it to manipulate access to Activision’s products for rival gaming consoles to Microsoft’s Xbox, therefore suppressing competition in the gaming industry.

“This Commission’s hostility to the procompetitive and efficiency-enhancing prospects of mergers is well-known—but the Commission’s position is not supported by merger case law,” said Bilal Sayyed, TechFreedom senior competition counsel, former director of the FTC’s Office of Policy Planning.

Among the briefs released, five independent publishers and studios that included Curve Digital, Finji, iam8bit, Strange Scaffold, and Studio Wildcard – going under “amici”’ in support of the acquisition – hint the deal will positively benefit the development community.

“Amici are five independent companies, of all shapes and sizes, that publish or develop video games for a range of game-streaming platforms, including Microsoft’s Xbox Game Pass service on Xbox,” the brief stated. “Thus having first-hand experience with Microsoft’s Game Pass subscription and its effects on the market for independently published and developed games.

“While the FTC argues that the merger will stifle competition, amici have had precisely the opposite experience with Microsoft’s Game Pass service.”

In June 2022, the CWA was able to enforce a Labor Neutrality Agreement with Microsoft if the acquisition were approved. Under the agreement, workers with Activision Blizzard would be able “to freely make a choice about union representation.”

“While the labor neutrality agreement at Activision does not take effect until the merger closes, Microsoft has already proven its commitment to abide by the agreement by extending its provisions to its own employees,” CWA wrote on their website.

IQ Fiber starts construction of fiber-optic network in northwest Gainesville, $40 million invested in phase one of project

IQ Fiber has started its first phase of construction Friday, a $40-million investment to bring a fiber-optic network to the Northwest Gainesville and Alachua County in Florida.

The company, based in Jacksonville, is bringing its services to Florida’s Alachua, Duval, Clay, Nassau and St. Johns counties, which is its “first major network expansion outside of the Jacksonville region.”

IQ Fiber expects online service to be available for “a few” Northwest Gainesville neighborhoods near the start of 2024.

Gainesville Mayor Harvey Ward said in a press release that extending broadband competition in the community was always a priority and is hopeful that IQ Fiber’s presence will provide a plethora of opportunities for the neighboring communities.

Since starting in 2021, the company has developed over 600 miles of fiber-optic cable across North Florida.

Digital Inclusion

Broadband Association Argues Providers Not Engaged in Rollout Discrimination

Trade group says telecoms are not discriminating when they don’t build in financially difficult areas.

Published

1 week ago

September 18, 2023

Hanna Agro

Image of redlining from historic map of the Home Owners’ Loan Corporation of Richmond, Virginia, from PBS.

WASHINGTON, September 18, 2023 – Broadband association US Telecom sent a letter to the Federal Communications Commission last week saying internet service providers don’t build in certain areas because it is financially difficult, not because they are being discriminatory.

The FCC proposed two definitions of digital discrimination in December 2022: The first definition includes practices that, absent technological or economic constraints, produce differential outcomes for individuals based a series of protected characteristics, including income, race, and religion. The second definition is similar but adds discriminatory intent as a necessary factor.

“To make business determinations regarding capital allocation, an ISP must consider a host of commercially important factors, none of which involve discrimination,” said the September 12 letter from USTelecom, which represents providers including AT&T, Verizon, Lumen, Brightspeed, and Altafiber.

“As the Commission has consistently recognized, such deployment is extremely capital-intensive…This deployment process is therefore subject to important constraints related to technical and economic feasibility” added the letter.

US Telecom explained that ISPs’ will choose to invest where they expect to see a return on the time and money they put into building broadband.

The association added that factors like population density, brand reputation, competition and the availability of the providers’ other services all go into deciding where broadband gets deployed.

“The starting point of the Commission’s approach to feasibility should be a realistic acknowledgement that all ISPs must prioritize their resources, even those that invest aggressively in deployment,” added the letter.

The association also highlighted the fact that it hopes to see as little government intervention in broadband deployment activity as possible, a concern that has been echoed by lobbyists before.

“Rather than attempting to use Section 60506 to justify taking extra-statutory intrusive actions that could paradoxically undermine ongoing broadband investment, the Commission must enable ISPs to make decisions based on their own consideration of the kinds of feasibility factors discussed above” read the letter.

Section 60506 of the Infrastructure, Investment and Jobs Act says that the FCC may implement new policies to ensure equal access to broadband.

The FCC is also looking to develop guidelines for handling digital discrimination complaints filed against broadband providers.

USTelecom said that ISPs should be allowed to demonstrate financial and logistical concerns as a rebuttal to those claims, in addition to disclosing other reasons for directing investment elsewhere to demonstrate non-discriminatory practice.

Reasons for investment elsewhere would include rough terrain, low-population density, MTE owners not consenting to deployment, zoning restrictions, or historical preservation review.

“To aid in the success of the Infrastructure Act and facilitate equal access, the Commission must continue to foster an environment conducive to ISP investment in the high-speed broadband infrastructure that Congress rightly views as central to our connected future,” concluded the letter.