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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. […]

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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.

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.

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. 

Drew Clark is the Editor and Publisher of BroadbandBreakfast.com and a nationally-respected telecommunications attorney at The CommLaw Group. He has closely tracked the trends in and mechanics of digital infrastructure for 20 years, and has helped fiber-based and fixed wireless providers navigate coverage, identify markets, broker infrastructure, and operate in the public right of way. The articles and posts on Broadband Breakfast and affiliated social media, including the BroadbandCensus Twitter feed, are not legal advice or legal services, do not constitute the creation of an attorney-client privilege, and represent the views of their respective authors.

Broadband's Impact

Technology Policy Institute Introduces Data Index to Help Identify Connectivity-Deprived Areas

The Broadband Connectivity Index uses multiple datasets to try to get a better understanding of well- and under-connected areas in the U.S.

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Scott Wallsten is president and senior fellow at the Technology Policy Institute

WASHINGTON, September 16, 2021 – The Technology Policy Institute introduced Thursday a broadband data index that it said could help policymakers study areas across the country with inadequate connectivity.

The TPI said the Broadband Connectivity Index uses multiple broadband datasets to compare overall connectivity “objectively and consistently across any geographic areas.” It said it will be adding it soon into its TPI Broadband Map.

The BCI uses a “machine learning principal components analysis” to take into account the share of households that can access fixed speeds the federal standard of 25 Megabits per second download and 3 Mbps upload and 100/25 – which is calculated based on the Federal Communications Commission’s Form 477 data with the American Community Survey – while also using download speed data from Ookla, Microsoft data for share of households with 25/3, and the share of households with a broadband subscription, which comes from the American Community Survey.

The BCI has a range of zero to 10, where zero is the worst connected and 10 is the best. It found that Falls Church, Virginia was the county with the highest score with the following characteristic: 99 percent of households have access to at least 100/25, 100 percent of households connect to Microsoft services at 25/3, the average fixed download speed is 243 Mbps in Ookla in the second quarter of this year, and 94 percent of households have a fixed internet connection.

Meanwhile, the worst-connected county is Echols County in Georgia. None of the population has access to a fixed connection of 25/3, which doesn’t include satellite connectivity, three percent connect to Microsoft’s servers at 25/3, the average download speed is 7 Mbps, and only 47 percent of households have an internet connection. It notes that service providers won $3.6 million out of the $9.2-billion Rural Digital Opportunity Fund to provide service in this county.

“Policymakers could use this index to identify areas that require a closer look. Perhaps any county below, say, the fifth percentile, for example, would be places to spend effort trying to understand,” the TPI said.

“We don’t claim that this index is the perfect indicator of connectivity, or even the best one we can create,” TPI added. “In some cases, it might magnify errors, particularly if multiple datasets include errors in the same area.

“We’re still fine-tuning it to reduce error to the extent possible and ensure the index truly captures useful information. Still, this preliminary exercise shows that it is possible to obtain new information on connectivity with existing datasets rather than relying only on future, extremely expensive data.”

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Broadband's Impact

New Report Recommends Broadening Universal Service Fund to Include Broadband Revenues

A Mattey Consulting report finds broadband revenues can help sustain the fund used to connect rural and low-income Americans.

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Carol Mattey of Mattey Consulting LLC

WASHINGTON, September 14, 2021— Former deputy chief of the Federal Communications Commission Carol Mattey released a study on Tuesday recommending the agency reform the Universal Service Fund to incorporate a broad range of revenue sources, including from broadband.

According to the report by Mattey’s consulting firm Mattey Consulting LLC, revenues from “broadband internet access services that are increasingly used by Americans today should contribute to the USF programs that support the expansion of such services to all,” it said. “This will better reflect the value of broadband internet access service in today’s marketplace for both consumers and businesses.”

Mattey notes that sources of funding for the USF, which are primarily from voice revenues and supports expanding broadband to low-income Americans and remote regions, has been shrinking, thus putting the fund in jeopardy. The contribution percent reached a historic high at 33.4 percent in the second quarter this year, and decreased slightly after that, though Mattey suggested it could soar as high as 40 percent in the coming years.

“This situation is unsustainable and jeopardizes the universal broadband connectivity mission for our nation without immediate FCC reform,” Mattey states in her report, “To ensure the enduring value of the USF program and America’s connectivity goals, we must have a smart and substantive conversation about the program’s future.”

According to Mattey’s data, the assessed sources (primarily voice) of income will only continue to shrink over the coming years, while unassessed sources will continue to grow. Mattey’s report was conducted in conjunction with INCOMPAS, NTCA: The Rural Broadband Association, and the Schools, Health and Libraries Broadband Coalition.

“It is time for the FCC to take action, and to move away from the worst option of all – the status quo – that is jeopardizing the USF which is critical to connecting our nation,” the report said.

John Windhausen, executive director of SHLB, echoed the sentiments expressed by Mattey in her report, “We simply must put the USF funding mechanism on a more stable and sustainable path,” he said, “[in order to] strengthen our national commitment to broadband equity for all.”

Mattey report uniform with current recommendations

Mattey’s research is generally in line with proponents of change to the USF. Some have recommended that the fund draw from general broadband revenues, while others have said general taxation would provide a longer lasting solution. Even FCC Commissioner Brendan Carr suggested that Big Tech be forced to contribute to the system it benefits from, which the acting chairwoman Jessica Rosenworcel said is an “intriguing” idea.

The FCC instituted the USF in 1997 as a part of the Telecommunications Act of 1996. The fund was designed to encourage the development of telecom infrastructure across the U.S.—dispensing billions of dollars every year to advance the goal of universal connectivity. It does so through four programs: the Connect America Fund, Lifeline, the rural health care program, and E-Rate.

These constituent programs address specific areas related for broadband. For example, the E-Rate program is primarily concerned with ensuring that schools and libraries are sufficiently equipped with internet and technology assistance to serve their students and communities. All of these programs derive their funding from the USF.

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Digital Inclusion

Outreach ‘Most Valuable Thing’ for Emergency Broadband Benefit Program: Rosenworcel

FCC Acting Chairwoman Rosenworcel said EBB will benefit tremendously from local outreach efforts.

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Internet Innovation Alliance Co-Chair Kim Keenan

WASHINGTON, September 13, 2021 – The head of the Federal Communications Commission said Monday that a drawback of the legislation that ushered in the $3.2-billion Emergency Broadband Benefit program is that it did not include specific funding for outreach.

“There was no funding to help a lot of these non-profit and local organizations around the country get the word out [about the program],” Jessica Rosenworcel said during an event hosted by the Internet Innovation Alliance about the broadband affordability divide. “And I know that it would get the word out faster if we had that opportunity.”

The program, which launched in May and provides broadband subsidies of $50 and $75 to qualifying low-income households, has so-far seen an uptake of roughly 5.5 million households. The program was a product of the Consolidated Appropriations Act of 2021.

“We gotta get those trusted local actors speaking about it because me preaching has its limitations and reaching out to people who are trusted in their communities to get the word out – that is the single most valuable thing we can do,” Rosenworcel said.

She said the FCC has 32,000 partners and has held more than 300 events with members of Congress, tribal leaders, national and local organizations, and educational institutions to that end.

“Anyone who’s interested, we’ll work with you,” she said.

EBB successes found in its mobile friendliness, language inclusion

Rosenworcel also preached the benefits of a mobile application-first approach with the program’s application that is making it accessible to large swaths of the population. “I think, frankly, every application for every program with the government should be mobile-first because we have populations, like the LatinX population, that over index on smartphone use for internet access.

“We gotta make is as easy as possible for people to do this,” she said.

She also noted that the program is has been translated into 13 languages, furthering its accessibility.

“We have work to do,” Rosenworcel added. “We’re not at 100 percent for anyone, and I don’t think we can stop until we get there.”

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