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How Internet Companies Are Driving a Public Utility Regulation Approach to Net Neutrality

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WASHINGTON, September 12, 2014 – In what would have seemed highly unlikely just a few months ago, growing support for public utility regulation is emerging. Tech companies, politicians, internet service providers, and component makers have started to outline their views regarding their policy approach to the issue of net neutrality. In order to understand the views of the major players and their respective camps, it is helpful to look back in time a bit.

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power lines via pixabay

In January 2014, the D.C. Circuit Court of Appeals ruled, in Verizon Communications v. Federal Communications Commission, that the FCC lacked the authority to enforce both the anti-blocking and anti-discrimination clauses of the agency’s 2010 Open Internet Order unless broadband providers were reclassified as common carriers, and subject to the regulation as “telecommunications services” under Title II of the Communications Act.

Although the FCC arguably has the authority to reclassify internet access service as a “telecommunications,” such a move would be a significant reversal of agency decisions. About 10 years ago, the FCC chose to make fiber-optics exempt from common carrier regulation; then it took the same path for cable-modem services, and for digital subscriber line (DSL) service over copper wires.

Is ‘Light Regulation’ Still Regulation?

While FCC Chairman Tom Wheeler has said that he is keeping the option of Title II regulation on the table, the thrust of his efforts have been aimed at regulating broadband providers without having to treat them as regulated entities.

The agency has argued that the D.C. Circuit has already authorized, using Section 706 of the Telecommunications Act of 1996, (1) the transparency requirement in his proposed network neutrality rules; (2) a “no blocking” requirement; and (3) the enforcement of a “commercially unreasonable” standard against potentially discriminatory practices by internet service providers.

Wheeler believes that his agency can enforce the no blocking goal and the non-discrimination rule under Section 706 of the Telecommunications Act of 1996. In a February 19 statement he said that the court agreed that the section “gives the FCC authority to encourage broadband deployment by, among other things, removing barriers to infrastructure deployment, encouraging innovation, and promoting competition.”

“The D.C. Circuit ruled that the FCC has the legal authority to issue enforceable rules of the road to preserve Internet freedom and openness.”

-FCC Chairman Tom Wheeler 

While major ISPs like Comcast and Time Warner Cable have said that they will continue to adhere to the principles of the 2010 Open Internet Order, critics of these companies want concrete safeguards. On January 30, a coalition of 86 groups, including the American Civil Liberties Union, Free Press, Demand Progress and Reddit, called for reclassification under Title II. In late February, Netflix signed a multiyear agreement with Comcast in which the video streaming company paid Comcast for a direct connection to Comcast’s network. It made a similar agreement with Verizon. Netflix has called for stronger net neutrality rules to protect an open internet.

Early Support for Wheeler’s Section 706 Approach

Some saw Wheeler’s proposition of enforcing net neutrality rules through Section 706 as a plausible way forward. In May, a huge coalition of tech companies, led by Google, Microsoft, Yahoo, Amazon, Facebook and Twitter, asked the FCC to protect users and companies “on both fixed and mobile platforms against blocking, discrimination, and paid prioritization.” Other companies that signed the letter include eBay, KickStarter, Reddit, WordPress, Mozilla, Dropbox, LinkedIn, Foursquare, Digg, Meetup and Lyft. However, these companies didn’t explicitly state which route – Section 706 or Title II reclassification — they supported.

A renewed push for reclassification started in July. In its FCC filing, Netflix made clear its staunch support for reclassification. In addition to advocacy groups like Free Press, Public Knowledge and EFF, both The New York Times editorial board and former FCC Commissioner Michael Copps, who now heads the advocacy group Common Cause, have argued for the common carrier solution. Tech companies Etsy and Dwolla have also joined this camp along with tech incubator Y Combinator, whose founder Alexis Ohanian argued that only reclassification would give the FCC the necessary authority to halt paid prioritization.

“The FCC cannot impose a nondiscrimination rule–unless it classifies broadband providers under Title II,” wrote Ohanian in a letter to the FCC. “The Court also held that, without classifying broadband providers under Title II, the FCC could not ban charging fees for priority access, even though the FCC recognized such fees would be a ‘significant departure from historical and current practice.’ ”

On Wednesday, September 10, the Battle for the Net’s “Slow Lane Protest” saw more than 10,000 websites participate, including Netflix, WordPress, Vimeo, Tumblr, FourSquare, KickStarter and Dropbox, display a symbolic loading icon on their respective sites that encouraged visitors to contact members of Congress, the White House and the FCC about net neutrality. This symbolic internet slowdown generated “nearly 300,000 calls and more than 2 million emails to Congress,” while “722,364 people filed comments at the FCC,” a press release from Fight for the Future stated.

Absent from the “slowdown” participants were tech giants Apple, Facebook, Google, Microsoft and Yahoo. These companies have signed on to coalitions that support open internet principles, and Google took to its “Take Action” page to voice its opposition for paid prioritization. Google did not respond to a request for comment as to why the company did not participate in Wednesday’s protest.

ISPs, Carriers & Equipment Companies Oppose Reclassification

Although ISPs like Comcast and Time Warner have been vague. Many of them are proponents of light regulation that they state has allowed them to grow and thrive. Comcast’s most recent post on their blog cements their stance against reclassification, together with a seemingly strong statement of support for open internet rules under Section 706. However, Comcast does not actually say that it supports this route; rather, it states that “The Courts have laid out a clear path and clear authority (under Section 706 of the Telecommunications Act) for the FCC to adopt robust and legally enforceable Open Internet rules.”

Other major carriers have taken a similar approach. Verizon has been an opponent of reclassification, a viewpoint reiterated in their filing with the FCC on July 17. Ars Technica reported that Verizon said Title II reclassification would require web services like Netflix to pay Verizon. In May, AT&T stated that they believed reclassification would “cause risks and harms that dwarf any putative benefits.” The telecommunications giant said in a filing with the FCC on July 17th that it supported a Section 706 approach to enforcing net neutrality and ending paid prioritization.

In a filing submitted on July 15, the Telecommunications Industry Association said that reclassification would “thwart cycle of investment, competition and innovation” in the broadband space. Many members of the TIA, such as Cisco, IBM, Intel, Panasonic, Broadcom, D-Link and Nokia, penned a letter to the FCC on September 9 in which they made similar comments.

 

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FCC

FCC Encouraged to Limit Data Collection on Affordable Connectivity Program, Others Want More

One trade group warns about providers leaving the program if data collection too onerous.

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Photo of Jonathan Spalter, CEO of US Telecom, from ISE

WASHINGTON, August 9, 2022 – The Federal Communications Commission is being warned not to overly burden internet service providers with its Congress-mandated order to collect pricing and subscription rates data from participants in the Affordable Connectivity Program.

Under the Infrastructure, Investment and Jobs Act, the FCC is required by November 15 to adopt rules to collect annual data relating to the price and subscription rates of each internet service offering by a provider participating in the broadband subsidy program, which offers up to $30 per month for low-income households (up to $75 per month on tribal lands) and a one-time $100 off a device.

But a number of submissions are warning the FCC against rules that require any additional data collection efforts beyond the scope of the law so as not to unduly burden providers and, at least one other trade group said, push providers away from participating in the program.

Telecommunications company Lumen, for example, recommended the commission limit the scope of the annual reporting to monthly pricing and to exempt “excessively granular” requirements, such as promotional rates, grandfathered plans, or subscriber-level data, which the commission is proposing to collect.

Communications companies and industry groups want to limit data collection

T-Mobile said in its submission that Congress told the FCC to rely on the broadband consumer labels, which are due this November, for pricing. The commission asked for comment on the interpretation of the IIJA requiring a reliance on price information displayed on the consumer labels.

For subscription information, T-Mobile urges the commission to look at data collection from the Universal Service Administrative Company – which administers high-cost broadband programs for the Universal Service Fund – to avoid “adopting a largely redundant collection that would impose additional burdens” on all parties.

“The IIJA leaves the Commission no discretion to collect any additional price information, and the statute does not require collection of data on other service plan and network characteristics,” such as speed and latency and data allowances, the submission said.

“Collection of this additional data would create additional burdens and is unnecessary,” the submission added.

Similar limitations were also proposed by telecom Starry Inc., which pushed for privacy protection by collecting data at a higher level (such as the state) and working with information collected in other transparency efforts, such as the consumer labels.

Industry association IMCOMPAS, which represents internet and competitive communications networks, told the FCC in a submission that data collection should be limited to the state level to protect consumer privacy and proprietary information of the providers; streamline other data collection, including the consumer labels; and provide instruction on how to providers to better understand the data collection rules.

Concurring with this position is the Wireless Internet Service Providers Association, which said data collection must be simple and should not go to a level of detail that goes beyond what the IIJA calls for. The trade group, which represents small providers, said such data collection beyond that required in the law could burden companies with small teams.

The included data, WISPA said, should be an annual aggregate of items including broadband plans subscribed to by ACP customers, number of subscribers for each plan, and pricing minus promotional rates, taxes, discounts or pricing breakdowns for bundled services. Any additional onerous collection could see providers leave the program, it added.

Industry groups US Telecom and NCTA – Internet and Television Association similarly urged a simple annual report that captured undiscounted monthly pricing of each broadband service offering and the number of customers subscribed. The Competitive Carriers Association and the Cellular Telecommunications and Internet Association also recommended a limited data collection approach.

ACA Connects, a trade group representing small and medium-sized independent operators, said the FCC should direct providers to report numbers of ACP households “that are applying their benefit to each speed tier along with the standard price of each tier on a state-by-state basis” – rather than the FCC-proposed continuous collection of subscriber-level data via the National Lifeline Accountability Database, it said, adding the commission should be mindful of the time it takes for completion, as smaller providers have limited resources.

Others pushing for subscriber-level, more data

The cities of New York and Seattle, in their submissions, said the FCC should collect subscriber-level information to assess different service adoption rates on different plans over time – publishing categories based on price, plan and performance by the zip code. It added it is not seeking information about the households itself, and said this would not be a privacy concern as others have pointed out.

Similarly, the Connecticut Office of State Broadband said the commission should go beyond the IIJA requirements by mandating information including performance of the plans and whether a device is offered.

For the National Digital Inclusion Alliance, data collection on the ACP should include data beyond what’s included in the consumer labels, and should include other items such as installation, equipment, service, miscellaneous, data and usage fees, and state and local taxes.

In a joint submission, non-profit media group Common Sense and internet advocacy group Public Knowledge recommended data collection that is necessary to monitor the ACP, which include promotional rates, taxes, overage costs and device and equipment costs. This way, they say, the FCC can get a better idea of how much is going toward internet access after applying the subsidy. They are also asking for the commission to collect information on whether the subsidy is being used to upgrade or discount current service, and how customers are becoming aware of the program.

The commission is currently trying to get more Americans on the program, which has over 13 million households signed up. That number, the commission said last week, should be much higher. As such, it ordered the development of an outreach program to market the subsidy.

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FCC

Former Commissioners Commend FCC in Absence of Fifth Commissioner

But there’s concern a Senate vote on a fifth FCC commissioner will not happen before midterms.

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Screenshot of Former FCC Chairman Richard Wiley

WASHINGTON, July 25, 2022 – Former chairs of the Federal Communications Commission commended the current FCC administration at a symposium on Wednesday for working together on important issues with a 2-2 party split, but expressed increasing uncertainty about the fate of a fifth commissioner.

The Senate vote to confirm Gigi Sohn, a Democrat and net neutrality advocate, has stalled for months. And former FCC commissioners were wary of her prospects before the midterm elections in November. Some Republican critics are concerned that Sohn, nominated by President Joe Biden in October, won’t be able to remain non-partisan on the issues she would encounter as a commissioner.

“Confirmation is still possible, but with the extended August recess and looming midterm election, there aren’t a lot of legislative days to get the job done,” said former FCC Chair Richard Wiley. With each passing day, the confirmation becomes more difficult, agreed panelists, as the Senate could flip to a Republican-controlled chamber come November.

In the meantime, the former commissioners praised the efforts of the current staff. “A lot of credit should go to the Chairwoman [Jessica] Rosenworcel and indeed to all the commissioners for maintaining a robust agenda over the last year and half and really getting decisions made,” said Wiley. “Two Democrats, two Republicans have worked together to serve the public interest.”

William Kennard added that, “this is an energetic commission, they want to get things done.”

Some initiatives that have received unanimous FCC votes include spectrum-sharing initiatives and robocall enforcement.

Editor’s note: The comments in this story were quoted from and attributed to a July 20, 2022, symposium. That symposium was hosted by the Multicultural Media, Telecom and Internet Council. 

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FCC

FCC Adopts Spectrum-Sharing Incentives, Proposal on Call Traffic Arbitrage

The agency voted to incentivize the sharing of underutilized spectrum to increase connectivity in the nation.

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Photo of Nathan Simington, Brendan Carr, Jessica Rosenworcel of FCC (left to right)

WASHINGTON, July 14, 2022 – The Federal Communications Commission voted at its July open meeting Thursday to adopt spectrum-sharing incentives and to crack down on the practice of driving up revenue from call traffic inflation.

The commission voted to adopt a program that will build incentives for larger spectrum holders to make underutilized spectrum available to smaller carriers, tribal nations and entities serving rural areas. The program, called the Enhanced Competition Incentive Program, will have incentives including longer license terms, extensions on buildout obligations, and more flexible construction requirements.

The commission is also seeking comment on whether to expand the program eligibility to non-common carriers serving non-rural areas.

“I’m excited to see the new deployments this program will foster,” said FCC Chairwoman Jessica Rosenworcel. “I think it will help expand wireless deployment in rural and tribal communities… to make sure we reach 100 percent of us with high-speed service.”

Experts have advocated for more carve-outs for unlicensed spectrum to tackle the growing demand for connections and relieve congestion on existing frequencies. The Rural Wireless Association applauded the FCC Thursday on the vote, saying it believes that program can “encourage the necessary transactions that can expand telecommunications and broadband service in rural America.”

Cracking down on call traffic arbitrage

The commission also proposed rules to address the practice of telephone companies inflating traffic to generate more revenue, which raises costs for long-distance carriers.

Intercarrier compensation is the system of regulated payments that sees carriers compensate each other for cross-carrier call traffic. Some companies, however, continue to take advantage of the system by inflating traffic to extract additional revenues, the FCC identified. As a result, the FCC proposes to adopt monitoring rules to identify illegal arbitrage practices.

“This rulemaking is designed to shut down the loopholes these companies are exploiting,” said Rosenworcel. It would require providers to tally and report call traffic volumes to the FCC to verify its compliance with access stimulation rules, which were adopted in 2019 to clarify financial responsibility for calls.

Other actions

The FCC also proposed a $116 million fine against ChariTel Inc. for a robocall scheme that made nearly 10 million robocalls to toll-free numbers, which then generated revenue for the company from payments by the toll-free service provider.

FCC commissioners further voted to open an inquiry to evaluate how the Lifeline and Affordable Connectivity Program can be modified to support the connectivity needs of domestic abuse survivors.

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