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Broadband's Impact

One Day After FCC’s Net Neutrality Repeal, Focus Turns to Reactions and Responses

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WASHINGTON, December 15, 2017 – The Federal Communications Commission’s Thursday vote to repeal the “open internet” rules classifying broadband services as common carriers represents the most significant regulatory shift in the internet in more than a decade. Critics in Congress, at the agency, and even on late-night TV wasted no time in blasting it.

These repealed network neutrality regulations prohibited broadband internet providers from speeding up or slowing down certain websites’ internet traffic based on financial or business relationships. Now, internet providers will be free to throttle, block and prioritize traffic, so long as they provide notice to consumers that they are doing so.

The most recent iteration of those regulations were put in place by the FCC under President Obama in February 2015. It was based on Title II of the Communication Act, which regulates common carriers like telephone companies.

Such common carriage rules require telephone providers to treat all traffic the same in the same way. For example, Ma Bell was prohibited from prioritizing voice calls over fax calls, or prioritizing the calls of customers who buy telephone handsets from the phone company over those who didn’t.

Broadband reverts to being an information service ‘regulated’ under Title I

Under the rules that the FCC will implement after Thursday’s vote, broadband internet access service will revert to being “regulated” under Title I. That section of the law governs “ancillary services,” and for decades the FCC has classified “information services” under this lesser regulatory standard.

These information services are not subject to the same kinds of requirements as are common carriers.

Thursday’s result was only the latest chapter in a public policy battle that has raged since the waning years of the George W. Bush Administration.

At the time, the FCC under then-Chairman Kevin Martin ruled that Comcast had discriminated against peer-to-peer file-sharing applications by blocking traffic using the BitTorrent application.

The agency had held that Comcast’s actions departed from standard industry practice and did not fall under the category of “reasonable network management.” That was, then, part of the standard under which the FCC would allow a broadband provider to manage traffic.

Chairman Julius Genachowski, the first chairman selected by Obama, said that the FCC would be a “smart cop on the beat.” Genachowski proposed network neutrality rules that would enforceable under Title I – the less-regulatory standard – of the law. But those rules were also struck down by the D.C. Circuit Court.

In part, that led Genachowski’s successor Tom Wheeler to take the stricter step of reclassifying broadband under Title II.

Taking enforcement authority for internet violations out of the hands of the FCC

Not only does the FCC’s action Thursday undo that reclassification, it goes further by declaring that the FCC will not attempt to regulate broadband providers at all. Additionally, enforcement of what little that remains of the “net neutrality” rules are passed to the Federal Trade Commission.

The FTC can only take enforcement actions after a violation of consumer protection rules has occurred. Further, under a recent decision by the 9th Circuit Court of Appeals, the FTC may not even have the authority to regulate broadband providers at all.

The Department of Justice Antitrust Division could also initiate litigation. But that can take years to achieve a result.

While Pai characterized Thursday’s vote as a return to the “light-touch” regulation that existed before 2015, it goes further. It abdicates the authority and responsibility that Martin – a Republican considered an ardent foe of network neutrality – acknowledged that the FCC possessed.

Sharply critical reactions from Democrats in Congress

In addition to strong comments by Congressional Democrats like Rep. Anna Eshoo, D-California, and Sen. Ed Markey, D-Massachusetts, progressives and other advocates of net neutrality rules through their lot behind arguments that the FCC cannot simply abandon it authority to enforce consumer-focused standards for an internet.

During a conference call with media last week, former FCC general counsel Jonathan Sallet predicted that the courts would not allow the FCC to pick and choose which parts of the law to enforce.

“The draft order seems to say that the FCC is no longer interested in exercising its responsibilities as an expert agency,” said Sallet. “I do not believe a court of appeals will uphold this order.”

On Thursday, Markey and Eshoo added that in addition to leading efforts to draft an amicus brief for litigation in support of the rules, Markey said he will introduce a resolution under the Congressional Review Act that would overturn the FCC’s decision.

Senator Patrick Leahy, D-Vermont – who conducted a Judiciary Committee field hearing in Vermont on the subject of network neutrality — also condemned Thursday’s vote in a statement.

“Today the FCC took a wrecking ball to the pillars of freedom and openness upon which the Internet was built.  Without the protection of net neutrality rules, powerful telecommunication companies can decide which content gets preferential treatment and which gets throttled or even blocked,” he said.

Leahy added that the decision will hurt consumers, small businesses, and startups by stifling innovation and competition, and pledged to keep fighting until the protections are restored.

Late-night comedians weigh in with their studied analyses

Even late-night television hosts whose employers have interests in the debate got in on attacking the FCC’s decision, with Stephen Colbert of CBS (which runs its’ own video streaming service), Seth Meyers of NBC (which is owned by Comcast), and Jimmy Kimmel of ABC (which is owned by Disney, which is starting its own video streaming services which could be blocked under the new rules) condemning the vote, which Kimmel called “absolutely despicable.”

“So now, we have to hope Congress agrees to vote on and reverse it,” Kimmel said. “So, thank you, President Trump – thanks to you and this (explitive deleted) [Pai] you appointed to run the FCC — big corporations are about to take control of the internet.”

Critics also raise concerns about the FCC’s public comment process

Kimmel noted that many of the public comments filed with the FCC that were in favor the repeal turned out to have been filed under the names of dead people.

Wheeler and others had previously noted that problems with the public comment process, which attracted more comments than any other rulemaking in the FCC’s history.

That could factor into litigation seeking to overturn the new rules by allowing network neutrality advocates to claim that the FCC did not properly follow the Administrative Procedure Act.

Internet service providers pleased with the decision

While consumer groups and most technology companies were vehemently against repealing the 2015 rules, perhaps the only groups excited about the FCC’s vote were those associated with large broadband providers.

Michael Powell, President and CEO of NCTA – The Internet Association, praised the FCC’s decision in a statement released to reporters.

“Today’s FCC action rightly restores the light-touch approach to government regulation of the internet that has fostered the development of a vibrant, open and innovative platform,” Powell said. “For decades, America’s internet service providers have delivered an open internet – allowing consumers to enjoy the lawful internet content and applications of their choosing.”

Powell said that Internet providers have repeatedly pledged to continue to adhere to the now-repealed rules, but did not explain why his association’s members lobbied so aggressively for the rules’ repeal if they still want to follow them.

The two Democratic FCC commissioners minced no words

Democrats on the FCC railed against Pai and the Republican majority in angry statements delivered before the vote.

“I dissent from this rash decision to roll back net neutrality rules,” Commissioner Jessica Rosenworcel, a Democrat said.

“I dissent. I dissent from this fiercely spun, legally lightweight, consumer-harming, corporate-enabling Destroying Internet Freedom Order,” said Rosenworcel’s senior Democratic colleague.

(Photo of Sen. Patrick Leahy, among the critics of the FCC’s Thursday decision on net neutrality.)

Andrew Feinberg is the White House Correspondent and Managing Editor for Breakfast Media. He rejoined BroadbandBreakfast.com in late 2016 after working as a staff writer at The Hill and as a freelance writer. He worked at BroadbandBreakfast.com from its founding in 2008 to 2010, first as a Reporter and then as Deputy Editor. He also covered the White House for Russia's Sputnik News from the beginning of the Trump Administration until he was let go for refusing to use White House press briefings to promote conspiracy theories, and later documented the experience in a story which set off a chain of events leading to Sputnik being forced to register under the Foreign Agents Registration Act. Andrew's work has appeared in such publications as The Hill, Politico, Communications Daily, Washington Internet Daily, Washington Business Journal, The Sentinel Newspapers, FastCompany.TV, Mashable, and Silicon Angle.

Broadband's Impact

Broadband Breakfast on October 27, 2021 — When ‘Greenfield’ Fiber Meets ‘Brownfield’ Multiple Dwelling Units

What options do owners of, operators in, and tenants within MDUs have for better-quality broadband?

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Our Broadband Breakfast Live Online events take place on Wednesday at 12 Noon ET. You can watch the October 27, 2021, event on this page. You can also PARTICIPATE in the current Broadband Breakfast Live Online event. REGISTER HERE.

Wednesday, October 27, 2021, 12 Noon ET — “When Greenfield Fiber Meets Brownfield Multiple Dwelling Units”

Bringing fiber to the premises is sometimes only half the battle. For example, bringing fiber to an MDU may not mean that every tenant will get better-quality broadband. In the case of multiple dwelling units or multi-tenant housing, it isn’t easy to completely rewire an existing building with fiber-to-the-unit. Further, the Biden Administration and the Federal Communications Commission are pushing real estate owners to eliminate or minimize exclusive MDU broadband contacts. What options do the owners of, operators in, and tenants within MDUs have to enjoy both competitive and better-quality broadband?

Panelists:

  • Kevin Donnelly, Vice President, Government Affairs, Technology and Strategic Initiatives, National Multifamily Housing Council
  • Jenna Leventoff, Senior Policy Counsel, Public Knowledge
  • Pierre Trudeau, President and Chief Technology Officer, Positron Access
  • Other Guests have been invited
  • Drew Clark (moderator), Editor and Publisher of Broadband Breakfast

Kevin Donnelly is Vice President for Government Affairs, Technology and Strategic Initiatives at the National Multifamily Housing Council (NMHC) and represents the interests of the multifamily industry before the federal government focusing on technology, connectivity, risk management and their intersection with housing policy. Kevin is a part of NMHC’s Innovation and Technology team and leads its Intelligent Buildings and Connectivity Committee.  Kevin has spent over 15 years in the public policy arena at leading real estate trade associations and on Capitol Hill. Kevin received his BA from Rutgers University and his Masters in Public Management from Johns Hopkins University.

Jenna Leventoff is a Senior Policy Counsel at Public Knowledge, where she focuses on broadband deployment and adoption. Prior to joining Public Knowledge, Jenna served as a Senior Policy Analyst for the Workforce Data Quality Campaign (WDQC) at the National Skills Coalition, where she led WDQC’s state policy advocacy and technical assistance efforts on state data system development and use. She also served as an Associate at Upturn, where she analyzed the civil rights implications of new technologies, and as Manager and Legal Counsel of the International Intellectual Property Institute, where she led the organization’s efforts to utilize intellectual property for international economic development. Jenna received her J.D, cum laude, and B.A from Case Western Reserve University.

Pierre Trudeau is President and Chief Technology Officer, Positron Access.

Drew ClarkEditor and Publisher of Broadband Breakfast, also serves as Of Counsel to The CommLaw Group. He has helped fiber-based and fixed wireless providers negotiate telecom leases and fiber IRUs, litigate to operate in the public right of way, and argue regulatory classifications before federal and state authorities. He has also worked with cities on structuring Public-Private Partnerships for better broadband access for their communities. Drew brings experts and practitioners together to advance the benefits provided by broadband. He is also the President of the Rural Telecommunications Congress.

WATCH HERE, or on YouTubeTwitter and Facebook

As with all Broadband Breakfast Live Online events, the FREE webcasts will take place at 12 Noon ET on Wednesday.

SUBSCRIBE to the Broadband Breakfast YouTube channel. That way, you will be notified when events go live. Watch on YouTubeTwitter and Facebook

See a complete list of upcoming and past Broadband Breakfast Live Online events.

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National Non-Profit to Launch Joint Initiative to Close Broadband Affordability and Homework Gap

EducationSuperHighway is signing up partners and will launch November 4.

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Evan Marwell, founder and CEO of Education Super Highway.

WASHINGTON, October 18, 2021 – National non-profit Education Super Highway is set to launch a campaign next month that will work with internet service providers to identify students without broadband and expand programs that will help connect the unconnected.

On November 4, the No Home Left Offline initiative will launch to close the digital divide for 18 million American households that “have access to the Internet but can’t afford to connect,” according to a Monday press release.

The campaign will publish a detailed report with “crucial data insights into the broadband affordability gap and the opportunities that exist to close it,” use data to identify unconnected households and students, and launch broadband adoption and free apartment Wi-Fi programs in Washington D.C.

The non-profit and ISPs will share information confidentially to identify students without broadband at home and “enable states and school districts to purchase Internet service for families through sponsored service agreements,” the website said.

The initiative will run on five principles: identify student need, have ISPs create sponsored service offerings for school districts or other entities, set eligibility standards, minimize the amount of information necessary to sign up families, and protect privacy.

The non-profit said 82 percent of Washington D.C.’s total unconnected households – a total of just over 100,000 people – have access to the internet but can’t afford to connect.

“This ‘broadband affordability gap’ keeps 47 million Americans offline, is present in every state, and disproportionately impacts low-income, Black, and Latinx communities,” the release said. “Without high-speed Internet access at home, families in Washington DC can’t send their children to school, work remotely, or access healthcare, job training, the social safety net, or critical government services.”

Over 120 regional and national carriers have signed up for the initiative.

The initiative is another in a national effort to close the “homework gap.” The Federal Communications Commission is connected schools, libraries and students using money from the Emergency Connectivity Fund, which is subsidizing devices and connections. It has received $5 billion in requested funds in just round one.

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Broadband's Impact

Steve Lacoff: A New Standard for the ‘Cloudification’ of Communications Services

The cloudification of communications services makes it easy to include voice, data, SMS, and video within any existing service.

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The author of this Expert Opinion is Steve Lacoff, general manager of Avalara for communications

The line of demarcation between what has traditionally been considered a telecommunications service was once very clear. It was tangible – there were wires, end points, towers, switches, facilities. Essentially, there was infrastructure required to relay voice or data from point A to point B.

Today that line is fuzzy, if not invisible. The legacy infrastructure remains, but an industry of cloud-based services that don’t require the physical connections has exploded. Voice, data, SMS, and video conferencing can now be conveniently delivered OTT. Enabled by simple API integrations, businesses can embed just one of these services or a complete communications platform-as-a-service (CPaaS) into an app, service, or product.

Cloudification is a game changer

This “cloudification” of communications services makes it easy to include voice, data, SMS, and video within any existing application, product, or service. These are essential components for many business models.

Consider these services we have come to rely on in our daily lives: food or grocery delivery, ride services, and business and personal communications. These require multiple methods of communication with shoppers, drivers, co-workers, watch party groups, and external business partners.

The exciting news is there is no end in sight. Use cases will continue to evolve and growth will continue to skyrocket. The scale cloud delivery accommodates is massive. These untethered, easy to embed communications services are a critical differentiator for both business-to-business and business-to-consumer buyers, and the lifeblood of the businesses providing both the end user subscriptions and the APIs.

In fact, one industry juggernaut saw H1 YoY video application service demand grow nearly 600% in 2020.

Not surprisingly, as business demand for these services increases smaller CPaaS players continue to enter the market to quickly snag market share. According to a recent IDC study, “the global market revenue for CPaaS reached $5.9bn in 2020, up from $4.26bn in 2019, and is expected to reach $17.71bn by 2024.”

Merger and acquisition activity is aligned with this hockey stick growth forecast. Large telcos, SaaS providers, and even other CPaaS providers are all on the hunt. Whether they want to add additional features to punch up their products or eliminate the competition in a very tight, nuanced market, the end game is clear – as the market expands, the players will ultimately contract leaving only the most competitive offerings.

Don’t let communications tax take you by surprise

One of the least understood risks when adding cloud-based voice, data, SMS, or video conferencing to an existing product or service is new eligibility for and exposure to the complex world of communications taxation. Making mistakes can get costly very quickly.

Here are some of the key pitfalls to keep an eye on:

  • Expanded nexus: Understanding communications tax nexus is different – and exceptionally more complicated – than sales tax. There are approximately 60,000 federal, state, local, and special taxing jurisdictions, each with uniquely complex rules that tend to change at their own pace. Rules are very different for each service.
  • More complex calculations: The more communications services you provide via API, the more complicated communications taxes will be. Each feature can be taxed at different rates in each individual jurisdiction, or the whole bundle can be taxed at one rate. It’s critical to monitor monthly to avoid audit issues.
  • Maintaining overall compliance: Just as tax rates and rules need to be maintained, so must tax and regulatory filing forms in each jurisdiction. Some of these are very long and require significant detail.  They must be filed in a timely, accurate cadence to avoid additional audit risk.

Bottom line: Don’t assume, be prepared! As these communications services become more pervasive a larger swath of technology providers will find themselves liable for communications tax. The more your business falls behind, the more it can cost you.

It pays to be proactive and prepared. Tax and legal advisory experts can help determine your level of risk, and tax and compliance software providers can help you keep up with changing rules and regulations. Don’t underestimate the ongoing value of networking with peers who are either struggling to answer the same questions or have already overcome the hurdles you’re facing today.

Steve Lacoff is General Manager of Avalara for Communications. With a focus on data, VoIP, and video streaming, Steve has spent 15 years in various product and marketing leadership roles in communications and technology industries, including Disney’s streaming services and Comcast technology solutions. Steve now drives business strategy on today’s changing industry landscape and associated tax impacts. This piece is exclusive to Broadband Breakfast.

Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to commentary@breakfast.media. The views expressed in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.

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