The usual suspects took their case to the U.S. supreme court last week, asking that the Federal Communications Commission’s decision to classify Internet access as a common carrier service be thrown out. Several lobbying groups, including a couple of cable industry front organisation and telco hired guns, and companies such as AT&T want the supreme court to declare that Internet access is an information service, rather than a telecommunications service.
The basic argument is that since Internet access involves a lot of background routing and (extremely brief) caching of data, broadband providers are producing and/or processing information, rather than just delivering it from point A to point B for subscribers.
If it’s information, it’s not a common carrier service. If it’s just schlepping data here and there, it’s a telecommunications service and therefore legitimately within the FCC’s scope to regulate under common carrier rules.
Regardless of whether Internet access should be regulated, or not, by the FCC, the claim that your Internet service provider is somehow adding value to your data stream is nonsense. It would be the same as arguing that because a telco has to look up the telephone number you dial and then route your call, it’s an information service too.
If that were true, telephone service – and telegraph service before it – would never have been brought under common carrier rules in the first place. Plain vanilla Internet service is no different. You type in a web address which an ISP interprets and routes your data – your request for a web page, for example – accordingly. It’s a simple transmission of data between you and the web service you specify. The ISP is adding no additional value.
This appeal to the supreme court is not likely to go very far. First, the case has been reviewed twice by an appeals court with deep experience with telecoms law and both times the ruling was in the FCC’s favor. Second, the FCC itself is reconsidering the decision. For good or ill, it might act before the supreme court even decides if it wants to take the case.
The Federal Communications Commission isn’t giving up on the telegraph. In fact, it’s giving telegraph companies a turbo-charged boost of free market competition. But don’t worry, it isn’t going completely crazy. The FCC is making it very clear that telegraph service is still subject to common carrier rules. In a lighter touch sort of way, of course, since this new and improved FCC is gung ho about light touch common carrier regulation.
In a wonderfully circular bit of reasoning, the FCC has decided that since there aren’t any telegraph companies, it’s okay for them to discontinue service without giving notice, because that will promote telegraph competition…
No entities filing [service reports] in the past five years indicated that they provide telegraph service, and we are not aware of any interstate telegraph service providers today. Nor did any entities file comments or objections in response to this proposal in the Notice…
Telegraph service is obsolete, and we find that no purpose is served by requiring any remaining (or future) providers of telegraph service to file discontinuance applications with the Commission. Nor is the public interest served by maintaining outdated and unnecessary requirements in our rules or by expending future agency resources on the processing of any such applications. To the extent that common-carrier telegraph service will ever be offered in the future, allowing unregulated discontinuance would promote competitive market conditions.
I would like to believe that this FCC order was written in the waning minutes of an all hands keg party: you call that deregulation? I’ll show you deregulation – hey, Ajit, you’re not supposed to swallow the ping pong ball. The thought of grave and grey bureaucrats ponderously weighing the free market benefits of fewer telegraph rules against the public’s need to be protected from rogue key pounders is too much to bear.
Federal law does not require telephone companies to be treated differently from cable companies, when it comes to attaching cables to utility poles. That’s the ruling of a federal appeals court (h/t to Omar Masry at the City and County of San Francisco for the pointer). It rejected a challenge from electric utilities to a 2015 decision by the Federal Communications Commission that equalised the standard charge for utility pole access, and trimmed back an irrelevant distinction. The rate is now the same whether the full service telecommunications company doing the attaching is the descendant of a television service provider or an old school telco.
Before then, telcos paid higher rates, which meant more money for electric utilities that owned poles. But the FCC’s decision to classify broadband as a telecommunications service and put it in the same common carrier regulatory bucket as telephone service created a quandary. Since cable companies are also Internet service providers, could electric companies start charging them the higher rate, and maybe push up broadband access costs in the process?
There was another problem. Or maybe an opportunity, depending on your point of view. Some states, like California, have exercised an option allowed by federal law and set their own rates for utility pole attachments – they were already charging cable and telephone companies the same, lower rate. Which might have given them a competitive advantage over states that relied on the FCC rules.
The court said that the FCC had sufficient reason to make the change…
The FCC sought to eliminate the disparity between the Cable and Telecom Rates in order to avoid subjecting cable providers offering broadband service to the higher Telecom Rate, and to avoid rate disparity between states whose pole attachment rates are regulated by the FCC and those states that had elected to regulate pole attachment rates using the Cable Rate even for telecommunications providers…This approach represents a “reasonable policy” choice, and thus we defer to the FCC’s interpretation.
It’s a good solution, but it misses the central issue. Cable and telephone companies are in the same business: selling television, telephone and broadband service, and buying up content companies to fill the pipeline. There’s no rational reason anymore to treat them differently.
The California Public Utilities Commission made the Monday deadline for commenting on the Trump administration’s move to scrap common carrier rules for broadband service. The filing more or less followed along with a rough draft approved by commissioners last week, and argues that reversing course would strengthen incumbent monopolies…
[Broadband service] providers must receive nondiscriminatory access to utility support structures, including poles and conduits, at just and reasonable rates, terms and conditions. Last year, the CPUC conducted a comprehensive review of the California telecommunications market, and analyzed the state of competition in various state sub-markets. The CPUC found that competitive bottlenecks and barriers to entry in the telecommunications network limit new network entrants and may raise prices for some telecommunications services above efficiently competitive levels. One particular bottleneck is access to utility poles, where the CPUC found that its safety mandate intersects, and must be reconciled with, its goal of a competitive market.
The CPUC comments also extoll other benefits of broadband’s common carrier status, including…
Which is all good as far as it goes. But the CPUC comments miss the fundamental reason broadband should be treated as a common carrier service: because it is.
The lack of competitive alternatives, as the CPUC correctly emphasises, is key. That’s only one of the elements in the mix, though.
The monopoly control wielded by what are effectively content companies with a telecoms sideline combined with the technical ability to analyse and shape user traffic in real time is unprecedented. Yet it would be instantly recognisable to the medieval jurists who conceived the principles of common carrier doctrine. Second order benefits are a fine thing, but broadband’s common carrier status is a first order necessity.
A $28 million grant for the Gigafy Phelan fiber to the home project in San Bernardino County and a statement opposing plans to roll back net neutrality rules were approved this morning by the California Public Utilities Commission. The exact comments to the FCC as it considers scrapping common carrier status for broadband service are still to be determined. After first trying to delay the filing, commission president Michael Picker opted for another round of editing before Monday’s deadline.
Once again, the California Public Utilities Commission is being asked to weigh in on whether or not broadband should be regulated as a common service. The current Federal Communications Commission is [asking for comments on its presumed plans to reverse the decision made during the Obama administration to classify broadband as a telecommunications service under “Title II” of federal communications law and regulate the way Internet service can be provided.
The recommendation in front of the CPUC is to come down on the side of keeping common carrier rules in effect…
Staff recommends the Commission comment that in order for the existing Open Internet Rules to remain viable, the FCC would need to retain the “telecommunications services” classification for BIAS, providing Title II as a legal foundation for the rules. Staff further recommends that the CPUC submit comments raising concerns that the FCC may have difficulty explaining its proposal to reverse BIAS classification back to Title I as the 2015 order has only been in place a short time and the FCC has provided scant evidence that either the Title II classification or the Open Internet Rules are not working. At a minimum, the FCC should wait to develop a sufficient record in order to evaluate the full effects of Title II on investment.
The last time the CPUC considered whether to support common carrier regulation for broadband, it decided not to do so, following a messy and politically charged back-and-forth vote. Two of the three no votes are still on the commission: Carla Peterman, who initially voted in favor of common carrier status but was convinced to back down during a break when commissioners left the room, and current president Michael Picker, who offered the anodyne excuse that he wanted to study it further. As if net neutrality hadn’t been the most hotly debated telecoms policy issue for months beforehand.
Round 2 is scheduled for Thursday’s CPUC meeting.
When I see a headline like "Broadband speeds have soared under net neutrality rules, cable lobby says", I gotta click on it. So I did and landed on an article by Jon Brodkin on Ars Technica.
There’s no Damascene conversion involved, though. What Brodkin is highlighting is how cable lobbyists, such as the National Cable Television Association (or whatever they say the acronym stands for these days), brag about faster Internet speeds, while at the same time bemoaning the infrastructure investment apocalypse that must surely follow the FCC’s 2015 decision to regulate broadband as a common carrier service…
As we can see, the NCTA has flexible messaging and applies conflicting arguments to different situations. When the NCTA tells the Federal Communications Commission that it should roll back net neutrality regulations, the association says that the rules harm investment and raise prices on consumers. But when trying to convince the public that US broadband is a marvel of innovation and that we should all be grateful to cable companies, the NCTA says speeds are soaring and that customers are paying less.
So which is it? On an aggregate basis, broadband speeds in the U.S. are still climbing, although improvements are unevenly distributed, with affluent areas getting attention and poorer rural and inner city areas not. The NCTA’s latest puff piece is based on the the most recent State of the Internet figures published by Akamai, which is a reliable gauge of worldwide Internet performance and traffic. The exact magnitude and distribution of those improvements might be open to debate, but the general trend isn’t.
On the other hand, there’s little evidence that common carrier rules have slowed infrastructure investment. Forbes thinks it has, but Brodkin’s research shows that big incumbent telecoms companies, including AT&T, Comcast, Charter and Altice, are still putting out a happy, happy, joy, joy message to Wall Street.
Broadband service is getting better for some in the U.S., and the areas where infrastructure investment is lacking never had it in the first place. Common carrier rules don’t seem to be doing any great harm. Thank you NCTA for clearing that up.
During a rural broadband road trip through the midwestern U.S., Federal Communications Commission chairman Ajit Pai shared time with a republican senator on a Milwaukee talk radio program (h/t to Phillip Dampier at Stop the Cap for tracking the interview down and getting the word out). Although he professed an open mind regarding the repeal of common carrier rules for broadband service – it’s under consideration at the FCC, so he has to say that – he dismissed net neutrality as a "slogan".
According to a story by Jon Brodkin at Ars Technica, Pai dismissed concerns raised by program host Gene Mueller about Internet service providers manipulating traffic for their own benefit…
"I have access to what I need when I need it, but with the removal of this Title II where we start treating the Internet as a commodity as opposed to a utility, that means the provider can then decide what I’m going to see more of," Mueller said. "If Spectrum [Charter] wants me to see Spectrum products first, then I’ll see that and other things will be slowed down."Mueller described a "fear that this wide open pipe will become monetized for providers’ profit."Pai said there’s no reason to worry. The scenario described by Mueller "is not the Internet we had prior to 2015 when we didn’t have these rules," he said.
The problem with that logic is that with or without FCC rules, the Internet we have now is not the Internet we had in 2015 or 2005 or 1995, and it never will be again. Pai is right to be concerned about "the government deciding how the internet is run", but he’s ignoring two key points: broadband service is increasingly concentrated in the hands of a few companies, and those companies are bulking up on digital content ownership.
As acquisition-driven debt piles up and shareholder value is increasingly dependent on revenue generated from content, the economic imperative to maximise profit from it by using monopoly control over broadband access becomes irresistible. The concept of common carrier obligations has evolved over hundreds of years as a counterweight to exactly this problem. If Pai has a better idea, he needs to stop popping off sound bites and start articulating it now.
Common carrier rules for broadband service are on the way out. As expected, the Federal Communications Commission voted along party lines to begin a rulemaking process that, in theory, is a neutral, technocratic assessment of current regulations that might lead to any outcome. But there’s never been any pretence that the result will be anything but a repeal of the FCC’s 2015 decision to bring broadband – wired and wireless – under the common carrier umbrella.
The agency’s official press release laid out the goals for the proceeding that was launched by yesterday’s approval of a notice of proposed rulemaking…
First, the Notice proposes to reverse the FCC’s 2015 decision to impose heavy-handed Title II utility-style government regulation on Internet service providers (ISPs) and return to the longstanding, successful light- touch framework under Title I of the Communications Act.
Second, the Notice proposes to return to the Commission’s original classification of mobile broadband Internet access service as a private mobile service…
Third, the Notice proposes to eliminate the catch-all Internet conduct standard created by the Title II Order.
The Notice also seeks comment on whether the Commission should keep, modify, or eliminate the bright-line rules established by the Title II Order.
Title II is the section of telecommunications law that governs what companies that are classified as common carriers can do.
You’re likely to be disappointed if you’re hoping that the common carrier regime, and particularly the net neutrality rule, will be saved by another wave of public protest, as it was in 2014 when the democratic FCC chairman initially floated a plan that wasn’t all that much different from what’s on the table now. Republican commissioner Michael O’Rielly blew off the flood of comments that have already come in, saying “thankfully, our rulemaking process is not decided like a Dancing with the Stars contest, since counts of comments submitted have only so much value”.
Buried within a half million comments about common carrier regulation of broadband service, in the midst of a system crash brought about, or not, by a John Oliver rant, is a letter from 19 municipal (to one degree or another) Internet service providers supporting the Federal Communications Commission’s current effort to roll those rules back.
In what must have been an epic, nay, herculean, speed reading session, FCC chair Ajit Pai came across those comments and felt compelled to issue a press release trumpeting the blindingly obvious conclusion that, hey, these guys agree with me so they must be pretty smart. I hope he lets his sidekick, Michael “what I am unwilling to do and will never support is allowing government-sponsored networks” O’Rielly, in on his eureka moment.
The muni ISPs make a couple of points in their letter: imposed service standards are a burden for small providers and munis don’t really need regulation since they’re directly answerable to elected officials.
Our customers have choices and can opt for another provider if we degrade their Internet experience. Moreover, because we are effectively owned by our customers and responsive to them politically, we make sure their interests are the primary drivers of our businesses. We always provide our customers with unfettered access to legal content on the Internet. We never block, throttle, or impair our customers’ traffic nor engage in paid prioritization. We have always said we would adhere to any such principles adopted by the Commission, as we have been doing since the Commission first articulated its Internet Policy principles in 2005. Yet, the Commission ignored the evidence, and imposed the straight-jacket of utility regulation, subjecting us to the constant threat that the Commission or some other party may bring an enforcement action based on the “unknown and unknowable” general conduct standard.
There is truth in their arguments. But there’s also a generous helping of disingenuousness. For example, several of the ISPs are affiliated with muni electric utilities. Being small or governed by a city council does not exempt electric utilities from Federal Energy Regulatory Commission standards or from complying with California Public Utilities Commission safety rules regarding jointly owned utility poles. And they know it.
Munis properly have latitude that privately owned utilities do not enjoy. City councils are rightly reckoned to be at least as good as the CPUC at setting electric rates and protecting consumer interests. But it isn’t a total exemption from oversight. Nor is simply being small. The federal and state rules for small rural telcos are different than those for AT&T and Frontier, but there are rules they must follow nevertheless.
Common carriers and other public utilities are subject to a complicated web of federal, state and local regulation. Dealing with it is just part of the job.