CPUC approves then pulls back endorsement of common carrier regulation for broadband

by Steve Blum • , , , ,

I come down strongly behind Title II, it’s the only thing that makes sense here.

It was high drama at today’s California Public Utilities Commission meeting in San Francisco, at least by the CPUC’s normally placid standards. Commissioners first voted 3 to 2 to tell the FCC that broadband infrastructure should be regulated under common carrier rules. About an hour later, after commissioners returned from a nominal five minute break that lasted somewhat longer, commissioner Carla Peterman asked to change her yes vote to abstain.

That put the commission’s debate on network neutrality policy on hold at least until its next meeting in October, which means missing next week’s deadline to officially file comments on the matter with the FCC. Assuming commissioners eventually come to a decision, they’ll put any recommendations they have in a less formal letter and send it to the FCC later.

Originally, Peterman joined commissioners Catherine Sandoval and Mike Florio in endorsing a recommendation to tell the FCC that broadband infrastructure should be regulated under common carrier rules.

The initially approved and ultimately walked back comments are in this staff report – it gives quite a bit of background as well. The two key recommendations – number 5 and 7 – were first adopted as is, then finally walked back and held for further study.

Alternative language – also in the staff report – endorsing the FCC’s currently proposed net neutrality approach, which relies on broader but less rigorous statutory authority was, in effect, rejected only to be brought back under consideration at the end.

Commission president Michael Peevey supported that approach, seemingly out of an expressed desire to maintain solidarity with FCC chairman Tom Wheeler. The fifth commissioner, Michael Picker, wanted to delay the decision in order to study it further.

But for at least a brief time, the CPUC was on record supporting stringent rules regarding net neutrality, based on regulating ISPs as common carriers.

The concept of allowing ISPs to cut deals with content providers based on whether the terms are “commercially reasonable” is at the center of the FCC’s proposed net neutrality rules, as currently drafted. There’s no standard for deciding what’s commercially reasonable, though. As the staff report points out the rule “would not prevent anti-discriminatory Conduct or practices at the outset; rather, upon receiving a complaint after the fact, the FCC would have to review, on a case-by-case basis whether a provider’s conduct was ‘commercially reasonable.’”

The accepted-then-rejected language would have told the FCC that’s not good enough…

The commercially reasonable standard would allow ISPs to discriminate under an undefined and likely unenforceable standard. Accordingly, the CPUC would oppose FCC adoption of the proposed “commercially reasonable” standard, and argue instead for adoption of the “no unreasonable discrimination” standard rooted in Title II. It is unclear whether or how the FCC could craft a “commercially reasonable” standard that would be workable and, as the Verizon decision requires, would allow providers to discriminate among edge provider traffic. Further, a rule that achieved both of those goals likely could not simultaneously further the FCC’s vision of protecting and promoting an “open Internet.”

“Title II” refers to the law that allows the FCC to regulate telecoms companies as common carriers, and make them subject to stringent oversight. Currently, broadband infrastructure is far more lightly regulated, at both the federal and state level.

Whatever the CPUC finally decides, its eventual letter to the FCC will stand alongside two million other comments that have flooded in. But it will be among the most significant.

First, one might hope that the nation’s top authority will care what it’s second most important telecoms regulator thinks.

Second, and more importantly, it will tell both the FCC and the telecoms industry whether the CPUC believes, as Florio put it, that “regulating infrastructure is not the same as regulating content” and that broadband infrastructure is as much a public utility as electricity and water, or that Californian regulation will be guided by Wheeler’s more lenient and accommodating approach.

Either way, Florio summed it up well: it is “the defining issue of our time in the telecommunications world”.

UPDATE 12 September 2014: The video of the meeting has been posted here:

CPUC Commission Voting Meeting – September 11, 2014

The staff presentation and commission discussion regarding net neutrality and the regulatory issues around it runs from about 1:17:00 to 2:36:30 – it’s excellent viewing, by the way, if you’re interested in the details of such things. It ends with the CPUC’s initial endorsement of Title II regulation for broadband infrastructure. The subsequent decision to reverse it runs from about 3:33:00 to 3:41:30.