Monday, April 5, 2010

If only Nero could have tweeted while Rome burned ...

WHY THE PUNDITS HAVE IT ALL WRONG:

Various academic and industry pundits paint the FCC as facing "very difficult" decisions when it comes to regulating broadband.  On one side they say the FCC faces the prospect of seeing the DC Circuit overturn its authority to impose quasi regulation under its "ancillary authority" (commonly referred to as "Title I" of the 1934 Communications Act (hereinafter the "Act")) or face World War III if it chooses to determine that "broadband", which is transmission of bits is transmission (known in the law as "telecommunications" - i.e. the transmission of information from one point to another without change).  (see, e.g. http://www.reuters.com/article/idUSTRE6341CB20100405)

1.  THE FCC ALREADY REGULATES BROADBAND UNDER TITLE II; THEY JUST CALL IT SOMETHING DIFFERENT.

Today the FCC regulates "broadband" in nearly every relevant respect, from imposing wire tapping and related requirements via CALEA, to enforcing basic principles of nondiscrimination (whether in post-hac form against "bad" cable actors, "bad" ILECs, or a pirori in the form of various policy statements and other tweets that say "play nice" - e.g. the 4 (now 6) freedoms, all of which boil down to the quintessential ingredient of common carriage - nondiscrimination), require interconnection (thus "interconnected VoIP"), and 911 (thus VoIP 911 orders), or require such non-telecommunications services to support USF --- for "telecommunications", or, even impose intercarrier compensation requirements (technically speaking upon the "telecommunications" component of the "information service").  Interestingly, every one of the requirements the FCC has or could ever seek to impose upon "broadband" exist in ... Title II of the Communications Act of 1934.

2.  TRANSPORT IS TRANSPORT; GET OVER IT.

Recall from my analysis in the December 2009 issue of the Cook Report, the notion that indeed the idea that "broadband" was different from "telecommunications" boiled down to some rather arbitrary factual distinctions.  As applied the distinctions in and of themselves still exist, but their purpose - preservation of an open and free Internet - has long since evaporated.  Only entrenched interests who benefit from stasis are in favor of Net Neutrality or its cousin, the Broadband Plan.

So, rather than define transport for what it is, subject that to Title II and then define information service as something not transport (actual processing and change of information), the FCC is going to continue to vacillate forcing the Agency and hordes of industry lawyers to spend fortunes of taxpayer and private money money fighting in the courts and then begging Congress for authority to regulate that for which they already have authority to regulate: namely telecommunications, which is the movement of information from one place to another unchanged. 

3.  TITLE I IS HEAVY HANDED REGULATION UNLESS YOU ARE AN INDUSTRY GIANT - LIKE VERIZON, AT&T OR GOOGLE

Worse yet, applying Title II is not only NOT heavy handed, it is actually LIGHTER regulation than the alternative.  Here's why:

Because the FCC has been dodging the "regulation" question since 1996, it has been repeatedly reversed by federal courts for failure to get even the basics required by statutory law correct.  Worse yet, one carrier spent 5 years appealing this only to have the DC Circuit in late 2008 issue a rare if not unprecedented mandamus order - they ordered the FCC to get it right and apply the law - that certain Internet traffic is "telecommunications" subject to federal jurisdiction.  As a result of the FCC's repeated and continuing failure to regulate with any semblance of clarity, state agencies and state courts have attempted to but failed to regulate all sorts of broadband services.  These decisions have resulted in needless confusion, delay, and, in some cases, state level penalties so severe that competitive network providers have been forcibly driven out of the market (and their customers into incumbent's hands). Worse yet these very decisions have left incumbent monopoly services free of regulatory discipline.  This has resulted in extensive court battles, the most recent of which came out of the DC Circuit today.  In that decision, the court determined that the FCC simply did not have authority to claim plenary authority over an entire class of Internet service providers under Title I (ancillary authority) of the Act.  (Comcast v. FCC, No. 08-1291, Fed. Ct. App. DC Cir. April 6, 2010).


Were the FCC to deem "broadband" to be a telecommunications service, however, they'd end these battles and free up all sorts of resources going into more legal battles to actually put money in the ground.

While Verizon's and AT&T's positions have been clear for a long time, most in the industry are still scratching their heads at Google's decision to back Verizon's version of Net Neutrality.

4.  TITLE II IS LIGHT REGULATION BY A FACTOR OF 50X

The FCC has authority under Title II of the Act to deem "broadband" (which in nearly every case is carriage of bits in Internet Protocol packets over the top of some transport layer service whether DWDM, SONET, GigE, Frame Relay, pure TDM, etc.) to be interstate telecommunications.  Bingo!  Right there they've lowered the regulatory burden by a factor of 50x because they've just removed 50 state regulatory agencies from the mix.   Secondly, they can deem such a Title II service to be competitive and subject to "light" regulation, not unlike how interstate interchange services are regulated today.   Thirdly, all of the regulatory requirements that the FCC continues to attempt to apply to voice and video services via Title II of the Act, would readily and immediately attach to broadband.  

5.  If only Nero tweeted while Rome burned ... 

So we could do this right.  We could have clarity, certainty, predictability, and finally, a chance to innovate rather than litigate.  The FCC could deem transport to be telecommunications, whether bits move across coper, coax, fiber optic, or radio spectrum (wireless, WiFi, WiMax) to your iPad, iPod, iPhone, Verizon or AT&T wireless "mobile hot spot" or some other device or service.

Or, the FCC could continue to refuse to define "broadband", pretend that there is such a thing as "net neutrality" while the networks that form the Internet's foundations burn up cash, resources, innovation and time fighting over whether the FCC has "ancillary authority" to impose upon "Title I" services requirements it already exports from Title II to "quasi regulate" under "ancillary authority" in Title I.  In other words, if the FCC seriously engages in an attempt to enforce Net Neutrality they will be fighting in the courts and in Congress for the right to pretend to "lightly" "regulate" that not only which they already regulate by exporting from Title II to Title I all sorts of standards today, but which they have the full authority to clearly and consistently regulate under the law as it exists today.   


If only Nero could have Tweeted while Rome burned.

1 comment:

  1. There would still be a role for state regulators if the FCC changed their classification of "broadband." States could concentrate more on enforcing their consumer protection rules and making sure that the infrastructure serving their citizens is sound. These are intensive factual inquiries best done at the state level.

    Brian H

    ReplyDelete