Don’t Try This in Your (Broadband) Home

Posted by: Bob Quinn on July 15, 2010 at 4:58 pm

Since the FCC released its Notice of Inquiry (NOI) on the regulatory classification of broadband Internet access services, we’ve spent some time explaining why Title II is a bad idea for achieving the goals of the National Broadband Plan – the investment, innovation, and market certainty needed for job creation.

Today, our filing at the FCC packages up all that is wrong with the Commission’s approach, including how the plan would scuttle the Administration’s ambitious broadband deployment and adoption agenda, and chill multi-billion dollar private sector investment and job creation.  We also debunk the notion that this is the only way to accomplish the FCC’s National Broadband Plan core objectives, and we highlight the plethora of legal problems and uncertainties that would sweep through the Internet ecosystem.

Is it all to achieve the political aims of some extreme pseudo “consumer” groups whose rhetoric gets more over-the-top every day if the FCC doesn’t do exactly what they want? Have you seen the Wanted Posters of FCC Chairman Genachowski?

The FCC’s Third Way, Title II proposal is truly like hunting flies in your home with a sledge-hammer.  When it is all said and done, some of the walls, ceilings and floors will be gone but the flies will still be there.  Let’s just take a few examples to show you what we mean. 

First, the Commission says that its proposal won’t regulate the Internet or affect critical Internet component services like backbone services or those delivered by content delivery networks (CDN).  That is just plain wrong and fundamentally misconceives how the Internet actually works.  The service the FCC wants to create and place under Title II common carriage regulation is Internet Connectivity Service.  Simply put, if you’re an AT&T customer, you can’t send an e-mail to a Comcast or Verizon or RCN customer without going through someone’s backbone.  And if you’re looking to get content from a company that does business with a CDN like Akamai, that content will come into the Internet from a transmission service provided by the CDN that sure looks like Internet Connectivity Service.  The unintended consequences falling upon a range of Internet-based services are far-reaching and serious.

Second, the will of the American people, as expressed through their elected officials, ranges from caution to alarm.  It is no small matter when a bi-partisan majority of Congress, expresses doubts, in some form or fashion, about upending decades of bi-partisan consensus against common carrier regulation of any aspect of the Internet.  And there is good reason for the doubts of those policymakers.  If an agency has to “create” a service that does not exist today and force companies to sell that service just so it can apply Title II and regulate that service all to get around a court decision, it seems to cry out that this is not an area where the agency has any clear jurisdiction.  Oh, and while we’re on this topic, just to be clear, when it comes to wireless broadband, the Commission is barred by law from classifying it as a Title II telecom service (see page 112 of our comments).

Third, for the past 12 years, a series of Commission and court decisions have confirmed that Internet access service is a Title I information service with no Title II telecom service component.  The Commission cannot point to anything factually that has changed that would warrant reaching a different conclusion.

Fourth, even if the Commission (in an alternate universe) could lawfully justify classifying broadband Internet access as a Title II service, it should not go down that path simply because it is bad policy.  For the first time in nearly a generation, a broad consensus is emerging among many stakeholders in support of targeted Congressional action.  Against this backdrop, the Commission does not need to throw American Internet policy into turmoil and uncertainty.

Finally, as we have pointed out previously, applying Title II to the entirety of the Internet infrastructure in the manner proposed under the Third Way would not have prevented the conduct at the heart of the Comcast-BitTorrent dispute nor the Madison River VoIP blocking Consent Decree – the only two examples ever cited in this debate by proponents of Internet regulation.

So, for those keeping score at home, the Third Way would be wrong technically, politically, and legally.  It would be bad policy from an investment and economic perspective and it wouldn’t fix the problem the FCC was trying to address in the first place.  All you have left at the end of the day is your sledgehammer, a lot of holes in your broadband home and those pesky flies still around to keep you company.

Hopefully common sense will prevail here, and we can move on to real issues, like removing barriers to investment in broadband infrastructure, creating some jobs and getting this economy moving again.

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Comments (5)

Bob,
The fact is that many phone companies, including AT&T provide truly LAME internet access. I am suffering with AT&T service in Los Angeles. The lines are noisy antiquated copper in my neighborhood, and there is no apparent plan to update them. I tried to get AT&T to upgrade the service. I spent 1/2 a day calling to various AT&T services all around the country, but nothing could be done. In fact, when I bought my house, AT&T told me that my line was not good enough to support any DSL service at all, so I had to obtain it through a third party, which of course comes into my house through an AT&T phone line. Go figure! If it takes a sledgehammer from the US government to force AT&T to upgrade its service against its will, then I am all for it. You are on the wrong side of this battle, in my opinion.

John Smith July 18, 2010 at 8:13 pm

Bob,

You and I both know that when people don’t play nice together on the playground, the principal has to step in and lay down some rules, even though the rules may simply state the obvious. In the case of Third Way, it seems as though the principal stepped in even though he knew the school district was planning on some modernized policies which would address the problem. I think I agree with you in that it isn’t the best way forward.

But I find it interesting that AT&T seems to be stifling the best way forward in another area, the availability of wholesale broadband to competitors. To my knowledge, at least in Southern California, AT&T has never offered its U-Verse broadband wholesale, and it doesn’t offer dry loop DSL wholesale either. Verizon, on the other hand, does offer dry loop DSL, and until recently was offering its FIOS broadband to competitors for resale. As technologies evolve and emerge, and services transition from circuit-switched to packet-switched, the need for products from a sole-source not only diminishes but becomes less desirable. By not making dry loop DSL available via competitors, consumers are forced to purchase a product—a landline– that they may not want or need, simply to use their ISP of choice. Of course, consumers can purchase these dry services direct from AT&T, albeit at inflated prices due to lack of competition.

On page 17 of your comments, it states “…the broadband marketplace is robustly competitive…” and “…even as the prices for service plummet…” Imagine the level of competition (maybe you don’t want to) and the consumer price points should you decide to open up these offerings. Now, granted, there isn’t a law that requires you to provide such services, but there certainly isn’t a law that prohibits you from doing it, either.

On page 28 it states “…These include tools that allow customers to compare the key details of Internet service plan options…” Sure, AT&T plans. But what motivation do you have to improve your terms of service for those products with no competition?

And on page 31 it states “…whether those terms and conditions are hospitable to small business entry…” Yes, that statement is referring to the Comcast case, but it still has a place in the context of my discussion. How can a company such as DSL Extreme grow, thrive, and help to implement the goals of the Broadband Plan if you’ve locked them out of a key product?

As the landscape changes, AT&T needs to live up to its self-proclaimed openness claim in all areas, not just those that are legally or financially convenient.

Thanks for your time.

Chris Lantz July 20, 2010 at 3:26 pm

John Smith says: “If it takes a sledgehammer from the US government to force AT&T to upgrade its service against its will, then I am all for it.”

These kinds of comments baffle me a bit. Do you really want the government to hold a gun to a business’ head and say spend this money upgrading even if it means losing money or going out of business? I didn’t know this is how a democracy worked.

George Ou July 21, 2010 at 10:53 am

There is nothing neutral about new neutrality and these people say that a sledgehammer is the right way will get a better understanding when it is swung at them. It is so hard to believe that any rational person could have any faith at all in this governments ability to do anything right. Oh, I forgot about that great job at the Gulf. Nothing quite like an oil soaked sledgehammer.

DANNY JEFFREY July 24, 2010 at 2:26 am

The sledgehammer is in the form of setup costs that neutralize any real savings and policies that make it impossible for me to switch my 30 or so offices to a more affordable connection. It’s obviously just about the money and AT&T is only willing to go as far as it takes so that they can maximize the profit off of land lines that were laid down 50 years ago. Can anybody say, “Free Money”?

Glenn Dicus December 14, 2010 at 2:54 pm

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