Posted by: Bob Quinn on May 11, 2010 at 4:21 pm
I’ve had some time to step back a bit from last week’s FCC announcement, in which the Chairman and General Counsel laid out a plan to go down the path of applying 75 year-old monopoly voice (Title II) regulation to the 21st century broadband Internet. I have to admit that while some issues have crystallized, others leave me a bit puzzled with the approach outlined by General Counsel Schlick.
For starters, I think analysts and market reaction to the FCC’s decision (as evident by the cable stocks, which have never before lived under the Title II umbrella) confirms our fears from the outset that heavy-handed regulation (however you try to spin it) will inject a great deal of uncertainty into an already jittery marketplace. So, I am left pondering many questions. Most notably, what does the Commission think it will actually accomplish with this proposal?
I will leave aside the perplexing assertion that the proposal appears to be based on the dissenting opinion by Justice Scalia in the Supreme Court Brand X case, in which he and two other justices would have reversed the FCC and not applied Chevron deference to its views. If there’s a SNL for telecom geeks, I know there is a funny skit in there somewhere.
Equally interesting were Commission statements that were pretty clear that reclassification of Title II would not apply to Internet Service Providers (ISPs), but only to the transmission facility used by the ISP to provide Internet access service. Allow me an overly wonkish moment: AT&T sells a DSL transport service to competitive ISPs (in fact, we had a merger commitment on this issue in the AT&T/BellSouth merger after EarthLink raised concerns that we might withdraw that service from the market post merger). The competitive ISP buys that service from us and couples it with its Internet access services and sells the whole package to the consumer as a retail Internet service.
Under the Commission’s “third way” proposal, net neutrality rules will not apply to ISPs like EarthLink or for that matter any other ISPs, including AT&T or cable companies.
Now, I am not suggesting that any ISP would think it wise to block where people want to go on the Internet, but the simple fact is that, if the net neutrality rules don’t apply to ISPs, then what is the FCC actually accomplishing? To put this in perspective, let’s look at the two incidents often cited by every net neutrality proponent: the Madison River VoIP blocking case and the Comcast/BitTorrent dispute.
The obvious question is: would either incident have been prevented or penalized if this new “third way” approach were actually adopted?
Let’s take the Madison River case. Madison River was accused of blocking ports commonly used by VoIP providers to send calls to the customer’s computer/VoIP interface device. The actual port blocking was accomplished by Madison River’s ISP affiliate (the consent decree was between the FCC and Madison River LLC and its affiliates). So, if the proposed net neutrality rules do not apply to ISPs, they could not be used to stop an ISP doing exactly what Madison River did to prevent its customers from receiving or sending VoIP communications.
I know. You’re thinking, “Surely the FCC has constructed a regulatory mousetrap that would capture incidents like Comcast/BitTorrent right?” When you look at the documents submitted by Comcast as well as the FCC Order it is clear that Comcast was sending a Transmission Control Protocol (TCP) reset packet not from a network router, but rather from a server in the ISP network to the end user’s computer telling that computer to stop sending data because there is network congestion. In techno-geek words, that is at the computer-to-computer layer of the Internet stack commonly known as Layer 4 (the transport layer, which includes TCP). So, once again, if an ISP incorporated that same equipment in its part of the network, it could do exactly what Comcast was doing and the “third way” net neutrality rules would not apply.
Which brings me to Pickett’s Charge. Pickett’s Charge is the name that has been given for the infantry assault made by the Confederate Army against the Union Army center on the third day of the battle of Gettysburg. Many historians have concluded that it was poorly conceived and doomed to failure. And it did indeed fail – it resulted in catastrophic casualties for the Confederate Army for no gain. I’ve stood on that ground, amazed at how any general, even the fabled Lee, could have decided that he had no alternative but to send his men directly against the heart of the Union line – a line bristling with cannon and ready for them in every way. How could Lee have looked at that situation and not considered other, better alternatives? To me, this discussion around Title II has the feel of Pickett’s Charge.
Chairman Genachowski has posited that he has no other choice but to charge ahead with a Title II reclassification. But, of course, there are alternatives, and good ones. The D.C. Circuit invited the FCC to return with a more well-reasoned Title I argument. Yet the FCC, seemingly so worried about preserving its authority, has now apparently abandoned Title I on the premise that the D.C. Circuit Order means they have no ancillary authority – a conclusion contradicted by the Supreme Court’s majority opinion in Brand X. Another alternative is to simply ask Congress to clarify the FCC’s authority to protect consumers and preserve the open Internet – an effort AT&T, and most of the industry, would likely support. Unfortunately, though, as in Pickett’s charge, logical alternatives seem to get little attention. Caught up in the pressures of the moment, only one path seems obvious, I guess. But this decision can lead to significant damage that will, in time, become all too clear.
Already, the financial markets are signaling that this “third way” will cost the country what we need most in this troubled economy: infrastructure investment and jobs. It will also create confusion and distraction from challenges on which we should be united, especially the National Broadband Plan. And now we also know that even if the FCC wins, the onerous rules they propose wouldn’t even prevent the only two alleged “net neutrality” violations that have occurred over the past five years.
So, I am left asking myself, why are we having this discussion, about this path, as if there are no alternatives that would pose less risk or less damage? Perhaps it is time for all of us to consider the obvious: that the Communications Act of 1934 is not the right vehicle to regulate 21st century technologies. If the FCC is intent on regulating in this space, what Chairman Genachowski needs is a new piece of legislation designed for exactly this situation—preventing consumer harm in a dynamic Internet environment not envisioned in 1996, let alone 1934. Sadly, though, it seems we’re all now fated to a battle no one wants, with likely damage no one wants, for goals that could more easily be realized… by simply choosing another path.
