Hiding the Internet Ball

Posted by: Hank Hultquist on June 28, 2010 at 12:47 pm

“To define is to limit.” Or so said Oscar Wilde in The Picture of Dorian Gray.

When it comes to regulating the Internet, however, the FCC is apparently unwilling to define its regulatory limits.

In its “Third Way” NOI, the FCC did not define the Internet transmission service (what it dubs “Internet Connectivity Service”) that it proposes to regulate under Title II of the Communications Act.  Instead, the NOI simply describes it, “at a high level,” as the service that “enables users to transmit data communications to and from the rest of the Internet.”

That’s all we get.  What could that definitional blob mean?

Well, it appears to encompass a broadband Internet access provider’s entire Internet infrastructure – from the first mile copper, fiber or cable lines that connect each end user to a network node in their neighborhood all the way to the provider’s backbone routers, high-capacity links, servers, and backbone peering relationships that enable the broadband Internet access provider’s customers to connect with customers of other networks.

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The Third Way: The Unpacked Director’s Cut

Posted by: Bob Quinn on June 24, 2010 at 11:43 am

The problem with the Open Internet fight generally and the Title II fiasco specifically is that fiction tends to trump facts in the debate.  It’s understandable.  It’s easier sometimes to understand and write about the vague and empty rhetoric than it is to unpack the facts and legal framework that lie at the heart of the dispute.

But, with the FCC proposing, unfortunately, to dip the Internet into the sugar-coated world of Title II regulation – light touch or not – specificity and clarity are really essential to understanding the extent and limits to the regulation that the FCC and particularly its General Counsel are advocating.

So, starting today, and over the coming days, we will do the hard work of unpacking the complex and esoteric legal issues of this debate so you won’t have to.

It’s been said repeatedly that the FCC must examine Title II regulation to put the Open Internet on a “solid legal foundation.”  See here and here.

I will begin our examination by noting that the absence in the Notice of Inquiry (“NOI”) issued last week of that “solid legal foundation” is a very large problem which is compounded by the notion that the FCC might actually attempt to go directly from NOI to Final Order in this proceeding.  

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Investment: Compared to What?

Posted by: AT&T Blog Team on June 24, 2010 at 11:32 am

Authored By Jeanine Poltronieri, AT&T Assistant Vice President-Federal Regulatory

In the FCC’s 14th Annual Wireless Competition Report, the Commission spends a lot of time discussing investment. It also delves into profits. Now, before your eyes glaze over, stick with me on this. I’ll try to be brief.

The Commission analyzes capital investment and concludes that it is “robust” but “declining relative to industry size.” An analysis of either of these areas may be helpful. But why link them together?

The idea of comparing investment to industry size was proposed last year in comments filed by certain interest groups. They specifically focused on the capex and revenues of AT&T and Verizon and concluded that there was a decline in investment compared to profits. This decline, they said, is “a strong sign that providers are not competing on non-price factors such as investment.” In its report, the FCC adopted this idea but broadened the capex/revenues comparison to include the whole industry, rather than just AT&T and Verizon.

The notion that this comparison is a cause of concern, let alone the idea that this comparison demonstrates increased levels of concentration or declining competition , is simply untrue. AT&T made these points in our comments, but they bear repeating here.

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AT&T Statement on FCC NOI

Posted by: Margaret Boles on June 17, 2010 at 2:29 pm

The Federal Communications Commission (FCC) today moved forward, in a 3-2 vote, to consider subjecting broadband Internet services to Title II phone regulations. Attribute the following statement to AT&T’s Senior Executive Vice President-External and Legislative Affairs, Jim Cicconi:

“Today’s decision by the FCC is troubling and, in many respects, unsettling. It will create investment uncertainty at a time when certainty is most needed. It will no doubt damage jobs in a period of far-too-high unemployment. It will also undermine the FCC’s own goals for the National Broadband Plan. A better and more proper approach is for the FCC to defer the question of its legal authority to the US Congress. A clear and bipartisan majority of Congress has urged this, and in his comments today the chairman did acknowledge Congressional action as an option. AT&T continues to feel Congressional action is far preferable, and far less risky to jobs and investment, than the FCC’s current path.

“The FCC has argued that it is not seeking to regulate the Internet. The facts—indeed the very words of the proposal voted on today—tell a different story. The Internet is commonly defined as “a network of networks”, and the FCC proposes to regulate broadband networks virtually end to end under a regulatory structure devised in 1934 for monopoly telephone networks. This is impossible to justify on either a policy or legal basis, and we remain confident that if the FCC persists in its course—and we truly hope it does not—the courts will surely overturn their action. We would also note that, significantly, the FCC’s proposal today fails to articulate any legal theory on which it feels it can proceed with a Title II reclassification.

“The Open Internet is a reality today. It is the stated policy of AT&T and every other major broadband provider to preserve Internet openness. That is the basis on which we have spent billions to build broadband networks, and it is the basis on which we operate them today. Just as we have worked at an industry level to create private sector mechanisms for protecting the Open Internet, we stand ready to work with the FCC on narrow, targeted authority for the FCC to ensure today’s Internet openness is preserved in the future.”

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The FCC: Having Its Forbearance Cake and Eating It Too

Posted by: AT&T Blog Team on June 16, 2010 at 4:08 pm

Authored by Paul Mancini, AT&T Senior Vice President and Assistant General Counsel

Over the last month, various members of the FCC and others have publicly promoted the agency’s proposal to change the classification of broadband Internet access service.  In a nutshell, the FCC wants to take broadband Internet access service out of the competitive-oriented Title I “information service” category where it has resided for more than a decade and put it into the old-style, monopoly phone-oriented Title II “telecommunications service” category.  No need to worry about those heavier Title II regulations deterring investment, innovation and jobs, say these folks, because the agency will only apply what it thinks are the six most essential sections of Title II and it will “forbear” from all the rest.

As more details on the legal theories girding this proposal come out, we’ve noticed a rather curious contradiction in the FCC’s proposal.  On one hand, when the FCC explains why it can jettison over a decade of bi-partisan deregulatory precedent and impose Title II common carrier regulations on the Internet, the agency claims that the legal threshold for “reclassification” is quite low.  Citing the Supreme Court’s decision in FCC v. Fox Television Stations, the FCC says it need not show any major change in circumstances or “market shift;” it only needs to take a “fresh look” at Internet technology and the broadband market and then “simply provide a reasoned justification” for its decision.  (As you might expect, we and others have a very different view of Fox)

On the other hand, when explaining why nobody should be concerned that the FCC will later rely on this same permissive interpretation of Fox to simply “unforbear” and impose some or all of the remaining Title II regulations on broadband Internet access, the agency says that reversing its forbearance precedent would involve a “painstaking process”  requiring it “to compile substantial record evidence that the circumstances it previously identified as supporting forbearance had changed.”  

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