Public Interest Groups Push for Title II Reclassification, as Carriers Urge Light Net Neutrality Rules

Public Knowledge and Common Cause urged the commission to use its transparency powers to gather more information about why certain Internet business practices have developed (http://bit.ly/1rpr3T9). “One of the recurring themes of threats to the open internet is that customers and the public have very little information,” the groups wrote. “While we have seen a rotating cast of explanations from ISPs, it is still unclear why data caps are being imposed on end users. It is similarly unclear how those caps are set, if they are evaluated against internal goals, and what conditions could cause them to be adjusted. The same can be said for peering and interconnection. The truth of the matter is that anyone not directly involved with a specific agreement has no way to know if the agreement represents a reasonable agreement between the two parties or a degradation of the open internet.” A Title II regulatory regime could create a “light touch” framework that relies on the “time-tested enforcement mechanism in Section 208,” they said.

The New American Foundation’s Open Technology Institute was “relieved” to see that Wheeler plans to keep Title II on the table, but was “very discouraged” by the lack of reference to Title II in the commission’s public notice seeking ideas on new net neutrality rules (http://bit.ly/1fbAVHj). “Title II is critical,” NAF said. “The Commission must not foreclose reclassification by either directing all attention in this proceeding toward analysis of authority under Section 706 or explicitly determining, without further consideration, that Title II is not a politically viable path forward.” Section 706 alone is an “insufficient basis of authority to achieve meaningful Open Internet protections,” the public interest group said. The U.S. Court of Appeals for the D.C. Circuit included “a very important caveat” when it blessed the power of Section 706, NAF said: If the commission regulates broadband providers as common carriers, that would violate the Communications Act. “This carve-out represents a fatal flaw in a theory of authority under Section 706,” NAF said. Case-by-case evaluation is “insufficient to achieve meaningful network neutrality protections” because the “very need for those protections is grounded in the fundamental common carriage principle of nondiscrimination,” it said.

"Section 706 increases uncertainty about what the Commission can do and when it can act,” Free Press said (http://bit.ly/1jxqeCh). “Grounding its actions instead on the solid footing of Title II would allow the Commission to prevent blocking, discrimination and other types of interference by broadband providers. Title II would not dictate how the Commission responds to such abuses, but would ensure that it can respond. Title II also would provide far more certain grounds to promote broadband deployment and competition -- preserving universal service and the reliability of the public telecommunications network even as the technologies powering that network evolve.” Under Verizon, Section 706 is not good enough to act as authority for enforceable nondiscrimination rules, the public interest group said. “Even a cursory reading of the D.C. Circuit’s recent decision makes it abundantly clear that the Commission cannot prevent discrimination by looking to Section 706."

Level 3 focused its comments on the need for interconnection requirements in updated net neutrality rules (http://bit.ly/1mqSD1c). “By failing to address interconnection, the commission’s Open Internet rules failed to address the threats the commission identified,” Level 3. Those threats were the ISPs’ incentives and ability to restrict an open Internet, it said. Any new rules should require ISPs to interconnect on “commercially reasonable terms,” Level 3 said. It is in interconnection relationships where ISPs are “attempting to exploit their bottleneck control over access to their end users, demanding arbitrary and unreasonable access charges,” it said. “ISPs should be permitted to charge other providers for services they provide, but they may not charge fees simply for the privilege of accessing that ISP’s customers.” Requiring interconnection on commercially reasonable terms would not impose common carrier duties, and so the commission could do this whether or not it decides to reclassify broadband as a telecom service, Level 3 said.

Competition Renders Rules Unnecessary?

CTIA said based on principles laid out by Wheeler in December in a speech at Ohio State University, the FCC should not impose additional rules on wireless. Wheeler said at the time “if the facts and data determine that a market is competitive, the need for FCC intervention decreases,” CTIA said. “The mobile broadband marketplace is intensely competitive, characterized by strong investment, rampant innovation, and pervasive openness,” the group said. “Under these conditions, the principles set forth by Chairman Wheeler weigh strongly against the adoption of prescriptive open Internet mandates."

CTIA pointed to statistics about the level of competition. It said 82 percent of U.S. consumers can choose from four or more wireless providers and 92 percent three or more (http://bit.ly/1rnK20q). “The mobile broadband provider market is characterized by investment, innovation, and price competition,” it said. “The U.S. is the runaway global leader in 4G deployment: with just 5 percent of the world’s wireless connections, we have almost half of all LTE connections worldwide. Americans consume twice as much mobile data as their counterparts in the European Union.” CTIA members have issued statements expressing a commitment to an open Internet, even in the wake of the Verizon decision, the group said.

Prescriptive rules would be “particularly harmful” for wireless, Verizon said. “Competition among wireless providers -- particularly with respect to their broadband offerings -- is intense, and thus market incentives ensure that providers will not act in ways that harm consumers,” Verizon said. “The United States now has more facilities-based wireless service providers that own and manage network equipment -- with 180 -- than any other nation in the world.” The level of competition is demonstrated “plummeting prices” for wireless data, “which dropped from 46 cents per megabyte to only 3 cents per megabyte from 2008 to 2012,” the carrier said.

"Competitive market forces naturally encourage an open Internet,” the Consumer Electronics Association said (http://bit.ly/1iv8rMB), pointing to FCC statistics that 97.8 percent of the population has access to two or more mobile broadband providers. The commission should act with “extreme caution,” CEA said. “An all-encompassing regulation significantly increases the likelihood of unintended consequences, especially because the Commission would be crafting new rules based on sporadic evidence of harm.” The commission must ensure it doesn’t “impose new regulations on a competitive market ‘just because we can,'” CEA said, quoting Chairman Tom Wheeler. “Reclassification would be a solution out of proportion to the perceived problem."

Section 706 is a strong mandate, and should be used by the FCC to adopt rules preventing broadband providers from favoring affiliated content, Vonage said (http://bit.ly/1m2Fqsy). “Affiliation provides gatekeepers with the incentive to discriminate,” and also increases switching costs, keeping a broadband subscriber “captive” to the ISP, Vonage said. Rules prohibiting those providers from favoring “their own, affiliated content” are “sufficiently different from a Title II blanket prohibition on discrimination to past muster under Verizon v. FCC and Section 706” of the Communications Act, Vonage said. It asked the commission to require a “baseline throughput” from broadband ISPs to edge providers, which for wireline providers should be close to 6 Mbps or higher. “Above this baseline throughput, broadband access providers would be free to negotiate both price and terms of service,” Vonage said. It also supported “the Chairman’s decision to leave title II on the table,” it said, saying any rules under Title II could “complement” rules passed under 706.

A “new no blocking rule” is “key” to new net neutrality rules, the Computing Technology Industry Association said (http://bit.ly/1nUQpsI). “All edge providers, large and small, must be able to reach potential customers, and ISP customers must be able to access any lawful content and applications they wish,” said the nonprofit IT trade association, which has several thousand members. If the FCC let ISPs “distinguish somewhat among edge providers,” and “leave sufficient room for individualized bargaining,” new net neutrality rules wouldn’t amount to impermissible common carriage, CompTIA said, quoting Verizon.