IP Transition Rulemaking Bringing Debate Over Section 214 Bounds

Critics, including ILECs, question whether the policies would survive a legal challenge, but proponents said the proposals bring new requirements but fit with what Section 214 has always been about --- protecting consumers. Jennie Chandra, Windstream vice president-public policy and strategy, called the criticisms of the proposals a “red herring,” in an email to us.

At issue are questions queued up in the proceeding like whether ILECs should be required to offer wholesale access to competitors at equivalent rates and terms when retiring TDM, or if the agency should consider whether replacement technologies would provide the same service when considering discontinuance applications. Public Knowledge has said factors like call quality and 911 access should be considered when providers want to retire copper phone lines.

One former FCC official, now representing telecommunications companies, sided with arguments made by AT&T that basing new requirements on wholesale service on Section 214 would run counter to Section 251, which regulates carrier-to-carrier obligations. The agency would have to justify changing course from the Triennial Review, which didn't require unbundling packet-switched loops, much as the agency had to do in explaining the reclassification of broadband in the net neutrality order, he said (see 1502260043).

Free State Foundation President Randolph May said "historically, the Section 214 process was not used as an alternative means to regulate rates of particular services, but rather to ensure the investments in new facilities were prudent and that discontinuances of service did not leave consumers without service.” CenturyLink, in comments in the rulemaking, also said Section 214 is meant to protect end users, not other carriers.

Another former FCC official, now representing telecom clients, predicted the agency would be given Chevron deference by the courts to enact the policies, but May disagreed. "I think it is always pretty tricky guessing how much deference a court will give an agency. But, in this case, because Section 214 has been around, virtually unchanged in all relevant respects, since the original 1934 Act, I think any turn away from the historical understanding of what the provision means and its purpose may well not pass judicial muster."

The proposal was also characterized as overreaching by former FCC Commissioner Robert McDowell, now at Wiley Rein: ““The plain language of 214 and the Commission’s and courts’ interpretations of it over the years have had a less expansive view. As with ... many other matters, the Commission is stretching its statutory leash.” Likening it to the net neutrality order, which he also opposed, McDowell said the “trajectory is clear: the FCC wants to be the lead agency regulating the entire Internet space and it will work until at least January 20, 2017 [the beginning of the next presidential term] to extend its authority."

The proposal “does not go beyond what Section 214 has been used for,” Chandra countered. The section has always been used to “protect consumers from loss or disruption of service,” she said. The company has argued that without wholesale access, competitors will not be able to reach business customers and that ultimately hurts consumers. “The core idea behind the 1996 Act was that competition delivers the best, most innovative services at the lowest prices for consumers,” Chandra said. “And the 1996 Act recognized that resale of network services or facilities was an essential part of delivering the benefits of competition to consumers.”

Section 251 provisions are not an obstacle, Chandra said. “The adoption of carrier-to-carrier provisions of the Act … were not adopted based on any finding or claimed lack of jurisdiction under Section 214,” she said. “Section 214 serves a distinct purpose not at issue in the other provisions -- addressing the public interest when a critical service is being discontinued.” She also said Windstream isn't seeking access to unbundled loops under Section 254, but seeking equivalent services, which falls under Section 214’s protection of customers.

The proposal on judging discontinuation applications would also stretch the intent of Section 214, AT&T has also argued in comments, because Congress actually intended the provision to strike a balance between the impact on consumers and on providers. The provision was supposed to consider such factors as the financial impact on the common carrier of continuing to provide the service, the company noted in comments. Section 214 also “does not give the Commission authority to regulate the technological details of carriers’ services and networks,” AT&T said. “It certainly does not give the Commission authority to mandate that the nation’s telecommunications infrastructure remain tied to legacy technologies.”

Tejas Narechania, a Columbia University Law School research scholar and former FCC special counsel who worked on open Internet rules from 2012 to 2013, disagreed. He said in an email that when technological changes have “substantive impacts on the service quality, the Commission should exercise its authority under 214 to protect the public interest.” Even though the statute “explicitly says that the FCC cannot exercise general authority over ‘changes in plant, operation, or equipment,’ it can take action when such changes will impact service quality or the public interest,” he said.