Get Ready to Rumble; FCC Launches Net Neutrality Rollback

Here’s how high tension is already running over the Federal Communications Commission’s proposal to undo it’s own net neutrality order: At Thursday’s open meeting where the commission voted 2-1 to proceed with the first phase of the rollback, with security on high alert over online threats aimed at commissioners, security personnel “manhandled” long-time Capitol Hill reporter John Donnelly and removed him from the building for approaching commissioner Michael O’Reilly in a hallway and attempting to ask him a question outside of an official press conference.

FCC Commissioner Mignon Clyburn

Tensions are only likely to get higher as the proposal moves forward. This week’s vote kicks off at least a three-month period of pubic comments, during which the commission can expect to be deluged with input, ranging from the substantive to he hysterical. Democrats on Capitol Hill, meanwhile, are vowing “all out war” to prevent any rollback.

Democratic commissioner Mignon Clyburn used Thursday’s public meeting as a platform to denounce the proposal and to call on members of the public to challenge the rollback in court, a tactic many legal experts say would stand a reasonable chance of success, given that the commission’s abrupt reversal on rules implemented just two years ago could well meet the legal definition of the sort of “arbitrary” and “capricious” actions federal agencies are supposed to avoid.

There’s also the possibility that Clyburn herself will leave the FCC at the end of June, when her current term expires, which would leave the already depleted commission one commissioner shy of the quorum needed to give any of its actions the force of law. Efforts to fill the by-then three vacant seats on the panel could well set off a major battle between the White House and Democrats on the Hill, which given the current chaos in Washington (Nostrovia!) could drag on indefinitely.

All of which is to say, we’re a long way from any formal rollback of the rules taking effect. Between now and then, though, we’re likely to hear a lot of overheated rhetoric and exaggerated claims from all sides of the debate.

As with the first time around, much of the public debate will focus on the alleged dangers of introducing “fast lanes” and “slow lanes” on consumer broadband connections or the blocking or throttling of disfavored content by ISPs.

For the streaming industry, however, the most substantive of the proposed changes would be the elimination of the current regulations’ “general conduct” standard for reviewing possible violations of open internet principles not covered under the rules.

That somewhat nebulous concept was introduced by previous FCC chairman Tom Wheeler to give the agency the authority to review interconnection agreements between edge providers and last-mile ISPs without issuing formal rules governing those arrangements, which were still evolving at the time.

That effort was in someways the linchpin of the entire previous rulemaking, including Wheeler’s decision to reclassify broadband access as a Title II telecommunications service. Whereas rules prohibiting blocking and throttling likely could have been sustained under the FCC’s existing authority without reclassification, asserting authority over interconnection arrangements could only be sustained if internet access was brought fully under FCC jurisdiction, with its public interest standard. Legally, that could only happen if internet access were formally classified as a telecommunications service under Title II of the Communications Act.

For all the sturm und drang over fast lanes and slow lanes, the number of confirmed cases of content-based throttling of consumer bandwidth is very small. Prioritization of favored content via zero-rating is increasingly common, and in some cases paid for, but it’s not clear that providing consumers with what amounts to free bandwidth qualifies as the sort of consumer harm that the FCC could or would prohibit, even under Title II.

Interconnection arrangements, however, were the source of fierce and genuine disputes between streaming services like Netflix and ISPs like Comcast, Verizon, and AT&T.

You could argue, as many do, that the government should stay out of such disputes and let market forces sort out the arrangements. But you can’t argue that interconnection arrangements aren’t directly material to the business of streaming. For better or worse, rolling back Title II would likely end the FCC’s jurisdiction over those arrangements, which could well rekindle the peering wars.


Netflix Ponders Life Without Net Neutrality

Netflix CEO Reed Hastings did as much as anyone to shape the Federal Communications Commission’s net neutrality rules. CEO Reed Hastings’ aggressive public lobbying for what he termed “strong” net neutrality, after Comcast and AT&T successfully forced Netflix to pay for access to their last-mile networks, was largely responsible for putting interconnection arrangements between ISPs and edge providers at the center of the debate and helped persuade former FCC chairman Tom Wheeler to push through reclassification of broadband access as a Title II telecommunications service, which gave the commission jurisdiction over those deals.

Yet, as Republicans in Congress and on the commission sharpen their knives to disembowel Wheeler’s hard-won rules Netflix says it no longer needs the protection.

“Weakening of US net neutrality laws, should that occur, is unlikely to materially affect our domestic margins or service quality because we are now popular enough with consumers to keep our relationships with ISPs stable,” Hastings said in his Q4 letter to shareholders this week.

Translation: we’re too big now even for Comcast to push around, a point Comcast itself obliquely acknowledged in November by integrating Netflix into its flagship X1 set-top box. Read More »

Court to ISPs: You Really Are Just Dumb Pipes

Back when the clamor began to reclassify broadband access as a Title II telecommunications service, in the wake of the DC Circuit Court’s ruling overturning the Federal Communications Commission’s effort to impose net neutrality rules under its Title I authority, there was a lot of grumbling among Verizon’s peers that the telco should have left bad enough alone instead of challenging the commission’s 2010 rules in court.

Though Verizon won the case, largely on technical legal grounds, it poked a hornet’s next that threatened the far-greater sting of reclassification. But now that the same DC Circuit Court has handed down its ruling on reclassification and the FCC’s revised net neutrality rules, many of those grumbling last time are probably wishing they’d followed their own advice.

FCC_buildingNot only did the FCC win the case this time around, but the court majority’s opinion delivers a series of roundhouse blows to most of the ISPs’ claims about the value of their services, if not yet to their market valuations.

In essence, the court concluded that as service providers, ISPs add almost no value beyond basic connectivity. And that goes for wireless as well as fixed-broadband providers.

Apart from their objections on procedural grounds to the FCC’s rulemaking, the ISPs and their trade associations argued they could not fairly be classified as utility-style telecommunications providers because the services they offer consumers include a range of complex, value-adding information-processing functions, such as email, online storage, content caching and DNS lookup. Read More »

FCC Unloads, Releases 313-page Report and Order on Net Neutrality

The full text of the FCC’s open internet order has now been released, along with 305 additional pages of exegetical elaboration and 79 pages of formal dissents from the two Republican commissioners.

ppcommissioners-nov-2013-webFrom an OTT perspective, there isn’t much in the full text that wasn’t already known from what the FCC released last month when it voted to approve the rules: The order’s “bright-line” rules against blocking, throttling and paid prioritization do not apply to commercial interconnection arrangements. However, the FCC will consider complaints regarding those arrangements and will take (unspecified) enforcement action if an ISP’s behavior is determined to violate the order’s “general conduct standard,” prohibiting actions that “unreasonably” interfere with or damage consumers or edge providers. Read More »

Finger-pointing over interconnection

When a consumer’s OTT video stream starts rebuffering, or suffers packet losses resulting in degraded quality, it’s often hard to know where to direct blame. The problem is typically caused by congestion somewhere between the content’s originating server and the consumer’s receiving device. But exactly where in the chain of transit that congestion is occurring, and more importantly who is responsible and why, can be difficult even for engineers — and virtually impossible for consumers — to ascertain.

045448280-maclean-d-deshler-m-baldwinBack when it appeared the FCC was poised to classify interconnection arrangements between last-mile ISPs and third-party transit and content providers as a new, distinct type of Title II service the question of liability for congestion in the chain of transit suddenly became urgent for those involved in wholesale traffic exchanges. Read More »