Verizon Begs To Be Classified Under Title II For Subsidies; Screams About Parade Of Horribles Any Other Time

from the title-ii-shell-game dept

Mon, Jun 2nd 2014 9:47am — Mike Masnick

If you've been paying any attention at all to the whole net neutrality fight, you'd know that the key issue is whether or not broadband services should be reclassified under Title II of the Telecom Act. In the early to mid-2000s, the FCC declared both cable and DSL broadband to be information services under Title I, rather than telecommunications services under Title II. This basically means they are not subject to common carrier rules, including non-discriminatory rules that are the key issue around net neutrality. And, of course, the telcos are putting up a big fight over this, listing out a supposed parade of horribles that would happen if they were reclassified under Title II.

There's just one big problem with this: those very same telcos with those very same networks are begging to have them classified under Title II at other times. Basically, the telcos absolutely love Title II when it gives them all sorts of subsidies and tax breaks.

Here, for example, you can see Verizon making it quite clear that its FiOS fiber service should be classified under Title II in New Jersey.

They've done the same elsewhere. Here they are in DC.

The reasoning here is simple to understand. For all the talk of why they hate Title II, Verizon (and AT&T) know that Title II gives them tremendous subsidies in the form of access and rights of way. Basically, the only way they can get the right to rip up the ground or access existing conduits and electrical poles to lay all that fiber -- is to be classified as a common carrier under Title II. So a bunch of Verizon's applications concerning its FiOS service are entirely about why they should be classified as Title II.

But here's the little dance move they pull. They claim that this infrastructure must be considered Title II, in order to get those subsidies, tax breaks and rights of way. And they insist that it's proper to classify it as Title II because it offers voice service over those lines. But, at the very same time, they claim that all other services that they provide, must be classified under Title I.

Oh, and it gets better: they claim that in order to pay for all of this (even though they're getting all these breaks and subsidies), they have to raise the prices on telephone service -- which they've done at a fairly astounding rate.

And, we're not done with the scam yet. As we've been describing for years, part of this shell game is that Verizon promises that, under Title II, it will install this fiber to everyone -- and then never delivers. And then, for the final kick in the gut, after it fails to deliver on those promises, it gets local politicians to drop the requirements it agreed to in order to get the subsidies.

And... this doesn't even touch on the issue of "IP transition," where after they get all these tax breaks and subsidies based on the claims of providing (increasingly expensive) "voice" services under Title II, the very same telcos will want to turn off that voice service, in favor of voice service over the internet. Now, voice services are clearly moving to the internet, and that's reasonable. But this is part of the telco shell game. Get all these tax breaks and subsidies by pretending all of that fiber was a Title II service, but then shut down the Title II covered-telco service the first chance they get, and shift it to an "information" service under Title I. Voila: they get all the tax breaks and benefits of Title II for installing the infrastructure, but then don't have to meet the obligations of a common carrier which they promised to meet in order to get those subsidies.

It's almost astoundingly brilliant if we weren't all left paying the (increasingly larger) bill for worse service.

Either way, whenever you see the telcos listing out the parade of horribles under Title II, it might be worth reminding them that they, themselves, were the ones who insisted on classifying their own networks under Title II because of all the "benefits" it brought.

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Filed Under: access, broadband, fcc, fiber, fios, net neutrality, rights of way, subsidies, title ii
Companies: verizon

10 Comments

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Michael, 2 Jun 2014 @ 10:13am

I'm pretty sure any communications acts from 1934 or older are somewhat out of date with the current technology.

Perhaps we should throw out some of these old laws.
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Anonymous Coward, 2 Jun 2014 @ 10:29am

Very nice writeup! I'm not sure I agree with voice service moving to the internet being alright though, they generally don't exhibit very good performance compared to circuit switched gear.

This does raise an interesting point though, as even without the "transition" proposals the telcos have been pitching, Verizon has actively forced people off of title II phone service when they've installed FiOS in some areas. Thankfully a utility reform agency is suing them for just that.
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Anonymous Coward, 2 Jun 2014 @ 10:31am

Title II
Ok, how about we just start treating all of their title II assisted lines as a public utility and sue them when they block us. We can use their own documents against them.
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PRMan, 2 Jun 2014 @ 10:44am

Re:
Except that every time we make a new law, it's worse than the old ones.
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Anonymous Coward, 2 Jun 2014 @ 10:59am

Didn't the telcos all scream about ISP's not being under Title II when VOIP services like Vonage and Comcast's Voice service first started popping up around 2000 because those offerings allowed people to get voice services that were not incumbered by all the federal taxes and regulations that the POTS providers were? Look, it was the bad behavior of the telcos that brought on all that nasty regulation in the first place. The FCC should not just base their decisions on what the service is but the history of the major players in the space. The telcos made that bed a long time ago, and still need to be made to lie in it.
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nasch (profile), 2 Jun 2014 @ 12:26pm

FCC
This wouldn't be such a problem if the FCC (and probably state and local governments too) weren't so willing to just go along with it. We expect the people running corporations to behave as dishonest slime with no consideration for anyone else, the real issues arise when regulatory agencies don't put any checks on their behavior.
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Michael, 2 Jun 2014 @ 12:33pm

Re: Re:
We don't make new laws - we just stick more band-aids on old ones. Our legal system is just one big sheet of duct tape these days.
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Michael, 2 Jun 2014 @ 12:36pm

Re: FCC
We expect the people running corporations and polticians, and political cronies, and lobbying groups, and law enforcement to behave as dishonest slime with no consideration for anyone else

- fixed
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Jeremy2020 (profile), 2 Jun 2014 @ 1:54pm

Re: Re: FCC
The general public consciousness still hasn't embraced that our government is wholly and completely corrupt
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John Fenderson (profile), 2 Jun 2014 @ 3:30pm

Re: Re: Re: FCC
Oh, I think it has. Unfortunately, I think the general public consciousness has also fallen into the self-fulfilling mindset that there's nothing that can be done about it. We see it all the time even in the comments on this very site. That's what we need to fight against. If you believe you're defeated before the fight is over, then you are defeated even when victory would otherwise have been possible.
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