Verizon: 'Title II Is Not The Answer... Except When It Gives Us Massive Subsidies, Then It's Totally The Answer'

from the read-the-fine-print dept

Thu, Oct 30th 2014 12:52pm — Mike Masnick

Oh, Verizon. When all the big broadband providers filed their original comments with the FCC concerning its net neutrality/open internet proposal, Verizon's comments were a little different than the others. Comcast and AT&T were pretty effusive in supporting FCC boss Tom Wheeler's proposal to rely on Section 706 rather than Title II. Verizon, however, seemed to push back against any new rules, even under 706. Verizon noted that it wanted to do whatever the hell it wanted, even if it meant "differentiated services" (i.e., paid prioritization, fast lanes, slow lanes, etc.):

...consumer welfare is best protected if the Commission allows broadband Internet access service providers to manage their networks and—if they so choose—offer differentiated services or implement sophisticated pricing strategies as long as those practices do not harm competition.

In assessing whether a practice harms competition, it is essential not to confuse harm to competitors with harm to competition. The Commission has stated “We believe that consumers of broadband access service should have the ability to exercise meaningful choices.” Those choices should include services offered by edge providers that have chosen to enter arrangements for differential treatment in order to offer more desirable services to their customers. Such options will benefit consumers, even as they reduce rival edge providers’ economic welfare by increasing the competitive pressure they face.

Of course, in the past few months, the pressure on the FCC to actually use Title II has increased, and the other big broadband players have made it quite clear that they're furious with Verizon for fighting back against the last set of totally meaningless rules, since the backlash may lead to much stricter rules under Title II.

It now appears that Verizon is belatedly making a big push to attack the idea of Title II and say, "Hey, those original plans from Wheeler to use 706 sound great." That seems to be the clear message from Verizon's new letter to Senator Pat Leahy and corresponding blog post entitled "Title II Is Not The Answer".

In the letter, Verizon refers to the Title II option as "unprecedented utility-style regulation" and praises Section 706 as being effective.

Unprecedented, huh? Really?

If that's the case, why did Verizon beg regulators to have its FiOS internet broadband service classified under Title II for the sake of government subsidies? Here's Verizon using Title II in New Jersey:

And again in Washington DC:

So, um, you know, it actually seems fairly well precedented... by Verizon, no less. Verizon is playing a ridiculous shell game here, in which it wants to be classified as Title II in order to get subsidized access to install its network, but then doesn't want to be held to the rules that Title II puts on those networks. And so it claims, laughably, that such rules are "unprecedented," even as Verizon begs to be regulated under them when it benefits itself.

The letter also insists that "paid prioritization" is a joke and nothing more than "demagoguery since no major ISP has expressed an interest in offering 'paid prioritization' and all agree that the FCC has a valid legal path to prohibit it." Oh really? Can we just go right back up to the quotes we pasted above from Verizon's own filing with the FCC in July, in which it made clear that it wanted to engage in offering "differentiated services" to consumers? Does it think no one read that thing? Now it says no ISP is interested in offering any such service?

Even worse, later in the letter, Verizon actively plays up the idea of a different form of paid prioritization: the cynical use of "zero-rating" apps or things like T-Mobile's "Music Freedom" service. Verizon and other anti-net neutrality advocates point to these programs as "consumer friendly" proposals that would be barred under real net neutrality rules. Here's Verizon's letter:

Inflexible regulation also threatens to take choices away from American consumers. For example, some net neutrality advocates have attacked new business models, such as sponsored data or “zero-rating,” that would save money for consumers. Under these nascent arrangements, content providers could voluntarily agree to pick up the tab for usage-charges when consumers go to their sites. Or in other instances, such as T-Mobile’s Music Freedom plans, in order to differentiate its service a broadband provider could decide not to charge usage for certain types of traffic. While most consumers would no doubt welcome the opportunity not to pay for their usage – and some consumer groups have recognized the potential for such practices to help address affordability and encourage adoption – many of the loudest supporters of new regulation have advocated the regressive step of banning these pro-consumer practices.

It's a total joke to refer to these as "pro-consumer practices." As we explained after T-Mobile announced the Music Freedom program, this is like saying that you're a "hero" for setting a house on fire to save the baby inside. The only reason these programs are good for consumers is because they knock down the artificial walls set up by the telcos in the first place. It's not pro-consumer to say, "Hey, we're going to charge you massive data rates for everything... Oh, except for these few services that we'll be nice and let you access without those fees (probably because those services paid us directly already)."

Zero-rating programs sound good if you ignore the very reason why they're necessary in the first place: because of the artificially high tariffs that the telcos put there in the first place. It's not "pro-consumer" to offer them a tiny oasis from the ridiculous billing practices you yourself set up.

But that's the kind of contradictory bullshit that we've come to expect from Verizon these days. Title II is unprecedented (except all the times we beg to use it to get taxpayer-funded benefits for ourselves). No one wants paid prioritization (except that we've said we'd like to do paid prioritization). Zero-rating is pro-consumer (in that it saves the consumer from the rest of our awful policies). Basically, it seems like Verizon is so used to hiding the nasty details down in the fine print, that it now does it as standard operating procedures in everything it says and does.

Leahy Response Final 10 29 14 (PDF)Leahy Response Final 10 29 14 (Text)

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Filed Under: fcc, net neutrality, open internet, paid prioritization, patrick leahy, section 706, title ii
Companies: verizon

23 Comments

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PRMan, 30 Oct 2014 @ 12:54pm

Hey, they begged for it...
Hey, it's clear from their documents that they want it, I say that we give it to them.
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alan turing, 30 Oct 2014 @ 1:23pm

utility
It is one already, make it so.
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Lord Binky, 30 Oct 2014 @ 1:28pm

Hrm... I wonder if Verizon understands, I don't care about their interests beyond the point of benefit for consumers and the economy. If it takes regulating infrastructure systems to protect consumers and businesses that make use of the infrastructure, so be it. So the insistance from Verizon that Title II may not be what I want, while possibly true, it is better than any alternative that Verizon & Friends have presented. At this point it feels more like crying because they are scared of losing the thing they know they misused (and would continue to if they don't lose it). Like a kid that just figured out they could lose their BB gun for shooting out the neighbors windows.
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Anonymous Coward, 30 Oct 2014 @ 1:37pm

Re:
It sounds more like they are acting like the government to me. They want what they want and everything else be damned and they deserve it because they are the good guys.
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That One Guy (profile), 30 Oct 2014 @ 1:40pm

If the FCC had any spine, they could solve this really quick by simply issuing an ultimatum.

'You have two choices: Either the installations, and therefor the network build upon them are under Title II, in which case you get the subsidies and the regulations, or they're not, in which case you get neither. Take your pick.'
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Typical Shill, 30 Oct 2014 @ 1:47pm

It's all the bandwidth hogs that are to blame. The bandwidth hogs keep hogging up all the bandwidth and the providers have to keep footing the bill making everything more expensive for everyone else. Plus Netflix, you know, they don't pay their fair share of the bandwidth bill. These guys just want everything for free and they don't want to pay for anything.
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DB (profile), 30 Oct 2014 @ 1:50pm

They have already taken the subsidies, both money and being granted right-of-way. They should not now get a choice about title II
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Anonymous Coward, 30 Oct 2014 @ 2:01pm

Hey, Verizon!

When are you going to stop stealing from customers?
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Lord Binky, 30 Oct 2014 @ 2:14pm

Re: Re:
Pretty close. Besides the point of being good guys, they barely keep a straight face when they say it. They are a business with only profit in mind, and they will be a good guy whenever it just happens to be profitable.
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Anonymous Coward, 30 Oct 2014 @ 3:43pm

Hey, Verizon!

When are you going to stop stealing from customers?

When it stops being profitable.

-- Verizon
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Anonymous Coward, 30 Oct 2014 @ 5:25pm

flip side of "the Aereo effect"
Kind of the flip side of "the Aereo effect" -- being classified as "a duck" in one legal analysis but "not a duck" in another.

The root of the problem seems to lie with the outdated-but-still-on-the-books legal classification of cable and DSL services. There really should be one unified classification that includes both traditional cable companies and traditional telephone companies because their functionalities have almost totally merged, as well as new technologies that don't perfectly fit either of these legacy business models.
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Anonymous Coward, 30 Oct 2014 @ 8:52pm

You have points with a optical/wired network. not so much with wireless.

Where can I buy some of that endless spectrum that you think is freely available?
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techflaws (profile), 30 Oct 2014 @ 11:09pm

Re:
So having you (or the services) pay extra for music sent to your phone somehow reduces network load? Makes total sense!
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Robert (profile), 31 Oct 2014 @ 1:45am

Re: Re:
They think they're the good guys but tyrants always think they're doing the best thing for the people even though they're actually harming them. Although I don't think the ISP's think they're doing the best for the people...except their shareholders and own pockets.

If the ISP's get their own way, it'll suck for us. The only thing we can hope for is the FCC will do everything in its power to get the ISP's to play good and also open up the fiber so other companies can use it. I know its a lot to ask for, but thats what we can hope for, even though it probably won't.
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lew, 31 Oct 2014 @ 3:46am

Re: FCC Spine
I think a lot of these comments forget the FCC's interests as a bureaucracy. Ending Title II subsidies would end the reason for existence of a chunk of the FCC. They can't allow that.
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Andyroo, 31 Oct 2014 @ 4:09am

The answer
All Walker has to do to resolve the problems the country has with slow and very very restricted broadband and help improve the broadband infrastructure to world standards is to do the exact opposite to what any of the big three have recommended. Declare title III already and create meaningful laws that restrict the manipulation of customers broadband connections in any way other than to improve service, and then only if they are upgrading the service to cover the lack OF IT.

Ensure that all systems used to sell broadband access do so in a manner that gives the consumer the best that they have. Ensure that ISP's buy or rent bandwidth that provides at minimum a 10:1 ratio of shared bandwidth for consumers, maybe let them provide 20:1 ratio at minimum for areas they are in the process of upgrading.

95% of all profits to be used to improve the network for the next 10 years,
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Andyroo, 31 Oct 2014 @ 4:16am

Re:
look to china for answers and to other modern countries that have advanced way beyond what America purchases from others.
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Mystiq (profile), 31 Oct 2014 @ 9:49am

Re:
I'm assuming troll or sarcasm, but I'm going to reply anyway.

This has been debunked:

https://medium.com/backchannel/jammed-e474fc4925e4

Whatever they say, the upgrades required to keep sufficient bandwidth are relatively cheap. In the case of Comcast/Netflix, it was well-documented. You, the consumer, pay your ISP for bandwidth. It's up to them to decide how much bandwidth to give you that their business model can afford. If they can't afford to give you 15 Mbps down, then don't offer that package.

By charging Netflix, all that's going to happen: Netflix pays the ISP, an additional cost to them and additional payment to the ISP in addition to your monthly cost. Netflix passes the cost on to you (arguably they already did), which increases your bill anyway. ISP can't afford Netflix? Raise rates, or lower bandwidth.
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John Fenderson (profile), 31 Oct 2014 @ 9:54am

Re: Re:
Based on the name, this is sarcasm (or parody). But it's also a great example of Poe's law.
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CrushU (profile), 31 Oct 2014 @ 11:00am

Re: Re: Re:
I almost fell for it until I saw the name.

Then I gave it a Funny.
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Dave Howe, 1 Nov 2014 @ 1:48pm

Sadly...
The US courts seem to have no problem with a classification only applying sometimes, when convenient to a big company - look at Aereo - who apparently is "like a cable company" if that makes them liable for distribution fees, but "isn't like a cable company" if they want the compulsory licensing available to cable companies.
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nubwaxer (profile), 1 Nov 2014 @ 2:02pm

public utility
broadband service is nearly as vital to existence, for businesses and individuals as well, that it needs to be regulated under section II as a public utility. it's that simple.
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pomyjok (profile), 7 Nov 2014 @ 2:31am

i laugh really at this
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