FCC Commissioner Ajit Pai Just Loves Net Neutrality Rulemaking Transparency, Except When It's His Turn To Be Transparent

from the walk-the-talk dept

You might recall that to try and thwart the agency's new net neutrality rules, former Verizon lawyer turned FCC Commissioner Ajit Pai launched a last-minute, facts-optional war on net neutrality and neutrality supporters like Netflix. Most of his arguments were nonsensically awful, like claiming that having real neutrality rules would somehow inspire North Korea and Iran to censor the internet, or that Netflix's fairly ordinary use of a CDN suggested it was somehow a hypocrite on the idea of net neutrality and was trying to destroy the internet.

But Pai's biggest complaint about the net neutrality rules was that the FCC wasn't being transparent enough, despite countless years of conversation and fully documented public input. Pai repeatedly and often proclaimed that the entire process wasn't transparent, even going so far as to hint that the White House's public Title II support was somehow part of a secret cabal with the FCC, even though as we noted at the time no rules were broken by the White House's entirely ordinary public statement of support for Title II.

If you know telecom company lawyers, you probably were keyed in early on that Pai and his staff's breathless love of transparency was a bit of a political show pony designed to rile up the folks that believe net neutrality is some vile, secret plot by government to ruin the internet. You also likely realized early on that when the shoe was on the other foot, this love of transparency would probably magically disappear.

And that didn't apparently take long. The House has been conducting an endless stream of political show pony hearings and "investigations" into the FCC's behavior on the net neutrality front under the noble pretense of reform, when the real goal is to punish the agency for daring to stand up to ISP campaign contributors. As the House digs through documents they hope will prove that net neutrality is an unholy, big government cabal (and not, as most realize, a genuine and remarkable grass roots movement) Pai apparently refused to provide documents to the FCC's own lawyer:

"Republican FCC Commissioner Ajit Pai is refusing to make his office’s documents available to the FCC’s Office of General Counsel as part of a House investigation into the agency’s net neutrality decision. Pai has instead promised to provide documents directly to the House Oversight Committee — though a panel spokeswoman said no documents have yet been provided."

Get it? Transparency is really, really important unless it doesn't coincide with partisan patty cake efforts to shame the FCC for finally doing its job and standing up for consumers. Of course in a few years when Pai's back at a telecom company or comfortably ensconced at one of their think tanks, this will all be forgotten, but if the rules get overturned in court by Pai's friends at Verizon, consumers and small businesses will be the ones left holding the detritus from Pai's noble, totally transparent time at the Commission.

Filed Under: ajit pai, net neutrality, transparency
Companies: fcc, netflix, verizon

Net Neutrality Rules Are Already Forcing Companies To Play Fair, And The Giant ISPs Absolutely Hate It

from the please-stop-doing-your-job dept

The FCC's net neutrality rules don't even go into effect until June 12, but they're already benefiting consumers. You'll recall that the last year or so has been filled with ugly squabbling over interconnection issues, with Level 3 accusing ISPs like Verizon of letting peering points congest to kill settlement-free peering and drive Netflix toward paying for direct interconnection. But with Level 3 and Cogent hinting they'd be using the FCC's new complaint process to file grievances about anti-competitive behavior, magically Verizon has now quickly struck deals with Level 3 and Cogent that everybody on board appears to be happy with.

And it's not just Verizon; Level 3 also quickly managed to strike a new interconnection deal with AT&T, and Cogent CEO Dave Schaeffer recently proclaimed Comcast has also become suddenly more amicable of late, turning on ports for capacity quickly and when needed. Comcast, like AT&T and Verizon, has also suddenly announced a new interconnection deal with Level 3 Comcast says it was "delighted" to sign.

That players in the transit and ISP space are suddenly getting along so wonderfully when ISPs insisted net neutrality rules would result in the destruction of the Internet is nothing short of miraculous. It's almost as if the FCC's new net neutrality rules are already benefiting consumers, companies and a healthy internet alike!

Obviously the threat of having a regulator that actually polices anti-competitive behavior instead of playing deaf, dumb, and blind is going to require an adjustment period for everyone involved. Still, despite evidence the FCC's neutrality rules are working as an anti-competitive deterrent, carriers are still busy claiming the agency is causing "irreparable harm" on the interconnection front. From a joint filing (pdf) from all the major ISP trade groups, including USTelecom, the NCTA and the CTIA:

"Until now, a variety of voluntarily negotiated, individualized arrangements have been used to exchange traffic between networks. But, under the Order, these arrangements are now part of the “telecommunications service” that broadband Internet access providers offer their retail customers, and thus broadband providers—but not their interconnecting counter-parties—are subject to the requirements of Title II. Yet again, however, the FCC did not explain what that means or how broadband providers must act."

While the FCC's rules on interconnection are a bit vague, the agency has made it clear they'll be looking at complaints on a "case by case basis" to ensure deals are "just and reasonable." Since this is new territory, the FCC thought this would be wiser than penning draconian rules that either overreach or contain too many loopholes. This ambiguity obviously has ISPs erring on the side of caution when it comes to bad behavior, which is likely precisely what the FCC intended. Still, companies with a generation of history at being bullies complain this ambiguity lets others...bully them:

"Providers are thus left to negotiate contracts subject to sweeping statutory mandates without knowing what decisions could lead to enforcement action. Already, providers face demands for significant changes to interconnection agreements. The parties making those demands are threatening to file enforcement actions if their demands are not met. This distortion in what had been a well-functioning private negotiation process is irreparable harm."

And by "well functioning private negotiation process," the ISPs clearly mean one in which they were able to hold their massive customer bases hostage in order to strong arm companies like Netflix into paying direct interconnection fees. One in which regulators were seen but not heard, while giant monopolies and duopolies abused the lack of last mile competition. Yes, the FCC's actions have been so brutish and aggressive, they've resulted in a cease fire across the interconnection front to the benefit of video customers and internet users everywhere. Will the nightmare ever end?

Filed Under: fcc, interconnection, net neutrality
Companies: at&t, cogent, comcast, level 3, verizon

Before Freaking Out About The FCC's New Neutrality Rules, Perhaps You Could Be Bothered To Actually Read Them

from the pay-attention,-chicken-little dept

While there's been no limit of hand-wringing over the new net neutrality rules, much of this has been either hyberbole by giant ISPs that don't like having their anti-competitive pipe dreams quashed, or by folks who don't actually understand what the rules actually do. There are a number of smaller ISPs, partisans and tech execs that exist in the second camp, assuming in kneejerk fashion that the FCC's new rules saddle them with all manner of burdensome regulations. In reality, as we've noted several times, not much changes under the new rules -- provided you don't intend to engage in anti-competitive behavior.

Former Verizon regulatory lawyer turned FCC Commissioner Ajit Pai voted down the rules, and has been waging a bizarre, facts-optional assault on neutrality supporters like Netflix ever since. Last week Pai managed to drum up a little extra hysteria on this front by proclaiming that the new rules were crushing small ISPs with all manner of new costs. Pai trots out several small ISPs that, in filings to the FCC, take a page out of the AT&T pouting playbook and say they're freezing investment in broadband because the rules are just too damn onerous:

"KWISP President Kenneth Hohhof told Ars that his two-person company makes revenue of $250,000 to $300,000 per year, and he estimates that he’ll have to pay $20,000 in legal costs because he intends to hire a lawyer to review his business practices. Hohhof admits that he “pulled that [number] out of the air,” but given the hourly rates charged by telecom lawyers, he expects the bill to be substantial for such a small company.

...Another wireless ISP Pai described is SCS Broadband in rural Virginia, which serves 800 customers and “has already stopped investing in new rural areas because of the FCC’s decision, and it won’t resume until it can ‘determine if the additional cost in legal fees warrant such investments,’” Pai said. “And investors have already told SCS Broadband that ‘projects that were viable investments under the regime that existed before the Order will no longer provide the necessary returns to justify the investment.’"

Yes, like with any regulations, investors will need to do due diligence, and businesses need to occasionally consult attorneys to understand the market landscape in which they operate. Also, shockingly, lawyers do indeed tend to take extra advantage of people who can't be bothered to understand when their services are or aren't needed. And while it's clear the FCC could do a better job communicating the rules' impact, these problems aren't the fault of the rules themselves.

Rather amusingly, Ars Technica then proceeds to dissect most of these concerns point by point, suggesting that most of the small ISPs engaged in hysterics over the rules appear to not understand them in the slightest. As Ars notes, most of the onerous portions of Title II (rate regulation, local loop unbundling) aren't included in the rules, and most smaller ISPs are exempted from new transparency requirements. Indeed, most of the non-blocking, non-throttling, and "reasonable network management" requirements are the same, relatively-generous ones these ISPs lived under with the original net neutrality rules, which they didn't need lawyers to understand and comply with.

The bottom line: a lot of confusion and fear on the part of hysterical anti-Title II folks could be eliminated by actually reading the rules (pdf), instead of listening to incumbent ISP lawyers, former incumbent ISP lawyers like Ajit Pai, or execs like Mark Cuban. Again, many folks who actually run ISPs for a living (like Sonic.net CEO Dane Jasper) note it's only ISPs that engage in anti-competitive behavior that should worry. That's not hard to realize if you've paid attention to the FCC's recent, totally out of character, shift toward notably more consumer and competition-friendly telecom policies that are already benefiting consumers and companies alike.

Even the major ISPs that hate the idea of having their anti-competitive shenanigans policed have repeatedly and quietly admitted the rules don't impact their day-to-day business operations much. While their lawyers and lobbyists have been busy predicting business Armageddon, dozens of ISP execs have gone on record in recent months to admit the rules don't change much of anything for them operationally. And indeed, small ISPs that have bothered to pay attention to this bizarre new about-face at the FCC (like Joshua Montgomery of Wicked Broadband in Kansas) appear to understand this:

"If you're behaving in your customers' best interests and operating above the board, I don't think you have anything to be concerned about,” he said. “If you're advertising a $19 rate and then jacking people's bills up to $125 with fees and other things after six months and claiming some kind of long-term deal, yeah you're probably going to have trouble. [The FCC] made it very clear that their goal is to encourage competition, and I don't think they have their eyes on small players."

At the heart of the net neutrality opposition are very wealthy companies immeasurably angry that somebody is finally trying to stop them from aggressively cashing in on the lack of competition over the broadband last mile. At the periphery are many satellite opponents who just oppose the new rules because (certainly not without some valid historic justification) they believe all regulation is always bad, and you don't need to have an intelligent, nuanced debate on the merits of individual proposals because the fact that regulation is always, automatically bad is always true and la la la I can't hear you. The former have a pretty easy time riling up the latter, but you can go a long way toward avoiding this kind of confusion by actually reading and understanding the regulations you're busy claiming will destroy the business universe as we know it.

Filed Under: ajit pai, fcc, net neutrality, rules, small isps
Companies: at&t, kwisp, scs broadband, verizon, wicked broadband

The Mere Threat Of Real Neutrality Rules Appears To Have Helped Calm Verizon, Level 3, Cogent Interconnection Feud

from the funny-how-that-works dept

A little over a year ago, Level 3 was busy accusing Verizon of intentionally letting its peering points get congested in order to degrade Netflix streaming performance, by proxy forcing Netflix to pay Verizon for direct interconnection if it wanted to remedy the situation. According to arguments by Netflix, Level3 and Cogent, big ISPs like Verizon, Comcast and AT&T decided to move the net neutrality debate out to the edge of the network, obtaining their pound of flesh by eliminating settlement-free peering and demanding new charges just to access last mile customers.

To hear AT&T, Verizon, and Comcast tell it, the fight was all just a big misunderstanding, and what was occurring was just run of the mill peering disputes. Meanwhile, their army of fauxcademics, astroturfers, lobbyists, consultants and think tankers were busy telling anyone who'd listen that Netflix was trying to destroy the Internet.

But in a series of blog posts from last year, Level 3 content and media VP Mark Taylor continued to argue that there was a major anti-competitive cabal afoot, with only the biggest ISPs holding network performance (and their own users) for ransom in a quest for more revenue:

"All of the networks have ample capacity and congestion only occurs in a small number of locations, locations where networks interconnect with some last mile ISPs like Verizon. The cost of removing that congestion is absolutely trivial. It takes two parties to remove congestion at an interconnect point. I can confirm that Level 3 is not the party refusing to add that capacity. In fact, Level 3 has asked Verizon for a long time to add interconnection capacity and to deliver the traffic its customers are requesting from our customers, but Verizon refuses."

The problem, as we noted at the time, is that with peering arrangements entirely confidential, it was impossible for any researcher to fully prove incumbent ISPs were up to no good, even if the context of thirty years of anti-competitive behavior -- and scattered glimpses of limited data sets -- suggested the Netflix and Level 3 narrative might just be true. As such, the FCC announced it would begin collecting internal company data on interconnection to determine who, exactly, was telling the truth.

Fast forward a year, and all the companies involved in this fight now face being governed by new net neutrality rules that include a mechanism for complaints over interconnection shenanigans. With this new threat of regulatory intervention looming, lo and behold Verizon and Level 3 quickly appear to have struck a new interconnection deal. Verizon and Cogent also say they've managed to strike a new deal that appears to make both sides happy. Gone completely is the hostile rhetoric from all companies involved.

Even Cogent founder and CEO Dave Schaeffer, one of the most vocal executives in regards to these interconnection feuds, seems happy to have struck a no-payment deal with Verizon. According to Schaeffer, the FCC's new neutrality rules helped bring Verizon to the table, since Level 3 and Cogent had hinted they might complain to the FCC:

"Schaeffer told Ars that it did not have to pay Verizon to get the deal signed. "We have never paid for peering, and we continue to never pay for peering," he said today. Schaeffer said the FCC's rules "probably influenced the timing" of the agreement. He believes Verizon was also motivated to settle because Verizon's own EdgeCast content delivery network will benefit from distributing traffic through Cogent's network. But there is still work to do to make sure performance improves. "The degradation exists right now, the ports are massively oversubscribed and our initial fix is going to dramatically increase the connectivity," Schaeffer said. "The parties agreed to make sure this doesn’t become a problem going forward."

While the net neutrality rules don't technically take effect until June 13, apparently the mere threat of a regulator actually doing its job was enough to bring Verizon to the negotiations table. That's not to say there won't be problems going forward; there needs to be much more transparency surrounding interconnection agreements to protect consumers and competitors alike. Schaeffer is quick to highlight continued problems with AT&T, Time Warner Cable and CenturyLink (though he also points out that Comcast has suddenly become more amicable as well). Meanwhile, the FCC's neutrality rules obviously will need to withstand the full frontal legal assault of the entire broadband industry to remain useful.

Still, if you were paying attention, you might actually start to doubt the claims on several fronts that Title II will destroy the internet as we know it. Comcast's busy deploying two gigabit fiber to 18 million homes despite claiming Title II would demolish sector investment. Executives from Frontier, Cablevision, Sprint, Sonic and even Verizon have all publicly admitted Title II doesn't really hurt them in the slightest. And now Verizon, Level 3 and Cogent appear to have settled their differences thanks, in part, to the mere threat of actual FCC anti-competitive policing. Yeah, so far our new net neutrality rules seem like a real disaster for consumers and internet health alike.

Filed Under: bargaining, interconnection, net neutrality, peering, title ii
Companies: cogent, level 3, netflix, verizon