AT&T Shows Cupertino Precisely What Broadband Competition (Or The Lack Thereof) Looks Like

from the fiber-to-the-press-release dept

As many of you may know, AT&T has been responding to Google Fiber with a gigabit broadband deployment of its own, primarily aimed at high-end housing developments where fiber is already in the ground. Dubbed AT&T U-Verse with "Gigapower," the service first appeared in Google Fiber markets like Austin, though AT&T tried to claim this timing was entirely coincidental. As with similar offerings from companies like CenturyLink, it's part of an industry push to at least give the impression that they're keeping pace with Google Fiber and gigabit municipal broadband deployments, even if the announcements often tend to be more impressive than the actual deployments (something I affectionately call "fiber to the press release").

Given this is AT&T, there are of course several caveats. One being that the company's promise to deploy the service to "up to 100 cities" is a bit of a bluff aimed at making the telco appear cutting edge, since it's actually consistently slashing its fixed-line investment budget. The actual deployment is much, much smaller (as in a few housing developments in a dozen markets or so), and AT&T's ambiguous projection numbers tend to ebb and flow depending on what AT&T's trying to get from the government. The other is that users need to pay $40 to $60 more if they want to opt out of AT&T's "Internet Preferences" snoopvertising, which uses deep packet inspection to track online behavior down to the second.

In short, yes it's competition -- but it's AT&T's special brand of competition. Still, it highlights the fact that Google Fiber markets very quickly see a much-needed industry response on both speed and price. Case in point: in the markets where Google Fiber is present, AT&T's gigabit offering costs significantly less, whether it's a standalone gigabit line, or a bundle. For example, this is the pricing seen by an AT&T customer in Austin, where Google Fiber is present:
Last week, AT&T launched the service in select parts of Cupertino, California where there's no Google Fiber pricing pressure. This is what local Cupertino users see when they try to sign up for service:
So yes, it's pretty clear it doesn't take much for pampered duopolists to respond to real price competition. The problem is despite the fact that Google Fiber is nearly five years old, its actual footprint remains fairly small, with only portions of Austin, Provo and Kansas City online so far. And that's a company with billions to spend and a massive lobbying apparatus that can take aim at the sector's regulatory capture. That's why community broadband and public/private partnerships become such an integral part of trying to light a fire under the U.S. broadband industry, as are the attempts to dismantle ISP protectionist state laws aimed at keeping these speeds and real price competition far, far away from most U.S. broadband markets.

Filed Under: broadband, competition, cupertino, fiber, google fiber, pricing, speeds
Companies: at&t, google

Massive Anti-Net Neutrality E-mail Campaign Shows Signs Of Faking Many Signatures

from the sockpuppetry-and-astroturf dept

During the first round of the FCC's net neutrality comment period, the agency was absolutely swamped by public input (including ours), the vast majority of it supporting net neutrality. After the agency released a database of the comments, analysis of the comments showed that while around half were generated via "outrage-o-matic" forms from various consumer advocacy groups, once you got into the other half of the comments -- almost all were in support of net neutrality. After the volume of pro-neutrality comments received ample media coverage, anti-neutrality organizations -- like the Phil Kerpen's Koch-Funded "American Commitment" -- dramatically ramped up their automated form comment efforts to try and balance the comment scales.

As we noted at the time, Kerpen and American Commitment's efforts were jam packed with some absurd, alarmist dreck. Similarly, claims that net neutrality opponents then "won" the comment period because they purchased some wingnut e-mail lists to pad the petition were misleading as well. Perusing the FCC comments and analysis of the data, there's really no way to conclude anything other than the fact the FCC's efforts have broad, bipartisan public support. Like countless similar groups, American Commitment obscures its funding sources, making its ties to the broadband industry impossible to prove.

That brings us to this week, when American Commitment proudly crowed it had managed to urge 540,538 citizens to send 1,621,614 letters to Congress opposing net neutrality and basically asking for the FCC to be defunded. Except some new analysis of the latest wave of comments suggests there was some serious skulduggery afoot. As in, some of the constituent names used to sign these letters -- either don't exist or never sent letters opposing net neutrality:

"The flood of traffic seemed to raise some lawmakers’ eyebrows, including Democratic Rep. Jackie Speier of California, whose office soon determined some of the messages had come from constituents who didn’t recall sending them. Her aides pointed to a memo sent to members’ staff last week by Lockheed Martin, which manages the technology behind some lawmakers’ “contact me” Web pages. Lockheed initially said it had “some concerns regarding the messages,” including the fact that “a vast majority of the emails do not appear to have a valid in-district address.” In some cases, Lockheed also questioned the “legitimacy of the email address contact associated with the incoming message[s]."

When asked about this, Kerpen suggested that the actions are that of unspecified third party rogue agents, and that his organization knew nothing about the ploy:

"Asked about the matter, Kerpen told POLITICO that American Commitment hadn’t impersonated members’ constituents. But he said that other groups had mounted similar campaigns, and borrowed the pre-written text available on his website. "We’re aware that other groups used identical language in their campaigns and we cannot speak to those efforts,” Kerpen said. “We verified our data through postal address verification and follow up phone calls. We stand by our campaign and Congress should work to stop President [Barack] Obama’s plan to regulate the Internet at the request of these constituents."

Whoever is to blame (and I'd imagine this entire affair is quickly forgotten in the annals of muddy neutrality lore), it certainly speaks to the quality of your argument when you need to either buy -- or just outright fabricate -- your support.

Filed Under: congress, letters, net neutrality, phil kerpen
Companies: american commitment

Verizon CEO Pushing Congress For 'Bipartisan' Consensus That Government Should Never, Ever Stand Up To Broadband Duopolists

from the you-do-it-to-yourself dept

As part of a last ditch effort to derail the FCC's net neutrality rules, you might recall that Senator John Thune and Representative Fred Upton earlier this year pushed an amendment to the Communications Act that they professed would codify net neutrality into law as part of a "bipartisan" proposal crafted after a painstaking public conversation. What the ISP-dictated amendment actually did was effectively gut FCC authority, pushing forth net neutrality rules significantly weaker than the already-flimsy 2010 rules Verizon sued to overturn.

Thune, Upton and the mega ISPs hoped their effort would go something like this: table some incredibly weak net neutrality rules under the pretense of consumer welfare, make a few minor concessions, then pass a still-flimsy amendment that would have killed the Title II push in the cradle. The problem is that most neutrality supporters in Congress saw this fairly-shallow ploy for what it was (or at the very least feared the wrath of a SOPA-fueled internet grassroots community). As such, Thune and Upton have had trouble getting neutrality supporters to sign off on the idea -- especially without the help of fellow Senate Commerce Committee member Bill Nelson:

"On Wednesday, (Nelson) reiterated what he's been saying for weeks: That he's open to working with Republicans on a "truly bipartisan" bill aimed at preventing Internet providers from speeding up, slowing down or blocking Web sites. But he'll only cooperate, he said, "provided such action fully protects consumers, does not undercut the FCC's role and leaves the agency with flexible, forward-looking authority to respond to the changes in this dynamic broadband marketplace."

Except that's not happening, because a flexible, empowered FCC is precisely what Thune and friends don't want.

Enter Verizon, who like AT&T and Comcast, has been desperately trying to gut FCC authority for years (and had been succeeding until recently). While Verizon did sue to overturn the 2010 rules, it wasn't the rules themselves the telco was taking aim at (after all, it co-wrote them, and the rules had the full support of companies like AT&T and Comcast). Verizon hoped a legal win would not only gut the rules, but also FCC authority moving forward. That backfired spectacularly, given the FCC only shifted to Title II after Verizon's lawsuits repeatedly showed you can't regulate ISPs like common carriers -- without first declaring they're common carriers. The entire shift to title II is, quite literally, thanks to Verizon.

Fast forward to this week, and Verizon CEO Lowell McAdam fired off a letter to Thune, Upton and the other leaders of the House and Senate Commerce committees (pdf), urging Congress to take the reins and punish the FCC for standing up to wealthy broadband companies begin updating "outdated and broken" telecom law. To hear Verizon's version of history, everything was going great until the FCC came along and decided to destroy the Internet:

"The broadband and mobile markets are America's greatest ongoing success stories: 20 years of bipartisan light-touch policy consensus has led to more than $1.2 trillion in private investment, resulting in a transition from 128 kilobit dial-up connections and analog wireless voice networks in the late 1990's to today's near-ubiquitous 4G mobile data coverage and fixed broadband networks capable of streaming simultaneous HD movies. The FCC claimed it was addressing concerns about an open Internet, something that Congress could and can - address with clarity and finality in a two-page bipartisan bill. Instead, the FCC went far beyond open Internet rules, engaging in a radical and risky experiment to change the very policy that resulted in the United States leading the world in the Internet economy."

Like Thune and Upton, McAdam continues to bandy around the word "bipartisan" when what they're actually pushing is anything but. In short, Verizon wants the FCC's authority gutted and all policy making moving forward under the authority of a Congress slathered in telco lobbying cash. Not only does McAdam want Congress to push flimsy net neutrality rules, Verizon is pushing hard for a total rewrite of the 1996 Telecom Act -- because the Title II rules Verizon's successfully used to build a massive wireless empire are "outdated and broken":

"At its root, these are all symptoms of a problem: the existing legal regime and its accompanying regulatory processes are outdated and broken. Congress last established a clear policy framework almost 20 years ago, well before most of today's technology was even developed. As a result, regulators are applying early 20th century tools to highly dynamic 21st century markets and technologies. Inefficiencies and collateral damage are inevitable. It is time for Congress to re-take responsibility for policymaking in the Internet ecosystem."

And by "take responsibility," Verizon actually means it's time for Congress to take Verizon campaign contribution cash and write new laws ensuring that broadband industry regulators have the strength of babies, the freedom and authority of an asylum inmate, and the budget of a high-school prom committee.

The real irony of course is that regulators wouldn't keep intervening in Verizon's market if the telco didn't consistently engage in behavior that made it necessary. Again, the FCC only shifted to Title II after Verizon sued to overturn its 2010, industry-friendly net neutrality rules. Similarly, the entire net neutrality conversation wouldn't be happening if Verizon didn't have a long, proud history of trying to block every technological innovation it deemed a threat. If Verizon's honestly looking to affix blame for the regulatory policy chaos of the last few years, it doesn't have to look very far.

Filed Under: bill nelson, congress, fcc, fred upton, john thune, lowell mcadam, net neutrality
Companies: verizon

A Growing Chorus Is Trying To Rewrite The History Of Net Neutrality -- And Blame Absolutely Everything On Netflix

from the kill-the-messenger dept

With either an ISP lawsuit or a 2016 party shift the only way to kill our new net neutrality rules, neutrality opponents have some time to kill. As such, they're in desperate need of somewhere to direct their impotent rage at the foul idea of a healthier Internet free from gatekeeper control. Step one of this catharsis has been to publicly shame the FCC for daring to stand up to broadband ISPs in a series of increasingly absurd and often entirely nonsensical public "fact finding" hearings. Step two is to push forth a series of editorials that tries to rewrite the history of the net neutrality debate -- with Netflix as the villainous, Machiavellian centerpiece.

A few weeks ago, Netflix CFO David Wells told attendees of an investor conference that Title II was "probably not" what the company wanted at the outset. This resulted in an endless stream of stories about how Netflix had "flip-flopped" on its net neutrality position and simply could not be trusted. Except if you actually bothered to read the transcript of his comments, he goes on to note the company is very pleased where things have wound up, and happy to have a viable regulatory mechanism at the FCC to file complaints over things like interconnection:

"Were we pleased that it pushed to Title II, probably not, right? I mean, we were hoping that, there might be a non-regulated solution to it. But it seems like companies that are pursuing their commercial interests including us have to arrive at something like that. So we're super pleased that there is now a notion, at least a vehicle, for a complaint...So I would say we are very pleased with what's been accomplished."

Wells pretty clearly explains that while it would have been nice if we could have protected net neutrality without regulation, it became pretty clear that Title II was the only way regulators could adequately police anti-competitive behavior in the broadband sector. That's what Title II supporters have been saying for months: while Title II isn't perfect, it's the best option we have given the lack of broadband competition in the sector (which despite a lot of rhetoric isn't improving anytime soon). There's nothing hypocritical -- or even shocking -- about what Wells said.

Still, that Wells had exposed Netflix as a shady trickster has somehow become the talking point du jour in the media and among net neutrality opponents for much of the last six months, with editorials and headlines suggesting Netflix was now "shunning ObamaNet", or was suffering "lobbyist remorse" over net neutrality. In an editorial for the Wall Street Journal, Holman Jenkins Junior declared the CFO had somehow single-handedly proven that the entire push for net neutrality was somehow a Netflix Con:

"Why, a month after this deluge of demurrers, did Netflix change its tune radically and call for utility regulation of even the upstream “network of networks,” which previously had not been considered part of the net-neutrality debate? Because Netflix was then rolling out its own network, Open Connect, to bypass the public network in favor of direct tie-ups with last-mile providers like Comcast,Verizon and AT&T. This largely ignored story has been told in detail by a disparate group of analysts and lawyers including Dan Rayburn, Larry Downes, Jonathan Lee and Fred Campbell. Netflix effectively engineered a slowdown of its own service in late 2013 by relying on an intermediary with inadequate capacity, then waved a bloody shirt in pursuit of the direct-connection deals that today allow Netflix to distribute its content more efficiently and cheaply.

At least now we understand the famous but nearly indecipherable remarks of Netflix CFO David Wells at a Morgan Stanley media conference two weeks ago. To wit, Netflix had been happy to flog the net-neutrality meme while negotiating these agreements, Mr. Wells indicated, and then unhappy when the FCC took its rhetoric seriously and imposed sweeping Title II regulation.

One, as we've noted repeatedly, the new rules are not "utility-style regulations." ISPs are being classified as common carriers, but the FCC is forbearing from a massive swath of Title II regulations reserved for utilities, including price controls and local-loop unbundling. It's more like "Title II lite," and given the ample remaining loopholes for things like zero rated apps, it's very, very far from "heavy handed regulation." Two, Netflix's Open Connect CDN is a free CDN that benefits ISPs, Netflix and consumers alike, and which ISPs are free to refuse. It's not, as Jenkins and FCC Commissioner Pai have tried to claim, some kind of secret devil-worshiping cult (though that would certainly add an awesome twist to the story).

Three, to hear Netflix, Cogent and Level3 tell it, it was the ISPs that failed to upgrade their side of peering relationships to degrade performance and extract direct interconnection fees. That Netflix intentionally sabotaged its own business so it could enjoy the privilege of paying Comcast, AT&T, and Verizon what basically are "duopoly customer access fees" doesn't make the slightest bit of coherent sense. Still, this is the narrative that's now being pushed by numerous industry-friendly folk in papers and trade rags nationwide.

Broadband industry think tanker extraordinaire Fred Campbell has penned a similarly ridiculous editorial that's circulating among industry trade magazines. Campbell, too, suggests we're all victims of the dangerous, shadowy Netflix cabal, using the company's out-of-context CFO comments as the only notable proof:

"Netflix revealed its Title II advocacy was a ruse on March 4, when Netflix chief financial officer David Wells said the company was disappointed by the ultimate outcome at the FCC...Wells didn’t say what “non-regulated solution” Netflix had hoped to achieve, but anyone who followed last year’s shenanigans between Netflix and major ISPs knows that its interest was aimed at obtaining free interconnection deals. Wells’s statement makes clear that Netflix hoped its public push for Title II would force ISPs to capitulate to its demands."

So again, the proof-optional narrative being pushed by ISPs and net neutrality opponents is that the entire ten year net neutrality debate is really all just a clever ploy by Netflix -- to save a few bucks. Netflix is the villain, the narrative continues, and companies like AT&T, Verizon and Comcast -- with a generation of anti-competitive behavior under their belt -- are the real victims here.

Except to seriously believe that you'd have to be so intentionally, willfully oblivious to the point of causing yourself personal, bodily harm. You'd have to ignore that the net neutrality really began with AT&T's former CEO basically stating AT&T wanted to double dip content companies, billing them for doing absolutely nothing. You then have to ignore ten years of history involving giant ISP experiments aimed at trying to make this dream a reality, whether that's AT&T blocking Facetime to push unlimited users on to throttled plans, Verizon's history of trying to block, well, every single technological advancement it hasn't liked over the last decade, or this latest interconnection kerfuffle.

Of course most of us realize the crime Netflix is actually guilty of here: the company stood up to ISPs on issues like net neutrality, a lack of sector competition, broadband pricing and usage caps. You can't have a relatively-respected technology company like that talking trash about the nation's cozy, broken broadband duopoly. As such, the only solution is to discredit Netflix using a literal army of policy wonks, paid to push the "Netflix is the devil" narrative so relentlessly and repetitively that it becomes discourse bedrock. I personally think it would have been much more effective to claim Netflix CEO Reed Hastings is a cyborg-vampire hybrid fueled by virgin and puppy blood, but then again, clumsy character assassination has never been my forte.

Filed Under: attacks, blame, david wells, holman jenkins junior, net neutrality, title ii
Companies: netflix

Showtime, HBO Working With ISPs To Make Their Streaming Services Cap Exempt

from the here-we-go dept

As we just got done saying, while the new net neutrality rules are certainly a great step forward, there are probably more questions than answers in terms of just how far the FCC will be willing to go when it comes to policing anti-competitive behavior. For example, while the agency says it will keep on eye on "interconnection" fights, we won't know what the FCC will determine as "anti-competitive" until we see the agency act. Similarly, while numerous countries including Canada, The Netherlands, Chile, Slovenia and Norway all have neutrality protections that outright ban "zero rated" apps (letting apps bypass user caps), the FCC so far seems to think zero rating is perfectly ok.

That's potentially a problem, given the bad precedents set by programs like AT&T's Sponsored Data and T-Mobile's Music Freedom, which the FCC has indicated are ok under their interpretation of the rules. These programs profess to be boons to the consumer, yet by their very nature automatically disadvantage smaller internet players. As such, the future of neutrality involves violations accompanied by skilled sales pitches that result in consumers not understanding -- or in some cases even cheering -- when the idea of net neutrality is compromised.

First case in point is HBO and Showtime, which appear eager to determine just where the FCC intends to draw the line. According to a new report in the Wall Street Journal, both companies are working closely with ISPs on deals that would not only give their upcoming streaming video services delivery priority, but would exempt them from carrier usage caps:

"Those companies have talked to major broadband providers such as Comcast Corp. about having their Web TV services treated as “managed” services, according to people familiar with the discussions. In effect, that would move them away from the congestion of the Internet, which they fear will only get worse as more people opt to stream movies and TV shows on the Web.

The other benefit: A separate lane would be exempt from monthly data-usage thresholds operators enforce for public Internet traffic, saving customers from the surcharges that can kick in if they binge on too many episodes of “Game of Thrones” or “Homeland."

The article's descriptions of things like "managed services" and "special treatment" are phrased so ambiguously I get the impression the Journal's reporters may not have fully understood what their sources were telling them. However, there's no ambiguity to the idea that Showtime and HBO are interested in having their content specifically made exempt from what are already arbitrary usage caps. The article proceeds to note that Comcast, with a merger awaiting regulatory approval, is nervous about running afoul of the FCC. Dish Network, meanwhile, makes it clear they'd see such a deal as a neutrality violation:

"At least one emerging online TV player, Dish Network Corp.’s Sling TV, believes the managed-service arrangement would be a negative overall. “It’s a bad thing for consumers and a bad thing for innovation,” said Roger Lynch, Sling TV’s chief executive, adding that big companies like Dish could afford to cut special deals like this but small companies can’t. "It makes a mockery of net neutrality,” he said, adding that Sling would strike such a deal only “under duress,” if other companies did first."

So again, while our new net neutrality rules are certainly a solid step forward, until we see what the FCC specifically determines is a violation -- and how the consumer complaint process will work -- it's hard to tell just how effective they're going to be. If it's ok for T-Mobile to exempt the biggest music services as part of its Music Freedom plan, is it ok for ISPs to similarly exempt Showtime and HBO from their usage caps? Where exactly is the line going to be drawn? The rules don't specifically say, but they won't be worth much if the FCC considers usage caps and "pay to play" cap bypass schemes just innovative market pricing.

Filed Under: data caps, exempt, fcc, hbo, managed services, net neutrality, picking winners and losers, showtime, streaming, video streaming, zero rating
Companies: hbo, showtime

Despite Throwing Money At Congress, Comcast Finds Merger Support Hard To Come By

from the money-can't-buy-you-love dept

Poor Comcast. Despite throwing millions of dollars at think tanks, consultants, PR reps, editorial writers, various front groups and a myriad of other policy tendrils, genuine, meaningful support for the company's $45 billion Time Warner Cable acquisition is still apparently hard to come by. You might recall that last year top Comcast lobbyist "Chief Diversity Officer" David Cohen proudly crowed that support for the company's merger was "pouring in" -- though he failed to mention that Comcast was paying people for that support, and that said support largely consisted of regurgitated form letters.

Despite the money spent however, it appears that actual support in Congress for the deal is tepid to non-existent. Comcast's hometown paper the Philadelphia Inquirer points out that whereas the NBC deal saw major support efforts by members of Congress, politicians appear to want nothing to do with this latest merger attempt:

"When Comcast made its move to buy NBCUniversal, more than two dozen letters from Congress - including one from 22 Republicans - landed at the Federal Communication Commission early in its review. Dozens more, from key chairmen and rank-and-file members of both parties, arrived before that deal was approved in 2011. The vast majority supported the merger, including one signed by 97 House members and several from minority lawmakers who hailed Comcast's commitment to diversity. But as the Philadelphia giant now pushes a merger with Time Warner Cable, Comcast has had little congressional support, and almost none outside its home state."

While politicians are happy to take Comcast's money, it appears that few actually want to be publicly associated with a company with the lowest consumer approval rating in any industry. Even Comcast's sleazy tactic of paying minority groups to parrot support (to create the illusion of diversity in Comcast policy support) isn't working very well anymore:

"Meanwhile, more than 50 black, Hispanic, and Asian members of Congress have expressed concerns about the impact of this deal and others, warning in a letter to the FCC that recent media "mega-mergers" show that "even the most reasonable conditions and diversity pledges" have proved difficult to enforce."

Most analysts meanwhile see the chance of the DOJ and FCC merger getting approval dropping by the week. The FCC has been on an uncharacteristic consumer-friendly tear of late, whether that's raising the definition of broadband to 25 Mbps, crafting new net neutrality rules or fighting for municipal broadband. As such, approving the Comcast deal without some tougher-than-usual conditions just doesn't seem likely. I personally think the deal will be approved, it will just be saddled with conditions heavily focused on keeping Comcast's bad ideas far away from internet video. Whether those conditions actually work or are enforced will be another issue entirely.

Meanwhile, it's kind of amusing to see telecom companies failing to recognize their own hubris isn't helping their case. As we saw when the DOJ rejected AT&T's attempted acquisition of T-Mobile, there really is a limit to the amount of bullshit you can push before you reach the point of diminishing returns. Using astroturf, claiming that killing competitors creates competition and lowers prices -- or that everyone who opposes your deal is ignorant or irrational -- clearly crosses that particular Rubicon. If you're already one of the most hated companies in the country, that only adds insult to injury.

It remains frequently uttered because it's true: money just can't buy you love.

Filed Under: congress, mergers, politics, support
Companies: comcast, time warner cable

State Of Tennessee Sues The FCC For Daring To Step In And Block Its Law Blocking Muni-Broadband

from the fighting-against-consumer-interests dept

Apparently the state of Tennessee really doesn't want its citizens to have good, competitive broadband. While the FCC's net neutrality rules keep getting all the attention, as we've discussed, in the long run it may be a bigger deal that the FCC (the same day it released the net neutrality rules) also started dismantling protectionist state laws that block municipal broadband. Those laws -- almost all of which were written directly by big broadband players afraid of competition -- make it close to impossible for local municipalities to decide that they're going to set up true competitors. The FCC preempted two such state laws, including in Tennessee, where one super successful municipal broadband project, in Chattanooga, wanted to expand to other nearby places. However, Tennessee's law blocked this.

We already noted that Rep. Marsha Blackburn was trying to pass legislation that would block the FCC's efforts here, but the state of Tennessee has taken it up a notch and sued the FCC over the rules. You will notice that the arguments used by the state of Tennessee are almost verbatim identical to the lawsuits we wrote about yesterday, challenging the FCC's net neutrality rules:

The State of Tennessee, as a sovereign and a party to the proceeding below, is aggrieved and seeks relief on the grounds that the Order: (1) is contrary to the United States Constitution; (2) is in excess of the Commission's authority; (3) is arbitrary, capricious, and an abuse of discretion within the meaning of the Administrative Procedure Act; and (4) is otherwise contrary to law.

Yes, this is almost word-for-word identical to the claims made about the net neutrality rules and is basically the standard language to challenge any FCC ruling.

But here's the larger question: if you're a resident of Tennessee who likes having fast, affordable, competitive broadband, are you happy about your tax dollars being used to sue the FCC in an effort to uphold a law written by the big broadband players, focused on blocking such competition? It seems like the current Tennessee Attorney General, Herbert Slatery, has painted a giant target on his back for a challenger who actually wants to support the public in Tennessee.

Filed Under: chattanooga, fcc, marsha blackburn, muni broadband, municipal broadband, pre-emption, tennessee

First Legal Challenges To FCC's Net Neutrality Rules Filed

from the get-ready-for-more dept

As we noted a week and a half ago when the FCC released its full net neutrality rules, it seemed like the legal challenges wouldn't start for a little while -- because the rules had to formally be published in the Federal Register, which would then set off the countdown clock for filing a lawsuit against the rules. However, some believe that parts of the new rules fall under a different legal regime, and thus there is a 10 day limit from the date the rules were released to file an appeal. And thus, we have USTelecom, a trade association of broadband providers and Alamo Broadband, a small Texas-based ISP, who have both filed legal challenges over the FCC's rules. Specifically, they're both asking appeals courts to "review" the rules. Alamo is asking the Fifth Circuit court of appeals, while USTelecom is focusing on the DC Circuit (which is where the last challenge to FCC rules happened). The reasoning in both is fairly similar. Here's USTelecom's argument:

US Telecom seeks review of the Order on the grounds that it is arbitrary, capricious, and an abuse of discretion within the meaning of the Administrative Procedure Act, 5 U.S.C. § 701 et seq.; violates federal law, including, but not limited to, the Constitution, the Communications Act of 1934, as amended, and FCC regulations promulgated thereunder; conflicts with the notice-and-comment rulemaking requirements of 5 U.S.C. § 553; and is otherwise contrary to law.

Meanwhile, the focus of Alamo's argument is:

Alamo seeks relief on the grounds that the Order: (1) is in excess of the Commission's authority; (2) is arbitrary, capricious, and an abuse of discretion within the meaning of the Administrative Procedure Act; (3) is contrary to constitutional right; and (4) is otherwise contrary to law.

You'll notice that they're both fairly similar. The focus, as in many lawsuits against FCC actions, is on that "arbitrary, capricious and an abuse of discretion." This is what haters of Title II have been arguing all along, but that seems like it may be a difficult argument to win in court -- especially given what courts have said previously, including in the Brand X ruling (which basically kicked off the process for broadband players classified under Title I instead of Title II) where they more or less said that the FCC should be given deference in these kinds of decisions. It's difficult to see how the suing broadband providers are going to get past that ruling.

Filed Under: arbitrary and capricious, fcc, lawsuits, net neutrality
Companies: alamo broadband, ustelecom

AT&T Is Fine With Title II -- When It Protects AT&T From Anti-Competitive Behavior

from the cake-and-eat-it-too dept

For months now, AT&T has been telling anybody who'll listen that Title II-based net neutrality rules are "from a bygone era," will "diminish industry investment and competition," and are a draconian, devastating example of regulatory overreach. In protest over the FCC's new neutrality rules, the company even went so far as to "suspend" its largely phony 100-city fiber-to-the-home investments to "prove" Title II was an investment killer (though it ultimately had to walk back the bluff after the FCC decided to fact check the company's math).

While publicly AT&T tries to argue that Title II is a menace of the highest order, privately, AT&T consistently defers to authority of Title II -- when it's in AT&T's best interests to do so. The company recently floated above, around and over Title II and common carrier definitions to skirt an FTC investigation into its throttling practices. You'll note that when AT&T benefits from some of the protections Title II can offer, suddenly, magically gone is all of the rhetoric about Title II being bad simply because it's based on the framework of an older law.

The latest example of this involves a billing dispute between AT&T and several smaller telcos. Basically -- AT&T recently complained that Great Lakes Comnet and Westphalia Telephone Company over-billed the telco to the tune of $12 million, and were demanding AT&T pay another $4.3 million in errant charges for interstate connections. AT&T complained to the FCC, stating that Sections 201(b), 203 and 208 of the Communications Act (**cough** Title II) prohibit such charges when they are not "just and reasonable." The FCC agreed, and sided in AT&T's favor:

"We agree with AT&T," the FCC wrote. "We find that GLC violated the Commission’s Rules governing competitive local exchange carrier tariffs for interstate access services, and that the tariff therefore is unlawful. We also grant AT&T’s claim in Count III that WTC unlawfully billed for services prior to May 2013 that GLC provided."

Just in case it's not clear, AT&T's using Title II to defend itself from over-billing, but has thrown a series of increasingly hostile hissy fits at the very idea the same standards could be applied to defend consumers from AT&T. AT&T's of course not alone in simultaneously demonizing a "regulatory framework developed for Ma Bell in the 1930s" while benefiting from it. Verizon has enjoyed massive tax breaks for years when it comes to classifying portions of its FiOS network under Title II. The wireless industry also witnessed a decade of explosive growth and profit while wireless voice remained classified under Title II.

That's because it's not really Title II the telcos are worried about. All they're worried about are the billions they stand to lose should a regulator be able to defend consumers from anti-competitive behavior. As such, it's never really been specifically about Title II -- it has simply been about government daring -- for probably the first time in fifteen years -- to stand up to broadband ISPs when it comes to seriously protecting consumers.

Filed Under: competition, consumer protection, fcc, overbilling, overcharging, title ii
Companies: at&t, great lakes comnet, westphalia telephone company