Tales of the Sausage Factory

The Last Time The FCC Classified A Service As Title II Was 2007. Here’s How It Worked.

Predictably, as we get closer to actually adopting Title II for broadband, we see much scrambling about by folks who never seriously considered the question of how Title II would actually work because no one in the press or the opposition ever really thought it could get that far. Opponents of Title II, needless to say, describe a blasted bureaucratic Hellscape smothering broadband service with (to quote the latest missive from a bunch of House and Senate Republicans) “1000 active rules that are based on Title II, and 700 pages of the C.F.R.”

 

After 6 solid years of Republicans opting for the partisan politics of obstruction rather than engaging on substance, such ridiculous claims hardly come as a surprise. It’s also a rather silly argument given that the bulk of those rules address things that would not apply to broadband and that everyone — even Republicans — actually like: making sure  9-1-1 works reliably, fixing rural call completion problems, keeping track of phone reliability and phone outages during natural disasters, protecting the privacy of our phone calls and requiring providers to report data breaches, etc.

 

Still, even without deliberate efforts to muck things up and exaggerate things, I recognize that this whole “Title II” thing doesn’t happen every day and lots of folks have questions about what the heck does this all mean. As I (and others) have noted in the past, classification doesn’t have to be a big deal. To illustrate this, I will go back to the last time the FCC classified a service — automatic voice roaming in the wireless world — as a Title II service. As we will see, this took remarkably little effort. The FCC explicitly rejected the requirement to do rate regulation or a requirement to file tariffs with the prices and did not need to engage in any extensive forbearance. They just said “nah, we’re not gonna do that.” The final adopted rules are less than a page and a half.

 

I will also note that despite classifying automatic voice roaming as a Title II service in 2007 (and classifying mobile wireless phone service as a Title II service in 1993), the wireless industry seems to be doing OK, with more than 300 million subscribers and (as CTIA never tires of telling us) several gagillion dollars worth of capital investment.

 

The automatic voice roaming decision also provides a nice comparison with a similar service classified under NOT TITLE II some years later. In 2011, the FCC issued an Order adopting data roaming rules, but couldn’t bring itself to go the Title II route. The result was an insanely complicated “commercial reasonableness” standard which requires wireless carriers to negotiate under a bunch of vague guidelines that still allow carriers to avoid coming to an actual deal. As the D.C. Circuit pointed out in affirming this approach, the FCC needed to leave enough room for carriers to discriminate against each other to avoid triggering the “common carrier prohibition.” Recently, T-Mobile (which opposes using Title II) filed a Petition on data roaming with the FCC alleging that the existing “commercially reasonable” standard is utterly useless unless the FCC adopts a bunch of “benchmarks” and presumptions to put some teeth into the standard. Without getting into the merits of the data roaming petition (which my employer Public Knowledge supports), it is interesting to compare how the Title II automatic voice roaming worked out v. the Title III/Title I data roaming rules.

 

I do not claim that reclassifying broadband as a Title II service (which, as I have noted before, was tariffed back in the day it was Title II) is exactly comparable. Rather, I offer this as an example of the principle of the Black Swan. Just as the appearance of a single black swan falsifies the statement “all swans are white,” the hysterical ravings of the anti-net neutrality crowd that classifying something as Title II would require the FCC to impose price controls, tariffs, and the occasional human sacrifice to avert structural separation is falsified by demonstrating that the FCC has, in the past, classified services as Title II and did not impose any of these things. In fact, the Title II solution worked out much better than the NOT TITLE II alternative.

 

More detail below . . . .

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Tales of the Sausage Factory

Title II Forbearance Is Actually So Easy It Makes Me Want To Puke.

For those following the debate around whether to classify broadband access service as a “Title II” telecommunications service under the Communications Act of 1934, you may have heard about a thing called “forbearance.” For those unfamiliar with telecom law lingo, “forbearance” refers to  a special magic power that Congress gave the FCC as part of the Telecommunications Act of 1996 — the major edit/update Congress did almost 20 years ago. The 1996 Act added Section 10 (now codified at 47 U.S.C. 160) which gives the FCC the power to say “you know that specific provision of law that Congress passed? We decide it really doesn’t make sense for us to enforce it in some particular case, so we will “forbear” (hence the term ‘forbearance’) from enforcing it.” Or, as the D.C. Circuit explained in a case called Orloff v. Federal Communications Commission, once the FCC invokes forbearance and decides to forbear from a particular statute, the statute for all practical purposes disappears.

 

For those familiar with the argument, you will also know that the anti-Net Neutrality camp argues that getting the FCC to forbear from any rule is such a horribly complicated and detailed market-by-market analysis that the FCC couldn’t possibly grant the kind of broad, nationwide forbearance we would need to make Title II workable. As someone who actually lived through the 8 years of the Bush Administration and saw almost every single pro-competition provision of the 1996 Act stripped away by forbearance proceedings, I can only say “hah, I wish.”

Anyone who actually troubles to look up cases like Earthlink v. FCC or Ad Hoc Telecommunications Users Committee v. FCCor a bunch of other FCC and DC Circuit cases that are not that hard to find, you will discover that Forbearance is so easy it makes a consumer protection and rule of law guy like me want to puke. Srsly, the standards on this are so low, and so deferential to the FCC, that if Chairman Wheeler stands up at an open meeting and chants “Broadband is great, competition is good, be deregulated like you should. All in favor say ‘aye!'” — and then at least two other Commissioners vote yes — the DC Circuit will affirm it. Heck, according to ATT, Inc. v. FCCyou can even forbear as against potential obligations that don’t even exist yet.

Not that I expect mere facts to alter firmly held opinions that have become factesque. What Paul Krugman has termed the Very Serious People of telecom have all decided that Title II is a terrible onerous thing and that forbearance is just not going to make it work — despite the fact that the stupid cell phone you’re using couldn’t even have existed if Congress hadn’t made it Title II in 1993 by adding Section 332(c) of the Communications Act and the only non-Title II service we have other than broadband access — cable service — is widely regarded a monopolistic nightmare with all the innovating power of a fossilized brick. But the lawyer and eternal optimist in me keeps trying. So I unpack all this below — with lots of quotes because I know most of y’all not gonna actually click through to the cases.

Besides, I do a My Little Pony (MLP) mashup below because “Broadband is magic!” And that always cracks me up. . . .

 

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Tales of the Sausage Factory

Sorry AT&T, Title II Would Not Require The FCC To Allow Paid Prioritization.

AT&T has raised a bit of buzz recently with claims from their policy folks that under Title II, AT&T could still do paid prioritization (aka “fast lanes,” “toll lanes,” or, as I like to call it in honor of the man who so clearly laid out the concept “Whitacre Tiering” — but that one sadly never caught on). The implication of these recent statements apparently being that (a) Title II is therefore sooooooo not worth it; and, (b) the demand by whacky-crazy-socialist-radicals to prohibit paid prioritization is just more whacky-crazy-radical-socialist stuff, so pay it no mind. One might ask, if so, why AT&T has invested so much money in demonizing Title II when it supposedly would require the FCC to allow paid prioritization, but I digress.

Instead, let’s play stupid fun lawyer games and try some legal analysis. Ooooooohhhh!!! I love that game! It makes me all nostalgic for a time when we actually filed pleading at the FCC and debated these issues before agencies in a public record rather then in blogs (which tells you how pathetically old I am). Besides, all kidding aside, debating actual law and precedent with with some of the other lawyer types willing to play law games is one of the few intellectual pleasures remaining to me in Policyland these days, given the way this usually degrades to blah blah Socialist blah blah. Heck, I may even see some substantive reply.

My short answer is that while Title II would allow the FCC to permit paid prioritization, in a non-discriminatory manner, it does not compel the FCC to permit paid prioritization. Further, while Title II would not require the FCC to prohibit paid prioritization, it would give the FCC authority to prohibit paid prioritization. Indeed, I first addressed this back when Genachowski announced his “3rd Way” proposal. At this point, the more results oriented can skip directly to the comments to tell me how socialist stupid I am, or describe how evil AT&T is (depending on your preference). Those interested in a little law and policy, see below . . .
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Tales of the Sausage Factory

Why We Care About Broadband Policy, Not Competititon.

I’m back from my week of travels, where lousy broadband connectivity prevented me from blogging my trip to the NARUC Summer Conference and trip to Netroots Nation. Hopefully, I will get to fill in some of the blanks. NARUC (the National Association of Regulatory Utility Commissioners) passed some good Telecom resolutions supporting the FCC’s reclassification of broadband back into the Title II telecom box (although reminding the FCC that states have an important role to play and therefore to use preemption sparingly), and urging the FCC to address early termination fees for cell phone services.

So to get the ball rolling, here is a reprint of my opening remarks in the “framing debate” between myself and Ray Gifford from our Wed. morning NARUC Telecom session. As regular readers know, I’ve argued that things like Network Neutrality are right as a matter of economics (that is, they promote a better economic outcome for everyone: see economists make this argument here and here), that it is critical as a matter of First Amendment freedom and to prevent “virtual redlining.” Below I add an additional argument, what Ray characterized (and I agree) is a “progressive era” argument for why we care about broadband policy.

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Tales of the Sausage Factory

Genachowski Hits The Legal Reset Button — “Title II Lite”

Genachowski has announced his proposed response to the Comcast case. This is precisely the result Comcast and the other carriers feared since the DC Circuit panel signaled at oral argument they would slam the FCC.  In my latest “5 Minutes With Harold Feld,” I give a short (at least, as short as I can) explanation of what this “Third Way” (also referred to as “Title II Lite”) means and what happens next from a process perspective. Some additional analysis, laughing at Wall St. analysts, and reference to a Dilbert from 1992 below . . .

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Tales of the Sausage Factory

McDowell and Baker Want To Preempt States on Broadband Reporting? Fat Chance Under Title I.

Sometime back, I coined the term “Cassandrafreude.”  A compound of “Cassandra” and “schadenfreude,” it means “the bitter pleasure derived from seeing someone else suffer in the way you predicted even though you are getting screwed yourself.”

I am experiencing a healthy dose of Cassandrefreude watching FCC Commissioners McDowell and Baker push the FCC to preempt state data collection of broadband deployment (statements here and here). The matter came up when the FCC issued a Declaratory Ruling findng that nothing in federal statutes or previous FCC orders stops states from collecting their own information about broadband deployment. The ruling expresses no opinion about whether state PUCs have existing authority (given that broadband is a Title I “information service”) or whether or not it would be a good idea for states to collect their own data. But even this specter that someone somewhere might do something carriers don’t like prompted Republicans McDowell and Baker to push for the FCC to preempt state authority to collect information. After all, as we all know, broadband providers are timid creatures and likely to be scared off by the least thing that could conceivably raise their cost of doing business — as the broadband providers themselves constantly remind us.

I’ll zip past the usually irony of Republicans who supposedly venerate federalism and demand record evidence before the FCC contemplates action to protect consumers sounding the alarm bell that unless the FCC rushes to preempt state governments, it will mean the end of broadband investment as we know it. Lets get right to the juicy part that fills me with such unbridled Cassandrafreude.

Under what authority, exactly, would the FCC preempt state collection of broadband data?

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