I have never accused the incumbents of being overly subtle, especially when they feel threatened. But this new 14-page letter from the major cable and telco trade associations — as well as from the three biggest ILECs and Time Warner Cable (Comast shows unusual, perhaps merger inspired, diplomacy by sitting this one out) — hits a new low on the “Lack ‘O Subtlety Meter.” Given that the only one actively pushing reclassification these days has been yr hmbl obdn’t blogger, I should take this as a tribute to my personal skill. But it seems more likely an extension of the “shock and awe” tactics used by the incumbents to try to derail NN from the beginning.
Of course, this goes well beyond network neutrality. As AT&T’s previous lengthy exercises trying to justify Universal Service Fund reform under Title I (as well as AT&T’s less-than-direct acknowledgment that eliminating the phone network in favor of an IP-based network would eliminate interconnection requirements and complicate public safety access) attest, the question of FCC authority over broadband and what it can or can’t do under Title I impacts every area of the National Broadband Plan agenda.
Most of the argument in the letter is pretty standard, boiling down to “the universe is great under Title I dereg, don’t mess it up,” “Title II will impose horrible regulation, kill investment, destroy jobs, strangle puppies, etc.” with an additional “the FCC has no basis to change classification because nothing important has changed since the FCC reclassified last time.” Two things, however, require attention. Sadly, they mark the introduction by major players into the realm of “Tea Party” tactics similar to the Death Panels and mud slinging that have infected the health care debate and the financial reform debate.
More below . . .
Dropping the S-bomb/Red Baiting. It’s one thing for my opposite numbers in the Libertarian blogosphere to complain about my “socialist agenda” for things like network unbundling. This is, after all, opinion-land rather than a formal policy making exercise and we expect some rough and tumble. I rail against the “religious fanaticism” of the worshipers of the gods of the marketplace whose high priesthood resides at U of Chicago and they yack about how I am an evil socialist who hates private property. But that’s just fun in the blogosphere.
But this letter from all the major trade associations from the incumbents, AT&T, Verizon, Qwest, and Time Warner Cable contains the first actual, honest-to-God serious red baiting I can ever recall seeing in a significant FCC filing. On page 5, the letter refers to an interview by Bob McChesney “co-founder and current member of the Free Press Board” (i.e., having no actual involvement in setting policy) who supposedly “articulated the group’s radical agenda in an interview in the Socialist Project.” There then follows an out of context quote, complete with ellipses to show further edits, on wanting a world where the internet is a public utility and — ideally — free. The letter goes on to actual assert that, all evidence to the contrary, the efforts of Free Press and Public Knowledge (which, when last I checked, does not have McChesney on its Board) is all a piece of this “radical agenda” spelled out by
Emmanuel Goldstien Robert McChesney.
What’s next? Will Kyle McSlarrow announce he has a list of 205 Communist members of Free Press?
Keep The Government Out of My Medicare! Tirades against “socialism” and the “evils of big government” have a fine ring of hypocrisy when these same trade organizations and companies have pushed the FCC to expand its Universal Service Fund handouts to include broadband. While I may disagree with my opposite numbers, they at least have the virtue of consistency in wanting to eliminate all government interference in the market — including federal hand outs. But the incumbents signing this letter argue that the government has authority to keep the USF Gravy Train running but shouldn’t have enough authority to protect consumers or promote competition.
Death Panels and Other Distortions. The notion of “death panels” in the health care debate, while an utter fabrication, turned on taking a proposed provision on end of life planning, taking it utterly out of context, then distorting it monstrously for political gain. Such is the case with the “1998 Report To Congress” and the “letter written by a bipartisan group of Senators” cited on page 2 of the incumbents’ letter, ostensibly included to show that classification of broadband access as an “information service” is “decades old,” “bipartisan,” uncontroversial, and uncontested until the radical socialists from Free Press and PK showed up.
The “Report to Congress” cited by the incumbent letter was a report on Universal Service, VOIP, and dial up Internet access aka the “Stevens Report,” not on classification of broadband access, as the Incumbent Letter would have one believe. In fact, directly contrary to the Incumbent Letter’s statetment that “in its seminal 1998 Report to Congress, the Kennard Commission performed a thorough factual and legal analysis and found that Internet access is an integrated “information service” without a “telecommunications service” component”” cannot really be characterized as anything less than an outright lie. Here’s how the Stevens Report actually characterized itself:
In this Report, we find, under the framework of the 1996 Act, that universal service and the growth of new Internet-based information services are mutually reinforcing. The development and continued growth of information services depends upon the preservation and advancement of universal service. By connecting our nation’s telecommunications networks to all citizens, we expand the potential customer basis for information services. At the same time, the growth of Internet-based information services greatly stimulates our country’s use of telecommunications, and thereby the revenue base from which we now fund universal service. As we confirm below in our Report, the parties supplying the underlying interstate transmission services used by those information services contribute to universal service based on their telecommunications service revenues. Because Internet service providers are major users of telecommunications, they make substantial indirect contributions to universal service support in the charges they pay to their telecommunications suppliers. We also consider below the regulatory status of various forms of “phone-to-phone” IP telephony service mentioned generally in the record. The record currently before us suggests that certain of these services lack the characteristics that would render them “information services” within the meaning of the statute, and instead bear the characteristics of “telecommunications services,” but we do not believe it is appropriate to make any definitive pronouncements in the absence of a more complete record focused on individual service offerings. To the extent we conclude that the services should be characterized as “telecommunications services,” the providers of those services would fall within the 1996 Act’s mandatory requirement to contribute to universal service mechanisms. Thus, in general, continued growth in the information services industry will buttress, not hinder, universal service.
Not exactly a “thorough factual and legal analysis” finding that broadband access is an “information service.” The nature of the lie gets worse when one discovers that, in fact, certain broadband services such as DSL were classified as “telecommunications” at the time. (GTE Tel. Operating Cos., Memorandum Opinion and Order, 13 FCC Rcd 22466 (1998)). When the Stevens Report talked about “information services” and ISPs, it meant the 1998 universe of dial up ISPs and other information services that (as described in the Stevens Report) purchase telecommunications provided by others. The Stevens Report did not presume to address the question of “self-provisioned” broadband providers offering internet access over their own lines and thus integrating the underlying telecommunications component and the information processing/information service. The FCC would not address this until the 2002 Cable Modem Declaratory Ruling.
Hah! Your eyes just glazed over, didn’t they? Which is exactly the point. Say “death panels” and point to some random provision that bears vaguely on the subject and you can make a lot of noise — especially when the truth requires more than a sound bite’s worth of explanation. Same problem here. The Stevens Report and the “Bipartisan Letter” (you will note the Incumbent Letter does not name the Senators in question, lest the Senators who signed the letter issue some angry denials about taking their words out of context) use the words “information service” and “ISP” for what they meant in 1998, but the Incumbents want you to think they meant the same thing as in 2010. And explaining how that is a big fat lie is complicated, and matters only to those who care about substance.
Bigger Than Network Neutrality
Still, as long as we’re on the subject of the Stevens Report and the telecom service/information service definitions, let’s read what the Stevens Report had to say about this trade off:
Under our framework, Internet service providers are not treated as carriers for purposes of interstate access charges, interconnection rights under section 251, and universal service contribution requirements. This treatment admittedly provides some benefits to such companies, but it also imposes limitations. Internet service providers are not entitled under
section 251 to purchase unbundled network elements or discounted wholesale services from incumbent LECs, they are not entitled to federal universal service support for serving high-
cost and rural areas, and they are not entitled to reciprocal compensation for terminating local telecommunications traffic.
Or, as I’ve been telling folks at the Commission lately, relying on just Title I ancillary authority puts a lot of stuff at risk that has nothing to do with network neutrality. That’s not just me. That’s also National Telecommunication Cooperative Association (USF Reform needs reclassification) and local governments (“no preemption for Title I services, so tell the incumbents to bugger off”).
Worse, what happens if something goes catastrophically wrong and the Commission discovers it has no power to resolve the problem? A bunch of scenarios suggest themselves, ranging from some screw up in the IPv6 transition that cuts off sections of the Internet from each other to some major peering dispute that spirals out of control? That would be a great time to discover that the FCC has absolutely zero authority to make sure our broadband infrastructure actually keeps running. And just as I don’t bet the mortgage at Las Vegas, I personally wouldn’t bet critical national infrastructure on Title I and the hope that somehow the D.C. Circuit will come OK on broad FCC authority.
Which leads us back to the problem of Tea Party tactics. You can rant and rave and threaten and bully. You can call people all kinds of variations of “socialist” or whatever in your fantasy world where the Cold War still runs and Reds sleep under our beds waiting to impose Godless Communism on us all. You can pull stuff out of context, make up stuff, whatever floats your boat. But at the end of the day, the underlying problems of the world don’t go away.
In this case, the situation is made more ludicrous by the fact that classification under Title II actually wouldn’t impose much regulation. You’d have Section 201 (“no unjust or unreasonable rates or practices”) and Section 202 (“no unjust or unreasonable discrimination”), and a complaint process under Section 208. True, classification under Title II would make it easier to impose other sorts of regulations and things carriers really, really don’t want (some of which, like unbundling, I personally really do want). But classification under Title II alone would not impose these regulations.
So the actual question before the Commission is really very simple. What in the National Broadband Plan do you want to put at risk to give incumbent telcos and cablecos a friggin’ firewall against the possibility of regulation? And when do you want to start asking the right questions? We’ve recommended the FCC issue a public notice asking carriers to put up or shut up on Title I, and reclassify broadband access as Title II if those answers don’t seem reliable enough. Incumbents want the Commission to keep its head in the sand, lest the Commission determine it can do more than sign USF checks.
Stay tuned . . . .