The FCC Never Regulated DSL, Oceania Has Always Been At War With Eastasia, and My Offer To AT&T.

Hank Hulquist over at AT&T writes that the FCC never regulated internet access.
It’s a funny thing, because I distinctly remember going through a process where the FCC reclassified DSL from a Title II telecom service to an information service. Let me rummage for a bit . . . . ah yes. Here is the link to the FCC’s 2005 Order reclassifying DSL as an “information service.”

In fact, come to think of it, I’m old enough to remember when the telephone companies wanted DSL classified as an “interstate telecommunications service.” Can I find that link on line? Why yes! Here it is: GTE’s DSL Tariff and the Bell Atlantic, BellSouth, GTE, and PACBELL DSL Tariff. (The telcos wanted these classed as Title II telecom to preempt state regulation, if you were wondering.)

And what does the first paragraph of the GTE Tariff Order say?

In this Order, we conclude our investigation of a new access offering filed by GTE that GTE calls its DSL Solutions-ADSL Service (“ADSL service”). We find that this offering, which permits Internet Service Providers (ISPs) to provide their end user customers with high-speed access to the Internet, is an interstate service and is properly tariffed at the federal level.

Which is why carriers providing DSL paid Universal Service support (paid only by Title II telecommunications carriers) until the FCC 2005 Reclassification Order.

[Funny story. The 2005 Reclassification Order phased out USF payments over the course of a year, but in 2006, rather than dropping the USF fee, the carriers tried to keep charging customers for a fee they no lnger had to pay. Then Kevin Martin threatened to investigate the Bells for false billing, and they backed off.]

More below . . .

Ah, those whacky Bells. First they beg the FCC to classify DSL as Title II and they charge subscribers USF fees which only get charged for telecommunications services. Then they get DSL reclassified as Title I information service. Then they try to keep charging subscribers for USF fees they no longer owe. Now they want to claim they were never even a Title II service in the first place. To paraphrase Mr. Hulquist, I can see why AT&T would peddle this stuff, and I could see why folks unfamiliar with the last 20 years of telecom/broadband access regulation would believe it. But given the exciting archival nature of the internet, why does Mr. Hulquist think nobody will look this stuff up and call him on it?

Hulquist is using an old lobbyist mind control trick. Those familiar with how “end of life counseling” became “death panels” will recognize the basic technique. I called the Bells and the rest of their buddies out on this nonsense when they tried to sell this line to the FCC back in February. Hulquist and others keep trying to take language from this 1998 Report on why dial up ISPs and others did not pay into the Universal Service Fund (which, as I just noted above, DSL providers did pay, and passed through to their subscribers).

To be fair to Hulquist and the other LEC boys trying to push this line (although, as usual, AT&T is out front when it comes to this sort of silly season business), Hulquist is right in one respect. Until the Cable Modem Order in 2002 (and as chronicled at length by the Supreme Court in the Brand X case), the FCC required that telcos (like today’s AT&T) to separate the “underlying transmission” (the DSL/ADSL capacity) from the “enhanced service” (the ISP part) and lease the transmission part to rival ISPs. In fact, telcos couldn’t even offer DSL or other “internet access services” directly. They had to have a separate affiliate, so that everyone could make sure that telcos played fair and leased DSL capacity at the same rates and terms to rival providers as they did to themselves. We used to call this “structural separation” or “line sharing.” So while the DSL was regulated, the separate ISP was merely “subject to Title I” and the FCC “forbore” from regulating it. Because it actually regulated the underlying DSL transmission as a Title II telecom service.

So I will offer this deal to Mr. Hulquist, and the rest of his revisionist buddies. If, as Hulquist says, “the FCC has never regulated any type of Internet access under Title II,” why don’t we all just go back and repeal the FCC’s 2005 Wireline Framework and go back to the rules as they existed under the GTE Tariff. You all can go back to leasing your last-mile DSL lines to rivals under Title II, and you can putter along beside them with your separately affiliated Title I ISP, operating under the same terms and conditions as folks like Earthlink or anyone else that wants to lease the underlying transmission facility. Cause hey, if DSL was never regulated and Oceania has always been at war with Eastasia, why shouldn’t we just go back to the way it was? I mean, I was pretty sure I remembered DSL being reclassified, but if I’m wrong about that and your right, we should just put everything back the way it was and stop arguing.

Stay tuned . . . .

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4 Comments

  1. The DSL in those tariffs was DSL local transport, not Internet access. Internet access was provided by the BOC separate affiliate for information services. And there was no analogous splitting of internet service into two artificial pieces on the cable side.

  2. Harold says:

    Mike: I agree about cable (indeed, the whole point of the 2002 classification of cable modem as broadband was to avoid any requirement to unbundle their platform. That was “open access” and it was the thing we used to fight about.) But what do you mean when you say the DSL tariff was “local transport?” It was tariffed explicitly as an interstate telecom service — hence the preemption of local regulation.

    WRT to the separate affiliate requirement, I believe I covered that rather explicitly. And, as I also say rather explicitly, I’m totally willing for us to go back to that. I just don’t think AT&T is up for that.

  3. “Local” as in between an end user’s home or office and the CO, just like a local loop. I didn’t mean “intrastate.”

    Having the transport element split out for common carrier (or private carrier) regulation would not enable the FCC to impose net neutrality/nondiscrimination regulations on the offering of internet access, which would continue to be an information service.

  4. Fred Goldstein says:

    This is just a terminology issue.

    “Internet access” could be taken to mean the part of the Internet service that rides the local loop (in which case it was an unregulated ISP) or it could be taken to mean “access to the Internet”, in which case it was the underlying formerly-regulated transport.

    This sort of linguistic ambiguity is serious when it confuses the issues, as it does with some Bell writers.

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