NCTA: Net Neutrality Order Is Imperfect, But Fair Resolution

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Industry reaction was guardedly supportive Wednesday of the Federal Communications Commission's proposed network neutrality order vote, scheduled for Dec. 21.

That is not a surprise since they were in on discussions and had been looking to head off Title II reclassification of broadband access--the proposed order is based on Title I (information services), not Title II (common carrier), authority.

The National Cable & Telecommunications Association, which was at the table when the FCC was hammering out the Title 1-based compromise proposal, called it an imperfect, but acceptable route to the shared goal of network openness, though it continued to maintain that no commission action was needed.

"While not perfect from our point of view and in the absence of further action by Congress, we believe that it is a fair resolution of this set of issues and that it is proposed in a way that achieves our essential and shared objectives: preserving the openness of the Internet and the incentives to invest and innovate for the benefit of consumers," said NCTA president Kyle McSlarrow.

McSlarrow pointed to NCTA's understanding of some key points in the order. They included the recognition of usage-based pricing and no ban on specialized services. McSlarrow said the order essentially codifies the industry's existing code of conduct. But he also reserved the right to "vigorously challenge" new rules if the "should the order change in any material way from our understanding."

AT&T reiterated that it thought Congress should be the one clarifying the FCC's broadband authority, and the agency didn't need to step in. But it did say that if the FCC was stepping in, it was generally pleased with the direction of the order, though it would reserve further comment for the final order--commissioners still have three weeks to weigh in and propose changes.

"Obviously, AT&T's strong preference would be for the FCC to refrain from any regulation in the Internet space," said AT&T senior execuitve vice president Jim Cicconi, who has been one of the stakeholder representatives at FCC discussions about the compromise order.

"We feel the industry's track record, the utter absence of any specific ongoing problem, and the state of the economy all argue for regulatory restraint," he continued. "We also believe, based on jurisdictional concerns, that the issue should rightly be deferred to the Congress, a view also expressed by a bipartisan majority of that body."

But given that the FCC has decided to proceed, "we are pleased that the FCC appears to be embracing a compromise solution that is sensitive to the dynamics of investment in a difficult economy and appears to avoid over-regulation."
What AT&T likes about the proposal, he said, was that it appeared to "avoid onerous Title II regulation; would be narrowly drawn along the lines of a compromise we have endorsed previously; would reject limits on our ability to properly manage our network and efficiently utilize our wireless spectrum; would recognize the capabilities and limitations of different broadband technologies; would ensure specialized services are protected against intrusive regulation; and would provide for a case-by-case resolution of complaints that also encourages non-governmental dispute settlement."

The compromise was one hammered out by House Energy & Commerce Committee Chairman Henry Waxman (D-Calif,), on which Genachowski's network neutrality proposal is based.

Verizon was somewhat less sanguine. Unlike the Waxman proposal, which had a two-year sunset, there is no sunset of the FCC network neutrality regs in the chairman's proposal, senior FCC officials confirm. Verizon had wanted the sunset to remain. Saying "if' the FCC decides to act on network neutrality, Verizon executive vice presidentTom Tauke, himself a former congressman said it should "consider the framework of the Waxman proposal, including its sunset provision. The FCC's authority to act in this area is uncertain, and Congress has indicated a strong interest in addressing this issue; interim rules would encourage congressional action, while showing appropriate deference to Congress."

Like Cicconi, Tauke said he would reserve judgment until the draft order is made public, but he did say that "In this fast-moving marketplace, inappropriate regulation can be very harmful to consumers, companies, and the ability of this industry to create jobs, provide new services, and be an engine for economic growth. That is why it is so important that policymakers get this right."

While the wireless industry would have preferred not to have any net neutrality conditions applied, it suggested it could live with the FCC's proposal only to apply non-blocking and transparency regs, while monitoring the industry's progress and reserving the right to revisit that decision.

"Although we have not seen the specific language of the Chairman's proposal, in his remarks, Chairman Genachowski emphasized the appropriateness of recognizing differences between fixed and mobile broadband," said CTIA President Steve Largent. "While we maintain our belief that any action in this area is unnecessary in the dynamic and rapidly evolving wireless environment, we understand and are pleased that the proposed rules have moved away from broad Title II regulation and toward a more tailored approach that recognizes the unique nature of wireless services. The wireless ecosystem moves at a startling pace, and if new rules are adopted, they should be reviewed in two years. "

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