Title II Is Looming for ISPs

At CES Q&A, Wheeler Signals That FCC Is Setting The Table
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WASHINGTON — Federal Communications Commission chairman Tom Wheeler has as much as confirmed that he’ll use some variant of Title II common-carrier regulations to restore network-neutrality rules thrown out by the courts.

Ever since President Obama signaled — first to Wheeler and then to the rest of the country — that he wanted Title II-based Internet neutrality rules, and that the FCC should also, the handwriting has appeared to be on the wall.

Internet-service providers made their case in person, in blogs and through advocacy groups, arguing that Title II was an innovation- and investment-killer. At last week’s International CES in Las Vegas, though, Wheeler came as close as he has come, and likely as close as he will come until Feb. 5, to outlining his plan for the new rules.

FEB. 26 DATE EYED

That included confirming that he wants to vote on the new rules at the agency’s Feb. 26 meeting; Feb. 5 is three weeks before the meeting date, the customary time to circulate an item to the other commissioners.

In a Q&A with Consumer Electronics Association president Gary Shapiro, Wheeler said he has concluded that the “commercially reasonable” standard for discrimination in his original proposal for new rules based on authority under Section 706 of the Telecommunications Act could be interpreted as meaning what was reasonable for ISPs, not for consumers, and that that was “the wrong question and the wrong answer.”

He said that led to a “more-robust” examination of a “just and reasonable” standard under Section 202 of the Title II regulations (see sidebar) and drove the FCC to start looking into various Title II approaches to get to that standard, which he said provides the best protection.

The FCC would also apply Section 208, which deals with consumer protection, Wheeler suggested.

That means new rules against blocking, throttling and paid prioritization, he suggested, measured against the “yardstick” of “just and reasonable.” Wheeler did not say it would those rules would be based on Title II, but did not dispute Shapiro’s characterization that what Wheeler had said “without totally confirming it,” that “you’re going down the Title II path, that the wireless model is a good model, and that the wireless model said forbear by law, except for a couple of sections, 201 and 208.”

Wheeler corrected him, noting it was Sections 202 and 208. Both wired and wireless ISPs have in the past branded Title II as a nuclear option, or a “Net Disaster,” as the National Telecommunications & Information Association recently tabbed it. They have argued it is easier to talk about forbearance than to do it.

Wheeler said he is concerned about not disincentivizing ISPs from investing and building out their broadband networks, as many providers have argued that’s exactly what Title II reclassification will mean. But he also said he has talked to smaller ISPs and rural and competitive carriers who said they liked Title II and hoped he would adopt it.

The American Cable Association, which represents smaller and midsized independent cable operators, didn’t agree with Wheeler’s plan.

“Common-carrier rules for telephone service, crafted in 1934, should not be applied to the hyper-competitive broadband Internet market in 2015,” the ACA said. “A Title II regulatory regime will cut off investment and end up doing more harm than good.”

Wheeler also pointed out that even after President Obama signaled his support for Title II, wireless broadband spectrum still generated record bidding in the AWS-3 auction.

Wheeler suggested he would follow the lead of those suggesting the FCC can forbear from all but a few sections — Sections 201, 202 and 208 — as the FCC did when classifying wireless phone service under common-carrier regulations two decades ago; Wheeler helped negotiate that while head of CTIA-The Wireless Association.

The chairman clearly sees the wireless model of forbearance as one that could translate to new networkneutrality rules.

“So, there is a way to do Title II right, that says there are many parts of Title II that are inappropriate and would thwart investment, but that a model has been set in the wireless business that had billions of dollars of investment, built the best wireless market, systems in the world, the most competitive wireless … in the world, the most innovative wireless system and the best service for consumers,” he told Shapiro last week. “We ought to take a look at how that fits together with this other goal I was talking about: making sure that we have open access.”

The National Cable & Telecommunications Association had no immediate comment, but its largest member, Comcast, was sufficiently concerned about Title II that it fi red off a Christmas Eve letter to the FCC calling it a “risky and destabilizing” alternative to Section 706 authority.

CTIA also fi red back at the Title II signals last week: “Comparisons to the regulatory framework for mobile voice are misplaced and irrelevant,” said CTIA president Meredith Attwell Baker, a former Republican FCC commissioner. “Congress created a regulatory regime for mobile voice under Section 332 and Title II. Congress also created a separate regulatory regime — explicitly outside Title II — for other services like mobile broadband.”

Washington, D.C.-based advocacy group Free Press, which has pounded Wheeler over his initial inclination not to use Title II, was not declaring victory just yet, but it clearly read the Wheeler tea leaves and liked what it saw.

SKEPTICAL ADVOCATES

“Chairman Wheeler appears to have heard the demands of the millions of Internet users who have called for real net-neutrality protections,” Free Press president Craig Aaron said. “Of course, the devil will be in the details, and we await publication of the agency’s final decision.”

The final decision will likely not be final. AT&T, for one, has threatened to sue if Title II is implemented, suggesting the FCC should defer to Congress on the matter.

Senate Communications Subcommittee member Dean Heller (R-Nev.) agreed. “[I]t is clear to me that bipartisan interest exists to pursue legislation that clearly addresses potential harms to an open Internet without creating onerous regulations,” he told Multichannel News in an email message last week. “I believe the FCC would be wise to let elected officials on Capitol Hill continue working before proceeding to any vote on a new order in February.”

Discrimination Brings Regulation

WASHINGTON — The key Title II regulation the FCC would apply in reclassifying broadband access under a common-carrier regime is Section 202, which says it “shall be unlawful for any common carrier to make any unjust or unreasonable discrimination in charges, practices, classifications, regulations, facilities, or services for or in connection with like communication service, directly or indirectly, by any means or device, or to make or give any undue or unreasonable preference or advantage to any particular person, class of persons, or locality, or to subject any particular person, class of persons, or locality to any undue or unreasonable prejudice or disadvantage.”

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