Verizon 'Corrects Record' in FCC Letter

Net-Neutrality Oral Argument Referred to Sponsored Data Plans

Verizon wrote the Federal Communications Commission Wednesday (Feb. 11) in response to agency chairman Tom Wheeler's Feb. 9 speech at the Silicon Flatirons Center.

In the speech, to make a point about why he pivoted from a "commercially reasonable" standard for net-neutrality rules to Title II to prevent blocking and throttling of content, Wheeler quoted Verizon's attorney as saying, in oral argument for Verizon's challenge to the old rules, "I am authorized to state by my client today that but for these rules we would be exploring those commercial arrangements."

In a letter billed as correcting the record, Verizon VP and associate general counsel William Johnson said the company has supported and will continue to support an open Internet.

He pointed out that Verizon's counsel had told the court as much.

Johnson said the reference to commercial arrangements was to the sponsored data plans the company was exploring, and is still exploring; such arrangements, he said, could offer its customers more choice and better value.

"[T]he Commission’s earlier rules foreclosed voluntary business arrangements, such as 'innovative arrangements (such as advertiser-supported services) that would help recover the costs of building and maintaining broadband networks.' " Johnson said. "These types of 'sponsored data' arrangements – where online content or service providers voluntarily pick up the tab for usage associated with their traffic, rather than the end user doing so – also hold promise for saving consumers money and enabling interested providers to differentiate themselves and better compete. These are the kinds of pro-consumer services that can arise in 'a two-sided market with respect to Internet services,' as we also explained at oral argument."

Verizon is the only company that challenged the 2010 order, a challenge that resulted in those rules being mostly remanded by the court. It is that remand that the FCC is responding to with the Title II proposal the chairman plans to vote on Feb. 26.

William said Verizon is still concerned that the FCC's new rules will "shrink the types of services that will be available on the Internet," which he said was the point it was making in court.

FCC officials have signaled that the new Open Internet order includes a case-by-case complaint process that could include sponsored data plans under an Open Internet conduct standard for ISPs that could "harm consumers or edge providers." In essence, the order would create a broad authority to investigate and potentially take action against current and future conduct the FCC deems anticompetitive.