At First Glance, Net Neutrality Comments Don’t Change the Debate, Observers Say.

In the days leading up to Monday’s deadline for filing replies to the FCC in the net neutrality debate, those on both sides told us they didn’t expect any major shifts or developments to come in the comments. Though the FCC, which said Tuesday the proceeding now has more than 3.7 million comments, still hadn’t posted most comments to the NPRM, observers said that based on those they've been able to obtain, their predictions were coming true.

Among comments made available to us by our deadline Tuesday, compromises offered by Rep. Henry Waxman, D-Calif., to use Communications Act Title II as a backstop, and by Mozilla to classify broadband as a telecom service for edge providers, were rejected by Comcast, NCTA and Verizon. The ideas “do not solve any problems with reclassification -- if anything, they only introduce additional problems,” Verizon said. The proposals, which involve using Title II in some capacity, “are without merit,” Comcast said.

Waxman proposed issuing one order under Section 706, and a contingent order under Title II. That would “be the epitome of an arbitrary and capricious rule,” Verizon said, because “it would require simultaneously classifying broadband service as both a telecommunications service and an information service."

Mozilla’s proposal to classify broadband differently for edge- and end-users “fails on factual and legal grounds,” Verizon said, because broadband providers offer both access to the “same integrated bundled service.” The “radical unbundling of Internet access service into its component parts” would mean broadband providers would “face prohibitive complexities in delivering distinct information and telecommunications services,” Verizon said: It would “threaten the quality of service” and bring the “added costs, confusion, and complication of having to pay for and manage both types of services.” Because the Communications Act’s definition of a telecom service involves charging a fee, Mozilla’s proposal “would require edge providers to pay a fee to broadband providers,” Verizon said. NCTA made the same argument.

Its proposal would not be limited to services involving a fee, said Mozilla (http://mzl.la/1wopnKI) said. The definition of a telecom service “should be interpreted by the Commission more broadly, to include services that are not offered solely in exchange for direct financial compensation,” the company said. Saying there’s no “'minimalistic approach,'” Mozilla said a Section 706 strategy would allow paid prioritization. That would “have a significant and transformative effect,” Mozilla said, “allowing network owners to extract a greater portion of the overall Internet revenue pie by skewing user choices and competitive content provider access.”

Netflix and Verizon also continued their duel over interconnection fees in the replies, with Verizon saying the commission “should reject self-interested proposals from Netflix ... seeking mandatory, free interconnection.” The idea is “nothing more than an attempt by Netflix and its allies to reduce the cost of their particular business models and shift all costs to ISPs’ subscribers,” said Verizon. It said Netflix’s proposal would “inevitably chill investment and unfairly shift network costs from large content providers (and their customers) onto ISPs’ subscribers, including those who never access these content providers’ content.”

Verizon said it has no incentive to cause congestion, “because we would risk losing customers to other ISPs that are able to provide uncongested access to the content that our customers demand.” The net neutrality rulemaking would fall short in ensuring an open Internet, Netflix said, because it would allow “'commercially reasonable’ discrimination” over the last mile and would not deal with interconnection. Large terminating access networks can “coerce” edge providers to pay fees “by refusing to add capacity to routes into their networks,” Netflix said. It said that requiring edge providers to pay terminating access fees “to avoid congestion poses the same threat as requiring an edge provider to pay for priority or to prevent blocking on the last mile."

Its proposal would not be limited to services involving a fee, Mozilla’s reply said (http://mzl.la/1wopnKI). The definition of a telecom service “should be interpreted by the Commission more broadly, to include services that are not offered solely in exchange for direct financial compensation,” the company said. Saying there’s no “'minimalistic approach,'” Mozilla said a Section 706 strategy would allow paid prioritization. That would “have a significant and transformative effect,” Mozilla said, “allowing network owners to extract a greater portion of the overall Internet revenue pie by skewing user choices and competitive content provider access.”

No New Ideas

Those on both sides told us last week the initial comments did not produce new ideas warranting a reply. Others said the Section 706 and Title II camps would maintain their positions. Title II proponents like Public Knowledge focused on the idea that most in the initial round of comments backed Title II. “As the record closes and as we see another flurry of activism and attention the subject, we'll see how and when the FCC and the Chairman’s office react to the overwhelming support for common carriage principles,” Free Press Policy Director Matt Wood told us last week. “I don’t think there've been any game-changing proposals or shifts in the ground we're fighting on over the last two months.”

It’s “clear that commenters prefer a Title II solution,” said Public Knowledge and the Benton Foundation in a joint reply (http://bit.ly/1ycS7L3). “An unprecedented number of individuals filed comments, overwhelmingly in favor of net neutrality.” Title II is “best suited to address the concerns that necessitate open internet rules,” they said, saying Section 706 rules “cannot protect the open internet.”

A former Senate staffer involved in drafting the 1996 Telecom Act said Section 706 “does not support the regulations proposed in the NPRM.” As a result, “the FCC must act to reclassify the telecommunications component of broadband Internet access service as a ’telecommunications service’ or else abandon its efforts to impose regulations on broadband Internet access service providers,” said Earl Comstock, lead Senate Republican staff negotiator in the drafting of the act. “Incumbent broadband Internet access service providers are all too happy to tell the FCC that its [706] authority is real when in fact they know -- and will happily let someone argue in court later -- that there really is no authority there.” Congress limited the scope of Section 706 to telecom services, said Comstock, who used to run Comptel. Under how it defined the term, “Congress was interested in the ability of users to be able to transmit information of their own design,” he said. “Of course that is precisely what the Commission currently insists users cannot do when they purchase broadband Internet access service.” Comstock, of Eckert Seamans, said his thoughts were his own.

Cat Videos v. E-911

Support for a Title II approach ranges from “innovative online education providers, to consumer advocates, to small business owners in real estate, to large American corporate telecom customers from diverse industry sectors, to the Attorneys General of New York and Illinois,” said Computer & Communications Industry Association, with members including Internet companies like Google and Facebook. There was “undisputable evidence” of discriminatory practices by broadband providers, CCIA said. Facebook and Google did not file separate comments, spokespeople for the companies said. Consumers Union (http://bit.ly/1r58PY4), the Electronic Frontier Foundation (http://bit.ly/1ydan77), Future of Music Coalition (http://bit.ly/1BJR6Zg), NTCA and New America’s Open Technology Institute (http://bit.ly/1r5imhK) were among those who sent us filings urging Title II.

The initial comments did not bring a “'perfect’ solution,” the American Cable Association said, but included “several moderate and thoughtful suggestions.” ACA cited the initial comments of the Center for Democracy & Technology, AOL and AT&T. ACA also reiterated its calls for anti-discrimination rules to apply to edge providers and broadband providers. A number of replies by broadband providers backed proposals by AT&T and Comcast (CD Sept. 16 p9).

Re-opening Title II “would be a disaster in ways that Title II proponents do not seem to understand -- or, at least, have not been willing to seriously discuss,” said TechFreedom and the International Center for Law and Economics in their reply (http://bit.ly/1t7ZLSK). They said the approach would “require the FCC not merely to authorize paid prioritization, but to set tariffed prices for it!” Imposing “public utility regulations on the Internet won’t create Net Neutrality, but the heavy hand of government will crush innovation and investment in broadband,” TechFreedom President Berin Szoka said in a news release (http://bit.ly/Xx1WTy).

There’s broad-based opposition to Title II, said the Telecommunications Industry Association. Countering claims Title II has more support than Section 706, TIA said “commenters from all sectors of the industry warn that reclassification would be unwise as a policy matter and unsound as a legal one.” Saying “prioritizing E-911 calls ahead of ‘cat videos’ clearly serves the public interest,” TIA said there’s a role for prioritization. The commission “should not foreclose particular business models, but continue to encourage experimentation and market responses for market demand,” TIA said. Among others backing a Section 706 approach were the National Minority Organizations, a coalition of 45 national civil rights, social service and professional organizations, and the Information Technology & Innovation Foundation (http://bit.ly/Zom8Il).