Cable Shouldn't Be Subject to new Special Access Rules, NCTA Says

The FCC would be “crazy” to subject cable operators to special access regulation under rules being examined by the agency, said NCTA Executive Vice President James Assey Monday at a Practising Law Institute seminar. The American Cable Association Friday questioned (see 1604080055) FCC Chairman Tom Wheeler's proposal to replace special access regulation with a new "technology-neutral framework."

Special access should be largely focused on ILECs, which remain dominant in the provision of business service, Assey said. Cable operators are “the new entrant” and shouldn’t be subject to new regulation, he said. Assey said he had troubling figuring out what is going on based on last week’s special access letter from Incompas and Verizon (see 1604070069) and Wheeler’s Friday blog post.

“My first principle going in: Is this is an area where competition is increasing? And the answer ought to be to figure out where competition exists,” Assey said. “Economic regulation should recede and we shouldn’t be adopting some new regime that is going to have all these landmines out there.”

Matthew Berry, chief of staff to Commissioner Ajit Pai, said on the same panel that how the U.S. Court of Appeals for the D.C. Circuit decides the net neutrality appeal will affect much of what the agency does over the rest of 2016. If the rules are upheld, “I think the commission’s work will pretty much proceed along the track that it’s on,” he said. If the rules are struck down, it would have huge implications for the FCC’s broader agenda, he said. “For instance, the privacy NPRM would largely become moot.”

If the mobile rules are overturned but the wireline rules upheld, that would also have some effect, Berry said. “Some of the zero-rating investigations that are going on would probably come to a halt.” Berry, a former FCC general counsel, said the court’s reasoning is critical. “If anything gets struck down, does it get struck down on substantive grounds meaning that it was an impermissible interpretations of the statute, something that really can’t be fixed by the commission without congressional action,” he said. If the order is struck down on the basis of Administrative Procedure Act problems, the FCC could seek additional comment and try for revised rules by the end of the year, he said.

Berry said there has been little consistency from “the top” at the FCC, not citing Wheeler by name. “One month we’re told that T-Mobile’s Binge On program is highly innovative and highly competitive,” he said. “The next month it’s suddenly under investigation.” One month, the FCC is told the agency won’t regulate privacy differently for ISPs and edge providers, “then we have an NPRM which proposes dramatically more stringent regulation for ISPs than the FTC regulates edge providers,” he said. At one point rate regulation was off the table, Berry said. “Then two weeks ago, the chairman tells the House Commerce Committee that the FCC should have the authority to regulate rates,” he said. “Last week, he tells the Senate Appropriations subcommittee that rates are at the center of everything.”

Mark Twain said if you don’t like the weather in New England. wait five minutes and it will change, Berry said, and the same applies to the FCC and broadband regulation. Berry also said the debate has changed on privacy because of how the proposed rules would treat ISPs. “It’s often seen as an issue of consumer privacy advocates versus the corporate interests of the ISPs,” he said. “But what I really think we’re seeing here is the corporate interest of edge providers versus the corporate interests of ISPs.”

Berry said consensus is forming on the need to address a proposal for Wi-Fi in the 5.9 GHz band (see 1601120055), though there needs to be leadership from the chairman’s office. “There’s no reason why we can’t get this done by the end of the year,” he said. “This could be an item where you really do have unanimity if we do this right.”

“In November, Chairman Wheeler said the FCC planned to keep an eye on zero-rating plans as they evolved, and he made clear that the informal policy review is not an enforcement action or investigation,” a commission spokeswoman said in response to Berry. On privacy, the FTC and FCC “have complementary authorities in this space, and will continue to work closely together,” the spokeswoman said. “The work of both agencies is focused on protecting consumers by promoting practices consistent with the well-known Fair Information Practice Principles.”

The spokeswoman also addressed Berry’s complaints about rate regulation, referring to a recent letter Wheeler sent to Reps. Greg Walden, R-Ore., and Frank Pallone, D-N.J. “This broad forbearance in the Open Internet Order was the basis of my comments to the Senate Appropriations Committee,” Wheeler wrote. Senate Appropriations Financial Services Subcommittee Chairman John Boozman, R-Ark., “asked if I objected to Congress prohibiting the Commission from rate regulation,” Wheeler said. “I responded that if Congress wanted to ensure that a future Commission would be unable to unforbear, I would have no difficulty with it. What I said then remains true today. If Congress in its wisdom decides to make doubly sure that the forbearance in the Open Internet Order is the law of the land, that is Congress’s prerogative.”

Grace Koh, a GOP telecom counsel for the House Commerce Committee, said little action should be expected from Congress this year on telecom issues. Spectrum has been a big focus, she said. “We’ve got quite a lot to do in terms of looking after the spectrum incentive auctions and also checking on FirstNet,” she said. “We’ve also been interested in how the FCC is managing it’s time after [broadband] reclassification.”

Koh said her boss, Communications Subcommittee Chairman Greg Walden, R-Ore., “is not impressed” with the FCC’s actions, especially on set-top boxes and ISP privacy. “It’s not clear to us exactly why the FCC is moving forward on privacy,” she said. The FCC’s authority “is not entirely set just yet,” she said. “That gives us some pause.” Koh predicted the subcommittee will spend much of its time on FCC process reform in coming months. If the net neutrality order is overturned or partially rejected by the court, “we’ll redouble our efforts at legislation,” she said.