Special access "overcharges" by major telcos have cost consumers over $150 billion in macroeconomic losses since 2010, said Mark Cooper, Consumer Federation of America research director, in a paper released Tuesday. The inflated charges are due to "premature" FCC deregulation of Bell dedicated circuits leased by competitors and business customers, said Cooper, who summarized his findings at an event hosted by New America's Open Technology Institute. AT&T said Cooper's report was based on outdated data, and it said more recent data showed the special access market is highly competitive where there is demand. Other ILECs didn't comment but some referred us to an economist who is skeptical of Cooper's estimate.
The FCC is giving interested parties until May 27 to file initial comments on proposed privacy rules for ISPs. Replies are due June 27. The NPRM, released by the FCC Friday night, runs 147 pages, with accompanying statements by the commissioners. It mentions the FTC, the nation’s more traditional privacy cop, 189 times. The FCC approved the NPRM 3-2 Thursday with dissents by Commissioners Ajit Pai and Mike O’Rielly (see 1603310049).
The FCC appears to be close to making some decisions on zero rating. Several observers said they expect nothing until after the U.S. Court of Appeals for the D.C. Circuit rules on the net neutrality appeal. But industry lawyers also said Wireless Bureau Chief Jon Wilkins has made several calls to industry to say the FCC has concerns that zero rating can be construed to be a violation of last year’s net neutrality order. The FCC didn’t comment.
AT&T's goal on special access is to delay FCC action that would "check monopolistic tendencies" of incumbent telcos, Incompas CEO Chip Pickering said Thursday. "In an act of desperation, AT&T is claiming that the FCC doesn’t have sufficient information to act -- even though it has just completed the largest data collection ever undertaken by the FCC in any proceeding," he said in a blog post. "With data in hand, now is the time for the Commission to act promptly to address this broken market. Finally ending monopoly pricing, and eliminating punishing terms and conditions, which are locking up customers and locking out competition." The FCC could issue a Further NPRM in April or May in its broad special access rulemaking and an order in its ILEC tariff investigation (see 1603210048). Pickering said AT&T "likes to take a helicopter view of the market" that looks at competition by census block. "But let me ask you, when was the last time someone said, 'I work in a census block?' Never," he said. "That is because real people work in buildings -- school buildings, hospital buildings, and fire station buildings." Pickering said ILECs have connections to virtually every commercial location in their monopoly-derived territories. "They are the only provider of special access services to the vast majority of these locations. That’s market power," he said. Pickering dismissed AT&T's suggestion that competitors don't need reasonably priced last-mile access to ILEC special access facilities. "If building to locations was as easy as the incumbents claim, why haven’t they (with hundreds of billions more resources than any competitor) built much, if at all, outside their incumbent regions?" he said. Pickering questioned AT&T arguments that cable provides "fierce competition" to ILEC special access services. "In reality, most cable services are not special access services (i.e., dedicated services)," he said. "Nonetheless, NCTA’s special access filing only demonstrates the ineffectiveness of a duopoly. It asserts more competition would be bad because it would force providers to improve service and lower prices ….um, YES, that is exactly what competitive market forces are intended to do." He called on the FCC to "address the abuse of market power," including over ethernet services, and voiced hope it would do so under Chairman Tom Wheeler, "who's been consistent in his efforts to promote and preserve competition."
Major FCC policies could fundamentally tilt the communications playing field in favor of Internet edge and tech companies and against broadband providers, NCTA President Michael Powell said Wednesday. If the commission succeeds in its net neutrality, broadband ISP privacy and set-top box initiatives, the regulatory “bias” will facilitate the ability of edge/tech companies to enter telecom and video markets while restricting the ability of cable and telco providers to compete in the Internet space, said Powell, a former FCC chairman, at a Free State Foundation conference.
AT&T said the FCC should ease, not toughen, special access regulation, and it responded to various commission queries in a meeting with staffers last week. There's no reason for the FCC to roll back past pricing deregulation of ILEC special access (dedicated circuit) services in the broadband business market, the company said. There is every reason to provide further "Phase II" relief where telcos are subject to facilities-based competition, such as in Chicago and Dallas, where AT&T faces intense competitive pressures, AT&T said in a filing posted Tuesday in docket 05-25 summarizing the Thursday meeting.
A three-hour FCC oversight hearing before the House Communications Subcommittee Tuesday became tangled in questions of FCC process and how commissioners can discuss items pending at the commission. Communications Subcommittee Chairman Greg Walden, R-Ore., helped trigger what became a fierce debate with his questioning. Senate Commerce Committee Chairman John Thune, R-S.D., raised the same issues in the last week (see 1603210052).
FCC Chairman Tom Wheeler, who circulated an NPRM Thursday on proposed privacy rules for ISPs requiring them to protect subscribers (see 1603100019), said in a Huffington Post blog post aimed at consumers: The FCC is protecting “your data.” The NPRM is set for a vote at the FCC's March 31 open meeting, as reported by Communications Daily (see 1602110054 and 1603100019). A senior FCC official said on a call with reporters the NPRM will explore a wide range of options. Wheeler said the proposal doesn't ask questions about edge providers like Facebook and Google but is sector specific. There's a long history in the U.S. of sector privacy rules and the FCC is the expert agency over ISPs, a senior agency official said.
A proposal by ISPs on privacy rules included groups representing nearly all ISPs (see 1603010069) except wireless ISPs, said Robert Quinn, AT&T senior vice president-federal, in a blog post Wednesday. FTC oversight has worked well, Quinn said. “All major ISPs have enacted privacy policies which explain to consumers the information that ISPs collect and how that data is used,” he said. “At AT&T, we’ve continued to simplify our policy, including several years ago when we went to a single comprehensive privacy policy that describes plainly and simply the information we collect, how we collect it and how we use it.” Quinn said he was AT&T chief privacy officer for several years and can say firsthand “we take customer privacy and how we communicate our polices to our customers seriously.” But some groups are pushing for much stricter rules than ISPs have faced in the past (see 1603070049), Quinn said. “To get there, those groups have characterized ISPs as ‘gatekeepers,’ asserted that ISPs (as opposed to companies like Google) are the real leaders of targeted advertising and, finally, argued that the Federal Trade Commission is, in essence, incompetent at policing privacy given the tools they have available.” Those arguments aren't supported by the facts, he said, though he warned the FCC may be listening. “Time and time again, the FCC appears to want to place its thumb on the scale in favor of Internet companies and against the companies that invest in broadband infrastructure in this country,” he wrote. “Last year, it was the Title II proceeding. Last month, we were talking about set-top boxes, this month it’s privacy, next month it could be special access.” The FCC did not comment. "I’ve characterized ISPs as ‘gatekeepers’ because that is what they are,” said John Simpson, Consumer Watchdog privacy project director, responding to Quinn. “Edge providers like Google and Facebook do pose serious privacy concerns, but that is no justification for not dealing with the privacy issues raised by ISPs and their unique position. That is what the FCC is legally bound to do now that broadband providers are classified as common carriers.” The FTC has tried to protect consumers' privacy, “but because it doesn’t have rulemaking authority in this area and can only move against ‘unfair and deceptive’ acts, its powers are limited,” Simpson said. “The phone and cable ISP industry is totally disingenuous claiming that the use of privacy policies is an effective way to protect consumers,” said Center for Digital Democracy Executive Director Jeffrey Chester. “These companies are engaged in significant cross device tracking and targeting using their advantage over subscriber information. They are expanding their work with data brokers, acquiring powerful consumer data assets, and are engaged in practices that threaten the privacy of their customers. The FCC has to step in before these broadband giants further invade our privacy.”
Whether the 1993 presumption of no effective competition in local cable markets stays or goes is beside the point because the legal challenge to the FCC's 2015 effective competition order involves ensuring the agency follows the statute through evidence-based findings of effective competition in each franchise area, said NAB, NATOA and Northern Dakota County (Minnesota) Cable Communications Commission in a reply brief filed Tuesday in U.S. Court of Appeals for the D.C. Circuit in their challenge of the agency's June order (see 1506020060). "Rulemakings do not provide a vehicle to rewrite statutes, even if the Commission regards the statutory scheme as anachronistic or inconvenient," the filing said, and any remedy "lies with Congress." Oral argument hasn't been scheduled. Final briefs are due March 29.