Basing net neutrality regulations on Title II authority would cause “World War III” and years of litigation, predicted Latham Watkins attorney Matthew Brill, who represented NCTA on a panel Wednesday. Brill predicted, though, the FCC will eventually adopt an approach under Section 706, along the lines of its rulemaking notice. Speaking at a National Regulatory Research Institute Web seminar, Public Knowledge Senior Vice President Harold Feld and Evan Engstrom, policy director for Engine Advocacy, which represents startups, countered that Title II would offer more protections against discrimination by ISPs.
The FCC should institute a rulemaking to “restore balance to the video marketplace” by limiting programmers’ ability to bundle channels, give discounts to large providers, control tier placement, or interfere with access to their content on the Internet, said Mediacom in a petition for expedited rulemaking filed Monday. The multichannel video programming distributor (MVPD) marketplace has changed from being “dominated by cable operators to one in which the programmers (both broadcast and non-broadcast) clearly have the upper hand and are able to engage in coercive practices,” said the Mediacom petition. To address the problem, the FCC should allow MVPDs to offer limited a la carte programming of high priced content, or compel programmers to offer all MVPDs the same bundles they offer large carriers or unbundled networks. The commission should also prohibit blocking of Internet access as a negotiating tactic and require programmers to seek waivers justifying volume discounts, the petition said. “The Commission has the statutory authority to address the problems afflicting the video programming marketplace,” Mediacom said. “What it needs is the will to do so."
The nation’s mayors urged Congress, President Barack Obama and the FCC to preserve a “free and open internet,” but backed off Monday from an initial proposal that also backed reclassifying broadband as a telecom service. Under the resolution approved at its annual meeting in Dallas the U.S. Conference of Mayors said it “supports comprehensive nondiscrimination as a key principle for any FCC rulemaking” and it backs “securing a commitment to transparency and the free flow of information over the internet, including no blocking of lawful websites and no unreasonable discrimination of lawful network traffic.” The resolution (http://bit.ly/UBM8xv)asks the White House and Congress to support those principles, and, “if necessary, use their lawmaking power to enshrine access to a free and open Internet and give the FCC a clear mandate.” The resolution passed unanimously, said a news release (http://bit.ly/1m6Upzd) from San Francisco Mayor Ed Lee.
Political pressure stirred up by the FCC net neutrality proceeding could lead to “negative spillover” for Comcast’s planned buy of Time Warner Cable, said Guggenheim Partners analyst Paul Gallant in an email to investors Friday. That could lead to harsher deal conditions or an FCC challenge to the transaction, Gallant said. “We don’t believe that is the most likely outcome, but it is more likely today than it was five weeks ago when the FCC issued its net neutrality proposal.” Regulatory approval of AT&T/DirecTV is likely, “but not highly likely,” Gallant said. AT&T’s deal concessions seem “well-designed” to address concerns about pay-TV pricing and expand broadband availability, Gallant said. If Sprint and T-Mobile were to agree to combine and seek regulatory approval, it would likely be the first telecom deal to take the Department of Justice to court for not approving it, Gallant said. “Sprint/T-Mobile would actually have a decent chance of beating DOJ.” Such a win could then cause the FCC to approve the deal, he said. “It’s definitely still an uphill battle, but not the hopeless case some believe.” On peering, Gallant said it’s unlikely that the FCC would ban paid peering fees by Netflix and content delivery networks. Most investors don’t see Title II reclassification of broadband as likely to happen, Gallant said. But unlike the last net neutrality rulemaking process, the U.S. Court of Appeals for the D.C. Circuit’s Verizon decision narrows the other options available to the FCC, Gallant said. “We are thinking the movie ends well for ISPs this time as well, but right now we're not as confident as most investors we spoke with.” On the upcoming Aereo decision, Gallant said only a “complete victory” for broadcasting would be viewed as a positive for broadcasters. Other outcomes, such as a remand back to lower courts, are “likely to be read as at least mildly negative for broadcasters,” he said.
The FCC should initiate a rulemaking to reform “unnecessarily onerous” pay-TV effective competition rules, said Commissioner Mike O'Rielly in a speech on regulation of the video market at a Media Institute luncheon Thursday. Along with effective competition, the FCC should relax its media ownership and foreign ownership rules, and consider eliminating the sports blackout rule, O'Rielly said. An NPRM proposes to end the blackout rule (CD Dec 19 p8). If the commission ignores the current competitive state of the video industry and doesn’t relax rules in that area, it will “look more foolish than an ostrich that has buried its head in the sand,” O'Rielly said.
AT&T and Netflix traded blows Wednesday as top executives questioned who should bear the costs of interconnection between content providers and ISPs. Jim Cicconi, AT&T senior executive vice president-external and legislative affairs, said at an Aspen Institute net neutrality event that the reason Netflix was seeing poor quality lately was its choice of “the cheapest transit company out there.” Columbia Law professor Tim Wu, who coined the phrase “net neutrality,” cautioned that ISPs sit as “situational” monopolies that could let them extract “too much from the rest of the network."
FCC Chief Technologist Henning Schulzrinne disputed the idea that regulation can’t keep up with the pace of technological change. Schulzrinne spoke Thursday at the opening of a symposium sponsored by the agency and The Institute for Information Policy (IIP) at Pennsylvania State University on the future of broadband regulation (http://fcc.us/1k4cfb9).
After pushing through votes on a net neutrality rulemaking and three incentive auction orders at its May 15 meeting, FCC Chairman Tom Wheeler scheduled more of a breather for the June 13 meeting. There are no orders on the agenda, only presentations on the IP transition and expanding community access to radio (http://fcc.us/SsmKt9). Meanwhile Friday, a Wheeler blog post put the IP transition in historic perspective.
House Republicans and Democrats sharply scrutinized the first half year of FCC Chairman Tom Wheeler’s tenure at the agency. Wheeler appeared before the House Communications Subcommittee for the second time as chairman Tuesday, less than a week after a highly controversial FCC meeting where the agency approved its net neutrality NPRM as well as an item on broadcast TV incentive auction design. Lawmakers of both parties widely focused on net neutrality.
The FCC approved service rules for the TV incentive auction and provisions that restrict bidding in the auction, over strong objections by FCC Republicans Ajit Pai and Mike O'Rielly. Both Republicans warned Thursday that the rules as structured could lead to a failed auction next year.