Wheeler Goes All In

February 4th, 2015 by · 9 Comments

When FCC Chairman Tom Wheeler was appointed, the cable and telecommunications giants tried to hide grins while public advocates worried about having a lobbyist with industry ties replace Genachowski. The tide has shifted a few times now, but today it’s definitely all the way back the other way with the new net neutrality rules Wheeler is proposing this week.

The policy wonks will dissect the details, but Wheeler’s editorial today over on Wired doesn’t mince words.  The gist is: a modernization of Title II to cover the internet, full application to wireless as well as wired access, and bright line rules against paid prioritization, throttling, etc. In short, Obama asked for it, and he got every bit of it. Of course, there might be loopholes in there we haven’t seen yet, but there’s even a ‘general conduct rule’ that will let the FCC quickly respond to new stuff that comes up that isn’t already covered.

The vote is set for later this month. Assuming it passes 3-2 as seems likely, we can look forward to the first lawsuit probably landing within hours. Whatever window there may have been for a middle-of-the-road compromise solution is now pretty much closed.  I wish it weren’t so, but the fact is that no one was really lining up behind any compromises anyway.

Soon we’ll get to see what the lawyers come up with to torpedo Title II.  You know they’ve been working on it for a while now, I’m sure they’ve got an angle prepared to take the fight to the Federal judiciary.  At least, I don’t think the industry is dumb enough to put all its cards on Congress passing a bill to stop Wheeler, let alone one that can override a certain veto.

For the consumer, nothing much will change in the short term.  That is, unless something is buried in the details that would give either Netflix or Verizon/Comcast/AT&T a leg up against the last mile at the interconnection layer.  That’s one of the bigger pieces Wheeler’s editorial didn’t touch on much.

And almost voiceless in the battle this year have been the smaller carriers and fiber builders/operators who would really like to be the counterbalance to the incumbents but without all the strings Title II could bring.  They really need to find a more effective way to affect things.


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Categories: Government Regulations · Internet Traffic

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9 Comments So Far

  • Cost Causation Lover says:

    The other thing you can now look forward to is the DOJ’s approval of the Comcast/TimeWarnerCable merger.

    The FCC/DOJ review would have conditioned the CMCSA/TWC merger on CMCSA’s continuation of net neutrality for some period of time after approval which the FCC imposed on them in previous merger reviews. In all likelihood that’s now out the window b/c of this decision.

    So, essentially, Wheeler ensured that if Eyeball owning network operators (EONOs) like CMCSA, VZ, ATT, Charter, etc., successfully challenge Wheeler’s Title II decision, CMCSA is free and clear to charge whatever they want.

    Here’s the funny thing about this story, Title II regulation may very well ALSO lead the EONOs to seek the creation of a switched packet access regime (SPAR) just like the switched (voice) access regime they milked for decades.

    As I commented last January on this websit:

    “If EONOs are successful you might want to dust off your separations accounting manuals and your 90s TELRIC (Total Element Long Run Incremental Costs) and TSLRIC (Total Service Long Run Incremental Costs) studies because content providers will have to march into the FCC with their own cost studies to push down the SPAR rates EONOs will seek to charge.”


  • Todd says:

    Maybe the MSO’s are using reverse psychology here and this whole fast lane argument is a smoke screen. If it passes, sure they can’t charge extra to Netflix, youtube etc. but it absolutely strengthens their position against competitors. Without prioritization copper plant can not keep up with the increasing number of devices per household and the OTT apps they are using to offer a service people need these day’s

    Direct TV and Dish do not partner with cable operators to deliver their Internet packages. They use DSL providers and why do you think AT&T and Verizon keep trying to sell off copper plant? DSL is horrible. Copper plant, wireless and fixed wireless can not compete with fiber and coax to the home unless they can prioritize applications. Maybe this will mean expanded franchise territory grants from Uncle Sam and increased regulated “service fee’s” on cable bills for MSO expansion. Seems like cable companies come out ahead either way on this one. -or maybe this is just another crazy conspiracy theory.

  • Mrs. Wheeler says:

    Or maybe this MSOs actually want this so that they have an excuse to roll out widespread metered billing and will then have “justification” for increasing access rates on a majority of consumers. Broadband penetration is probably close to saturation, so they’re looking at tiered rate increases to keep growth going.

    • Cost Causation Lover says:

      Mrs. Wheeler, respectfully, I think you’re wrong. They don’t want to raise consumer rates because that could invite investment for new entrants to compete against them. Instead, they’d rather assess an access charge on the content providers b/c then they can keep consumer rates cheap and new entrants out.

      Mrs. Wheeler, charging content providers an access fee would force content providers to raise the cost of content. For example, YouTube might have to begin charging you to watch videos. Netflix would have to raise their rates.

      At the same time the MSOs are charging the content providers access fees, the MSOs can offer you the same content w/o those additional charges b/c they’re not going to charge their affiliated companies an access charge. And if they did (or had to), no biggie, because the money moves from the right hand to the left hand, but stays on the body.

      This fight still has a long way to go. Best of all, it’s a gravy train for politicians b/c there’s a lot of money on both sides of this issue. Both sides will have to pay dearly for the outcome they want.

      • Mrs. Wheeler says:

        Maybe, but if ISPs become utilities, I don’t have any utilities that don’t use an access/usage model for billing. Pay for the connection, pay for what you use. Of course the floor works out well for the provider, and those with sky high ceilings pay more. I’ve heard that Comcast is testing metered billing in some places already – not certain if that is true or not.

  • Anonymous says:

    Could not have been announced at a better time, right in the middle of NANOG. Let’s be clear, the providers and content guys alike are shitting more bricks than they let on. Uninformed, lousy politicians stepping in to ruin what was not very broken to begin with. It seems to work so well on everything else….

  • Anonymous says:

    Two things seem to be easy to agree on:
    1-when two sides have this much at stake, the politicians stand to reap a small fortune from lobbyists
    2-everybody loves to use the “its a utility” view right up until metered billing is mentioned

    Good points from both – thanks CCL and Mrs. Wheeler

    • Anonymous says:

      Exactly. “It should be a utility that’s flat rated and unlimited.” Again, catering to ignoramus consumers and their traffic, and not thinking of the ramifications to Enterprise business that is also being done over the same edge and core. What happens to IaaS and SaaS?

      Good point was brought up at NANOG: we are having much of this fight because the consumer side has so little choice if/when a cableco (for the most part) wants to jack up rates or do fast lanes. But we are attacking the edge and the core with regulations, which is the wrong piece of the puzzle to solve. The piece that is causing a lack of choice and options is the last mile.

  • Tom Collins says:

    Rob, thanks for bringing up the smaller carriers and fiber builders/operators. We definitely have skin in the game. I’d love to see more comments from the TR community and appreciate the feedback thus far by CCL and Mrs. Wheeler.

    Two quick comments… this has to mean that Comcast/TW Cable deal will not be approved. How could Uncle Sam allow the deal to complete while forwarding this Title II plan? Secondly, I really wish the government would let the techies decide. Successors to Ted Stevens making decisions on how to operate a network… what could possibly go wrong?

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