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Regulation

FCC & Google's Extreme Internet Makeover -- A Preview

At its Thursday meeting, expect the FCC to adopt Google's PR script to try and better sell the FCC's upcoming "Extreme Makeover" of Internet regulation.

  • The centerpiece of the FCC and Google's "extreme Internet makeover" plan is the creation of an entirely new, Google-inspired, regulatory classification called "Broadband Internet Connectivity Service" or BICS.
  • The BICS extreme makeover is designed to:
    • Enable the promotion of integrated "edge" products and services like Google Voice, Google TV, and Google's Chrome/Android operating systems; and
    • Empower the FCC to implement its National Broadband Plan on its own without additional Congressional authorization or action. 

Predictably, the FCC's Google-oriented-BICS-scheme has three fatal flaws -- making it a disaster waiting to happen. 

Americans want online privacy -- per new Zogby poll

American consumers clearly want online privacy, per a national poll conducted over the weekend by Zogby International, that was commissioned by Precursor LLC. 

  • In a nutshell, over 80% of Americans are concerned about the security and privacy of their personal information on the Internet; about 90% of Americans consider some common industry behaviors to be unfair business practices; and about 80% of Americans support a variety of stronger consumer protections of their privacy online.

More specifically, this Zogby poll asked eight timely questions that are highly pertinent to:

FCC retransmission update can protect consumers

The FCC has a ready-made opportunity to protect consumers by approving the simple rule updates recommended in the pending Retransmission Petition.

  • The FCC has the authority and the obligation to protect consumers by updating the FCC's Section 325 rules with a functional dispute resolution framework and a mandatory interim carriage agreement during negotiations.
  • Without these common sense consumer protections, consumers unnecessarily will continue to be unintended collateral damage in someone else's commercial fight.

The petition is laser-focused on updates to the FCC's rules to protect consumers from being used as pawns or hostages in commercial disputes not of their making or interest.

It is highly instructive that opponents of the retransmission petition focus most all their argumentation on protecting the status quo, that unnecessarily puts consumers directly in harms way, and that does not directly address why consumers should not be protected as recommended in the petition.

FCC Exceptionalism and Supremacy?

Often stepping back to gain perspective and to try and see the forest for the trees, can be highly instructive. However, if one steps back to see the big picture of how this FCC is attempting unilaterally to change U.S. Internet policy, the view is surreal.

  • Increasingly, this FCC is becoming an island.
    • It is insisting on self-asserting its exceptionalism and its supremacy over the Internet; and
    • It is ignoring an overwhelming amount of important and contrary input, advice and evidence from Congress, the Courts, DOJ, FTC, past FCCs, industry, and the public. 
  • Simply, this FCC increasingly appears to view itself as exceptional and as the supreme authority on and over the Internet, unconstrained by Congress, the courts, law, economics, markets, or the public.
Consider the avalanche of input and evidence that the FCC is completely ignoring as it proceeded yesterday with its announced plans to have a preliminary vote June 17th to enable the FCC to officially declare broadband a common carrier regulated service for the first time and to mandate its currently illegal proposed open Internet regulations.

1.  Ignoring Congress: A majority of members of Congress now oppose the FCC plan in writing (285 of 535) per the National Journal

NetCompetition.org Press Release on FCC wireless report which advances FCC de-competition policy

FOR IMMEDIATE RELEASE       

May 20, 2010                                                                                         

Contact:  Scott Cleland

703-217-2407

 

Scott Cleland, Chairman NetCompetition.org, on FCC Wireless Report:

  • “FCC advances its new de-competition policy in its new wireless assessment”

FCC's Dysfunctional Retransmission Rules Harm Consumers

The FCC's retransmission rules now perversely cause consumers to suffer unnecessary collateral damage in retransmission negotiations -- the exact opposite outcome the FCC wants -- in large part because the FCC's retransmission rules have not kept pace with dramatic competitive and technology changes over the last two decades.  

  • The FCC should, and easily can, protect consumers from becoming unnecessary collateral damage in retransmission negotiations by simply updating their nearly twenty-year-old FCC regulations with petitioned common sense modifications that ensure consumers never find themselves unnecessarily in the "bulls-eye" of the FCC's out-dated retransmission rules again.

To better understand how rules that possibly made sense in 1992, could produce predictably perverse and dysfunctional consumer outcomes today, think of the retransmission rules, like a regulatory "gun" that was originally and permanently pointed directly at a 1992 cable monopoly and no one else. 

Why FCC faces such skepticism on Title II assurances

There are many valid reasons why industry is highly skeptical of the FCC's many rhetorical assurances that nothing bad will happen from the FCC's planned regulation of broadband for the first time as a Title II common carrier service.

First, in response to the Comcast court decision, the FCC is hastily gambling away the benefits of broadband's proven "solid business foundation," in its longshot bet to win back an unproven "solid legal foundation" for the FCC.  

  • The FCC apparently is ignoring that restoring the FCC's legal "status quo" comes at the expense of the broadband industry's long-time status quo of being unregulated and the consumer's status quo of enjoying the benefits of a market driven Internet "unfettered by Federal and State regulation."  
  • Despite employing all the soothing words the FCC thinks the industry wants to hear, industry is much more interested in actions than words, as actions are what affect their businesses -- not words. 
    • Simply, industry is increasingly watching what the FCC does rather than what it says.
  • The fact is industry is not reassured that nothing bad will happen to them, because the FCC has announced it plans to apply the most onerous foundational common carrier regulations on the broadband industry for the first time without any defensible justification or legal authority to do so. 

Second, the assertion that there has never been an instance of FCC "un-forbearance," is no assurance, because the FCC has never before reversed an entire sector's regulatory status before either. 

FCC's Achilles Heel on Broadband Third Way Approach

The Achilles heel of the FCC's announced "Third Way Legal Approach" for regulating the Internet is that it is simply not credible.

Incredible claim #1: The third way "does not involve regulating the Internet."

FCC Understating Systemic Risks of "Third Way" -- Why It's a Disaster Waiting to Happen

The FCC is vastly understating the systemic risk involved in the FCC's radical "third way" regulatory surgery to the Internet, the communications sector and the economy.

  • The FCC's proposed "third way" is an elaborate public relations facade that disguises huge problems and fatal conceptual/practical flaws that will become painfully obvious over time.
  • The FCC's proposal is long on politics and soothing rhetoric, but short on real world practicality or legitimacy; it predictably will ultimately collapse under its own weight, complexity and hubris -- unfortunately leaving exceptional carnage in its wake.
  • Simply, this proposal is too inherently contradictory and mind-numbingly complex, and too big not to fail.
  • This analysis will explain why it is a disaster waiting to happen; it's not a matter of if, but when the "third way" will collapse on itself.

I.  Why this "third way" is a disaster waiting to happen:

The best way to understand what is going on here is to think of the Internet as a brain and the FCC's "third way" proposal as brain surgery to fundamentally rewire how the Internet brain operates at its most basic level.

Title II is no "solid legal foundation" for broadband

A common tactic of net neutrality proponents is to assert their desired outcome repeatedly in hopes that it becomes conventional wisdom. Now the Open Internet Coalition asserts that Title II for broadband would be a "solid legal foundation" for the FCC, while FreePress asserts broadband Title II would provide the FCC a "sounder legal basis" for its broadband agenda. 

  • Fortunately, under the rule-of-law, legal authority simply cannot be asserted or deemed "solid" or "sound" by political acclamation, it ultimately must be proven and affirmed as solid and sound by a full court process (in the absence of Congress passing a new law.)

Surely the FCC understands that the courts ultimately will decide if any legal analysis defending Title II broadband is solid/sound, especially given:

  • The recent D.C. Circuit Comcast decision (which the FCC is not challenging);
  • Broadband has never been classified as Title II; and 
  • The FCC is hardly a disinterested observer in trying to determine the boundaries of its own authority.   

In the Open Internet reply comments, there are many substantive legal analyses strongly indicating that any FCC decision deeming broadband to be Title II would not be on a solid/sound legal foundation. For just three of the most notable analyses see:

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Q&A One Pager Debunking Net Neutrality Myths