In requesting the FCC and DOJ condition the Comcast-NBCU merger with Title II telephone regulation of Comcast's Internet backbone, Level 3 seeks to achieve through the back door of the FCC what they could not achieve through the front door.
- In a speech December 1st, FCC Chairman Genachowski said he would not pursue Title II regulation of the Internet, the exact approach Level 3 is urging the FCC force on the Comcast-NBCU merger.
Level 3 has escalated this beyond a peering dispute to a de facto Title II price regulation precedent that Level 3 could then use to insist that all the industry should follow out of "fairness."
Level 3's extortionate tactics are destructive on many levels.
First, this bald attempt to set de facto industry-wide policy, via merger conditions, abuses due process, the Administrative Procedures Act, and sound policy making.
Second, this proposed condition has nothing to do with "preserving a free and open Internet," and everything to do with changing the Internetfrom a "competitive free-market... unfettered by Federal and State regulation" to a Title II price-regulated Internet backbone where the FCC arbitrates Internet disputes like the FCC "fixed" CLEC disputes in the 1990's.
Third, the Title II policy undergirding Level 3's proposed conditions would be a predictable unmitigated disaster, because it would take a long-well-functioning Internet backbone peering system, which has scaled with the Internet because it is based on voluntary market-based negotiations, and break the system by making it just like the FCC's 1990's system of favoritism and subsidies of CLECs, which created such an uneconomic, regulatory-dependent industry that most all CLECs and fiber backbone companies went bankrupt.
- Those who don't remember the lessons of history are doomed to repeat them.
Fourth, Level 3 is a financial-basket-case and failing business that effectively is claiming to be entitled to subsidies from competitors.
- This proposed condition is a shameless attempt to finagle an effective off-budget FCC bailout for a mismanaged company that can't compete.
In sum, Level 3 is seeking corporate welfare while it masquerades as a antitrust victim.
- At core, Level 3 is asking the DOJ and FCC to change the Internet, and abandon the well-functioning unregulated Internet peering system for a proven-disastrous regulated Internet interconnection system.
- That CLEC approach would obviously devolve into the FCC micromanaging most every market interaction like they actually did when the regulated access to bathrooms in the 1990's.
