2015 July

The FCC: An Internet Referee Without Rules

Posted by | Broadband Internet, Regulatory State | No Comments

Tom Wheeler, Chairman of the Federal Communications Commission (FCC), is fond of saying the agency’s role is to “be a referee on the field to keep the Internet fast, fair and open,” not to “call the plays.” But his version of “fair” has more in common with a FIFA referee fixing a World Cup exhibition match than unbiased officiating. The FCC’s officiating appears to be greatly influenced by who is playing rather than the action on the field — a biased approach that harms the fans (consumers) the referee should be protecting.

The recent order approving the AT&T—DIRECTV merger is yet another example of discriminatory play calling at the FCC. Based on the FCC’s detailed economic analysis, the merger was a straight shot goal that should have been approved on time and without onerous conditions. But when AT&T’s competitors called for a time-out, the FCC pulled the plug on the game clock and took 408 days to review the merger before deciding to impose 17 pages of unnecessary penalties.

When compared to other recent mergers, the FCC’s officiating conduct during the AT&T—DIRECTV proceeding highlights how the agency wants to “make [itself] part of the game unnecessarily” rather than “make sure the game is played fairly.” Read More

FCC’s First Net Neutrality Fine Heralds The Big Internet Chill

Posted by | Broadband Internet, Net Neutrality Series 2.0 | No Comments

I doubt ISPs are laughing at the irony in the FCC’s decision to propose a record-setting fine for an alleged lack of transparency without the agency providing any guidance regarding the reasonableness of the underlying practice.

When it adopted net neutrality rules imposing “Title II” restrictions on the Internet, the Federal Communications Commission (FCC) claimed it was adopting a “modernized” approach that wouldn’t burden Internet service providers (ISPs) with “antiquated rate regulation” — a claim FCC Commissioner Ajit Pai charged was “flat-out false.” The first net neutrality fine proposed by the FCC has since revealed Commissioner Pai was telling it true. The FCC’s net neutrality rules impose the same old rate regulation on ISPs with the “modern” addition of unfair procedures and discriminatory enforcement.

The fundamental duties that Title II imposes on ISPs are exactly the same as those it has imposed on telephone companies since 1934: to provide communications serviceupon reasonable request subject to reasonable charges and practices that are not unreasonably discriminatory. Both ISPs and telephone companies are also required to publicly disclose their charges and practices.

The biggest change the FCC made to Title II involves its process for monitoring and enforcing these antiquated obligations. The 1934 version of Title II requires the FCC to determine the reasonableness of telephone services before they are offered to the public and the “21st century” version requires ISPs to offer their services without knowing whether the FCC will fine them afterward. This seemingly minor procedural change has the effect of keeping the harmful aspects of antiquated rate regulations in place while discarding their only potential benefit. Read More

T-Mobile Spectrum Song Is A Broken Record At The FCC

Posted by | Wireless | No Comments

This week the Federal Communications Commission (FCC) is voting on procedures for an upcoming auction of spectrum (or airwaves) that will expand wireless broadband services to Apple and Android devices. Like bidders on eBay, it’s natural that spectrum bidders want to win big while paying as little as possible. It’s not natural for eBay or any other auctioneer to help some bidders win big by discriminating against other bidders, yet that’s what the FCC decided to do last year when it ruled that Verizon and AT&T can’t bid against T-Mobile or other bidders for nearly half of the spectrum expected at auction.

The FCC’s decision to shelter T-Mobile from competition for such a large portion of the spectrum for sale counts as a big win for T-Mobile before the auction even starts. But a bidding preference for nearly half of the spectrum still isn’t big enough to satisfy T-Mobile, who’s demanding an even bigger handout. The company claims it can’t buy the spectrum it needs unless the FCC gives it an additional unfair bidding advantage for more than half of the spectrum. Read More