How AT&T's Own Legal Fights Show It's Lying In Claiming Broadband Reclassification Would Create Collateral Damage

from the dispensing-with-the-fud dept

Forbearance is crucial to net neutrality because it helps to limit FCC regulation. If the FCC reclassifies broadband as a telecommunications service, which it must if it is going to do its part to protect an open and neutral Internet, then many folks fear it will be obligated to impose on the Internet a whole set of rules that were developed for telephone service. That would be a disaster, because most of those rules just don’t make sense when we’re talking about Internet infrastructure. For example, there are rules about obscene phone calls, rate schedules, telephone operator services, carrier reporting requirements, etc., that could lead to a host of new problems if misapplied to our Internet.



Forbearance is how we help ensure the FCC does what is necessary – and no more. It isn’t an iron-clad limit; the FCC must choose to do it, and it can change course if need be. But having made the choice to forbear, the FCC can’t change its mind willy-nilly, or in secret. Instead, it has to invite public comment, and respond to public concerns. If Internet users stay vigilant, forbearance would give us some lasting confidence that the FCC couldn’t use "net neutrality" as an excuse to interfere with free expression and innovation.

The implications of that rationale for every Internet company are enormous. It would capture movies purchased from Google Play or iTunes, videos downloaded from YouTube, and OTT subscription services like Netflix and HBO Go. It could also implicate advertising served over the Internet — if those companies are providing, at least in part, a Title II transmission service, contribution to USF is mandatory for the revenue associated with the Title II service. That means allocating revenues between the telecommunications service and the information service, filings justifying those allocations, Form 499s…. you get the drift. Innovators would be paralyzed before they even get off the ground.



And this only scratches the surface of potential harm. Hundreds of other questions would face Internet companies under Title II, scenarios discussed in a recent article by former Clinton Administration official Robert E. Litan of Brookings. Turning up or shutting down services would require FCC permission. State PUCs would also have a fulsome regulatory role over the Internet. Pricing regulation, which is inherent throughout Title II, could intrude into all types of Internet services. Wireless location data would likely be considered CPNI, which means it could no longer be shared with Internet companies for mapping, advertising and other purposes. And once data like IP addresses, URL destinations, browser settings, and location are considered part of a Title II service, FCC privacy rules would surely follow.

According to EarthLink, the statute permits the FCC to grant forbearance only after a "painstaking analysis of market conditions" in "particular geographic markets and for specific telecommunications services." We disagree. On its face, the statute imposes no particular mode of market analysis or level of geographic rigor.

The FCC reached a hotly debated and eminently debatable, but ultimately reasonable, conclusion that eliminating the extra layer of dominant-carrier pricing regulation on the ILECs' special access lines— while leaving in place basic Title II common-carrier regulation—will better promote competition and the public interest. We find no legal basis to upset the FCC's policy judgment.

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Earlier this year, we shared our own comments to the FCC on the issue of net neutrality and keeping the internet open. The key, as we noted, is that if this issue is left to the FCC (as appears to be the case), it should use Title II reclassificationto narrowly tailor rules for broadband access providers that maintain an open internet. As with so many things related to net neutrality, this gets a bit down in the weeds, and is a bit wonkish, but it's important to understand. Even the EFF -- a longtime critic of Title II reclassification -- changed its position in light of other factors, but made sure to emphasize forbearance as a key part of this. Forbearance, in short, is effectively a statement from the FCC that it's using certain rules, but has committed to not enforcing parts of what it's allowed to do under those rules. As the EFF explains:In fact, under the Telecommunications Act of 1996, the FCC is required to use forbearance when enforcing rules that would be against the public interest. And, it seems rather obvious that obsolete parts of Title II that might limit the free and open internet would clearly be against the public interest, and thus rather easy to forbear.But, to hear the big broadband guys talk about it, forbearance is a messy process that is almost impossible to do right, with all sorts of complicated facets that will create problems. AT&T sent a letter to the FCC earlier this year decrying forbearance and repeatedly suggesting that it was a difficult process, likely to create uncertainty and lawsuits. AT&T further posted a blog post talking about all of the parade of horribles that other parts of Title II would dump on the rest of the internet:AT&T is mostly playing a FUD game. And... AT&T knows this because it took part in a lawsuit that helped define how forbearance can be used here. The case, AT&T Inc. v. FCC , involved AT&T trying to get the FCC to "forbear" from applying Title II regulations to IP services in the first place. The FCC originally refused, claiming that it was entirely speculative that the FCC would even use Title II on those services, but a court overruled the FCC and basically said the forbearance process is easy to do, even forobligations.Other lawsuits against the FCC (all involving... AT&T) further made it clear that the process is rather straightforward and easy for the FCC. For example, they show that, contrary to the claims of AT&T and others, the idea that forbearance would require a costly market-by-market analysis is not true, as was noted in Earthlink v. FCC . In that case, AT&T (oh look!) got the FCC to forbear certain unbundling requirements. Earthlink went to court to say that the FCC failed to do a thorough enough market-by-market analysis. The court said there was no such requirement:Moving on. In another, rather important, case, Ad Hoc Telecommunications Users Committee v. FCC , related to an effort by AT&T (hello!) and others getting the FCC to forbear from certain(uh huh) common carrier regulations on "special access" broadband lines, AT&T got its wish for forbearance (no problem!). Some competitive broadband providers challenged this, saying that the FCC couldn't just forbear parts of Title II (i.e., picking and choosing which pieces to apply and which it would officially ignore). The court totally rejected this argument, saying the FCC could very much pick and choose in order to apply rules very narrowly:In other words, contrary to AT&T's repeated insistence that forbearance is a mess, difficult to implement, and that Title II reclassification would have all sorts of collateral damage from all those other (obsolete) parts of Title II, the FCC has wide latitude to use forbearance totailor Title II to just protect an open internet from broadband providers acting like gatekeepers. And a big part of the reason why we know this is because of three lawsuits involving AT&T and the FCC, which showed that the FCC not only can, but actually must, use forbearance to very narrowly tailor which parts of Title II will apply.So, for all the talk about how Title II will require all sorts of onerous regulations on other parts of the internet, and how the forbearance process won't work... well, we have three separate lawsuits, all involving AT&T, that certainly seem to indicate otherwise. You'd think that AT&T would be aware of those decisions, wouldn't you?

Filed Under: common carrier, fcc, forbearance, reclassification, title ii

Companies: at&t