What You Need To Know To Understand The FCC National Broadband Report.

The FCC is required by Congress to do lots of reports. Of these, the one that gets the most attention is the annual Report on broadband deployment under Section 706 of the 1996 Telecommunications Act (47 C.F.R. 1302). Sure enough, with the latest report announced as up for a vote at the FCC’s January open meeting, we can see the usual suspects gathering to complain that the FCC has “rigged the game” or “moved the goal post” or whatever sports metaphor comes to mind to accuse the FCC of diddling the numbers for the express purpose of coming up with a negative finding, i.e. That “advanced telecommunications capability” (generally defined as wicked fast broadband) is not being deployed in a timely fashion to all Americans.

 

As usual, to really understand what the FCC is doing, and whether or not they are actually doing the job Congress directed, it helps to have some background on the now 20 year old story of “Section 706,” and what the heck this report is supposed to do, and why we are here. At a minimum, it helps to read the bloody statute before accusing the FCC of a put up job.

 

The short version of this is that, because between 1998 and 2008 the FCC left the definition of “broadband” untouched at 200 kbps, Congress directed the FCC in the Broadband Data Improvement Act of 2008 (BDIA) (signed by President Bush, btw) to actually do some work, raise the numbers to reflect changing needs, and take into account international comparisons so as to keep us competitive with the world and stuff. This is why, contrary to what some folks seem to think, it is much more relevant that the EU has set a goal of 100% subscription of 30 mbps down or better by 2020 than what is the minimum speed to get Netflix.

 

Also, the idea that the FCC needs a negative finding to regulate broadband flies in the face of reality. Under the Verizon v. FCC decision finding that Section 706 is an independent source of FCC authority to regulate broadband, the FCC gets to regulate under Section 706(a) (general duty to encourage broadband deployment) without making a negative finding under Section 706(b) (requirement to do annual report on whether broadband is being deployed to all Americans in a “reasonable and timely manner”).

 

So why does the FCC do this report every year if they already have regulatory authority over broadband. Because Congress told them to do a real report every year. This is what I mean about reading the actual statute first before making ridiculous claims about FCC motivation. Happily, for those who don’t have several years of law school and are ld enough to have actually lived through this professionally, you have this delightful blog to give you the Thug Notes version.

 

 

More below . . . .

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My Amazingly Short (For Me) Quickie Reaction To Oral Argument

So, I suppose you’re wondering, how did oral argument went.  Since we have less than an hour before Shabbos, I will give you all my short version. You can download the recording from the D.C. Circuit here: Part I (wireline), Part II (wireless, First Amendment, Forbearance).

 

As always, the usual disclaimers apply. It is always perilous to try to guess from oral argument how things are going to go. Judges may ask a lot of questions to explore options, or they may let one judge pursue a line of inquiry while hanging back.  And there’s lots of issues that never get discussed that are part of the appeal and will get decided based on the written record. Or the judges may be leaning one way, but when they start drafting and hasj things out further they change their mind.

 

Taking all that into account, here are my impressions based on sitting in the front row listening and watching the judges and attending to all the nuances, as filtered to my obvious bias in wanting to see the FCC affirmed.

 

More below . . . .

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Net Neutrality: Tomorrow Is The Judgement Day (Well, Oral Argument).

So here we are. One day more until oral argument on the FCC’s February 2015 decision to reclassify broadband as a Title II telecom service and impose real net neutrality rules. We definitely heard the people sing — 4 million of them sang the songs of very angry broadband subscribers to get us where we are today. But will we see a new beginning? Or will it be every cable company that will be king? Will Judges Tatel and Srinivasen and Senior Judge Williams nip net neutrality in the bud? Or will we finally meet again in freedom in the valley of the Lord?

 

You can read my blog post on the Public Knowledge blog for a summary of the last 15 years of classification/declasification fights, rulemakings, and other high drama. You can read my colleague Kate Forscey’s excellent discussion of the legal issues in this blog post here. This blog post is for all the geeky Tales of the Sausage Factory type factoids you need to know to really enjoy this upcoming round of legal fun and games and impress your friends with your mastery of such details. Thing like, so how do you get in to the court to watch? What opinions have the judges on the panel written that give us a clue? What fun little things to watch for during argument to try to read the tea leaves? I answer these and other fun questions below . . .

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Turns Out Our Mobile Broadband Is As Mediocre As Our Wireline Broadband.

It is time once again for folks to file comments in the Federal Communications Commission (FCC) annual Notice of Inquiry on the Deployment of Advanced Telecommunications Services, aka the Section 706 Report (after Section 706 of the 1996 Act) aka the data (which along with FCC Form 477) which forms the basis for the FCC’s annual “State of the Broadband” report. You can read this year’s notice here. This year’s notice is particularly good, as (befitting a more mature broadband industry than we had when we started running this in 1998), so of course all those who would prefer we set the bar low enough to give ourselves a gold star for showing up hate it. See, for example, Pai dissent here, comments of NCTA here, USTA here.

 

Which makes these two reports on the state of broadband particularly timely. According to Akami, we rank 20th in global broadband speeds. Before the broadband industry and their cheerleaders counter that we have the best mobile broadband/most extensive LTE deployment in the world, I point to this new report from OpenSignal that finds we rank 54th in global mobile network speed.

 

20th and 54th. I’m so proud. USA! USA!

 

I unpack this a little bit below . . . .

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Phone Industry To The Poor: “No Privacy For You!”

Back in June, the FCC released a major Order on the Lifeline program. Lifeline, for those not familiar with it by that name, is the federal program started in the Reagan era to make sure poor people could have basic phone service by providing them with a federal subsidy. Congress enshrined Lifeline (along with subsidy programs for rural areas) in 1996 as Section 254 of the Communications Act. While most of the item dealt with a proposal to expand Lifeline to broadband, a portion of the Order dealt with the traditional FCC Lifeline program.

As a result, the wireless industry trade association, CTIA, has asked the FCC to declare that poor people applying for Lifeline have no enforceable privacy protections when they provide things like their social security number, home address, full name, date of birth, and anything else an identity thief would need to make your life miserable. Meanwhile, US Telecom Association, the trade association for landline carriers, has actually sued the FCC for the right to behave utterly irresponsibly with any information poor people turn over about themselves — including the right to sell that information to 3rd parties.

 

Not that the wireless carriers would ever want to do anything like that, of course! As CTIA, USTA, and all their members constantly assure us, protecting customer privacy is a number one priority. Unless, of course, they’re running some secret experiments on tracking without notifying customers that accidentally expose customer information to third parties. Oh, and it might take longer than promised to actually let you opt out once you discover it. And in our lawsuit against the FCC’s Net Neutrality rules, they explicitly cite the inability to use customer information for marketing, the inability to sell this information to third parties, and the requirement to protect this information generally as one of the biggest burdens of classifying broadband as Title II. But other than that, there is no reason to think that CTIA’s members or USTA’s members would fail to respect and protect your privacy.

 

So how did the Lifeline Reform Order which most people assumed was all about expanding Lifeline to broadband became the vehicle for the phone industry to tell poor people they have no privacy protections when they apply for a federal aid program? I explain below . . .

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New D.C. Circuit Decision Knocks Fairly Large Hole In Anti-Net Neutrality Case.

Every now and then, the D.C. Circuit throws you an interesting little curve ball. This opinion issued last week would appear to knock a serious hole in the argument made by the cable and telcos against the FCC’s reclassification of broadband as a Title II telecom service.

 

The case, Home Care Association of America v. Weil (HCAA) addresses the legal question that takes up about a quarter of the main brief for petitioners: does the Brand X decision that the Telecom Act was “ambiguous” mean that the FCC gets deference under the Chevron Doctrine when it reexamines the question in 2015 and comes out the other way? Or can Petitioners argue that the statute is not ambiguous and explicitly precludes the interpretation the FCC now gives it? Under HCAA, the D.C. Circuit appears to find that once the Supreme Court decides a statute is ambiguous, that settles the question. If the statute was ambiguous for an interpretation in one direction, it is still ambiguous — and thus subject to Chevron deference — when the agency reverses course. Nor does the agency have a higher burden when it reverses course then it did when it first made the decision.

 

Good lawyers can always distinguish cases, of course — as can a conservative panel of the D.C. Cir. that wants to find a particular result. Furthermore, Petitioners have lots of other arguments to make that are not impacted by the HCAA decision. Nevertheless, it seems clear this case is good news for the FCC (and those of us who support the FCC), and Petitioners will no doubt need to spend a good portion of their reply brief explaining why HCAA doesn’t dictate the result here.

 

I explain in more detail below . . . .

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The First Net Neutrality Complaint Under The 2015 Rules Is Likely To Lose, And That’s A Good Thing.

As reported by Brian Fung at Washpo and others, a company called Commercial Network Services (CNS) has filed the first network neutrality complaint under the FCC’s new rules — which went into effect June 12 after the D.C. Circuit denied a stay request. You can read the complaint here. While I probably should not prejudge things, I expect the FCC to deny the complaint for the excellent reason that — accepting all the facts alleged as true — Time Warner Cable did absolutely nothing wrong.

 

I elaborate on what CNS gets wrong, why this differs from other high-profile disputes like Cogent and Level 3, and why such an illustration is good for the FCC’s rules as a whole, below . . .

 

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Net Neutrality Litigation: Round 1 Goes To the FCC.

Good news! The D.C. Circuit denied the request by the carriers suing the Federal Communications Commission (FCC) to prevent the FCC’s net neutrality rules and reclassification of broadband as a Title II telecom service. As of today, the Net Neutrality rules are in effect, and broadband access is once again a Title II telecommunications service — pending the final outcome of the lawsuit challenging the the FCC’s actions.

 

Reactions from net neutrality opponents have ranged from defiance to “no biggie” with a side of trying to claim a partial win for getting expedited briefing (I’ll explain below why this is a tad disingenuous). On Twitter, I did see a few of my opposite numbers wailing and gnashing their teeth, at the prospect that their beloved Broadband Equestria ruled by the wise Queen Comcast Celestia and Princess Verizon Twilight Sparkle is now going to be converted into a Hellscape overrun with Tyrannosaurus Tariffs that will devour helpless ISPs like tourists dumb enough to go to Jurassic World. Needless to say, supporters of net neutrality and Title II, like my employer Public Knowledge, have been somewhat more upbeat.

 

So what does all this mean for the litigation and the ongoing machinations in Congress around net neutrality? Short version — the court was not impressed with the arguments of the carriers that the FCC was so whacky crazy power-usurping unlawful that this case is the slam-dunk reversal the carriers and their cheerleaders keep saying it is. Mind you, that doesn’t mean the FCC will win. But it does mean that opponents of net neutrality and Title II might want to ratchet back the TOTAL CONFIDENCE OF VICTORY they have exuded until now just a wee bit. It also provides a psychological lift to the pro-net neutrality side that the FCC can win this even in the D.C. Circuit.

 

On the political side, Republicans had hoped that a stay would push Democrats to the bargaining table to avoid the litigation risk. Because the FCC’s odds improve with the denial of the stay, this may have the opposite effect, with Democrats more likely to wait for a court decision rather than try to strike a deal. This could either prompt Republicans to sweeten their offer, or double down on efforts for total repeal.

 

I provide the longer version below . . .

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Comcast/TWC/Charter — OK, NOW It’s Time To Pop The Champagne, And Thank Staff For Doing Their Job.

Yesterday I wrote that it was too soon to start celebrating and that we could expect Comcast to muster its vast army of lobbyists and effectively bottomless treasury to keep trying to push its merger through. I even gently chided Tim Wu for declaring the Comcast deal “dead.”

 

Well, I am incredibly happy to eat crow on this one. To my surprise, Comcast decided to pack it in rather than push like Hell for the next few weeks. But on reflection, Comcast’s decision makes sense for several reasons. I will break these out in a separate post. But first, before the wonky stuff, I want to pause and reflect on the last 16 months.

 

At the start of 2014, things looked grim. First, the D.C. Circuit threw out the old Net Neutrality rules. Then Comcast announced it would buy Time Warner Cable. People believed that in corrupt Washington, no one could stop the well-connected Comcast whose CEO plays golf with Obama from getting what it wanted, and assumed the “former cable lobbyist” Tom “dingo” Wheeler would simply hand the Internet over to his cable buddies.

 

In February 2015, the FCC reclassified broadband as Title II. Today, Comcast will announce that it is abandoning its effort to acquire Time Warner Cable in response to resistance at every level of government. And Tom Wheeler appears on track to put a real pro-consumer, pro-competition agenda in place.

 

I know it is typical at this point for me to remind everyone that we have proven once again that Citizen’s movements are citizen driven!   And it is indeed the case that without the massive and coordinated efforts by the grassroots at every level — like my friend Hannah Jane Sassaman and the Media Mobilizing Project taking it to Comcast HQ in Phildelphia (and who continues to organize efforts to reform Comcast’s practices via the city’s refranchising process), the folks at TURN and Greenlining who opposed Comcast at the California Public Utility Commission, and everyone who wrote to the FCC or called their member of congress — we could not have won these battles and the battles yet to come.

 

But we also need to actually appreciate the hardworking folks at the Department of Justice and the Federal Communications Commission who actually did their jobs and looked at the facts and recommended the right thing — despite all the pressure some of the most powerful corporations in America could bring to bear. The staff who took the time to pick apart all the carefully prepared expert statements and the professionally prepared and packaged “evidence” submitted by Comcast and sift through the millions of pages of documents submitted into the record, patiently building the legal and factual case against the merger that could survive not only judicial scrutiny, but the anticipated counter-attack by the army of coin-operated think tanks and shills.

 

Yeah, those guys. The despised “bureaucrats” and the FCC and DoJ bosses who had their backs and gave them room to do the right thing. Them. They did their jobs. They worked hard at it. They came to the right result.

 

Next time you want to score cheap points or enjoy the pleasures of easy cynicism, remember that. I’m not saying they’re perfect, or all good and pure and noble. Heck, I spend a good deal of my time trying to swim upstream and push staff in directions they may not want to go, and am not afraid to call out the bad calls, the politically based decisions, and the stuff that’s just plain wrong — often in rather snarky and unflattering terms. I’ve got a job to do as well, and that means making sure that those in charge don’t get a free pass when they side with special interest against the public interest.

 

But I am saying that there are a lot of people at the FCC — and in federal service generally — trying to do their job and get it right. Sometimes they even succeed, if the process lets them. When that happens, it would not kill you to say “thanks.”

 

Stay tuned . . . .

 

Comcast/TWC/Charter — Looking Good But Too Early To Pop The Champagne.

We’ve seen a bunch of news reports recently that the Department of Justice Anti-Trust Division (DOJ) staff and the staff at the Federal Communications Commission (FCC) appear ready to recommend that the proposed Comcast acquisition of Time Warner Cable does not pass statutory muster and their respective agencies should take appropriate action. You can review what that means in these two lengthier blog posts I wrote about how DoJ merger review works and how FCC merger review works.

 

Critically, however, as this CNN piece notes, we only have rumors and speculation. Obviously, as an opponent of the deal, I would not be surprised of staff at DoJ and the FCC, after reviewing the record, concluded that this deal caused serious anti-competitive harm and offered no offsetting benefits. But, as someone who has played regulatory poker with Comcast for 15 years now, I can say from personal experience that no one counts Comcast out until the game is well and truly over. Even if the rumors are true (and I have no way of knowing), these would only be staff recommendations. Comcast still has plenty of opportunities to plead, cajole and bully DoJ and FCC into submission.

 

Which is why it’s important to remember my advice from last February with regard to Title II reclassification: DON’T BE THE SEA HAWKS! We need to continue to keep the pressure on to get this over the goal line. You can start at my employer, Public Knowledge, which has this action page up over here.

 

At the same time, while not getting ahead of ourselves, it is important to understand how this deal went from “sure thing, no antitrust issues, these aren’t the drioids you’re looking for, move along, move along” to “on the ropes and sinking fast.” While I’m not going to fall into the trap of thinking we have already won, we have a lot of good reasons to believe that this fight is winnable. I elaborate a bit below . . . .

 

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