PublishedSeptember 11, 2013

Open Internet Rule Is About Broadband Internet Access in the US

The FCC Open Internet rule is about consumer and end user access to everything Americans want on the Internet.   It is not about big edge providers’ access to any particular end users.  Verizon has successfully twisted this case upside down as if edge providers like Google and Facebook and Netflix were the only customers that matter.   While online platforms both large and small are enterprise broadband customers of Verizon and other telecoms, consumer and business end users purchase their own Internet access connections from Verizon or AT&T or their cable provider.  And it is these broadband Internet access customers that the FCC open Internet rule is designed to protect in the public, not private, interest.

It is a very old fashioned notion for Verizon to suggest that somehow edge providers should pay for terminating access to the end users that have called up their services online.   Even in the voice telephony world, terminating access charges have all but been phased out completely.  They are a vestige of monopoly.   By demanding freedom to seek new rents from popular online platforms, is Verizon conceding its monopoly with respect to its Internet access customers?  Now that would be news.

And it would mean online start-ups and entrepreneurs would gradually become walled off from end users in a relative slow lane for websites that Internet access providers do not consider revenue or profit centers.

Former FCC Chairman Genachowski worked his team hard on crafting an alternative to the relatively recent FCC classification of broadband Internet access as NOT a telecommunications service.   Instead of leaving broadband Internet access as a totally unregulated information service, thereby ignoring the primary importance of physical network connections, the Genachowski FCC crafted a “third way” approach in which Internet access would be classified as telecommunications, but without the rate regulation and other baggage that applied to all voice, data and video transmission services up until 10 years ago or so.

Unfortunately, when push came to shove in late 2010, the FCC became intimidated by our two most dominant phone companies and abandoned its thoughtful and forward thinking approach to open Internet access in America.   Instead of embracing the “third way,” it adopted an open Internet rule based on a far weaker choice of statutory authority in the Telecommunications Act.   No wonder the federal Justices who heard Verizon’s challenge to the rule this week are so confused and frustrated.   The Telecom Act is technology neutral and clear statutory authority is there in Title II governing the telecommunications services that support Internet access, but the agency did not use it!  They maintained the fiction that broadband network access connections are themselves (unregulated) information services, more akin to AOL than a physical phone or fax line.  That is not sustainable without rendering the FCC irrelevant to Internet access.

Nondiscrimination rules are not only permissible under the Telecom Act for internet access connections, but were in force and effect at the birth of the Internet and boosted its widespread popularity in the 1990s and a few years into the 21st century.   It was only the FCC’s questionable new classification of Internet access connections as unregulated information that changed that legal scenario and caused Chairman Powell to adopt legally unenforceable nondiscrimination “principles” in a 2005 policy statement instead.   Now that broadband Internet access is as critical to most Americans as phone lines once were, that interim classification is untenable and may need to be revisited and reversed by our new FCC.

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