Genachowski Proposal Would Leave Much of the Internet Unregulated, Carriers Say

AT&T Senior Vice President Robert Quinn questioned in a Tuesday blog post whether Genachowski’s proposed “third way” for regulating broadband (CD May 7 p1) would have prevented either the actions that the commission censured Comcast for in the BitTorrent case or Madison River’s blocking of VoIP ports, another high-profile FCC Internet case. Quinn compared Genachowski’s approach to Pickett’s Charge at Gettysburg, a bloody, futile attack.

"Under the Commission’s ’third way’ proposal, net neutrality rules will not apply to ISPs like EarthLink or for that matter any other ISPs, including AT&T or cable companies,” Quinn said. “Now, I am not suggesting that any ISP would think it wise to block where people want to go on the Internet, but the simple fact is that, if the net neutrality rules don’t apply to ISPs, then what is the FCC actually accomplishing?"

Madison River was accused by the FCC of “blocking ports commonly used by VoIP providers to send calls to the customer’s computer/VoIP interface device,” Quinn noted. “The actual port blocking was accomplished by Madison River’s ISP affiliate. … So, if the proposed net neutrality rules do not apply to ISPs, they could not be used to stop an ISP doing exactly what Madison River did to prevent its customers from receiving or sending VoIP communications."

The FCC’s powers wouldn’t be any more clear-cut in the Comcast decision, Quinn said. “When you look at the documents submitted by Comcast as well as the FCC Order it is clear that Comcast was sending a Transmission Control Protocol (TCP) reset packet not from a network router, but rather from a server in the ISP network to the end user’s computer telling that computer to stop sending data because there is network congestion,” he said. “In techno-geek words, that is at the computer-to-computer layer of the Internet stack commonly known as Layer 4 (the transport layer, which includes TCP). So, once again, if an ISP incorporated that same equipment in its part of the network, it could do exactly what Comcast was doing and the ’third way’ net neutrality rules would not apply.”

"There are lots of issues with the order” proposed by Genachowski, agreed Jonathan Banks, senior vice president for law and policy at USTelecom. “When you read what they write, what they're saying is they're going to regulate the broadband transport pipe, not the ISP service, which is really the routers and the servers, that have the intelligence. It seems to be aiming for the old days when the FCC regulated the dial-up transport but not ISPs like AOL, which operated walled-garden Internet services."

The questions that carriers raise show why the FCC shouldn’t change how broadband is regulated, said Randolph May, president of the Free State Foundation. “Questions about whether or not Genachowski’s approach to regulate transport as common carriage would, in the eyes of some, reach far enough just illustrate the highly problematic nature of the proposal,” he said. “In today’s integrated broadband systems, the line between transport and everything else is not that clear, and it is not that stable. Genachowski’s approach would lead to ongoing litigation as to what services fall on the regulated side. And there likely would be regulatory creep as pressure is applied to expand what falls within transport.”

But Public Knowledge Legal Director Harold Feld said that the criticisms are “premature,” especially since the FCC has yet to publish a proposed reclassification order. “Genachowski was writing for the general public,” Feld said. Even FCC General Counsel “Austin Schlick provided only the vague overview of the overall legal theory. It’s hard to take such criticism seriously when it’s nine-tenths speculation with a twist of bile, although it certainly seems effective at confusing the issue.” Feld said once the FCC determines that a service should be classified under Title II “it has the authority to phrase its rules as duties on carriers to ensure just and reasonable practices and no undue discrimination."

The FCC has authority over much of the middle mile through special-access regulation, Feld added. “The bottom line is that this is yet another flavor of a favorite tactic of trying to make this seem more complicated than it is,” he said. “Since Congress first delegated authority to the FCC over telecom in 1934, carriers have tried to play all manner of clever games with definitions and technology. The FCC, when it wants to, has generally managed to see through this kind of thing with the blessings of reviewing courts."

Sascha Meinrath, director of the New America Foundation’s Open Technology Initiative, said there will “always be tensions” around the issues raised in the Genachowski proposal. “Digital enclosures can happen at any layer of the Internet -- from the physical infrastructure to the applications and services that run over these wireline and wireless networks,” Meinrath said. “The FCC made the right decision to ensure that the freedom to communicate is not subjugated to the business models of telecommunications companies; however, we are still a long way from ensuring our fundamental freedom to communicate. In future years, we will be facing a series of battles that pit the rights of network owners against the rights of their customers.”

Meanwhile, Progress & Freedom Foundation Adjunct Fellow James Dunstan said in a paper Genachowski’s reclassification proposal could destroy the Internet as we know it. “While the Chairman asks us to trust him that he'll handle broadband with a light regulatory touch … one look at how VoIP was treated must lead us to conclude that all manner of regulatory hell potentially faces each carrier providing an onramp to the Internet, if the FCC goes its ‘Third Way,'” he said. “But the part of this proposed regulatory course that’s most disturbing is the way in which this Commission is likely to both grant itself regulatory powers Congress never intended and in one fell swoop impose the largest single new tax in its history. This is a side of the story that has somehow flown under the radar.” Dunstan said one the most significant parts of the National Broadband Plan is its proposal to overhaul the Universal Service Fund and transform the $9 billion program subsidizing basic telephone service “into a program to subsidize deploying broadband to rural areas and subsidize subscriber fees in high cost areas and for those with low incomes.” He added, “Of course, this is the same USF with some of the largest percentages of waste, fraud, and abuse of any government program. The GAO estimates that in 2008 alone, some $1.3 billion was improperly paid out, with some 23.3 percent of payments made under the High Cost program being made in error. This is also the same fund where the ‘contribution factor’ (a fancy word for tax, since all contributing carriers pass that amount right along to you and me in our monthly bills) has increased from around 5 percent in 1999 to a current … 15.3 percent.”