Broadband Discussions at FCC Intensify, But Compromise May Prove Difficult
Negotiations for a possible compromise on broadband reclassification and net neutrality, hosted by FCC Chief of Staff Eddie Lazarus, intensified this week, with industry officials at the commission for two additional days of discussions and a call scheduled for late Thursday. What is being described as a “marathon” Saturday meeting is also on tap, set to start at 8 a.m. that day. Hill pressure on the commission to reach a compromise is also growing, with Rep. John Dingell, D-Mich., telling FCC Chairman Julius Genachowski he’s not pleased with responses to his May 27 letter posing questions about the agency’s work on broadband reclassification.
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"Unfortunately, the Commission could not respond to my questions in sufficient detail,” Dingell said in a response released Wednesday night to a letter from Genachowski. “This substantiates my fear that the Commission is proceeding along a precarious path that will lead to bad policy and result in protracted litigation. I have urged Chairman Genachowski to abandon this effort and work with the Congress to enact law that resolves this matter."
Industry reported on two meetings this week with Lazarus. On Tuesday, AT&T Senor Executive Vice President James Cicconi and NCTA President Kyle McSlarrow met with Lazarus. On Wednesday, a larger group, bringing in Verizon, Google, Skype and the Open Internet Coalition, met with Lazarus. An ex parte letter had yet to be filed by our deadline. Another meeting is scheduled for Saturday, industry officials said, and a 90-minute call for late Thursday. The House, which is in recess, will not hold one of its recurring meetings Friday to discuss possible changes to the Telecom Act.
Genachowski is feeling some pressure to reach an agreement with industry that would also satisfy a Democratic base that made net neutrality an issue during the 2008 presidential election, industry and commission officials said. Genachowski declined to characterize the tone of the meetings in an interview Thursday. “Staff continues to consult with all stakeholders in facilitating progress on this issue,” he said.
Wireless continues to be a main topic of discussion and the most difficult to work through (CD July 26 p1). One possibility would be an agreement that would allow customers to pay for an improved connection but not allow carriers or services like Netflix to pay for prioritized service. Prohibitions against blocking are in play. In other areas discussions are centering on paid prioritization of content on all application platforms. Another topic of discussion has been a consent decree of some kind, to which high-tech companies and carriers would agree.
"My impression is that they're completely far apart on wireless and that they're having trouble coming up with an enforcement mechanism,” said Media Access Project Senior Vice President Andrew Schwartzman, a net neutrality proponent. “I'm cautiously pessimistic about the likelihood of a deal.” Lazarus “clearly wants to try to do something, but it’s going to be very hard to do,” Schwartzman said.
"What we have heard is there is still substantial disagreement among these folks on principle, particularly with regard to wireless,” said Public Knowledge Legal Director Harold Feld. Finding an enforcement mechanism will prove elusive, he predicted. “I'm not sure this is going to move forward,” Feld said. “It is certainly increasingly clear that Eddie would like to see an agreement but it remains not at all clear that an agreement is going to do any good. If the whole point of this was to get an unenforceable promise by the major players that they would play nice with each other, you didn’t have to burden your reputation by pretending to do Tile II.”
Some executives involved in the talks have expressed optimism that common ground can be reached, including McSlarrow, a communications industry lobbyist said. An NCTA spokesman didn’t reply to a message seeking comment. Cicconi and Verizon Executive Vice President Tom Tauke, also part of the ongoing talks, seem to be digging in their heels on some issues, said industry officials monitoring the discussions. Google has been at the meetings with some reluctance. “It sounds like things are going backwards,” said an executive of a company that wants net neutrality rules. Some had hoped “the telcos would back off on some of their positions, but [they] seem to have hardened on some of the key issues,” the executive said.
"A compromise still appears to be an uphill battle, but with policymakers and stakeholders obviously working hard to find middle ground, you cannot count out the possibility of a deal being struck in defiance of the odds,” said Jeff Silva, analyst at Medley Global Advisors.
Concerns that net neutrality rules would apply to content delivery networks (CDN) are baseless because rule proponents don’t seek such an application, said Research Director Derek Turner of Free Press, which backs net neutrality. “We have absolutely no problem with the CDNs and these rules never contemplated that the CDNs would be banned,” he said. “It’s certainly not a net neutrality issue” and “no one opposes geographic prioritization.”