Net Neutrality Talks Move Forward With Tacit FCC Support
The restart of discussions on a net neutrality agreement seems to have at least the tacit approval of FCC Chairman Julius Genachowski, industry officials said. Commission officials have made it clear that the agency probably won’t hold another round of discussion, after negotiations brokered by Chief of Staff Eddie Lazarus collapsed two weeks ago. By keeping discussions going, Genachowski will at least be able to show Congress that the commission isn’t moving rashly to reclassify broadband transmission as a Title II service, executives said. They said the talks don’t give him an escape hatch for the conundrum he faces in which public-interest groups are unlikely to join the talks and so he may still need to decide whether to promulgate rules or wait for Congress to do so.
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The Information Technology Industry Council (ITIC), which hasn’t been a major player on telecom issues, acknowledged late Wednesday that talks were taking place at its headquarters (CD Aug 19 p6). An FCC spokeswoman welcomed the ongoing discussions and a public forum in Minneapolis set for late Thursday.
"The new talks are in line with our sense that FCC Chairman Genachowski remains interested in finding a net neutrality compromise that could head off the need for reclassification, at least from his perspective,” Stifel Nicolaus said in a research note. “Even if the Bells/cable can reach an agreement with select industry parties, particularly big companies, we believe Chairman Genachowski will want to make sure that it protects consumers and Internet start-ups, and that it has some degree of broader backing -- how much broader remains a key open question. But we do believe the latest talks further suggest the FCC is unlikely to push ahead with reclassification in September, which would be politically risky ahead of the mid-term elections."
"I think they really are trying to get something,” said an attorney with clients on both sides on net neutrality. “This is a topic on which there really ought to be middle ground. There ought to be some way people can work out a solution. If you leave it to the FCC to make up the answer it may be sub-optimal for everyone.” Deciding on rules for wireless will be more difficult than for wireline, the lawyer said. “There’s a much stronger need for management” in wireless. “Whether that means the solution is a null set or a small set I think is an open question.”
"My sense is Chairman Genachowski remains eager to have dialogue continue that might lead to a broadband framework/net neutrality compromise that could become a template for targeted legislation later this year or next, thereby negating an FCC move to Title II reclassification,” said analyst Jeff Silva of Medley Global Advisors. “Though the FCC is not a party to new industry talks, the agency probably welcomes any efforts that further its strategic policy goals in the near term. At the same time, it cannot be assumed that more talks may necessarily bring warring parties closer to identifying a middle ground. Sometimes, extensive negotiations tend to simply reaffirm essential differences that cannot be readily bridged."
"Short of coming up with a comprehensive proposal that has buy-in from all the so-called public interest groups, it probably leaves Genachowski in the same place where he is now,” said a telecom attorney. Without that buy-in, the talks “don’t decisively solve the question,” the lawyer said. Officials of public interest groups, who haven’t been involved in the renewed talks, questioned whether they will produce a workable compromise.
"Whether the chairman has tried to encourage the industry guys to carry on or not … it is absurd to me in the wake of the public reaction to the Verizon-Google deal that anyone can think that this group can come up with something acceptable,” said Public Knowledge Legal Director Harold Feld. “The public was less than thrilled about this when it was Google and Verizon. Does anyone think they'll be more pleased when you include AT&T and Microsoft?” The continuation of meetings may help Genachowski politically, Feld said. “Genachowski will be able to say to the Democrats who said let Congress go first, ‘You guys did stakeholder meetings. We did stakeholder meetings. We sent the industry guys back to their headquarters to see what they learned from Verizon-Google.'”
"These talks help solidify the pro-net neutrality side because it looks like a few big companies looking out for themselves,” said Andrew Schwartzman, senior vice president of the Media Access Project. “Even in an election season, Democrats don’t want to be on the side of corporate giants."
"Industry deal-making is no substitute for responsible policymaking,” said Free Press Policy Counsel Aparna Sridhar. “This latest effort by a few large companies to dictate the rules behind closed doors will not protect Internet users. Industry titans will propose rules that serve only their own interests. The uproar over the Verizon-Google deal leaves no room for doubt that the public rejects these secretive negotiations -- and so should the FCC."
Whether or not the talks bear fruit, Genachowski remains boxed in on net neutrality, commission and industry officials said: Industry participants are unlikely to be joined at the negotiating table by public interest groups seeking rules, so a deal wouldn’t set the stage for commission action. No decision has been made on when the FCC will vote on reclassification, commission officials said. The earliest would be at the Sept. 23 meeting.
"The struggle between the lead regulatory agency here and Congress is very interesting,” said Chairman Charles Benton of the Benton Foundation, a net neutrality proponent. Analyst Kevin Taglang of the foundation isn’t hopeful that a deal can be reached without the participation of the Open Internet Coalition, which was involved in the discussions that Lazarus led. “There may be some people who are pro-net neutrality, but you're taking the entire public interest community out of the equation” in the conversations, Taglang said. “You can’t have that debate just between companies."
"I am not sure whether the restarted talks have the chairman’s blessing, but he should be pleased with them in any event,” said Randolph May, president of the Free State Foundation. “They are a hopeful sign that interested parties are trying to see whether a compromise position can be forged to serve as a basis for legislation. In my view, the FCC ought to stop threatening near-term action and give the talks more breathing room."
Wednesday, 13 music groups, unions and royalty collectors asked Google for details on how the company’s net neutrality accord with Verizon (CD Aug 10 p1) would affect protection of copyrighted content. The groups want to ensure “that the distinction between lawful and unlawful activity has operational meaning,” said a letter to Google CEO Eric Schmidt. “Our ability to invest in and create the next generation of music is grounded on crafting Internet policies and procedures that respect intellectual property,” said royalty groups Broadcast Music Inc., SESAC and Sound Exchange; RIAA; unions American Federation of Musicians, American Federation of Television and Radio Artists; and others. “The current legal and regulatory regime is not working for America’s creators,” they said. “Our businesses are being undermined.”