Paid Prioritization Ban by far Biggest Flaw in FCC Net Neutrality Rules, Berninger Says
Net neutrality provisions prohibiting paid prioritization are the biggest threat to the future of a vibrant Internet, said Internet entrepreneur Daniel Berninger, who made one of the three challenges to the FCC February net neutrality order in cooperation with Alamo Broadband. “The main issue for me as an entrepreneur is I need paid prioritization to do my HD voice initiatives,” Berninger told us. “The problem here is the FCC is essentially banning all future uses of this notion of paid prioritization even though it has no notion what those uses might be.” For the IP transition to be a success, you need paid prioritization “hands down,” he said. It’s impossible for the Internet to replace traditional networks without paid prioritization, he said.
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“The FCC in banning paid prioritization is thinking, ‘We don’t like people favoring one website over another and that gives us anxiety,’” Berninger said. “Yeah, maybe, but that business model never took off and nobody actually cares about that and you have banned paid prioritization altogether. Any payment between myself as an entrepreneur and Verizon or AT&T is banned.”
The net neutrality rules also contain “bright line” prohibitions against blocking and throttling (see 1502260043), but the ban on paid prioritization is the most troubling, Berninger said. “Nobody actually cares about the blocking, nobody does blocking, so that doesn’t even come up,” he said. “The ban on throttling is really problematic in the sense of how do you define it,” he said. “The issue there is what is the difference between managing your network and throttling and it just is a mess.” But he said no one makes money by throttling.
Berninger said the briefs filed last week (see 1507310042) don't cover the same ground in attacking the case. The main industry pleading was underwritten by CTIA, NCTA, USTelecom and other big industry players, including AT&T. The court imposed “pretty harsh” restrictions on word length, he said. “We in our briefing didn’t want to cover anything that was covered in the USTelecom briefing and they, in general, don’t agree with things we’re saying, so they didn’t say what we said.”
Berninger said his pleading makes two other major arguments, in addition to the argument against the ban on paid prioritization, which he believes the FCC “must overcome” for the order to survive review. He also argues that the open-ended Internet conduct standard violates the First Amendment and that Telecom Act Section 706 doesn't offer an affirmative delegation of authority to the FCC to impose the rules. “The basic point is that there’s nothing in the whole history of the creation of the Telecom Act that gives Section 706 separate authority,” he said. “We do feel that on all three of our complaints the FCC is vulnerable.”
Critics of the order told us Wednesday that Berninger is on the right track in his complaint. “To provide the type of transmission service needed for HD voice, telemedicine, and immersive video conferencing, Internet service providers will need to differentiate these applications from the common Web browsing and video streaming applications that dominate the Internet today,” said Richard Bennett, network engineer and visiting fellow at the American Enterprise Institute. “To enable third parties to compete for conferencing services, ISPs will need to sell them access to higher priority transmissions. Differentiation is actually required by the LTE voice service, VoLTE. The FCC’s order makes conforming to 3GPP [3rd Generation Partnership Project] standards effectively illegal. I don’t think the FCC meant to do this, but the agency’s poor understanding of the Internet led it to make a grievous policy error in pursuit of a lofty but unwise goal.”
Net neutrality rules “favor only innovation at the upper layers of the Internet, taking a cynically narrow view of what types of services a network of networks could enable in the future,” said Doug Brake, telecom policy analyst at the Information Technology and Innovation Foundation. “It’s odd that net neutrality advocates celebrate a flat ban on paid prioritization when it effectively locks entrepreneurs out of providing carrier-grade services.” The HD voice solution being developed by Berninger “is a great example, but there are certainly others that would rely on prioritization to function, or function as well as carrier’s own services,” Brake said.
Free State Foundation President Randolph May said Berninger is right to focus on paid prioritization. "The problem with the way the FCC handled the issue is that it adopted an absolute ban,” May said. “Aside from stifling the development of new services that consumers might value, it sets a bad precedent too. In today's dynamic, fast-changing Internet environment, any putative prohibition on particular practices should be tied to findings relating to market competition. In other words, absent findings of market failure, the commission should let ISPs respond to consumer choice.”
In a news release last week, Free Press slammed the various industry briefs, calling them “the same flimsy legal arguments broadband providers have been putting forth for more than a decade.”