The FCC voted 4-0 to allow some rate-of-return rural telcos to choose incentive regulation for business data services, and to open rulemakings on the treatment of both RoR and price-cap carrier legacy transport. Commissioners gave eligible RoR carriers a second chance to opt into incentive regulation, instead of the single opportunity in a draft order with two Further NPRMs. Commissioner Jessica Rosenworcel concurred, supporting the outcome despite "analytical shortcomings." RLEC groups cheered.

Incompas and Sprint asked a court to deny an FCC motion to stay the mandate of the court's partial reversal of a commission order largely deregulating price-cap incumbent telco business data services (see 1810100054). Intervenors USTelecom, AT&T and CenturyLink supported the motion. The commission "fails to articulate any standard for the stay that it seeks," said Incompas/Sprint opposition Monday to the 8th U.S. Circuit Court of Appeals in Citizens Telecommunications v. FCC, No. 17-2296. "It likewise fails to identify any timeframe for the stay requested, stating only that the Commission 'proposes to file status updates every 90 days to apprise the Court of developments in the agency’s rulemaking.'" The FCC said an indefinite stay is justified because "the agency is diligently working to address this Court's remand, and there is every reason to believe [it will] proceed efficiently to adopt a new TDM transport rule," the opposition noted. But that isn't the Supreme Court's standard, which requires "extraordinary circumstances" or, when a cert petition is pending, "good cause," Incompas and Sprint said. The ILECs, noting the new rules took effect in August 2017, said a "stay is necessary to prevent pointless and costly industry disruption as the FCC moves forward expeditiously ... to re-adopt on remand the same transport rule in effect." If the court issues the mandate "vacating the 2017 transport rule before the remand proceedings are complete," carriers must "file thousands of pages of new federal tariffs," the intervenors said. "Carriers would also have to puzzle through how to apply the resulting regime, a bizarre regulatory hybrid with conflicting geographic units and jumbled service baskets, in which transport is subject to legacy pre-2017 regulations while interrelated, non-transport data services are subject to the new, lighter-touch regime that this Court has upheld."

Sprint, Twitter and three tech and telecom industry groups reported increasing Q3 lobbying expenditures over the same period in 2017. Cox and others said spending dropped. The filing deadline was Monday night. Outside firms reported substantial income from lobbying on behalf of other telecom and tech companies and industry groups.

Rural telco groups urged FCC Chairman Ajit Pai and aides to bolster USF support mechanisms for high-cost rural areas. NTCA, ITTA, USTelecom and WTA officials asked the commission to address USF "sufficiency and predictability" concerns by year-end, including by adopting their proposals to increase funding for rate-of-return carriers (see 1810010045), said a filing posted Thursday in docket 10-90 on meeting Pai aides. "NTCA noted the overwhelming support from stakeholders ... and among policymakers generally for longer-term funding to promote universal service in rural areas," in a meeting CEO Shirley Bloomfield and Senior Vice President Mike Romano had with Pai and an aide. "Adopt and implement a straightforward set of reforms ... for each of the already-existing USF mechanisms," NTCA recommended. It sought action on an "outdated rate floor policy."

A key problem with U.S. privacy is few stakeholders fully understand the issues, said an expert who has discussed it with members of Congress at their request. "They don't know how it works," University of Pennsylvania communication professor Joseph Turow told C-SPAN. "It's very hard to regulate industries when the industries are the ones who are controlling the information, because the regulators, certainly in the Congress, have very little understanding of how this stuff works." He mentioned companies including or devices from Amazon, AT&T, Comcast, Facebook, Google, Verizon and brick-and-mortar retailers that may use people's information in ways Turow contends many don't understand. He worried about China's social rating-surveillance system slowly being adopted in the U.S. Those who can help privacy-caused ills are "all of the above" -- Congress, the FCC and FTC, states, tech companies and consumers -- Turow said on a Communicators episode to have been televised this weekend. "We have to make our regulators, our legislators understand this." The professor recommends educating students about such issues. Research, including what he's involved with, shows many people don't back trading some personal information for accessing tech services. It's not so much they "buy into" this but are "resigned," he said: "We are being trained to give away our data" and feel "there's nothing else we can do." He agreed privacy policies can be oxymoronic. "Most Americans have no clue really what the phrase 'privacy policy' means," surveys show, he said. They're "written by lawyers, to be read by lawyers, to be understood principally by lawyers," the academic said: Companies can do "almost anything they want to do if they write it in the right way." USTelecom members have long "embraced strong consumer privacy policies," a spokesman responded. "Privacy is a shared responsibility and the burdens and obligations cannot rest only with ISPs. Consumers expect and demand strong privacy protections," so Congress should "develop a national privacy framework" for the entire "internet ecosystem,” he added. The Association of National Advertisers, which earlier this year acquired the Data & Marketing Association, declined to comment. NCTA declined to comment, and the Internet Association didn't comment.

Net neutrality litigation is about whether the FCC may ensure "light touch" regulation of broadband, not about internet openness, said USTelecom, CTIA, NCTA, the American Cable Association and Wireless ISP Association in a supporting intervenor brief Thursday citing their commitment to an open internet. The Supreme Court's 2005 "Brand X makes clear that the Commission may do so, and the ["internet freedom"] Order demonstrates that the Commission’s decision to follow that path was reasonable," the ISP groups argued to the U.S. Court of Appeals for the D.C. Circuit in Mozilla v. FCC, No. 18-1051: The FCC "amply" justified returning to a "flexible" Communications Act Title I regime (see 1810120022). "Petitioners establish no distinction between the Order’s classification of broadband as an information service and the 2002 Commission decision reaching the same conclusion, which Brand X upheld," said the ISPs. "The Commission lawfully preempted state and local regulation of broadband, which is a jurisdictionally interstate service." The order rightly repealed the "unconstitutional" 2015 Title II net neutrality order that "violated" individuals' speech rights, argued intervenor Leonid Goldstein, of Austin. "So long as an agency acts within its realm of authority, its decision to alter a pol-icy decision -- or even reverse course -- is not subject to a special, enhanced standard of review," argued amici Texas, Arkansas and Nebraska. The Title I order "is eminently justified given the highly competitive nature of the broadband market and the importance of removing unnecessary barriers," argued the National Association of Manufacturers, U.S. Chamber of Commerce, Business Roundtable and Telecommunications Industry Association. Petitioner network arguments that broadband internet access "can only be rationally classified" as a Title II service are wrong, argued network architect Richard Bennett and others. The court should resolve the legal questions "definitively to put an end to the regulatory 'ping pong,'" argued TechFreedom. Countries "with hard bright line rules do not exhibit increased innovation at the edge," argued scholar Roslyn Layton: "Increased edge innovation is seen in countries with soft net neutrality rules (e.g., Sweden, Norway, Denmark, South Korea)" or "no rules at all." Other amicus filers were: Technology Policy Institute, Tech Knowledge, Georgetown Center for Business and Public Policy, Multicultural Media, Telecom and Internet Council, International Center for Law and Economics, Phoenix Center, Information Technology and Innovation Foundation, Washington Legal Foundation and Southeastern Legal Foundation and Christopher Yoo.

A potential blue wave in state legislative and gubernatorial elections (see 1810110031) could strengthen efforts to counter the FCC December order rescinding some net neutrality rules, said a state lawmaker and observers. But there’s no guarantee bills will pass even in Democratic-controlled states, and lawsuits against states could give lawmakers pause, some said. Flipping the state Senate is key to passing net neutrality in New York, said state Sen. Brad Hoylman (D), whose 2018 bill failed to pass. Adding Democrats may make less difference in other states that failed to pass bills last year, some said.

The FCC is thought likely to move forward on rules that bar use of money in any USF program to buy equipment or services from companies that “pose a national security threat” to U.S. communications networks or the communications supply chain. Commissioners approved an NPRM 5-0 in April (see 1804170038). CTIA and other carrier groups' comments raised concerns (see 1807050028), but industry officials said the FY 2019 National Defense Authorization Act may require FCC action.

Cable and telecom industry groups sued Vermont over its net neutrality law and executive order that restricted government contracts to companies that follow open-internet principles. Gov. Phil Scott (R) has vowed to fight the suit. It was the third state to enact a net neutrality law when in May the state put into statute Scott’s February executive order (see 1805240043). USTelecom, CTIA, NCTA, the American Cable Association and New England Cable and Telecommunications Association complained Thursday in the U.S. District Court in Burlington. Restricting state contracts are pre-empted under the U.S. Constitution’s Supremacy Clause by the FCC December order and the Communications Act’s ban on imposing common carrier obligations on mobile and information-service providers, the groups said. The Vermont actions "regulate outside the borders of the State of Vermont and burden interstate commerce in violation of the" Constitution's dormant Commerce Clause, they said. “Internet traffic flows freely between states, making it difficult or impossible for a provider to distinguish traffic moving within Vermont from traffic that crosses state borders.” States can’t “use their spending and procurement authority to bypass federal laws they do not like," but Congress should pass a national law, said a statement by the national associations. NECTA supports "federal legislation that would enshrine these principles permanently across the entire U.S.," said CEO Paul Cianelli. While Scott understands "consistent regulation is important to ensuring a vibrant and thriving telecom and cable sector, our obligation as a state government is to our citizens, who I strongly believe have a right to free and open access to information on the internet,” the governor said. “In the absence of a national standard to protect that right, states must act.” The national groups earlier sued California for a comprehensive net neutrality bill (see 1810030036). Other states with net neutrality laws (Oregon, Washington state) or executive orders (Montana, New York, New Jersey, Hawaii and Rhode Island) have yet to be sued. Washington has comprehensive rules, while the others restricted procurement.

U.S. broadband capital expenditures rose 2 percent in 2017 to $76.3 billion, said USTelecom's annual report Thursday. The group credited the FCC's recent "internet freedom" and tech transition orders and congressional "tax reform" with helping to reverse a two-year capex decline that "began" when the FCC "moved to impose common carrier" regulation on broadband providers in 2015. The report confirms FCC "policies to promote broadband deployment are working," said FCC Chairman Ajit Pai. "Investment is pouring back into this space," said Commissioner Brendan Carr at a USTelecom event.