The National Hispanic Media Coalition filed suit against the FCC's Restoring Network Neutrality order Friday (Feb. 23), one of several legal challenges expected to be filed.

The suit was filed in the U.S. Court of Appeals for the District of Columbia, the court with principal jurisdiction over challenges to government agency rules.

The order's publication in the Federal Register Thursday (Feb. 22) triggered the window for filing legal challenges to the Dec. 14 decision to eliminate the rules against blocking, throttling and paid prioritization, as well as a general conduct standard that could get at other ISP activity.

NHMC says it is suing the FCC to protect the rights of Latinos and other marginalized communities to speak and be heard online."

NHMC argues the order--actually a declaratory ruling, report and order, and order--is arbitrary, capricious and an abuse of the FCC's discretion.

Related: FCC, FTC Will Team Up to Monitor Open Internet

In the order portion, the FCC denied NHMC's motion that informal FCC complaints NHMC had obtained through a FOIA request be included in the record and put out for comment before a decision, calling it a "pretext for delay."

“Throughout the proceeding NHMC uncovered 50,000 of the FCC’s own net neutrality consumer complaints -- clear evidence that the 2015 Open Internet Order provided adequate consumer protections," said NHMC VP and general counsel Carmen Scurato. "Nonetheless, the FCC charged ahead without considering this key evidence as part of its rulemaking proceeding, a striking violation of the Administrative Procedure Act. NHMC will continue to raise this fatal error in process and will fight in court to reinstate Title II Net Neutrality.”

Free-market group Consumer Action for a Strong Economy (CASE) said that, according to its analysis of the FCC's open internet docket, a majority (65%) favor repealing the Title II-based Open Internet order, as FCC chairman Ajit Pai has proposed to do.

But it also noted that a vast majority (75%) of those comments are from "letter campaigns" coming from both sides of the issue.

In addition, nearly 6% of the comments have been submitted by self-identified international filers.

The group said it looked at the 4,990,000 filings as of June 20, and said it would do similar assessments in the future.

Of those, it said, 3,237,916 support repealing the order, while 35% (1,752,084) oppose repeal.

It said that assessment was based on analysis of "clear language" one way or the other -- including the language encouraged by HBO's John Oliver -- mostly on the form letters that make up the 75% of comments, though it said the percentage might actually be more since it was looking at varieties and permutations of the same language, and there could be more.

CASE identified 19 different form letters. There were at least 288,611 filings from foreign entities, with most against repeal, though it said that number, too, could be higher since those were only folks who had marked the box saying they were international.

One interesting side note: Well over a tenth of the filings (13.2% to be exact) were 140 characters or shorter -- the length of a tweet (suggesting either that commenters were used to conveying their thoughts in that amount of space or that perhaps the comments were doing double duty as FCC input and tweets).

CASE looked at overall sentiment, number of form submissions, comment length and international filers, and said it was "simply providing one way to look at the data."

House Democrats used a hearing on emergency alerts to raise red flags on the FCC Republican majority's plan to roll back classification of ISPs as Title II common carriers, which is scheduled to be voted May 18.

The House Communications Subcommittee was looking into the future of alerts, both online and on-air, but in opening statements, some Dems diverged from the topic at hand to an issue much on the minds of legislators.

Ranking member Mike Doyle (D-Pa.) said he was "concerned" about the timing of its hearing. "The FCC at its open meeting tomorrow will vote to advance an order that will roll back essential rules that protect and promote a free and open Internet. "

He pointed to over one million comments that have been filed and also pointed out that the committee had yet to hold a hearing on the proposal or an FCC oversight hearing. He said the committee should be discussing the  issue with the commission. "It is critical that they be held accountable by Congress," he said. "With the commission on the brink of considering an enormously unpopular and ill-advised proposal that could have far-reaching implications on the most innovative part of our economy, it seems irresponsible for Congress not to provide the much-needed oversight."

Rep. Frank Pallone (D-N.J.), ranking member of the parent Energy & Commerce Committee, also talked about the FCC's effort to "strip away" network neutrality protections. "FCC Chairman Pai has proposed a plan that would kill net neutrality, he said, and "would have a chilling influence on our democracy, chip away at our connections with each other and limit opportunities for the future. He urged the FCC to "listen to the American people and reconsider this misguided approach.

Reps. Doyle and Pallone have also asked the FCC to extend the comment period on the Title II rollback notice of proposed rulemaking, a call Doyle renewed at the hearing.

Doyle also called on the committee to hold a hearing on the Sinclair/Tribune deal, something he called for in a letter to the FCC earlier this week.

Rep. Anna Eshoo (D-Calif.) seconded the need for an FCC oversight hearing and Sinclair/Tribune hearing. She said the FCC was about to begin the effort to unravel net neutrality and called on Communications Subcommittee Chair Marsha Blackburn to hold an oversight hearing on the proposed merger.

NCTA: The Internet & Television Association took out a full page ad in the Washington Post today (May 17) to commit to an open Internet.

That came as the FCC prepares to vote May 18 on new chairman Ajit Pai's controversial proposal to reverse the Title II common carrier designation of ISPs and rethink the 2015 Open Internet order rules against blocking, throttling and paid prioritization.

In the ad, the signatories, comprising 21 ISPs member of NCTA and the American Cable Association, said by open Internet they meant they "do not block, throttle or otherwise impair your online activity," and said they stood by that commitment.

"As providers of broadband internet service in many communities across America, we've always been committed to an open internet that gives you the freedom to be in charge of your online experience. And that will not change," the ad pledged.

One suggestion for enforcing such pledges after reclassification would be for the Federal Trade Commission to enforce such a voluntary ISP pledge of openness.

Signing on to the ad were Altice, Armstrong, Boycom, Buckeye, Cable ONE, Charter Communications, Comcast, Cox, Eagle, GCI, MCTV, Mediacom, MetroCast, Midco, RCN Grande, Service Electric CAblevision, Shentel, Sjoberg's TDS, Vast Broadband, Vyve Broadband.

FCC Chairman Ajit Pai's meeting with some top Hill leaders of both parties has been rescheduled for May 3 at 1:30 p.m., according to a source familiar with the meeting.

He had been scheduled to brief a bipartisan group of House Energy & Commerce Committee members last Friday on his plans for reversing Title II, but work on the appropriations bill intervened and the legislators had to postpone it.

Some Democrats wanted a briefing before last week's vote on the Open Internet order Notice of Proposed Rulemaking (NPRM) on reversing the classification of ISPs as common carriers subject to mandatory access rules, but Pai could not accommodate the meeting, according to sources, in part because he had another briefing.

Democrats are vowing to fight the reclassification as a threat to Internet openness while Republicans are praising the effort as rolling back unnecessary regs.

Pai has tentatively scheduled a vote at the May 18 public meeting on the NPRM, which has been christened "Restoring Internet Freedom."

Reps. Suzan DelBene (D-Wash.) and Erik Paulsen (R-Minn.) have launched the Digital Trade Caucus to help small businesses reach big digital markets worldwide.

Among the aims of the new caucus is to promote "a free and open Internet" and comes days after FCC Chairman Ajit Pai announced his plans for reclassifying ISPs as information services providers (no longer under Title II mandatory access rules) and rethinking the FCC's Open Internet order.

But the caucus' focus is on trade, new markets and new customers for U.S. goods.

It's other goals are:

"Promote free cross-border data flows; Eliminate data localization requirements; Ensure trading partners allow open online and cloud platforms by not requiring them to filter speech; Eliminate requirements that businesses transfer technology, source code or encryption keys; And address customs and trade facilitation barriers for e-commerce."

The FCC's open Internet docket is starting to fill up with new comments, according to the FCC's online list of the most active proceedings.

It remains number three on the top 10 list with 402 comments in the past 30 days. That is still way below the 992 Lifeline subsidy program compliance filings in that last 30 days and the 1,246 filings on the high-cost fund, both of those related to the Universal Service Fund for broadband subsidies.

But it is the busiest docket since last week, when some Democratic members of Congress called on the public to begin flooding the FCC again with support for retaining the Title II-based Open Internet order.

There have been over 200 comments logged since last week (there were 178 as of Feb. 9)

By contrast, the two USF dockets only logged 68 new comments combined.

Sen. Ed Markey (D-Mass.) said that pushback on any potential rollback of Title II by new FCC chairman Ajit Pai would make the 4 million-plus comments filed on net neutrality previously look minuscule by comparison.

To establish a baseline for a promised flood of network neutrality comments to the FCC, as of Thursday (Feb. 9), the proceeding was listed as the third-active proceeding in terms of comments with 178 comments in the past 30 days. Universal Service Fund comments and Lifeline subsidy compliance forms are the busiest dockets with over a thousand in each.

At a press conference this week, Senate Democrats urged fans of the FCC's Title II-based Open Internet order to flood the FCC with new comments in support given that Republican Chairman Ajit Pai is a strong opponent of that reclassification.

The FCC received more than four million comments when the FCC was coming up with the last Open Internet order, a stat Dems often cite in arguing that the rules have broad support and should not be rolled back. Sen. Ed Markey (D-Mass.) said this week that given the new threat to the rules by Republicans, the new public outcry would make that look minuscule.

In a separate press conference this week, House Communications Subcommittee chairman Marsha Blackburn (R-Tenn.) said she would be looking to the FCC to make the first move on rolling back Title II, with Congress to follow up with new "principles and definitions and make sure we don't end up in the situation again where we had agency overreach and an agency that decides they want to go off script…"

The "interplay" of three pending FCC issues -- the "unlocked" set-top box proposal, privacy rules and "the ultimate resolution of  net neutrality -- is impeding cable industry development and improperly putting "a government imprimatur on the notion of competition," NCTA president/CEO Michael Powell said March 23 at the Free State Foundation’s Eighth Annual Telecom Policy Conference.

Expanding his criticism of several FCC initiatives, Powell cited the agency's "biases [towards] the development of tech companies" that "makes it possible for tech companies to invade our traditional areas" but prohibits cable firms from moving in  their direction. 

He singled out the recent privacy proposal that would affect Internet Service Providers (including cable operators) in different ways than it would impact content or application suppliers.

"Privacy is not controversial; it is the hypocritical inconsistency that is controversial," Powell said.  "You cannot describe that data collection and monetization is the justification for this level of rules while ignoring the fact that [similar actions] take place on every other platform that consumers use."

Powell challenged the FCC to find a way to differentiate "between the value of privacy and personalization" without taking a heavy-handed approach.

He also slammed the set-top box proceeding, saying that it "perfectly encapsulates government intervention."

"You cannot find one soul who doesn't recognize that there is no market that is shifting more than video delivery," Powell emphasized.  He said cable has lost 50% of its market share to new entrants, referring to telco TV and over-the-top operators. "This market is on fire."  He called the FCC's STB plan a "rent transfer" decision and an "unrestrained violation" of its role.

"All costs will be borne by customers," Powell said. He pointed out that the proposal will take at least five years to implement, "by which time the market will have changed."  The commission should not "pick winners and losers," Powell said.

His criticisms came during a panel of association executives discussing "Hot-Topic Communications Issues," part of a day-long program that included FCC commissioners Michael O'Rielly and Mignon Clyburn plus Federal Trade Commission member Maureen Ohlhausen. FSF's intent was to explore "the FCC and the rule of law," although many of the speakers focused on perceived abuses of power.

Even FCC general counsel Jonathan Sallet, in a conversation with FSF president Randolph May that was centered on procedural processes at the commission, conceded that "more direct conversations between commissioners would be a very helpful step."  Sallet, who recommended changes to sunshine laws "so that commissioners can deliberate," acknowledged that the FCC could use more input on many topics it is reviewing.

"Sometimes we know issues are in flux and we need to know more," he said.

Right-leaning FSF's agenda began with politicized rhetoric when keynoter Rep. Marsha Blackburn (R-Tenn.)  lambasted the FCC and singled out chairman Tom Wheeler as "a bull in a china shop."  Blackburn, vice chair of the House Energy and Commerce Committee and a member of its Communications and Technology Subcommittee, characterized the FCC staff as having "failed to exercise regulatory humility," citing its recent effort to oversee privacy, which she said is the FTC's responsibility.

"The FCC does not have the necessary expertise to oversee privacy," she said.  "It is arguing for a solution that is one-sided and focused only on one part of the Internet ecosystem."  

Blackburn also plowed into the issues of unlocked set-top boxes and municipal broadband, citing that Memphis "is $27 million in the hole" from its flirtation with such plans, and "the list of failures goes on and on."

"It's the government's job is to create an environment that encourages competition, not to create a system where the government is the competition," she said. "If the state decides to create broadband networks, so be it, but "the FCC has no right" to butt in.

As for the open STB issue -- which she referred to under the old "All-Vid" name -- Blackburn said, "Nashville content creators are absolutely baffled by what the FCC is trying to do." She contended that the FCC plan would encourage theft and could create conflict between FCC policy and business contracts between content producers and carriers.

"It has created a tremendous amount of confusion," Blackburn said.

"The FCC's decision-making has frustrated content makers, the telecom industry and policy makers," she concluded, emphasizing that telecom "has thrived under light-touch regulation."

Diplomatic Commissioners

FSF's May sought to explore possibilities for less politicization and more "collegiality" among FCC commissioners during his "fireside chat" with O'Rielly and Clyburn, with a series of "can't we all just get along" questions.  Both officials initially tried to be cordial.

O'Rielly: "I get along with my colleagues very well. ... I try not to let one issue color my feelings about the next one."

Clyburn: "My compass is serving the public interest. We're not in a vacuum." 

And then they got into specifics, where political polarization quickly emerged.  They disagreed on the STB plan.

"Words have meaning," O'Rielly said about the chairman's perception that software is part of the STB revision. "When Congress wrote 'equipment,' it didn't mean 'software.'"  The direction toward applications and software has nothing to do with the statute and is "problematic," he added.

Clyburn insisted that "Congress envisioned a robust marketplace...whatever the interface is."  She said that the plan is focused on "whether this is a non-competitive marketplace."

Similarly, on the privacy issue, O'Rielly pointed out that "our expertise, the number of people at the FCC working on privacy is small, compared with expertise at the FTC."  Clyburn said she doesn't use the word "duplicate" but rather focuses on "context," considering the two agencies' efforts "complementary."

"We work together to insure that expectations are met," Clyburn said.

And again when discussing the Open Internet situation, she emphasized "flexibility and innovation," while O'Rielly insisted, "You can never have certainty when you have no structure." 

"That's what the chairman created under the 'net neutrality rule," O'Rielly said.

They also sparred over proposals for "lifeline" services.  O'Rielly said he prefers "a hard budget rather than a [percentage] cap," while Clyburn insisted that the plan "removed duplicates, put in discipline and [provided] a lot of accountability."

The panel of association executives, which included (in addition to NCTA's Powell) CTIA president/CEO Meredith Baker; U.S. Telecom Association president/CEO Walter McCormick; NARUC general counsel Brad Ramsay; and Nicol Turner-Lee, VP of the Multicultural, Media, Telecom and Internet Council, continued the blast of the FCC rulemakings and its process.

Regarding muni cable, Ramsey said, "The FCC is telling the state what to do." He predicted if the Sixth Circuit appeals court in Cincinnati, which is reviewing challenges by Tennessee and North Carolina to the FCC's muni cable ruling, sides with the FCC,  the case is likely to go to the Supreme Court and it will be reversed.

McCormick focused on FCC decisions that are "slowing investment in the industry. "

"We've seen that in every year since the recession, there were increase in broadband investment up until Title II," he said, referring to the FCC's 2014 ruling to regulate broadband.  McCormick said that annual investment growth for the industry dropped from 9% to almost nothing, contending that the privacy issue has further muddied the financial market's view of telecom. He criticized FCC policies as thwarting "the full development of the telecom industry."

The CTIA's Baker focused on 5G (fifth generation) wireless as a "life-changing technology," calling it the "high-speed spectrum frontier." She emphasized the Internet of Things opportunities.

Most of the panelists were also critical of President Obama's intervention in the net -neutrality decision rulemaking which led to the now-contested Title II decision.

"It sets a bad precedent," Powell said. "Future administrations will use it as a precedent.  We might as well have a Secretary of Communications."

At an afternoon session wrapping up the "rule of law" theme, AT&T senior VP Robert Quinn promoted the value of a revision of the Communications Act.

"We have to go back to the drawing board," he said. "The Act really doesn't contemplate the kinds of things we're doing differently with the Internet.  We compete with everyone."

FSF's May said that this year's event was the best-attended conference in its eight years.

WASHINGTON — Depending on who’s doing the talking, zero-rating plans are either potentially anti-competitive violations of the Federal Communications Commission’s new network-neutrality rules or an innovative business plan that could help drive broadband adoption and benefit low-income Web users.

But the key to the future of those toll-free or sponsored data plans, which are becoming increasingly attractive, is what the FCC decides they are after it completes an inquiry into the practice.

The FCC is still vetting the information it requested in December from major Internet-service providers — the mid-January deadline for data in the inquiry was pushed back by Winter Storm Jonas, which buried the nation’s capital.

The inquiry appeared to be a reaction to pressure from zero-rating plan critics after FCC chairman Tom Wheeler in November praised T-Mobile’s new “Binge On” offering, which allows the mobile phone provider’s subscribers to access video from certain providers without it counting against subscriber data caps, as just the type of innovation the FCC’s new Open Internet order would not discourage.

When Wheeler seemed to backtrack on that praise and said the agency wanted more information about Binge On, Comcast’s Stream TV service and AT&T’s sponsored data plans, AT&T responded, “We remain committed to innovation without permission, and hope the FCC is too.”

AN INQUIRY, NOT A FIAT

Wheeler insisted two weeks ago that the FCC’s inquiry was merely that, telling reporters he had not sat in on any of the meetings, nor had any of the members of his staff.

But the chairman controls the agency’s bureaus, Republican commissioner Michael O’Rielly countered. “We do all know that the bureaus are at his discretion because otherwise, I would get a lot more information,” O’Rielly said.

O’Rielly said he is still trying to find out more information about the inquiry, but said that he was troubled by the direction in which the FCC was heading. He said he was troubled by the “mother may I” approach of the agency’s having to bless — or reject — new business models. That was concerned him about the net-neutrality rules, he said.

The new Open Internet rules do not prevent zero-rating plans, but they do prevent paid prioritization and also give the FCC some wiggle room through a general-conduct standard with which it can essentially review any business practice it thinks might have the effect of favoring some content over others for anti-competitive purposes.

“Because the Internet is always growing and changing, there must be a known standard by which to determine whether new practices are appropriate or not,” Wheeler said back when he proposed the Title II-based rules.

At the Internet Education Foundation’s 12th annual State of the Net conference in Washington two weeks ago, people on both sides of the issue were trying to help the FCC decide.

Roslyn Layton, a visiting fellow at the American Enterprise Institute’s Center for Internet, Communications, and Technology Policy, made the case for why zero rating plans were not the threat to Internet openness that some have claimed.

She said that there is no good or service that is not subject to a differential price and said it was “strange” to her why Internet service would be singled out.

She said the one of the best things about the history of TV, radio and the Internet was that advertisers and sponsors were allowed to lower the cost to end users. That’s a key difference between media industries in the U.S. and Europe, she said, saying Europe’s license-fee model has meant fewer channels and less content.

The Internet also benefits from third-party subsidization, she said, pointing out that edge provider Google effectively zero-rates its search by displaying ads.

One criticism of the FCC’s approach to its new Internet rules is that they target ISPs while leaving edge-provider business practices alone. ISPs aren’t explicitly asking the FCC to regulate the edge, but point out that there are opportunities for edge providers to interrupt the virtuous circle that the FCC appears to gloss over in focusing on regulating ISPs. Wheeler has said edge providers are outside the scope of the rules.

On the other side is Stanford University law professor Barbara Van Schewick. The key to the issue is whether a zero rating plan has the effect of “picking winners and losers online,” she said. The bright-line net neutrality rules are about doing that with technology, via slowing or blocking traffic or by buying a technical advantage for a fee, aka paid prioritization.

Zero-rating is just a different form of favoring some content over others, she argued — via business plan, rather than technical limitations or advantages.

WATCHING FOR ‘COMPETITIVE ADVANTAGE’

Comcast’s Stream TV, for example, was not about subsidizing access, but instead about “giving a competitive advantage to [Comcast’s] own application,” she said. That is a key net-neutrality concern, she said.

Kevin Martin, former FCC chairman and now an attorney for Facebook, which has its own zero-rating program to try and boost basic connectivity, said he didn’t have any problem with the FCC taking a case-by-case approach to vetting business plans under its new rules, but said zero-rating can be beneficial.

Martin signaled the FCC was right to be vetting the plans, but did not throw cable operators under the bus. He said MSOs would argue their customers have already paid for the programming ISPs are zero-rating.

But unlike cable operators, which have issues with the FCC’s case-by-case approach under the general conduct standard, Martin was all for it. “I think an analysis of what’s actually going on with each program is appropriate, and the FCC got that component right,” he said.

Layton argued zero rating plans aren’t just for the big dogs. She said they benefit smaller network providers who can’t compete with larger providers in terms of speed, but need another way to differentiate themselves.

The Free State Foundation has named a D.C. all-star lineup of speakers for its eighth annual Telecom Policy Conference March 23 at the National Press Club including FCC and FTC commissioners, top FCC officials and National Cable & Telecommunications Association President Michael Powell.

The speakers are Meredith Baker, president and CEO, CTIA-The Wireless Association; FCC Commissioner and former chair Mignon Clyburn; Seth Cooper, senior fellow, Free State Foundation; Randolph May, president, Free State Foundation; Walter McCormick, president,

USTelecom; FTC commissioner Maureen Ohlhausen; FCC Commissioner Michael O'Rielly; Michael Powell; Robert Quinn, SVP, federal regulatory, AT&T; Jonathan Sallet, general counsel, FCC; Nicol Turner-Lee, VP and chief research and policy officer, Multicultural Media, Telecom and Internet Council (MMTC); and Philip Verveer, senior counsel, FCC.

Among the topics teed up for discussion are the FCC's Title II-based Open Internet order appeal, video competition (the FCC is launching an inquiry this month into independent programmers' access to distribution channels), and universal service and Lifeline Reform (FCC Chairman Tom wheeler signaled this week that should be coming soon).

Smaller cable operators will not have to comply with new enhanced transparency reporting rules under the FCC's new Open Internet order for at least another year.

Small cable operators had hoped the FCC would make its temporary waiver permanent, but that could still happen.

In a bureau-level order, the Consumer and Governmental Affairs Bureau suggested that it would be premature to either grant the permanent extension or allow the waiver to sunset. It cited the fact that the FCC was still working through the Paperwork Reduction Act (PRA) impact estimates, saying after that extra year, the full commission would weigh in on what to do next.

The waiver was granted to systems with 100,000 or fewer subs due to the additional impact of such paperwork on systems without big pockets.

The bureau decided to extend the temporary waiver until Dec. 15, 2016, at which time it said the full commission could consider whether and how to further extend it. It confirmed that it thought 100,000 and fewer was the right cut-off for the waiver.

"The Consumer and Governmental Affairs Bureau (CGB) finds that at this time it cannot fully evaluate the impact of removing the temporary exemption for smaller broadband Internet access service providers from the enhancements to the Open Internet transparency rule previously adopted by the Commission in the 2015 Open Internet Order," the order said.

FCC Chairman Tom Wheeler said the decision "provides a reasonable period to assess the burden associated with the enhancements to the transparency rule, which will not be known until after the Paperwork Reduction Act process is completed. It would be premature to end the temporary exemption until the Bureau has had sufficient time to conduct a data-driven review of the burden through the PRA process.

“At the heart of this issue is the right of broadband customers, including the nearly 7 million customers of these exempt providers, to have access to essential information about their service—while at the same time ensuring the Bureau is able to conduct a thorough fact-based review," he said.

He pointed out that ISPs large and small are still subject to the existing transparency rules--part of the first Open Internet order that the court did not remand. "Next December, I will present to the full Commission for their decision the facts, which are being developed, so they may make an informed decision on the policy issues," he said.

Republican Commissioner Michael O'Rielly crticized both the decision and the way it was made.

"[T]emporarily extending the small broadband provider exemption is a monumental mistake in judgement and a missed opportunity to restore a bit of credibility and rationality," he said in a statement. "We all know that smaller providers never had the imaginary market power envisioned by the Commission, and they shouldn’t have to comply now or in the future with burdensome requirements that divert limited resources from broadband deployment and provide no real value to consumers. I am equally troubled that I was precluded from voting on this item as the majority of the Commission delegated it to the Bureau, reducing its own transparency and accountability."

missioner Mignon Clyburn suggested it was a necessary step toward a final determination of whether or not it should be permanent.

“In voting to approve the Open Internet Order, I advocated to exempt smaller providers from heightened transparency requirements because of my concerns that additional burdens would be placed on these entities," said FCc Commissioner Mignon Clyburn in a statement. "Before we make a final determination on whether this exemption should be permanent, the Commission needs more information and analysis that ought to include the resolution of the Paperwork Reduction Act (PRA) process. The effective date of the increased transparency rules remains pending while the Office of Management and Budget (OMB) assesses the burden as part of the PRA. OMB’s decision is a necessary input into the Commission’s analysis, therefore I believe it is appropriate to wait until that process is complete.  Increased transparency is always beneficial and we have a duty to ensure that the benefits outweigh the burdens, particularly for our small businesses.”

The Federal Communications Commission released its network-neutrality order Thursday (March 12), beginning the process that will include publishing it in the Federal Register (likely in the next week or so), with the rules going into effect 60 days after that, followed by the inevitable lawsuits against the decision to reclassify Internet access as a Title II common-carrier service.

The order provides more meat on the bone of the general conduct standard the FCC is adopting and makes clear that the FCC sees ISPs as the potential problem in the "virtuous cycle" that includes both consumers and edge providers like Google and Netflix. The FCC even quoted Ben Franklin (chairman Tom Wheeler is a history buff) to suggest ISPs need broad oversight of their broadband conduct.

It also uses over-the-top alternatives to traditional video -- like Netflix, and HBO and CBS's plans for streaming services -- that can deliver video "free of cable subscriptions" to argue that the rules are needed to allow those new services to flourish.

The document, including statements, came out to 400 pages, but most of those cover the legal defense of the move and statements of commissioners, with the actual rules plus introduction and executive summary only taking up the first 17 pages.

As already telegraphed and explained by the FCC both before and on the day (Feb. 26) of the party-line vote on the rules, the order adopts bright-line rules banning blocking, throttling and paid prioritization, the last which the FCC defines as "when a broadband provider accepts payment (monetary or otherwise) to manage its network in a way that benefits particular content, applications, services or devices."

The order also boosts the network management transparency requirement to "promotional rates, all fees and/or surcharges, and all data caps or data allowances," and adds "packet loss as a network performance measure that must be disclosed to users." It also requires "specific notification to consumers that a network practice is likely to significantly affect their use of the service."

The rules apply to both fixed and mobile broadband, also called BIAS, which sounds pejorative but stands for broadband Internet access service.

The order also finds that interconnection is a Title II service subject to case-by-case review of alleged violations, but not to the bright-line rules. "We find that broadband Internet access service is a 'telecommunications service' and subject to sections 201, 202 and 208 (along with key enforcement provisions)," the order states. "As a result, commercial arrangements for the exchange of traffic with a broadband Internet access provider are within the scope of Title II, and the commission will be available to hear disputes raised under sections 201 and 202 on a case-by-case basis."

But the FCC left open the possibility of applying bright-line regs to interconnection down the line, saying it would not intervene "now," and explaining thattt one reason it was not applying the bright-line regs was that it did not have the regulatory experience with such a regime.

"While we have more than a decade’s worth of experience with last-mile practices, we lack a similar depth of background in the Internet traffic exchange context," the order states. "Thus, we find that the best approach is to watch, learn and act as required, but not intervene now, especially not with prescriptive rules."

There is an exception to the rules for specialized services, which was in the 2010 Open Internet order, but the FCC makes clear that if those are used to end-run the new rules, the FCC will step in.

"The commission expressly reserves the authority to take action if a service is, in fact, providing the functional equivalent of broadband Internet access service or is being used to evade the open Internet rules."

In its suggestion that it is the ISPs who are the potential snake in the garden (perhaps they should be called ASPs), the FCC has adopted a general conduct standard, alleged violations of which it will investigate both in response to complaints and on its own initiative if need be. That case-by-case approach includes alleged suppression of free expression.

"The key insight of the virtuous cycle is that broadband providers have both the incentive and the ability to act as gatekeepers standing between edge providers and consumers," the order says. "As gatekeepers, they can block access altogether; they can target competitors, including competitors to their own video services; and they can extract unfair tolls.

"The bright-line bans on blocking, throttling, and paid prioritization will go a long way to preserve the virtuous cycle," says the FCC order, but not "all the way."

"Gatekeeper power can be exercised through a variety of technical and economic means, and without a catch-all standard, it would be that, as Benjamin Franklin said, 'a little neglect may breed great mischief,' " the order states in explaining its adoption of the standard, which follows:

"Any person engaged in the provision of broadband Internet access service, insofar as such person is so engaged, shall not unreasonably interfere with or unreasonably disadvantage (i) end users’ ability to select, access, and use broadband Internet access service or the lawful Internet content, applications, services, or devices of their choice, or (ii) edge providers’ ability to make lawful content, applications, services, or devices available to end users. Reasonable network management shall not be considered a violation of this rule. This 'no unreasonable interference/disadvantage' standard protects free expression, thus fulfilling the congressional policy that 'the Internet offer[s] a forum for a true diversity of political discourse, unique opportunities for cultural development, and myriad avenues for intellectual activity.' And the standard will permit considerations of asserted benefits of innovation as well as threatened harm to end users and edge providers."

Michael Copps, the former Federal Communications Commission commissioner, had a poignant moment at the end of last week's FCC meeting at which Title II regulation for Internet services was adopted.

As the crowd milled around, Copps worked his way to the front of the room and had a long chat with his former legal advisor, who also just happened to be commissioner Jessica Rosenworcel, who had voted "for" the plan. There was no audio of the informal conversation, although the C-SPAN camera captured plenty of smiles, head-nodding and a sense of accomplishment as the two celebrated a shared achievement.

For Copps, who from 2001 to 2011 served as an FCC commissioner (and briefly as interim chairman in 2009), it was a "wonderful feeling ... going back into the meeting room where I cast the only dissenting vote" when in 2002 then-FCC chairman Michael Powell pushed through the light-touch Internet regulatory policy, Copps told Multichannel News this week.

"I was thinking, 'Wow, this is really a big deal,'" Copps said. "To be there and be part of the enthusiasm and understanding that citizen power had a lot to do [with it] was a moving experience."

Copps, a passionate advocate for Title II regulation, said he was "thrilled to be there" when "we put ourselves more firmly on the road to Open Internet." He characterized the FCC's 3-2 decision as "a critical step" because it established "the best legal foundation" for the court and legislative challenges ahead.

Implementation and enforcement are now the FCC's major hurdles, he said.

"I'll be watching to make sure that we have a good implementation team," Copps said. "We've seen in the past all kinds of conditions put on them. I don't think that will happen here."

Copps, who now serves as special advisor to Common Cause's Media and Democracy Reform Initiative and is also associated with the Benton Foundation, focused on the importance of the four million public comments that flowed into the FCC as well as President Obama's endorsement of Title II regulation.

"The fact that people would be attracted to [supporting] something as wishy-washy sounding as 'net neutrality'" was "incredible," Copps said.  He called the presidential support "very influential" and not unprecedented, citing  President George W. Bush's push on network-ownership issues.

Recognizing the inevitable Capitol Hill reviews of the FCC's decision, Copps said he "feels sorry for the commissioners having to spend so much time up there." He contended that the more Republican legislators "push this, they'll find it is not playing too well back home." He referred to polls -- but did not indicate a source -- that suggest "80% of the public doesn't want fast lanes."

'This is not a party issue," Copps said, referring again to the Republicans who opposed Title II regulation. "They may be in for a surprise."

He also complimented the FCC's "community broadband" decision as "a wonderful thing." Just prior to the net-neutrality vote, the Commission (also in a 3-2 partisan vote) ruled that Tennessee and North Carolina cannot stop local municipalities from expanding their own broadband networks.

"Put those all together, and we can make some forward progress," Copps said. Both votes resultedin "good rules that will encourage innovation."

"There's going to be a lot of money made," he added.

Maintaining his long-held populist views, Copps posted a blog this week simply entitled "Victory," in which he predicted that in the upcoming legal challenges, Internet Service Providers (naming names such as Verizon, Comcast and AT&T) will trot out "old skeletons dressed in new clothes." He said he expects "more astroturf strategy" and he doubts the ISPs "will be able to come up with anything new."

In particular, he said he hopes that civil rights and labor organizations won't be seduced again to support the ISPs' views after "they have [been] favored with corporate contributions ... to spread the ISPs’ message."

"Now is the time for them to rally 'round the Open Internet flag and fight for what has been achieved, rather than become the unwitting tool of those who seek to close the doors of Internet opportunity," Copps wrote in his blog. He deemed the FCC's decision "a civil rights issue -- perhaps the preeminent one of the 21st century."

Copps said he views the FCC's ruling as a "significant reform" that came "from pressure from the grassroots. That's really important."

"That was a big deal," he added. "It bodes well for the future of the Open Internet."

Federal Communications Commission commissioner Mignon Clyburn has signaled she likes the direction the Title II reclassification draft order is heading -- there is a vote on the order Feb. 26 -- but she also raised several flags, including one that has been waved vigorously by the American Cable Association with an assist from The National Cable & Telecommunication Association: Providing smaller operators some relief from the new regulations.

In a speech to the Federal Communications Bar Association last week, Clyburn said her office was not commenting on the 332-page draft ("including footnotes"). But she said she would take a few liberties with her practice of not commenting on pending proceedings.

Clyburn said agency chairman Tom Wheeler's proposal to use Title II with forbearance, to apply the new rules to mobile as well as fixed broadband, to ban paid prioritization and to prevent the specialized services exemption from becoming a loophole all tracked with what she would have preferred in the original 2010 rules.

"When the chairman announced his proposal upon circulation, I was pleased to hear how closely it aligned with my prior vision," Clyburn told the audience after initially saying she would not comment

"My office is still in discussions with the chairman’s office about the item, and I will not divulge those specifics," she said. "[B]ut what I will say, is that it is imperative that the order strikes the right balance, for consumers deserve and need strong Open Internet protections, and investors need clarity and certainty. And when I say investors here, I include investment in ISPs, edge providers, content creators, as well as those developers in garages and on stoops. Some have expressed concerns about allowing private rights of action in court, failing to consider the impact on smaller ISPs, that including interconnection goes too far or that the case-by-case approach does not go far enough, and that the new conduct rule may not be a strong as the previous unreasonable discrimination rule."

Clyburn said she would continue to listen and find the right balance.

House Energy & Commerce Committee chairman Fred Upton (R-Mich.) reacted strongly Thursday (Feb. 5) to a report in The Wall Street Journal about the degree to which the White House had pushed for Title II regulation.

Federal Communications Commission chairman Tom Wheeler announced Wednesday (Feb. 4) that new network-neutrality rules to be voted on Feb. 26 would be based in Title II common-carrier regulations, though only a few of them in a "tailored" attempt to restore regs thrown out by a federal court.

President Obama last fall came close to directing a federal agency to take action in an online video outlining why he thought Title II reclassification was necessary; he even sent an aide to the FCC in advance of that video to let the chairman know it was coming.

The Wall Street Journal pointed to what it called an "unusual, secretive campaign" by a couple of White House staffers to get strong network-neutrality rules.

Upton responded: "Tom Wheeler infamously declared to reporters, ‘I am an independent agency,’ after the president publicly pushed for heavy regulation of the Internet," the congressman said in a statement. "Turns out that wasn’t the case then, it’s not the case now, and the White House needs to get its hands off the FCC. The White House’s efforts to drag the Internet into 1930s regulations is a move that puts the FCC on the fast-lane to the federal courthouse. We have a solution that achieves bipartisan goals to protect an open Internet, satisfying both the president’s and chairman Wheeler's previously stated requirements.”

Tom Wheeler won't make public his draft of new open Internet rules before the Feb. 26 meeting, the FCC chairman told the Republican leaders of the House and Senate committees overseeing communications.

"What you have suggested in terms of releasing the preliminary discussion draft of the Order runs contrary to Commission procedure followed over the years by both Democratic and Republican Chairs," he said in a letter dated Feb. 2 obtained by Multichannel News. "If decades of precedent are to be changed, then there must be an opportunity for thoughtful review in the lead up to any change." Wheeler signaled last week that he was unlikely to grant the request, citing the need to go through regular process in order to change regular process.

Wheeler said he would circulate the draft to the commissioners Feb. 5 as planned and they should have the requisite three-week period to discuss the substance of it "in confidence" before the planned Feb. 26 vote. "This is commonplace for administrative agencies and closely resembles the way that appellate courts - including the Supreme Court - hear public argument, confer privately, share their views and review drafts confidentially, and then issue their public decision," he said.

The request to see the draft, which the chairman has said will circulate to the other commissioners Feb. 5 per custom, came in a letter Jan. 22 to Wheeler from House Energy & Commerce Committee chairman Fred Upton (R-Mich.), Communications Subcommittee chairman Greg Walden (R-Ore.), and Senate Commerce Committee chairman John Thune (R-S.D.).

During network neutrality hearings in the House and Senate two weeks ago, those same leaders suggested one advantage of congressional action—they have proposed a bill to clarify FCC authority over Internet access— is that it was on the table for everyone to check out.

"We will continue to hear from interested parties in the run-up to the open meeting, will engage in the normal confidential process of sharing and considering changes to that Order and, of course, will consider and discuss the matter in public at the open meeting," he said.

The letter is reprinted in full below:

Dear Chairmen Thune, Upton, and Walden:

Thank you for your letter regarding the Commission's Open Internet proceeding. I
recognize and appreciate that your Committees are fully engaged on Open Internet issues, which
are of great importance to Congress and the American people. It is critical to preserve an open
Internet.

The Commission's process for considering items like the Open Internet rule is designed
to give stakeholders and members of the public ample opportunity to engage in a transparent and
vigorous discussion. It is also designed to give Commissioners a three-week period to discuss in
confidence the substance of an item before final decisions are released. This is commonplace for
administrative agencies and closely resembles the way that appellate courts - including the
Supreme Court - hear public argument, confer privately, share their views and review drafts
confidentially, and then issue their public decision.

What you have suggested in terms of releasing the preliminary discussion draft of the
Order runs contrary to Commission procedure followed over the years by both Democratic and
Republican Chairs. If decades of precedent are to be changed, then there must be an opportunity
for thoughtful review in the lead up to any change.

I intend to ask the Commission to adopt an Open Internet Order at our next open meeting,
on February 26, 2015. As is long-standing and established FCC procedure, I will circulate a
draft Order for consideration by my fellow commissioners three weeks prior to the date of that
meeting (on February 5, 2015). We will continue to hear from interested parties in the run-up to
the open meeting, will engage in the normal confidential process of sharing and considering
changes to that Order and, of course, will consider and discuss the matter in public at the open
meeting.

The Commission's Open Internet proceeding has been one of the most transparent and
inclusive proceedings in recent memory. Indeed, we have received more than four million
comments - a record for any Commission proceeding - on the Notice of Proposed Rulemaking
released last spring. We have been urged to act, and act swiftly, to protect Internet openness. We
have also had continuous engagement with stakeholders, including in the form of six separate
roundtables. These roundtables, which were open to the public, addressed Open Internet issues,
including mobile broadband, effective enforcement, and technological considerations, and also
sought the best economic and legal thinking on Open Internet topics. The information gathered
from these roundtables, public comments, and other engagement with stakeholders has informed
our deliberations in the Open Internet proceeding. The almost 600 Ex Parte filings in this
proceeding are another indication of the extensive dialogue the Commission and stakeholders
have conducted in recent months.

Our decisionmaking process has also been informed by regular and detailed, bipartisan
engagement with Congress, including you and other Members and staff of your Committees.
Again, I am pleased that we share the goal of ensuring a free and open Internet, and I am
committed to continuing to work with you toward that end and on other matters of interest to
your Committees,

Again, I am pleased that we share the goal of ensuring a free and open Internet, and I am
committed to continuing to work with you toward that end and on other matters of interest to
your Committees. Please do not hesitate to be in touch with me if I may be of further assistance
in this matter.

President Obama during his State of the Union address Tuesday night did not spend much time on broadband to which he had already devoted a speech last week, and the White House had already outlined his ambitious high-speed broadband plans, as well as actions to protect privacy and push cybersecurity.

The speech was mostly a valedictory vision of a better America through Democratic policies, or what CNN's John King called a left of center speech to a right of center Congress.

But the speech did include a number of communications-related issues, including network neutrality and at least a couple of mentions of high-speed broadband.

"I intend to protect a free and open internet, extend its reach to every classroom, and every community, and help folks build the fastest networks," the President said, "so that the next generation of digital innovators and entrepreneurs have the platform to keep reshaping our world."

He also talked about building infrastructure including "the fastest Internet."

On cybersecurity, he said: "No foreign nation, no hacker, should be able to shut down our networks, steal our trade secrets, or invade the privacy of American families, especially our kids.  We are making sure our government integrates intelligence to combat cyber threats, just as we have done to combat terrorism.  And tonight, I urge this Congress to finally pass the legislation we need to better meet the evolving threat of cyber-attacks, combat identity theft, and protect our children’s information." He went off speech to emphasize that that should be a bipartisan effort. "If we don’t act, we’ll leave our nation and our economy vulnerable. If we do, we can continue to protect the technologies that have unleashed untold opportunities for people around the globe."

On government data collection: "As Americans, we cherish our civil liberties – and we need to uphold that commitment if we want maximum cooperation from other countries and industry in our fight against terrorist networks.  So while some have moved on from the debates over our surveillance programs, I haven’t.  As promised, our intelligence agencies have worked hard, with the recommendations of privacy advocates, to increase transparency and build more safeguards against potential abuse.  And next month, we’ll issue a report on how we’re keeping our promise to keep our country safe while strengthening privacy."

He took a shot at the flood of political ads post Citizens United. "A better politics is one where we spend less time drowning in dark money for ads that pull us into the gutter, and spend more time lifting young people up..."

A discussion draft of new Republican-helmed network neutrality legislation is being circulated on Capitol Hill and it would define paid prioritization, which would be disallowed, and the reasonable network management and specialized services that would be allowable.

While the debate has been over using Sec. 706 authority or Title II authority, the bill in essence says neither works and addes its own section. It also responds to the D.C. Court of Apeals decision in the Verizon case by saying that Sec. 706 is not a broad grant of authority.

As advertised by its Republican co-sponsors earlier in the week, it is appears meant to achieve most of the aims of the FCC's former rules--no blocking, unreasonable discrimination--plus guard against paid prioritization, but doing so while clarifying that Internet access is an information service--as the FCC has been treating it--rather than a telecom service subject to Title II.

Here is the new section:

‘‘SEC. 13. INTERNET OPENNESS.
8 ‘‘(a) OBLIGATIONS OF BROADBAND INTERNET AC9
CESS SERVICE PROVIDERS.—A person engaged in the pro vision of broadband Internet access service, insofar as such person is so engaged—12 ‘‘(1) may not block lawful content, applications, or services, subject to reasonable network manage ment; may not prohibit the use of non-harmful 16 devices, subject to reasonable network management; may not throttle lawful traffic by selectively slowing, speeding, degrading, or enhancing Internet traffic based on source, destination, or content, subject to reasonable network management; may not engage in paid prioritization; and shall publicly disclose accurate and relevant information in plain language regarding the network management practices, performance, and commercial terms of its broadband Internet access services sufficient for consumers to make informed choices regarding use of such services and for content, application, service, and device providers to develop, market, and maintain Internet offerings, except that a provider is not required to publicly disclose competitively sensitive information or information that could compromise network security or undermine the efficacy of reasonable network management practices."

The bill would allow for specialized services, defined as "services other than broadband Internet access service that are offered over the same network as, and that may share network capacity with, broadband Internet access service.’’

It also clarifies for the FCC what a reasonable network management practice is, defining it as one "appropriate and tailored to achieving a legitimate network management purpose, taking into account the particular network architecture and any technology and operational limitations of the broadband Internet access service provider."

The paid prioritization the bill would prohibit is defined as "the speeding up or slowing 6 down of some Internet traffic in relation to other 7 Internet traffic over the consumer’s broadband 8 Internet access service by prioritizing or 9 deprioritizing packets based on compensation or lack 10 thereof by the sender to the broadband Internet access service provider."

Federal Communications Commission chairman Tom Wheeler has been making some news over the past few weeks, outlining an agency agenda for ensuring broadband speeds keep up with what he says are the table stakes in the 21st century, taking aim at sports-blackout rules that prevent cable operators from importing games during home-team broadcast blackouts, and more. Wheeler has also been facing pushback on his network-neutrality proposal from Web activists, though he says such back and forth is the “beauty” of the Internet. He has also strongly defended the need to pre-empt state laws that limit municipal broadband networks.

He spoke with Multichannel News Washington bureau chief John Eggerton from an undisclosed underground command center — actually the basement of the Sands Expo Center in Las Vegas, following his keynote speech to the CTIA-The Wireless Association convention there — weighing in on those issues and much more, including his management philosophy, which he says is to eschew homogenized proposals for “knock-down, drag-out” arguments in his office.

An edited transcript follows.

MCN: Were you surprised by the blowback online to the proposal for recrafting net-neutrality rules under Section 706 of the Telecommunications Act?

Tom Wheeler: We have put ideas out there, and we are looking at all the feedback on that now, and we are obviously looking forward to the roundtables that are going to take place in the next couple of weeks. We’ll be seeing where things go after that.

MCN: But were you surprised that there was so much opposition to it, particularly since the court signaled that was a way for you to go?

TW: Well, this is the nature of the Internet. This is why we want the Internet to be open and free, because it allows for this kind of discourse and dialogue. I think this just proves the value of an open Internet.

MCN: Are you still targeting the end of the year for a new Open Internet order?

TW: I don’t want to be held to a specific date. We want to make a decision based upon the record and based upon the work that has been done in the interim. And we’ll let the decision set its own timing. I don’t want to [say], “it’s got to be done by Christmas,” or that sort of thing.

MCN: Some online advocacy groups have called for field hearings on net neutrality. Will you hold some outside of Washington, D.C.?

TW: We are going to have these roundtables and they are going to be open to people to participate in via the Internet. We’re going to have a whole and complete record. I don’t think it’s necessary to have to do a road show for that, because the Internet itself is connecting us all. If somebody in Minneapolis wants to see an ongoing discussion and debate and be able to ask questions, we are going to facilitate that using the technology itself.

MCN: Do you ever worry that the substance of your position is getting lost on people who are being pitched slick ads saying essentially, “Free the ’Net,” as though somehow you are imprisoning them?

TW: [Laughs.] I’m for “free beer.” Look, there is nothing more important than protecting free speech and innovation online. This is a complicated issue, so it’s not surprising that it can be misconstrued. Right now, there are no rules in place to protect the open Internet and I am focused on finding the right approach that will pass legal muster.

MCN: You have said that you don’t think fast and slow lanes would meet the commercially reasonable standard proposed in the new anti-unreasonable-discrimination network-neutrality rule. But your critics say that the next chairman might not make the same judgment call.

TW: I have been real clear in saying that the court said we have authority over anything that interferes with the virtuous cycle. And I think that fast lanes do that. I think prioritization does that. I think blocking does that. I think that degrading and slowing down service does that. And that is what the court said. That’s not what Tom said. That’s the authority of the commission. Period.

MCN: But critics ask, What if the next chairman disagrees, and has the flexibility of a “commercially reasonable” standard?

TW: That’s what the courts are for.

MCN: Reed Hastings [the CEO of Netflix] inWiredmagazine said that, “If net neutrality rules don’t apply to peering, it would be better to have no rules.” I assume you disagree.

TW: I know Reed’s position.

MCN: What is your position?

TW: We are in the process of working through everything that we have [received], and we’re going to come out with our thoughts and we will share that with you at that point in time.

MCN: The NCTA said in its comments on the Section 706 report that the commission should not change the baseline broadband speed threshold from 4 Megabits per second downstream and 1 Mbps upstream because that is sufficient for high-quality voice, video and data. What’s your take?

TW: That’s funny, because I’ve been on the floor at the show here and I have been looking at new applications with cellphones and heads-up devices and things like this, all of which have 4, 5 6 or 7 Mbps at least. And then when they go to 4K [ultra-high-definition video], that increases even more in the need for throughput.

So, I disagree. As I said the other day, I think we are looking at table stakes for the 21st century being 25 [Mbps]. And I hope that they are actually talking about at least 100 Meg and going to a [Gigabit per second] as much as possible. I had people this morning talking to me about how they needed 2 [Gbps] of throughput to do some of things they are talking about doing with technology.

MCN: Would that mean changing the 706 report’s definition of advanced telecommunications services to 10 Mbps, or maybe 25 Mbps?

TW: That is what the whole notice of inquiry is about. I have said we should be increasing it at least to 10 for Universal Service Fund activities because shame on us if our subsidy program for hard-to-serve areas creates a second-class area of service because we didn’t set our sights high enough. That would be a failure on our part.

MCN: Do you have any plans to act on the open retransmission-consent docket, or are you going to leave that to Congress?

TW: I’m going to be really interested in seeing what Congress does. Obviously, we have a great interest in the whole retrans issue, but I think Congress is in the process of considering some game-changing concepts.

MCN: Former FCC chairman Reed Hundt, who is leading an effort to get Washington Redskins owner Daniel Snyder to change the name of the [National Football League] team, has asked FCC commissioners to speak out. Will you?

TW: Yes. I don’t use the term personally and I think it is an offensive and derogatory tone. I am a Civil War buff, and there were a lot of terms that were appropriate at that time that aren’t appropriate anymore. I think it would be great if the Washington football team would recognize those kinds of changes itself.

MCN: Does the FCC have any role in that beyond the bully pulpit?

TW: I hope that this is something that if enough people express themselves, that Dan Snyder can see which way things are going.

MCN: The Republican commissioners have complained about not being sufficiently included in the process. Are there grounds for that complaint?

TW: Oh, golly. We have had far more unanimous votes than we have had 3-2 votes. The Republican commissioners get the information on white-copy day — items for the next meeting — the same as the Democratic commissioners do. They may have differences of opinion, but the process is operating as the process has always operated.

MCN: Why should the FCC be pre-empting broadband-related laws passed by duly elected state legislatures?

TW: Section 706 gives us a responsibility to encourage the growth of broadband and I am for faster, cheaper, better broadband. And I am for competitive broadband. We are going to look at the petitions that have come in with serious analysis because the question is, how do we get faster, better, cheaper broadband?

At least what I have seen in the Wilson, N.C., and Chattanooga [Tenn.] situation, and again I am not making up my mind here, but what we have seen in some of the submissions, is that outside of the area they’re getting an un-faster, they’re getting an un-better, they’re getting an un-cheaper kind of a service, and when people want to extend them faster, cheaper service, if the local representatives of the people, and elected by the people to resolve the local issues, say they want to do that, I think we should be for faster, better, cheaper broadband.

MCN: You came out strongly against the NFL blackout rules last week and scheduled a vote for the end of this month.

TW: This was put into the rules 40 years ago when we had an entire different reality. The [FCC rule] has been an excuse people pointed to to defend why consumers couldn’t watch TV. That’s wrong. We deal with communications policy. And using communications policy for something that gets in the way of consumer’s ability to see the home team is an idea whose time has come and gone, if it ever existed.

MCN: Speaking of the ability of the fans to watch the home team, what is the status of your vetting of documents in the Time Warner Cable regional sports-network carriage impasse [regarding the Los Angeles Dodgers-owned SportsNet LA network], and what role does the FCC have?

TW: We looked at all the documents. We are going to send out a request for additional information. But we have three weeks to go in the season. The Dodgers are in a pennant race. I mean, come on folks, for three weeks let’s put down the gloves and let consumers see the games.

It’s three weeks. We are going to continue our process, but that is not going to be done in the next three weeks because no kind of an enforcement process like this is ever done in that short period of time. But, my goodness, you would think that Time Warner Cable and the MVPDs could say, “Hey, we will forget about it. Let’s just carry it. Let’s just get it done so that people can see the games.”

MCN: On your management style, I have talked to a bunch of folks and their read is that your style is primarily top-down, almost like a cabinet secretary, and that when you are convinced of the rightness of something, it is hard to move you from that position. Does that sound right?

TW: I have two management philosophies. One is that I think you ought to delegate responsibility and authority, and so I have been trying to push responsibility and authority down in the agency to the bureau chiefs and asking the bureau chiefs to delegate it out further. And as you know, delegated authority is a huge political issue at the commission, so that gets challenging.

The other is that what I learned in the first few months in the job is that people would bring in homogenized presentations that said, “here’s what we think the answer is,” and it would be a homogenization of multiple positions. And I kept saying, “No, what I want to see is knockdown, drag-out arguments right here in my office, and I want to participate in them.”

And that is, I think, the way you make good policy. You don’t just say, “OK, we are going to agree amongst ourselves and I’ll give you this,” or whatever the case may be, and you come up with a homogenized policy, because these are important, multifaceted issues. So I have been encouraging folks to come in and argue it out. Let’s hear all sides of the issues; let’s not just hear what the conclusions are.

MCN: Does it help to have been a lobbyist because you know how people are going to be making those arguments?

TW: No. I think that is management. I don’t think it has anything to do with being a lobbyist. The nature of an institution is to arrive at commonality, and what I am trying to say is that by the time it gets to the [commissioners on the] eighth floor, I hope that there is still an ability for people to debate. Obviously, we will make decisions when it is necessary to make decisions, but let’s hear all sides out. Let’s not kick ideas out just because we’ve got to get something up to the eighth floor.

MCN: Will the FCC weigh in with a definition of an MVPD [multichannel video programming distributor], which would seem to be an important answer in the over-the-top world we are moving toward?

TW: I think it is a question we’ve got to look at. I am not ready today to plant a flag in the ground one way or the other. But I don’t disagree with your point that it is worthy of looking at, particularly as we go to an all-IP environment and as cable systems evolved from QAM to DOCSIS [3.0], does that have any policy implications. I don’t have an answer to that, but I think it is an interesting question.

MCN: At CTIA, you said, “If mobile operators don’t put their money where their mouth is, then the future of spectrum policy will look a lot different.” What did you mean?

TW: What I was saying was that there are two things that are the promise of the future of spectrum. One is sharing — and not just broadcast sharing, but all kinds of sharing, like the mobile operators are now having to do with DOD [the Defense Department] and other federal users — and the fact that digital allows for sharing. And the other is that the auction creates a way in which both parties’ economic realities can be dealt with. And we can say: “OK, is it possible to find an economic model that works for both [broadcasters and mobile operators] in an incentive auction?”

If this first incentive auction doesn’t work, then I think the whole concept of incentive auctions going forward will have a tougher hill to climb.

MCN: Can you understand why some broadcasters feel the FCC is pushing them toward the auction with its crackdown/scrutiny of sharing arrangements?

TW: That is an entirely specious argument. That the sharing arrangements have anything to do with the auction is a concocted fiction.

Sharing had to do with the fact that there was a cottage industry in Washington, D.C., of lawyers who were cooking up fancy ways to cook ownership to get around the rules. I mean, hey, people can characterize it any way they want, but it is a totally specious argument to say there is any connection between the two.

Verizon says its "network optimization" policy that "under certain circumstances, the speeds of a few heavy users may be temporarily slowed at congested cell sited in order to provider a great wireless experience to all of our customers" is narrowly tailored, common industry practice, reasonable network management, and endorsed in the FCC's 2010 Open Internet order as a way to ensure fair allocation of capacity in times of congestion.

That was Verizon's response to a strongly worded letter from FCC Chairman Tom Wheeler asking it to explain its decision to ""manage data connection speeds for a small subset of its [4G LTE] customers--the top 5% of data users on unlimited data plans" during periods of congestion.

'Reasonable network management' concerns the technical management of your network; it is not a loophole designed to enhance your revenue streams," Wheeler said in a letter to the company.

Verizon SVP, regulatory affairs, Kathleen Grillo, responded that the company adopted the policy for its 3G network three years ago to manage congestion at specific cell cites experiencing unusually high demand, that it only applied to a small percentage of customers only for those peak demand periods and only on plans that don't limit the amount of data they can use without adding data charges, and so only on those who have no incentive to limit usage during high-demand periods.

Wheeler has been arguing that ISP's need to deliver promised speeds if they want to stay in the commission's good graces.

Grillo said that when the company implemented the network management practice it "disclosed it to our customers, reviewed it in detail with your agency, and discussed it with consumer and other interested third-party groups." She added that it was "similar to, though in some cases more targeted than, network management practices commonly used throughout the industry."

She cited similar policies by the other major wireless carriers.

Grillo pointed out that Verizon was giving 4G LTE customers several months notice of the policy in the interests of transparency/

The FCC's enforcement bureau recently reminded ISP's of their responsibility to be transparent about how they were managing their networks, as well as delivering on promised data speeds.

Grillo also provided the following answers to Wheeler's questions:

Wheeler: "What is your rationale for treating customers differently based on the type of data plan to which they subscribe, rather than network architecture or technological factors? In particular, please explain your statement that, “If you’re on an unlimited data plan and are concerned that you are in the top 5% of data users, you can switch to a usage-based plan as customers on usage-based plans are not impacted.”

Grillo: "The rationale is to provide the best possible network experience for customers, given the realities that network resources are finite and shared and that occasional states of unusually high demand on particular cell sites are unavoidable in the case of wireless networks. We also know that a very small percentage of customers are extremely heavy users who use a disproportionate amount of network resources and have an out-sized effect on the network. Not surprisingly, many of these heaviest users of the network are on unlimited data plans. Under these circumstances, we believe that it serves our subscribers as a whole better if these heavy users are temporarily slowed to allow more of the shared and in-demand capacity to be available for other users of the network during times when a particular cell site is subject to heavy demand. These heavy users can continue to access the network and use their service, even during these times of heavy demand. And as soon the customer moves to a cell site not experiencing high demand or when the demand abates, he or she will continue to get the same speeds as everyone else.

"As your question notes, this Network Optimization practice does not apply to customers on usage-based plans. Such customers have incentives to moderate their usage that customers on 'unlimited' data plans do not, and such customers are less likely to engage in the forms of extremely heavy usage that we see from customers on unlimited data plans. Our statement quoted above informs customers of the differences among plans and the options available to them."

Wheeler: "Why is Verizon Wireless extending speed reductions from its 3G network to its much more efficient 4G LTE network?"

Grillo: "Verizon Wireless is focused on ensuring that our 4G LTE network is robust, and operates efficiently. We continually invest and add capacity to this network. In fact, we have doubled the capacity available for 4G LTE customers in many parts of the country over recent months through our XLTE initiative. As a result, independent testing consistently confirms that Verizon Wireless has the largest and most reliable wireless network.

"While our 4G LTE network has great advantages over 3G or earlier technologies, the network’s capacity remains a shared and limited resource that we must manage to provide the best network experience for all of our customers. Even in a 4G LTE environment, at certain times high demand can affect the performance of particular cell sites. When that happens, we believe that the best experience for the most subscribers is possible through the use of narrow and targeted practices such as network optimization."

Wheeler: "How does Verizon Wireless justify this policy consistent with its continuing obligations under the 700 MHz C Block open platform rules, under which Verizon Wireless may not deny, limit, or restrict the ability of end users to download and utilize applications of their choosing on the C Block networks; how can this conduct be justified under the Commission’s 2010 Open Internet rules, including the transparency rule that remains in effect?"

Grillo: "Network optimization is a form of reasonable network management that is consistent with both the C Block rules and the Commission’s 2010 Open Internet rules. The Open Internet Order and the 700 MHz C Block Order both recognize the continuing need to engage in reasonable network management practices, and, as noted above, the FCC has expressly endorsed the type of targeted congestion management practice that we employ as a form or reasonable network management.4 Providers throughout the industry have employed similar (and often less tailored) versions of this same practice.

"With network optimization, our customers continue to be free to go where they want on the Internet and to use the applications, services and devices of their choice. Although the policy may result in slowed throughput under the very limited circumstances described above, neither the C Block rules nor the Open Internet rules requires any particular minimum speeds, so long as providers are transparent with their customers. And here, Verizon Wireless is clearly apprising our customers of that under certain circumstances, the speeds of a few heavy users may be temporarily slowed at congested cell sited in order to provider a great wireless experience to all of our customers."

After his new Open Internet plan narrowly passed its first test — the recent 3-to-2 vote in favor of the proposal, which sent it into the public comment phase — Federal Communications Commission chairman Tom Wheeler is in for the fight of his career.

While the new chairman has taken a hardline stance to safeguard Internet availability, vowing to keep the spirit of network neutrality alive, his decision to allow Title II reclassification of broadband to remain on the regulatory plate has set off a firestorm of controversy.

Cable operators have argued that Title II rules, which would essentially regulate Internet service as a “common carrier,” like phone service, would unravel all the advances made by Internetservice providers over the past decades.

On the other side, technology and Internet giants like Google, Facebook, Yahoo and Twitter proclaim that a free and open Internet should be devoid of individualized bargaining and discrimination, tenets which some believe are the cornerstones of Title II.

The cable industry has faced down the threat of Title II before — most recently in 2010, when then-FCC chairman Julius Genachowski proposed using the reclassification as part of his national broadband plan. While the industry managed to dodge that bullet in the short term, this time it appears that Title II is closer to becoming reality than ever before.

About 150 technology firms, including Google, Amazon, Facebook, Netflix and Twitter, fired off a letter to the FCC recently urging the agency to adopt policies that prohibit “blocking, discrim ination, and paid prioritization” that would “make the market for Internet services more transparent,” which some have interpreted as a veiled endorsement of Title II. One doesn’t have to look far back in history for proof of the sheer power of these tech giants when they decide to back a policy issue.

Motion Picture Association of America chairman and CEO Chris Dodd had his proverbial head handed him to him during his campaign to stop piracy in a rout by some of the same companies now calling for reform. The failed Stop Online Piracy Act (SOPA) and its companion, The Protect Intellectual Property Act (PIPA) of 2012, two bills that were forged to stem what content companies had claimed was an epidemic of users with ultra-fast Internet connections stealing their wares, was summarily crushed. Once Facebook, Google and others unleashed their considerable user bases on the issue, a tidal wave of protest quickly ground both pieces of legislation into dust.

“In a period of seven or eight days, you have the unprecedented action where 7 or 8 million emails showed up on the computers of members of Congress; 13 million at the White House,” Dodd told MultichannelNews in 2013. “This was a tsunami. [Netflix CEO] Reed Hastings said to me it was almost like a swarm of bees. We’ve never seen anything like it before.”

Many believe the same scenario could take place with Title II, with the Internet giants boiling down the issue into a simple “Free Internet or Not?” debate, as the government bogs down in explaining the minutiae of the issue while its earnest message of punishing bad players gets lost on confused consumers.

“It’s hard to argue against a bumper sticker,” MoffettNathanson principal and senior analyst Craig Moffett said. “And net neutrality is a bumper sticker.”

Already the battle lines are being drawn. Last Thursday (May 15), several public advocacy groups were staging protest rallies to drive home their Title II agendas — liberal groups Free Press, MoveOn.org and CREDO Action planned a 19-city rally, including one in front of FCC headquarters in Washington, D.C., to push net neutrality. In Congress, 20 House Democrats urged Wheeler to take Title II off the table, claiming it would stifle competition, while another three dozen Democratic House members called for Title II to be adopted.

Over the next 120 days — the length of the FCC publiccomment period — Wheeler, the other FCC commissioners, private business, public-interest groups and the general citizenry will have ample opportunity to weigh in on the issue.

Anything can happen in politics, and conventional wisdom leans toward the government simply not acting on the issue. But if Title II does get traction, companies and consumers can expect some big changes. Here’s a look at what many of the industry’s leaders in government and business think is possible.

1. Title II could lead to higher prices for broadband service, as ISPs are allowed to charge transport and termination fees and usage-based pricing becomes the norm.

While Wheeler has stressed that he has no intention of creating “fast lanes” and “slow lanes” on the Internet that would give priority to content providers that pay for faster access, Title II does not prohibit ISPs from charging for transport and termination of service. While pricing would be set by the government — by way of tariffs like those for electric utilities — it also would not stop providers from charging more based on bandwidth usage.

While cable operators are loathe to utter “usage-based pricing” in mixed company, in a letter to the FCC they alluded that Title II would not prevent ISPs from going down that route.

“In defending their approach, Title II proponents now argue that reclassification is necessary to prohibit paid prioritization, even though Title II does not discourage — let alone outlaw — paid prioritization models. Dominant carriers operating under Title II have for generations been permitted to offer different pricing and different service quality to customers.”

This could backfire for online subscription video-on-demand providers like Netflix, Amazon Prime and Hulu Plus, which use large amounts of bandwidth to deliver their service. It is estimated that Netflix alone accounts for one-third of Internet traffic.

“It’s possible that a net-neutrality ruling would push the industry into usage-based pricing territory. That would be a disaster for Netflix,” Moffett said. “For all the online video companies, usage based pricing would be the worst thing that could happen.”

Title II could place a mountain of regulation on Internet service — including pricing limits — to ensure that it is available to everyone at every time. Then there is the danger of the traditionally nimble Internet being mired in government bureaucracy and inefficiency.

As the NCTA said recently, there were 307 electric blackouts across the country in 2011 (up from 76 in 2007); one in three U.S. roads are in poor or mediocre condition and there are an estimated 240,000 water main breaks annually.

2. A new regime of rules could force a wave of consolidation among small operators, forced to sell their companies because they cannot keep up with the new regulations.

Already, some small MSOs have said privately that they foresee scores of providers from within their ranks throwing in the towel in the wake of Title II.

Buford Media CEO Ben Hooks said that for small operators, Internet service is the main reason for existence. The government setting prices and heaping more regulation onto broadband would only serve to destroy the business for the small operator. For that reason, he hopes that the FCC won’t implement Title II.

“When operators say [Title II] will be the last straw, it will be,” Hooks said. “I’m just hoping that Title II doesn’t happen.”

Cable operators are governed under Title VI of the Communications Act of 1936, which does not require nondiscrimination at the level that the Open Internet rules do.

“The Title VI world never had to know Title II,” Precursor LLC president Scott Cleland said. “This is a morass that is alien to them.”

3. Cable operators say Title II will stifle future investment and innovation in broadband, a network of fiber and coaxial cable created by private investors — not the government.

With the government setting prices — and profit margins — on broadband service, cable operators and telephone companies alike will have little incentive to continue investing in the broadband business. According to a letter sent to the FCC on May 13 and signed by top cable and telecom executives, about $60 billion is spent on cable, fiber, fixed and mobile wireless, phone and satellite broadband networks each year.

“Reclassification of broadband Internet access offerings as Title II telecommunications services would impose great costs, allowing unprecedented government micromanagement of all aspects of the Internet economy,” the letter said. The CEOs noted that the last Title II threat in 2010 had an “investment-chilling effect” by erasing about 10% of the market cap of some ISPs.

“Today, Title II backers fail to explain where the next hundreds of billions of dollars of risk capital will come from to improve and expand today’s networks under a Title II regime,” the CEOs stated. “They too soon forget that a decade ago we saw billions newly invested in the latest broadband networks and advancements once the Commission affirmed that Title II does not apply to broadband networks.”

Innovation, once the watchword of the Internet, also could go by the wayside under Title II, the CEOs claimed.

“Under Title II, new service offerings, options, and features would be delayed or altogether foregone,” the CEO letter said. “Consumers would face less choice, and a less adaptive and responsive Internet. An era of diff erentiation, innovation, and experimentation would be replaced with a series of, ‘Government may I?’ requests from American entrepreneurs. That cannot be, and must not become, the U.S. Internet of tomorrow.”

In a recent blog posting, American Enterprise Insitute Center for Internet, Communications and Technology Policy visiting fellow and president of Entropy Economics Bret Swanson said that keeping Title II out of the Internet was “one of the best economic policies of the last generation. Unleashing Title II on the Internet could spread an epidemic of confusion and litigation across an Internet environment that over decades has developed millions of fruitful technical and commercial connections outside (and often oblivious to) the old Title II regime. In short, Title II would threaten Internet innovation at its very foundation.”

4. A new set of rules will certainly spark a wave of lawsuits from nearly every side of the issue, from distributors who would seek to block the move to Title II and protect their current multibillion-dollar investments in Internet infrastructure to content providers looking to ensure their placement and availability on the Web.

Cleland likened the advent of Title II to a crowd of people firing machine guns in a circular metal room — you never know who or what is going to get hit. The Precursor LLC president said Title II would set off a firestorm of litigation. “It would create a free-for-all for interested parties to interpret things their own ways. You could come up with dozens of scenarios over several years.”

Cleland added that Title II has about 1,000 separate items, all of which would be up to countless numbers of interpretations.

“It would be a litigation frenzy from almost every angle,” Cleland said. “It would only be limited by the imaginations of the people who want to sue.”

5. How the government implements the rules could change the way distributors and content providers do business with each other.

No one — not even government regulators — can say exactly how Title II could affect programming deals. According to Moffett, under the strictest Title II interpretation, cable TV is technically illegal because operators designate specific blocks of spectrum (a 6-Megahertz cable channel) to a specific content provider at a specific price.

“Allocating a 6-MHz channel for an analog stream of ESPN, and another six tenths of a digital channel for a digital stream of ESPN and another 2.4 GHz channel for an HD stream of ESPN; they’re are all illegal in a pure net neutrality world,” Moffett said. “They’re all contractual carriage deals. Does it really matter if the traffic is encoded in MPEG and QAM or if it’s encoded in IP?”

While the FCC could waive that provision under some form of forbearance, Cleland said it is not that simple. The FCC is allowed to “forbear,” or basically ignore, certain aspects of a regulation for the public good. But any forbearance must be detailed and written into the regulation, he said, which could add a lot of time to the process.

“They can’t do an omnibus forbearance,” Cleland said. “You have to literally write out what you mean and what you don’t mean. Each issue is different and there are legal decisions as to why you do one and not the other. It would take months or years just to figure out how to do it.”

John Eggerton contributed to this report.

American Cable Association President Matt Polka says Viacom's denial of access to its web sites by broadband Internet subs of Cable One and other distributors with which Viacom is in a carriage dispute violates Internet openness and should raise warning flags in Washington.

Cable One dropped 15 cable networks April 1, and Viacom then decided that its programming would "no longer be available to Cable One customers in any form."

Polka today (May 6) said that broadband Internet customers of both Cable One and Liberty Cablevision of Puerto Rico are being denied access to Viacom Web sites, including customers who have cut the cord on traditional video.

Viacom essentially echoed the earlier sentiment, adding Liberty Cablevision to the list. "“Cable ONE and Liberty Cablevision have chosen to no longer carry Viacom programming and, as a result, it is no longer available to their customers in any form.”

“Viacom’s actions are a flagrant attack on Internet openness and a textbook replay of the vengeful action CBS took against Time Warner Cable and Bright House Networks broadband customers during their well-documented retransmission consent dispute last August," said Polka. “All who care about ensuring access to content on the Internet should be outraged that Viacom is selectively blocking access to its public websites by broadband Internet subscribers served by smaller cable companies."

Polka pointed to an op ed in The Hill by FCC Republican commissioner Michael O'Rielly Tuesday, who raised the issueof  CBS blocking, though in the context of warning edge providers that they could fall under the FCC's proposed new network neutrality rules, too. "[C]onsider the contractual fight over programming between CBS and Time Warner Cable last year," O'Rielly wrote. "During its retransmission dispute, CBS pulled its signal off of certain cable TV systems — and also blocked all Time Warner broadband customers from accessing CBS’ Web-based content, even outside the territory of dispute. This is precisely the kind of content-blocking broadband providers are so often accused of but aren’t actually doing."

O'Reilly doesn't support ACA's position on network neutrality regs.

In 2012, Viacom blocked DirecTV subscribers' access to online content in the midst of a nine-day carriage standoff.

A Viacom spokesperson did not immediately respond to a request for comment.