The Federal Communications Commission today adopted new, higher download and upload speeds as the benchmark for determining whether or not broadband is being deployed in a reasonable and timely fashion.

The new benchmarks are 100 megabits per second for downloads and 20 Mbps for uploads, an increase from the agency's 25/3 standard set in 2015. The new determination is part of the FCC’s regular assessment of the state of broadband deployment under Section 706 of the Telecommunications Act. The FCC, under chair Jessica Rosenworcel, set the latest review last November, signaling that the Biden administration sees 1 gigabit per second as future table stakes for the definition of high-speed broadband that is today’s “advanced telecommunications.”

The agency said in a statement after meeting today that advanced telecommunications capability is not being deployed in a reasonable and timely fashion based on the total number of Americans, Americans in rural areas and people living on Tribal lands who lack access to such capability, and the fact that these gaps in deployment are not closing rapidly enough. The vote for the new speed standards was 3-2 with the Democrats in the majority.

In setting the new benchmarks the agency considered standards now used in federal and state programs (such as NTIA’s BEAD Program and various Universal Service Fund programs), consumer usage patterns and what is actually available from and marketed by internet service providers, it said.

NCTA: The Internet & Television Association, representing cable companies, called the report “a missed opportunity for the FCC to acknowledge the substantial and undeniable progress that has been made in deploying broadband to all Americans, and to take credit for its role in that success. Indeed, just two days ago, the FCC’s own annual performance report stated that ‘this past year at the agency will be remembered for our progress toward [the] objective’ of ensuring 100% broadband coverage. The FCC’s decision not to recognize this progress in today’s report seems to be driven by an effort to bolster its regulatory authority more than any attempt to assess the pace of broadband deployment objectively. As internet providers work to connect every community to fast, affordable and reliable broadband service, the FCC can further speed this deployment by reducing regulatory barriers instead of imposing onerous new utility rules that will give the agency unprecedented power to micromanage the broadband marketplace.”

NRECA, representing electric co-ops, said: “The commission’s vote is a step in the right direction but still falls short of meeting the needs of rural communities. Affordable and reliable broadband access creates new ways to live, learn and earn in rural America. Rural families and businesses should not be subjected to second-class service simply because of their ZIP code. Consumer residential and business demands have already surpassed the benchmark approved today. With that in mind, the FCC should move to set future-proof benchmark speeds of at least 100/100 Mbps to ensure the broadband needs of rural communities can be met as demand continues to grow.”

The FCC under chair Jessica Rosenworcel has signaled it wants the Biden administration’s universal service benchmarks of “affordability, adoption, availability and equitable access” to be part of its equation when calculating if advanced telecommunications are being deployed to all Americans in a reasonable and timely fashion.

“In light of the increasing uses and demands for broadband and the Congressional directives embodied in the Bipartisan Infrastructure Law, which includes the largest ever federal investment in broadband deployment, this Notice of Inquiry (NOI) will take a fresh look at the Commission’s standards for evaluating broadband deployment and availability, the quality of the Commission’s available data, and the framework that the agency uses to make a finding under section 706,” the Federal Communications Commission said.

Congress has charged the FCC under Section 706 of the Telecommunications Act of 1996 with periodically assessing the state of broadband deployment. Just what level of service should meet that definition has become a political football between Republican and Democratic administrations since if the FCC concludes that deployment isn’t timely, it can regulate to rectify the situation.

Republicans have traditionally found that there need not be 100% deployment for the process of deploying to be found reasonable and timely, while Democrats have seen less than 100% as less than timely. Now, the FCC is looking to make affordability, uptake and equitable access all targets that broadband deployment must meet to be considered reasonable and timely deployment to “all” Americans.

As part of its latest effort to make that deployment assessment for its upcoming Section 706 Report, the commission Wednesday (November 1) launched an inquiry into boosting its broadband speed benchmark. The inquiry has its eye toward setting a goal of 1 gigabit per second as future table stakes for the definition of high-speed broadband that is today’s “advanced telecommunications.”

“In order to get big things done, it is essential to set big goals,” Rosenworcel said. “That is why we are kicking off this inquiry to update our national broadband standard and also set a long-term goal for gigabit speeds."

The FCC currently defines high-speed broadband as speeds of 25 Megabits per second downstream and 3 Mbps upstream. It proposes to raise that to 100 Mbps upstream and 20 Mbps downstream. 

The majority of Americans have neither the broadband speeds nor prices that would qualify them as having access to the advanced communications that FCC chair Jessica Rosenworcel has proposed as table stakes for broadband availability.

That’s according to a survey from BroadbandNow, a comparison and research site tracking high-speed internet service in the U.S., meant to determine which states have the best and worst broadband.

In its latest proposal for what level of service should meet the congressional definition of advanced telecommunications being rolled out to all Americans in a reasonbable and timely fashion, Rosenworcel signaled that she wants to add 100% affordability to the definition.

The Federal Communications Commission is required to report to Congress periodically on progress toward universal broadband access, with the regulator empowered to regulate access to advanced telecommunications service if it concludes it is not being rolled out on a reasonable and timely basis.

Rosenworcel also wants to raise the FCC’s minimum definition of access to high-speed broadband to service at 100 Megabits per second downstream and 20 mbps upstream. The current standard is 25 Mbps upstream and 3 Mbps downstream, set in 2015.

According to the BroadbandNow survey, based on data from the FCC and other sources, speeds of 100 Mbps downstream and 20 Mbps upstream service are available to just 39% of Americans. While low-cost high-speed broadband access has increased, the survey found that “at least 20%” of Americans have access to broadband for $60 per month or less in all states, but in only one state, Wyoming, do more than half the residents have such access.

The top state for broadband access according to the survey was Delaware, whose former U.S.  senator, President Joe Biden, has made universal access by the end of the decade one of his administration's major goals.

Alaska has the worst access, with 20% of residents unable to access broadband at the current high-speed definition of 25 Mbps upstream and 3 Mbps downstream. 

BroadbandNow aggregates data to help consumers comparison-shop for wired and wireless broadband service. It advocates for municipal broadband and for raising the definition of high speed to 100 Mbps upstream and 20 Mbps downstream.

FCC chair Jessica Rosenworcel wants to add 100% affordability and a bunch of other benchmarks to the regulator’s definition of what constitutes the deployment of advanced telecommunications services by internet service providers to “all Americans” in a reasonable and timely manner.

She also wants to raise the minimum definition of access to high-speed broadband to 100 Megabits per second downstream and 20 Mbps upstream. The current standard is 25 Mbps downstream and 3 Mbps upstream, set in 2015.

Rosenworcel proposed the new metrics in sharing an updated Notice of Inquiry launching the agency’s latest report — the so-called Section 706 report to Congress. In addition to access and affordability, the Federal Communications Commission chair said equitable access — no redlining, for example — and adoption should also figure into "whether broadband is being deployed in a reasonable and timely fashion” to “all Americans.”

The FCC is required to report to Congress periodically on progress toward that benchmark, with the agency empowered to regulate access to advanced telecommunications services if it concludes such services are not being rolled out on a reasonable and timely basis.

Past Democratic FCCs have interpreted that to mean that as long as there is still one U.S. citizen without broadband access, that reasonable and timely benchmark hasn't been met. Adding the new affordability and other metrics could give the FCC more opportunity to regulate broadband to make it more affordable, raising the specter of some form of rate regulation or at least regulation that impacts rates.

Those new benchmarks dovetail with the Biden administration's framework for handing out tens of billions of dollars in subsidies to help get to the goal of universal broadband, which President Joe Biden has said should be achievable by the end of the decade. The 110/20 high-speed metric would also square with the Administration's definition of high speed for its subsidy program administered by the National Telecommunications & Information Administration. 

The debate over what constitutes high-speed broadband has heated up as the FCC collects comments for its next report to Congress on the state of broadband availability.

The devil is in the details, which in this case means the definitions.

At stake is whether the Federal Communications Commission gets to regulate broadband to ensure it meets Congress’s goal of universal service.

In Section 706 of the Telecommunications Act of 1996, Congress required the FCC to “encourage” the deployment of advanced telecommunications capability “on a reasonable and timely basis” to “all Americans.” The language is particularly important.

The FCC has to report annually to Congress on the state of that deployment. Under the previous Democratic FCC chair, the emphasis was on “all Americans.”

Reports under then-chairman Tom Wheeler concluded that because broadband was not available to all Americans, it was not being deployed on a reasonable and timely basis. That opens the door, at least potentially, to rate regulation or other rules meant to remove the obstacles to deployment.

RELATED: Next TV: The Speed Lowdown on Downloads

But the FCC under its current Republican chairman, Ajit Pai, reversed that, concluding the share of Americans without access to high-speed broadband, defined as speeds of 25 Megabits per second for downloads and 3 Mpbs for uploads, had decreased. Though the decrease was less than originally thought, due to at least one carrier’s overreporting, deployment was deemed reasonable and timely according to that progress-based metric.

And while the FCC was pushed by some activist groups and others to boost the speed benchmark, the 2019 Section 706 report stuck with the current benchmark of 25 Mbps downstream and 3 Mbps upstream.

That has only fueled pushback from groups arguing that 25/3 is not fast enough; that the FCC’s deployment numbers are skewed because of bad data; and that the FCC should be looking beyond availability to how many people actually access broadband, rather than simply where they could access it. Price could also be an obstacle to broadband getting to all Americans, as well as a failure on the government’s part to sufficiently educate them on why it is so important to be connected.

Meanwhile, cable broadband operators argue that 25/3 is a sufficient benchmark, and perhaps even too high.

Here is a look at who is making which arguments, and why, as the FCC prepares to collect string on the 2020 report.

Fast Enough. Broadband providers represented by NCTA-The Internet & Television Association told the FCC it should definitely not increase the 25/3 speed threshold, and even suggested that might be too high of a metric for availability.

NCTA, which represents the larger incumbent cable operators, conceded there are still deployment gaps. It suggested, though, that the best way to fill them would be to target funds where there is no broadband at all, the so-called “unserved” rather than “underserved” population. Arguably, some available service may have to be overbuilt so that there is an ongoing business case for service that is harder or more expensive to serve. But NCTA makes it clear job one should be serving the unserved.

NCTA argues that the current 25/3 standard is sufficient to provide “high-quality voice, data, graphics and video telecommunications.” It also said the commission could look at speeds below that.

Need for Speed. In a joint filing, advocacy groups Public Knowledge, Next Century Cities and Common Cause, whose common cause is higher speed threshholds, told the FCC it should raise the high speed broadband definition to 100 Mbps. They argue the agency should skate to where the puck is going to be.

They concede that 100 Mbps is a “bold” approach, but say it is warranted. They interpret the mandate as requiring the FCC to “continuously improve” its speed standard, and point out it has remained the same for the past four years while innovation and consumer demand have not.

“The [FCC] proposal to maintain the current benchmark broadband speed without even inquiring what future benchmarks may be necessary runs contrary to the Commission’s congressional mandate,” the groups have argued.

Need for Blazing Speed. INCOMPAS, with members that include Amazon, Google, Microsoft [Editor's note: Microsoft says the association’s specific position on broadband "is not one we share"], Netflix and Twitter, are going the activist groups one better. Make that 10 times better.

They say the FCC’s new high speed benchmark should be speeds of 1 Gigabit per second and that it should be “future-proofing” the definition of broadband. They argue that 1 Gig isn’t an aspirational target for the future, but “rather a sensible standard” that consumers are buying now.

“The U.S. should be adopting benchmarks that reflect truly ‘advanced’ telecommunications capability, not settling for baseline speeds that major BIAS providers have surpassed in their initial offerings to consumers,” INCOMPAS told the FCC.

Been there, doing that. Certainly ISPs have made big strides in providing 1 Gbps, and talking it up as important for the future of things like AI, VR and 4K, though NCTA also says not everyone may have the need for that speed.

NCTA in January said that 80% of the nation can now receive those speeds, so even by that metric ISPs have been taking big steps. NCTA said more than 40 states have 1 Gbps offerings in both rural and urban areas, up from just 5% in 2016. “And while every consumer may not need Gigabit speeds today,” NCTA blogged, “it's imperative that networks stay ahead of innovation to enable next generation technologies and applications to emerge.”

So, by the FCC’s progress definition, a 1 Gbps speed benchmark could still pass Section 706 muster, though broadband providers clearly don’t want the FCC to hold them to that standard just yet.

WASHINGTON — The Federal Communications Communications continues to consider progress towards universal high-speed broadband service as sufficient to declare that advanced telecommunications is being deployed to all Americans in a reasonable and timely fashion.

For the second year in a row, the agency’s Republican majority has voted to reach that conclusion following several years when a Democratic- controlled FCC declared that not to be the case. That Democratic view was considered overly pessimistic — and calculatedly so — by Republicans and internet-service providers.

In making the reasonable and timely declaration, the FCC is instead giving a passing grade to both private and government deployment efforts.

The FCC’s Obama-era Democratic majority under Tom Wheeler had focused on the “all” in that congressional (Section 706) mandate, signaling that until high speed broadband was available to every last American, deployment wasn’t reasonable or timely.

Pai is Reluctant to Regulate

But Pai, as the minority commissioner, always bristled at the “all or not good enough” calls, particularly since Section 706 of the Telecommunications Act includes a mandate for the FCC to regulate broadband to get that answer to “yes.”

A new wrinkle in the report is that the carrier data it is based on (the so-called Form 477) has come under increasing scrutiny and even pretty general agreement that, overall, the FCC data and the maps it uses to identify where high-speed broadband is and isn’t has itself been found wanting.

Microsoft, which wants to use TV spectrum to fill in the gaps, pointedly made that point following the report’s release. “There is strong evidence, including the FCC’s own subscription data and Microsoft data, that broadband is not available to millions of people in America even though the FCC’s data says it is,” John Kahan, the tech company’s chief data analytics officer, said.

It did not help that the first draft of the FCC’s Section 706 broadband deployment report was based on inflated numbers due to an overestimate by one carrier. That slip-up not only led to a report do-over, but to questions about whether there were other mistakes that had not been uncovered. Also unhelpful was that the error was discovered by activist group Free Press, not by the FCC itself.

The reissued report, which not surprisingly was approved on a party line vote with two strong Democratic dissents, still found that progress was being made, just not quite as much as originally billed.

As John Horrigan, senior fellow at the Technology Policy Institute, pointed out, the 2012 report, under Democrat Julius Genachowski, found that 19 million Americans lacking high-speed internet access was not reasonable and timely deployment, while the 2019 report found that 21.3 million lacking access was.

Horrigan was not suggesting there had not been improvement since then: it is actually an apples-to-faster-apples comparison, as the 2012 definition of high-speed was 3 Megabits per second downstream while 2019’s is 25 Mbps. Horrigan made the point that how those who lack access are treated is in part a political calculation, with Democrats wanting freer rein to regulate. Horrigan also suggested, and likely correctly, that a Republican FCC would take a more liberal view of what constituted progress toward universal service.

Providers Stress Investment, Challenges

ISPs have always argued that they were making good progress — progress the Section 706 report should recognize — with hundreds of billions of dollars invested over the past two decades and high-speed available in 90% of a large country with a variegated population, with areas where there are many more cows passed than homes.

Certainly that was the Republicans’ view in suggesting that the digital divide was narrowing substantially, while conceding there was still a gap to be bridged. Democrats pointed to the issues with the FCC data and suggested the GOP’s thumbs-up was akin to the George W. Bush Administration’s premature “Mission Accomplished” call on the second Iraq war.

The Republican FCC was not overtly declaring victory but was declaring reasonable progress toward closing the digital divide, one of Pai’s prime directives.

Republicans have long argued that the “reasonable and timely” test is about such progress toward a universal service horizon — the Rome-wasn’t-built-in-a-day view — not about declaring failure, and thus justifying regulation, until every last American has high-speed broadband.

The National Cable & Telecommunications Association has told the FCC that it should not up its Sec. 706 report definition of broadband to 25 Mbps downstream/3 Mbps upstream.  And that if it does, the commission should make it clear that it has no regulatory "significance" outside that report.

NCTA's put forth its positions in filing with the FCC in advance of its planned vote later this month on the report and its proposed new speed definition.

"The Commission should be particularly careful to clarify that it is not endeavoring to define a distinct product market for broadband services meeting the speed benchmark," it said.

One concern is that the new speed benchmark could be used against Comcast in the Time Warner Cable merger review since it would give the combined company a greater percentage of subs since the have a greater percentage of high-speed subs.

The association says that even limited to the 706 report, the definition does not cut it, either legally or factually. It points out that the definition of advanced telecommunications capability" in the report is "“high-speed, switched, broadband telecommunications capability that enables users to originate and receive high-quality voice, data, graphics, and video telecommunications using any technology,” and says those are supportable at well below the 25 Mbps level.

NCTA also says that defining broadband in the report as only services 25 Mbps/3 Mbps and higher would breed complexity and confusion in other contexts, like network neutrality.

It says the commission's plan to impose network neutrality regs on ISP service regardless of whether or not they are delivering at least 25 Mbps "[calls] into question the relevance of any new definition of "broadband."

Congress directed the FCC in Sec. 706 to report on the timely deployment of advanced service to All Americans, and said it could take a number of regulatory actions if it found it was not being timely deployed. The FCC has concluded a lack of timeliness in the past several reports under Democratic chairmen, much to the dismay of cable ISPs investing billions and reaching all but a small fraction of the population with service.

The higher the speed definition in the report, the smaller the number of customers show up as having broadband, and thus the continued authority to regulate in the name of universal deployment if, as the FCC has interpreted it, the requirement won't be satisfied until "All Americans" have broadband.

The FCC's most recent Sec. 706 definition is 4 Mbps/1 Mpbs, but the commission had signaled last year that it wanted to up that downstream definition to at least 10 Mbps, and is now looking at 25 Mbps, citing all the demands of apps and the Internet of things and high-definition

Sen. Ted Cruz (R-Tex.) has posted a YouTube video explaining why internet service providers should not be regulated under Title II.

In the video, of a speech on the issue in Austin, Tex., last week, Cruz says that smart phones should be outside of Title II, and uses black rotary phone and cell phone to illustrate the difference between calcified public utility regulations and the innovation start-ups and entrepreneurs.

He said the simple message is: "Don't mess with the Internet."

Cruz, who told the crowd his parents were computer programmers back in the 1950s and 1960s, the era of key punches and cards and vacuum tubes, said it is now a whole different world and that the President's call for regulating ISPs under decades- old Title II was the worst thing that could happen. "The government shouldn't be picking winners and losers," he said. He argued that it was regulation that favored "the big guys with armies of lobbyists," rather than the startups and innovators.

Cruz is also the former chair of the Internet Task Force at the Federal Trade Commission, he pointed out.

"The worst thing you want is for five unelected bureaucrats in Washington to take charge of regulating the Internet as a public utility," he said.

Cruz also said 'net freedom is a speech issue and an empowerment issue and an entrepreneurship issue, and that that freedom depends on not "messing with the Internet" by imposing the "plague" of excessive regulation. He said that includes no Internet sales tax--there is a bill that could be voted on in the lame duck session, the Mainstreet Fairness Act  that would impose a sales tax on 'net transactions by eliminating the requirement that a business be connected by brick and mortar with a taxing jurisdiction.

He also argued for the U.S. not handing domain name registering over to international stakeholders.

The FCC is currently considering numerous approaches to restoring network neutrality rules, including using Sec. 706 authority to promote broadband deployment, Title II authority to regulate monopoly markets--treating ISPs as so-called "terminating monopolies" of Internet access--or some combination of the two.

In the week since President Obama's unexpected "Title II" video debuted, plenty of Washington verbiage has been spilled on what happens next - and why.

The White House recommendation that the FCC should place public utility regulation upon Internet Service Providers rankled countless insiders and, of course, totally confused "civilians" - the unwashed masses who merely rely on the Internet for all kinds of business, consumer, financial and entertainment services.

By fortunate coincidence, several D.C. think tanks had already scheduled broadband seminars for the week, some timed as follow-up analyses to the recent Congressional elections, others keyed specifically to the evolving debate about Title II regulation.  Obama's screed merely inserted an added dimension into the predictable, politically-fueled pronouncement that emerge from these think-tank symposia.

What did not emerge from these seminars or from Obama's appeal was any comprehensive approach to the big issue confronting policy-makers: an omnibus overhaul of the nation's communications law, the elusive "Telecommunications Act Reform" process on Capitol Hill.

Indeed, last week's Kabuki maneuvering and posturing about the FCC and Title II was a good way to distract attention from a really big topic - policy overhaul - and focus instead on the pretty-big topic du jour - Internet regulation. To be fair, some of the Washington events touched on copyright reform (which might include retransmission consent), media mergers, Internet tax issues (some of which require immediate action) and spectrum allocation.

Collectively, these interconnected issues cry out for integrated analysis and action. Realistically, the new Congress is unlikely to tackle such a massive undertaking - especially when brush fires such as Title II can both distract attention and simultaneously attract so much lobbying support  (i.e. contributions).

Inevitably, at last week's seminars, there was substantial debate about the merits of "Section 706" (the part of the 1996 Telecom Act that lets the FCC oversee "Advanced Telecommunications Capabilities") versus Title II regulation.   For example, at Friday's Free State Foundation session entitled "Thinking the Unthinkable" (i.e. the 'utility model" regulation) Rep. Bob Latta (R-Ohio), who sits on the House Communications Subcommittee, and the two Republican members of the FCC blasted the "unthinkable" idea of Title II regulation.

FCC commissioners Ajit Pai and Michael O'Rielly(pictured left and right) both pointed to two significant ripple effects of imposing Title II regulation on ISPs: putting onerous Universal Service Fund fees on ISP usage and sending a bad message about America's Internet stance to foreign authorities. The USF issue would have more immediate impact on cable operators and other ISPs since customers would see substantial fees directly in each month's bill. 

Pai and others are even more concerned about any policy that would embolden foreign governments, especially repressive regimes, to impose Internet regulation of all sorts on their domestic system operators. Pai warned that if the FCC adopts a restrictive Title II policy, it would further diminish America's credibility and tell other nations to "do as we say not as we do."

In addition, there are immediate problems, such as how a unilateral U.S. regulation policy will affect international treaties for dealing with transborder communications, an issue with vast consequences in the Internet Protocol era.

In separate remarks at the Free State Foundation event, O'Rielly focused on forebearance, the process by which the FCC could carve out exemptions from its most severe policies.   But  as O'Rielly said, it "should not  be conceived as easy"  and there has been no indication about which parts of Title II might receive such forebearance.

Last week's seminars served as reminders about the complexity of the individual issues and the inevitable frustrations triggered by such piecemeal action rather than a comprehensive process, such as a Communications Act overhaul.

Going down either road will take a lot of time, and as the recent policy-wonk omphaloskepsis reminds us: there is unending contemplation ahead.  Bringing it all into a bleak perspective were the concluding comments at the FSF seminar.

It's a "regulatory rat hole," said Gerald Faulhaber in an abject summary of the FCC's current options.  Faulhaber, a former FCC chief economist and now professor emeritus at the University of Pennsylvania's Wharton School, characterized the choices:

"The only difference between Title II and Section 706 is how fast we go down the rat hole."

Washington, D.C., is now buzzing with various “compromise” proposals to resolve the thorny issue of “net neutrality” and the Federal Communications Commission’s right to implement it.  But neutrality is a baby that won’t split.

In 1996, the Clinton administration and the Congress agreed that the complex, interconnected Internet was fundamentally different from the old Ma Bell phone system, which consisted of one collection of loops that only knew one trick.  So it deregulated the Internet while perpetuating regulation for the Bell System (in “Title II” of the Telecommunications Act of 1996), or at least for as long as the Bell System survived.

That vision has been proved correct. Deregulating the Internet allowed over $1 trillion to flow into its construction and improvement, and the U.S. now consistently ranks in the top 10 in the world for speed, despite its sprawling, high-cost geography.  And the link between the two is evident in Internet history.  When courts made clear that “Title II” did not apply to cable, cable investment took off; when they made clear it didn’t apply to mobile phones, mobile took off; and when they finally made certain that it didn’t apply to the Internet side of the phone companies, fiber systems sprouted up almost immediately.

But industry critics now want to bring back Title II and apply it to the entire Internet, giving the government the right to tell companies how to manage the Internet and how to price it.  Why?  Because, last year, a court ruled that the Internet had to fall under Title II if the FCC wanted to regulate it that way, specifically, if it wanted to impose “net neutrality,” the idea that everything on the Internet has to travel at the same speed.

In fact, things don’t travel at the same speed on the Internet already -- Google caches its content on server farms around the world to get closer to you; Netflix cuts deals to get a better route through the wormwood of networks.  That’s what the “neutrality” debate is really about.  It’s not about censorship or openness or any of the things consumers want the Internet to be.  In fact, “neutrality” is about the big websites maintaining their advantages on the Internet -- if Google’s or Netflix’s competitors can’t buy a faster connection, those giants’ ability to use their size to get an advantage on the Internet won’t be challenged.

And the “compromise” proposals all share one thing -- they would let those companies keep their privileged positions. For example, one proposal comes from Mozilla, which provides the search engine Firefox and which depends on Google for 90% of its revenue. You’d expect its proposal to favor Google with whatever it wants, and it doesn’t disappoint.  In essence, the Mozilla proposal would “limit” the application of Title II to the Internet “backbone,” that is, the trading of zeroes and ones among the labyrinth of interconnected networks, a market that has never been regulated in its entire existence.

Then what’s the compromise?  Well, Mozilla proposes, that in exchange for regulating the high-functioning, competitive backbone market, allowing Internet-service providerss to offer “fast lanes” on the “last mile” -- the local loop that ties you to the Internet universe. But the point of neutrality is to allow content that wants to buy a way to cut through this labyrinth -- that’s where the “fast lane” would be. In essence, they’re suggesting that the companies that want to challenge Google or Netflix be required to put their Ferrari in second gear until they get to your driveway, when they can really open it up.

Another approach to compromise comes from retiring Rep. Henry Waxman (D-Calif.) through an unfathomable “hybrid model.” Under this “compromise,” the FCC would attempt to implement the full slate of “non-discrimination” regulations that require Title II status, but under the Section 706 authority the Court recognized.  If that attempt didn’t withstand legal challenge, then the FCC would be granted “backup” Title II authority and would seek forbearance so it can pick and choose which parts of Title II apply.  But, just like a similar proposal from Rep. Anna Eshoo  (D-Calif.) that calls for strict Title II but with temporary forbearance, this proposal would open the door to paralyzing regulatory uncertainty in the market and invite judges to resolve the key issues facing the FCC, rather than the Congress or the Administration. To put it kindly, this is a head-scratcher. It’s like a disarmament treaty that forbids nuclear weapons except in cases where you want to use one.

These flailing attempts to split the baby look all the more pathetic because there’s a real compromise available, the outlines of which were first suggested than no less a proponent of Internet openness than the FCC’s current chairman, Tom Wheeler. It’s simply this -- let’s allow the ISPs to explore new business models that could actually benefit consumers by encouraging new services and offerings, and the added competition, that “neutrality” prohibits. Allowing some experiments in this area would let us to test the propositions that neutrality advocates have asserted. Is edge provider content being “slowed down” as they claim will happen? Are edge providers coerced into paying, and are those payments beyond any concept of reasonableness? Alternatively, the arguments made by neutrality opponents -- such as myself -- would get a close scrutiny as well. Most importantly, do consumer embrace the content brought to them on through transmission arrangements that may not exist today, but could if the FCC would get out of the way. Does it increase demand and consumer satisfaction?  Do new, two-sided business models lead to new product offerings?

That’s a real compromise, one that doesn’t lead to legal shenanigans or that regulates what’s never been regulated before in the name of less regulation. Instead of trying to split the baby, let’s focus on ways to raise the baby into a healthy and prosperous adulthood.

Ev Ehrlich is president of ESC Co., an economics-consulting firm, and former undersecretary of commerce in the Clinton administration.

WASHINGTON — The Federal Communications Commission has wrapped up its Internet neutrality forums with plenty to contemplate, including a variety of cures for what the agency believes is ailing the Internet.

Among those cures is a hybrid version of net neutrality applying rules based on both Title II and Section 706 of the Telecommunications Act — the former to traffic between ISPs and edge providers, the latter to the “last-mile” connection between Internetservice providers and subscribers.

The FCC’s final net-neutrality forum last week focused on legal options for restoring new rules, so Title II vs. Section 706 got a lot of attention, but so did hybrid models.

The forum started out well for cable operators backing regulation under Section 706, which authorizes the FCC to determine whether “advanced telecommunications capability” — i.e., broadband — is being deployed to all Americans in a reasonable and timely fashion.

‘SUBSTANTATIVE POWER’

FCC general counsel Jonathan Sallet said that according to his reading of the U.S. Court of Appeals for the D.C. Circuit’s decision overturning the agency’s 2010 Open Internet Order, the agency had “substantive power” under that section to protect the “virtuous circle” of innovation and broadband adoption.

But the court also talked about ISPs as a threat to Internet openness, Sallet added.

The options the FCC appears to be considering include using that Section 706 authority, as FCC chairman Tom Wheeler initially proposed; reclassifying ISPs as common carriers akin to incumbent phone companies under Title II of the Telecom Act; or perhaps some combination of the two.

One proposal is a Title II “insurance” option in which the FCC would reclassify ISPs under Title II, but forbearing all common- carrier regulations and restoring the no-blocking and no unreasonable discrimination rules under Section 706 instead. If a court threw out the rules — as it did in 2010 — the FCC could un-forbear Title II and justify them that way.

Another option would be to “split the baby,” something the FCC did not do the first time around. That would be to classify the relationship between the ISPs and users under Section 706 information-services regulations, but classify the relationship between ISPs and edge providers as a common-carrier telecom service under Title II.

Others are pushing a proposal that would reclassify the link under Title II, but would forbear most of those regulations. Another proposal by AT&T does not involve Title II, but would effectively ban paid prioritization by ISPs, or at least set a very high bar, while allowing for user-directed priority.

But anything with Title II on it might as well be marked “poison” as far as ISPs and their allies are concerned.

Wheeler has proposed a Section 706 approach to the new rules that would disallow blocking but allow for commercially reasonable discrimination beyond a baseline of level service. The court signaled that a flat ban on prioritization would be hard to sustain under Section 706, because it smacked of common carriage (Title II) regulation.

Tim Wu, the Columbia University Law School professor generally acknowledged as having coined the term “net neutrality,” argued for a hybrid approach, which he said had the best chance of being legally sustainable.

The FCC has previously found that Internet access could not be separated into transmission and content, but Wu said that so called “sender-side” relationships give the FCC a chance to weigh in for the first time on what the ISP/edge relationship is. That means it could classify that as a telecom service under Title II with low legal risk because it would likely get so-called Chevron deference (that is, federal judges’ general deference to expert agencies) from the courts for making that call, Wu said.

Gus Hurwitz, assistant professor of law at the Nebraska College of Law, had issues with the hybrid approach. He said it was legally plausible, but not sound. He suggested Chevron deference from the courts is hardly a given, pointing out that the definition of that deference was evolving.

‘BRAND X’ PRECEDENT

Thomas Navin, a partner at Wiley Rein and former chief of the FCC’s Wireline Competition Bureau, said the Supreme Court had already weighed in on the definition of ISP in the its 2005 Brand X Internet Services vs. FCC ruling, which said federal regulators could block competing ISPs from their networks.

“The Brand X decision sustained the commission’s determination that what the wireline broadband Internet access provider is providing to the end user customer is an information service, not a telecommunications service, and that’s significant,” he said. “I don’t think you’d be able to get by that obstacle.”

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.