Ann Arbor Area Business Monthly
Small Business and the Internet

The FCC and Title II

March 2015

By Mike Gould

Ah jeez, here we go again. I promise this is the last time this month I’m going to cover this, but it is important. I’ve been groping for a metaphor and the closest I can come is that we are in the days just before the Magna Carta and the king is starting to feel the heat. Previous BizMo article about this available at the URL below.

Pretty confusing business, but one whose outcome is liable to affect us all, all us Internet users, anyway. This falls roughly under the rubric of Net Neutrality, but is a much wider issue. Check out my previous columns, URLs below. So let’s try to unscrew the inscrutable and figure out where we are.

What Just Happened
FCC Chair Tom Wheeler hasn’t completely unveiled his plan, but a summary was released last week, and boy howdy, is Comcast gonna be pissed miffed. The four page “New Rules for Protecting the Open Internet” is available at the URL below.

The Title II business refers to re-classifying cable data providers as “Common Carriers”, regulated under existing and updated federal law. This is how telephone companies are classified. As not-so-common carriers, ISPs like Comcast are currently unregulated and free to do the things they do that have brought us to our current situation. Interestingly, DSL already is common carrier, even though that service is essentially the same as cable: delivery of data. The reasons for this go back to the 1996 Telecommunications Act, and earlier. Long story, good article about this from the Free Press, URL below. Anyway, the whole point of the Net Neutrality debate is to bring old laws up to date to reflect current technological realities.

A Long Litany of Lamentations
But first, as usual, some background. Thanks to the best Congress money can buy, we are at the mercy of monopolies. In this country you get broadband from one cable provider, at rates well above what the rest of the world pays, and for much less speed. (According to the Ookla net index, we are currently at #26 in Internet connection speeds, behind Bulgaria and Romania.)

Or you can get DSL which has much less speed, and only if you are within range of the right telephone switchbox. Or you can spend even more for satellite service if you are in serious boonies. And there’s Dish and DirecTV, which have their advantages and disadvantages. But if you want the fastest download times, you are pretty much on cable. And at the mercy of an arrogant entity that has a horrible track record of customer service, as monopolists tend to have.

This is what happens when essential services are controlled by mega corporations fixated on quarterly profits. The FCC’s take on The Net Neutrality issue seeks to address this in a very small way: baby steps, here, but in the right direction, IMO. Notably absent in the current considerations are any efforts to increase competition in this arena. Baby steps.

Here are some of the arguments pro and con:
The con are generally from the National Cable & Telecommunications Association (NCTA). NCTA says that onerous Federal regulation (if that’s not being redundant) will result in higher fees for everyone. Their argument assumes an increase in state and local fees and taxes due to compliance and other issues. And Title II will result in the regulation of rates which will drive up the cost of broadband.

Pro-Title II groups point out that congress has repeatedly voted down any sort of taxes on Internet transactions. There is a feature called “forbearance” that figures in this: the FCC considers rate-related complaints from consumers or providers and generally favors not getting involved in such issues.

NCTA says that Title II will stifle innovation and investment in cable infrastructure. That’s what NCTA says; ISPs themselves contradict this. According to Ars Technica:

Verizon Chief Financial Officer Francis Shammo told investors at a conference last week that Title II would not affect how the company invests in its wireline and wireless networks. At the same conference, Time Warner Cable CEO Rob Marcus noted that even Title II proponents are not pushing rate regulation.

As Ars Technica reader SixDegrees commented:

The electric and phone companies behaved in exactly the same way[back when regulation of their industries was first proposed]. As a result, we got the Rural Electrification Act and the Rural Telephony Act.

Both greatly expanded the nation's economy as a whole - and, incidentally, led to much higher profits for both telcos and electric companies, despite their previous wailing that such requirements would bankrupt them.

What’s It To Ya?
Again, this is a first effort to clean up a messy situation brought about by a bought Congress, the ever-increasing rate of technological change, and the collision betwixt. Consumers, as usual, will be the ones caught in the cogs as the machinery of government chugs along.

So how will this end up affecting us small business people? Well, either things will:

A) Get better (speed improves, ISPs get hauled into court over service outrages, rates go down due to, oh, I dunno, a lessening of corporate greed? Nah…)

B) Stay the same (your cable bill continues to drain your household budget, the US remains a global laughing stock in the Internet speed department – you can just hear those sneering Bulgarians…)

C) Get worse (the oligarchy triumphs, monopoly pricing is here to stay, and a vital service all business depends on is devoid of anyone’s oversight, under the solid control of the wealthy.) Yikes.

I do know this: as a small business person who trusts the government as much as any other small business person (not a lot), I’m hoping for A. Time will tell.

Previous Net Neutrality article:
http://mondodyne.com/b2b/smbiznet.202.shtml

FCC rules summary:
http://transition.fcc.gov/Daily_Releases/Daily_Business/2015/db0204/DOC-331869A1.pdf

Ars Technica take on it:
http://arstechnica.com/business/2015/02/dont-call-them-utility-rules-the-fccs-net-neutrality-regime-explained/

http://arstechnica.com/business/2014/12/worst-case-scenario-why-the-cable-lobby-is-scared-of-becoming-a-utility/

Anti Title II take on things:
http://www.progressivepolicy.org/wp-content/uploads/2014/12/2014.12-Litan-Singer_Outdated-Regulations-Will-Make-Consumers-Pay-More-for-Broadband.pdf

History of Telecommunications law:
http://www.progressivepolicy.org/wp-content/uploads/2014/12/2014.12-Litan-Singer_Outdated-Regulations-Will-Make-Consumers-Pay-More-for-Broadband.pdf

Mike Gould bemoans the amount of research time this article took, was a mouse wrangler for the U of M for 20 years, runs the MondoDyne Web Works/Macintosh Training/Digital Photography mega-mall, is a laser artist, performs with the Illuminatus 3.0 Laser Lightshow, and welcomes comments addressed to mgould@mondodyne.com.

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