Light Reading

Cable Walks Line on Net Neutrality

Mari Silbey
1/15/2014
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The ink had barely dried on the federal appeals court decision to strike down the Federal Communication Commission's Net Neutrality rules Tuesday before the cable industry began issuing carefully worded responses backing an Open Internet, if not the FCC's rules to enforce it. (See Net Neutrality Fight Not Over.)

In a prepared statement, the National Cable & Telecommunications Association (NCTA) mostly shrugged off the court decision itself. Instead, the group expressed its firm commitment to the Open Internet and support for the Federal Communications Commission (FCC) 's hands-off approach to web regulation so far.

“The cable industry has always embraced the principles of an open Internet and the Court decision will not change that," NCTA President & CEO Michael Powell said. "While we fully expect some to rush to judgment about the fate of the open Internet, we should remember neither the adoption of the Open Internet Order, nor its partial repeal, has led or will lead to significant changes in how ISPs manage their networks.”

Further, Powell said, “the cable industry has always made it clear that it does not -- and will not -- block our customer’s ability to access lawful Internet content, applications or services. We look forward to working with Chairman Wheeler and the FCC on ensuring that American consumers will continue to enjoy a fast, robust and open Internet experience.”

Similarly, Time Warner Cable Inc. (NYSE: TWC) re-affirmed its commitment to the Open Internet and support for the FCC's laissez-faire approach up till now. “Since pioneering the development of high-speed broadband service in the late 1990s, Time Warner Cable has been committed to providing its customers the best service possible, including unfettered access to the web content and services of their choice," the company said in its own prepared statement. "This commitment, which long precedes the FCC rules, will not be affected by today’s court decision.”

Likewise, American Cable Association (ACA) chimed in with its support for the Open Internet despite its opposition to the now-struck down Net Neutrality rules.

“ACA members believe that customers should be able to access the lawful content they wish on the Internet irrespective of who provides their Internet access service," ACA President & CEO Matthew Polka said in another prepared statement. "ACA has long held that adopting Open Internet rules was unnecessary because its members had been operating and would continue to operate in conformity with the FCC’s 2005 Open Internet principles. That remains true today regardless of the court’s decision.”

Although the appeals court unanimously decided that the FCC does not have the authority to ban broadband providers from blocking or discriminating against certain types of Internet traffic, it said the FCC could regulate such behavior if broadband providers were re-classified as common carriers. Up to now, the Commission has determined that ISPs are not common carriers and therefore not subject to such rules.

On the face of it, the appeals court ruling is a good one for cable companies. It means that the FCC cannot stop them from blocking or discriminating against popular web content providers like Netflix Inc. (Nasdaq: NFLX) that flood their networks with video traffic. However, the reality is far more complicated.

For one thing, the battle is far from over. The FCC still has room to create Internet protections outside of the specific parameters on which the court ruled.

For another, service providers have to be very careful about the arguments they make, given the potential anti-trust issues associated with prioritizing their own IP video content over a competitor's. Cable companies must show that they are fighting for an open Internet – as indeed their public statements so far indicate – because they have control over both broadband delivery pipes and the content that gets delivered over those pipes.

If the appeals court has walked a fine line with its decision, it's not the only one trying not to stray too far to one side or the other of the net neutrality debate. The cable industry also has a delicate balance to strike.

— Mari Silbey, special to Light Reading.

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sam masud
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sam masud,
User Rank: Light Sabre
1/16/2014 | 1:45:40 PM
Re: When lawyers are editors...
I really should have clarified my comment--fault of my mind thinking one thing and fingers doing something else--because in my head I was thinking about the telcos, VZ in particular, in light of the open Net ruling by the appellate court. My bad, as they say :-(
brookseven
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brookseven,
User Rank: Light Sabre
1/16/2014 | 1:27:02 PM
Re: When lawyers are editors...
Sam,

Let me use an ad absurdum argument to help clarify your last comment.

Since we are talking about Cable, their last mile is broken up into QAM groups allocated for different channels and for DOCSIS cable modems.  I could argue that the use of bandwidth for carrying broadcast channels is discriminating against OTT versions of that service already.

In fact, I could argue that the fact that any bandwidth in the local loop not dedicated to Internet Service is in fact discriminatory.

I don't believe those things but can argue them.  The challenge is a slippery slope definition wise.  Is applying QoS discriminatory?  Yes but it might be required to offer some services.

seven

 
sam masud
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sam masud,
User Rank: Light Sabre
1/16/2014 | 10:51:47 AM
Re: When lawyers are editors...
You're right about CDNs and peering agreements, even so that's something content companies do on their own--no one is putting a gun to their head and saying, "If you don't pay us more, then you're not going to get the same treatment as that other company." The point is that those who control the last mile should not descriminate when it comes to Net access.
TomNolle
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TomNolle,
User Rank: Light Sabre
1/16/2014 | 10:43:45 AM
Re: A Very Fine Line
I've been involved in regulatory politics for literally decades.  Back in the time of the Telecom Acti (of 1996) I had a conversation with a congressional aid on the topic of how the legislation was framed and passed.  He said "We brought in one side and gave them everything they wanted, then we brought in the other side and gave them everything they wanted."  This isn't a picture of an honest process, however you think that public policy should go in the matter.  Politics is universally corrupt, and regulatory policy is politics.
KBode
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KBode,
User Rank: Light Sabre
1/16/2014 | 9:58:02 AM
Re: A Very Fine Line
I agree with Carol.

In Congress, it's politically toxic and there's too many other battles being waged. It has been framed as trying to "regulate the Internet" after years of misleading debate. Dems won't touch it.

A the FCC, what's the over/under on a former cable lobbyist reclassifying ISPs under Title II? I just don't think it's likely. Maybe he'll surprise me.

I think we get to see first hand the kind of "innovation" carriers have long stated they wanted to experiment with in terms of consumer pricing. I'm sure it will start with baby steps (like AT&T's sponsored data) and gradually get worse from there.

Caps, unreliable meters, certain content made exempt provided the company pays up, etc. Brave new world ahoy.
brookseven
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brookseven,
User Rank: Light Sabre
1/15/2014 | 4:10:00 PM
Re: When lawyers are editors...
Mari,

The other major sports networks are NBC/Comcast, Fox and CBS.  None of them (especially NBC) will struggle with data cap overrides.  I think you are more concerned about new players.  There I think they need to be niche players.  There is a network that focuses on a Video Gaming League.  That seems to be more likely and I don't see ESPN competing in that business.

seven

 
msilbey
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msilbey,
User Rank: Blogger
1/15/2014 | 12:18:38 PM
Re: When lawyers are editors...
seven- By new players I mean content companies. Let's say ESPN bundles its IP video with transport costs so that any ESPN streaming doesn't count towards your data cap. In that case, ESPN is paying the cable companies for delivery and handing the cost back to consumers in the price of the service. Fine. But how does any other sports content company compete without also paying transport costs up front? Answer: by offering a cheaper, lower-quality service that eats into your data cap. Possible, but it won't be easy to create something compelling within those parameters. 

I do recognize that there are a lot of factors at play here. And arguably ESPN is impossible to compete with anyway. But I also believe we still need to keep tabs on how much we blur the lines between content and transport. It's only going to favor the companies - from ISPs to programmers - who already have power. 
albreznick
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albreznick,
User Rank: Blogger
1/15/2014 | 12:13:43 PM
Re: A Very Fine Line
Agreed, Seven. The Dems have been bought and sold just like the Reps on issues like telecom. 
Carol Wilson
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Carol Wilson,
User Rank: Blogger
1/15/2014 | 12:13:17 PM
Re: A Very Fine Line
I agree that the big carriers have spread their lobbying dollars around liberally and own, that is, influence, a fair number of folks on both sides of the aisle. 
albreznick
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albreznick,
User Rank: Blogger
1/15/2014 | 12:11:29 PM
Re: A Very Fine Line
Yep, i agree with you there, Carol. I don't think the Dems have the stomach for this battle, at least not this time around. They have bigger, or at least other, fish to fry right now.  
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