Policy Watch: Will the FCC Declare War?

In this week's roundup of cable policy hullabaloo: Pundits wonder to what lengths the Federal Communications Commission (FCC) might go to exert its authority over the Internet; the House gets ready to ponder the proposed cross-industry gateway; and the CableCARD regime gets mixed reviews.

  • Although Comcast Corp. (Nasdaq: CMCSA, CMCSK) won the most recent battle over so-called network neutrality, there's speculation running rampant that it -- and other MSOs, for that matter -- should start preparing for a long, uncertain war, should the FCC indeed take the "nuclear" option of reclassifying Internet services as common-carrier, phone-like services. (See Net Neutrality Ruling: FCC Loses, Comcast Wins and Did Comcast Really Win?)

    The FCC has yet to tip its hand, so let's just say, in Wargames terms, that the situation is still fixed at DefCon 3. But should the FCC turn both keys and launch a Title II, carrier-level missile (today the FCC's authority over the Internet is under a Title I, information service designation), it could usher in regulations tied to rates and other terms and conditions. It would likely take several years to resolve all the fallout of such a move.

  • One person who is strongly against seeing the FCC seek out such a reclassification is former Commission Chairman Michael Powell, who told The Washington Post that the current classification is doing the job, and that the market, not the government, can do a better job expanding broadband.

    "Here’s the bottom line, to talk about going to Title II is talking about doing something relatively epic, novel and unprecedented. It doesn’t mean they [the FCC] couldn’t do it, but I might challenge it," he said, adding latter: "I think we are better off asking Congress for guidance."

  • The Comcast decision is being perceived as a setback to the FCC's authority over the Internet, but Commission Chairman Julius Genachowski claims it doesn’t alter the landscape much at all. The appeals court ruling "does not change our broadband policy goals, or the ultimate authority of the FCC to act to achieve those goals… The court did not question the FCC's goals; it merely invalidated one technical, legal mechanism for broadband policy chosen by prior commissions."

  • The court's decision likewise did not stop the Commission from releasing a "Broadband Action Agenda" last Thursday. Among the action items on the 2010 agenda for the proposed National Broadband Plan is to carve out an additional 500 MHz of spectrum for mobile broadband use within the next 10 years, and to transform the Universal Service Fund to support broadband service. Here's the more colorful schedule the FCC has in mind in 2010.

  • One National Broadband Plan item that will get some attention this week is the FCC's coming proposal to develop a standardized, Web-capable gateway (or functional equivalent) to be used by cable operators, telcos, and satellite TV service operators alike. The FCC thinks such a device would help drive broadband adoption. (See FCC Floats 'Simple' Gateway, CableCARD Rules .)

    The House Communications Subcommittee is slated to conduct a hearing on the gateway matter this Thursday morning.

  • One guy who can't wait for some new CableCARD rules is gadget blogger Dave Zatz. After reporting a relatively pain-free reactivation of his Moxi HD-DVR in February, the experience went into the tank when he tried to get a CableCARD paired with his new TiVo Inc. (Nasdaq: TIVO) Premiere box, resulting in delays, hand-wringing, and much gnashing of teeth. (See TiVo 'Premiere' DVRs Go Retail.)

  • Speaking of TiVo, its experience with the CableCARD regime is well documented, complaining ad nauseum about installations, certification headaches, and tuning adapters (the devices needed to connect CableCARD-based TiVo boxes to cable's tier of switched digital video channels). (See TiVo Gives Cable Both Barrels .)

    Well, Ceton Corp. has a much different tale to tell, giving an exemplary description of its dealings with, and support from, CableLabs, MSOs, and the CableCARDs themselves. Ceton, maker of a new CableCARD tuner for Microsoft Corp. (Nasdaq: MSFT) Windows Media Center PCs, expressed its view in an FCC filing last week, holding that the Commission should reaffirm its support for the CableCARD system and think twice about abandoning it. (See Ceton Delays CableCARD PC-TV Tuner and Ceton Pitches Cable Set-Top Alternative .)

    — Jeff Baumgartner, Site Editor, Light Reading Cable

  • bollocks187 12/5/2012 | 4:39:51 PM
    re: Policy Watch: Will the FCC Declare War?

    FCC is a joke.

    Go Google


    acohn 12/5/2012 | 4:39:51 PM
    re: Policy Watch: Will the FCC Declare War?

    I am so sick of hearing people say that the free market works better than the government. That may be true in some things--like making and selling clothing, building houses, and similar things, but when it comes to big things that belong to the whole country--like water, air, and airwaves--we need government regulation. The free market is only in it to make profits. Some things work better for the people when profits are not the only goal. After the past 30 years of seeing how the "free market" really works, we find our country in the worst financial shape since the big depression of the 30s. Anyone who has eyes and ears can judge for themselves by the results. It is time to admit that the "free market" isn't the answer to everything.

    paolo.franzoi 12/5/2012 | 4:39:50 PM
    re: Policy Watch: Will the FCC Declare War?

    The extreme example on the other side is vacuum tubes and semiconductors.  In the extreme of regulation, the Soviet Union forced all R&D into vacuum tubes and ignored semiconductors.  This, of course, turned out to be a completely wrong decision but could not be overcome.  Russia (and other former Soviet Republics) have the world's best vacuum tubes which are a comfort to those audiophiles.

    So, the free market works better at lots of things.  It also needs to be regulated.  If you actually read the Wealth of Nations, you would see that this was a requirement by Adam Smith.  His primary objection was to the creation and propagation of government monopolies (like the East india Company).  His argument was that this heavy handed control is not effective for the consumer.

    The question you are asking is about infrastructure.  Let's use broadband as an example.  We have had many discussions on here about the right way to build infrastructure and how to regulate it.  I want to point out to you how odd this is when you think about it.  Right now, just about everyone (and I am using the 80/20 rule here - so I mean 80%) can get what is termed broadband (DSL, Cable Modem, 3G Wireless) from various providers.  Generally a DSL, Cable and at least 2 wireless providers.  These have all been funded by private money.  In a government controlled manner, there would be an installation of likely 1 wireline (dsl/cable/fiber) and 1 wireless (3g) service.  The ongoing upgrade of this service would not be directly determined by technology availability.  There would be ongoing debates about extending coverage and capability of the existing infrastructure versus building new infrastructure.  What you can not expect is the ongoing deployment of the latest technology.  If you think that is what would happen, then you would have to think about the infrastructure in the US that is falling apart and ask yourself if having it be run similarly would be any different.

    On top of all of this the pace of technological change is faster than the pace of regulatory change.  So, the regulators have insufficient capability to manage and monitor the infrastructure.



    Cooper10 12/5/2012 | 4:39:49 PM
    re: Policy Watch: Will the FCC Declare War? "...things that belong to the whole country". Since when did broadband infrastructure built with private, at-risk capital become something that belongs to the whole country? You're right that the free market isn't the answer to everything, but take a close look at Social Security, Medicaid, and the deficit before assuming that the free market isn't the better answer.
    Jeff Baumgartner 12/5/2012 | 4:39:45 PM
    re: Policy Watch: Will the FCC Declare War? It's true that US broadband has been built by private dollars, but for some reason there's this overarching feeling of entitlement that's somehow emerged for broadband. Broadband's become a near necessity for some and there's a lack of coverage and competition in many parts of the country, but is it really the government's role to step in and "fix" it? And if that intervention does manage to improve the picture, how hard will it be later for the government to loosen those reins and let the market do its thing? JB
    Jeff Baumgartner 12/5/2012 | 4:39:45 PM
    re: Policy Watch: Will the FCC Declare War? It's been interesting to see the many reactions so far well before the FCC offers any indication on what it might indeed do next. While it's hard to find many opinions that the FCC should just steer clear of all this, what do you think the FCC should do so its hands aren't completely tied? I've seen opinions for and against the pursuit of applying Title II on the Internet, but what do you think is the best course for the FCC to take since whatever decision it does make could have major implications on its proposed National Broadband Plan? JB
    Cooper10 12/5/2012 | 4:39:45 PM
    re: Policy Watch: Will the FCC Declare War? The court decision essentially said that the FCC, in this specific instance, overstepped their authority, and did not have statutory authority to determine that the network mgmt practice of delaying P2P traffic was inappropriate and doling out fines and punishment based on that determination. It wasn't the "end of FCC authority over the internet" as many "consumer advocates" are making it out to be. A novel approach may be for the FCC to admit that they have no idea how business models will evolve between ISPs and content providers, and that they will monitor the market and take action where necessary, vs. trying to create prescriptive mandates for what "might" happen.
    Jeff Baumgartner 12/5/2012 | 4:39:41 PM
    re: Policy Watch: Will the FCC Declare War?

    Even thought the court found that the FCC did exceed its authority in the P2P-related order against Comcast, the whole process did put ISPs on notice that they'd better behave and, from now on, be more transparent in how they treat traffic, so the intended effect still applies.

    But the decision won't make any future net neutrality-related plays by the FCC any easier. But, I agree that it does make more sense for them to step in when appropriate versus implementing some super broad rules. JB

    DCITDave 12/5/2012 | 4:39:37 PM
    re: Policy Watch: Will the FCC Declare War? <div align="center">Video Comment

    fgoldstein 12/5/2012 | 4:39:30 PM
    re: Policy Watch: Will the FCC Declare War?

    The Court's wise decision only addressed the narrow question of whether or not the FCC had the right to use Title I ancillary jurisdiction in order to regulate the content and managment practices of ISPs.&nbsp; It said no, on grounds that claims of ancillary jurisdiction must be tied more closely to rules and their actual enabling laws, not just statements of principle.

    The ruling also made quite clear that the FCC can impose common carriage and even structural separation requirements on telephone companies (i.e., Computer II was legal) and can even impose open-to-other-ISP rules on cable (i.e., Brand X gave the FCC lots of latitude in both directions).&nbsp; These are both things that open up networks to more competition, but do not regulate the content of ISPs, which is what "neutrality" actually refers to.&nbsp; So it looks like neutrality -- the right to run a conetnt distribution network on your cusotmers' PCs and their ISPs' nickel -- will be hard to enforce on ISPs who don't want it.&nbsp; But restoring a choice of ISPs, so you can pick one whose policies you like?&nbsp; That is certainly within the FCC's jurisdiction.

    Since this latter "choice" neutrality is the only kind that actually works (unless you're a pR0n distributor), the actual ruling was strongly pro-neutrality.&nbsp; And in a similar irony, it could possibly invite more regulation on Comcast, to let other ISPs onto its cable.

    Of course the FCC had avoided citing Title II because the goal was to relieve the Bells of their obvious responsibilities, and that "ancillary to nothing" approach got slapped down hard.&nbsp; Since the new FCC is a bit less Bell-captive than the old one, maybe they'll take the hint.

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