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Gigabit

The Sound of One Hand Clapping

As expected, FCC Chairman Tom Wheeler today announced he will lead the charge to re-regulate broadband service under the Title II rules that exist for phone lines.

In the process, Wheeler intends to lead the Federal Communications Commission (FCC) where it has never gone before -- into regulation of cable and mobile broadband lines as well as phone lines -- but is likely to be leading the agency right back into a federal court, where its last Net Neutrality effort was deemed improper.

The technicality on which that ruling was based is being addressed this time, but that doesn't mean the high-powered attorneys who work for the big telecom and cable players won't find other means on which to challenge anything the FCC passes.


For the latest on broadband network innovation, visit Light Reading's dedicated Gigabit Cities content channel. And be sure to register to attend Light Reading's Gigabit Cities Live event on May 13-14 in Atlanta.


Reaction to Wheeler's announcement was entirely predictable. Consumer advocates, Congressional Democrats and many within the tech community are cheering. Republicans, the big broadband ISPs and their backers are crying foul.

There are two unknowns at this point: how Wall Street will react (not just today but in the months to come) and how the FCC will attempt to draw the "bright-line rules" that Wheeler is promising.

And that is the interesting part of what he said today, which you can read in its entirety here.

Wheeler is promising "the strongest open internet protections ever proposed by the FCC" which will "ban paid prioritization, and the blocking and throttling of lawful content and services." But he also claims to be able to encourage investment in broadband in the process, something else no FCC chairman bent on regulation could accomplish.

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The FCC Chair is taking on the big boys in a bold move, but can he pull it off?

To do this, Wheeler says he'll offer a modernized version of Title II, "tailoring it for the 21st century, in order to provide returns necessary to construct competitive networks."

According to him, this means "no rate regulation, no tariffs, no last-mile unbundling." This is the version of Title II that the wireless voice industry has grown up with, and that's good enough for Wheeler.

But it's not yet clear to me -- nor, based on what I read elsewhere, is it clear to many -- exactly what the chairman has in mind. I'm assuming part of the modernization of Title II will take into account network interconnection, content storage and distribution, since those issues factor heavily into the conflicts that triggered this latest round of Net Neutrality arguments -- namely, alleged delays of Netflix traffic.

Whatever Wheeler has in mind, it's just beginning to unfold and will face certain legal challenges once passed. That could mean broadband rules become part of the debate in the next presidential election -- not a bad thing, in my mind.

The downside of that period of debate, however, is the potential disruption of a market that was getting into the whole gigabit thing. Whether that happens lies in the hands of the investment community, which is not subject to pressure from TV pundits, consumer groups or even the Obama administration.

— Carol Wilson, Editor-at-Large, Light Reading

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Mitch Wagner 2/5/2015 | 9:55:39 PM
No fast lanes I can see the value of net neutrality regulation, but the "no fast lanes" provision seems problematic.

I know that sounds contradictory -- isn't "no fast lanes" the essence of net neutrality? -- but stay with me on this.

Consumers WANT fast lanes. They WANT their video traffic to be prioritized over other traffic, because video is more sensitive to delays. ("Buffering... ") .

This becomes even more of an issue as IoT apps emerge. You WANT your heart monitor's urgent signals to get priority over music videos.

The solution here is simple: Allow fast lanes, but make them available to anyone at the same price. Comcast can't prioritize Netflix over YouTube, but it can allow any video provider to pay an extra fee for priority traffic.

I had always assumed this was built into net neutrality, but I'm not seeing it explicitly stated in the coverage I've seen.

Also:

Google has a dog on both sides of this fight.

 
mendyk 2/5/2015 | 1:17:09 PM
Re: Years of fighting Yes, well, consumers in general want better service at a lower price, which even without regulations has a negative impact on operator spending. The FCC at this point -- or at least the chairman of the FCC -- doesn't appear to be taking reality into account. So a lot of this comes off mainly as pandering.
brooks7 2/5/2015 | 11:27:33 AM
Re: Years of fighting Dennis,

Where I am coming from on all of my thinking is the point of the consumer.  Can I get the content I want at a quality that I want.  My presumption is that I want more investment in the network to meet the growing demand by me and others.  So, I am always pondering the investment in the network angle to see how we stimulate it.  What regulatory model works best.  My concern is not a reduction in access spend, but rather a reduction in metro and deeper spend for residential broadband.  This would mean increasingly bad performance of my service.  It would also (at least today) to seem the best way to improve profit for residential broadband.

seven

 
mendyk 2/5/2015 | 11:19:49 AM
Re: Years of fighting Ultimately, retailers decided that six days in Bergen County was better than zero days. And the huge expansion in retail space over the past 20 years shows they've adapted to the reality. When the rules change, they will probably see some benefit, though it will be incremental. Again, I think net neutrality is very similar to this situation, on a simplistic level of course.
mendyk 2/5/2015 | 11:02:23 AM
Re: Years of fighting I do think the insistence on net neutrality will have some negative impact on investment, but I don't think it will result in any operators walking away from the broadband business. In contrast, the rapidly deteriorating business environment for conventional video services is much more likely to result in walkaways.
Ariella 2/5/2015 | 10:32:42 AM
Re: Years of fighting @Mendyk true but profit motive generally dictates that people (and corporations) will try to make as much as they can and not appreciate any impediments to that end. I can see a small mom and pop store liking the option of closing on Sundays but not one of the major department stores that line Route 4 and 17. We eneded up shopping on 46 on Sundays. 
brooks7 2/5/2015 | 10:20:44 AM
Re: Years of fighting  

Dennis,

So, if you think it might limit profits will this not also limit investment?

seven

 
mendyk 2/5/2015 | 10:13:57 AM
Re: Years of fighting It used to be every five  years or so. Then the big retailers figured out they could still make good money without Sunday openings. So again, an analogy to the net neutrality thing -- NN doesn't mean you can't make money, only that you can't maybe make AS MUCH money.
Ariella 2/5/2015 | 10:06:23 AM
Re: Years of fighting @mendyk It comes up for a vote so infrequently? Is it 4 times a century or so? Do the retailers campaign to get people to vote against it? I would guess if it would come up now, there would be massive ads on every available medium arguing about the increase in tax revenue and income that could result from an additional day open for business just when most people have the time to shop.
mendyk 2/5/2015 | 10:00:07 AM
Re: Years of fighting Yes, that's the analogy -- an amazingly outdated concept that survives because an entrenched interest group exerts an amazing amount of control to keep that concept alive. In the interests of full disclosure, the last time we voted on the Blue Law issue (at least 20 years ago), I voted to keep them intact.
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