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Title II Reclassification and the Price Regulation of Retail Broadband Services…

October 31, 2014

by George Ford
The Pheonix Center

Last month, Larry Spiwak and I published a paper entitled Tariffing the Internet: Pricing Implications of Classifying Broadband as a Title II Telecommunications Service in which we outlined how the reclassification of broadband as a Title II telecommunications service would work in practice. (See Larry’s Op-Ed for a condensed version.) Since net neutrality seems aimed at prohibiting “paid prioritization,” we concluded that reclassification must lead to a positively-priced and tariffed termination service. That is, edge providers will be required to pay broadband providers to terminate their traffic. Today, they do not. No one has yet to make any reasonable argument against the proposal,though numerous experts have affirmed our logic. In fact, our proposal seems fairly obvious once the evidence is considered. When you recognize who are the buyers and sellers of “paid prioritization” and what type of regulation is being done, a tariffed termination service is the most natural approach to net neutrality under Title II. We also concluded that the Commission could not forbear from tariffing the termination service (that is, regulating it) given that the agency has concluded that the termination market is a monopoly. There’s no FCC precedent for detariffing a monopoly. Besides, if the agency didn’t tariff termination service, then it would not be regulating the price of termination, and controlling the price of termination seems to be a requirement of addressing paid prioritization. Read More…

Verizon warns FCC could violate law

October 30, 2014

by Julian Hattem
October 30, 2014

Verizon this week offered its most thorough analysis so far on why the Federal Communications Commission (FCC) would break the law by taking a controversial step on new rules for the Internet.

Reclassifying broadband Internet so that the FCC could regulate it like traditional phone service would be a “radical and risky” move “with significant harmful consequences,” Verizon executive Michael Glover told the agency in a letter on Wednesday accompanying a 20-page legal analysisof the action.

Any attempt to reclassify broadband service, even “hybrid” approaches that have been proposed, “would face significant legal challenge and would be unlikely to withstand appeal,” Verizon asserted in its white paper. Read More…

How Much Tax?

October 30, 2014

by Hance Haney
Tech Liberation

As I and others have recently noted, if the Federal Communications Commission reclassifies broadband Internet access as a “telecommunications” service, broadband would automatically become subject to the federal Universal Service tax—currently 16.1%, or more than twice the highest state sales tax (California–7.5%), according to the Tax Foundation.

Erik Telford, writing in The Detroit News, has reached a similar conclusion.

U.S. wireline broadband revenue rose to $43 billion in 2012 from $41 billion in 2011, according to oneestimate. “Total U.S. mobile data revenue hit $90 billion in 2013 and is expected to rise above $100 billion this year,” according to another estimate.  Assuming that the wireline and wireless broadband industries as a whole earn approximately $150 billion this year, the current 16.1% Universal Service Contribution Factor would generate over $24 billion in new revenue for government programs administered by the FCC if broadband were defined as a telecommunications service. Read More…

Internet Speed: What You Don’t Know About The Web

October 28, 2014

by Richard Bennett
Tech Policy Daily

High-speed (more correctly, “high capacity”) broadband networks are often touted as the cornerstones of a blazingly fast web experience, but this isn’t really the case. The other factors that influence the web experience are the capacity of web servers to respond to user requests and the ability of browsers and end user devices to render and display web pages. At the speeds that most Americans use today, these non-network factors account for 50 to more than 90 percent of the wait time to load web pages. Consequently, increasing network capacity has a minimal effect on the user experience of surfing the web. In fact, upgrading from a 10 Mbps broadband connection to a faster one is unlikely to produce a perceptible effect most of the time. Read More…

AT&T makes case for user-driven ‘fast lanes’

October 27, 2014

by Julian Hattem
The Hill

If people want to prioritize one website over another on their own Internet service, they should be able to, according to AT&T.

Company officials last week met with Federal Communications Commission (FCC) lawyers to argue that the agency should not ban Internet “fast lanes” that individual users want placed on their service.

For instance, a business might want to give workers faster access to certain websites over others when traffic gets clogged, to incentivize employees to stay on task rather than surf the web, AT&T argued. Read More…

Big bad Title II and the FTC’s digital huntsmen – A Halloween story

October 31, 2014

by: Babette Boliek
Tech Policy Daily

Some say today is the scariest day of the year (tax day is of course a viable contender). It is the day to scare friends with witches, ghosts, and haunted houses. Let me spin you one of my own favorite tales, adapted for the digital age — the tale of Little Red Consumer off to visit her sick relative, the (Grand)mother of Invention.

In this story, Little Red Consumer is sent by her mother into the thickest part of the Internet forest, happily walking the winding path to Grandmother’s house. Old Grandmother of Invention had laid this crazy path for years and years with the invaluable aid of countless helpers. Luckily, Big and Small Good Companies like AT&T, Verizon, T-Mobile, Google, Apple, Microsoft, Comcast, Facebook, WhatsApp, and Twitter had cleared the brush and added more value to each step Little Red now took. Read More…

Title II Reclassification and the Price Regulation of Retail Broadband Services…

October 31, 2014

by George Ford
The Pheonix Center

Last month, Larry Spiwak and I published a paper entitled Tariffing the Internet: Pricing Implications of Classifying Broadband as a Title II Telecommunications Service in which we outlined how the reclassification of broadband as a Title II telecommunications service would work in practice. (See Larry’s Op-Ed for a condensed version.) Since net neutrality seems aimed at prohibiting “paid prioritization,” we concluded that reclassification must lead to a positively-priced and tariffed termination service. That is, edge providers will be required to pay broadband providers to terminate their traffic. Today, they do not. No one has yet to make any reasonable argument against the proposal,though numerous experts have affirmed our logic. In fact, our proposal seems fairly obvious once the evidence is considered. When you recognize who are the buyers and sellers of “paid prioritization” and what type of regulation is being done, a tariffed termination service is the most natural approach to net neutrality under Title II. We also concluded that the Commission could not forbear from tariffing the termination service (that is, regulating it) given that the agency has concluded that the termination market is a monopoly. There’s no FCC precedent for detariffing a monopoly. Besides, if the agency didn’t tariff termination service, then it would not be regulating the price of termination, and controlling the price of termination seems to be a requirement of addressing paid prioritization. Read More…

NCTA to FCC: Be Careful How You Define MVPD

October 30, 2014

by John Eggerton
MultiChannel

The National Cable & Telecommunications Association is warning the FCC not to put a thumb on the scale for over-the-top (OTT) video in its effort to promote it as competition to traditional MVPDs.   In a statement responding to FCC Chairman Tom wheeler’s circulation of a proposal to define linear OTT providers as MVPDs, at least as far as having access to programming is concerned, NCTA advised it to move cautiously.   “In today’s video marketplace, consumers are reaping the benefits of robust competition and an ever expanding menu of video options,” said NCTA. “Redefining what it means to be an MVPD raises profound questions about how government will extend Read More…

The End of Free Speech

October 30, 2014

Graham Noble
Liberty Voice

Democrats on the Federal Election Commission (FEC) are planning to introduce new regulations regarding political content on the internet, in order to kill free speech and political dissent. The decision of intent, which was announced late Friday, came about after an anti-Obama video posted to Youtube raised the ire of Democrats who found themselves powerless to stifle it as it was not a paid-for political ad, which would have brought it under existing FEC regulations.

Political content and advocacy posted free on the internet is not currently regulated by the FEC. Ann M. Ravel, who is a Obama-appointed Democrat and Vice Chair of the commission, Read More…

The T in Title II Stands for Taxes

October 29, 2014

NCTA
Platform

In response to proposed legislation imposing a tax on Internet use, tens of thousands of Hungarians have taken to the streets to protest this new tax.

These protests raise an important question – what would happen in the United States if the FCC were to impose a tax on Internet access services?

Unfortunately this is not a hypothetical question. While Congress generally is responsible for assessing taxes, the FCC requires all telecommunications carriers to contribute to the federal Universal Service Fund (USF). And if the FCC decided to regulate broadband as a Title II telecommunications service, customers for the first time would see the USF contribution fee assessed on their broadband bills. Read More…

Utility Regulation Will Make the Internet Rusty

October 10, 2014

Mike Wendy
Media Freedom

No one loves their public utilities. They’re slow, unresponsive to change, and only just good enough for government work, which isn’t saying much.

If you’d talk to progressives working in the Internet space, though, you’d hear a different story. They think that utilities, and the 19th Century regulation used to control them, are the greatest things since sliced bread.  You see, they want to make private U.S. broadband providers public utilities, and radical groups like Free Press, Public Knowledge and MoveOn.org have pulled out all of the stops to get the Federal Communications Commission to do so.

Why? Read More…

Free State Foundation Comments

September 17, 2014

by Free State Foundation

On the issue of            )           AT&T and Direct TV merger

COMMENTS OF
THE FREE STATE FOUNDATION*
I. Introduction and Summary
These comments are filed in response to the Commission’s request for comments
concerning the agency’s review of the transfer of control of licenses in connection with the
proposed acquisition of DIRECTV by AT&T Inc. These comments do not endorse or oppose the
proposed merger. Rather, their purpose is to set out baseline principles by which the Commission
should evaluate this as well as other mergers and to provide a summary analysis of
AT&T/DIRECTV in light of those principles.
Mergers and acquisitions are competitive entrepreneurial activities Read More…

Free-Market Advocates’ Comments to FCC, Opposing Internet Regulation

July 15, 2014

Before the

Federal Communications Commission

Washington, D.C. 20554

In the Matter of  Protecting and Promoting the Open Internet

GN Docket No. 14-28

Comments of

Free-Market Advocates Opposed to Internet Regulation

For 10 years officials at the Federal Communications Commission have told Americans that the Internet will “break” unless the agency steps in to keep it “free and open.”  All the while, the Internet’s privately driven development has been vibrant, relentless and universal.  Nevertheless, at points during this same period the Commission twice sought to encumber the Internet with restrictive common carrier-like, Net Neutrality regulations.  In response to each of these actions, the DC Circuit twice struck down the agency’s overreach.  In the latest DC Circuit ruling – Verizon v. FCC[1] – the Court struck down the main thrust of the Commission’s arguments, but found that the Commission had some authority under Section 706 of the Communications Act.   The Commission has apparently undertaken the present Notice of Proposed Rulemaking to once again establish a regulatory regime in the absence of a market failure or a clear Congressional grant of authority.

The Internet is “free and open,” making the vast “network of networks” an integral engine for societal growth, participatory democracy and global commerce.  Its healthy development came primarily through the lack of government regulation, not because of it.  Although the Court seems to have offered the FCC a very narrow pathway to impose some form of Net Neutrality regulation on the Internet, nothing demands that the FCC go forward with its present plans.

Read More…

IFC Reply Comments to FCC: Title II Reclassification Unjustified, Unnecessary

August 12, 2010

Before the

Federal Communications Commission

Washington, D.C. 20554

In the Matter of Framework for Broadband Internet Service                    

GN Docket No. 10-127

FCC Docket No. 10-114

 Reply Comments

of the Undersigned Members of the

INTERNET FREEDOM COALITION

Introduction

The Commission is being asked by Free Press and other organizations to pursue a radical course of action – reclassifying information services as telecommunications services in order to regulate the Internet for the first time.  We write to urge the Commission to keep the Internet free of new government regulation and taxation and to refrain from rushing into such a potentially disastrous course of action.

Analysts are only beginning to grasp the extent of the disruptive and destructive consequences of regulating the Internet under Title II of the Communications Act, and the Commission is in no position to predict the outcome, much less assure Americans it will be positive.  Americans have heard political leaders admit that we will not know the full extent or nature of massive health care and financial services regulations until after the underlying legislation has been passed.  Now, Americans are facing the imposition of an even lesser-understood regulatory regime over the Internet without the benefit of any legislative process whatsoever.

CLICK HERE FOR PDF

IFC Supplemental Reply Comments: FCC Lacks Authority, Justification for Reclassifying Internet as Title II Service

April 26, 2010

Before the

Federal Communications Commission

Washington, D.C. 20554

In the Matter of
Preserving the Open Internet              GN Docket No. 09-191                                  
Broadband Industry Practices            WC Docket No. 07-52

Supplemental Reply Comments of the Internet Freedom Coalition

Just two days prior to the Commission’s deadline for reply comments regarding the above Notice of Proposed Rulemakings, the U.S. Court of Appeals ruled in Comcast v. FCC that the Commission has no authority to enact Net Neutrality rules.  The deadline for comments was extended, particularly to facilitate discussion of other methods of promulgating Net Neutrality regulations.

 Beginning with comments on the National Broadband Plan filed by Public Knowledge in January, a small number of organizations have since proposed classifying the Internet as a Title II common carrier service as a way of asserting the Commission’s authority to enact Net Neutrality regulations.  The Internet Freedom Coalition respectfully submits these reply comments in strong opposition to any effort to reclassify the Internet as a Title II service.

Read More…

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