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Broadband: Why would an edge provider let FCC see its business model

Technocrat’s Anne L. Kim blogged on comments Consumer Electronics Association CEO and president Gary Shapiro made at a recent Brookings Institution event.  Here is an excerpt from her post:

On net neutrality, Shapiro wants more of a hands-off approach from the government. He wants to see government allow industry and nongovernmental organizations establish principals. “And if the principals are violated, then act,” he said.

“I personally am fearful of all of a sudden sending those companies into a new area of regulation like utilities,” referring to the FCC considering using Title II of the 1996 Communications Act to rewrite net neutrality rules.

He said he likes things the “way they are” and that he’s rather not see them changed, adding that “good intentions scare me.”

Take a look at Title II, something more edge providers need to do, and you can appreciate some of Mr. Shapiro’s fear.  For example, section 211 of the Communications Act requires that common carriers (a classification that net neutrality advocates want applied to broadband providers) file copies of all contracts that they have with other common carriers.  So, if Google, a broadband wannabe, has peering or transit contracts with Comcast, Google will have to file its contracts with the Federal Communications Commission, and probably with state public utility commissions as well.  If these contracts contain information regarding traffic from certain edge providers a la Netflix, Netflix wouldn’t be happy that some aspect of its business model may be on public display with the FCC.

This type of transparency may bring joy to net neutrality proponents but not to the edge providers they purportedly are so concerned about.  In my opinion, letting the government have a copy of a contract entered into autonomously is the same as the government regulating your free speech.  Unless there is a dispute to be resolved between two parties to a contract, I see no reason to let the government have access to its contents.  If edge providers want to see a slippery slope created that takes regulation right to their doorsteps, Title II will lay the bricks for that driveway.

My walk down the Yellow Brick Road of regulation gets scarier when I take a look at section 215.  Section 215 allows the FCC to examine transactions involving the furnishing of services, supplies, equipment, personnel, etc., to a carrier.  Also, the FCC, pursuant to this section, may examine transactions that impact charges a common carrier assesses for provision of wire or wireless services.  Section 215 also allows the FCC to determine how reasonable these charges are.  Also, the FCC may report its recommendations to Congress as to whether charges are invalid and should be modified and prohibited.

Now, not to knock on Google, but since they are the Internet flavor of the week given the disclosure of their perceived wretched diversity in hiring practices, disclosing matters regarding personnel much less on their services should make the company and its investors think twice about supporting net neutrality brought to you via Title II classification.

All of Title II should be scary to venture capitalists, private equity, and their investor clients, but section 218 should bring great pause. This section allows the FCC to inquire into the management of all common carriers.  The FCC may obtain management information not just from the carriers, but from entities that directly or indirectly control them.  That, in my mind, includes private equity firms or venture capitalists that may have a controlling interest in some little regional or rural broadband provider.  With the SEC stepping up its scrutiny of private equity via the Dodd Frank Act, does private equity want another alphabet soup agency knocking on its door?

Here is one more, especially for the app developers.  Section 231 speaks to app developers, or more definitively access software providers.  This section prohibits the use of the World Wide Web to transmit material harmful to minors.  I wonder how many apps fall under this category.

When you look behind the curtain of good open network intentions, you can find some scary stuff.

Genachowski’s moderate tone on net neutrality rules a good start

Posted December 1st, 2010 in FCC, indecency, Internet, net neutrality and tagged , , by Alton Drew

I found listening to Federal Communications Chairman Julius Genachowski’s moderate tone during today’s press conference encouraging. From what we know based on today’s press conference, a reclassification of broadband access as a Title II telecommunications service is off the table. By taking Title II off the table, the FCC increases the perception of its approach to net neutrality rules as middle of the road.

Proponents and opponents agree with the overall concept of an open network, and the Chairman acknowledged that the Internet is currently Open, which has enabled its success today. Openness, as I’ve argued time and time again, adds value to this digital engine of economic growth. The more consumers accessing the Internet and the World Wide Web for digital information, the better.

At the heart of this growth is an innovative, responsive, and daring private sector that relishes in bringing products to as many consumers as possible. Everyday this sector finds ways to make the Internet better and faster than it was before. Everyday, there is a network engineer or an application developer that is designing and building devices that can connect us to the Web and each other in both fun and productive ways. All this growth since that first web page in November 1990 without the burden of excessive regulation.

I hope Mr. Genachowski presents in December rules that effectively maintain the status quo. His rules should be more an acknowledgement and celebration of what the private sector has done in providing mankind an awesome tool for productivity, which he seemed to address in his speech today. His rules should be a reinforcement of existing consumer and privacy protections and not a recreation of the regulatory wheel.

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Baker and McDowell feel FCC credibility at stake. I agree.

Federal Communications Commission members Meredith Baker and Robert McDowell made valid points last week about FCC chairman Julius Genachowski’s proposal to reclassify broadband as a Title II, common carrier service. 

Baker and McDowell are concerned about the FCC’s credibility being shot in the foot should they suffer another defeat in the courts.  Shouldn’t the FCC get congressional authority first?  

Maybe Mr. Genachowski knows he won’t get it from Congress but it sure comes off pretty presumptuous if not downright arrogant for him to try and reclassify broadband without trying first.