THE BLOG

Net-"Sue-Me"-Neutrality: Get Ready for the Spring Offensive

02/26/2015 08:20 pm ET | Updated Apr 28, 2015

How we ended up here: The Book of Broken Promises: $400 Billion Broadband Scandal and Free the Net."

First, congrats to those who helped to get the pendulum to swing back a bit from the anti-customer, 'we're the phone company' position. We'll see how long it lasts.

The count-down has started and by the end of next week, or once the entire Open Internet (Net Neutrality) rules are put out (we have only an outline as of this writing), you can expect a lawyers' banquet, a feeding frenzy where they will file and file and file.

There were actually two items that were presented by the FCC:

On the municipality front -- A group called the American Legislative Exchange Council, ALEC, created 'model legislation" to close down the rights of municipalities and they have led the charge and already got over 20 states to use this legislation. This legislation is penned by (and/or with the assistance of) the ALEC corporate members, which include AT&T, Verizon, Comcast and Time Warner Cable, and then given to waiting state politicians, most of whom are funded and groomed by these companies, (or who also received foundation grant money to spend in their districts to make them look good).

And this is not new. I've been writing about this since at least 2007.

(As we pointed out, FCC Commissioner Ajit Pai congratulated ALEC on its 'model legislation' at an event in 2013.)

We expect 'law-suits-a-plenty' in all state and federal jurisdictions. Remember, they have massive amounts of lobbying dollars, fake astroturf consumer groups, corporate-funded think-tanks -- and a series of skunkworks (hidden) networks to coordinate these attacks, not to mention tens of thousands of anxiously awaiting lawyers, (their own and outside firms), all chomping at the bit for this race to begin.

Oh, and did I mention that you paid for all of this lobbying, lawyering, foundation monies, etc., which is built into your rate increases? (I'll be discussing this in the next few stories.)

Net Neutrality being solved? As we take our victory lap, I can hear the cheers of joy from the phone and cable companies now. But that is not what they will tell the public.

Verizon writes that the FCC's decision is harmful and a radical step that is applying antiquated regulations.

2015-02-27-Verizonfeb26.png

But this is all a feign as this antiquated regulatory framework is the basis of Verizon's entire fiber optic investment and deployment.

I mean -- how can they say this when their own official documents state their Fiber-to-the-Premises (FTTP) networks are Title II under that same 'utility style regulation' today? (Note that almost identical language is used in almost every state-based cable franchise agreement we could find.)

2015-02-27-titleiiverizon.png

This is one of the reasons we filed a Petition for Investigation against Verizon for perjury, as they never once told the FCC about their current deployment's reliance on Title II. As we outlined, Verizon New York also received multiple rate increases on local phone customers because the network construction is Title II.

But, don't worry; Verizon, AT&T, et al will be filing and filing and filing to get rid of the 'Net Neutrality' rules making the same bogus claims about 'utility styled regulations.'

The Net Neutrality Underbelly

The reason why Verizon et al are happy is because of the outline of the Open Internet rules posted today, which actually gives the phone companies what they want.

"The Order provides the strongest possible legal foundation for the Open Internet rules by relying on multiple sources of authority including both Title II of the Communications Act and Section 706 of the Telecommunications Act of 1996. At the same time, the Order refrains - or forbears - from enforcing 27 provisions of Title II and over 700 associated regulations that are not relevant to modern broadband service. Together Title II and Section 706 support clear rules of the road, providing the certainty needed for innovators and investors, and the competitive choices and freedom demanded by consumers, while not burdening broadband providers with anachronistic utility-style regulations such as rate regulation, tariffs or network sharing requirements."

To put this into English, just take out your current communications bills -- There is no competition, so prices continue to rise. This says -- we're not going to regulate rates --even if they are egregious, (rate regulation is supposed to be used when there is no competition to lower prices), and we are not opening the networks ("Network sharing") so you can't choose your Internet, broadband or cable TV provider over the wires coming into your home.

While some will say that this decision will swing the pendulum back to the 1990's and the pre-closing of the networks' hey day, that's pure wishful thinking without any clue about the actual history.

The Telecommunications Act of 1996 was passed (by a Republican congress), to open the 'last mile', i.e., open the wires coming into your home and office to allow competitors to offer you service. This doesn't do that. This still blocks competition and your cable and phone company can raise your rates as they see fit.

Now you know why the phone and cable companies are still smiling.

But, I can hear the cries of the cable and phone companies-- "woe is me" and they will, of course, take the FCC, throw in some states and municipalities, to court as it will cause even more confusion while they sit back knowing that the real use of Title II -- to reopen the networks to competition -- isn't even on the table.

And, it could be worse as some of the 27 Title II obligations that are being cut include the requirement to fix your broadband lines after a storm, or even requiring that the company makes sure you can even get service. These requirements will no longer be a burden to those monopoly/duopoly controllers of the wires, though the final order will outline the extent of the damage - or what will be taken to court.

And that underbelly? AT&T and Verizon have already been eroding customers' rights with another piece of ALEC legislation which has been claiming to 'free the net' through the "IP transition". This is nothing more than a euphemism for 'get rid of Title II obligations and oversight'. And it fooled most Internet companies along the way as the majority of the US has passed a deregulation bill eliminating some, if not all Title II obligations. ("IP", Internet Protocol, is classified as 'Title I', an 'information service', and therefore is not 'telecommunications' and not 'Title II".)

So, combining the state and federal erasure of laws and regulations -- and the law suits that are coming-- Fasten your seat-belts, ladies and gentlemen; we're in for a bumpy ride.

My big laugh, however, is that the FCC will be the agency to deal with complaints. Doesn't anyone know the history of the FCC's inability to monitor and enforce basic laws or the complaint process? Why do you think we're in this situation?

Simply put, there is an 'informal' and 'formal' complaint process. But unless you have deep pockets, you can't take formal complaints as they cost $50,000-$100,000; they are legal proceedings and in the past even the 'rocket docket' can take years and be cost-prohibitive, especially for small companies. Moreover, 'informal complaints' are essentially useless, or at best hit and miss. And since Congress controls the FCC's budget and the Republican congress is now planning on stripping the FCC of authority about all of this if they get the chance...

And oversight? Your bills are unreadable, there are made up charges, deceptive billing and advertising practices and no oversight about this.

And yet, the FCC is erasing basic "administrative filing requirements or accounting standards".

But, I'm optimistic. Hell, who would have thought that an obscure telecom wonk phrase like "Title II" would be quoted by the major media or that people are so pissed that you can get over 4 million to do something that doesn't involve some sports personality or pop diva.

And this is more in the right direction than the carpet bombing of regulations by then-chairman Michael Powell (now head of the NTCA cable association), or the empty suit chairmen, Martin and Genachowski.

But the battle ahead is not about Net Neutrality but re-opening the networks, finally, so that there are competitors who are fighting for your business vs us begging to raise our rates less. It's also time to expose just how far the pendulum has swung in the wrong direction and finally fix the mess.

Welcome to the Spring Offensive.