Fast Lane, Slow Lane -- "No Lane" -- End Game in Telecommunications

09/23/2014 01:57 am ET Updated Dec 06, 2017

Forget about Net Neutrality's fast lane vs slow lane. We are at the end game in telecommunications and we should all be talking about the "No Lane."

Net Neutrality is like one of those Rorschach Tests used in psychological examinations where everyone sees something different in the same picture. With a record 3.7 million comments filed at the FCC in the Open Internet proceeding, as of September 15th, 2014, one thing is clear -- America is angst-ridden about something.

The most common theme in the last round of comments filed is now the-easy-to-remember chant -- "fast lane vs slow lane," while over the last decade it has referred to the blocking or degrading of service.

But the truth is -- the angst is not only from 'Net Neutrality'. According to an ACSI survey, in 2014, Comcast and Time Warner are leading the list as the "most hated companies in America," while "ISPs," (actually the phone and cable companies, including AT&T and Centurylink) were also at the bottom of customer satisfaction.

While Net Neutrality focuses on important issues, it doesn't address or cure anything to do with stopping the "No Lane"-- the end game if AT&T, Verizon, Comcast and Time Warner continue on their path. These companies are the incumbent wireline and cable companies that control most of the wires in the US and that also means that they control all wireless services. Control of the wires also gives them control over all services, including competitor services, but more importantly it gives them the ability to control who gets upgraded and who doesn't, or what prices customers' pay, or worse, who will be 'shut off' and end up in a 'Digital Dead Zone'.

How bad is the broadband 'landscape'?

A recent speech by FCC Chairman Tom Wheeler brings the "No Lane," filed with the "have nots," into focus.


"At the low end of throughput, 4 Mbps and 10 Mbps, the majority of Americans have a choice of only two providers. That is what economists call a "duopoly," a market place that is typically characterized by less than vibrant competition."

"At 25 Mbps, there is simply no competitive choice for most Americans. Stop and let that sink in...Three-quarters of American homes have no competitive choice for the essential infrastructure for 21st century economics and democracy. Included in that is almost 20 percent who have no service at all!" "Things only get worse as you move to 50 Mbps where 82 percent of consumers lack a choice."

Ironically, (as we mentioned in our previous article), America's customers have been charged about $400 billion dollars to have the entire US upgraded to fiber optic services by 2010, or there abouts, with speeds of at least 45 Mbps in both directions -- and that was the speed of broadband in 1992; by 2014, we should have been a 'gigabit nation'.

Wheeler, unfortunately, appears to be in denial about the other pressing issues -- And it is going to get worse.

The "No Lane": Shutting off the Copper -- and Force-Migrating to Wireless.

At an investor meeting, a CITI Investment Research analyst asked Fran Shammo, Verizon's CFO, about "the homes where you don't have FiOS. I think it's... maybe roughly 8 million homes...."

Fran Shammo responded: 'VoiceLink' and 'harvesting' are the plan.

"Outside of the FiOS footprint obviously, really we are taking two measures there. One is the Wireless portfolio and replacing some of that that old voice legacy copper voice with our LTE voice product that Wireless has been selling across the nation for almost two years now called Home Phone Connect. Within Wireline, they have a very similar product called VoiceLink which in essence is the same thing.

"So we will try to replace that copper legacy with those technologies. But look, I mean, outside, this is kind of where you say it's you have to nurture it and harvest what you have and we know that we are not going to be able to compete with speed in that environment and we will continue to do the best we can."

Harvesting customers is essentially getting as much profits out of a customer as possible by raising rates until the customer screams uncle and leaves, or stays but is being gouged. But the primary goal is to shut off the copper, so make as much as possible until then. Meanwhile, VoiceLink caused a revolt on Fire Island, New York. After the Sandy Storm, Verizon's plan was to not fix the copper utility networks in various parts of New York and New Jersey and force customers onto a 2G-styled wireless service called VoiceLink. Fire Island residents attacked this plan and in 2014 they were wired with fiber optics; Mantoloking New Jersey wasn't as fortunate or vocal and is still forced onto VoiceLink.

Unfortunately, AT&T has an identical plan, but they call it the "IP Transition." This chart, supplied by AT&T to the FCC, is the current and after picture about its plans for the Carbon Hill Alabama Internet Protocol (IP) transition trials, which is supposed to migrate customers from the current networks to Internet-based networks.

2014-09-23-attcarbonhill.png

In this rather jaw-dropping chart we see that AT&T will shut off 60% of working wired services to be replaced with their own wireless service, while 4% can't get anything upgraded so far. And their wireless product includes a VoiceLink-like service. (I note that as of the filing, VoiceLink couldn't do data applications or Internet service.)

How exactly does shutting off the working phone lines (and not upgrading the customers), or worse, replacing the line with an inferior and expensive wireless service constitute a "transition" to IP protocols exactly?

Net Neutrality's Broadband Utility Push and the Disconnect.

Net Neutrality activists have started a clarion call for a) the return of broadband to a Title II classification, and b) there has been a new wave calling for a "broadband utility."


"A good number of politicians have recently made statements in favor of net neutrality, but House Minority Leader Nancy Pelosi is going further than most of them today and asking that the Federal Communications Commission reclassify broadband as a utility using Title II of the Communications Act -- exactly what net neutrality advocates have been pushing for."

And a number of the Internet companies also want to move toward applying public utility regulation to solve "net neutrality" as well.

"In what would have seemed highly unlikely just a few months ago, growing support for public utility regulation is emerging. Tech companies, politicians, internet service providers, and component makers have started to outline their views regarding their policy approach to the issue of net neutrality."

Besides the fact that the Verizon fiber networks are still Title II, and that there has been a utility that was supposed to be upgraded to broadband since 1992, there are other disconnects in all of this.

While the Tech and Internet companies suddenly want to 'reclassify' broadband as Title II, the damage has already been done -- with massive campaigns over the last five years to strip-mine the state utilities that are in place of their Title II classification. And many of the Tech and Internet companies have been part of this push.

We've explained this elsewhere, but simply put-- "Title II" is a classification of telecommunications services, and it was applied to broadband for decades. Telecommunications services have obligations like "carrier of last resort," meaning that if your line breaks they fix it as everyone is entitled to phone service. Also, the networks are 'common carriage', meaning, like roads, anyone can use the wires; there's no gatekeeper to block someone from using a public road.

Then, around 2005, the FCC decided that broadband and Internet service, which was classified as an "information service" (Title I), should now be one service -- classified as an information service. An information service doesn't have the telecom requirements, so simply changing the classification, even for the exact same wire, changes the laws and regulations.

And right now the entire US is a battleground as whole areas of America are being targeted to get 'shut off' or 'migrated' -- with or without the customer's consent, and much of this has been about reclassifying services to get rid of regulations.

Erasing the Existing Title II laws throughout the US and Customers' Rights.

Working through a group called the American Legislative Exchange Council (ALEC), AT&T and Verizon have been running campaigns to remove regulations where they created model legislation that is given to ALEC state legislator members, (most of whom are funded via AT&T, Verizon and the cable companies), to pass odious deregulation bills to strip-mine the Title II obligations. And these are joined by hordes of co-opted non-profits, corporate-funded think tank data, and astroturf and skunkworks campaigns to help push their funders' desires.

And the public side has been losing, big time. A report by NRRI called "Completing the Process," where the name alone should be sounding alarms, details the current situation.

"Deregulation of retail wireline telecommunications continued to be a focus for state regulators and legislators during the 2014 legislative sessions. By the end of 2013, 30 states had reduced or eliminated retail telecommunications regulation. Two additional states, Colorado and Iowa, were added to the map in 2014, bringing that total to 32. Bills pending ...increase that number to 36, covering nearly 75% of the country.

"During 2014, legislators continued to focus on leveling the playing field between the Incumbent Local Exchange Carriers (ILECs) and their competitors by proposing bills that would eliminate or significantly reduce carrier of last resort obligations (COLR), reduce or eliminate the state commission's authority to resolve customer complaints for both wireline and IP-enabled services, and eliminate oversight of IP-enabled services. By the end of 2013, 15 states had eliminated or significantly reduced COLR obligations. By the middle of 2014, bills in Colorado and Michigan increased that total to 17, with additional legislation still pending in Pennsylvania and Massachusetts."

There have been complaints nationwide about the shutting off of the networks in this forced migration.

"Public Knowledge, TURN, National Association of State Utility Consumer Advocates, NASUCA et al write to the Federal Communications Commission today to express concern about reports that have surfaced across the country indicating carriers are forcing customers off of traditional copper-based phone service. Complaints often state that customers are being involuntarily moved to fiber or IP-based service (or some combination thereof), even if those new technologies fail to serve all of the user's needs or will be more expensive. Denying basic phone service to people who have relied on the network for decades violates the network compact that has successfully guided our communications policy for one hundred years."

But the question remains, what exactly will the Tech and Internet companies do over the next year? There are, of course, different groups of companies. A group of hardware-tech companies, including Cisco and IBM have already come out against Net Neutrality, while another group, which includes Google and Microsoft, as well as Meetup and Etsi, are for Net Neutrality.

Net Neutrality Doesn't Give Customers a Choice of Internet Service Providers.

The other disconnect is that while NN may stop your Internet service from a 'slow' lane problem, it doesn't open the networks to direct competition. Today you can't choose a competitive Internet Service Provider, ISP, on the cable or telco wires.

The i2Coalition's comments in the Open Internet proceeding point to the difference of an 'Open Internet' and what they call 'Open Access'. They write:

"Net Neutrality is not Open Access. Indeed, Tim Wu, who is credited with crafting the Net Neutrality concept, took great pains to distinguish Net Neutrality from Open Access in his original paper that introduced the topic.

"Open Access is about opening essential infrastructure to competition. Net Neutrality accepts that there is no Open Access, and regulates Internet access rather than the essential facilities.

"

And as we wrote in 2012, you can't really be free if there is there is no choice of an entrance ramp to the Internet. Ironically, in the 1990's, the Telecommunications Act of 1996 was established to open up this 'last mile' or some call it 'first hundred feet' so that customers had a choice of ISPs. And competition drove innovation and Internet growth.

Net Neutrality was caused, in a large part, because now AT&T and Verizon got the government (the FCC) to protect their monopolies over the wire, all the time claiming they were doing it for competition.

Bottom line -- if you had a choice of ISPs and broadband providers, then if your ISP blocks or degrades your service, you could simply choose another company that doesn't.

Finally, Net Neutrality doesn't address a multitude of current topics.

  • Net Neutrality Doesn't Stop the Mergers -- From the proposed Time Warner-Comcast or the AT&T-Direct TV mergers, Net Neutrality touches on market power but doesn't have any direct actions to stop these joinings.
  • Net Neutrality Doesn't Fix Pricing Issues or Customer Service Issues -- With prices on a continual rise, even though we hear that there is plenty of competition, or the issues, like not fixing the line after a storm in a timely manner, these issues are only peripheral to NN's current discussions.

These are all "No Lane" issues; the mergers will simply make the companies larger, who then get more control over pricing and don't have to worry about 'quality of service' because they are removing the laws and obligations, even closing down state commissions who no longer have the power to examine the books or fix issues like poor service quality.

While different groups have discussed some of these issues, the "No Lane" needs to be discussed -- now.