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All posts by Doug Brake

Ninth Circuit Throws Wrench into Jurisdictional Boundary Between FCC and FTC

To little fanfare, the Ninth Circuit Court of Appeals issued an opinion Monday morning in FTC v. AT&T Mobility. The case has important, if murky, implications for the future jurisdictional lines between the Federal Trade Commission (FTC) and Federal Communications Commission (FCC), opening some level of doubt as to which body will be responsible for protecting consumers and competition for a fairly large swath of the tech and telecom industries. While some reactions were overblown, just how far the fallout spreads is not clear. Regardless, the case warrants attention from policymakers on Capitol Hill, at the FCC, and elsewhere.

Back in 2014, the FTC brought an enforcement action against AT&T, suing the company for misleading customers about rate limiting or “throttling” of grandfathered unlimited data plans. AT&T defended itself by essentially saying, “Hey FTC, you don’t regulate us, the FCC regulates us,” pointing to what is called the “common carrier exemption” within section 5 of the FTC Act, which says that the FTC does not have jurisdiction over common carriers.

The question for the Ninth Circuit Court boiled down to whether the FTC common carrier exemption is “status-based” (triggered

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Expand Lifeline, But Keep Consumer Choice

(3/31/16 Ed Note: ITIF congratulates the FCC on its historic vote to transition the Lifeline program into the 21st century. Broadband is the predominant communications platform of today, and supporting broadband access for low-income Americans is long-overdue progress. In addition to broadband support, administrative reforms will streamline the program and reduce the potential for fraud. The FCC made some improvements to the initial draft order, specifically delaying the phase-out of support for standalone voice. However, it would have been better to offer consumers even more flexibility, and it is disappointing to see the minimum standards remain.)

The Federal Communications Commission (FCC) is nearing a historic vote to expand the Lifeline program, which subsidizes communications for low-income Americans. After the rules go into place, recipients will be able to put the $9.25-per-month subsidy towards broadband Internet access instead of the voice telephone service the program originally supported. Such an expansion of the Lifeline program represents a tremendous step toward achieving the goal of ensuring every American has affordable access to the Internet.

As more and more services migrate online, realizing the full promise of the digital economy requires that

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Netflix Throttling: Good for the Goose

News broke Thursday night that for more than five years, Netflix has been deliberately reducing the data rate of its video streams to AT&T and Verizon mobile customers. The streaming video company capped its video stream to a measly 600 Kbps, presumably to allow its customers to enjoy more video hours using less data.

First of all, this is pretty clearly not a violation of the net neutrality rules as currently implemented by the Federal Communications Commission (FCC). Nor should it be a violation of any rules. These are Netflix’s video streams, and it should be able to manage its data however it thinks will best please its customers. But what is good for the Netflix goose should be good for the gander: If Netflix is free to manage its traffic to better serve consumers, Internet Service Providers (ISPs), who are in an even better position to understand the traffic patterns and dynamics at play within the network itself, should be able to do the same. Same customers, same practice, same good outcome, but as it stands today, only one is unlawful.

That said, there are a couple of problems

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All Signs Point to Go for Zero-Rating

Mobile carriers across the world have been rolling out what are called zero-rated or free data products, allowing consumer access to certain data traffic without it counting against their monthly cap. The motivations for these services are different in different markets, but at least in the United States mobile carriers are trying to differentiate their services in a competitive fight over who can best meet consumers’ ever-increasing demand for streaming video.

Zero-rating has run into opposition from some of net neutrality’s more puritanical followers. Susan Crawford offered one of the more eye-opening harangues, claiming that allowing some of the world’s poorest people the choice to access basic information online for free is a “malignant” “surrendering of the Internet” that should be outlawed immediately.

Thankfully, the Federal Communications Commission (FCC) is not quite so hostile to pragmatic solutions to expand access and use of the Internet. In the Open Internet Order, the FCC laid out a case-by-case approach for overseeing zero-rating programs. Later, in a speech discussing zero-rating at the Computer History Museum, Chairman Tom Wheeler explained that “the Open Internet Order did not discourage this type of two-sided market”

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The FCC’s Broadband Progress, a Ways Yet to Go

This afternoon the Federal Communications Commission voted on a Broadband Progress Report, which once again reaches the erroneous conclusion that the United States is not making reasonable and timely progress toward deploying “advanced telecommunications capability” (a.k.a. broadband). The report’s conclusions rest on a highly strained reading of the evidence, and do not conform to the statutorily-directed purpose of the report.

This is the second broadband progress report based on the controversial threshold, with only 25 Mbps or greater qualifying as “broadband.” I would call this an arbitrary benchmark, but it actually seems carefully chosen to paint a particular picture of industry, defining away competition and supporting a finding of slow progress to trigger the Commission’s authority to regulate broadband providers under its recently expanded section 706 jurisdiction. Even a quick glimpse of the National Broadband Map data from 2014 makes clear the different picture painted by a 25 Mbps standard vs. a 6 or even 10 Mbps definition.

On the other hand, to the extent the FCC genuinely believes that 25 Mbps should be the expected broadband standard, it shows the Commission as captured by the ideology of digital

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Net Neutrality Oral Argument Rundown: A Wake-up Call for Legislation

This morning saw the Federal Communications Commission’s (FCC) third attempt to defend net neutrality rules in court, with the U.S. Court of Appeals for the D.C. Circuit hearing oral argument in US Telecom v. FCC. A three judge panel, composed of Judges Tatel, Williams, and Srinivasan, heard from a series of lawyers, with the main arguments against reclassification made by Peter Keisler and defended by FCC General Counsel Jon Sallet. Sallet did an impressive job with the hand he was dealt, skillfully defending the FCC’s gerrymandering. That said, he did run into some tough questions from the judges—questions the FCC simply doesn’t have good answers for.

This case is a big one, with a lot more at stake than particular rules to protect the open Internet. When the FCC was pushed into reversing course for its open Internet order, classifying broadband providers as common carriers under Title II of the Communications Act instead of staying the course with rules grounded in section 706, it fundamentally changed the underlying framework of how this country regulates the communications industry. These changes are so sweeping, involving multiple changes in regulatory definitions and statutory

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One Small Step for Auctions, One Giant Leap for the Spectrum Relocation Fund

President Obama has now signed into law the Bipartisan Budget Act of 2015, which puts into force a title specific to radio spectrum auctions. Telecom legislation is a rare bird, and many were excited to see authorization for the next tranche of spectrum auctions. There is some good and some bad—here is a rundown of what’s in the new law, and what we at ITIF would have liked to see.

First the good. The title of the legislation specific to spectrum, a.k.a. the “Spectrum Pipeline Act of 2015,” makes much needed changes to what is known as the spectrum relocation fund, or “SRF.” The SRF is a pot of money managed by the Office of Management and Budget to pay for federal entities to transition radio systems when their spectrum is repurposed for other uses. Eight years after the creation of the fund in 2004, the 2012 Tax Relief Act—which extended the FCC’s auction authority and set the upcoming 600 MHz incentive auction in motion—expanded the types of costs which federal agencies could recover from the SRF. However, those funds were still limited to planning and research directly

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Time to End the FCC’s Designated Entity Program

Each maneuver [by the regulated party] generates a counter‐maneuver from the regulatory bureaucracy and Congress; every feint and dodge, a more complicated prophylactic for the next encounter. The result, over time, is a profusion of legislative and regulatory detail that confounds American business.

— Robert Reich, “The Miasma of Regulation,” 1987

In his essay “The Miasma of Regulation,” Robert Reich lays out the cat-and-mouse game played between the regulated and their regulators, exploring how industry pushes the boundaries of acceptable legal behavior and government pushes back, closing loopholes or filling in grey areas. This continual back and forth, he argues, generates more, and more complicated, rules. One might be hard-pressed to find a better example of this dynamic than the Federal Communications Commission’s (FCC) designated entity (DE) program.

With the FCC’s first authorization to conduct spectrum auctions in 1993, Congress mandated the commission promote participation of small businesses and businesses owned by minorities or women. The DE program devised by the FCC gives bidding credits to discount the price of the spectrum licenses sold at auction. The program leapt into the headlines this past winter with Dish’s controversial bidding in

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Legal Arguments Take Shape Against Title II

Through a sleepy August, the Title II imbroglio continues, extending along two main fronts: glimmers of a legislative solution possibly gaining traction when Congress returns, and the DC Circuit Court marching through its briefing schedule. On the latter, initial industry briefs are now in, along with those of their friends, and we can start to see the shape of the legal fight to come. The court has expedited the briefing schedule, with final briefs due the middle of October, and oral argument expected in December.

It is looking to be a fairly complex case, with multiple petitioners arguing in different directions, interveners on both sides, and plenty of amici weighing in. There are many ways in which the FCC’s order could unwind. Here I want to focus on a few of the most basic legal challenges that stakeholders have advanced.

First, a point that still seems lost on many—the major Internet service providers (ISPs) are not challenging the basic net neutrality rules; instead they are focused on the FCC’s decision to classify broadband as a common carrier service under Title II of the Communications Act. Op-eds that argue carriers should

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Federal Spectrum Opportunities

At last Wednesday’s Senate Commerce, Science and Transportation hearing on wireless spectrum, senators and witnesses alike expressed a general desire to “free up” more spectrum for wireless broadband. Sen. Bill Nelson (D-FL) said, “Spectrum legislation is not only necessary, but it has traditionally been bipartisan.” Along the same line, Sen. Brian Shatz (D-HI) said, “there is a real opportunity for bipartisan consensus” on spectrum legislation. It’s true, spectrum policy, although often difficult and complex, is rarely mired in partisan disagreement. Growing demand for additional wireless capacity for streaming video, Internet of Things (IoT), and machine-to-machine communications makes clear that relatively low-cost opportunities to repurpose spectrum are no-brainers we can all get behind.

However, a bit further down in the weeds there was a point of disagreement among the witnesses that is worth teasing apart. It has to do with mechanisms to seek out inefficient uses of spectrum by the federal government. There was general agreement on the panel that federal users will be a significant source of spectrum in the future, but not exactly consensus on the particular mechanisms to repurpose that spectrum.

There has been a lot of talk

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