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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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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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Premature Privacy Concerns Over Verizon-AOL Deal

The recent announcement that Verizon Communications Inc. intends to acquire AOL Inc. generated a surprising amount of media coverage, and unfortunately some groups are using the news as an excuse to push for expanded privacy regulations that would stifle innovation and competition in the burgeoning mobile ecosystem.

By telecom standards, this is not a huge transaction. At $4.4 billion, it is a full order of magnitude smaller than either the AT&T-DirecTV deal or the ill-fated Comcast-Time Warner Cable merger. And Verizon’s purchase of the 45% stake Vodafone had in Verizon Wireless was almost 30 times larger. Nevertheless, reporters flocked to the story, perhaps drawn by potential jokes about promotional CDs or the opportunity to poke fun at the 2 million Americans who remain AOL dial-up subscribers.

More likely interest in the deal was driven by its implications for the business Verizon wants to become. AOL is well known for its content, such as Huffington Post and TechCruch, but its growth is now in online ad sales—especially in video ads. The nation’s leading wireless company is looking down the road and seeing mobile video (presumably sprinkled with advertisements) as the future.

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What Would Cesar Chavez Think?

I keep telling myself that the claims of tech populists about net neutrality could not get wackier, but then they go and say something that makes you realize, “yes they can.” Case in point, Alex Nogales, of the National Hispanic Media Coalition, writing this week:

“We just won a historic victory, a critical step towards equality for Latinos in the digital age. Yet many American Latinos are unaware of this win and the tremendous potential it brings for us and our families to achieve full participation in the American Dream: better educations, better jobs, more financial stability and more political power. No, unfortunately, I am not talking about important and much needed reforms to education, immigration, criminal justice, and the other major issues before us today. But this victory has far reaching implications for the way we leverage our burgeoning political power in these kind of fights in the months and years to come. So what is this beautiful, mysterious victory? On February 26, the Federal Communications Commission voted to adopt “Network Neutrality” rules.”

If Cesar Chavez were alive, I wonder what he would say. How would a man who

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Wheeler Sets the Broadband Bar Higher than South Korea

Recently, FCC Chairman Tom Wheeler gave a speech arguing that “A 25 Mbps connection is fast becoming ‘table stakes’ in 21st century communications,” with the implication that anything less than 25 mbs is not really broadband.

This is an odd sort of statement, as it appears to be based not on any real analysis, but simply on the Chairman’s opinion. He tried to provide some rationale for this number when he stated “It’s not uncommon for a U.S. Internet connected household to have six or more connected devices – including televisions, desktops, laptops, tablets, and smartphones. When these devices are used at the same time, as they often are in the evenings, it’s not hard to overwhelm 10 Mbps of bandwidth.” I don’t know about you, but I personally am generally not using two devices at once. And as the Census Bureau reports, the average household size in the U.S. is 2.58 people with the median size being less. So, the majority of households are not overwhelming 10 Mbps of bandwidth.

So, if sub-25 Internet connections are not really broadband what does this mean in terms of what nations have

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