Thursday, April 07, 2016

Regarding FCC Internet Regulation, "Watch What We Do"!

For those of you too young to recall, John Mitchell, Richard Nixon’s infamous Attorney General, famously advised the press: “Watch what we do, not what we say!” 
This turned out to be good advice back then. 
In a similar vein, it is wise to watch what the Federal Communications Commission and Tom Wheeler, its Chairman, do with regard to the regulation of rates for broadband Internet services in the wake of the FCC’s February 2015 decision subjecting Internet service providers to so-called “Title II” regulation. This, of course, is regulation akin to the public utility regulatory regime applied to the railroads in 1887 and the Ma Bell monopoly in 1934. 
On February 4, 2015, shortly before the FCC adopted its Title II regulation order, Chairman Wheeler stated in a piece he wrote for Wired: “[T]here will be no rate regulation, no tariffs, no last-mile unbundling.” 
In his official statement accompanying the Title II regulation order adopted on February 26, 2015, Chairman Wheeler declared: “That means no rate regulation, no filing of tariffs, no network unbundling.” 
According to an Ars Technica piece published on March 3, 2015, referring to the Title II regulation order, Mr. Wheeler stated: “This is not regulating the Internet. Regulating the Internet is rate regulation, which we don’t do….” 
If you like, you can find other statements to similar effect. 
I said at the time the FCC adopted the Title II regulation order – and many, many times since –that the FCC’s action would lead to “rate regulation” of Internet services, regardless of whatever the FCC called its actions. I explained that subjecting interconnection arrangements to Commission intervention would lead to regulating interconnection rates. That banning paid prioritization is rate regulation. That prohibiting, or even curtailing, so-called zero-rating and sponsored data is rate regulation because the FCC will be dictating the structure of the usage tiers and rate caps in subscribers’ service plans. 
Perhaps the meaning of “rate regulation” is like the meaning of “is.” It all depends. (Again, for those of you too young to recall, Bill Clinton famously said, by way of attempting to explain his way out of a hot spot, that, “It depends on what the meaning of ‘is’ is.”) 
Regarding the FCC’s Title II regulation order, I was pleased to see that, this week, in opposing a legislative provision intended to prohibit broadband rate regulation by the Commission, Mr. Wheeler provided a bit more clarity – or perhaps I should say “reality” – as to the meaning of his earlier “no rate regulation” pledges. According to a report in the April 6 edition of Communications Daily [subscription required], Mr. Wheeler said this at a congressional hearing: 
“Because at the heart of everything is rates. So paid prioritization is a rate issue. Throttling is a rate issue. Blocking is a rate issue. Interconnection is a rate issue.” 
This is true. This is reality – at the heart of all the actions that Mr. Wheeler identifies, and others, “is rates.” And, of course, so are any actions that curtail or alter the various zero-rating plans now under Commission examination, if not formal investigation, or that impact usage tier charges. 
I’m pleased, in a way, that, in trying to fend off “no rate regulation” legislation, Mr. Wheeler at least is now acknowledging that much of what the Commission majority did in adopting the Title II regulation order either presently amounts to rate regulation or likely will lead to rate regulation. I just wish he had been more forthright about the matter at the time of the FCC’s February 2015 action. 

Going forward, with regard to the FCC’s actions regulating the Internet, it will pay to heed of John Mitchell’s advice: “Watch what we do, not what we say.”