Recently in FCC Category
February 10, 2017 11:40 AM
It interesting to note how former FCC Chairman Tom Wheeler passively and aggressively defied the House
post-election requests for the agency to focus "only on matters that require attention under the law." In ignoring that Congressional request, on December 1, 2016, Wheeler ordered the Wireline Competition Bureau to designate
4 carriers as "eligible telecommunications carriers" ("ETC's") for purposes of participating, as broadband providers, in the Commission's "Lifeline" program, which offers a $9.25/month subsidy to carriers serving low-income customers. Then only two days before Chairman Wheeler left the Commission, the Wireline Competition Bureau, without Commissioner input, went ahead and designated
5 additional carriers as broadband ETCs.
To put the Bureau's actions into context, consider that since the FCC first initiated reform of its Lifeline Rules back in March, 2011
--it has designated exactly 0 carriers as wireless, or broadband, ETCs
. Thus, in more than 6 years the FCC made no ETC designations, despite having applications that have been pending for longer, and from equally--or better--qualified applicants. Oddly, the recent ETC Designation Orders offer no explanation for why these carriers
, out of all the pending applications
, were chosen for approval.
So, it's against this backdrop, that Chairman Pai took the incredibly wise and unremarkable step to request a pause
and take a second look at the two orders, which represented the first agency action on ETC designation in at least 6 years. Nevertheless, that did not hold the Washington Post
back from breathlessly issuing a sensational, and misleading headline that the "FCC is stopping 9 companies from providing subsidized broadband to the poor."
By Monday, the story grew only more misleading as activists on the Left amplified it on social media. Against this backdrop (keeping in mind that Chairman Pai's very first policy pronouncement
to the FCC's staff prioritized the importance of improving the quality/speed of broadband service available to rural and low income Americans), the Chairman, on Tuesday, personally penned an article
on Medium, explaining in detail the Commission's recent decision.
Perhaps concerned that a good fake-news-cum-Twitter-outrage-campaign story was going to die from exposure to the cold hard facts, Gigi Sohn, a former senior advisor to previous FCC Chairman Wheeler, penned her own blog post
yesterday--to address a "controversy" resulting from a misleading article (that she probably sourced in the first place). In her post
, she argues that Chairman Pai's Medium article
"doth protest too much" and that his "arguments fail to mask two clear truths."
While the normal use of the Hamlet line
"doth protest too much" means the person protesting actually supports the conclusion they argue against, it's obvious that Sohn does not think that Pai secretly supports the previous FCC's post-election change of policy. Moreover, even though the "clear truths," to which she refers
, are both actually "arguments;" let's look at these.
The first "clear truth" she argues is that Pai's "actions will make the market for Lifeline broadband services less competitive, limiting choice and keeping prices high." But if you read the two ETC Designation Orders, you will see that the only firms that are already selling their "broadband" services are wireless resellers offering 3G and 4G data as part of overall wireless plans. This is not to impugn these firms' offerings, but to clarify that the same offers were already available to Lifeline consumers from other carriers, e.g
,--and will remain so, despite Pai's decision to rescind these designations.
Yet, if Sohn felt this strongly about the merits of Lifeline "competition," why didn't she and Chairman Wheeler approve more qualified providers as ETCs, starting at the beginning of his term as Chairman?
I, personally, have a client
that--during the terms of the last 3 Democratic FCC Chairs--has consistently been rated
as the "best," or among the very best, wireless service providers in the country, and which has been waiting over 7 years for ETC Designation
The second "clear truth," which Ms. Sohn believes Chairman Pai's Medium article exposes, is that "[Pai] and fellow FCC Commissioner Michael O'Rielly, fundamentally disagree with the structure and goals of the Lifeline program and will seek to undermine it in word and deed." This statement is a textbook example of the logical fallacy of ad hominem
, in which an argument is rebutted "by attacking the character, motive, or other attribute of the person making the argument, or persons associated with the argument, rather than attacking the substance of the argument itself." Here, Ms. Sohn fails to refute any reason proffered by Chairman Pai for taking a second look at the ETC Designation orders, and simply accuses Pai, and the other Republican FCC Commissioner, for having some broader "evil" motive ["disagree[ing] with the 'structure and goals of the Lifeline program'"] unrelated to this specific dispute.
If there is one thing that Ms. Sohn's blog post
does successfully convey, it is to give us a better idea of where the first misleading headline came from, at least in terms of motive. Perhaps if Sohn took less "surprise and delight" in someone else having to defend themselves against misinformation, then she could have advised Chairman Wheeler to take an interest in Lifeline competition before
being asked by Congress to focus only on matters "that require attention under the law" prior to the change in presidential administrations.
February 8, 2017 2:33 PM
In his first two weeks on the job, newly-appointed FCC Chairman Ajit Pai seems to have already distinguished himself from his predecessor, Chairman Wheeler. The distinction is not merely one of political philosophies--which was apparent when Wheeler was still Chairman. Rather, the two are distinguished by differences in leadership styles and goals.
Wheeler, for his part, took the reins of the Commission with more industry-specific knowledge than any prior Chairman--having been the head of two major industry associations. However, Wheeler had no specific policy goals, a general philosophy ("competition, competition, competition"), and a leadership style more accustomed to dictation than persuasion and cooperation. Thus, Wheeler's legacy as Chairman may have been destined to end up as bitterly disputed as the rules he would adopt.
Chairman Pai, on the other hand, has chosen to be much more inclusive--of both his fellow Commissioners and the public--in order to progress toward an ambitious policy priority; bridging the digital divide. Notwithstanding some predictable hyperbole from "net neutrality" advocates
(dedicated to a dogma that "protects" consumers from a non-existent
"threat"), and a sensational headline
about "stopping services" to few, if any, customers (which Pai himself debunked
), Chairman Pai has been very well-received
. Importantly, Pai deserves credit for his commitment to humble/inclusive leadership, and for prioritizing the goal of improving access to advanced communications services of rural, and low income, Americans.Good Ideas Don't Just Come from the Boss
The advantage of being the Chairman of an independent agency is not only the ability to set the agency's agenda, but also in the Chairman's solitary ability to control every matter on the agenda until the last minute, changing the item as needed to get the votes the Chairman wants. To give up this power requires real humility, but it offers the prospect of getting the best possible advice/information/criticism from one's Commission colleagues and the public.
On February 2nd, as part of a "pilot program," Chairman Pai elected to
release to the public complete drafts of two items (an NPRM and a Report & Order) at the same time the items were included on the agenda for the FCC's next Open Meeting, on February 23, 2017. Pai hopes to make this a routine Commission practice in the future. Likewise, on Monday of this week, Chairman Pai pledged
to share with the other Commissioners the content of matters that would be voted on at future FCC Open Meetings before
disclosing this information to the public or members of the press. Finally, yesterday, he adopted two additional
process reforms--at the suggestion of his fellow Commissioners, Michael O'Rielly (R) and Mignon Clyburn (D). Leading Toward a Specific Goal
Chairman Pai's decision to enlist everyone's talents is smart; because he's going to need all the help he can get. You see, Pai has chosen to address a formidable problem that has long confounded policy-makers: the "digital divide," which has left many Americans without access to advanced communications services. In his first speech
as Chairman (to Commission staff), Pai stated his belief that "one of our core priorities going forward should be to close that divide--to do what's necessary to help the private sector build networks, send signals, and distribute information to [all Americans]."
This was not, by any means, the first time that Pai has drawn attention to this problem. As recently as September of last year, then Commissioner, Pai released his "Digital Empowerment Agenda
" which contained a number of ideas for things the Commission could do, either by itself or as part of a partnership with local governments, to spur broadband buildout to underserved communities throughout the country.
Yet, despite having his own ideas about how to help bridge the digital divide, Chairman Pai, consistent with his process reforms, seems more interested in soliciting the best ideas of others. Thus, at his first Open Meeting as FCC Chairman, Pai announced
the formation of a "Broadband Deployment Advisory Committee" ("BDAC") to "provide advice and recommendations to the FCC on how to [accelerate broadband deployment in underserved areas]." And, while the group's first
project will be to provide recommendations for how to bridge the digital divide "by reducing and/or removing regulatory barriers to infrastructure investment," there is no reason to think the group will only be used for one project. See Announcement
and also Public Notice
. Nothing to Lose
The problem that Pai has chosen is as vexing as it is worthy, and Chairman Pai's willingness to "tie himself" to this problem is both ambitious and risky. However, as someone
once said, "it's amazing what you can accomplish if you don't care who gets the credit."
The full support of the FCC--and the private stakeholders, whose support the FCC is currently enlisting--will lead to cooperation from, at least some, state and local governments, and will improve access for some Americans. But, even in the worst case scenario, policymakers will at least have a better conception of the problem than they did before. In other words, by choosing a specific goal--along with his humble commitment to including the public, private stakeholders, and fellow Commissioners--Chairman Pai has made it more likely that some of the country's most neglected consumers will see a bigger slice by the end of his term.
January 18, 2017 10:01 AM
Wednesday, January 11th, we were treated to what is hopefully the
last instance of Chairman Tom Wheeler's "because-I-said-so" policy-making, when
the FCC released a "Report" from the Wireless Telecommunications Bureau ("WTB
Report") regarding the WTB's "Policy Review" of the sponsored data and
zero-rated offerings of major wireless broadband ISPs. The WTB Report asserts that it is applying
the Commission's "General Conduct Rule" in its 2015 Open Internet Order
to 4 offerings from 3 carriers (AT&T, T-Mobile, and Verizon Wireless). The WTB Report concludes that AT&T's
"Sponsored Data" offering, and Verizon's "FreeBee 360" plan "present significant
risks to consumers and competition in downstream industry sectors because of
network operators' potentially unreasonable discrimination in favor of their
own affiliates." WTB Report at p.1.
Ajit Pai, in a separate statement,
decried the FCC's "midnight regulation of free data." Commissioner Pai also succinctly identifies
one of the major errors in the WTB Report's application of the Commission's
Rules, noting that the plans "are popular among consumers precisely because
they allow more access to online music, videos, and other content free of
charge." Pai statement (emphasis added).
Commissioner Pai implicitly notes, the Commission's "General Conduct Rule" is,
on its face, consumer focused. Yet, the
WTB's analysis ignores the market targeted by the plans, and their
corresponding consumer benefits.
WTB Report Analysis Ignores the Open Internet Order
WTB Report notes that it "expresses no concern with retail zero rating per se." Report at 1. Rather, the report
notes that FCC acknowledged the potential benefits of zero rating in its Open
Internet Order. Specifically, the FCC
evidence in the
record suggests that these business models may in some instances provide
benefits to consumers, with particular reference to their use in the provision of mobile services.
Service providers contend that these business models increase choice and lower costs for consumers.
at para 151 (emphasis added and internal citations omitted). While not explicitly mentioned by the
Commission in its Open Internet Order, the WTB Report argues that "[t]hese benefits
may include increased video competition by facilitating the availability of
over-the-top (OTT) offerings." WTB Report at p.1.
the Commission recognized that a potential benefit of zero-rating, in the
provision of mobile broadband Internet access services, would be greater
competition in the broadband Internet access market. On the other hand, the specific potential benefit
mentioned in the WTB Report is in the increased availability of OTT video
offerings. This difference is important,
because, as noted by Commissioner Pai, the WTB Report does indeed ignore the
benefit of enhanced competition in the primary market: the market for mobile
broadband Internet access.
WTB Report Misapplied the Commission's General Conduct Rule
respect to carrier-specific zero-rated data promotions, the WTB Report focuses
its criticism primarily on AT&T's "Sponsored Data" program. This program allows AT&T Wireless subscribers,
who also purchase AT&T's "DirecTV" or "DirecTV Now" subscription television
services, to watch that video content without accruing data usage charges.
Commission's General Conduct Rule, provides that a broadband ISP "shall not unreasonably interfere with or unreasonably disadvantage"
either, 1) a consumer's ability to access Internet applications/content/services,
or 2) an edge provider's ability to provide any application/content/service to consumers. See Order at para 136 (emphasis added and internal
citations omitted). The
WTB Report notes that among the "guiding factors" identified by the FCC in the
application of this Rule, the WTB chose to focus primarily on "competitive
effects." See Report at 10, and Order at para 140.
the emphasis on the word "unreasonable" in the FCC's General Conduct Rule, one
would expect that any "competitive effects" analysis under the rule would look
a lot like the "Rule of Reason" in antitrust analysis under Section 2 of the
Sherman Act. This analysis looks at the
intent of the conduct in question, as well as its effects, in terms of whether
the conduct increases or restricts consumer welfare (output) in the relevant market.
WTB Report notes that its concern is "that AT&T offers Sponsored Data to
third party content providers at terms and conditions that are effectively less
favorable than those it offers to its affiliate, DIRECTV." WTB Report at 13. This, the WTB argues, will "likely
obstruct competition for video programming services delivered over mobile Internet
platforms and harm consumers by inhibiting unaffiliated edge providers' ability
to provide such service to AT&T's wireless subscribers." Id.
are several problems with the WTB Report's "competitive effects" analysis. First, the WTB Report never defines a market,
much less attempts to assess AT&T's intent in offering the service, or to
determine the actual consequences of AT&T's Sponsored Data program in that
market. Instead, the WTB Report seems to
regard its analysis as more of an exercise in imagination, asking, "Could there
ever be a situation in which future output could be limited as a result of this
Broadband Competition Expands--Rather than Restricts--OTT Video Availability
WTB Report's own description of all carriers' zero rated data plans makes it
clear that the purpose of each plan is to entice mobile broadband Internet
consumers to use their service instead of that of a competitor. This point could not have been made more
clearly by T-Mobile's prompt response to AT&T's Sponsored Data program--in which
it offered AT&T Wireless customers a free year of DirecTV Now.
fact, the original provider of AT&T's Sponsored Data with DirecTV was
competitor Sprint, which offered new DirectTV customers a free year of wireless
service in "celebration" of AT&T's purchase of DirectTV--well over a year
before AT&T came out with its DirecTV/mobile broadband offer. The purpose of sponsored data is obvious in the competitive effect that each
new offer sparks in the marketplace--more access to Internet content at a lower
price--and this is what makes mobile broadband Internet access the relevant market.
what about that hypothetical future OTT service? As every mobile broadband provider has more video
content available--without charge--to its subscribers than ever before, what is
clear is that mobile Internet video content has grown as a result of sponsored data, and not in spite of it.
November 18, 2016 3:37 PM
An independent, "expert agency," like the FCC, is at its most effective when it is focused on keeping the industries it regulates running smoothly, in the interests of consumers, by filling policy "potholes." On the other hand, nothing incites partisan rancor like addressing "problems" that look a lot more like ideological crusades, rather than good faith efforts to address genuine
Under Chairman Tom Wheeler
, the FCC became a battlefield for "proxy wars" pitting business interests against each other in the name of ideology--that, itself, was a disguise for transparent political favoritism. These battles were fought not by the traditional strength of evidence and argument, but instead through PR campaigns, produced social media outrage, and 3rd party Hessians claiming the "public" or "progressive" interest mantle. This approach has devalued the deliberative process and the role of the majority and minority commissioners in driving consensus at the expert agency. A Regulatory "Pothole"
A good example of a regulatory "pothole" is the agency's response to rapid adoption of VoIP technology by consumers in the early 2000's. Though VoIP calls were a cheaper substitute for PSTN calls in most respects, because VoIP calls didn't use the PSTN, consumers could not access E911 service.
After some well-publicized tragedies
, the FCC quickly focused on this specific issue (out of a larger number of issues) in its already-pending 2004 VoIP NPRM
. Acting quickly, and unanimously, the FCC issued an Order
in 2005, adopting some interim measures to: 1) better inform consumers of the limits of nomadic VoIP services, and 2) to ensure that "interconnected" VoIP providers quickly became able to offer E911 service to their customers by terminating calls through CLECs.
But, if the VoIP 911 matter was an example of interested stakeholders (carriers and public safety/law enforcement) forthrightly putting their interests on the table, and the FCC balancing those interests to find the best solution for consumers, the FCC's recent Broadband Privacy Order
provides a good illustration of the exact opposite type of proceeding. Broadband Privacy ≠ Internet Privacy
The Commission's classification of broadband Internet access service as a "telecommunications service," in its 2015 Open Internet Order
, in turn, allowed the FCC to define what information, with respect to this service, it would define as "customer proprietary network information" ("CPNI") under Section 222
of the Act. Section 222 defines CPNI as, essentially, information that the service provider knows by virtue of providing a telecom service to a customer, and requires the carrier to obtain customer permission before selling the customer's CPNI to a third party.
The Interent Service Providers ("ISPs") argued that consumer Internet usage information is not information uniquely held by the ISP, in the way that CPNI was uniquely in possession of a telecommunications carrier in 1996 (when Congress wrote the law). See, e.g.
, AT&T Comments
pp.9-30. Rather, the primary market for consumers' internet usage information is the online advertising market. , in which the ISPs do not possess sufficient unique, or valuable, consumer information to even possess a measurable share of the market.
Indeed, consumer Internet usage information is "monetized" in the online
advertising market--a market in which almost 2/3's of all revenue, and 90% of growth since 1Q 2015, is controlled by Google and Facebook
! Significantly, the online advertising market is also one in which no ISP even possess a measurable share of the market.
Not surprisingly, according
to Princeton University researchers, Google and Facebook account for all of the top 10 third party trackers on the Web
The ISPs explained that, despite the FCC's rhetoric in its NPRM
about consumer "privacy,"
[n]o matter what the Commission does in this proceeding, major actors in the Internet ecosystem will continue to track and use all of the same information the proposed rules would keep ISPs from efficiently tracking and using.
., AT&T Comments
at p. 35 (emphasis added). Thus, they argued, the FCC's proposed rules would not enhance consumer privacy, but merely foreclose competition in the online advertising market.Party Participation vs. Proxy Participation
Given the competitive significance of the FCC's proposed rules, you might think the record in this proceeding would pit edge providers and ISPs against each other, with each side trying to show why the ISPs do/don't possess some unique information about their customers that is worthy of rules protecting its disclosure. If this was your guess, you'd be half right; the ISPs definitely showed up with their best information/arguments.
On the other side, though, neither Google/Alphabet, nor Facebook appears in any search of this docket. Yet, the FCC had no trouble finding support in the record for its contention that it is the ISPs from whom consumers' information needed protection, and not the two dominant firms in the business of collecting and selling that information. If you look through the Order
, you'll see that a majority of the support the FCC cites is supplied by parties with ties to Google, Facebook, or other edge providers.
For example, the Electronic Frontier Foundation
(cited 45 times in the Order) is a frequent advocate for, and recipient of funding
from, both Google and Facebook. We've discussed Public Knowledge
(56 cites) here
before, but it and other groups that the Commission cites frequently, like the Center for Democracy & Technology
(61 cites), and the New America Foundation Open Technology Institute
(72 cites) are also supported
by Google. The Commission also cited a paper
filed by Upturn
, which is a legal/policy advocacy group, whose involvement was sponsored by the Media Democracy Fund
by edge providers Microsoft and Tumblr.)
Even groups with names as innocuous as Consumer Federation of America
, Consumer Watchdog
, and National Consumers League
are groups for which Google discloses
support. Academics, as well, may have more than an "academic" interest.
Princeton University Professor, Nick Feamster comments
, but doesn't disclose that he has received
$1.6 million from Google over the past 5 years. Other Princeton faculty members filed comments similar to Feamster's. And, in May, Princeton's Center for Information Technology Policy, of which Feamster is Acting Director, was a co-sponsor, along with Google-funded Center for Democracy and Technology, of a policy conference
on the topic of "broadband privacy." The Google Transparency Project notes
that 5 of the 7 panelists at the event had received support from Google. You Need Not Be Present to Win
The reasons behind some parties' participation doesn't mean that their advocacy/arguments were wrong, but the FCC woud have benefited more from a direct exchange between both sides with first-hand knowledge of the consumer information they track. And, why weren't Google and Facebook in the record, making these points, themselves?
One reason could have been that more information about these firms' dominance in online advertising came out over the summer, including a paper
by one of the Princeton academics in this proceeding, noting that Google and Facebook controlled all the top 10 third-party trackers
. Another reason for Google's absence may have been that it went back on its self-imposed ban on using consumers' personally-identifiable information in its web tracking, according to this ProPublica report
Would it have been embarrassing for the leading edge providers to ask the government for protection from competition? Maybe, but consumers deserved the ability to transparently see which side--between two interested parties--the government was choosing, and why.
* * *
The FCC's leadership has been willing to undertake ideological crusades for the sole purpose of advantaging politically-favored firms. The transparent nature of the FCC's actions ensure that they will quickly be undone by a subsequent Commission. The legacy of such leadership leaves only acrimony among the majority of Commissioners trying to put consumers first. Hopefully, the next FCC will learn from history.
February 21, 2013 1:51 PM
One week ago, S. Derek Turner of Free Press was doing like he do--criticizing other parties for speech with which he disagrees, and presumably advocating the moral purity of single letters as first names--except that this time, he couldn't wait the 5 minutes or so that Free Press normally waits before doing something completely inconsistent. No, this time Free Press tied it up in one neat little package for us.
Not wanting to waste such extreme courtesy (or poetic irony), the task of reporting this feat has fallen to moi
. Specifically, Mr. Turner released a statement
calling AT&T out for a "missive" against the FCC that, Turner believes, was emblematic of AT&T's "penchant for bullying" which, he continues, is as "boundless as its hubris."
From what "bullying" by AT&T was Mr. Turner defending the FCC? It turns out to be this blog post
by Bob Quinn, speculating that if the FCC has a difficult time saying goodbye to "old-timey" regulations designed to protect the then-nascent telephone market from the depredations of the telegraph industry, then hopes were dim for the FCC to progressively regulate the unique issues that will arise as part of the transition from TDM-based networks to IP networks.
I'm not surprised by AT&T's comment any more than I am by Free Press's disagreement with this comment. But "bullying?" Correct me if I'm getting the whole "bullying" thing backwards, but isn't the goal of bullying to intimidate someone to act differently than they would otherwise act? I'm pretty sure that AT&T's blog post more accurately qualifies as "criticism."
"ToMAYtoe"/"toMAHtoe", right? I mean how's a phone company to act if they don't like what the FCC is doing/failing to do you? Interestingly for AT&T, Free Press's guidance is linked at the bottom of the post.
In its comments opposing AT&T's Petition for the FCC to start a proceeding to deal with issues involving the IP transition, Free Press points to the "right way" for AT&T to pursue a deregulatory goal,
"it is perfectly appropriate for any incumbent carrier to assert its rights under Section 10 of the Act to seek forbearance from specific regulations
, as has been done for the specific regulations AT&T names in its petition." At p.2
See, if AT&T had just supported forbearance, that's the way Congress told them the FCC would deregulate, then it would be OK. Oh, wait, AT&T's blog post sounded like it was expressing support for the US Telecom Forbearance Petition
that it believed the FCC could have granted in less than a year. Message to AT&T from Free Press: you suck! With a capital S.!