Legacy incumbent telcos, cablecos not entitled to state sanctioned monopoly without FCC enforcement of Title II universal service requirement

Colorado Localities Vote for Broadband, but Must Get Creative to Actually Deploy It: “Cities don’t do this because they want to compete with the incumbent — they do it because the incumbent refuses to,” said Tom Roiniotis, general manager of Longmont Power & Communications, which runs the network.

Why the refusal? One big incumbent legacy telco explains: 

Mark Soltes, CenturyLink’s assistant vice president in Colorado for public policy and government affairs, said the gaps in service across the state are due to rugged landscapes and far-flung population centers. “You’re looking at deployment in some places where there’s no payback,” he said.

That's the economic reality and there's nothing unreasonable in CenturyLink's justification. It owes its investors a profitable return. But if a public sector entity steps into the gap where the numbers don't pencil for CenturyLink or other legacy incumbent, that's hardly market competition. In an open market, competitors compete for market share and profitable business. That's not the case when a public sector entity provides an essential telecommunications utility that's not being provided a private sector player because there's not a sufficient business case to do so. It's simply serving the need where the private sector cannot.

Nor do incumbent telcos and cablecos have a right to a state sanctioned monopoly. Particularly when the U.S. Federal Communications Commission is not enforcing the universal service and anti-redlining requirements of its current Open Internet regulations based on Title II of the Communications Act and is poised to repeal those rules later this month. If the FCC did enforce the rule, then the incumbents would have a far stronger and reasonable position. At present, they do not.

Net neutrality hurts health care and helps porn, Republican senator claims | Ars Technica

Net neutrality hurts health care and helps porn, Republican senator claims | Ars Technica: Sen. Ron Johnson (R-Wisc.) agreed that net neutrality rules harm ISP investment and offered a lengthy analogy to explain why. Johnson said he wants to cut through the “rhetoric, slogans, and buzzwords,” before saying that enforcing net neutrality rules is like letting too many people use a bridge and ruin people’s lawns. Net neutrality rules, he said, also give pornography the same level of network access as remote medical services.

This is an unfortunate outcome of the misplaced obsession with the "net neutrality" aspect of the U.S. Federal Communications Commission's 2015 Open Internet rulemaking that erased the line between legacy and advanced telecommunications services by reclassifying Internet service as a common carrier telecommunications utility under Title II of the Communications Act. The obsession with net neutrality is so exaggerated that the term has become synonymous with the rulemaking.

The Open Internet rulemaking does properly require ISPs to treat all telecommunications traffic equally and without preference as to content. But with millions of Americans left offline and many still using circa 1994 dialup access that was state of the art when Bill Clinton was serving his first term as president, the higher value of the rulemaking is bringing Internet service under the universal service and anti-redlining requirements of Title II that have governed telephone service for decades -- and not debating whether the network should give priority to porn or any other information. Those requirements also comport with Metcalfe's Law, which holds a network is only as valuable as the number of subscribers on it.

State rep flustered by AT&T FTTP deployment to unspecified areas of Bradley County, Tennessee

Report: State broadband access lacking | The Cleveland Daily Banner: The debate is now continuing over whether Tennessee should change its laws allowing municipalities, such as Chattanooga’s EPB, to extend its broadband service footprint into adjacent areas. Communication conglomerates such as AT&T and Verizon have been vigorous in their fight against such measures saying any competition between government and private companies would not be fair. There are those who argue that point, particularly noting AT&T has received hundred of millions of dollars in federal subsidies that are supposed to aid in providing broadband access to rural areas.

AT&T announced Aug. 25 it would be introducing its fiber network to “areas of Bradley County.” State Reps. Kevin Brooks and Dan Howell, who have spearheaded efforts in Nashville to change the laws, questioned why the announcement said “areas” of the county. “What areas exactly? Why not all areas of Bradley County?” Brooks asked in a statement to the Cleveland Daily Banner in response to the announcement.

The answer, Rep. Brooks:

1. Whatever areas we cherry pick because the FCC isn't enforcing its Open Internet rules classifying Internet service as a common carrier telecommunications utility requiring universal service and barring redlining.

2. Even if it did, we couldn't afford to comply and would have to go bankrupt.

UK considers universal service legislative requirement

Families face paying thousands for high speed internet access | Daily Mail Online:

Every family will win the right to demand a ‘fast’ broadband connection it was announced in the Queen’s Speech yesterday, but those in remote communities may have to pay hundreds of pounds to get it. The new Digital Economy Bill hopes to finally bring broadband technology to one million people whose properties have until now been treated as economically unviable or too difficult to provide with high-speed connections. But the legislation falls short of the Conservative Party’s manifesto pledge to ensure every home gets access to so-called ‘superfast’ broadband.

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Adam Marshall, of the British Chambers of Commerce said: ‘If implemented in full and at pace, this could go some way to improving the poor digital connectivity that far too many firms face.’Government sources said BT, which is in line for subsidies worth 1 billion to roll out broadband to 95 per cent of homes by the end of next year, has resisted the idea of a legal guarantee. But ministers have decided the threat of legal action is needed to ensure the final five per cent of homes also get a decent connection.

It boggles the mind to consider a relatively small island nation has so many premises still off the Internet grid in 2016. The U.S. already has a universal service/nondiscrimination requirement in law per the Federal Communications Commission's 2015 Open Internet rulemaking but is not enforcing it.

AT&T seeks state sanction to exit residential premise service, transition customers to mobile wireless

Fellow blogger Steve Blum of Tellus Venture Associates calls bullshit on AT&T for sponsoring California legislation that would relieve it from its premise landline universal service obligations under Title II of the federal Communications Act. Blum has the same problem with the bill as I do. It's dressed up as enabling AT&T to transition from copper POTS service to Internet protocol-based service. As Blum points out, AT&T can do that without the need for enabling legislation. It has chosen not to make an orderly transition over the past two decades. That's a business issue, not one of regulatory policy.

The bill is essentially seeking state sanction to transition AT&T residential landline customers to its mobile wireless service. The thing is, that's not premise service under Title II's universal service obligation. However, with the U.S. Federal Communications Commission not enforcing its 2015 Open Internet rulemaking bringing IP-based services under Title II's universal service requirement, AT&T faces no regulatory consequence for "mobilizing the world" of its residential customers with service not engineered or priced for residential premise service.

Local government Internet infrastructure efforts spurred by FCC's non-enforcement of Title II, encourgement of "competition"

EPB Lays Out Plans To Provide All Of Bradley County With High-Speed Internet, TV Service; Cost Is Up To $60 Million - Chattanoogan.com: State Rep. Dan Howell, the former executive assistant to the county mayor of Bradley County, was in attendance and called broadband a “necessity” as he offered his full support to helping EPB, as did Tennessee State Senator Todd Gardenhire. “We can finally get something done,” Senator Gardenhire said. “The major carriers, Charter, Comcast and AT&T, have an exclusive right to the area and they haven’t done anything about it.”

The "exclusive right" mentioned here isn't generally a government-granted or regulated license or franchise to offer Internet service. It's actually a de facto duopoly market of legacy telephone and cable companies. Title II of the federal Communications Act recognizes that telecommunications infrastructure due to its high cost of construction and operation tends to function as a natural monopoly. In accordance with this, the Federal Communications Commission classified Internet as a telecommunications utility under Title II by adopting its Open Internet rules in 2015. But the FCC is currently not enforcing the universal service and anti-redlining provisions of Title II.

It's therefore unsurprising that barring such enforcement, local governments will attempt to fill in the gaps in unserved or poorly served areas in response to their citizens' complaints. When those living and operating businesses in landline unserved areas attempt to order Internet service, without FCC enforcement of Title II the incumbent telephone and cable companies can summarily turn them down without consequence. That leaves them little recourse other than to demand their local elected officials do something to help. The FCC's non-enforcement of these Title II provisions correlates with its current policy position advocating local government "competition" with incumbent telcos and cablecos -- in conflict with its Open Internet rules predicated on a monopolistic and non-competitive market.

At start of new year, U.S. faces worst of all worlds on federal telecom modernization policy

As 2016 dawns, the United States faces the worst of all worlds when it comes to federal policy on telecommunications infrastructure modernization to ensure all American homes and small businesses have access to landline Internet connections.

In early 2015, the nation adopted policy classifying Internet service as a common carrier telecommunications service. Under the Federal Communications Commission’s Open Internet Order, Internet service is subject to the Communication Act’s universal service requirement, mandating service be provided upon request and barring neighborhood redlining by Internet service providers. Nevertheless, a year later, millions of U.S. premises that attempt to order service will -- as they have for more than a decade -- continue be turned away by ISPs because the FCC is not enforcing these provisions.

Absent regulatory action ensuring compliance with these requirements and frustrated by technologically outmoded, spotty and overpriced Internet telecommunications service, state and local governments are naturally concerned over the adverse economic impacts. Consequently, they’re looking to build their own modern infrastructure. But given the billions of dollars needed to build it, they’ll need substantial financial backing from the federal government. Since none exists or appears to be forthcoming, pressure for strong policy action at the federal level will grow this year.

Internet service franchises offer local governments potential work around to incumbent-sponsored state video franchises

Mediacom questions Iowa City deal with ImOn | The Gazette: Jeff Janssen, vice president of sales and marketing with ImOn Communications, said Tuesday he had not seen the Mediacom letter, but said ImOn has lease agreements similar those with Iowa City in other communities like Hiawatha and Marion.

Janssen also noted a franchise agreement only becomes required when cable TV is added to the list of service offerings. ImOn’s current plans for Iowa City are strictly for telephone and Internet services, he said.

“Franchise agreements are all around cable TV,” he said. “Once we decide, or if we decided to offer cable TV in Iowa City, we would get that franchise agreement, we are required to.”

This issue was bound to emerge sooner or later. In the early 2000s, legacy incumbent telephone and cable companies realized that with the emergence of the Internet and its capability to deliver TV programming, local governments would come under intense pressure from their constituents to require ISPs offering video services to provide Internet connections to all premises under municipal franchise agreements. That would have required substantial capital investment incompatible with the incumbents' business models based on milking their existing wireline "footprints" -- and not modernizing and expanding them to reach every doorstep.

To head off this prospect, the legacy incumbent cable and telephone company lobbies went into high gear to get state laws enacted putting states in charge of so-called "video franchises" and usurping local government authority over video services.

But that left a potential loophole for local governments to franchise Internet services other than video -- what's at issue in this Iowa case. Watch for this gambit to take off elsewhere, especially in states where there are also laws barring local governments from building and/or operating their own Internet services. Local governments could get around both restrictions by creating Internet service franchises and partnering with private ISPs as their franchisees. (Also referred to as "telecommunications franchises" in this item on a recent Brookings Institution panel discussion). They could also pressure the legacy incumbent telephone and cable companies by requiring them to obtain an Internet service franchise serving all premises if they wish to offer Internet services other than video within their jurisdictions.

With interest in wireline-delivered video declining among "cord cutting" consumers and incumbents relying more on Internet service for revenue, that pressure could be quite intense. It would also give localities a powerful tool to bring service to all of their residents and businesses given the U.S. Federal Communications Commission's lack of interest in enforcing its recently adopted rulemaking reclassifying Internet as a common carrier telecommunications service subject to the universal service and anti-redlining provisions of Title II of the Communications Act.

Redlined in Bradley County, Tennessee

Broadband providers battle over service in Bradley County | Times Free Press: Dr. Terry Forshee, president of Cherokee Pharmacy stores in Cleveland and Dalton, is eager for that growth. He said he can't get broadband at his South Bradley County home near Red Clay State Park.

"Charter Communications has had 27 years to bring cable down to me, but I'm still three miles away from service," he said. "I'm waiting, and I call every month to both Charter and AT&T, but I can't get anyone to come to my residence."

Forshee said he is trying to build his obesity education business, Take Charge, into a national company. But that's hard to do when he can't get high-speed Internet service at home.

Sandy Wallis lives in northern Bradley County, less than a quarter-mile from where Charter Communications and AT&T lines end.

"I've lived in my house for 30 years waiting on Charter and AT&T, and I've had to send my kids into town to do their homework (where broadband is available)," she told the Chamber gathering. "We need better service."

The U.S. Federal Communications Commission's Open Internet rules adopted earlier this year require Internet Service Providers fulfill requests for service under universal service and non-discrimination provisions of the Communications Act. Internet service is treated as a common carrier telecommunications utility under the rules. So far, however, there are no indications the FCC is enforcing these requirements in response to reports of ISP redlining such as these.

Lifeline Internet access first requires universal service -- and FCC not enforcing

L.A. County backs plan to ensure Internet access for seniors and the poor - LA Times: Undergirding the county leaders' support for expanding the lifeline programs is the increasing prevalence of digital technology in the economy and social programs.

"Technology is a key component of our economy, and it is unconscionable that so many county residents lack access to broadband," said Supervisor Hilda Solis, who co-wrote the motion passed Tuesday by the board. "These individuals are being marginalized and ignored."

The policy expressed here is Internet service is now as vital as telephone service was before it. Hence per the position adopted by the county, it too requires a "lifeline" rate subsidy for lower income households to ensure universal access. However, before there can be universal access, there must be universal service.

Early this year, the U.S. Federal Communications Commission adopted its Open Internet rulemaking classifying Internet service as a common carrier telecommunications utility service like telephone service. That legal classification under the Communications Act includes a universal service obligation on providers to offer Internet service to any household requesting it. But thus far, the FCC has shown no inclination to enforce the rule, which became effective in June.

FCC inquiry could set stage to further reduce pressure on telcos, cablecos to deploy last mile infrastructure

Now that the U.S. Federal Communications Commission appears to be whiffing on enforcing Title II’s universal service and anti-redlining provisions relative to Internet service despite deeming Internet service a common carrier utility in a rulemaking earlier this year, it appears to be setting the stage to give big incumbent telephone and cable companies another potential pass on modernizing and building out their last mile infrastructures.

The FCC signaled that possible gambit this week in opening its annual review as required by Section 706 of the Telecommunications Act of 1996 to determine whether advanced telecommunications capability is being deployed to all Americans in a reasonable and timely manner.

In previous reviews, the FCC examined advanced telecom infrastructure providing both landline premise as well as mobile wireless and premise satellite service but opted to include only premise landline service in its determination, citing “significant concerns about the quality and reliability of the mobile and satellite service data” as well as factors including latency and usage allowances.

The 2015 review determined infrastructure deployment remained untimely as in previous reviews dating back nearly two decades and that 55 million Americans – 17 percent of the population – lack access to advanced telecommunications services capable of supporting high-quality voice, data, graphics and video.

For its next annual review, the FCC announced an inquiry this week seeking comment on whether mobile wireless and satellite should be included:

While fixed terrestrial broadband service can have advantages for high-capacity home use, mobile broadband has become increasingly important for many uses, including connecting on social media, navigating during travel, communicating with family and friends, receiving timely news updates, and more. In the event mobile broadband is added to the assessment, the FCC is seeking comment on what speed of service should serve as the benchmark for assessing availability. The FCC is also proposing to consider the availability of fixed satellite broadband in its annual assessment of fixed broadband availability.

Such a move could also pave the way for creating a benchmark lower than the new speed standard of 25 Mbps down and 3 Mbps up established in the 2015 Section 706 review since this level of service is not offered by mobile wireless and satellite providers. That would make it easier for the FCC to declare advanced telecom infrastructure is in fact being timely deployed. Doing so would effectively sanction the deplorable status quo that has existed for many years where about one in five customer premises remain unable to obtain premise landline Internet service.

Early indications that FCC not enforcing Title II Internet universal service, anti-redlining provisions

--FCC accepts AT&T assertion of Title II compliance on its face

--Consumer complaint against Comcast closed despite demand for $535,000 to establish Internet service

 

Earlier this year, the U.S. Federal Communications Commission deemed Internet service a common carrier utility under Title II of the Communications Act and thus subject to the law’s universal service and non-discrimination obligations. New FCC rules implementing the policy became final on June 12, 2015 and withstood judicial petitions by large telephone and cable companies and their trade associations to block them from taking effect.

Going forward, it remains to be seen whether the FCC will enforce Title II universal service and anti-redlining requirements against the large, dominant telephone and cable companies that provide much of the nation’s premise landline Internet service in tightly proscribed “footprints” within their service areas. Early indications are that the FCC is opting to not enforce these requirements even though it specifically declined to forbear their enforcement in its March 12, 2015 Open Internet Order and Rulemaking, finding that doing so would not be in the public interest. Harold Feld of Public Knowledge termed universal service “the quintessential common-carrier obligation.”

Nevertheless, it appears the FCC rather than enforcing key Title II obligations is choosing to merely pass complaints of violations on to providers and then summarily closing them out once the provider communicates with the complainant. I offer my own experience as evidence.

On June 15, 2015, I attempted to place an online order for Internet service for my home office premise in Northern California and received this screen:

I also obtained the following communication from an AT&T agent in a June 15, 2015 online chat session:

Agent: Unfortunately, neither AT&T Business U-verse nor DSL services are available in your area. There may be several reasons why AT&T Business Internet Service is not available in your area. The most common reason is that there are a set number of ports to deliver service in each area, and we've reached capacity. It's also possible that your business is outside of the range to receive service.

A subsequent attempt to order a small business bundle of phone and Internet service resulted in this email from AT&T:

Dear Fred Pilot,
I'm sorry but internet services are not available to this address at this time. Do you want to continue with the phone line and long distance order?
Thank you for choosing AT&T.

Sincerely,

Shelley Zeigler
AT&T Small Business Online

 

* * *

I filed a complaint with the FCC on June 15, 2015 contending AT&T by failing to fulfill my order for Internet service was in violation of the FCC's recent Open Internet Order and specifically Title II SEC. 201(a) of the Communications Act that requires common carriers to "furnish service upon reasonable request therefor."

On July 30, 2015, I received this update from the FCC:

Hi Frederick,

Your Ticket No. 342043 was served on your carrier for its review and response.

Your carrier has provided the FCC with a response to your complaint. You should receive a copy of the response from the carrier within 7-10 days via postal mail. As such, no further action is required. Your complaint is closed.

Thank you for your complaint and help in furthering the FCC’s mission on behalf of consumers.

*  *  *

On July 18, 2015 I received an email from the manager of the AT&T Office of the President stating that AT&T reviewed my complaint and “determined that neither DSL or U-verse are available at this time,” adding that “AT&T also finds that it is not in violation of the Open Internet Order referenced in the FCC complaint.” 

Bottom line: The FCC closed the case based on AT&T’s assertion that it is not out of compliance with Title II SEC. 201(a). The FCC’s position appears to be we’ll accept AT&T’s word it’s in compliance with the law and move on. That’s hardly what could be termed enforcement by an entity established as a regulatory agency.

Since Comcast also nominally serves my ZIP Code, I also attempted to order Comcast’s 25Mbs Internet service from its consumer website. The site responded “The address you entered could not be recognized” and offered four other addresses in my ZIP Code with numbers matching my own. A few days later, Comcast left a voice mail stating my address was "not serviceable."

I filed a complaint with the FCC alleging Comcast was in violation of Title II Section 201(a) and a ticket was opened. Subsequently, Comcast sent me an email indicating Comcast could service my address if I paid $535,000 to expand its network:

To: Frederick Pilot
Sent: Monday, June 29, 2015 8:58 AM
Subject: RE: Comcast/ESL01973870/Pilot/AE  

Good Morning Mr. Pilot,   I hope your weekend was well. I have just received word from our serviceability team. The serviceability team has confirmed that your address is over a mile from Comcast’s nearest network. The estimated cost to have the Comcast network expanded to your home is $535,000.00. 

Kind regards

Alyssa Executive Customer Relations Comcast | West Division Office: 1-888-966-7794 Ext. 3007906 M-F: 8:00a – 4:30p PDT        

Another email from Comcast clarifying that I (and not Comcast) would have to bear the cost:

WST - Comcast Executive Customer Relations 5

Jun 29 at 10:06 AM

To:  Frederick Pilot

Mr. Pilot,   If you would like to discuss paying the estimated fee of $535,000.00 to have the lines ran to your home I can get you in touch with our construction team. Please let me know how you’d like to proceed.

Alyssa Executive Customer Relations Comcast | West Division Office: 1-888-966-7794 Ext. 3007906 M-F: 8:00a – 4:30p PDT

*  *  *

I added these emails to my FCC complaint file, pointing out the demand for such a large sum in order to provide Internet service potentially violates two additional Title II provisions:

• Section 254(b)(3) requiring Internet Service Providers to provide access to advanced telecommunications in all regions of the nation at rates that are reasonably comparable to rates charged for similar services in urban areas.
• Section 202(a) of the Communications Act insofar as it is an unjust, unreasonable and discriminatory charge in order to effect a common carrier communications connection per Section 202(b). 

Apparently this additional information didn’t pique the interest of the FCC, which closed out the complaint on July 17, 2015:

FCC Consumer Complaints July 17, 2015 08:29

Hi Frederick,

Your Ticket No. 351820 was served on your carrier for its review and response.

Your carrier has provided the FCC with a response to your complaint. You should receive a copy of the response from the carrier within 7-10 days via postal mail. (None was received as of 7/31) As such, no further action is required. Your complaint is closed.

Thank you for your complaint and help in furthering the FCC’s mission on behalf of consumers. 

A follow up query to the FCC asking why the complaint was closed produced no response.