No fast or slow lanes for Internet? New rules proposed | The Sacramento Bee

No fast or slow lanes for Internet? New rules proposed | The Sacramento Bee: "Net neutrality" means that whether you're trying to buy a necklace on Etsy, stream the season premiere of Netflix's "House of Cards" or watch a music video on Google's YouTube, your Internet service provider would have to load all of those websites equally quickly.

This is a much less important problem in the United States than inadequate Internet infrastructure that leaves millions of American homes and small businesses to substandard slow dialup, satellite or costly bandwidth rationed mobile wireless connections. The Federal Communications Commission recently reported that Internet infrastructure is not being deployed in a timely manner.

FCC Chair Wheeler may still be trying to split the baby on regulation of Internet as common carrier telecom service

U.S. Federal Communications Commission Chairman Tom Wheeler issued a fact sheet today summarizing a draft rulemaking the FCC will vote on this month to classify Internet service as a common carrier telecommunications utility under Title II of the Communications Act. It should be borne in mind this document represents a starting point in the FCC's deliberations preceding formal promulgation of proposed regulations and the public comment period before their final adoption.

Here are some quick takes on some of the provisions mentioned in the FCC fact sheet:

Reasonable Network Management: For the purposes of the rules, other than paid prioritization, an ISP may engage in reasonable network management. This recognizes the need of broadband providers to manage the technical and engineering aspects of their networks.

This is a big loophole that will likely send net neutrality proponents up the wall. A major friction point between core content providers and ISPs is the edge ISPs won't upgrade their last mile networks to fiber to support higher throughput. "Reasonable network management" could thus mean core content will have to be throttled so as to not overwhelm their networks.
 

Some data services do not go over the public Internet, and therefore are not “broadband Internet access” services subject to Title II oversight (VoIP from a cable system is an example,

This carves out Internet voice service from Title II -- a major telecommunications service.

Bolsters universal service fund support for broadband service in the future through partial application of Section 254.

It will be interesting to see what exactly "partial" means. Section 254(b) of the Communications Act requires common carriers to provide access to advanced telecommunications and information services (i.e. Internet service) in all regions of the nation. Will the FCC provide waivers for some areas of the country even as it finds Internet infrastructure is not being timely deployed to all parts of the nation?

The proposed Order applies “core” provisions of Title II: Sections 201 and 202 (e.g., no
“unjust and unreasonable practices.”

Section 202 bars “discrimination in charges, practices, classifications, regulations, facilities, or services...” It also contains an anti-redlining provision barring providers from discriminating against localities in providing service. That means dominant providers would have to serve all premises in their service territories and not just selected neighborhoods, roads and streets as is current practice.

No last-mile unbundling.

This effectively neuters common carrier under Title II and protects the closed access monopoly incumbent providers enjoy over what services are sold to customers since they would continue to be able to bar access to ISPs offering competing content and services.

UTOPIA’S “fiber highway” offers roadmap to greater competition for premise telecommunications services

A major complaint about Internet service in the United States is legacy incumbent telephone and cable companies lack incentive to provide better value and customer service and to build out their networks to fully serve communities and neighborhoods and not just selected segments. Many believe the solution is introducing more competition.

But given that telecommunications infrastructure costs a lot to build and maintain, that circumstance creates high economic barriers to potential competitors. That leaves the incumbent telephone and cable companies firmly entrenched in a market that naturally tends to be monopolistic. It puts them in the dominant position and consumers in the weaker role, forced to be what economists call “price takers,” meaning they must pay whatever their ISP charges or go without service. 

Summed up, a market that’s naturally monopolistic can’t easily be transformed into a competitive one without a radical reordering. One such example is the Utah Telecommunication Open Infrastructure Agency (UTOPIA), which operates its regional fiber telecom infrastructure as public works -- like a road or highway. That introduces competition by giving consumers the choice of what Internet services they want to purchase and from which ISPs. “The value to users is generated through greater choice of providers that generates a shift in the balance of power from the ISPs to the user and the superior service that the new network will provide,” notes this recent update by Macquarie Capital on its public-private partnership venture with UTOPIA.

As the report notes, there has been some resistance to a key financing element: a proposed monthly utility fee. But as it also points out, the estimated $22.60 monthly utility fee is offset by better value consumers would receive than as price takers of the incumbent telephone and cable companies.

As the maxim holds, there’s no free lunch. But some lunch deals are better than others, particularly when they help fund fiber to all and not just some premises as with Google Fiber’s “fiberhoods.” UTOPIA’s open access model provides the additional advantage of ensuring everyone is connected regardless of where they live or operate their business. Applied on a regional basis as UTOPIA plans, the utility fee model is a particularly important financing mechanism in places like Bettendorf, Iowa and Danbury, New Hampshire -- small localities that would be challenged to fund Internet infrastructure construction without new revenue streams.

The Obama administration and the Federal Communications Commission – looking for ways to increase competition for premise telecommunications service amid a growing tide of consumer dissatisfaction – would be wise to look to UTOPIA’s open “fiber highway” model. And consider tax incentives such as making utility fees tax deductible for all taxpayers to make them more palatable.

The FCC is moving to preempt state broadband limits - The Washington Post

The FCC is moving to preempt state broadband limits - The Washington Post: Under Section 706 of the Communications Act, the FCC is authorized to promote the deployment of broadband in the United States. By ruling that the anti-municipal state laws constitute barriers to that mission, the FCC's draft order invokes Section 706 in preempting the laws.

But that theory has already been questioned by Republicans who believe private investment is a more effective tool for rolling out high-speed broadband. 

Private investment in theory might be effective -- if there was a lot more of it. The legacy, shareholder owned incumbent providers are constrained in their capital investment capacity by the demand for short term profits and high dividend obligations and debt loads. Witness Verizon, for example. The company stopped new build outs of its FiOS fiber to the premise infrastructure in response to shareholder concerns.

Private pension money might be brought into play as is the case with Australia-based Macquarie Capital, the financial partner of the Utah Telecommunication Open Infrastructure Agency (UTOPIA). But so far no other similar financiers with the billions that are needed have emerged.

In summary, there really isn't any point in debating what's the best source of U.S. fiber to the premise telecommunications infrastructure funding. What's truly important is that there be an adequate and viable funding source -- something the nation is currently lacking.

AT&T ramps North Carolina FTTP workforce to battle Google Fiber's impending entry - FierceTelecom

AT&T ramps North Carolina FTTP workforce to battle Google Fiber's impending entry - FierceTelecom: Just days after Google Fiber (NASDAQ: GOOG) announced it would bring its fiber-to-the-premises (FTTP) service to a number of major North Carolina towns and cities, including Charlotte and the Triangle area, AT&T (NYSE: T) is ramping up its workforce to support its own fiber network push in the state.

After launching its 1 Gbps FTTP GigaPower service in December in Carrboro, Cary, Chapel Hill, Raleigh and Winston-Salem, the service provider said it is committing capital dollars to hire nearly 100 new technician positions to support the service rollout. The service provider also is planning to bring the 1 Gbps service to Durham, Charlotte and Greensboro.

As Google Fiber and the legacy incumbents try to do each other in with duplicative and wasteful parallel fiber to the premise (FTTP) telecommunications infrastructure (like having a premise served with two power lines, two gas lines, and two water lines) in a few select metro areas, the bulk of the United States continues to lack a comprehensive plan to build FTTP. Does it make sense for some Americans to have multiple fiber connections while most others have none?

Where high hopes of fiber telecom infrastructure collide with weak federal funding

Changes to RUS Broadband Loan Program Include Rural Gigabit Pilot - Telecompetitor: When President Obama spoke last week about reforms to the USDA Rural Utilities Service broadband loan program, he was referencing changes adopted in the 2014 Farm Bill, a USDA official advised in an email to Telecompetitor.

Joan Engebretson's report illustrates the wide gulf between the Obama's administration's aspirations for fiber telecommunications infrastructure America needs for the 21st century and the stark paucity of available funding under current federal programs to help finance this high cost endeavor.

Casey Peck, General Manager of the Kalona Cooperative Telephone Co. of Kalona, Iowa pointed up the gap in this opinion piece appearing in the Kalona News:

It seems the President’s objective is to encourage municipal construction of broadband networks, which would compete with existing providers.  The push to allow municipalities to construct broadband networks, which is prohibited by state law in 19 states but not in Iowa, will do little or nothing for the actual rural customers for which Obama claims to be concerned.

The fact is that most companies want nothing more than to roll out the next generation of broadband services, but simply do not have the cash flow to do so.  The biggest hurdle facing those consumers without high-speed internet services is provider’s lack of funding to get these services to the most remote customer in their areas.

Common carrier utility regulation appears a near certainty in 2015

Legacy incumbent telephone and cable companies have threated to sue the U.S. Federal Communications Commission if as expected the FCC follows President Barack Obama’s call to classify Internet services as a common carrier utility under Title II of the Communications Act. The incumbents hope the specter of prolonged litigation and uncertainty will give the FCC pause before it acts next month.

The problem for the incumbents however is even if they make good on the threat, it may not buy them the degree of uncertainty and delay they would like. Any litigation arising from the expected regulatory action by the FCC would likely be disposed of in relatively short order. The courts operate under a doctrine of judicial deference to how regulators interpret and apply statutory law such as the Communications Act. They are loath to put themselves in the place of regulators and second guess administrative rulemaking, reasoning the regulators and not the courts hold the requisite expertise when it comes to figuring out how to apply the finer points of statutory law. 

Possibly realizing this, the incumbents’ lobbying corps is implementing a backup strategy in Congress to amend the Communications Act to carve out Internet service on the grounds that it doesn’t function as a market monopoly – the underlying rationale for classifying it as a common carrier utility like telephone service. Demerits of that legislative rationale aside, that nascent effort also isn’t likely to be productive since even if passed it would face a likely presidential veto.

The outlook for 2015 is common carrier utility regulation of the Internet is coming and isn’t likely to be derailed.