Local governments seek federal preemption of Internet regulation

In the early 2000s as legacy cable companies contemplated offering Internet-protocol (IP) based services including Voice Over Internet Protocol (VOIP), they feared local governments that franchised their decades-old cable television services would demand they offer IP services to all neighborhoods within their jurisdiction. That prospect was very real possibility given their residents had other options for television service including over the air broadcast and satellite, but would need landline infrastructure built out in order to provide universal Internet access as demand for Internet service jumped. Also, by offering voice service via VOIP, cablecos began emulating telephone companies that are required to offer universal service to any premise requesting it.

To head off what to them appeared to be a costly prospect, cablecos heavily lobbied state governments to preempt the locals by giving state public utility commissions franchise authority over IPTV. While nominally limited to video services, for both cablecos and phone companies the move forestalled for many years any local requirements they upgrade and build out their Internet infrastructure since their video services are typically bundled as part of landline premise Internet service.

Now more than a decade later, local governments are getting in on the preemption game. Since their oxen were gored by their states at the behest of the legacy incumbent cablecos and telcos, they are looking to the federal government for relief. An example is the Federal Communications Commission’s order earlier this year to preempt statutes in two states barring local governments from building their own infrastructure. Doing so would allow local governments to get around the state sanction of the incumbents’ redlining practices.

In Arizona, local governments appear to be looking to the feds to resolve a dispute involving the city, a legacy cableco and Google Fiber over the city’s regulation of video services. “The City believes these questions will more likely be resolved more definitively in the future by the Federal Communications Commission or a similar authority,” said Scottsdale Chief Information Officer Brad Hartig in a statement. (H/T to DSLReports).

In California, two legacy telcos are making an argument that would place Internet services in a regulatory non man’s land, subject to neither state nor federal jurisdiction. Frontier and Verizon contend regulation of Internet service falls under federal jurisdiction per the FCC’s order classifying Internet as a common carrier telecommunications service under Title II of the federal Communications Act. But at the same time, they argue that order does not preempt California law giving the California Public Utilities Commission jurisdiction over legacy (non IP-enabled) telephone service but not Internet services. (Item here at Steve Blum’s Blog)

U.S. facing telecom infrastructure crisis due to poor policies and planning, according to new book

A generation ago, it became clear that telecommunications was shifting to the Internet. However, as a nation, the United States failed to build the infrastructure to reliably support and deliver it to all Americans.

Today, the nation is paying the price for its lack of an orderly transition plan to move from legacy metal cable systems designed to support the analog voice telephone and cable television service of decades past to fiber optic-based infrastructure optimized for the Internet in the 21st century.

According to a new eBook, Service Unavailable: America’s Telecommunications Infrastructure Crisis, the United States – the nation that innovated the Internet – now stands at least two decades behind where it should be and requires a crash federal infrastructure initiative to catch up.

In much of the nation, many locations have no Internet service options due to inadequate infrastructure -- and have little prospect of obtaining service in the foreseeable future. According to the U.S Federal Communications Commission, as of 2015 approximately 55 million Americans – about 17 percent of the population -- live in areas unserved for basic Internet service capable of supporting high-quality voice, data, graphics and video. Meanwhile, demand for Internet bandwidth is growing exponentially as U.S. residential and business premises use multiple Internet-connected devices, straining the capacity of legacy landline infrastructure and wireless services.

Consequently, the nation now faces a telecommunications infrastructure crisis. As time passes, the crisis deepens as Americans grow increasingly reliant upon robust and reliable Internet connectivity that only fiber can accommodate now and into the future.

Just as the interstate highway system supported commerce in the twentieth century, the United States needs an information highway bringing fiber connections to all Americans no matter where they live in the information-based economy of the new century.

Authored by longtime telecommunications blogger Frederick L. Pilot, Service Unavailable drew praise from Michael Copps, who served on the U.S. Federal Communications Commission from 2001 through 2011:

“Pilot digs deep in the facts and emerges with a spot-on, realistic assessment of America's stultifying broadband shortfall,” Copps wrote in a foreword to the book. “He shows how two decades of federal inaction permitted huge telecom incumbents to ration scarcity rather than build bandwidth abundance. And he demonstrates beyond a shadow of doubt that without a true national mission to build this essential infrastructure, we will continue to stifle economic opportunity for millions of citizens and shackle America's global economic performance, too.”

Service Unavailable is offered through Amazon.com and iBooks.

Aging legacy copper infrastructure isn't solely a regulatory issue

Regulatory Relief Would Speed FCC’s Broadband Deployment Goals | USTelecom: Removing barriers to investment is a concrete action the Federal Communications Commission (FCC) can take to accelerate broadband deployment, USTelecom said in recent comments responding to an inquiry on the state of broadband availability. To that end, the commission should approve USTelecom’s forbearance petition requesting Incumbent Local Exchange Carriers (ILECs) be relieved of directing investment to legacy telephone networks and allowed to redirect that money to next-generation broadband networks. USTelecom said its member companies are required to invest in legacy networks that soon will become obsolete while other broadband providers- cable, wireless, and competitive fiber providers do not have this requirement, and that forbearance relief for ILECs would help the FCC achieve its goal of deploying broadband to all Americans in a reasonable and timely fashion.

This isn't a problem caused solely by regulatory requirements. Rather, it's a train wreck borne of poor policy and planning. Had an orderly plan to migrate from copper-based legacy telephone service to fiber-based Internet protocol-based telecommunications been put in place and executed starting two decades ago, the United States would not be in the current dire situation where legacy copper plant is literally rotting on the the poles. As it does, it grows increasingly less reliable to support voice telephone service -- and emergency call response -- in areas where the copper has not been replaced by fiber -- as well as copper-based DSL where it is offered.

Germany promises 50Mbps broadband for all, 10 times faster than global average

Germany promises 50Mbps broadband for all, 10 times faster than global average: As around 70 percent of Germany is already connected to networks of 50Mbps or faster, it will be a relatively ‘cheap’ task to connect the final 30 percent. The German government is putting aside €2.7 billion for the project, but will be looking for matched funding from local providers who will benefit from extending the reach of high-speed broadband networks.

“The German Federation will contribute up to 50 percent of the costs. A combination with development programs provided by German states is possible and can offer a further 40 percent of financing. The community would then have to provide the remaining 10 percent,” a spokesperson said.

The implicit policy assumption here is that by providing generous federal government and German state contributions along with a minor (10 percent) community contribution, the incumbent providers will have incentive to undertake Internet infrastructure construction and modernization.

The economics don't work out quite the same way in the United States. Unlike Germany, it isn't "relatively cheap" to build telecommunications infrastructure to reach the 55 million Americans who according to the U.S. Federal Communications Commission aren't offered service meeting even half Germany's benchmark. Instead of an ambitious initiative to bring fiber to nearly all American premises, U.S. policy is to provide small subsidies to incumbent telephone companies to build one off, 1990s-era DSL projects using existing copper outside plant serving small numbers of premises that don't even meet the FCC's benchmark and are already obsolete given burgeoning Internet bandwidth demand.

FCC's Sohn: Forget Incumbents, Build Your Own Broadband Networks | DSLReports, ISP Information

FCC's Sohn: Forget Incumbents, Build Your Own Broadband Networks | DSLReports, ISP Information: Don't wait for incumbent ISPs to build networks in uncompetitive areas, build your own networks. That was the message from FCC staffer Gigi Sohn at the NATOA Annual Conference in San Diego this week, ironically just days before Google announced that San Diego will likely be an upcoming Google Fiber launch market. According to Sohn cities tired about lackluster, uncompetitive service now have the power to do something about it.

The U.S. Federal Communications Commission's call to localities to "build your own" Internet telecommunications infrastructure likely coincides with its apparent policy not to immediately enforce its recently adopted Open Internet rulemaking classifying Internet as a common carrier telecommunications utility under Title II of the Communications Act. Notwithstanding that the FCC's order and rulemaking specifically declined to forbear enforcement of the law's anti-redlining universal service provision at Section 254(b)(3) requiring ISPs to provide access to advanced telecommunications in all regions of the nation.

Hyper local view of Internet telecom infrastructure misguided, reinforces network access disparities

City Broadband Plans: One Vision, Four Markets, Four Issues | Benton Foundation: My message today is simple: every city needs its own broadband plan.

At one time, I would have agreed with this statement by Blair Levin, who wrote the 2010 U.S. "National Broadband Plan" while serving on the staff of the Federal Communications Commission. I even went as far as paraphrasing the late House Speaker Tip O'Neill by declaring "all broadband is local" on this blog.

I no longer hold that view. It's not just about "broadband" in a given municipality or as is more often the case, a particular neighborhood. Instead, the truly important issue is ubiquitous Internet telecommunications infrastructure in keeping with the FCC's recent reclassification of Internet service as a common carrier utility. And that infrastructure is fundamentally interstate -- much like the federally funded interstate highway system -- and global. In that regard, it's not directly comparable to the municipal and cooperative electric power systems created in the early 20th century that generated and distributed power consumed locally. The Internet is a telecommunications network that reaches far beyond the borders of a given city or town and whose true value is recognized by Metcalfe's Law, which holds a network increases in utility as more users are added to it. In short, it's all about the network and not "broadband" or discrete "gigabit cities."

The hyper-local focus on this essential infrastructure for the 21st century is well meaning and understandable in the absence of strong federal leadership and support. But it's also misguided and dangerous because it serves to reinforce incremental thinking and Internet infrastructure disparities that have plagued the nation for a generation. It's also unrealistic to expect local governments to shoulder the financial burden as they continue to deal with the adverse impacts of the 2008 economic downturn and are strapped to fix crumbling roads, schools, sewer and water infrastructure and fund enormous public pension obligations.

If it is to realize the full value of the Internet, the United States should instead adopt a bold, wholistic and robustly funded national Internet infrastructure initiative to bring fiber infrastructure to all homes, businesses and institutions.

Cable companies facing enormous shifts in market, regulatory environments

Cable companies like Comcast, Time Warner and others are facing enormous shifts in the market and regulatory environment that are likely to prove very challenging to navigate going forward. Earlier this year, the U.S. Federal Communications Commission subjected cable companies to Title II of the Communications Act in its Open Internet rulemaking deeming Internet service providers -- cable companies top the list measured by total customer premises served -- common carrier telecommunications utility providers under Title II. 

That's hugely incompatible with cable's business model based on offering subscriptions to bundles of TV channels to selected -- and not all -- customer premises in their service areas. At the same time as this regulatory sea change is occurring, the marketplace is also being disrupted as consumers increasingly shun these offerings.

Cable's subscription-based model is far better suited to the FCC's previously adopted classification of Internet service as a specialized information service -- and the cablecos' market positioning of themselves as entertainment and not telecommunications providers. Now it's gone except in the unlikely event the courts step in and restore it. Meanwhile, consumers are turning elsewhere for video entertainment.

Gov. Beshear, Rep. Rogers launch statewide broadband network – The Ohio County Monitor

Gov. Beshear, Rep. Rogers launch statewide broadband network – The Ohio County Monitor: Reliable, high-speed Internet is coming to every county of the state, and supporters say the broadband project will be the key catalyst for profound and sweeping growth in job creation, health access and education.

To celebrate the construction of the statewide KentuckyWired, I-Way broadband network, Gov. Steve Beshear, Congressman Hal Rogers, state and local officials and hundreds of citizens gathered at Hazard Community and Technical College to learn more about KentuckyWired and how Kentucky’s future will benefit from broadband.

The broadband project will begin in eastern Kentucky and over the next three years will spread throughout the state.

*  *  *

The leaders also called on communities and local providers to get ready for the project by preparing the “last mile,” or the Internet hookups from the broadband “highway” to homes and businesses. (Emphasis added)

It's one thing to build middle mile Internet infrastructure such as the project reported here. But the value of that middle mile infrastructure can only be fully realized when it connects homes, businesses and institutions via last mile infrastructure. Merely issuing calls to communities and local providers to build it is no assurance that last mile infrastructure be constructed in a timely manner, particularly given the business model and financial challenges. There needs to be a holistic plan to build a complete telecommunications system. Otherwise there's the very real risk of ongoing Internet access disparities as I previously commented.

AT&T to deploy "wireless local loop" fixed premise service in high cost areas

AT&T will apparently use wireless technology to provide fixed premise Internet telecommunications services using funding from the Connect America Fund (CAF) to subsidize infrastructure costs in high cost areas of the nation. The U.S. Federal Communications Commission announced this week that AT&T accepted $428 million in annual subsidies from the CAF to serve 2.2 million rural consumers in 18 states. Since the FCC requires CAF recipients to provide connectivity of "at least" 10Mbps for downloads and 1Mbps for uploads, the wireless gambit could potentially meet that standard. AT&T's wireless strategy was communicated to the FCC in a letter dated August 27, 2015 (H/T to California-based Steve Blum of Tellus Venture Associates):

We anticipate meeting our CAF Phase II obligations through a mix of network technologies, including through the deployment of advanced wireless technologies on new wireless towers that will be constructed in previously unserved areas. We will diligently pursue the necessary tower siting and permitting processes so that these new towers can be completed in a timely manner.

As previously mentioned in this space, the so-called "wireless local loop" (WLL) infrastructure strategy proffered in 2014 as part of AT&T's proposed takeover of DirecTV will also help AT&T meet its universal service obligations under the FCC's recently adopted Open Internet regulatory scheme classifying Internet as a common carrier telecommunications service. The strategy will also provide alternative premise service delivery infrastructure as AT&T retires its legacy copper cable outside plant.

The upshot for AT&T customers: Those that were never offered DSL service when AT&T rolled it out more than a decade ago might now see premise service roughly equivalent to DSL sometime in the next five years while those outside the very limited range of its U-Verse triple play DSL-based service could find themselves switched from legacy DSL to WLL.

An unresolved problem, however, is as Internet bandwidth demand continues its inexorable rapid rise, the WLL technology will be obsolete as soon as it's deployed and falls short of the FCC's current minimum benchmark for Internet service of 25Mbps down and 3Mbps up adopted earlier this year.

U.S. paying price for lack of orderly transition plan to fiber telecom infrastructure

FCC Orders Rules for Copper Retirement | POTs and PANs: The biggest issue I see with getting rid of copper is where the phone company doesn’t have an alternate landline network ready for the transition. It doesn’t seem like a big issue to me when a company like Verizon wants to move customers from copper to FiOS. There have already been tens of millions of customers who have changed from copper to either FiOS fiber or to a cable company network who have experienced and accepted the required changes.

But AT&T has said that they want to walk away from millions of rural copper customers. That would force customers to migrate to either the cable company or to cellular wireless. This could be a huge problem for business customers because there are still a lot of business districts that have never been wired by the cable companies. And even where a business can change to a cable company network, they are not always going to be able to buy the services they want from the cable company. For example, those businesses might be using trunks or Centrex today that isn’t supported by their cable provider. These businesses are going to be facing an immediate and expensive upgrade cost to keep the kind of service they have always had.

Doug Dawson lays out the effects of the train wreck caused by the lack of an orderly transition plan in the U.S. to migrate from copper to fiber telecom infrastructure that should have been put in place a generation ago. The consequences of this and misplaced reliance on market forces in a monopolistic microeconomy are now coming home to roost. More on this in my forthcoming book, Service Unavailable: America's Telecommunications Infrastructure Crisis, available in September.

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.