Copps Says FCC Has Collected Enough Information to Move on New Neutrality Rules

"I don’t mind asking more questions, but issues were teed up long ago and I don’t happen to believe the Bureaus need to kick this can 55-plus more days down the road to get the answers” they need, Copps said. Commissioner Mignon Clyburn is the only member of the FCC who declined to release a statement.

"I don’t see [the notice] as calming the waters,” said Independent Telephone and Telecommunications Alliance Vice President Joshua Seidemann. “This has created a bigger stir than some folks might have anticipated. And justifiably so: The fact of the matter is, when you look at the history of broadband Internet access, there has been a bare handful of matters that the commission has had to be involved in. … It raises the question of why that model should be interfered with.” The notice may help detoxify the net neutrality debate ahead of this fall’s elections, said Qwest Senior Vice President Steve Davis. “I think there’s tremendous concern that this industry will be thrown into a state of flux and uncertainty and litigation."

But Precursor President Scott Cleland said Wednesday’s FCC public notice shows the commission understands the importance of industry input. “The FCC apparently now better recognizes that the open industry collaborative dynamic, which has been so consistently successful in resolving most every other major Internet issue over the last couple of decades, can also succeed in appropriately resolving the FCC’s Open Internet concerns now -- if only given the time and flexibility to negotiate a workable outcome,” Cleland said.

Some say the FCC has left open the possibility of applying neutrality rules to just wireline. In the first paragraph of the public notice, Genachowski cited consensus “that with respect to the handling of lawful traffic, some form of anti-discrimination protection is appropriate, at least on fixed or wireline broadband platforms.” Seidemann and Davis said the “at least” clause gives Genachowski enough wiggle room to tackle wireline issues while leaving wireless and managed questions to another day. A Senate Republican aide said the notice leaves a wireline-only approach as an option, but it’s not likely a top choice for the commission, particularly given the heat Google and Verizon got when they proposed exempting wireless from net regulation.

Qwest is “clearly concerned with the suggestion that regulation of the Internet depends on the technology you use to get there,” said Davis. Grant Sieffert, president of the Telecommunications Industry Association, said he hoped the commission wouldn’t split wireline from wireless, which he said would be “patchwork.” TIA believes “a lot of these issues are interlinked and intertwined,” and “it would create more uncertainty in the rule-making process,” Seiffert said. “We'll be asking the same questions as everybody.” Genachowski’s staff declined requests for comment. A senior FCC official said, however, that “all options remain on the table."

ITI Talks Continue

Participants in the ITI discussions have had little to say since the talks started two weeks ago. Industry and agency officials not in the discussions say they're getting conflicting reports about how well the effort is progressing. Several said they were told ITI President Dean Garfield met with FCC Chief of Staff Eddie Lazarus to give him an update. Earlier this week, Garfield said in a statement the group has made “significant progress."

"I'm hearing conflicting reports, about whether this is going to lead to anything or not,” said an FCC official. “The only ones who know for sure how this is going are the ones who were in the room, and they're not talking,” an industry source said. Stifel Nicolaus said in a research report it appears negotiators have reached “a general agreement that provides additional concessions on the part of the network operators on wireless net neutrality, maintaining certain robustness of the ‘public Internet,’ and an expanded role of the FCC.”

"I have not been in the room, and have been hearing only secondhand reports at best,” said Matt Wood, vice president of the Media Access Project. “Nothing makes me think they're making progress -- but my impression is limited by the fact that I have no direct knowledge of their draft or their discussions, and also by the fact that I might have a very different definition of ‘compromise’ and ‘progress’ than the negotiating parties … would have."

"I haven’t seen any signs of progress, but I am not privy to the conversations,” said Public Knowledge Legal Director Harold Feld. “My feeling, given that these are members of an industry association with common interests, is that it is relatively easy for them to reach agreement among themselves. I think it is somewhat harder for them to consider what they are willing to concede that would look like an improvement over the Google-Verizon deal.”

"We believe the issues around Net Neutrality may still be resolved by an agreement among industry participants or possibly legislation,” said Credit Suisse in a research note.

Genachowski may be putting off action on net neutrality because the ITI talks haven’t yet resulted in a deal, commission and industry officials said. They said that while progress appears to have been made during the meetings (CD Aug 1 p7) , a watershed deal on both wireline and wireless net neutrality is not at hand. The parties may make one final attempt to reach consensus when Congress is back in session, speculated an industry lobbyist not part of the talks.

Continued lack of participation at ITIC by non-profit groups that seek net neutrality rules and some companies that aren’t members of the council but have stances on the subject would reduce the import of any agreement reached there, some net neutrality supporters not in on the talks said. Earlier expectations that a wide-ranging agreement on wireline and wireless broadband would be worked out didn’t come to fruition, an executive said. Progress has been made but an accord no longer seems imminent, the executive said.

September Hill Action Unlikely

Senate Communications Subcommittee Chairman John Kerry, D-Mass., said he’s open to and “actively working on a legislative solution to ensure that law reflects the growing consensus that the Open Internet must be preserved and promoted.” But Kerry also thinks “the FCC has the authority, ability, and responsibility to use its regulatory authority under existing law to preserve Internet freedom with or without a new law,” he said. Now that the FCC notice is out, everyone should take a “deep breath” and be “constructive,” said Kerry. “The FCC is stating that it has a role to play in preserving open, ubiquitous, and accessible communications networks and that the wires and airwaves that constitute that network are and should be subject to oversight and regulation. It is both fair and smart, however, to ask how best to execute that responsibility and apply those values given the modern infrastructure and changing landscape."

Rep. Gene Green, D-Texas, would prefer Congress to act, and hopes the FCC “will agree and hold off until we can pass targeted legislation,” Green said Thursday. He praised the FCC for “acknowledging the need to tread carefully and to strike the correct balance that will further our shared goals of preserving an open Internet, promoting broadband innovation, and expanding broadband deployment in underserved areas.” A month ago, Green introduced a House resolution against FCC reclassification, and he was one of 74 Democrats who signed a letter to that effect in May.

The possibility of imminent Hill action was suggested in a statement Wednesday by Rep. Ed Markey, D-Mass. Markey said he hoped the FCC would act if Congress failed to address the agency’s broadband authority “this month.” But Potomac Research analyst Paul Glenchur said he doubted Congress would leap into action. “Hill action is theoretically possible in September but highly unlikely -- more like extremely unlikely,” Glenchur said. It’s more likely Markey is saying “the FCC should simply go ahead and reclassify broadband as a common carrier service,” he said. The chances of Congress passing such legislation this year are “slim to none,” especially in the House where lawmakers are split on whether the FCC should reclassify, said Medley Global Advisors analyst Jeffrey Silva.

Markey “knows full well that Congress cannot pass something remotely controversial in a month -- and this issue probably goes beyond ‘remotely’ controversial,” said a telecom lobbyist. If Congress were going to try, the call for action would have come from Senate Majority Leader Harry Reid, D-Nev., House Speaker Nancy Pelosi, D-Calif., or the House and Senate Commerce Committee chairmen, the lobbyist said. Markey is “aware, I think, that the tide has turned against his cause in Congress and believes his best hope now is Chairman Genachowski.”