Despite AT&T's pushback, Cogent continues to urge the FCC to impose an interconnection condition on any approval of the AT&T/DirecTV transaction, according to a May 27 Cogent ex parte filing in docket 14-90. During a teleconference with Gigi Sohn, counselor to FCC Chairman Tom Wheeler, Cogent CEO Dave Schaeffer and others repeated Cogent's belief that "AT&T-created congestion at interconnection ports" continued to result in "degraded broadband experiences for its customers," the filing said. They also said AT&T's proposed buy of DirecTV and its video distribution business will increase its incentive to use its ability to "impair broadband Internet access." "Accordingly, we emphasized the need for a clear, robust and enforceable interconnection condition as a prerequisite to a determination that the proposed transaction comports with the public interest," the filing said. "In particular, Mr. Schaeffer underscored the need for a durable interconnection solution that not only solves congestion today, but ensures that as broadband usage continues on its upward trajectory congestion will not reappear in short order." AT&T recently disputed in detail the arguments of Cogent and others for an interconnection condition (see 1505270049.

Telco and cable petitioners filed their final brief Thursday in support of their motion to stay two key parts of the FCC net neutrality order, which they called "a seismic departure from the status quo that has prevailed for more than two decades." The American Cable Association, AT&T, CenturyLink, CTIA, NCTA, USTelecom and the Wireless Internet Service Providers Association filed their response to the stay opposition of the FCC, Department of Justice and others (see 1505220037) a day before the filing deadline imposed by the U.S. Court of Appeals for the D.C. Circuit. The petitioners said FCC reclassification of broadband Internet access as Title II common carriage under the Communications Act would expose their industry members "to a host of new, ill-defined requirements, and it immediately threatens them with class-action litigation and enforcement actions." They said the reclassification is likely to be set aside as contrary to the Communications Act and promulgated in violation of the Administrative Procedure Act, citing a host of reasons. "This is thus a paradigmatic case for granting a stay pending appeal," the groups said. "The Internet economy has thrived without Title II mandates, to the immense benefit of the public." Petitioners knocked FCC arguments invoking Supreme Court Justice Oliver Wendell Holmes to claim that case-by-case adjudication can't cause harm. "Petitioners object not to case-by-case adjudication itself, but to a massive regulatory sea change, accompanied by potential class-action litigation and multi-million dollar forfeitures, without any intelligible guidance as to what 'rates' and 'practices' are 'just' and 'reasonable' in the broadband context, and what conduct the newly concocted Internet conduct standard proscribes. Justice Holmes never sanctioned such a regime," they said. Thousands of providers face "immediate and irreparable harm," with the situation "most dire for the hundreds of small broadband providers," they said. The petitioners haven't asked that the four FCC net neutrality rules -- no Internet blocking, throttling or paid prioritization, along with transparency duties -- be stayed. Absent a stay, the commission order takes effect on June 12. The petitioners said at a minimum the court should grant expedited review, which the agency and its intervenors support.

FCC Commissioner Ajit Pai continued his attacks on the agency's net neutrality order, and also took aim at the agency's recent broadband privacy guidance (see 1505200059). "There’s been a dramatic shift towards heavy-handed regulation of the Internet -- one that has created tremendous uncertainty and is already resulting in broadband providers cutting back on investments," he said in his written remarks prepared for delivery Wednesday at the International Institute of Communications Telecommunications and Media Forum in Miami. Pai said FCC policy for years removed barriers to investment, helping spur broadband deployment and innovation. "Unfortunately, the U.S. government is now putting our success at risk," he said. "First and foremost is the FCC’s recent net neutrality decision -- a decision to apply last century’s public-utility laws to today’s broadband providers, a decision to regulate everything from the last mile of the network to interconnection near the Internet’s core." Pai said the FCC order, which adopted net neutrality rules and reclassified broadband under Title II of the Communications Act, complicated the business case for deployment. He said the regulations "give the FCC power to micromanage virtually every aspect of how broadband providers offer service and manage their networks." That injected uncertainty into the market, Pai said. "Take the so-called 'Internet conduct standard' as an example. It gives the FCC power to review businesses models and prohibit pricing plans that benefit consumers," he said. "Everything from zero rating to usage-based pricing might be on the chopping block. And 'might' is the key. The vaguely worded standard gives the FCC a lot of discretion." Pai also questioned the utility of recent Enforcement Bureau guidance on broadband privacy, which he said was vague. "What exactly do broadband providers have to do to comply with the law? I'm an FCC Commissioner and a lawyer, and I have no idea. You're guess is as good as mine. This 'guidance' casts far more shade than sunlight."

AOL had at least three other potential suitors before agreeing to be bought by Verizon, AOL said in a 14D-9 filing Tuesday at the SEC, without naming the three. Verizon’s pursuit of AOL started last summer, when Verizon CEO Lowell McAdam first met with AOL CEO Tim Armstrong to discuss “ongoing and emerging trends in their respective industries,” the filing said. On March 15, Verizon made a more formal offer to buy a majority of AOL, which Armstrong took to his board four days later, AOL said. Discussions continued with a second potential suitor in April, the filing disclosed. It said AOL has considered selling off some assets. Armstrong is slated to get an incentive award of 1.5 percent of the company’s market value at the time of the deal's completion, which would translate to $59 million at the current $3.9 billion value, the filing said. Armstrong also holds options and shares that would bring him $179 million or more. The deal was unveiled two weeks ago (see 1505120019).

USTelecom asked the U.S. Court of Appeals for the D.C. Circuit to intervene in defense of the FCC against Full Service Network's petition for review challenging the agency's net neutrality order. "Unlike all of the other petitioners that have filed petitions to date, these Petitioners intend to argue that the FCC should have imposed even more regulation on providers of broadband Internet access service, including USTelecom’s member companies," USTelecom said in its motion Tuesday. USTelecom has filed a petition for review (and sought a stay) of the FCC order on the grounds that the commission allegedly overstepped its authority in seeking too much regulatory oversight, among other things.

The FCC asked the U.S. Court of Appeals for the D.C. Circuit to reject Neustar’s challenge of the agency’s March order effectively giving rival Telcordia the inside track to become the next local number portability administrator. Neustar is the longtime incumbent LNPA. Neustar had asked the court for an expedited review of the challenge (see 1505070047). The challenge isn't ripe because the March order is “not final Commission action,” the FCC told the D.C. Circuit in a pleading posted by the agency Friday. “Rather, it is an interim step in a process that, after additional Commission action, may result in the selection of a new Local Number Portability Administrator. Because the order from which Neustar seeks review is not final, the Court lacks jurisdiction to review it.” The selection of a new LNPA is a process that “has involved multiple steps over the course of several years” and the order "is merely the latest stage," the FCC said.

The FCC unanimously approved the creation of a regulatory fee category for satellite carriers in its 2015 rulemaking on regulatory fees, said a regulatory fee NPRM and order in Friday's Daily Digest. This corrects a “long-time imbalance“ in the treatment of pay-TV carriers “that exempted two of the nation’s largest [multichannel video program distributor]s from contributing to the regulatory costs of the Media Bureau because they happened to be satellite operators,” said Commissioner Ajit Pai in a statement. The NPRM seeks comment on total proposed FY 2015 fees of $339.8 million. That breaks down to $21.3 million or 6.28 percent from International Bureau regulatees, $69.3 million or 20.4 percent from Wireless Bureau regulatees, $131.1 million (38.57 percent) from Wireline Bureau regulatees, and $118.1 million (34.75 percent) from the Media Bureau regulatees, the order said. The NPRM seeks comment on a request for relief from fee assessments by the Puerto Rico Broadcasters Association. Along with new fees for direct broadcast satellite, the order contains instruction for a new toll-free number fee requirement, and takes amateur radio vanity call signs and general mobile radio service off the fee schedule, the order said. It included in the rulemaking specifies when delinquent fee debt is transferred to the U.S. Treasury.

FCC E-rate changes are working, but this isn't the time for the agency to stop moving forward, Commissioner Mignon Clyburn told the Schools, Health & Libraries Broadband (SHLB) Coalition in a speech Friday. The group understands “E-rate modernization was about far more than just adopting speed targets and revamping a budget,” Clyburn said in written remarks. “I am optimistic, because the FCC remains focused on its objective of ensuring access to world-class digital learning tools -- an objective shared by SHLB and the education community.” Clyburn asked attendees to provide plenty of feedback about how the revisions are working in practice. Also “tell us what we are doing right, because positive feedback is welcome as well,” she said. Clyburn also repeated calls for similar overhaul of the USF Lifeline program. The FCC isn't meeting a congressional mandate to ensure that all Americans, including those with low incomes and in rural and high-cost areas, have access to advanced telecom and information services at affordable prices, Clyburn said. “Lifeline, the only universal service program focused on bridging the affordability gap, remains stuck in an era where leg warmers, stretch stirrup pants, and scrunchies were the fashion craze, and talking on our home telephone or sending a letter through the mail were the main means of communicating.” Lifeline should help people build a better life, she said. The program's goal should be “for it to work so effectively that current subscribers will no longer need Lifeline, or any other federal benefits program,” she said. Industry and FCC officials have predicted Lifeline changes could headline the agency’s June 18 open meeting (see 1505010051). Chairman Tom Wheeler is to circulate draft orders for that meeting Thursday. Wireline Bureau Chief Julie Veach said in a blog post Friday that the FCC has drawn some important lessons from its Low Income Broadband Pilot Program, including lessons for possible Lifeline changes. Among the lessons is that consumers “respond well to having a choice of plans” and all households don’t have the same needs for “data speeds, usage amounts, service type and devices,” Veach wrote. Price matters, even if it is not the only barrier to adoption, and carriers “aren’t necessarily the best” at addressing these barriers, especially “lack of digital literacy and relevance to one's life,” Veach said. There is no “silver bullet,” she said. “While the pilots were focused on different approaches for adoption, let's be clear that Lifeline is focused on ensuring services are affordable, not to solve the broadband adoption challenge,” she said. “As the Commission moves forward to consider how to restructure the Lifeline program for the digital age, the pilot report will help provide useful data for the Commission and public to consider.” The FCC also released the report on the pilot program Friday.

The Department of Justice and the FCC, backed by intervenors, asked the U.S. Court of Appeals Friday for the D.C. Circuit to deny the telco/cable request to stay the FCC net neutrality order's Communications Act Title II broadband reclassification and Internet conduct standard (see 1505130049). “We remain confident the court will deny the request for a stay," an FCC spokeswoman said. "Petitioners have not demonstrated that they are likely to prevail, and granting the stay motion would strip the FCC of the ability to protect consumers and innovators from harmful conduct by broadband providers.” In their opposition, DOJ and the FCC said the stay motion wasn't what it seemed. "It asks the Court to halt the application of Title II of the Communications Act to broadband, while allowing three bright-line rules to go into effect," they said. "But those bright-line rules are precisely the kind of regulation this Court held (in Verizon v. FCC, 2014) could not be applied until and unless broadband was reclassified as a 'telecommunications service.'" DOJ and the FCC said the Supreme Court's 2005 NCTA v. Brand X ruling was controlling, giving the commission authority to set telecom policy in a complex area, including the discretion to divide broadband into a telecom service of pure transmission and a separate information service, such as providing an email address. "The order does precisely that," they said. "The decision to reclassify broadband as offering a telecommunications service is consistent with the marketplace today and necessary to fulfill the goals of an open Internet, which the Verizon Court held were valid." DOJ and the FCC disputed petitioner claims they would suffer irreparable harm, another stay requirement: "Petitioners showcase a few broadband providers representing a small percentage of the marketplace to allege that the entire industry will be harmed, yet even these cherry-picked examples fail to demonstrate harm from the order." Former Supreme Court Justice Oliver Wendell Holmes "would be astonished to hear petitioners claim that unfairness, vagueness, and uncertainty result from the use of case-by-case adjudication in which the commission simply seeks the 'experience' that our common law tradition extols," the agencies said. In their opposition, industry and "public interest" intervenors said the broadband reclassification and net neutrality rules "safeguard the public's ability to use the Internet ... without interference from petitioners." They said "the harms from a stay would dwarf the speculative injury petitioners claim, none of which is irreparable and little, if any, of which qualifies as injury at all." The intervenors are Cogent, Comptel, Dish Network, Level 3, Netflix, Etsy, Kickstarter, Meetup, Tumblr, Union Square Ventures, Vimeo, Credo Mobile, Demand Progress, Fight for the Future, Center for Democracy and Technology, New America's Open Technology Institute, Vonage, the National Association of State Utility Consumer Advocates, ColorOfChange, Public Knowledge and Free Press. The telco/cable petitioners have until noon next Friday to file a reply.

Alamo Broadband and USTelecom asked the U.S. Court of Appeals for the D.C. Circuit not to dismiss their initial challenges to the FCC net neutrality order. In a joint opposition to the agency's motion to dismiss their filings, Alamo and USTelecom said the FCC had conceded they have since filed timely supplemental petitions for review of the order following its Federal Register publication. "The Court need not decide the motion to dismiss now and can -- and should -- refer the motion to the merits panel, which may address it if necessary to resolve this case," said the company and the association. "In any event, contrary to the FCC’s claims, neither its regulations nor this Court’s precedents clearly resolve the question of when a party may petition for review of a declaratory ruling that is included in an FCC document that also promulgates new regulations."