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FCC girds for legal attacks on net neutrality order

Matt Hamblen | March 16, 2015
The Federal Communication Commission's 400-page official order on net neutrality, released Thursday, will undoubtedly elicit lawsuits on various fronts once it is officially published in the Federal Register.

The Federal Communication Commission's 400-page official order on net neutrality, released Thursday, will undoubtedly elicit lawsuits on various fronts once it is officially published in the Federal Register.

Attacks are expected to range from whether current law allows the agency to legally act as it has to whether carriers feel they can be treated fairly in setting up services in the future. One of the biggest areas of dispute will likely revolve around the FCC's new authority to oversee interconnection deals struck between broadband providers like Comcast and content providers like Netflix.

The order was approved by a 3-to-2 vote on Feb. 26, but had already faced months of criticism that it will stifle Internet investment, raise taxes on Internet use and lead to Internet rate regulation. And that's only for starters.

AT&T has been one of the most vocal critics of the FCC's order. Moments after the final text came out, the carrier issued a two-sentence condemnation from legislative affairs head Jim Cicconi that showed how broad and deep the industry concerns are likely to be: "Unfortunately, the order released today begins a period of uncertainty that will damage broadband investment in the United States. Ultimately, though, we are confident the issue will be resolved by bipartisan action by Congress or a future FCC, or by the courts."

FCC senior staff flatly denied all these concerns in a call with reporters and posted a "Separating fact from fiction" statement that lists 10 facts to contradict 10 "myths" being circulated.

To the concerns about damages to investment, the FCC noted that $270 billion was invested from 2003 to 2009 in wireless voice services that were under Title II regulation, noting that revenues in that period skyrocketed by 1,300%. The FCC also noted the Verizon expenditure of nearly $5 billion for spectrum licenses in 2008 that came despite FCC open access regulations.

The FCC's Open Internet Order in effect from 2010 to 2014 (when it was largely struck down by court order) didn't obstruct investment either, the FCC noted. Capital investments went from $64 billion in 2009 to $75 billion in 2013.

Service provider investment concerns are probably overblown, said Gartner analyst Bill Menezes. "The final rules will be created in court," he said. "If history is any guide, there are few legal barriers that will keep any of these companies from making a lot of money from mobility and Internet-transmitted services.

"Let's face it, the fundamental perspective all Internet-dependent businesses have on this issue is, 'How will this affect my ability to make more money than I do now?' so any final rules should be judged through that lens."

 

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