Potential Litigant USTelecom Challenges Reclassification Justification

As the coming legal battle was being previewed, there were indications the list of groups lined up to challenge the order was growing. An American Cable Association official suggested to us Wednesday the ACA may also challenge the net neutrality order. ACA has “serious concerns about the direction of the order,” Senior Vice President-Government Affairs Ross Lieberman said in an interview. The group rarely challenges agency decisions in court, “but this item concerns us enough that it warrants such consideration,” he said.

ACA, which has been seeking forbearance for small cable operators from Title II Communications Act regulation, was still seeking changes in the draft before the scheduled Feb. 26 commission vote. ACA has been having “constructive conversations” with the agency, including meetings with Commissioners Mignon Clyburn's and Jessica Rosenworcel’s staffs, at which the association discussed how to define small carriers and what level of relief would be appropriate, Lieberman said. “We’re not sure if it’s going to go anywhere,” he said of the discussions, but said the commission has traditionally been sympathetic to the needs of small operators.

An NCTA spokesman said the order as a whole could allow the agency to regulate rates unrelated to net neutrality, including cable modem fees, interconnection costs or usage based pricing. He noted that Wheeler aide Gigi Sohn said Tuesday that the agency will be looking closely at data cap plans (see 1502170029). Free Press Policy Director Matt Wood argued for strong interconnection rules: “There may be multiple routes to get to Comcast's system, but there are not multiple routes to get to an individual Comcast customer. There is one."

Quoting a Jan. 21 letter to the agency from Comptel, USTelecom Senior Vice President-Law & Policy Jonathan Banks wrote that some have argued broadband providers hold a terminating access monopoly “because it ‘controls the only means of access by which others may reach the end user regardless of whether the end user itself had a competitive choice.’” Comptel’s argument “seems bereft of any real world economic reality,” Banks wrote. If broadband providers had a terminating access monopoly, they’d be charging Internet backbone providers for terminating traffic to their end-user customers as competitive local exchange carriers did in charging long-distance companies, Banks wrote. “Broadband Internet access providers either have settlement free peering arrangements or pay for transit arrangements with backbone providers for connectivity to the broader Internet."

There is no “comparable regulatory framework” for broadband traffic to the idea of a terminating monopoly from “the voice world,” Banks wrote, noting there’s no requirement for Internet traffic similar to the phone requirement for the network of the caller to pay the called person’s network for terminating a call. The open Internet NPRM said the terminating monopoly construct was based on its finding that customers may face significant costs when switching providers. That argument is “unsupported by the Commission’s own data and the record evidence,” Banks wrote.

Public Knowledge Senior Vice President Harold Feld said the U.S. Court of Appeals for the D.C. Circuit affirmed the termination monopoly theory in last year’s ruling on the 2010 net neutrality rules. USTelecom "is, of course, free to relitigate it, but this filing adds nothing to the arguments the Verizon Court rejected last year,” Feld said. Wood said that “USTelecom and others keep conflating the legal classification question with the policy question.” From a legal perspective, he said, broadband “is a telecom service because it lets people send and receive information of their choosing, not because it's a terminating access monopoly.” From a policy perspective, he said, “we need protections against broadband providers' gatekeeper power because of their terminating access monopolies."