TIA's Open Internet Proposal: Reject Title II Utility Regulation
Over a decade ago, TIA was at the forefront of the effort to repeal Title II obligations because of the severe impact they posed to the deployment of next-generation broadband infrastructure. Unfortunately, we are again fighting Title II as part of the FCC's Open Internet rules, and the implications are no less severe.
TIA members have a deeply rooted interest in ensuring Title II of the 1996 Telecom Act is not applied to broadband in any way, shape, or form. Its application will significantly impact investment in our members' products and services, thereby preventing consumers from reaping the benefits of broadband, and devices and services that rely on an Internet connection. And in fact, when Title II was first repealed, there was an immediate impact: TIA identified increased sales directly related to the rules being lifted – a correlation based on concrete data, financial records, and direct quotes from our customers.
The good news is that the courts already have concluded that the FCC can act to ensure an open Internet without having to classify Internet Service Providers (ISPs) as public utilities under Title II. The DC Circuit held in January, when ruling on the FCC's prior Open Internet order, that the FCC already has the necessary legal authority for a balanced approach towards maintaining an open Internet.
As a result of FCC Chairman Wheeler’s original Open Internet proposal, a record number of comments was filed with the FCC. Millions of concerned citizens made it clear they want to be assured of having unfettered access to the content they choose. They expressed their concerns that ISPs could become "Internet gatekeepers," with the power to decide which content or service arrives fastest. Reflecting these concerns, TIA has strongly advocated for Open Internet principles – and in fact, our commitment goes back to the rules we drafted through the High-Tech Broadband Coalition (HTBC) in 2003. These principles have been adopted, in some form or another, by every FCC Chairman since their inception.
These core connectivity principles are possible without applying Title II, which would all but guarantee harm to TIA members – the companies that build the Internet backbone, contribute over $1 trillion to the U.S. economy, and create 3.5 million jobs.
The latest proposal outlined in a Wall Street Journal article suggested an approach similar to the Mozilla proposal, whereby financial arrangements from "back-end" content providers to ISPs would be classified as a Title II telecom service – as opposed to arrangements between ISPs to the consumers, which would maintain its unregulated status. This proposal is unworkable for the reasons mentioned above. Title II in any way, shape, or form is bad for consumers, bad for industry, and bad for the U.S. economy.
This is not to say there may be potential for concern over paid prioritization (or a "fast lane") provided by ISPs. Even in the words of AT&T and Verizon themselves, in response to an inquiry from Senator Leahy demanding details of the ISPs' plans with regard to paid prioritization, both carriers claimed that they had no plans to consider paid prioritization at this time. This does not mean that all prioritization, or even paid prioritization, is bad. Specialized services currently exist, and exist for a reason. Many important societal purposes are served through an increased quality of service for certain traffic: public safety, education, healthcare, and more.
Given the unknown and theoretical nature of these arrangements, paid prioritization can and should be governed by existing anti-monopoly laws, where an abuse of market power determines whether a violation or "harm" has occurred. TIA supports a prohibition on harmful paid prioritization.
And in fact, paid prioritization opponents should be very wary of the use of Title II, which could actually undermine their policy goals. If the FCC goes in this direction, it will have rejected the legal approach already blessed by the courts, creating significant uncertainty while the Commission's decision is again tested in the courts. The first round of Open Internet litigation took four years, from 2010 to 2014. Another four years of uncertainty would be harmful to consumers, ISPs, and our overall economy.
TIA has proposed to the FCC that it reject using Title II as a means to impose utility-like regulation on the Internet, and instead use its existing authority to prohibit the practices the public most objects to, such as paid prioritization arrangements that may have a harmful impact on consumers. We have called upon the FCC to focus on rules preventing Internet Service Providers from trying to enter into commercial arrangements favoring some content or services over others.
The approach we have advocated – not just this year, but for a decade – will ensure an open Internet that serves American consumers, while encouraging continued and significant network investment in TIA member companies' innovative products and services.