Unless you’ve been hiding under a rock, you know by now that the FCC voted – on party lines – to reclassify broadband access as a Title II telecommunications service (rather than as an unregulated information service) and re-apply the so-called Net Neutrality rules on that basis. To telecom regulatory geeks like me, the webcast Open Meeting and dueling press conferences afterwards were a great show.
I doubt all this will have any substantive effect. Here are my speculations.
There will, of course, be litigation, probably framed around the legal arguments in Commissioner O’Reiley’s dissent. The composition of the DC Circuit has changed since the last round, and the FCC has apparently followed the less risky of the two road maps laid out by the Court in the Verizon decision. I am not a lawyer, but as a keen observer, I’d expect the FCC to prevail in this one.
There will of course be attempts at legislation. It is doubtful that any of them could get a cloture vote in the Senate in this term, and even more doubtful that they’d pass an override vote. There will be some posturing in committee hearings over the next few weeks, but it won’t come to much. In the worst case, there will be another standoff over the FCC’s budget. A shutdown would stop the shot clock on two mergers, plus halt day-to-day licensing transactions and equipment approvals. It can’t last too long.
I doubt that the Order is going to prevent the incumbents from doing anything they’d actually planned to do. That depends on the exact technical meaning of “paid prioritization”. If taken literally to include any network behavior other than Best Effort, that could monkey wrench managed VoIP, tele-presence and IPTV, as well as some IoT applications. I’ve been concerned that this might happen since the NPRM was released, and explained in comments why it would be a bad idea. Others have offered the same advice. We shall see what comes out in the Order.
I’d also be surprised to see significant changes to CAPEX. Regardless of regulatory status, either there is a business case for new deployments and upgrades, or there isn’t. Each of the big players has a story line, and I can’t imagine a business rationale for any of them changing direction because of this Order.
The activists will spend the next couple of weeks enjoying their victory. The real win was not the inconsequential “no blocking, no degrading, no paid prioritization” rule. It was in applying the “just and reasonable” standard to broadband ISPs, and giving the FCC authority to adjudicate consumer complaints. My guess: it would take a particularly egregious act for the Commission to take enforcement action based on consumer complaints. The incumbents are usually too smart and too cautious to do such things.
Finally, I expect a proceeding on interconnection, either as a rule making or as an enforcement action in response to a complaint. This is the real issue that powered the astroturf campaign for Net Neutrality. This is somewhat of a wildcard. My guess is that Netflix, Cogent and Level-3 are overreaching in their demand for settlement-free peering, with unlimited capacity upgrades at no cost to themselves. We shall see.
The devil is in the details. It may take a while for the final text of the Order to be complete. Despite the spin, this is has been par for the course at the FCC for decades. Chairman Wheeler pointed out that a recent court decision compels the majority to provide a written response to the dissenting statements. This, of course, will not happen on “Internet Time”. I’m waiting patiently, with bated breath.