Thursday, December 04, 2014

Investors will flee if ISPs are reclassified as Title II carriers - bring it on

There is considerable angst and worry within the telecom industry that ISPs, the companies that provide the last mile connection between you and the internet, will reduce the amount of investment and effort to maintain their networks if they are reclassified as common carriers under Title II of the 1996 Telecommunications Act. The National Cable and Telecommunications Association goes to great lengths to tell us that it's a good thing that ISPs are not common carriers, and fails.

The biggest argument they have against reclassification? Cable and telecom companies will hold back investments in their networks if they're reclassified. Why? Reclassification will require a few changes in how they behave. First, they will have to share their networks with other service providers. Second, they will not be as free to discriminate against traffic sources as before. In their words, investors will flee if they are reclassified.

If the cable and telecom companies are worried that investors will flee as a result of reclassification, that's fine by me. Even without reclassification, our biggest ISPs are not even close to being the fastest or the most innovative service providers in the world or even in this country. In fact, they seem a lot more interested in the media side of their business than in the infrastructure side. Comcast, ATT, Verizon, Time-Warner and even Centurylink have enormous investments in media and tend to favor media over speed. In other words, rather than building out a faster network, they are putting most of their effort into media distribution.

This creates a conflict of interest and an enormous incentive to deploy unfair business practices against their competitors. A good case in point is how Comcast negotiated a contract with Netflix to charge more money to ensure that Netflix customers had proper delivery of their services. In my mind, just that example alone is reason enough for reclassification of ISPs under Title II.

The FCC's classification of ISPs as "Information Services" is arbitrary and capricious. In at least one Supreme Court ruling more than ten years ago, Justice Scalia wrote a dissenting opinion that tells us that if you own the pipes, you're a common carrier. He pointed out that you cannot classify ISPs as information service providers just because they provide a service on top of the cable that they provide to connect you to the internet. Even Scalia could see the conflict of interest that Title II classification seeks to prevent.

If investors flee from incumbent carriers over reclassification, that's OK. In fact, I say bring it on. Why? Community broadband will rise up to meet the demand for consumers clamoring for more speed. Cities like Chattanooga, TN and Wilson, NC, have demonstrated that communities can build and maintain their own networks when the incumbent carriers fail to address repeated requests for better service. Both of those cities now offer 1 gigabit service to their customers, far surpassing the service and speed offered by the incumbent carriers.

Community broadband networks don't have a conflict of interest like the incumbent carriers do. Their only interest is the network, not the content. So they make sure that every legitimate service is treated equally. Since they don't own content properties, they have no reason to discriminate against traffic sources. As far as they're concerned, net neutrality is a moot issue. The only issue they're concerned with is building and maintaining a fast, efficient network that satisfies the demands of the people they serve. That's it.

To hear it from the incumbent carriers, you'd think the internet would fall apart if they are reclassified. Their warnings of woe and suffering would only come to them. For when community broadband is finally seen as the ally we need to fight against the communications and media conglomerates that control most of our internet access in this country, we will have speeds and service that are world class.
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