A Compromise That Enables Networks of the Future


Kathleen Grillo, Senior Vice President, Public Policy & Government Affairs, Verizon


Chip Pickering, CEO of INCOMPAS

In an effort to move beyond a more than decade-long debate, INCOMPAS and Verizon sent a letter to the FCC today that recommends adopting a permanent policy framework for all dedicated services, including Ethernet services.

We agree that we need a new technology-neutral model – one that is legally sustainable, that recognizes the changes in the marketplace over the last ten years, that is flexible enough to accommodate new technology and new competitive circumstances going forward, and that will encourage the transition from legacy services to IP and more advanced communication services.

While we don’t agree on everything, and there is more work to be done, these principles are an important first step towards bringing an end to this proceeding and reflect a balanced approach that incorporates the concerns of both sides of this debate.

We hope that these principles help the FCC formulate this balanced approach as it concludes its work. We believe this agreement represents a significant break from the stalemates of the past, and moves the conversation forward into the future. A future that is better for customers, communities, and companies who depend on advanced networks—both wired and wireless.

On the Set-Top Box, You Know Best

Set top box


With 900 channels of reruns, you would think it would be hard for the cable industry to pick a favorite show. But listening to the cable companies’ set top box arguments in Washington DC, one would have to assume it’s the 1950’s sitcom “Father Knows Best.”

It’s old, traditional, and predictable. Just like cable’s arguments against allowing consumers the freedom to choose their own video device.

Recently, FCC Chairman Tom Wheeler announced that he would heed the bipartisan Congressional mandate to bring competition to the box, an area where the cable and pay-TV industry controls 99 percent of the market. The FCC wants open platforms that enable consumers to move between traditional cable content and new Internet streaming services without having to change devices. Pretty straight forward.

A wave of consumer support poured into the FCC and across social media through the hashtag #UnlockTheBox. Seen by millions, it became a rallying cry for change. Headlines calling for an end to the tyranny of the box proliferated, and editorials across the nation praised the news.


Predictably, the cable and pay-TV industry responded like a controlling parent, suggesting they and only they know what’s best for you and your television: What you should pay. What you should watch. And what device you watch it on. That’s been their formula for a long time. Prices rise, innovation falls.

This has pushed their customers to revolt by cutting the cord and ranking cable dead last incustomer satisfaction.

Is it really that out of the box to suggest changing the set-top box policy might be best for cable as well?

It starts with competition.

Lack of choice continues to be at the heart of cable’s problems. The no-choice set-top box has resulted in a 185 percent increase in box prices since 1994. By contrast, in the same time period, prices for televisions and computers dropped by 90 percent. Innovations, many from brand new companies, have revolutionized phones and televisions as well.

The Department of Justice agrees. They recently welcomed the FCC action, as the old rules do not ensure the benefits of competition and innovation for American consumers.

But the beauty of competition policy is that it’s good for everybody — yes, including the cable and other pay-TV companies. Both incumbents and new insurgent companies — many of which have yet to be invented — can thrive under the FCC’s openness proposal.

Competition policy does two important things. First, it encourages new innovations and new ideas. Once upon a time a little company called TiVo made the first commercially viable video recorder; now those early innovations are used industry wide.

Second, competition expands the market and grows the pool. Truly open and interoperable boxes would mean Comcast could sell their boxes to DirectTV customers, creating a free market scenario where the best box wins. More importantly, the consumer would have the power to choose a box that fits their technology needs and their budget.

History has shown this to be true. We ended AT&T’s ability to force-lease the black rotary dial phone, helping bring new companies with new technology rushing into the space. Today, we have smart phones that power a new on-demand economy. Consumers benefited, prices dropped, and innovation flourished.

And AT&T? Well, they commissioned a report to suggest there would be only 900 thousand cell phones by the year 2000 — far shy of the real number: 109 million. It was a huge new market they didn’t see coming, but have prospered in.

Empowering competition for set-top boxes can do the same for video devices.

Open vs. Closed

It’s clear that the cable industry loves that box the way it is. It provides them with almost $20 billion in revenue each year. That’s $231 dollars per year per family according to US Senate report. Cable responded to that report byraising set top box prices again in 2016.

The closed box also allows cable to control what you see, blocking content from their competitors, mainly new Internet-based streaming companies who want to go directly to the consumer without paying for permission from the cable company.

Ironically, as reported by The Verge, in 2008 the nation’s largest cable company, Comcast, revealed a different vision of the future — one more in line with Chairman Wheeler’s proposal.

In a major address to CES, Comcast declared, “the age of the closed, proprietary set top box is behind us,” stressing the need for an open, national and interoperable structure. They suggested this would lead to a box freeworld by 2010.

Interestingly, NCTA and its allies never attacked Comcast’s plan to end the “closed proprietary box” over copyright, privacy, ad placement and impact on minority programing as they have done to Chairman Wheeler and advocates for open set top box reform.

But equally important, if an open device policy was good for cable companies then, why not embrace that future again and provide interoperability devices that allow customers the freedom to access streaming content?

Put the Consumer in Control:

While I encourage the pay-TV industry to change the channel, Tom Wheeler’s set-top box plan doesn’t wait for the cable knows best policy to bring innovation.

Wheeler’s proposal puts consumers in control of their device choices, even if they choose no device at all. It is the fastest path to the future. Use of open standards will help bring more content from more places into your home more quickly. In the same way we didn’t allow our streaming services to be throttled by the pipe into the home, we must remove bottleneck of the boxes that block content once it gets there.

It’s time to unlock the box and let competition stream in. It’s a simple solution that incentivizes innovation and lowers prices. The FCC wants to put the future of control in the hands of consumers.

After all, the consumer knows best.


Broadband Competition is a Year Round Deal

Broadband Competition is a Year Round Deal

By Chip Pickering


Store Graphic

Were you elbow to elbow at the mall or big box store on Black Friday? Chatting with your neighbor who owns the hardware store down the street on Small Business Saturday? Are you planning to click your way around the Internet on Cyber Monday? After all, that Aunt Sally is hard to buy for.

But no matter how you decide to shop this weekend, many of the retailers and businesses you chose to support — large or small, national or local — are speaking out in support of more choice and competition for broadband service. Why? It’s saving both them and you money.

If you stop and think about it, broadband is central to the shopping experience — from consumers surfing for deals and planning their Black Friday strategies, to the retailers who depend on data, payment and cloud services to run their businesses.

Over 300 businesses have written the Federal Communications Commission (FCC) calling for more choice in broadband service by preserving and protecting common sense competition policy — both in the tech transitions and the special access proceeding.

And it’s not just the sweaters and toy purchases that move over high capacity broadband lines. If you filled up your car with gas, or stopped at an ATM, those transactions probably touched a broadband line served by competition.

That is why industry associations representing 150,000 gas stations and convenience stores and 70% of all the electricity providers powering homes and businesses also wrote to the FCC to ask that competition be enshrined for future networks.

But to give you an idea of the impact broadband competition is having on the economy, let’s break it down by the three shopping days this weekend.

Black Friday:

How is competition helping big box stores and malls? This Summer, CIOs from some of the nation’s premier retailers came to Washington DC to speak with FCC Chairman Tom Wheeler about the benefits of broadband competition to help keep prices low. Example attendees included Brooks Brothers, the nation’s oldest retailer and Pier One Imports, with stores in all 50 states.

In addition, the CIO of Simon Property Group, which manages malls with 30,000 retail stores supplying 600,000+ jobs, suggested new competitive broadband providers were the only ones willing to upgrade their malls’ broadband with next generation services at reasonable rates.

Small Business Saturday:

Shopping small is a big way to save. Of the 300 letters sent to the FCC, dozens came from small businesses. Many were from local chains with a few locations in their communities — things like flower shops or local arts and crafts stores.

The Broadband Coalition looked at the impacts of competitive broadband on small business. What they found was strong bond between small providers and small businesses who share a passion for providing better customer service. They also noted that innovations — like the cloud, Ethernet, and Voice over IP — from the competitive community have enabled small businesses to connect with a bigger audience of customers.

Earlier this year, the leading consumer voice for small business — the Small Business Administration Advocate — wrote a fantastic blog post calling for the protection of broadband competition policy as a way to help local retailers and mom and pop stores.

Cyber Monday:

Last year, Cyber Monday sales online grew 15 percent over the 2013 mark. A phenomenon made possible by the evolution of competitive networks, rising out of the landmark, bi-partisan 1996 Telecom Act, is ultimately at the core of all the traffic and commerce that will take place on Cyber Monday.

Cell Phone graphic

At INCOMPAS, we are proud to have Amazon as a member. We’re equally proud of companies that build and maintain the Internet backbone like Level 3 and Cogent. We also count as members a number of data centers and key voices in the competitive ecosystem powering the transactions this weekend.

So how can policies keep broadband competition driving the economy?

First, the FCC and Chairman Tom Wheeler made great strides toward ensuring future networks will continue to be powered by bi-partisan competition policy. Thetech transitions order will also continue to unleash investment and new ideas from providers other than incumbents — including new Internet companies and app developers who benefit from new faster, more affordable broadband options. But challenges remain as lobbyists and lawyers from the largest incumbent providers threaten to pick that deal apart.

Second, the FCC can continue to prioritize competition data. In another big credit to this FCC, after a 10 year delay, data that can assist communities to identify places where broadband competition is lacking will become available. While the entrenched incumbents continue to try and delay this data, the FCC has launched an investigation into egregious terms and conditions that lock up customers and lock out competition.

So let’s be sure we keep the door open for more broadband competition. After all, it’s giving business customers and their patrons a deal year round.

#ShopSmall #NoLockUp

JoIN the Future of Competition

By Chip Pickering

For more than three decades, COMPTEL has championed competition in the communications industry. Our members drive and advance technological innovation to create greater opportunity and economic development for our communities and the businesses that serve them.

We’ve come a long way – our membership has grown and evolved. From broadband builders and retail service providers, and the vendors that cater to them. Today we count social media leaders, content providers, streamers, wireless companies, Internet companies, international providers, start-ups and venture capitalists among our members.

By organizing and unifying the leading competitive companies across a wide spectrum of platforms, we are a stronger voice for both existing and new network builders. We also are building coalitions with like-minded groups – including consumer advocates, associations and business organizations – to advocate for policies that promote competition, foster innovation and encourage economic development.

The COMPTEL brand has a rich history. Competition is our root – and technology is constantly changing. How do we capture this enduring principle in a world that is continuously advancing?

As we go forward, it’s about how we honor the history but define a future that is equally strong and sustainable.

Join us at COMPTEL PLUS, Oct. 18-21 in San Francisco as we announce a new direction that will drive the future of competition.

So, I have just one question – are you IN?

The Tech Transitions: Competition Genesis, Competition Future

The Tech Transitions:

Competition Genesis, Competition Future

By Chip Pickering

Last week FCC Chairman Tom Wheeler was asked what the FCC was doing to help the middle class with broadband issues. His answer: competition, competition, competition.

The Chairman quickly pointed to an item scheduled to appear on the agenda for the upcoming August 6th meeting, the tech transitions, as a critical component for helping small businesses and the middle class — with price, choice and access.

The technology transitions offer significant benefits to consumers, business customers and non-profits of all sizes. New technology enhances their ability to simplify their networks; transport critical business data securely and reliably among multiple office, branch, store, or campus locations; support high-bandwidth applications at a lower cost; and scale bandwidth as their businesses grow.

The tech transitions have been on Wheeler’s radar since his very first address as FCC Chairman at his alma mater of Ohio State University in 2013. Since then he has built momentum and bipartisan support for these issues. Last year, in a 5–0 vote, a unified FCC coalesced around a series of core network principles to guide the tech transitions conversation that included: public safety, consumer protection, competition, and universal service.

Then, last Fall, in a keynote address before the COMPTEL show in Dallas, Wheeler summed up his position: “Let me be clear: transitions to IP are not a license to limit competition.”

As pointed out in the Wall Street Journal and Bloomberg BNA, action on tech transitions will ensure smaller, competitive broadband carriers have access to networks at reasonable rates. But the issue was best summed up inthis story by Fierce Telecom which observes that competitors need last mile access to the telcos’ networks that are ubiquitous:

“ Without ensuring competitive choice, the real losers in these transitions are the small businesses that need communications services to run their daily operations.” — Fierce Telecom

So as the FCC gears up to vote on the tech transitions proceeding, here are some key points:

The Genesis for IP Transition was Competition:

The introduction of Ethernet and other IP-based services to incumbent telco networks are the result of competitive pressure from competitors innovating and challenging the 100 year old monopoly networks of the Bell system. IP networks, first introduced by competitors, were both faster and more efficient. New network growth in IP has been impressive.

In fact, one competitor, Level 3, in just over 15 years’ time has built the nation’s second largest network of enterprise Ethernet circuits — even though the two bigger Bell companies have hundreds of billions more in market capital for investment.

Technology Neutral:

At a physical level, networks — both old and new — are blind to the higher-level technologies needed to communicate over them. Innovation in service has to do with the transition in technology, from the rigidity of TDM to the flexibility of IP. It has nothing to do with whether the facility is copper or fiber. The FCC highlights a point that is often missed: IP services can be offered over fiber or copper.

Importantly, the need to reach the customer through wholesale last mile access services is not altered by either the transition in technology or the transition from copper to fiber facilities. Thus, by including reasonably comparable wholesale access provisions in a technology neutral tech transitions Order, the FCC will take an important step to ensure competition continues across all technology networks and platforms.

Business Customers:

Businesses from across the nation, including small corner shops and national retail chains, have taken advantage of competition policy. For some, it’s about affordability. For others, it’s about access for multiple locations — be it a bank with branch offices around town, or a restaurant with chains located in all 50 states. Customers have spoken about how they like competitors’ innovative offerings and personal customer service.

Recently industry associations representing over 150,000 gas station and convenience stores, 70% of all the electricity providers powering homes and businesses throughout the country and security companies delivering safety and protection in every community joined COMPTEL on this issue. The bottom line — to disconnect competition now would cause damaging disruption throughout our economy and would be extremely irresponsible to do so.

A network upgrade shouldn’t be an excuse to raise prices, or cut off network connections that work for customers. In addition to the U.S. Small Business Administration’s Office of Advocacy, hundreds of businesses (both large and small) have asked the FCC to protect their ability to choose a competitive provider during and after the tech transitions.

As I have written, the customer is always right, and to hear theses business stories don’t miss our Customers 4 Competition page.

Market Driven Affordability, Not Price Caps:

Affordability has always been at the center of communications policy. As we have seen, competition is the best way to drive down prices, while protectionist policies that favor monopolies or duopolies are a sure-fire way to send prices higher.

While the Bells have recently cried foul over protecting and promoting competition in the tech transitions, it’s important to remember a few things.

First, the Bells aren’t giving access to their networks for free. The wholesale market is a multi billion-dollar revenue generator for the Bells. Second, AT&T’s approach to replacement products for the wholesale market in the transitions has been telling. They started by asking for significant price hikeson high capacity broadband lines — lines that power things like ATM machines and gas pumps which would have stung consumers in the wallet. Then, during their IP trial they casually listed a significant part of the wholesale market as “TBD –To Be Determined”, in documents. Two huge red flags.

One broadband company, Windstream, is not only a competitive provider, but also the nation’s fifth largest incumbent provider. They recently took issue with AT&T’s arguments against competition on tech transitions.

If the tech transitions are simply viewed as a ploy to raise prices and eliminate competition the nation will miss a huge opportunity to advance our economy forward.

A New Networks Necessity:

As detailed in this great piece from XO Communications CEO Chris Ancell, action on tech transitions is an important step in continuing the development and construction of new networks by companies that rely on longstanding bi-partisan competition policy.

All networks need to connect. It’s a core element of free market principles. The technology transition is an evolution in the networks not unlike other changes to networks that that have taken place in the past century. With competition policy as a guide, consumers have a bright future.

Conservative Precedent Bipartisan History – The FCC and Future Forward Internet Policy

The release of the Federal Communications Commission Open Internet Order today confirms what defenders of an open Internet have been advocating — consumers should get what they pay for.

By building off the sustainable rules set forth in the 1996 Telecom Act, the Commission’s Order continues to follow the light touch approach that has unleashed innovation, investment and job growth.

The Commission has made it clear that interconnection practices cannot be used to harm an Open Internet — which is appropriate because interconnection is the first amendment for the open Internet.

Now, since the FCC approved its Open Internet Order at the February Open Meeting, there has been a lot of Monday morning quarterbacking.

Out of the gate, opponents of strong open Internet protections floated the old “market scare” trick, suggesting big telecom stocks would drop in value. That did not happen and in fact their stocks increased. Now the same crowd would have you believe that the Commission has overstepped its bounds, and arbitrarily made these decisions without any sort of precedent. But those claims couldn’t be further from the truth.

There is a long history of bipartisan support for an Open Internet. It was a Republican-led FCC that originally established the principle that consumers should be able to access the lawful Internet content, applications and services of their choice. In 2005, the FCC, under Republican Chairman Kevin Martin, adopted and released the original Internet Policy Statement. At that time, the Commission expressed the belief that it could use its ancillary authority under Title I of the Communications Act to enforce the Internet Policy Statement and the principles articulated therein.

Remarks before the Ford Foundation on bipartisan history of open Internet.

The Commission’s Internet Policy Statement was supported by then President George W. Bush, who in 2006 issued a Statement of Administration Policy that expressed the Administration’s belief that the FCC had sufficient authority to address potential abuses by Internet access service providers.

Comcast subsequently appealed the Commission’s issuance of a decision finding that it had violated the Policy Statement when it interfered with BitTorrent traffic. The Court of Appeals vacated the decision on the grounds that Title I did not give the Commission authority to assert jurisdiction over network management practices. In response to that decision, the Commission adopted Open Internet rules that most ISPs supported using its Title I and Section 706 authority. Verizon’s appeal of that Order resulted in the Court vacating the Commission’s no-blocking and nondiscrimination rules in January 2014. Although the Court agreed with the Commission’s assessment that the rules were necessary to protect consumers, it determined that the Commission’s classification of broadband Internet service providers as information service providers exempted them from the common carrier obligations that the no-blocking and nondiscrimination rules imposed.

Because of the court rulings, today’s Commission had no choice but to reclassify Internet access service as a Title II service, so that it has clear and explicit authority to prohibit abusive ISP practices such as blocking, discrimination, throttling and paid prioritization, and be able to quickly address consumer complaints and take enforcement action as necessary. At the same time, the Commission’s decision to forbear from 27 provisions of the statute and more than 700 regulations that are not relevant to modern broadband services will ensure that broadband providers are not subject to onerous “utility style” regulation that the naysayers claim will burden providers and cause costs to rise. The Commission’s Open Internet decision takes a prudent approach that both addresses the court-determined shortcomings of the previous Internet rules and continues to protect consumers’ access to the Internet content, applications and services of their choice. A similar “Title II light” regulatory approach has been proven effective in the wireless market.

ISPs — including several of COMPTEL’s members — have stated that the decision will not impact their investment decisions. This means more competition, which will benefit the many small businesses and consumers that rely upon the Internet every day.

The Commission’s decision is consistent with the comments it received from millions of consumers — regardless of political affiliation.

In its Open Internet Order, the FCC made all the right moves to ensure that consumers, start-ups and companies of all sizes can continue to use the Internet to communicate, do business and innovate without fear of discrimination, blocking or having to pay exorbitant charges for specialized treatment.

The FCC made the only play it could, and by adopting common sense consumer protection measures, it has promoted the promise of investment, innovation and the growth of the Internet ecosystem for future generations.

Understanding the FCC’s Order on Open Internet

What does net neutrality (aka Open Internet) mean?

Net neutrality means that providers offering wireline or wireless broadband Internet access service (ISP) to residential and small business consumers must treat all lawful Internet traffic the same on their networks. For example, they cannot block or throttle traffic to or from certain websites or favor or prioritize delivery of traffic based on payment. To see this explained, watch this New York Times video: http://www.nytimes.com/video/technology/100000002881329/how-net-neutrality-works.html.


How does this affect me and my company?

As a residential or small business broadband Internet access consumer, these high-level rules will allow you to obtain any service, application, or content on the Internet of your choosing. Your ISP cannot block, throttle, or unreasonably discriminate what you request on the Internet.

If you are a wireline or wireless broadband ISP that serves mass market customers, then you will need to abide by the Commission’s rules—these rules are largely the same ones the Commission adopted in 2010 that most ISPs supported:

(1)    No Blocking: you may not block access to legal content, applications, services, or non-harmful devices.

(2)    No Throttling: you may not impair or degrade lawful Internet traffic on the basis of content, applications, services, or non-harmful devices.

(3)    No Paid Prioritization: broadband providers may not favor some lawful Internet traffic over other lawful traffic in exchange for consideration of any kind—in other words, no “fast lanes.” (This rule also bans ISPs from prioritizing content and services of their affiliates.)

An ISP may engage in reasonable network management. This recognizes the need of broadband providers to appropriately manage the technical and engineering aspects of their networks.  In assessing reasonable network management, the Commission’s standard takes account of the particular engineering attributes of the technology involved—whether it be fiber, DSL, cable, unlicensed Wi-Fi, mobile, or another network medium. To be reasonable, network practices must be primarily used for and tailored to achieving a legitimate network management—and not business—purpose. For example, a provider can’t cite reasonable network management to justify reneging on its promise to supply a customer with “unlimited” data.

The Commission will continue to require ISPs to be transparent about their network management practices. It has also added some new transparency requirements but ISPs that serve 100,000 or fewer subscribers will be exempt from the new requirements for the present time.


Why did the Commission reclassify broadband Internet access service under Title II, and what impact will that have on my business?

We do not expect this Order will impact most ISPs’ current business practices. We do think this Order will help protect those small businesses and entrepreneurs that rely upon the Internet to do business and those who offer over-the-top services. We also believe this Order helps protect and promote competition on the Internet, and our members that provide equipment and software in the industry will continue to have many providers to sell to as a result.

The FCC reclassified in response to a court decision. Verizon took the FCC to court after the 2010 rules were issued, and most of the rules were struck down because the court believed the rules were common carrier obligations. Because the FCC had earlier classified ISPs as information service providers, not telecom service providers, it could not impose common carrier like obligations on them. A few months after the court decision last year, the Commission issued a new Notice seeking comment on how to lawfully impose the rules on ISPs. Many commenters, including 4 million consumers, filed comments at the FCC. Most supported reclassifying broadband Internet access service so that the rules can withstand judicial scrutiny.

The Commission chose to forbear from enforcing those provisions of Title II that are not necessary for Internet access services. It has left in place those Title II provisions that are needed to protect Internet consumers, such as the availability of service for disabled consumers.


Will reclassification lead to rate regulation of ISPs’ retail rates?  What about new taxes? 

No, reclassification will not lead to rate regulation of ISPs’ retail rates. The Commission rarely regulates retail rates, and it has vowed not to do so here. Broadband Internet access service will remain exempt from state and local taxation under the Internet

Tax Freedom Act. No state USF fees will apply. While the Commission is forbearing from federal USF contributions at this time, it has a separate proceeding that has been examining whether broadband ISPs should pay into the federal fund to ensure the availability of broadband networks across the U.S.


Why did COMPTEL decide to support Title II reclassification?

COMPTEL supported the FCC’s use of Title II together with forbearance to achieve a light touch regulatory framework that will continue to promote investment in the entire Internet ecosystem. To read COMPTEL’s full statement after FCC’s vote, click here. LINK TO http://www.comptel.org/Files/filings/2015/02-26-15_FCC_Open_Internet_statement.pdf.

Many of our members currently provide services that are subject to Title II already, and the imposition of Title II “regulation” does not scare them. Most importantly, however, we have a number of members that were concerned that the business practices of large ISPs could put them at a significant business disadvantage without the Open Internet protections. For example, some large ISPs are in the position to demand tolls from transit providers, content delivery networks, and others such as Netflix. Small ISPs, however, are not in the position to demand such fees—putting them at a competitive disadvantage when they compete head to head in the market against the large ISPs. Other members have concerns about whether their over-the-top services and applications will be treated fairly by ISPs. We believe reclassification was necessary under Title II for the Commission’s Open Internet rules to withstand judicial scrutiny.


How come the FCC has not released the Order yet?  When will it be released?

Any time the Commission has dissenting opinions, it takes longer for an order to be released. The reason is that the Order must address the legal arguments being made in the dissenting opinions.  Once the dissents are made available to the majority, they will then need to review the Order and make any changes necessary to fully address the dissents. The back and forth process can take a while. It can be difficult to predict how long this will take. We think it will be at least a few weeks before the Order is released.


When will the new rules go into effect?

 The new rules will not go into effect until after the Order is released, the rules are published in the Federal Register and the FCC receives any necessary further approvals, such as Paperwork Reduction Act approval. It will be a number of months before all of this happens.  We will keep our members apprised as developments occur.

Read the FCC’s entire Open Internet Fact Sheet here: http://transition.fcc.gov/Daily_Releases/Daily_Business/2015/db0226/DOC-332260A1.pdf

Do you still have questions on the FCC’s new Open Internet rules?  If so, ask to speak with one of our policy experts.


COMPTEL Launches New Campaign Against the Comcast-TWC Merger

Yesterday afternoon we launched a new campaign “Don’t Comcast the Internet” to oppose the proposed Comcast/Time Warner Cable merger. Supported by COMPTEL, ITTA – the Voice of Mid-Size Communications Companies, and NTCA – The Rural Broadband Association—the campaign will mobilize businesses and other voices to urge the Department of Justice and Federal Communications Commission to protect competition, innovation and consumer choice by denying the transaction.

Each of the associations represents businesses who compete with and do business with Comcast and Time Warner Cable. We have launched the “Don’t Comcast the Internet” campaign to raise awareness about the serious consequences this proposed merger would have for technological innovation, competition and consumer choice. Our campaign launch included a briefing of reporters wherein we focused on the following concerns:

  • Comcast’s “no overlap” argument for the merger is wrong. Comcast continues to claim that because it and Time Warner Cable do not “overlap” (i.e. compete for retail customers) in any local market, there is no anticompetitive harm posed by the merger. This argument ignores both Comcast’s past anticompetitive practices as well as basic economics. First, Comcast already has demonstrated a willingness to engage in a host of anticompetitive practices and, with even more market power in video and broadband post-merger, Comcast would have greater incentive and ability to expand such practices. Moreover, by Comcast’s logic which has no limiting principle, it could consolidate all non-overlapping service providers into a single, nationwide monopoly that would control the cable and Internet choices for most Americans.
  • The merger would expand Comcast’s bottleneck control over the Internet and restrict consumer choice online. Comcast has used its gatekeeper control over broadband to favor its own content, harm rival online video providers and limit consumers’ ability to enjoy content online. For instance, last year Comcast severely degraded its customers’ broadband speeds for Netflix (as well as other content flowing over these networks) until Netflix agreed to pay an anticompetitive “access fee.” By giving Comcast control over an additional 8 million customers’ broadband connections, this merger would allow it to even further restrict the market for content providers and consumers’ ability to access the content of their choosing.
  • The merger would give Comcast greater power and ability to restrict competition. Comcast has already used its substantial market power—along with its massive programming holdings including its regional sports networks—to prevent other providers from acquiring must-have content and otherwise limit their ability to compete. For example, for years Comcast has refused to license local Philadelphia sports telecasts to DISH or DIRECTV, its only significant competitors in that metropolitan area. Similarly, Time Warner Cable, as the exclusive sales agent for the distribution rights for LA Dodgers games, has demanded such high rates for access to Dodgers telecasts that competitors in southern California have been unable to purchase the rights for their customers. This merger would give the new Comcast even more leverage to undermine its competitors and dictate the programming choices and pricing available to consumers.
  • This merger would limit choice and curb innovation in the set-top box and streaming device markets. If the merger is approved, Comcast’s dominance over the home video and broadband market would allow it to impose its own X1 set-top box platform as a closed industry standard. Comcast could exploit its ownership of the X1 to tilt the scales against rival set-top box providers and further limit the ability of consumers to use streaming devices that compete with its own X1—just as it already does by blocking HBO Go streams over certain third-party streaming devices.

I urge you to learn more by visiting our campaign website: dontcomcasttheinternet.com and then please get involved. This merger carries huge implications for both business and consumers.

Wheeler (Inter)Connects the Future.

For an FCC Chairman so rooted in history, Chairman Tom Wheeler is well on his way to leaving his own, impressive chapter. We know the vote on the open Internet will define the future of the Internet as we know it and drive investment.

If recent reports are true, the Commission’s willingness to address interconnection in the open Internet proceeding will enshrine pro-competition policies. Wheeler’s interconnection action is a big deal. Start ups, people who want to tweet during the Super Bowl, and consumers getting ready to binge-watch the new season of House of Cards this February (count me in) will welcome strong interconnection action by the Commission.

We commend Chairman Wheeler and the other Commissioners for their willingness to assert Title II authority over the points of interconnection between edge providers and ISPs. Doing so would establish a strong standard, just and reasonable, and provide a process to resolve interconnection disputes to ensure that the goals and principles of the open Internet are not undermined by anti-competitive, or anti-consumer interconnection practices.

The decision to tackle issues like the open Internet and interconnection was not easy. But Wheeler has shown he’s not afraid to do what is difficult when it’s the right thing.

Wheeler’s thoughtful, methodical approach has enabled progress toward policies that will shape the future of the Internet, and can be attributed to his ability to think, listen and act.

At the core of each and every step has been Wheeler’s commitment to competition. How do we get more companies connecting with and competing for more customers? That has been the core challenge. And one that drove Wheeler to understand the essential point: you cannot separate the open Internet from interconnection. They are inextricably tied together.

Last fall Wheeler said:

“The common core of the competitive initiatives we have been discussing is the ability to get access to, get on, and interconnect with the new digital networks. This is the shape-shifter that is defining the analog-to-digital transition that will determine who wins the 21st century. Those of you in this room are lifting your weight in developing innovative new applications and technologies.”

By setting up a process for listening to the millions of voices — industry leaders, lawmakers on Capitol Hill and the President – that flooded the FCC last year. Wheeler has taken a sound legal and sequential approach to interconnection – whether at the edge of the last mile, IP interconnection and in the tech transition.

As we go forward over the next few weeks, we trust continued progress and commitment to open and competitive interconnection will be preserved.

We commend Chairman Wheeler and the Commission for their willingness to address and include interconnection and complete the open Internet proceeding. This is a step forward, and will help enshrine pro-competition policy.

Interconnection can be described as the First Amendment of the Internet. It’s a right that COMPTEL, and other champions of competition and an open Internet, will continue to defend.