AT&T and Verizon are surprising industry watchers by joining the “Day of Action” to protest the FCC’s plan to gut current net neutrality rules, but the two telcos are sticking to their guns that Title II is the wrong method with which to regulate service providers.
The two telcos laid out their views in separate blog posts delivered on the eve of what will be a massive protest from over 100,000 websites, internet users and organizations.
During this protest, the parties will speak out against the FCC’s plan to do away with net neutrality rules enacted by former FCC Chairman Tom Wheeler in 2015 and designed to ensure the internet would not be bogged down by censorship and throttling. A prevailing concern was that content owners would have to pay toll fees to service providers to effectively deliver services to their users.
AT&T, the largest U.S.-based telco that’s been outspoken in questioning the former FCC regime’s actions on the issue, said that it supports net neutrality as a way to enable customers to get the content it wants to access.
“We agree that no company should be allowed to block content or throttle the download speeds of content in a discriminatory manner,” said Bob Quinn, SVP of external and legislative affairs for AT&T, in a blog post. “So, we are joining this effort because it’s consistent with AT&T’s proud history of championing our customers’ right to an open internet and access to the internet content, applications and devices of their choosing.”
Verizon echoed a similar tone. Will Johnson, SVP of federal regulatory and legal affairs for Verizon suggested in a blog post that “real action will involve people coming together to urge Congress to pass net neutrality legislation once and for all.”
The service provider pointed to its own effort to invest billions of dollars in several content providers and producers. Now that it has completed its purchases of AOL and Yahoo, which it has integrated under its Oath subsidiary, Verizon has over 50 brands reaching 1 billion people each month.
Additionally, the company’s Verizon Digital Media Services is focused on helping online video providers other data services deliver services across the internet.
“Like other Internet companies, these businesses depend on the ability to reach customers over other internet service providers’ (ISP) networks,” Johnson said. “And if ISPs—or other internet companies, for that matter—started engaging in practices that undermined the open internet, we would be hurt.”
Regardless of how the largest service providers support net neutrality, it’s clear they are putting plenty of money up to fight the current rules.
A recent study by Maplight indicated that for every comment submitted to the FCC on net neutrality (and there have been roughly 5 million so far), the telecom industry has spent $100 in lobbying to crush the open internet. The group found that Comcast, AT&T, Verizon and the National Cable & Telecommunications Association (NCTA) have spent $572 million on attempts to influence the FCC and other government agencies since 2008.
Reversing Title II
However, there’s a catch behind the two service provider giants' stance: Net neutrality should not incorporate Title II regulations from the Communications Act. they argued.
Quinn said that the FCC’s original 2010 Open Internet Order already put a ban on blocking, throttling and anti-competitive paid prioritization. He added that reclassifying the internet under Title II regulation, which was developed during the monopoly Bell System days, is the wrong approach.
“Saddling modern broadband infrastructure and investment decisions with heavy-handed, outdated telephone regulations creates an environment of market uncertainty that does little to advance internet openness,” Quinn said. “Instead, it jeopardizes the prospects for continued innovation and robust growth we have witnessed since the internet’s creation.”
Verizon’s Johnson agreed with AT&T’s thesis.
“While we agree with the goal of an open internet, we do not think the answer is to impose 1930s utility regulation on ISPs,” Johnson said. “Regulation designed for rotary phones and monopoly railroads doesn’t fit today’s competitive Internet space.”
Johnson added that the Title II-based regulation has already been having negative effects.
“One of the first targets of the new broadband regulation was to go after programs that gave consumers 'free data' when accessing content using their wireless devices—plans that had already proven very popular with consumers,” Johnson said.
CenturyLink also took aim at the Title II issue, arguing that it is creating confusion for ISPs who want to make new network investments.
“An excessive regulatory regime, like Title II—designed for monopoly telephone companies, not broadband providers—hampers our progress,” said John Jones, SVP of public policy and government relations for CenturyLink, in a blog post. “Time and money is directed elsewhere as we figure out whether the specific network we want to build, the services we want to provide, and the rates we are permitted to charge, are regulated or may be regulated in the future. This uncertainty is real and has enormous impacts on broadband investment decisions. In the end, it is customers who lose when investment is stifled.”
Taking it a step further, CenturyLink’s Jones claims the Title II regime has slowed broadband network investments since the net neutrality rules were passed 2015.
According to data the telco collected, CenturyLink says that broadband investments by the 12 largest ISPs declined 5.6%, adding that the impact is even greater for rural service providers.
“Financing for infrastructure projects has dried up, especially in rural areas,” Jones said. “Admittedly, the 2015 order is not the only factor leading to reduced investment, but there is little doubt that the regulatory uncertainty it caused stifled ongoing infrastructure investment.”
Not everyone agrees with CenturyLink’s figures.
Sen. Ed Markey, D-Mass., noted during the “Oversight of the Federal Communications Commission” hearing in March that carriers collectively made large investments in network infrastructure between 2015 and 2016.
“The Census Bureau reported that the U.S. broadband and telecommunications industry spent over $87 billion in capital expenditures in 2015,” Markey said.