Today’s Score: Verizon-Google vs. the FCC
Companies recognize that the capabilities and availability of underlying network infrastructure are essential ingredients to sucessfully deploying and using Unified Communications transparently across multiple types of users and locations. Thus the ongoing Net Neutrality debate merits close scrutiny. Yesterday, Verizon and Google announced a nine-point proposal on Net Neutrality (see http://www.scribd.com/doc/35599242/Verizon-Google-Legislative-Framework-Proposal ). I recently provided a high-level analysis of the FCC’s Net Neutrality NPRM (see http://www.ucstrategies.com/detail.aspx?id=5345&terms=Lisa+Pierce)
On a 0-1.0 probability scale in which 1.0 is “certainty” and 0 is “won’t happen even if Hades froze over”, here is my assessment on the probability that the FCC will ultimately agree with each of the points in the Verizon-Google proposal:
1. First three points- Transparency, Consumer Protection and Non-discrimination on broadband Internet elements: Probability of FCC agreement: 1.0
2. Network management: First the FCC must wrap its head around the reality that just adding more bandwidth to the Internet won’t make it more reliable, usable, etc. Once the FCC concurs that proactive network management is essential to maintaining a reliable, relatively secure, functioning internet, then the probability of FCC agreement: .8
3. Additional online services—These already exist-they are supported via MPLS and Ethernet services, and can interface to Broadband Access. But by definition, these are not public internet services, and so aren’t part of the FCC’s net neutrality NPRM. Also, some providers have implemented QoS functionality on their public Internet networks. The underlying rub seems to be that FCC assumes that broadband internet customers will *only* be able to access content via the public internet. Despite the fact that this is not the case today and won’t be the case tomorrow, the probability of FCC agreement: .6
4. Wireless broadband: Of the nine points, this is by far the most important. Verizon and Google. They want to exempt wireless data from all other principles here except the Transparency Principle (above). Many customers use mobile devices as their primary method of interacting with Internet-based content. Some rely on mobility exclusively, and this trend is expected to grow with time. It’s likely a wireline-only FCC ruling on Net Neutrality would face numerous challenges in the courts and in Congress. True, there have been and will be substantial investments in wireless broadband access (e.g., 3G investments, current and future 4G/LTE investments). But very suubstantial investments have also been made and will continue to be made in landline Broadband access. If accepted, the proposal might lead to a world where new multimodal applications appear first on LTE, and sometime later (if at all) on landline. Such an outcome would not make the FCC happy-because the Commission would see this as a creating new kind of information divide. Thus, as envisioned by Verizon and Google, probability of FCC agreement: .1
5. Case by case enforcement: As described by Verizon and Google, the FCC would be enforcing policy in areas where it does not have rulemaking authority. That’s a huge can of worms – one that will make for endless litigation and Congressional oversight. Probability of FCC agreement: .1
6. Regulatory authority: stipulated over Internet Access, not applications or content. Those who want more federal oversight of problematic Internet content will point out that this stance is inconsistent with other types of FCC authority (such as over radio and broadcast TV) and so even if all the FCC Commissioners agreed, it could face numerous court challenges. Probability of FCC agreement: .3
7. Broadband Access for Americans: Proposes using Universal Services Funds to spur broadband deployment in underserved areas and by low income populations, and continues to treat Internet services as Interstate. The FCC is in favor of all of this, so probability of FCC agreement: .9. But let’s point out that (1) From a regulatory perspective, the internet is currently treated as an interstate service, (2) billions of dollars have already been allocated to deploy Broadband to under-served markets. Since this has recently begun, we don’t know how much these funds will solve the availability problem and make it un-necessary to redirect additional resources, and (3) the Verizon-Google proposal isn’t clear if any of the USF would directly or indirectly subsidize wireless broadband access, a technology that Verizon and Google clearly want very much to remain unregulated.
The Bottom Line: Although it has attracted a lot of attention and debate, this proposal will have very little if any substantive impact. At best, the FCC will extend an olive branch to Verizon and Google on those points where all parties share similar perspectives. But it is precisely the controversial topics, like the wireless exclusion proposal, that regulators believe are essential to resolve in order to achieve their stated objectives. Undoubtedly the Net Neutrality debate will generate more fireworks, but don’t be surprised if this topic takes a hiatus at least until after Election Day.