ip transition and net neutrality:why local governments should care

Telecommunications Law


IP Transition and Net Neutrality:Why Local Governments Should Care

PRESENTED BY

Joseph Van Eaton, PartnerBest Best & Krieger LLP

IMLA MID-YEAR SEMINARAnchorage, AK


Background – the Public Switched Telephone Network: 1913

First Meeting of the Alaska Legislature – and the Year of the Kingsbury Commitment


The Network Compact

• Universal Service• Competition & Interconnection• Consumer Protection• Network Reliability• Public Safety


IP Transition: What Is It?

• Replacement of traditional public switched telephone network (PSTN) with a network based around the IP protocol – a packet-switched v. circuit switched network

• “We stand today at the precipice of a very different technology transition -- the turning off of the legacy suite of services that has served our nation well.” In re Tech. Transitions; AT&T Petition; Connect Am. Fund et

al., 29 FCC Rcd 1433, 1436 (F.C.C. 2014)



Source: http://www.highteck.net/EN/Basic/Internetworking.html


IP Transition

• Potentially much more efficient network carriers claim duplicative systems now being maintained

• Multi-purpose network – not designed for voice• Not wireless or wireline – could be a combination of

the many different networks• Does NOT mean Internet everywhere


IP Transition

• BUT – the network also may not function the way you assume it will function Verizon Voice Link May not be as reliable in power outages Some functions may not work (9-1-1; Life Alert; Faxes;

Credit Card Machines) or require substantially more expensive services

• AND transition creates significant questions as to what regulatory rights and obligations are…


IP Transition – Legal Issues• FCC has not resolved legal issues, and merely

recognizes that the legal issues are significant: Interconnection – will there be interconnection obligations? How will the services be classified? And how will that

affect universal service obligations, and obligations to provide services

Will states be in a position to protect consumers – and will they have any role in regulation of IP-enabled services?• 27 states have passed ALEC-sponsored deregulatory

legislation, including legislation prohibiting regulation of IP systems


IP Transition• Will rural areas be cut off from new IP networks?• Will networks be less reliable in the event of

emergency?• Will networks provide basic services at a

reasonable quality and price?• Will the network be secure?


What FCC Is Doing

• In January, issued Order seeking proposals for test of shift from legacy to IP networks (meaning, in some specific geographic areas, network services will be shifted to IP).

• Order is designed to determine real-world impacts, with goal of preserving Network Compact: “as networks transition, public safety is assured, access is universal, competition is promoted, consumers are protected, and the nation remains well-served by its critical communications infrastructure…”


Why You Should Be Concerned

• The transition is occurring and will occur. You are affected operationally and budgetarily As the front line for public safety As the agency closest to the public, and most

responsible for ensuring your community has infrastructure necessary for economic development

As a key customer for reliable services


Why You Should Be Concerned

• Will the compact under which providers obtained access to city property be maintained? And if not, what are your rights?

• Will your tax codes, franchise fee provisions and other fee provisions reach the services as they may be redefined – or are they technology or location dependent?


Net Neutrality- Background

• In the Matter of Protecting and Promoting the Open Internet, GN Docket No. 14-28, NOTICE OF PROPOSED RULEMAKING (Adopted: May 15, 2014)

• Comment Date: July 15, 2014• Reply Comment Date: September 10, 2014• http://

www.fcc.gov/document/protecting-and-promoting-open-internet-nprm

• http://www.fcc.gov/document/fact-sheet-protecting-and-promoting-open-internet

• 2014 FCC LEXIS 1689 • Workshop On The Future Of Broadband Regulation At FCC May 29-30,

2014

http://www.fcc.gov/document/protecting-and-promoting-open-internet-nprm



http://www.fcc.gov/document/fact-sheet-protecting-and-promoting-open-internet




Net Neutrality - Background

• Refers to treatment of traffic once on an Internet Service Provider’s network

• Internet Operation – Traditionally Internet service was treated as a common carrier service Provider sold service to end user End user could access any lawful site While end user could buy different levels of service, basically, all similar

traffic was treated identically, and “edge provider” was NOT charged • Beginning in 2002, FCC issued decisions classifying Internet

service as an “information service,” not subject to common carrier regulation


Net Neutrality - Background

• FCC also adopted a series of “openness” principles designed to prevent ISPs (including cable operators and telephone companies) from blocking certain Internet traffic

• In Preserving the Open Internet, GN Docket No. 09-191, WC Docket No. 07-52, Report and Order, 25 FCC Rcd 17905, 17910, para. 13 (2010) (Open Internet Order or Order), FCC adopted open Internet rules: Transparency No blocking No discrimination

• Decision aff'd in part, vacated and remanded in part sub nom. Verizon v. FCC, 740 F.3d 623 (D.C. Cir. 2014).


Net Neutrality – Why It Matters

• Broadband providers have ability and incentive to block, and to discriminate against certain services – a “real threat, not merely a hypothetical concern”

• “[T]he Internet's open architecture allows innovators and consumers at the edges of the network "to create and determine the success or failure of content, applications, services and devices," without requiring permission from the broadband provider…[a]s an open platform, it fosters diversity and it enables people to build communities.” Order, para. 1

• An open Internet fosters innovation, which leads to economic growth, provides new opportunities for civic engagement/providing new educational opportunities


Net Neutrality – Why It Matters

• App economy responsible for 752,000 jobs, from zero in 2007• 87% of Americans use the Internet, compared to 14 per cent in

1995• E-commerce marketplace of $263.3 billion• $250 billion in private capital invested as part of virtual cycle:

innovations leads to demand, demand leads to investment, investment leads to network improvements, improvements allow new innovations

• Tablet use growing from zero in 2010 to 160 million users by 2016

• Key question “what is the right public policy to ensure the Internet remains open?” Order, para 2.


Net Neutrality - Options

• No regulation – allow the market place to control

• Move back to common carrier regulation [issue: is common carrier regulation too burdensome]

• Adopt a new approach that allows creation of “fast lanes” on the Internet

• Something else?


Net Neutrality – Life in the Fast Lane

• Enhanced transparency rules – so consumers and edge providers understand network practices (and can choose or place pressure on providers to change practices)

• Re-adoption of “no blocking rule,” with clarification that broadband providers can negotiate individualized arrangements with “edge providers” so long as they do not “degrade lawful content or services to below a minimum level of access”

• Broadband providers required to use “commercially reasonable” practices in provision of broadband service.

• Commercial reasonableness based on totality of circumstances – anything that threatens to harm Internet openness in prohibited

• Case by Case determination


Net Neutrality – Particular Issues for Local Gov’t

• The open Internet serves as a critical platform for speech and civic engagement….[T]he ability of citizens and content providers to use this open platform…at very low costs drives further Internet use, consumer demand, and broadband investment and deployment. We therefore propose to adopt a factor or factors in applying the commercially reasonable standard that assess the impact of broadband provider practices on free exercise of speech and civic engagement.

• “We… seek comment on the role that the open Internet has for public institutions, such as public and school libraries, research libraries, and colleges and universities…”


Net Neutrality – How Would It WorkWheeler: • “If the network operator slowed the speed below that which the

consumer bought (for reasons other than reasonable network management), it would be… commercially unreasonable…”

• If operator blocked access to lawful content, it would violate “no blocking rule and be commercially unreasonable…”

• “When content provided by a firm such as Netflix reaches the consumer's network provider it would be commercially unreasonable to charge the content provider to use the bandwidth for which the consumer had already paid…”

• “When a consumer buys specified capacity from a network provider he or she is buying open capacity, not capacity the network can prioritize for its own profit purposes.”


Net Neutrality – Concern

• “Minimum service” levels will be locked in at current levels• Providers who need additional speed, capabilities, or to avoid

data caps will be required to negotiate agreements with Internet service providers

• Significant concern for development of high-capacity applications related to e-health, e-planning and permitting, or that require significant capacity up and downstream

• Money will flow to creation of the “fast lane” and away from development of the public Internet

• What would be the effect on your community if Internet capabilities had been frozen to 2007 levels? Or you had to pay to reach your residents with higher-quality services?

Telecommunications Law 26

QUESTIONS?

Joseph Van EatonBest Best & Krieger LLP2000 Pennsylvania Avenue N.W.Suite 4300Washington, DC 20006(202) [email protected]

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mailto:[email protected]

ip transition and net neutrality:why local governments should care

Technology

common carrier

commercially

optionsno

open internet

net neutrality

network provider

fast lanes

market place