FCC Will Lose Open Internet Case, Should Not Go Back to Title II, Say TWC,Public Knowledge Officials

Officials from Time Warner Cable, Verizon and Public Knowledge agreed the FCC should not go back to enforcing net neutrality rules under Title II of the Communications Act if Verizon wins its appeal of the commission’s net neutrality order in the U.S. Court of Appeals for the D.C. Circuit. A Verizon win is likely, said Time Warner Cable Chief Government Relations Officer Gail MacKinnon. “That is what’s widely believed,” she said at a Free State Foundation luncheon Tuesday on what policies the next FCC chairman should pursue. “Title II should be a last resort,” said Public Knowledge President Gigi Sohn. “A more narrow fix would be better” than what some consider “the nuclear option” of Title II, she said.

Sohn also said she believes the Verizon v. FCC case will go against the commission, but the recent Arlington v. FCC decision had “breathed new life” into the agency’s case. If the commission loses, Sohn said the new chairman should take the case to the Supreme Court, where she said Justice Antonin Scalia’s previous rulings indicate a favorable reception. If the commission is unable to prevail in the courts, Sohn said the commission should urge Congress to pass new legislation before resorting to Title II. “I have a two-sentence fix that would give the commission authority over the open Internet,” she said.

The FTC should have authority over the Internet rather than the FCC, said MacKinnon and Craig Silliman, Verizon senior vice president-public policy and government affairs. “Title II would be pretty destructive for us,” said MacKinnon. “If people are worried about having a cop on the beat, the FTC has the authority for this,” she said. Silliman compared the FCC’s regulation of the Internet to fitting “a round peg in a square hole,” and MacKinnon said Title II would subject the Internet to “an 80-year-old regime.” She said ISPs are already committed to an open Internet, and that if she were FCC chief, she would close Title II proceedings regardless of how the court ruled in the Verizon case.

Sohn said carriers applying data caps to some content providers differently than others showed that preserving an open Internet required regulation beyond what the FTC could provide. But Silliman defended the practice as “price differentiation,” and compared it to Netflix paying the postage on its customers’ DVDs. “This is not an unfamiliar practice,” said Silliman. “Differentiation is at the heart of competition. It takes a certain amount of arrogance to say we know better than customers do.” Data caps are a “disincentive for consumers to try new things,” said Sohn. “It turns consumers into meter readers.”

Although most of the forum discussion was taken up by net neutrality, the panelists also weighed in on other issues the new FCC chair should tackle. All three panelists said the FCC should trim and streamline its many regulations, and both MacKinnon and Sohn said retransmission consent rules should be changed or eliminated. MacKinnon said the new chairman should take up retrans within the first six months of the new administration, and prohibit blackouts and joint negotiation by broadcasters. Silliman said the new chairman should focus on the incentive auction of broadcast spectrum, which he called “the rocket fuel of innovation.” All three panelists also denounced the current CableCARD rules. Sohn thinks there needs to be some form of regulation, she said. “Just because technology is changing doesn’t mean there should be no rules of the road.”