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July 27, 2005

Senator Ensign Introduces Sweeping Communications Bill - Statutorily Capturing Our Ongoing Communications Policy Debate:

Weighing in at 72 pages, Senator Ensign (joined by Senator McCain) is first out of the box in Congress with an omnibus rewrite of the Communications Act - The Broadband Investment and Consumer Choice Act." We expect a few more members of Congress to weigh in before the Fall with their own conceptions of how to best pave the way for our communications future.

Obviously, it will take us, collectively, some time to digest the nuances of the Ensign Bill, to figure out all the ramifications, potential confusions, conflicting provisions, and inevitable unintended consequences. Here is my first blush on the Bill.

Clearly, the Ensign Bill is an effort to account for the technological advances primarily afforded by IP technology and Moore's Law. The Bill is also an effort to create a very deregulatory landscape. In the process, however, the Bill, per force, imposes some regulation on the previously unregulated information and application providers who happen to be able to deliver quality voice applications that could compete with traditional telecom services. In particular, the Ensign Bill allows for some imposition of emergency response, lawful intercept, and even disabilities access obligations on voice application providers. On the bright side, the Bill also explicitly prohibits port-blocking ... or does it? I can't quite reconcile several potentially conflicting and litigation-inducing provisions. Let's take a look at the relevant provisions:

Section 7(a)(1)(c) reads: "A consumer may not be denied access to any content provided over facilities used to provide broadband communications service and a broadband service provider shall not willfully and knowingly block access to such content by a subscriber, ..."

This seems good. But then Section 7(a)(1)(c) continues: "... unless ...such access is inconsistent with the terms of the service plan of such consumer including applicable bandwidth capacity or quality of service constraints."

Hmm, does this provision open the door to allow some discriminatory treatment depending on whether the end-user is using the carrier-provided application or an unaffiliated application provider's application?

Section 7(a)(2) sheds some light: "Customized Content. A broadband communications service provider may offer to a consumer a customized plan ... to differentiate (A) access to content; (B) the availability of applications; and (C) the character of service components available." This certainly supports the proposition some degree of discrimination between applications is lawful.

But then, Section 7(a)(3) seems to counter that conclusion: "Non-Customized Content. Nothing in subsection (a) shall adversely affect the performance of non-customized consumer access to content, services, and applications offered by the competitors of a broadband service provider."

Perhaps the Enforcement provision will make things a little clearer:

Section 7(b) "Enforcement of Access Violations.
(1) The [Federal Communications] Commission may take such enforcement action as it may prescribe by rule, if the Commission determines that a broadband communications service provider intentionally restricted access to any content described in subsection (a)(1)."

This sounds very promising. But let's review the exceptions:

(2) Exception. A broadband communications service provider may not be in violation of subsection (a), if such service provider does not interrupt or block access to any content described in subsection (a)(1) when (A) performing network (i) optimization or management; (ii) security; or (iii) prioritization; ..."

Again, some degree of discrimination might be lawful.

7(d) "Connectivity of Devices. Except as provided in this section, a broadband service provider shall not prevent any person from utilizing equipment and devices in connection with lawful content or applications."

This sounds very much like the core net freedom and consumer empowerment principles. And certainly, this next provision is an outright statutory memorialization of net freedom:

7(e) "Access to VoIP Applications. Nothing in subsection (a) shall permit a broadband service provider to prevent a customer from using voice over Internet Protocol applications offered by a competitor."

All in all, I would say these provisions weigh heavily in support of net freedom and consumer empowerment and generally allow consumers to control their own communications experience and reach the content and applications of their own choosing. It is obviously a difficult balance, and the provisions clearly reflect the debate we have been waging for the past couple of years over what net freedom means and when may a carrier differentiate between its own services and potentially competing Internet applications. What security and quality of service issues open the door for some degree of discrimination? I, for one, am glad that this Bill positions this debate front and center. For me, it has been the most relevant issue that we need to resolve in order to create the best possible communications future and regulatory structure that allows for the best balance between fostering broadband deployment, application innovation and competition.

As an aside, here is another provision I found potentially problematic (although similar State commission delegations in the '96 Act do not seem to have posed any Constitutional challenges):

8(c): Enforcement.
(1): "... a State commission shall have authority to enforce the rules established by the Commission pursuant to this section.
(2) Each State commission shall designate a local point of contact, which residents of that State may contact to alert the State of any potential violations of the rules and regulations set forth under subsection (a)."

Now, I'm not a Constitutional scholar, but I believe that State commissions are creatures of their states and not of the Federal government. I think this delegation by Congress directly to State commissions might be a violation of the 10th Amendment and a usurpation of the authority delegated to the States. Frankly, I think the '96 Telecom Act might have imposed obligations on State Commissions (such as arbitration procedures between carriers, interconnection, collocation, UNE, pricing and some number administration tasks), but I don't think that is clear evidence that this provision would not be a 10th Amendment violation, simply that no one bothered to challenged the Constitutionality of such prior provisions. I was confused as to why no States successfully challenged such direct delegation to State commissions after the '96 Act. Maybe they did, I just missed it or forgot about it. In any event, I am still confused. Any Constitutional insight on this point would be appreciated.

Finally, I suspect the CLECs will be quite concerned about Sec. 9's providing for "commercial arrangements regarding the ability of such facilities-based providers to interconnect with other facilities-based providers." I'm not sure what the incentive really is for a provider with market power to negotiate fairly with smaller competitors, but that is not necessarily my battle. Maybe I should count my blessings -- getting strong statutory language in support of net freedom and consumer empowerment might be good enough.

* * *

I must, however, renew my concerns, that once the big boys start playing with the language of even the friendliest of bills, it's anyone's guess how the final Bill ends up. Frankly, I do not know who will speak up for the would-be innovators. We do not have the deep pockets or lobbying muscle of the entrenched players in DC and we might end up as collateral damage, ripped up scraps of noble intentions strewn across the Committee Floor. I think we, at least, have an eloquent champion in Senator Sununu, and a few of his colleagues appear to understand the needs of the Internet and communications innovators and entrepreneurs. But without the vocal and financial support of the Internet community - the innovators and entrepreneurs trying to transform the ways in which we communicate -- there may simply be too many forces weighing against those advocating for the Internet, for innovation and for advanced communications.


I would have simply liked to have seen Senator Sununu's Bill or Rep. Pickering's Bill pass during Congress' last term. Alas, that term has expired, that ship has sailed. We are in a world where Congress seems committed to a more omnibus rewrite of the Communications laws. Regardless of what legislation ultimately moves through Congress, I have deep concerns that any expansive rewrite ends up with too many conflicting provisions subject to radically divergent interpretations. And, in the end, I suspect we end up in a new regulatory and judicial interpretative quagmire.

* * *

On a lighter note, whenever I hear the phrase "Senator Ensign", I can't help think of the character "Major Major", formerly "Captain Major" from Catch 22. If Senator Ensign were promoted would he become "President Ensign" or "Senator Lieutenant"?

Posted by jeff on July 27, 2005 06:30 PM | Permalink

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