FCC’s O’Rielly: Net neutrality would hike broadband costs


Synapse Synergy Group, Inc.

By Scott M. Fulton, III 

At a broadband connectivity summit in Boise, Idaho on August 19, Federal Communications Commissioner Michael O’Rielly stepped up his rhetoric against reinstating federal Open Internet regulations. In text of his remarks released by the FCC on Tuesday (pdf), Comm. O’Rielly told attendees that re-imposing net neutrality regulations would result in reduced investment in rural broadband–which attendees had assembled to support–and higher costs for citizens. Stated O’Reilly:

“There’s a real downside to intervening here. Broadband regulations will impede its growth, both in terms of availability and speeds. That’s because regulations carry costs, which means less investment in deployment and upgrades, or more fees for consumers. Here the FCC is proposing to adopt detailed disclosure, reporting and certification requirements for providers–information that may not even be useful to ordinary consumers. It is troubling that the FCC might impose extensive new burdens to address hypothetical harms and provide no real benefit. And that’s without even getting into the chaos that would ensue if the FCC were to seriously consider re-classifying broadband as a Title II service.”

The reporting requirements to which O’Rielly referred take effect next October 1. In June, the Commission announced that broadband providers nationwide would be required to file FCC Form 477 twice each year. This includes providers who were previously only required to file forms with the regulatory bodies of the states in which they do business.

Since many mobile service providers are at least investigating the prospects of providing voice service over Internet protocols, the new reporting requirements force carriers for the first time to disclose the technologies they use for all mobile voice service, in their respective coverage areas. This is despite the fact that states are generally the providers of broadband licenses to those providers.

One problem this creates, the Commissioner argued, is that the FCC can change the definition of “broadband” at a time when states are just now becoming accustomed to the existing one.

“The FCC has raised the prospect of increasing the broadband speed standard for all support recipients from the current 4 Mbps downstream to 10 Mbps downstream before we’ve completed the task of ensuring that all consumers have access to 4 Mbps. The 4 Mbps standard that the Commission selected seems to be sufficient to enable people to send email, look for jobs, complete homework assignments and even watch an occasional movie. For those that have dial-up service or no service at all, getting access to broadband can be a welcome improvement. And given the way that networks are constructed, delivering 4 Mbps to the very remote homes means that most homes would have access to far greater speeds.”

The tendency with regulations, he stated, is that they tend to linger on far longer than the technologies they cover. One case in point is the definition of “broadband” itself; another is the federal requirement for service providers to record expenses, investments and revenue using the modern GAAP reporting standard, while at the same time keeping a separate set of books using the older reporting standard that the FCC thus far has neglected to phase out.

But a third case O’Rielly mentioned is the nature of intrastate and interstate jurisdictions, the concept of which dates back to when the geography of communications service was based on the principles of long distance calling. The concept no longer makes sense, he said, in the modern marketplace.

By raising these issues in tandem with one another, O’Rielly gives present-day opponents to net neutrality an opening for actual legal action, rather than just a place on the sidelines as protestors. As one of only two Republicans on the Commission, O’Rielly’s case would likely fail in a 3-2 vote. But the question of whether a federal agency has the right to regulate reporting requirements in a state-licensed industry, could conceivably be examined by some future appeals court. Interstate commerce has always been a federal matter; but if the rules of interstate commerce no longer apply in the modern world, where distance may be irrelevant, a judge could possibly rule that any federal agency’s rules may no longer apply.

For more:
– read O’Rielly’s remarks (.pdf)

Related Articles:
FCC’s net neutrality dissenters: Deregulation is better alternative
Congress punted on net neutrality, and FCC’s O’Rielly missed it

Read more about: Michael O’Rielly

Jarrett Neil Ridlinghafer
Founder & CEO/CTO
Synapse Synergy Group, Inc.