DSL Item Released — coulda been worse

After pushing the FCC’s open meeting off for a day and then delaying another hour and half to reach a compromise, Martin got his DSL reclassification order by a uninamous Commission. Instead of the complete deregulation proposed by Powell, the Commission will take steps to protect “network neutrality” and will take steps to protect various other “social” policies (including, unfortunately for us civil libertarian folks, the ability of the FBI to read your email).

I gotta give credit to Martin. He put the FCC meeting off a day and then delayed it another hour and a half to get consensus. And he actually negotiated and compromised on some items, rather than waiting for two Republicans to ram something down the Dems throat. And my salute to Dems Copps and Adelstien, who did the best with the cards the Supreme Court and the 2004 election dealt them. Oh heck, props to Abernathy also for sticking it out when she wants off the Commission.

On to substance. The Order’s not out yet, so I’m only going by what I heard at the open meeting before my audio kicked out (sadly, just as Adelstien was starting his statement — the FCC has really got to expand their streaming capability).

DSL gets reclassified as an information service (see my post of a few days ago). Also, the “Computer Proceeding rules” get eliminated. The Computer Proceeding rules were the rules the FCC came up with in the 1970s and 1980s that prevented the Bells from interefering with dial-up ISPs and prohibitted the Bells from favoring their own affiliated dial up ISPs. So now dial up and DSL ISPs are on the chopping block (although I don’t think the Bells will bother to mess with the dial up ISPs. Too risky and why bother.)

The FCC will have a one year transition period during which old rules are in effect and DSL providers can negotiate new contracts with telcos (or not, as the telco sees fit).

Telcos have the freedom to offer DSL transport on a common carrier basis if they want to (apprently, some rural telcos wanted this).

On the plus side, the FCC also did the following:
1) A clear statement that the FCC has authority to take necesary action to remedy any problems under their “Title I ancillary jurisidiction.” (For those curious, Title I of the Communications Act is the general authority of the FCC to act over all wireline and wireless communications. The D.C. Cir. has been aggressively whittling this away to nothing in recent years, sometimes for good things (eliminating broadcast flag) and sometimes for bad things (eliminating the FCC requirement for narrative description for the blind).

2) A policy statement that the FCC does not want to see network providers using their control of networks to interefer with access to content or competing services (like voice over IP) and that the FCC reserves the right to address situations if they arise. While not as good as a rule, it is a heck of a lot better than most of us ever hoped we’d get if we lost Brand X. It also means that if SBC or Comcast try to degrade Vonage or Skype VOIP service, there is a place to go to get action.

3) Preserve existing CALEA obligations (CALEA is the statute that says you have to give law enforcement the ability to tap your network if it is a communications network. The FBI has opposed reclassification of broadband as “information service” because “information services” are not required to be accessible to law enforcement. This says that DSL will still need to be CALEA compliant).

4) Preserve disabilities access (telecom services have disabilities access requirements, unregulated information services don’t. This preserves existing requirements for disabilities access.)

5) Preserve universal service contribution for the next 9 months, during which the FCC will consider how reclassification will impact DSL and create new rules to maintain or even expand the current levels of DSL funding. (Telecom services contribute to universal service fund — a fund that subsidizes broadband connections to schools, libraries and rural areas. Once mocked by the Republicans as the “Gore Tax” for Al Gore’s insistence that it go in the Telecom Act of 1996, now cherished by such Republicans as Senator Stevens because it gives money to rural states. DSL recalssificatiuon could have eliminated millions of dollars from the fund.)

The FCC also will release a new Notice of Proposed Rulemaking asking what, if any, rules should apply to DSL now as an information service.

Bottom line- I think independent ISPs are going to end up eaten by the dinosaurs, rather than the other way around. OTOH, it looks like Amazon, Google and even Wetmachine will be safe from being blocked or forced to pay fees for “preferred transport” over the DSL and cable lines.

Unanswered questions- what will happen to the wholesale peering and connectivity markets? Will wireless ISPs, community wireless networks, and munie systems still get interconnection and affordable backhaul? Or will they become mere intranets, unable to connect out to the broader world? The statutory inerconnection requirement for telecom services is gone, and the backbone market is consolidating. Will the Commission protect interconnectivity as well as access to content?

More when the Order gets released.

Stay tuned . . . .

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4 Comments

  1. Ian says:

    So, Harold, starting to price Verizon fiber service yet?

  2. Harold says:

    Gotta be deployed here first. Looks like Howard County will get a franchise before we do.

  3. Ian says:

    You sure? I thought they were rolling fiber over in Kemp Mill…

  4. Ian says:

    Ok, since I don’t know anything about Verizon fiber, here’s a press release from Cavtel: (_08_09.shtml” rel=”nofollow”>http://www.cavtel.com/compa…)

    Cavalier Telephone Press Release Archive
    August 09, 2005
    FCC Ruling Supports Cavalier Telephone’s DSL Offering

    RICHMOND, VA (August 9, 2005) – Cavalier Telephone, a leading provider of integrated local, long-distance, Internet and DSL services in the Mid-Atlantic region, announced today that the recent FCC ruling declassifying DSL as a telecommunication service and reclassifying it as an information service will not impact Cavalier’s ability to provide DSL services.

    The FCC’s unanimous decision intends to remove the mandate for large telecommunication companies such as Verizon to provide wholesale DSL services to independent internet service providers. As a facilities-based provider, Cavalier Telephone does not purchase wholesale DSL services from any provider. Instead, Cavalier utilizes its own DSL equipment and network capacity to provide consumers with superior value on Internet access.

    Brad Evans, Cavalier’s CEO and Chairman, commented, “This important decision once again validates Cavalier’s business model and provides the foundation and support needed to help us accelerate penetration of our market-leading DSL product. While the full text of the FCC’s order is not available, we believe this ruling will negatively impact internet service providers reselling the Verizon DSL network. Being a facilities-based provider relying upon our own network and equipment, Cavalier is able to provide consumers the fastest DSL product available at the lowest cost possible. This ruling strengthens our competitive position and allows Cavalier to further invest in additional innovative DSL services,” commented Evans.

    – – –

    It sounds like they say that they don’t need Verizon, but doesn’t Verizon own the last mile or 10?

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