Transcripts For CSPAN2 The Communicators 20160201

Chris lewis of Public Knowledge, hes the Vice President there. Mr. Mccormick, in the year or so since the fcc made the decision on Net Neutrality, how has that affected your Member Companies . Guest it doesnt affect us operationally daytoday because the open internet standards are standards that we agree with; the no blocking, the no throttling, the no paid authorization. We have supported their adoption as regulations under 706 authority, we support their enactment into law by the United States congress. But what we objected to was the way in which the fcc went about the open internet standards i. Adopted them as regulations pursuant to common carrier authority. This is a 19th century form of regulation, originally applied to common carriers like railroads, Trucking Companies and airlines. It has been repealed for all of those traditional common carriers, and we dont think common carrier regulation is the right form of regulation for the 21st century internet, so thats why we brought the suit. Host and some of your Member Companies include verizon, at t. Guest frontier, and a hundred smaller companies. Host chris lewis, how has the Telecom World changed in the past year . Guest well, we think, you know, like walter said, that the rules were common sense, that there was broad agreement on the general idea of open internet rules, and i think its brought a lot of confidence from consumers that their rights online will be protected, you know, given the four Million People that weighed in on the proceeding. There are a lot of folks who are watching this and wanted to make sure that the internet remained open and that innovators were able to innovate without having to ask for permission. And now theyve got that assurance, so thats a good thing. Host do you think if the ncc had not done what it did last year, that it would be any different today . Caller it could be different. There are a lot of new and different, innovative business methods, and they need to be tested against these basic open internet principles. If you didnt have rules, then they couldnt be. So thats why you need high level rules of the road. Its something thats been talked about for over a decade now, and the 2015 rules were structured in a way that they would be able to pass court muster, you know . We saw rules from 2010 overruled, and we saw the court basically say that the only way to make the strong, robust rules that consumers were demanding was to do it under reclassification of broadband as a title ii or common carrier service. And since the court pointed in that direction, thats the direction i think the fcc ultimately decided to go in based off of that public ruling. Host what is Public Knowledge . Guest a nonprofit Public Interest Advocacy Group thats been around for 15 years or so. Host concentrating on intellectual work and copyright, things like that. Guest thats right. Host lets bring in alex byers of politico. Chris, i want to start with you. Something that sort of lived at the heart of what i think walter was saying is something weve heard from a lot of conservative groups which is that the push for title ii regulation, these stronger regulations or the basis wasnt even about Net Neutrality for a lot of the Public Interest groups, that what they really wanted were some of the things that come along with title ii; the fcc authority to regulate privacy or stronger universal service capabilities. Whats your take on that . I mean, would you guys be fine if congress wrote a law that applied these, basically, agreedupon rules but didnt go with title ii, thereby sort of stripping the fcc of some of the things they have the authority to deal with thousand . Guest weve actually testified for the senate talking about the importance of making sure that when that if congress were to legislate and basically write the rules into law, that they need to be careful about unintended consequences, that there are basic values around Communications Networks that need to be protected. And some of those values include privacy or universal service. Or insuring that the Network Works seamlessly which goes to the issue of interconnection and competition. Sure, sure. Guest and it would be a shame if congress enacted a law to get to Net Neutrality that precluded the fcc from actually dealing with those important issues. Sounds like its fair to say that Public Knowledge, while thinking that title ii is the best way to solve the issue, also appreciates the fact that it also sort of bolsters some of these traditional Consumer Protection components that go into telecom regulation. Guest sure. And those basic core values have been affirmed at the fcc in a unanimous vote by the commissioners. So, you know, we think thats a great place as an Expert Agency in Communications Networks for them to actually figure out the right way to apply them. Got it. Walter, lets talk about the lawsuit and in particular the oral arguments now that happened in december. The room, the courtroom was packed. I was there, i bet you guys were probably there as well, or if you werent, youve seen the audio or the transcript. Give me a little bit of your thinking how that went down. I think it was or sort of very interesting to see that the judge, who had written a great deal in the previous order that sort of started this second round or third round even of the debate, was sort of leading things again this time. I mean, i guess the basic question is based on what you saw, do you think that youre going to be successful in throwing out the fccs decision overall to reclassify broadband providers as a title ii service . Guest were optimistic. Optimistic because, first of all, the court understood that nobody was opposed to open internet standards. So there werent even any questions about whether or not there should be open internet standards which i think really reflects the consensus. The court focused in on an issue of the way in which the fcc had gone about it. And by virtue of the questions the court was asking, we felt that the court was really delving into the central issues. First of all, does an agency have authority to just determine what the scope of its jurisdiction is going to be, or because an agency is a creation from congress thats really exercising delegated authority from the congress, does it need to get that delegation from the congress of the United States . So the court was asking questions like, well, the statute itself speaks in terms of telecommunications and Information Services, and you as an agency have previously defined the internet as an Information Service. The court asked questions about the fact that the statute speaks in terms of the public switch network, and thats different from the ip networks. And it talks about the fact that one judge mentioned, you know, when youre on a public switch network, you dont have the ability to just simply call the ip network and vice versa, so how can you treat these as one network . The court asked questions related to, well, what really would constitute an Information Service if Broadband Internet access, which is specifically mentioned in the statute as an Information Service, is suddenly declared not to be an Information Service. So we felt that by virtue of the questions that the court was asking, the court was zeroing in on the real, key legal questions in this case and its cause for optimism. Now, thats interesting, because i think based on what i had read after the case, a lot of folks thought at least two of the three judges were going in the other direction at least in terms of the broadest question, can the fcc reclassify Broadband Service as a Telecommunications Service. But, obviously, there were more questions below that. One of those being something that you just alluded to, the mobile issue with the public switch network. Tell me a little bit about your thinking about how that went. And there was also this issue of whether the fcc has properly dealt with interconnection issues. I think those were areas where the judges were a little bit more skeptical of what the fcc had presented. Do you guys feel like youre in a stronger position on mobile, for example . Guest at the end of the day, the statute, we think, is pretty clear. It defines commercial mobile services with great specificity. It defines Information Services with great specificity. It defines what a Telecommunications Service is. And it specifically says that Information Services include Broadband Internet access. Courts are, when called upon to engage in statutory construction, tend to look at the plain meaning of the statute. And when you couple the plain meaning of the statute with the fact that the fcc for well over a decade had indicated that these services were Information Services and not Telecommunications Services, we think leads to a pretty strong case that the fcc cannot simply call something that was one thing, you know, Information Service and suddenly decide were going going to call that another thing simply because we can exercise jurisdiction sure. Dont court, i mean, im not a lawyer, but dont Appellate Courts tend to defer to agencies a fair bit . I felt like watching those arguments they had, the court was giving them a little bit of leeway there. Guest courts do offer deference to agencies within their area of expertise. But that deference is not unfettered. Sure, yeah. Guest and it has to be exercised in a way that is consistent with what they call reasoned decision making. And thats because agencies are exercising authority that is not their own, but authority that has been delegated to them by the congress. Host chris lewis, what do you hear . Guest we actually felt very confident about the overarching question of reclassification. Walter talked about how for over a decade now, well, up until the fcc reclassified [laughter] they had approached broadband as a title i or an Information Service. But we had the internet before that. And during the first decade or so of the public internet, it was chat tide as a title ii classified as a title ii service. We felt very confident when we saw the judge asking questions about whether or not this had been settled or not. Host dsl was a title ii service. So theres been a little bit of both sides here. Interesting. Stepping away from the legalesee for a second, it seems over the last few months and really in this month i think one of the key Net Neutrality issues in practice has been the issue of zero rating which is, obviously, exempting certain traffic from day caps or data plans, those consumers arent charged for them. Its a very interesting question with a lot of fierce debate on both sides about whether this is either a Net Neutrality violation or an awesome consumer benefit and whether its something that would be good for the internet and Internet Users Going Forward. What is your take on that, chris . I mean, regardless of Net Neutrality, i guess, is this going to be a good thing if zero rating becomes common . Guest you know, i think were watching it closely. Weve written on zero rating and basic data cap, Data Management practices. Sure. Guest and in studying it, we felt the fcc needed to take a strong look at it and learn more about how companies are applying these practices. Why . Because we fear that it can be applied in a neutral way, or it could also be applied in a way thats antipet ttive ask and harms competitive and hams innovation harms innovation from materializing. Weve seen some of the plans over the last few months, and some of them really give us pause. Were looking at the one from comcast and the one from at t especially where those two are not necessarily well, comcast has admitted theyre not doing it because they have a congestion problem, theyre just choosing to favor their own content and zero rate it while others may not be. Host so should a Telecom Company be allowed, in your view, to give unlimited online ability to a customer . Guest so as far as unlimited data, we want to make sure that those sorts of free, you know, when were talking about unlimited data and zero, were talking about free data, that its done in a way that doesnt preclude other new Innovative Services from coming along. So if youre going to apply it, lets say, to one video service, why not apply it to all Video Services . If the real concern is how youre managing video traffic, and im using video as an example because its one of the high band bid uses online. Bandwidth uses online. Guest we believe the fccs role is to protect the consumer, so this should be looked at from the standpoint of the consumer. The big question before the fcc is this who should bear the costs of the internet . We believe that all of the costs should not necessarily simply be born by the end user and that the end users have to pay a rate that maybe doesnt reflect the use that theyre making or the value that theyre receiving. So, for example, why should a social, a wealthy social elite who has multiple hd televisions and is simultaneously streaming three channels of hdtv to their home, why should their use with be subsidized by a low income consumer who wants to have Internet Access for email, to be able to allow their children to do homework and to be able to have health care function . We think that the fcc needs to be very, very careful here in making sure that the market is allowed to develop in a way that allows the greatest benefits to inure to the consumer. Host and youre shaking your head yes. Guest i think the highlevel goal that walters talking about is true, and i think thats why you have an Expert Agency to look at these specific Business Practices and apply them. You know, were worried about consumers. You know, thats what drives us. And we dont want while we want consumers to be able to get the best deal they can, we also want to make sure that everyone has access to the great opportunities that the internet offers. And when you start to see a twotiered internet created because of any competitive way that data caps and zero rating is applied, that causes concern, you know . Talk about access for education, for example, and the homework gap. A lot of the new, innovative education tools that are coming online today are videobased tools. This allows special education students, other students that need extra support to preteach prelearn and relearn content. If students are worried about a data cap because some video is exempted and other video, say their education services, are not, thats a concern. This is the sort of example that were looking at as opposed to the broad, you know, goal that everyone has, you know, the most affordable broadband that they can. You know, how these practices are applied can impact people based off of limiting what services they can use. And, again, jumping back to not the rules or the legal theory behind the rules, but what is happening or what would be happening in the real world. Walter, you were talking about we generally agree on these principles of no blocking, no prioritization. At the same time, if i remember correctly when the last round of appellate case was happening, verizon v. The fcc, the lead plaintiff said but for these regulations, you know, my clients would be looking at these types of arrangements. So doesnt that sort of take a bite out of the contention from broadband providers at this point that they have no interest in pay prioritization or blocking or throttling . Guest no. I think because the fcc has adopted common carrier regulations and because that is the most pervasive form of economic regulation, it means that the fcc has basically sorted authority over every aspect of our business and has even indicated that to the extent the Companies Want to engage in innovative offerings, they can go seek advisory opinions from the enforcement bureau. This is exactly the kind of mother may i approach to innovation that we wanted to seek to avoid with regard to the internet. We think its fine for the federal Communications Commission to come in where there are identifiable harms that are leading to anticompetitive abuses or consumer injury, but its another thing for the federal Communications Commission to be involved in sort of a Central Planning of the economy and to have to spin out hypotheticals and whatifs with regard to every new business application that is being offered only when it is offered by an Internet Service provider. So thats really the concern. If it had just been the bright line rules, if they had been adopted pursuant to 706 or as an alternative so the bright line rules are good even though there was an indication previously that maybe some providers would be looking at things that potentially could have run afoul of them . Guest were comfortable with the bright line rules. Okay. Chris, any thoughts . Guest well, the bright line rules that were created in 2010 were overturned, and i think we all wanted bright line rules. Sure. Guest so, you know, you have to get them in the way thats legally possible. So, you know, we support it Going Forward with the rules we have. Got it. Lets turn away from Net Neutrality to an issue that i think actually both of you probably, if ive read the filing correctly, agree on to a fair extent, and thats thish lieu the issue of lifeline which the fcc is looking at modernizing sometime in 2016. I was looking at the data the other day and found that theres about 13 Million People or so, i might be a little bit off there, that are currently enrolled in lifeline, but estimates there might be as many as 40, 45 Million People eligible for the program. Why are so many people not taking advantage of what would seem to be a pretty useful subsidy for them, and is there anything that you think the fcc can do to make it more attractive to them or even, for walter, i guess, your own organization . Ill let anyone take that, whoever wants to go first. Guest so its difficult to be poor. Yeah. Guest and when youre poor, one of the things thats particularly difficult is having to comply with all kinds of paperwork requirements to take advantage of every program thats out there thats aimed at providing you with some ability to have sustenance. With regard to the lifeline program, today even though you qualify for other low income programs, you have to separately go prove your qualifications to the lifeline provider sure. Guest whether thats wire line telephone company, wireless, Cable Company. We think it ought to be the federal government that decides whether or not you qualify for this program. And that would help streamline it for poor people. Sure. Chris . Guest right. I think we both support the program. The question is how do we make it most efficient for folks who have to go to multiple programs like walter said, how do we make it efficient for the company that are providing the service . And so were glad that the fcc is looking at different options in the record to figure out how to do it in the simplest way. But also to look at while you try to make it simple, while you try to take some of the waste and fraud out of it, how do you extend that to broadband . Thats really where all of these services, voice and video, are converging on to. Host i think theres another issue you both agree on, and that is the charter time warner merger. Chris lewis, why is Public Knowledge against that . Guest well, weve raised concerns about the increasing consolidation of the cable market. You know, the charter merger would make the company as large as probably the Biggest Company out there, thats comcast, and yet we still continue to see a local monopoly in the cable market, and that has not improved prices for consumers. We continue to see them go up. And so the consolidation of the market has been a real concern for us, you know . Host youve got a netflix or an apple tv, etc. , competing . Guest well, they compete, but they only compete when they can get connected to the network. And so most people still have to go to that Cable Company for that access to the internet. And, you know, most consumers only have access to one or two highspeed internet choices. And if one of walters companies isnt in that market, then its just the cable industry. Guest let me respond to that. First of all, this is a big merger. Were not opposed to the merger per se, and i would take issue with the idea that its a cable monopoly. Monopoly means one, and we know that today consumers can get video from the Cable Company, from local telephone company, from Satellite Companies, they can get video programming over the top from netflix, they can have roku boxes and apple tv. So there are a variety of video choices out there. But heres what we want the fcc to do. We want the fcc to impose some common sense conditions to make sure that the competition that exists today continues to exist in this particular area. The cable industrys a highly integrated industry. They have cable labs that only does research and development for cable companies. They have cable marketing that only does marketing for cable companies. We dont want to see cable programming thats only programming for cable companies. We want cable programming to continue to be available to other multichannel video providers whether its offered by telephone companies, Satellite Companies or other Broadband Service providers x. In that regard, new charter would have control over a lot of programming. John malone has control over a lot of programming. We want to make sure that there are common sense conditions, sure, that new charter cannot favor itself or be favored with regard to programming. The apparentlies to this merger parties to this merger have indicated this is something they would not do otherwise, so we think that the commission should have no objection to imposing these conditions. Host Walter Mccormick, isnt that the same oorgt chris lewis is making in favor of Net Neutrality regulations . Guest i dont think its the same argument at all. First of all, i indicated that with regard to Net Neutrality that we support the standards, that we would support their adoption and regulation, we would support their enactment into law. And this is not a case even with Net Neutrality regulations where theyre being imposed because of some monopoly. Consumers today have a variety of ways to access the internet. They are being imposed because it is felt that those particular standards are the way in which an open internet should operate, and i dont know of a single Internet Service provider in the country whether its a wireline telephone company, a Capable Company or a Wireless Company that seeks to operate a Business Model in conflict with the open internet standards. Go ahead, chris. Guest by the way, we agree with walters point about program access. We think its consistent, as youre saying, with the idea of letting consumers have access to all the options available online. You brought up dr. John malone, cable industry magnate who has a lot of programming interests and also about a 20 or so stake in charter. Charter has preemptively offered some concessions that they say would limit to the point of not being an issue his interests in charter visavis his interests in other programming. Does u. S. Telecom think that those conditions are sufficient, or would you like to see the fcc go even farther in making sure john malones hands stay far away from programming decisions . Guest we want to see his hands stay very far away from charters programming decisions. And, chris, i dont remember exactly what it was you said, but you talked about charters going to be almost as big as comcast. I think new charter will have about 19 million or so subscribers to comcasts 22 or so. Comcast, obviously, has a lot of the highspeed broadband connections which is what the fcc, for example, has focused a lot on, connections of 25 megabits or more. Charter has a minimum service tier of 60 megabits per second. They bill themselves as a broadbandfirst company that doesnt have settop box piece or modem fees and has committed to Net Neutrality. Are you still worried that even though they seem to have right now some characteristics were friendly to on line video, those arent sufficient to block any harms that might come from future Business Opportunities . Guest we have been encouraged by some of the showings that weve seen from charter. You talked act not about not having settop box piece. I believe, correct me if im wrong, theyre not capping their data right now. Right. No data caps. Guest right. Which were seeing from comcast. Sure. Guest again, we dont know why, they dont have a congestion reason to do it. So those are encouraging. But there are multiple parts to this marketplace. Its not just the video marketplace, it is the broadband marketplace. And when it comes to broadband, there are just very few opportunities for consumers to get access through their Cable Company or perhaps one telephone company. Host chris lewis, hoe closely is public how closely is Public Knowledge following the spectrum auctions that are happening next month . Guest very closely, yeah. Were watching it very closely. Were excited for the opportunity to see some of the mediumsized companies, not the two leading wireless companies, get at quality spectrum to make them more competitive. Host are you satisfied with the setasides . Guest i think well judge it at the end of the auction, you know . We pushed for probably stronger rules than we got, but were hopeful that we can get a competitive result out of this. Host mr. Mccormick. Guest were looking forward to the auction. [laughter] host how to closely are you following them . Guest well, the companies individually are following the auctions. Host right. Guest so we tend to represent the companies on the wire line broadband side, so were not advocates of our, so is not advocates for particular policy with regard to the auctions except to say this its important to get the spectrum out there, its important to get the auctions underway, and i know our companies are looking forward to getting on with it. Host Walter Mccormick is president and ceo of u. S. Telecom, and he is retiring at the end of 2016. Chris lewis, Vice President of Public Knowledge and alex byers of politico. Thank you, gentlemen. Thanks. The issue that imte