The Rise of Quasi-Common Carriers and Conduit Convergence

1. The Rise of Quasi-Common Carriers and Conduit Convergence A Presentation at Competition and Innovation in the Broadband Age A Symposium Organized by I/S A Journal of Law and Policy for the Information Society The Ohio State University, Moritz College of Law Columbus, OH (March 22, 2013) Rob Frieden, Pioneers Chair and Professor of Telecommunications and Law Penn State Universityrmf5@psu.edu Web site : http://www.personal.psu.edu/faculty/r/m/rmf5/ Blog site: http://telefrieden.blogspot.com/

2. A Broken Dichotomy • The FCC generally seeks to maintain a “bright line” distinction between ventures subject to Title II, III and VI regulation (telecommunications service, broadcasting and video). Even as converging technologies and markets blur distinctions, the Commission prefers to apply a single classification. Remarkably reviewing courts have show greater flexibility. • Absent direct statutory authority, the Commission resorts to ancillary jurisdiction, based on Title I, as grounds for ad hoc solutions to remedy anticompetitive conduct. • Reviewing courts have deferred to the FCC’s expertise and statutory interpretation (Chevron Doctrine) even when the Commission stretches its regulatory wingspan, e.g., applying some, but not all of Title II’s common carrier requirements on ventures that do not qualify for complete coverage. • The FCC has imposed “quasi-common carrier” burdens on cable television operators by mandating compulsory carriage of broadcast television signals (“must carry”). • Recently the D.C. Circuit (which previously rejected extending Title I to justify sanctions for discriminatory treatment of data traffic) affirmed FCC-mandated interconnect ion obligations among wireless carriers providing first and last mile access to the Internet, an information service not subject to Title II regulation.

3. Squaring the Data Roaming and Comcast Cases • In the Data Roaming decision (Case No. 11-1135, slip op. Dec. 4, 2012) the D.C. Cir. affirmed the FCC’s imposition of compulsory duties to deal that represent some, but not all of the elements of common carriage. The court saw no problem in subjecting wireless carriers to a bifurcated regulatory scheme combining common carriage for Title II regulated voice services and ancillary authority for mobile data interconnection. • In Comcast v. FCC, 600 F.3d 642 (D.C. Cir. 2010), the court rejected FCC sanctioning Comcast for sending packet reset commands, which functionally blocked peer-to-peer file transfers of some subscribers, on grounds that the Commission lacked direct statutory authority and could not stretch ancillary authority. • While far from clear it appears that the court considered data roaming interconnection as a reasonable duty for the FCC to impose on ventures that use spectrum and can help promote near ubiquitous Internet access without unduly burdening a class of largely unregulated information service providers.

4. Available But Not Cited Case Precedents • Must Carry; Turner I and II, 512 U.S. 622 (1994) 520 U.S. 180 (1997); local origination United States v. Midwest Video Corp., 406 U.S. 649 (1972), but not PEG channels absent legislation FCC v. Midwest Video Corp., 440 U.S. 689 (1979). • Pole attachment right of access; Florida Power Corporation, 480 U.S. 245 (1987). • VoIP carrier requirements, including number portability and porting Nuvio Corp. v. FCC, 473 F.3d 302 (D.C. Cir. 2006); Vonage Holdings Corp. v. FCC, 489 F.3d 1232 (D.C. Cir. 2007) The Minnesota Public Utilities Commission v. F.C.C., 483 F.3d 570 (8th Cir. 2007). • Madison River; 20 F.C.C.R. 4295, 4297 (2005). • Truth in Billing (transparency) including charges for inadvertent data sessions; Verizon Wireless Data Usage Charges, Enf. Bur. DA 10-2068, 25 F.C.C.R. 15105 (2010). • AOL instant message interconnection with rivals. • Tennis Channel relocation to Comcast’s enhanced basic tier from more expensive sports tier and Bloomberg TV relocation to the news channel “neighborhood.”

5. Quasi-Common Carriage on the Ascent? • Carriers subject to quasi-common carriage can assert that this possibility generates regulatory uncertainty and a disincentive to invest in next generation network plant. • Verizon has invoked a First Amendment right for its content packaging and distribution function as an ISP. As with must carry, data roaming would trigger intermediate scrutiny and would constitute an insignificant burden, based on an insignificantly greater spectrum and carriage burden to handle data roaming. • The data roaming decision probably does not identify a road map for the FCC to impose network neutrality/open Internet access quasi-common carriage, based on the view that these type requirements look too much like actual common carrier requirements. • However as incumbent carriers have begun the process of trying to convince the FCC to allow them to end basic telephone service replace it with unregulated Internet-based services, the FCC may have a new precedent for maintaining still necessary duties to deal/interconnect.