The Federal Communications Commission (FCC) has released a revision/expansion to its net neutrality notice of proposed rulemaking (NPRM), targeting the two issues specifically raised by the Google/Verizon proposal — broadband wireless and “managed services.” The latter is always what we’ve believed to be the key issue.
In the Google/Verizon accord, that term was used for what we’ve called “IP-non-Internet” services, meaning services that are delivered over the same access conduit as the Internet but which are structurally separate. Some voice over IP (VoIP) and Internet Protocol television (IPTV) services already fit this model. An excessive neutrality position would encourage operators to move more services to this category; as such, it could represent both a path to continue to encourage broadband investment and a way to marginalize the Internet. We think that it could well be both, depending on just how far things go in what’s clearly a face-off developing between operators and regulators.
We already have many communications services that are delivered on IP and not subject to neutrality provisions — business services are the best example. We also have non-IP services that are delivered over the same conduit as Internet access, including phone services using time-division multiplexing (TDM). While our definition excludes these services from consideration, it’s less clear whether the FCC debate might not branch out there, if for no other reason than that expansion of neutrality provisions to non-Internet IP would beg the question, “Why then not use another protocol, like Ethernet?” That would further muddy the waters.
In our view, all of this debate could be ended decisively by simply declaring that broadband access was a telecommunications (Title II) service fully subject to the Telecom Act requirements for wholesaling, and then setting wholesale rates at retail prices, less avoidable sales/marketing costs.