A broadband plan of sorts goes forth, with muted net neutrality

The strategy being employed by the Federal Communications Commission, as put forth yesterday, is to treat its loss to Comcast in DC Circuit Court two weeks ago not as a defeat of its ability to implement the entire Broadband Plan...and then hope that no one puts up any new roadblocks toward deploying at least most of it.

The priorities the FCC put forth during yesterday's open hearing are perhaps the ones that would generate the least friction from possible opponents. One of these priorities is reflected in a major rule change yesterday with respect to what regulators originally thought should be an oxymoron: home roaming.

Specifically, this has to do with whether a wireless carrier that has limited coverage in a given area because it's building out in that area, may be free to roam its service to other, more established carriers in that same area. A 2007 FCC order made a clear exception against this practice, in what seemed at the time to make some sense: A carrier should use its own spectrum in areas where it owns spectrum.

An unintended consequence of this exception was apparently a disincentive for carriers to build out in rural areas, feeling that they would be servicing customers there at a clear disadvantage until they had become completely established.

"With this decision, we continue to strive to adopt policies that balance competing interests, including -- promoting competition among multiple carriers; ensuring that consumers have access to seamless coverage nationwide; and providing incentives for all carriers to invest and innovate by using available spectrum and constructing wireless network facilities on a widespread basis," reads the FCC order published yesterday (PDF available here). "Upon reconsideration, we find that an up-front, categorical exclusion of home roaming from the automatic roaming obligation does not strike the best balance in furthering these goals. As a result of our decision, home roaming will be subject to the automatic roaming requirement and, as a common carrier service, is subject to Sections 201 and 202 of the Act. We will apply the same general presumption of reasonableness to requests for home roaming that we apply to other requests for automatic roaming, and take into account the competing interests when addressing roaming disputes on a case-by-case basis."

That reversal put the Commission's most outspoken Republican, Robert McDowell, in a good mood.

"The good news today is that we agree on a new course," McDowell wrote yesterday (PDF available here). "Specifically, we recognize that the better, simpler path is to eliminate the home market exclusion completely. We also clarify that wireless carriers have statutory rights to complain, even if they seek automatic voice roaming arrangements within a home market. By setting forth factors that the Commission will consider in the event of a complaint, we provide a framework that will provide both sides -- the host and the requesting carriers -- with greater incentives to succeed in negotiating roaming agreements based on reasonable terms and conditions. We allow market forces to drive flexible deals among market players to give consumers the benefit of seamless, nationwide voice services."

But a disparity still remains, and McDowell was not one to take his eye off of it: The wireless service rules to which the 2007 exception originally applied, were written in the days when "wireless" and "telephone" were considered synonymous. Yesterday, FCC Chairman Julius Genachowski cited the Broadband Plan as one of the driving forces behind removing the exception -- and the broadband plan deals with information service. On April 6, after the DC Circuit handed down the Comcast decision, Commissioner McDowell did nothing to hide his glee, saying, "I hope this decision will provide certainty in the marketplace, and will not lead to the unnecessary classification of broadband service as a monopoly phone service under Title II of the [Telecommunications] Act." That put McDowell's stake firmly in the ground against any attempt at reclassifying Internet service as a way of regulating net neutrality.

The problem is, if the FCC can't really regulate information services under Title I, then it can't also do something that McDowell may very much appreciate: essentially the opposite of the exception, granting a mandate that carriers must negotiate automatic data roaming agreements. So in his commentary on the ruling yesterday, McDowell asked an open-ended question:
"With respect to the Further Notice on data roaming, for some time now, I have requested that interested parties submit for our consideration a legal analysis setting forth the means to this end. The question is simple: Given that, in 2007, the Commission classified wireless broadband services as Title I without dissent, is there a legally sustainable path to mandate automatic data roaming? I have sought this analysis well before the DC Circuit's recent ruling in the Comcast case, which casts even more doubt on our jurisdiction in this area. I strongly encourage all commenters to give us their analyses of how the Comcast decision affects our ability to regulate data roaming."

Also yesterday, the FCC took the next step in a strategic move away from its support of CableCARD, the technology that's supposed to enable cable and satellite TV subscribers to fully utilize the capabilities of their digital signal -- for example, to digitally record programs they're permitted to record. In a new Notice of Inquiry yesterday (PDF available here), the Commission conceded its existing stance on the technology -- which consisted mainly of a requirement for service providers (MVPDs) to include it but not really to support it -- was a complete failure.

"The Commission's rules require cable operators to support only one-way plug-and-play capability for retail CableCARD devices. This largely reflects the absence of a proven market for two-way services when negotiations began, and a desire within the industry to achieve consensus on how to assure access to the most basic services first and not await the conclusion of negotiations regarding access to new services that might be introduced later," the NOI reads. "Accordingly, the Commission's rules do not require cable operators to provide access for retail devices to two-way services such as interactive program guides, pay-per-view, or video-on-demand services, which were nascent services in 2003 and would have required complex and lengthy technical consideration. For that reason among others, retail CableCARD devices have not been able to offer all of the cable services available to subscribers who lease their set-top boxes from the cable operator. This is partially responsible for the failure of the CableCARD solution to create a strong retail market for navigation devices."

That move prompted positive response (PDF available here) from the Commission's other Republican, Meredith A. Baker: "As we consider a long-term solution, I hope that we recall valuable lessons from the CableCARD regime. First, our technological mandates come with significant costs. By one estimate, the cost of CableCARD compliance for the cable industry alone -- costs passed on to cable consumers -- has totaled nearly one billion dollars. Second, we should be careful not to mandate particular technological solutions that would freeze into place the current state of technology. We need to craft flexible rules that foster continued investment and innovation both on the network and device level. We should also not inhibit the ability of MVPDs to continue to invest in innovative devices and offerings. There are numerous promising collaborative efforts in home network and industry standard setting bodies to provide consumers with greater flexibility and options in how to view their video content. Hopefully, that spirit of collaboration between MVPD and consumer electronics companies will carry over to our consideration of a post-CableCARD regime."

Not lost on anyone, however, including Baker, was the fact that any new "two-way" technology would involve the invocation of the "I" word. So in her comment yesterday, she suggested that since the subject involved the regulation of program distributors -- which everyone agrees are under the FCC's purview -- then perhaps this should not be framed as part of the Broadband Plan.

"The National Broadband Plan framed this issue as one of broadband adoption. I agree that our set-top box policy does relate to broadband, but I believe that it relates primarily to broadband deployment, not adoption," Baker wrote. "In order to provide higher speeds and more advanced broadband offerings, cable operators need to reclaim spectrum dedicated to video programming without eliminating the hundreds of video channels available to subscribers today. We should be vigilant that our set-top box policy does not unintentionally frustrate the efforts of cable operators investing in their next-generation broadband networks by putting up roadblocks to an affordable transition to all-digital operations or raising uncertainty about investment in more efficient technologies like switched digital video."

The Commission remains aware that it might not be able, under its current mandate, to regulate net neutrality -- a fact that commissioners cannot sweep under the rug. So the question of "how the Internet's openness can best be preserved" will be put to a panel of experts next Wednesday, including the CTO of T-Mobile, a chief researcher for Yahoo, and the chief commercial officer for Clearwire.