3 Of The Many Times The Big ISPs Have Tried To Have It Both Ways

With the prospect of new regulations staring them in the face, big ISPs have been taking every possible opportunity to wail about how doomed they will be if anything changes. But every cable and telecom company that has spent 2014 and 2015 vowing that regulation is the worst thing ever has also spent years benefiting from exactly those regulations. Here are just a few examples.

AT&T: We can’t be sued or regulated

AT&T is currently being sued by the FTC. The gist of the lawsuit is that AT&T promised its unlimited-plan customers that they would, in fact, receive unlimited service, but that the company was misleading subscribers by throttling those customers’ data instead. The FTC is the agency that regulates false and misleading advertising and statements to consumers, so they’re the agency doing the suing.

AT&T, however, says that the FTC doesn’t have standing to sue them. Although the FTC Act says: “The Commission is hereby empowered and directed to prevent persons, partnerships, or corporations … from using unfair methods of competition in or affecting commerce and unfair or deceptive acts or practices in or affecting commerce,” there are several categories of businesses exempted from that mandate. Among those categories are banks, meat packers, and “common carriers subject to the Acts to regulate commerce.”

Telephone services are indeed regulated as common carriers, and communications common carriers are regulated under Title II of the Communications Act — FCC territory. Therefore, argues AT&T, the FCC, not the FTC, is the agency that should look into the matter if even there is a matter to be looked into. “[The FTC] asserts in this lawsuit that AT&T’s imposition of [data throttling] was unfair and that its disclosures were inadequate. But whether AT&T’s network management program is ‘unfair’ and whether its disclosures were ‘inadequate’ are issues for the FCC to decide,” AT&T’s filing says.

However, mobile phone data services are not currently considered common carriers. Like home broadband services, they are considered information services, not communications services, and are not subject to Title II common carrier regulation under the FCC.

Of course, one of the big stories of the last year is that data — both mobile and wired — may well become subject to Title II common carrier regulation in the very near future. The FCC is set to vote on a proposal to reclassify broadband, which may include mobile data, as a common carrier on February 26.

If the FCC does pass the proposal, and if mobile data is included, then AT&T will be correct that the FCC, and not the FTC, has standing to investigate the misleading “unlimited” plans. But AT&T has been arguing strenuously for months that their data services are not and should not be subject to common carrier regulation, and has threatened to sue the FCC if the commission moves forward with reclassification.

AT&T: A common carrier when they want to avoid being sued, and emphatically not a common carrier when they want to do the suing.

Verizon: We oppose and love Title II

Verizon: with AT&T, another one of Schrödinger’s common carriers. They, perhaps more than any other of the big ISPs, really hate it when the FCC tries to regulate them.

Verizon is the company that filed the suit that got net neutrality thrown out last year. Verizon was then the first company to threaten legal action again if any part of the new net neutrality proposal involves Title II classification or otherwise displeases them. Whenever there’s a chance for them to say how much they hate regulation, they take full advantage of it.

And all this time, while treating potential Title II status as the end of the world, Verizon has benefited enormously from the public assistance available to telecommunications common carriers, in order to install their wires.

Verizon relies very heavily on a technicality: while the FiOS service you subscribe to that lets you search Google and stream Netflix and upload cat videos is a Title I information service, the actual fiber cables they run under your lawn to plug you in to FiOS are regulated under Title II just like century-old copper phone wires.

A report released in late May looked at how Verizon’s FiOS rollout in New York and New Jersey relies heavily on being able to have it both ways. “It appears this was done for two reasons,” the report concludes. “It gets all of the powers of the utility, including the rights-of-way that are part of the telecommunications utility service, but it also may charge the copper-based POTS [plain old telephone service] utility customers for the development and deployment of FiOS.”

In short, Verizon gets to collect tax subsidies, rights-of-way guarantees, and fees from consumers phone bills under Title II utility regulations, but then gets to turn around and insist that they are not common carriers and that they’ll sue anyone who says they are.

Even Verizon’s own shareholders — those who benefit most when the company gets to make more money — are finding the telecom giant’s positions “inconsistent and contradictory” and are “confused by this ambiguity” that Verizon’s oscillating positions take.

Comcast: We’re buying the competition because we have no competition

Comcast doesn’t want internet service to be regulated under Title II any more than Verizon and AT&T do, but compared to their telecom brethren they’ve been moderately more circumspect with their objections. That’s because they have plenty of other things to be two-faced about, as they push hard to be allowed to buy Time Warner Cable.

Comcast’s greatest hypocrisy this year is not around whether their industry should be regulated as a common carrier or not, but rather around the entire nature and history of that industry.

The biggest claim? Comcast’s oft-repeated mantra that since they and Time Warner Cable do not have any geographic overlap, they are not in competition and therefore should be allowed to merge.

It’s true: there is no geographic overlap. But it’s not due to some fortunate quirk of gee-golly happenstance, as Comcast execs have enjoyed pretending: it was an entirely deliberate move on the part of Comcast and its smaller predecessors.

Back in March, Comcast chief executive Brian Roberts lamented to the New York Times that cable “is a relic of an antiquated model,” and that — oh, too bad, so sad — Comcast never had a chance to go compete in major Time Warner Cable towns like New York and Los Angeles.

But of course they didn’t. Cable has been a system of competition-free local monopolies entirely by design, and extreme industry consolidation has left only a very few players remaining.

The lack of geographic competition is disastrous for consumers, but for Comcast it’s absolutely a feature, not a bug. If consumers actually had any real choices, they wouldn’t be trapped in customer service nightmares or voluntarily putting up with the worst-rated companies in America.

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