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What are the consequences of an FCC Internet "utility"?

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superboyac:
yea, nice article.
so that makes more sense now.  My next question would be, what did we accomplish by this step of formally classifying the internet as a "common carrier" ?  who does this benefit?  what is going to change?

app103:
Purely on the basis that it is a natural monopoly, is repeatably and highly abusive to consumers because of that natural monopoly, and because they are turning immense profits off of an aging network that is in dire need of capacity upgrades.
-SeraphimLabs (February 06, 2015, 05:15 PM)
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But in most parts of the country, it's not a natural monopoly. It's an unnatural monopoly. A natural monopoly would be when you naturally have no competition. An unnatural one is when you suck extra money out of the pockets of your customers to provide local municipalities with kickbacks franchise fees to secure the legal right to not have any competition within that municipality.

However, contrary to many people's expectations, the draft rules will also keep other parts of Title II that allow the FCC to: enforce consumer privacy rules; extract funds from Internet providers to help subsidize services for rural Americans, educators and the poor; and make sure services such as Google Fiber can build new broadband pipes more easily, according to people familiar with the plan.

Internet providers won't be asked to contribute to the subsidy fund, known as Universal Service, right away. The draft rules merely open the door to that obligation down the road should the FCC determine that step is necessary. (The Universal Service Fund helps schools and libraries buy Internet service and reduces the cost of telephone service for low-income Americans. It also subsidizes connectivity for rural areas. If the FCC later decides to ask Internet providers to pay into the fund, the money would go toward these programs.)
-wraith808 (February 06, 2015, 07:45 PM)
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Check your landline phone bill, gas & electric bill. Your phone and utility company were told to contribute to this fund out of their profits, but never has contributed a dime towards it. Instead you have. You pay for it, for them, 100%. And the same will happen when (not if) the FCC demands money from the ISPs. Your bill will go up to cover it.

My next question would be, what did we accomplish by this step of formally classifying the internet as a "common carrier" ?  who does this benefit?  what is going to change?

-superboyac (February 06, 2015, 09:33 PM)
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We established an additional revenue stream for the government, of course, which they will use to bribe ISPs into not withdrawing service from less profitable rural areas, not jacking up the rates of those living within those areas.

40hz:
My next question would be, what did we accomplish by this step of formally classifying the internet as a "common carrier" ?  who does this benefit?  what is going to change?

-superboyac (February 06, 2015, 09:33 PM)
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We established an additional revenue stream for the government, of course, -app103 (February 06, 2015, 09:49 PM)
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Indeed.

which they will use to bribe ISPs into not withdrawing service from less profitable rural areas, not jacking up the rates of those living within those areas.

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I think it will be more to bribe them to marginally upgrade their services to something that approaches barely usable. They already have plant and equipment in place so there's some small incentive for them to continue milking it until they can't any longer. And then sell their fully depreciated and obsolete equipment and non-profitable business divisions off to some poor sucker at fire sale prices - like what AT&T recently sold to Frontier Communications - or to the Baby Bells a few decades earlier.

Sure looks like it's "business as usual" - as in: the public, once again, getting fleeced blind. :-\

wraith808:
Looks pretty much to be regulated like Title II to me, though I could be wrong.

Thoughts?
-wraith808 (February 06, 2015, 07:45 PM)
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This from Techdirt?

Stop Saying That The FCC Is 'Treating Internet As A Utility' -- It's Not
from the mythbusting dept

Now that FCC boss Tom Wheeler has made it official that he's going to present rules to reclassify broadband under Title II for the purpose of implementing stronger net neutrality rules (details still to come...), the opponents to this effort have come out of the woodwork to insist, over and over again, that reclassifying is "treating the internet as a utility." The cable industry's main lobbyists, NCTA, decried "Wheeler's proposal to impose the heavy burden of Title II public utility regulation...." and AT&T screamed about how "these regulations that we're talking about are public-utility-style regulations..." Former Congressman Rick Boucher, who is now lobbying for AT&T whined that "subjecting broadband to public utility regulation under Title II is unnecessary."

Hell, even those who are merely reporting on the issue are calling it "treating internet as a utility." Here's the Wall Street Journal, NPR, CNET, Engadget and the Associated Press all claiming that the new rules "treat" or "regulate" the "internet as a public utility."

And they're all wrong. While there are some "utility" like aspects in Title II, Wheeler actually made it pretty clear he's not using those sections in the net neutrality rules that he's putting together (though, again, the details here will matter, and we haven't seen them yet). What he's doing here is just using Title II to be able to designate broadband as a common carrier, but just being a "common carrier" is not the same as being a "public utility" -- a point that John Bergmeyer at Public Knowledge makes nicely, by highlighting that there are lots of common carriers that aren't utilities...
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Interesting... (read the rest of it here)
-40hz (February 06, 2015, 08:44 PM)
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Yeah... I read that.  Read my comment above.

Vurbal:
Once again, those proposed regulations are completely unrelated to how utilities are regulated. All they would do is prevent providers from using their monopoly power in anti-competitive ways. In theory that's SOP for regulating all industries.

Utility regulations pretty much fall into 2 categories, quality of service and rate schedule approval. If they were being treated as utilities, ISPs would be required to adhere to a minimum QOS level. If your individual Internet connection wasn't working, they would be required to fix it within hours, a day or 2 at most, just like traditional PSTN providers. Even a VOIP service sold by a cable provider doesn't get that level of regulation - at least not between the ISP and customer.

For example, Mediacom, the local cable company here, resells Sprint PSTN connections for their VOIP offering. If you call with a connection, or even quality problem and it's due to a problem between their CO and where the PSTN wires terminate, they fix it within 24 hours. If the problem is somewhere between the cable headend and your phone, you're at the mercy of Mediacom's schedulers.

They will get one of their VOIP specialists out as soon as possible, but if they happen to be unusually busy, and especially if you can't be there for a midday appointment, you may not see a tech for several days - even a week or more. If it were PSTN to the home, that would result in enough FCC fines to eat up all their profits and then some.

The television signal OTOH is regulated as a utility. If that goes out, they'll have someone there within 48 hours. If you call Internet support and your TV service is also affected, your service call gets scheduled from a completely different job queue. If there isn't an appointment available within 48 hours, the rep calls dispatch and it gets dumped on somebody's schedule anyway. If a tech ends up short on time, TV calls get priority and Internet calls get rescheduled.

Their ability to set arbitrary rates and impose arbitrary data caps would be similarly unaffected. The phone company's rates for PSTN service are capped at just slightly above maintenance cost for phone service. After the massive deregulation in the 90s, or unbundling as it was called in the industry, they can charge extra for everything beyond the phone number and basic service, but they are required to offer the barebones service by itself. Not that people are going to get service without "extras" like caller ID, but they have to offer it.

There are rural telcos who game the system by providing PSTN termination for out of area VOIP services. However, that's still only because they have government permission to charge extra for connections through their switches. And, once again, the utility regulations stop once the VOIP data is transmitted. One of those telcos tried to sell the company I worked for that service, and my boss turned them down for exactly that reason.

My point is this. When the lobbyists claim this plan amounts to utility regulations, it's purely to back up their claim that they won't have money to invest in the network. All it would really do is prevent them from erecting artificial barriers that interfere with the normal functioning of the Internet.

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