Uncertainty Filled the Air

Uncertainty filled the air at the 2015 ACA Summit this week in Washington D.C. Precursor, LLC president, Scott Cleland, summed up the concerns of many at this conference of independent broadband operators with his analogy of how to boil a live frog. Using that analogy, he suggested the FCC’s vote on Title II regulation of the Internet is the equivalent of putting operators in a pan of water on the stove. In the beginning, operators will feel like they are still in their familiar pond, but he believes the FCC will slowly heat the regulatory waters until one day operators will find their businesses engulfed in a boiling cauldron of regulations and rules.

Beyond Net Neutrality, Sohn indicated the major items on FCC’s agenda are:

  • Broadcast incentive auction
  • The Comcast/TW and AT&T/DirecTV mergers
  • NPRM on the definition of MVPD
  • Lifeline telephony transition to broadband
  • Finalizing rules to an all IP transition

In this context, she indicated that the FCC staff have no discretionary time and that the most effective meetings are those where operators avoid small talk and share their point in 10 minutes or less. In as many words, she stated that old management maxim about coming to the FCC with solutions, not just the problem.

In her session moderated by ACA’s CEO Matt Polka, Gigi Sohn, Special Counsel for External Affairs for FCC Chairman Tom Wheeler, provided a different view and reiterated the position of her boss in suggesting that what was approved last week is light touch regulation that forbears many of the provisions of Title II and provides a temporary exemption for “small” operators (defined as fewer than 100k subscribers, for now). She said that, “Title II, shouldn’t keep you up at night.”

Whether this proves true remains to be seen. Telecommunications attorney Barbara Esbin of the Cinnamon Mueller suggested that the FCC’s decision not to forbear section 201b for small ISPs, “an arbitrary and capricious decision.”

Matt Wood of Free Press used the example of DSL providers as successfully investing and running businesses under a Title II regime (of course, that is for their telephony side of the business and not their broadband business).

Countering that, Cliff Duncan, founder and owner of 2,500 customer-strong, Duncan Cable of Vermont indicated in the question and answer session that, although he provides broadband, he decided that his company, with only a handful of employees, could not afford the burden of Title II in that it would literally take him away building better broadband networks (stay tuned for an exclusive interview with Cliff Duncan). He echoed the opinions of many other small operators who fear the increased overhead of Title II will ultimately translate into higher prices for the consumer.

Cable veteran and Wave Broadband executive, Patrick Knoor, made the nuanced point that Title II could create a sort of arbitrage opportunity for content owners; in this case, content is not just video, but could be apps and more. Stay tuned in a future issue for an interview with Knorr where he will elaborate on this so-called “cablization” of the Internet.

The back and forth between the audience and the diverse group of panelists definitely made for a thought-provoking panel and conference. One thing that all would probably agree upon is that, until the rules are released and, even then, with the expected court cases, future rulings and potential legislation, this saga will continue.

ACA Summit coverage brought to you by the ACA and ViodiTV.

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