On December 19, 2013, TechFreedom is celebrating the 100th anniversary of the Kingsbury Commitment with lunch and policy analysis. The event will include a luncheon keynote address by FCC Commissioner Ajit Pai followed by a panel of policy leaders moderated by TechFreedom President Berin Szoka.  

The panel:

• Harold Feld, Public Knowledge
• Rob Atkinson, Information Technology & Innovation Foundation
• Hance Haney, Discovery Institute
• Jeff Eisenach, American Enterprise Institute
• Fred Campbell, Former FCC Commissioner

From the announcement:

Join TechFreedom on Thursday, December 19, the 100th anniversary of the Kingsbury Commitment, AT&T’s negotiated settlement of antitrust charges brought by the Department of Justice that gave AT&T a legal monopoly in most of the U.S. in exchange for a commitment to provide universal service.

The Commitment is hailed by many not just as a milestone in the public interest but as the bedrock of U.S. communications policy. Others see the settlement as the cynical exploitation of lofty rhetoric to establish a tightly regulated monopoly — and the beginning of decades of cozy regulatory capture that stifled competition and strangled innovation.

So which was it? More importantly, what can we learn from the seventy year period before the 1984 break-up of AT&T, and the last three decades of efforts to unleash competition? With fewer than a third of Americans relying on traditional telephony and Internet-based competitors increasingly driving competition, what does universal service mean in the digital era? As Congress contemplates overhauling the Communications Act, how can policymakers promote universal service through competition, by promoting innovation and investment? What should a new Kingsbury Commitment look like?

The war over keeping copper alive rages on in New York with more stealthy antics from Verizon. Stop the Cap! now reports that, rather than wait for a hurricane to take out the copper lines in the Catskills, it will quietly shift seasonal home owners to VoiceLink as they request reconnection. Stop the Cap! also published a letter [PDF] from the Communication Workers of America (CWA) who allege Verizon has also been installing VoiceLink in the City.

We recently visited this drama with Harold Feld from Public Knowledge on Broadband Bits podcast #52. He and Christopher discussed the issue as it applies to Fire Island in New York and Barrier Island in New Jersey. Verizon has permission from the New York Public Services Commission (NYPSC) to use the VoiceLink product in place of copper wires on a temporary basis as a way to get service to victims of Hurricane Sandy. Seven months is a long time to go without phone service.

Our readers know that VoiceLink short changes users, especially those that rely on phone connections for Life Alert, want to use phone cards, or want the security of reliable 911 service. Feld also noted in his Tales from the Sausage Factory blog, that Verizon was rumored to be making secret plans to expand VoiceLink well beyond the islands, regardless of the limitations of the NYPSC order. 

We have long argued that smart antitrust policy promotes investment and competition in the market. Allowing a few firms to consolidate too much power allows them to ignore our needs because we lack alternative service providers. In economic terms, they can use their market power to prevent market entry from innovative new firms.

Harold Feld recented provided more empirical evidence for our view by comparing the present cellular wireless market against that of 20 months ago. He notes new investment from abroad in T-Mobile and Sprint and that U.S. Cellular plans to expand its footprint; AT&T is planning upgrades in its spectrum holdings. Bottom line - investment is starting to happen, which was not the case a year ago. 

Feld breaks out details in FCC and DoJ activities to show the relationship. In addition to the DoJ and FCC mutual block of the AT&T/T-Mobile deal, Feld notes the FCC's new attitude regarding regulatory reform. From the Feld blog:

On top of this, the FCC sudden[ly] started getting all serious about regulatory reforms designed to keep carriers other than AT&T and Verizon in the game as serious players. This included not just the long-awaited data roaming order (which now looks like it will probably survive review by the D.C. Circuit after all), but also revisiting special access, 700 MHz Interoperability, and renewed interest in clarifying the spectrum screen/possibly reviving the spectrum cap. While the last three are still in progress, the fact that the FCC is even talking about them in a serious way is so radically different from what folks expected at the beginning of 2011 that it puts heart into investors and competitors who were looking for some sign that anyone in DC gave a crap or if competitive wireless would end up going the way of competitive telecom and competitive ISPs.

Feld acknowledges that there will be those that jump to conclusions and discourages an all-or-nothing viewpoint in favor of a more measured approach. Also from his blog post:

The Department of Justice released a statement on August 16th, that it will allow the controversial Verizon/SpectrumCo deal to move forward with changes. We have watched this deal, bringing you you detailed review and analysis by experts along with opinions from those affected. One week later, the slightly altered deal was also blessed by the FCC.

Many telecommunications policy and economic experts opposed the deal on the basis that it will further erode the already feeble competition in the market. In addition to a swap of spectrum between Verizon and T-Mobile, the agreement consists of side marketing arrangements wherein Verizon agrees not to impinge in the market now filled with SpectrumCo (Comcast, Time Warner Cable, Cox, and Bright House Communications).

Verizon has been accused of hoarding spectrum it doesn't need. The marketing arrangements constitute anti-competitive tools that the DOJ has decided need some adjusting. From the announcement:

Genachowski proposed that the FCC formalize its four principles of network openness. To encourage broadband deployment and preserve and promote the open and interconnected nature of the public Internet, consumers are entitled:

• to access the lawful Internet content of their choice.
• to run applications and use services of their choice, subject to the needs of law enforcement.
• to connect their choice of legal devices that do not harm the network.
• to competition among network providers, application and service providers, and content providers.

To these, Genachowski proposed adding two more: The first would prevent Internet access providers from discriminating against particular Internet content or applications, while allowing for reasonable network management.

On its face, this is the sort of toll booth between residential subscribers and the content of their choice that a Net Neutrality rule is supposed to prohibit.  In addition, this is exactly the sort of anticompetitive harm that opponents of Comcast’s merger with NBC-Universal have warned would happen — that Comcast would leverage its network to harm distribution of competitive video services, while raising prices on its own customers.

Harold Feld at Public Knowledge created another five minute video on broadband policy - embedded below - that I heartily recommend. This video fits in nicely with my recent posts discussing comments submitted to the FCC on the definition on broadband, and more recently, on why the definition matters. If you want to dig in deeper to Harold's comments, I recommend his blog. If you take one thing away, remember that broadband is not a simple market of sellers and buyers, it is an ecology - impacting everything from energy efficiency to education to entertainment ... and those are just some of the e's.