Network Neutrality: The U.S. Experience Patrick DeGraba*

Network Neutrality: Implications for Europe Sess ion VII , egul ati on & P oli cy Hotel Kanzler, Bonn , Germany 4 December 2007

*Economist Federal Trade Commission. The opinions expressed are not necessarily those of the Commission or any Commissioner.

1 Overview

„ FCC Policy Statement

„ Merger Conditions

„ Unbundling

„ Some Market Data

„ Program Access Rule

„ Dorgan-Snowe

2 FCC Policy Statement

„ Four Internet Principles (September, 2005) „ access the lawful Internet content of their choice. „ run applications and use services of their choice, subject to the needs of law enforcement. „ connect their choice of legal devices that do not harm the network. „ competition among network providers, application and service providers, and content providers.

http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-05-151A1.pdf

3 FCC Enforcement

„ Madison River (February, 2005)

„ Rural Telco blocked DSL access to Vonage.

„ FCC executes consent decree.

„ Madison River unblocks ports to VoIP.

„ Makes a $15,000 voluntary contribution.

http://hraunfoss.fcc.gov/edocs_public/attachmatch/DA-05-543A2.pdf

4 FCC Merger Conditions

„ SBC/AT&T Merger (November, 2005)

„ Effec tive on the Merger Closi ng D at e, and conti nui ng for two years thereafter, SBC/AT&T will conduct business in a manner that comports with the principles set forth in the FCC’s Policy Statement, issued September 23, 2005 (FCC 05-151).

„ Offer ADSL service separate from voice service within one year of the merger closing.

http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-05-183A1.doc

5 FCC Merger Conditions

„ AT&T/Bell South Merger (December, 2006)

„ Adopt ed SBC/AT&T commit ment f or 30 month s.

„ Agreed for two years to not sell “to Internet content, application, or service providers, including those affiliated with AT&T/BellSouth, any service that privileges, degrades or prioritizes any packet transmitted over AT&T/BellSouth's wireline Internet access service based on its source, ownership or destination.”

„ Exc lud es ent erpri se servi ce and IPTV . http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-269275A1.pdf

6 Broad Band Classification

„ FCC classified Cable Modem service as an information service rather than as a telecommunications service. (March, 2002) http://www.askcalea .net/archives/docs/20020315 .fcc .02 -77.pdf

„ Upheld by U.S. Supreme Court – (Brand X) „ Subsequently classified wire line broadband internet access, wireless and Internet access over power lines as information services. „ Information Services are not subject to common carrier regulation.

7 FTC Merger Conditions

„ AOL-Time Warner (December, 2000)

„ FTC required AOL Time Warner to open its cable system to competing ISPs.

„ No other cable system is required to provide access to competing ISPs.

„ Respondents shall not interfere in any way, directly or indirectly, with Content ppgassed in either direction along the Bandwidth contracted for and being used by any Nonaffiliated ISP in compliance with the Non-affiliated ISP’s agreement with Respondents.

http://www.ftc.gov/os/2001/04/aoltwdo.pdf

8 Unbundled Elements

„ FCC does not require unbundling of

„ Packet switching including DSLAMs

„ fiber to home loops in green field

„ Only require 64 kbps in brown field rehab

„ FCC eli mi nat ed th e li ne sh ari ng UNE , th ough h the entire copper loop is still available.

„ “Naked DSL” was never a UNE.

9 U.S. Infrastructure

„ Number of Lines > 200 kbps (Dec 2006) ILEC non-ILEC xDSL 25mm 1mm Fiber 111mm .1mm Cable 32mm MbilWilMobile Wireless 22mm 4mm Fixed and Satellite 1mm

httppgp://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-277784A1.pdf Table 6

10 AT&T U-verse

„ IPTV service

„ Most Bandwidth dedicated to AT&T content

„ Maximum ppppublic internet speed 6Mbps

„ 100 channels and 6 Mbps - $74 / month

„ 100 channels and 3 Mbps - $64 / month

„ 100 channels and 1.5 Mbps - $59 / month

http://www. att. com/Common/merger/files/pdf/ServicePackages41907. pdpdff

11 Program Access Rules

„ Any content owned by a cable company and distributed via satellite must be made available to other MVPDs.

„ Extended for 5 more years (October, 2007)

„ Not extended to independent “must have” content. http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-07-169A1.pdf Applicability to Internet in Q uestion

„ Virtual Digital Cable, streams cable programming over the internet, is trying to gain access to several Time Warner networks, including TNT, TBS, CNN and CNN Headline News. VDC wants the FCC to rule that the program access rules applies to it, as an internet provider of video programming. http://blog.vdc.com/vdc/public_fcc_filings/VDC-FCCComplaint-CBS-Media.pdf

12 Dorgan-Snowe 2007

„ Broadband Service Providers shall - „ not block or degrade legal content „ not prevent attachment of legal devices „ make available information about services to customer. „ enable content available on the internet on a basis that - „ is reasonable and nondiscriminatory „ is at least as good as it provides to affiliated content „ does not impose charges based on the type of content „ OlOnly pri oriti ze cont ent t“ “accessed db by a user th thtiat is mad e avail ilblable on the internet within the network of such broadband service provider based on the type of content” and user’s service level without charge for the prioritization. „ Offer stand alone broadband service.

„ http://dorgan.senate.gov/documents/newsroom/net_neutrality.pdf

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