FCC Chief's plan saves net neutrality as AT&T gears up to sue

Even before FCC Chairman Tom Wheeler officially proposed using Title II and new rules to protect an open Internet and save net neutrality, AT&T was gearing up to sue.

Tom Wheeler
Credit: FCC

Even before FCC Chairman Tom Wheeler wrote "This is how we will ensure net neutrality" on Wired, proposing that the FCC use its Title II authority to implement and enforce open internet protections, AT&T was gearing up to sue the FCC.

Today Wheeler said:

Using this authority, I am submitting to my colleagues the strongest open internet protections ever proposed by the FCC. These enforceable, bright-line rules will ban paid prioritization, and the blocking and throttling of lawful content and services. I propose to fully apply—for the first time ever—those bright-line rules to mobile broadband. My proposal assures the rights of internet users to go where they want, when they want, and the rights of innovators to introduce new products without asking anyone's permission.

FCC Tom Wheeler net neutrality tweets Tom Wheeler

In a blog post on Monday, AT&T attorney Hank Hultquist said he filed two letters picking apart the FCC's plan. While that's not the same as suing, AT&T claiming the FCC's proposed rules won't hold up in court seems like a thinly veiled threat that a lawsuit is imminent.

A "well-placed source" told VentureBeat that Monday's New York Times article about the FCC planning to propose regulating the Internet as a utility was "intentionally leaked by the commission." VentureBeat added that we should expect AT&T and Verizon to "immediately sue."

AT&T's first big point hinges on the fact that in 2002, the FCC called ISPs "information providers"…making it sound impossible for the FCC to change, as if nothing has changed since 2002. AT&T should know all about specific wordings, being that the FTC sued AT&T last year because unlimited didn't actually mean unlimited.

Nevertheless, AT&T wrote that the FCC said "cable modem service, an Internet access service, was an information service because it ‘combines the transmission of data with computer processing, information provision, and computer interactivity, enabling end users to run a variety of applications'." To AT&T, the FCC's own definition means it can't view ISPs as telecom-like utilities.

Yet as Wheeler pointed out, "Congress wisely gave the FCC the power to update its rules to keep pace with innovation. Under that authority my proposal includes a general conduct rule that can be used to stop new and novel threats to the internet. This means the action we take will be strong enough and flexible enough not only to deal with the realities of today, but also to establish ground rules for the as yet unimagined."

FCC Tom Wheeler Open Internet Tom Wheeler

AT&T's second complaint letter "focuses on procedural infirmities with an attempt to reclassify ISPs as common carriers, even if the FCC finds that they are not information service providers."

Hultquist added, "The FCC cannot mandate that a service be offered on a common carrier basis without, at a minimum, a finding that a particular provider has market power in a particular geographic market. Needless to say the FCC has engaged in no analysis of market power on a geographic market basis." In other words, AT&T claims the FCC hasn't conducted a study that proves ISP in specific areas are "monopolistic common carriers.

The big showdown is scheduled for Feb. 26 and you can have a front seat at the FCC open meeting via a live webcast. Wheeler added, "The proposal I present to the commission will ensure the internet remains open, now and in the future, for all Americans."

Cable stocks soar after Wheeler outlines proposal

Incidentally, by Wheeler saying his proposal would not try to control pricing, Comcast and Time Warner Cable stocks soared. Bloomberg added, "AT&T Inc. rose as much as 1.2 percent, while Verizon Communications Inc. added as much as 1 percent." Despite Comcast rising 4.6%, the biggest gain since 2013, and Time Warner Cable jumped up 5.2%, neither would comment upon Wheeler's proposal.

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