Cogent, Level 3, CompTel Back FCC in Net Neutrality Litigation

By Josh Long

Various broadband interests including AT&T Inc. have moved in federal court to challenge Internet regulations. The larger Internet ecosystem is far from united when it comes to the comprehensive Net neutrality framework released in March by the Federal Communications Commission.

Consider Level 3 Communications LLC, the tier 1 Internet service provider, and CompTel, the trade association in Washington, D.C., whose service members include (among others) Cogent Communications, Inc., Level 3, Sprint Corp. and Windstream.

Colorado-based Level 3 and CompTel have moved to intervene in the Net neutrality litigation in support of the FCC and United States of America.

“The rules will ensure that consumers and businesses can access a competitive network of online content, applications, and services,” CompTel’s outside lawyer, Markham Erickson, declared in a motion to intervene in the litigation before the U.S. Court of Appeals for the District of Columbia Circuit. “Through its intervention in this dispute, CompTel intends to support the FCC’s rules that protect an open Internet and the virtuous cycle of innovation and investment that the rules will foment.”

The regulations are set to take effect June 12, although cable and telecom interests last week asked a federal appeals court to block them.

“Once implemented, the order will result in huge burdens on companies of all sizes, and create an open season of regulation and litigation that imposes immediate and unrecoverable costs,” USTelecom President Walter McCormick said last week in a statement.

USTelecom, the Washington, D.C.-based trade organization, represents some of the largest U.S. telecommunications companies, including AT&T, CenturyLink Inc. and Verizon Communications Inc.

Interconnection Complaints at Stake in Litigation

The FCC largely adopted the Open Internet Order to prevent fixed and wireless Internet service providers from unreasonably discriminating against Web content and services. The regulations prohibit certain behaviors, including blocking lawful content and favoring certain Web traffic, a practice commonly referred to as paid prioritization.

The 400-page order also laid out a process to hear individual disputes over the interconnection of networks. Interconnection has been a thorny issue that has divided ISPs and global network providers like Cogent and Level 3.

The ISPs and network providers have blamed each other for network congestion that affects consumers who access Web-based content, such as the movies and television programs that Netflix Inc. streams to its 42 million U.S. members.

In a recent court filing, Level 3 asserted its right to intervene in the litigation. “The FCC’s new rules

provide for the first time an avenue for transit providers, such as Level 3, to file complaints against BIAS [broadband Internet access services] providers for unjust or unreasonable interconnection practices,” Erickson, a Steptoe & Johnson LLP lawyer, pointed out on behalf of his client Level 3.

Dave Schaeffer, founder and CEO of Cogent, expressed support for the Net neutrality regulations and said his company planned to intervene in support of the FCC.

“We are very pleased with the rules as the FCC adopted them,” Schaeffer said in a phone interview with Channel Partners. “We think the rules are actually not regulation of the Internet or even Internet service providers, but rather those rules are designed as consumer protection measures and we are very supportive and do plan to intervene.”

Thanks to the FCC invoking its authority under Title II of the Communications Act of 1934, the FCC has authority to hear Internet-related complaints, including consumer complaints and grievances related to interconnection of networks, Schaeffer said.

While the FCC declined to adopt specific regulations that would delineate unacceptable practices, the FCC said it would “continue to monitor Internet traffic exchange arrangements and have the authority to intervene to ensure that they are not harming or threatening to harm the open nature of the Internet.”

The FCC defended its actions in the Open Internet Order, citing broadband providers’ “ability to use terms of interconnection to disadvantage edge providers and that consumers’ ability to respond to unjust or unreasonable broadband provider practices are limited by switching costs.”

“When Internet traffic exchange breaks down — regardless of the cause — it risks preventing consumers from reaching the services and applications of their choosing, disrupting the virtuous cycle,” the FCC added.

The FCC probably prefers that big ISPs and others with whom they interconnect would get along — leaving the government out of their commercial affairs.

To a certain extent, that is the case. On May 1, for example, Cogent and Verizon announced entering into a long-term commercial interconnection agreement. The companies said the pact “ensures customers on the two networks can continue to exchange data in an effective and efficient manner.”

But Schaeffer said Cogent is still engaged in interconnection-related disagreements with Time Warner Cable Inc., AT&T and CenturyLink. He hopes to resolve those differences, although Cogent may ultimately bring its grievances to the FCC under the Net neutrality regulations if the commercial talks fail to yield fruit.

“I sincerely hope

that we do not have to do that, but it is possible that we will have to bring some complaints,” Schaeffer said.

Netflix, Other Content Companies Back Net Neutrality  

Several others in the Internet ecosystem also have thrown their weight behind the FCC in federal court. Web-based companies that have filed requests to intervene in the litigation and support the FCC include Netflix; Tumblr Inc., the online media network and platform; Vimeo LLC, which provides an Internet-based video service that enables the uploading and sharing of videos; Etsy Inc., a marketplace where individuals connect on the Web and offline to buy and sell goods; and Kickstarter Inc., a community to fund creative projects.

“As an edge provider whose services include delivery of high-definition video content, Kickstarter relies upon broadband Internet access carriers to reach its customers,” the company said in its motion to intervene. “Kickstarter would be disadvantaged if broadband Internet access carriers were permitted to block, throttle,or charge fees for traffic between Kickstarter and its users.”

FCC Faces Many Critics in Court

The FCC must defend its regulations against a number of powerful companies and organizations that make up a large swath of America’s broadband industry.

The agency’s adversaries in federal court include AT&T, Alamo Broadband Inc., the American Cable Association, CTIA-The Wireless Association, CenturyLink, National Cable and Telecommunications Association, the Wireless Internet Service Providers Association and Daniel Berninger, the founder of a nonprofit startup called the Voice Communication Exchange Committee.

CenturyLink, the third-largest U.S. telecom company, said the FCC’s recent move to subject broadband providers to Title II regulation is a poor decision.

“CenturyLink invests hundreds of millions of dollars a year to build, maintain and update an open Internet network and does not block or degrade lawful content. However, the FCC has chosen to subjugate the Internet to government-controlled public utility regulations from the 1930s,” the company said in a statement last month announcing its appeal. “These regulations not only have no place in the 21st century economy, but will chill innovation and investment. We are challenging the FCC’s misguided Net neutrality order for these reasons and because we believe it could lead to higher prices and fewer choices for consumers.”

Sprint, a CompTel member, declined to comment on its Net neutrality position. Windstream, another CompTel member, didn’t respond by deadline to a request for comment.