Martin Discusses Complaints Against Comcast and Verizon Wireless

March 7, 2008. Federal Communications Commission (FCC) Chairman Kevin Martin gave a speech at Stanford University's law school.

He discussed open wireless platforms, quantifying broadband deployment, network neutrality, the pending complaint against Comcast, the pending complaint against Verizon Wireless, and VOIP patent litigation. Martin spoke harsh words about Comcast's network management practices, which affect consumers' use of BitTorrent. In contrast, he distinguished the petition against VW regarding blocking of certain text messages on the basis that VW promptly changed its practice.

The FCC did not release either a prepared text or transcript of this speech. This article quotes from an audio recording in the Stanford web site.

Martin (at right) identified three issues, (1) "implications for innovation on the wireless networks, and how that innovation was often stymied by the inability to easily get those applications placed on the wireless network today", (2) "where the United States ranks in terms of its broadband deployment" and how this is measured, and (3) "wireline broadband networks and their ability or their potential ... to engage in arbitrary blocking of content and applications".

Open Wireless Platforms. He said that the 700 MHz spectrum auction, which began in January, led to debate over wireless rules. He described the nationwide 22 MHz block with a "more open platform" requirement.

He said that the auction has so far been successful, in that the minimum threshold has been met and surpassed. He also said that the auction rules, and the push by open handset coalition, with its Android, "will push the entire industry to take a more open approach". See, story titled "Open Handset Alliance Announces Android and New Members" in TLJ Daily E-Mail Alert No. 1,670, November 6, 2007.

He also cited the subsequent announcement by Verizon Wireless as evidence of a change in approach by the wireless network operators. See, story titled "Verizon Wireless to Open its Network to Others' Devices, Software and Apps" in TLJ Daily E-Mail Alert No. 1,681, December 1, 2007.

Broadband Data. Martin next discussed "broadband penetration" and how the U.S. compares to other nations. He said that "we have seen a significant increase in penetration rates" in the U.S. regardless of whose data is examined, the FCC's or Pew's.

He continued that "we have ... taken some important steps and made a significant amount of progress", not only in broadband penetration, but also in the manner in which the FCC collects and reports data.

He noted that the FCC has proposed to raise minimum speeds for what is considered to be broadband. Also, the FCC is "looking at how many people are actually subscribing". Previously, the FCC examined whether broadband was available to one person in a zip code, rather than how many people were actually subscribing there.

Network Neutrality. Martin next discussed the "network neutrality debate". He said that "in general, the government and the Commission needs to make sure that we are stepping out of the way and allowing for innovation to continue in the marketplace".

He also stated: "recognizing that it is the marketplace itself is going to be the one that is going to deliver those benefits of innovation and choices to consumers".

But, he added that "this doesn't mean that the government doesn't have a role to play. And I think that it has two significant roles, one in creating a regulatory environment that promotes investment and competition, setting the rules, so to speak, of the road, so that you are going to allow that kind of competition to occur". Also, the government must act "to achieve broader social goals", such as on "public safety issues" and "consumer protection issues".

He said that it was in "this vein" the FCC adopted "principles" in 2005, providing for "significant economic deregulation", but at the same time adopting a "policy statement".

The FCC adopted this Policy Statement [3 pages in PDF] on August 5, 2005. See, story titled "FCC Adopts a Policy Statement Regarding Network Neutrality" in TLJ Daily E-Mail Alert No. 1,190, August 8, 2005. The FCC released the text of the Policy Statement on September 23, 2005. See, story titled "FCC Releases Policy Statement Regarding Internet Regulation" in TLJ Daily E-Mail Alert No. 1,221, September 26, 2005.

The 2005 FCC policy statement provides that "consumers are entitled to access the lawful Internet content of their choice ... consumers are entitled to run applications and use services of their choice, subject to the needs of law enforcement ... consumers are entitled to connect their choice of legal devices that do not harm the network ... consumers are entitled to competition among network providers, application and service providers, and content providers."

Martin recited these principles in his speech at Stanford. He elaborated that these principles are "subject to reasonable network practices", and that there will be "enforcement" going forward. He also noted that this 2005 statement of policy contained no "non-discrimination" principle.

He next stated that the FCC has enforced the principles contained in its policy statement, in the Madison River case, in which a telecommunications company was blocking consumers' access of VOIP communications. See, story titled "FCC Stops Broadband Provider From Blocking VOIP Traffic" in TLJ Daily E-Mail Alert No. 1,089, March 7, 2005.

Comcast Complaint. The FCC is considering complaints that networks operators are violating these principles or Title II of the Communications Act.

Martin discussed these at length. However, prior to the question and answer portion of the program, he only referenced the complaint against Comcast. He said that the Comcast matter involves "blocking or delaying consumers' access and ability to use BitTorrent applications".

On November 1, 2007, the Free Press and others filed a complaint [48 pages in PDF] with the FCC that alleges that Comcast is "degrading peer-to-peer protocols" by inserting forged reset packets into communications between peers in peer to peer (P2P) communications that terminate those communications. This, the complaint alleges, interferes with Comcast's subscribers use of applications like BitTorrent, and violates the FCC's 2005 Policy Statement. See, story titled "Free Press Files Complaint with FCC Alleging that Comcast Is Violating 2005 Policy Statement" in TLJ Daily E-Mail Alert No. 1,669, November 1, 2007.

Martin said that the "Commission is going to live up to its commitment to enforce these principles, and to do so in a way that tries to preserve the ability for innovation and entrepreneurship to occur on the wireline network, and specifically recognizes that the Commission has the jurisdiction to address these issues".

He said that "the question directly in front of the Commission is what are the reasonable network management practices that a company can engage in"?

He said that "there are several factors that I think should inform the Commission's answer to those questions". First, he said, is "adequate disclosure of the practices that are occurring. A hallmark of what should seem like a reasonable business practice is certainly whether or not the people who are engaging in that practice are willing to describe that publicly. One of the most troubling aspects of  the complaints in front of us is that at first the network operator at first denied that they were engaging in the practice publicly, and indeed, the manner in which they were engaging in this practice had actually altered the return address effectively of the code, of the bits that they were inserting, the reset bits, so that it looked like it was coming from someone else. I think that those are two of the more troubling aspects of the assertions that these were reasonable network practices."

He was not explicit in his speech that it was Comcast to which he was referring.

He continued that "on a going forward basis when we talk about adequate disclosure", the Commission "needs to emphasize two components, both that the people who are developing applications need to fully understand the manner in which their applications could be limited by the network practices that are being engaged in. That requires that the network operators to make sure that they are adequately disclosing under what circumstances any of these network management practices can en up being triggered".

"And second, we need to make sure that those network operators are adequately disclosing to consumers the implications for any of their network management practices, in terms of the broadband access that they are selling."

Finally, he said that the Commission will consider "whether or not particular applications are being singled out for different treatment arbitrarily, versus, to actions that would apply to all kinds of similarly situated applications, or content. To the extent that there are arbitrary distinctions made about particular applications or companies, as opposed to general practices that would apply on a more widespread basis. I think that will also trigger heightened scrutiny by the Commission, really cause them to question the reasonableness in terms of network management practices."

While these statements do not bode well for Comcast, Martin added that "Commission has not yet acted on any of the complaints. We are still evaluating the underlying facts".

Martin concluded his speech by stating that how the FCC handles these issues sends a message internationally, and has implications for democracy, and the empowering aspects of the internet.

Verizon Petition. Gigi Sohn, head of the Public Knowledge, asked Martin about another complaint pending before the FCC, alleging text message blocking by Verizon. She asked whether the FCC would hold a hearing on that.

The PK and other groups filed a Petition for Declaratory Ruling [33 pages in PDF] with the FCC on December 11, 2007. See, story titled "Public Knowledge Asks FCC to Declare that Blocking and Refusing to Carry Text Messages Violates Title II" in TLJ Daily E-Mail Alert No. 1,686, December 11, 2007.

That petition alleges that "Mobile carriers currently can and do arbitrarily decide what customers to serve and which speech to allow on text messages, refusing to serve those that they find controversial or that compete with the mobile carriers' services."

Martin said that this is "also an important issue". However, he distinguished the Verizon matter from the Comcast matter on the basis that Verizon promptly changed its practice, while Comcast has not.

He explained. "The difference, I think, Verizon, after that initial complaint, even before the initial complaint was filed, acknowledged that they shouldn't have engaged in that practice, and has stated that they have reformed their processes, so that is not a problem going forward. I don't disagree that doesn't mean that the Commission doesn't have to respond to the concerns that are addressed, and I think that we should focus on that issue as well. I think though that the context is completely different when the carrier, has, 24 hours of the stories that broke about this practice that they engaged in, has stated that it was a mistake that it occurred, it shouldn't have occurred, and they stated that they have changed their practices on a going forward basis. It think that one of the distinctions between the Verizon practice and Comcast practice is that Comcast is still claiming that these are appropriate network management practices on a going forward basis, which Verizon is conceding that they, that it was not only inappropriate, that they are no longer engaging in it."

VOIP Patent Litigation. Martin was also asked about civil lawsuits against companies alleging patent infringement in connection with VOIP technologies. He was asked "does the Commission have a role in overseeing or intervening with respect to patent litigation that may impact the ability of the parties you regulate to use telecommunications"?

Martin responded that "we don't have a direct role in the patent litigation issues surrounding whether or not applications that are developed by" some are violations of the patents of others. Hence, he said that "that is not an area that the Commission traditionally ends up getting into".

But, he added "the Commission has recognized the importance of some of the competitive aspects of applications developers to compete with the underlying network operators, and, like the Vonages, to be able to compete with the underlying, for business with the network operators ...".

And, he stated that "I think that that has been offset to some degree by some of the other network operators putting in place their own voice over IP applications", such as cable companies.

Martin also responded to a question about the timing of its decisions on pending petitions. Martin that that he wants the Commission to act "quickly", and that it may act in the "first half of this year", and "sometime in the second quarter of this year".