FCC 'Intentionally Ignored' Content Companies Blocking ISPs, Says ACA Head

The FCC intentionally ignored edge providers and content companies blocking ISP customers in its new net neutrality rules, said ACA Board Chairman Robert Gessner in a press conference at the association's Summit 2015. FCC officials had acknowledged the issue as a problem that could be addressed by the commission but abandoned that stance after President Barack Obama supported Communications Act Title II regulation, ACA President Matt Polka said. ACA representatives and speakers at the event Wednesday also discussed the Comcast/Time Warner Cable merger and future FCC policies on retransmission consent and program carriage.

Polka and Gessner faulted the FCC for not including a carve-out in the Internet order that would have kept the Title II rules from applying to smaller operators. Though Chairman Tom Wheeler's aide Gigi Sohn -- interviewed onstage at the event -- pointed to a provision in the still-unreleased order exempting companies with fewer than 100,000 subscribers from disclosure rules, ACA Senior Vice President Ross Lieberman said it wasn't sufficient.

Polka and Gessner said it was consistent for the ACA to oppose Title II regulation of the Internet but advocate for rules stopping content providers from blocking ISP traffic because ACA supports rules barring throttling, blocking and paid prioritization. The FCC is regulating companies as “gatekeepers” regardless of size, Polka said.

Asked if ACA was planning to challenge the net neutrality rules, Polka said all options are on the table, including litigation and lobbying lawmakers. In a later panel Wednesday, Cinnamon Mueller cable attorney Barbara Esbin, who represents ACA, pointed to the lack of a carve-out for smaller providers as a possible avenue of legal attack on the rules. Challengers could claim the commission had not assessed how the new rules would affect smaller operators compared with larger ones, she said. The difference between the final rules and the NPRM that preceded them also could be used to challenge the rules under the Administrative Procedure Act, she said. The net neutrality rules are a “grave concern” to small cable operators, Gessner said.

The FCC's review of the Comcast/ Time Warner Cable deal has resembled a Department of Justice review more than previous FCC merger reviews, Lieberman said. Comcast hasn't gotten the merger review it was initially expecting, he said. Transaction opponents Public Knowledge Senior Staff Attorney John Bergmayer and Dish Deputy General Counsel Jeffrey Blum both said they no longer believe the merger will be approved. The FCC's investigation has been serious, but Comcast welcomes that, said Davis Polk attorney Jon Leibowitz, a former FTC chairman who now represents Comcast. There doesn't seem to be any reason for regulators to block the merger, he said. The merger review process appears to be about halfway over, judging by the FCC's progress, Lieberman said.

Wheeler wants the FCC to accomplish more in 2015 than it did the previous year, Sohn told the summit. FCC priorities include the incentive auction, the multichannel video programming distributor mergers, and including over-the-top providers under the MVPD rubric, she said. The latter proceeding is intended to update the commission's rules for current market realities and protect consumers by preventing companies from avoiding MVPD rules by going all OTT, she said. Wheeler believes the retransmission consent market needs to be repaired, she said, and sees the Satellite Television Extension and Localism Act Reauthorization Act-wrought changes on joint negotiation as “a first step.”