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By Lydia Beyoud
Oct. 29 — Verizon “has no plans to engage in paid prioritization of Internet traffic,” the company said in response to a letter from Sen. Patrick Leahy (D-Vt.) asking it and other major Internet service providers (ISPs) to pledge not to engage in the practice.
Verizon Communications Inc. said Oct. 29 that the concept of paid prioritization, in which ISPs enter into agreement with online content companies to charge them for premium delivery service to consumers, is “a theoretical scenario.”
However, paid prioritization has proved one of the most galvanizing issues in the ongoing debate over what form of regulation the Federal Communications Commission's should rely on in its open Internet proceeding (MB Docket No. 14-28).
Verizon added that the FCC has adequate authority under Section 706 of the Telecommunications Act of 1996 to presumptively prohibit any forms of paid prioritization it deems harmful to competitors or consumers.
It also said calls for stricter Internet regulation under Title II of the 1996 Act are simple “demagoguery since no major ISP has expressed an interest in offering ‘paid prioritization' and all agree that the FCC has a valid legal path to prohibit it.” The company also said the market has found the means under current “light touch” Internet regulations to correct harmful practices by ISPs.
The FCC's current net neutrality rules would allow broadband providers to strike deals with content providers like Netflix Inc., Google Inc. or online video games to deliver their content faster to consumers.
Sen. Leahy, chairman of the Senate Judiciary Committee, sent letters to AT&T Inc., Charter Communications Inc., Comcast Corp., and Time Warner Cable Inc. the week of Oct. 20 asking them to make “concrete” commitments to oppose paid prioritization.
In the letters, Leahy said although he recognized some ISPs had already committed to a no-paid prioritization stance, he remained “gravely concerned that if such agreements are permitted, market incentives may drive” ISPs to change their positions in the future.
AT&T has suggested an alternate path for the FCC to consider in regulating paid prioritization deals.
“User-directed” prioritization arrangements don't pose the same risks as non-user-directed prioritization, AT&T said in an Oct. 24 filing. User-directed prioritization involves customers asking their ISP to prioritize specific types of content or services they want to receive by prioritized delivery in the event of network congestion. Such arrangements are already common between broadband providers and business customers, the company said.
The FCC has the authority under Section 706 to allow such arrangements while prohibiting other paid prioritization arrangements deemed harmful, without treading into Title II regulation, AT&T said.
“Customer-selected prioritization is fine up to a point,” but should be distinguished from transactions involving payment, Matt Wood, policy director at Free Press, told Bloomberg BNA by e-mail.
AT&T said in its filing that Free Press and other advocates for Title II net neutrality regulation haven't opposed user-directed prioritization arrangements.
Wood said there were important distinctions to be drawn, however, in how such arrangements might be structured.
Consumers should be able to—and often can already—choose what type of Internet traffic to prioritize over others, he said. But he drew a line at ISPs subsequently demanding payment from content providers of the content that a consumer chooses to prioritize.
“AT&T shouldn't be allowed to extract a new fee from the content provider just because of how I choose to access their content,” said Wood.
To contact the reporter on this story: Lydia Beyoud in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Heather Rothman at email@example.com
Text of Verizon's letter to Sen. Leahy is at http://publicpolicy.verizon.com/assets/images/content/Leahy_Response_Final_10-29-14.pdf.
Text of AT&T ex parte filing is at http://op.bna.com/der.nsf/r?Open=sbay-9qcps9.
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