The FCC cares about peering fights, but how will it act?

Ruth Milkman, Chief of Staff for FCC Chairman Tom Wheeler discussed the fights in the interconnection market today at a speech at the Progressive Policy Institute, signaling that the FCC may be ready to act on the issue of last mile ISPs such as Comcast, charging content companies like Netflix, Apple or Google for the right to directly interconnect with their networks.

Such fights have been in the news this year as consumer broadband quality on some services has suffered and as content companies and middle mile transit providers that link edge providers to last mile ISPs try to make the issue a network neutrality fight. What’s clear based on a previous interview with FCC chairman Tom Wheeler back in January and reiterated today by Milkman, is that the FCC views interconnection as an integral element of the 21st century network, and that the FCC won’t tolerate companies trying to block that connection.

But the real question for the agency heading into the network neutrality debate this year, is how it plans to tackle the problem — from the agency’s perspective it may still be unclear that there is a problem given we and the agency know so little about the terms of these deals. I’ve had sources at the agency explain that peering will be a big issue this year, and companies like Netflix and Level 3 are certainly making the case for FCC intervention.

Milkman discussed the history of the railroads and how governments have mandated network interconnections in the past, drawing several comparisons to the regulations the FCC imposed on the wireline telephone network. “Disconnected networks do not serve the public interest,” Milkman said before tying it back to Wheeler’s network compact and vision for how the agency will regulate communications under his tenure.

In the telephone network examples Milkman gave she discussed device openness, how telephone companies had to let a variety of devices connect to the network as opposed to only allowing phones made by AT&T for example. In other cases, the FCC mandated how new technologies in wireless communications were tied into the telephone network and even set rates on how much telcos could charge competitors for accessing their networks. But she fell short of saying the FCC was looking at any of this as an option for peering problems.

Instead the FCC, despite having tentatively decided that peering is not a network neutrality issue, will seek comments as part of its network neutrality notice of proposed rule making issued earlier this month. It also is keeping an eye on complaints in the market, but fell short of demanding data in this particular venue. The FCC seems to be trying to avoid making a bold declaration on this issue for the time being, encouraging players to explain their peering policies and positions, while reiterating how important a fair interconnection market is.

Is that enough to keep players honest, especially as broadband becomes more important to consumers and businesses, and as players in both the last mile and content side of the business consolidate? We actually have no idea since we don’t have enough data on this market to begin to make calls about how we should or should not regulate it.