U.S. Cellular partner, Cellcom and other small carriers oppose using Title II for net neutrality rules

A group of smaller, regional carriers has come out against reclassifying broadband as Title II common carrier service. The stance, the latest action in the ongoing net neutrality debate, aligns the smaller carriers with their larger wireless carrier rivals on the issue. 

The carriers issued their position on the topic in a letter that came after a report from the New America Foundation think tank that argued carriers can put in place strong network neutrality rules that prohibit any discriminatory treatment of third-party applications or content despite repeated claims from the industry that wireless networks should be exempted from heavy net neutrality regulations.

In a letter flagged by CTIA, executives from U.S. Cellular (NYSE:USM) partner King Street Wireless, Cellcom, Bluegrass Cellular, Carolina Wireless and Cavalier Wireless argued the FCC should not embrace reclassification under Title II. President Barack Obama on Monday advocated for reclassification, setting off an avalanche of commentary and debate over how the FCC should proceed in crafting net neutrality rules.

"All wireless carriers operate in a dynamic environment with varying user demand and fluctuating interference conditions, and we need the flexibility to aggressively manage traffic to provide consumers the mobile broadband experience they expect," the executives wrote. "Rigid new rules grounded in a 'fixed world' perspective would upend and disrupt this mobile broadband experience and harm those carriers providing broadband access to the most rural and remote communities across the nation."

The carriers argued that as regional providers "it is critical that we have the ability to differentiate our services as we seek to compete against larger national mobile broadband providers. Our relationships with our customers are vital to our success, so we are strongly incented to seek out new and innovative pro-consumer offerings, and to examine alternative ways to deliver services that will be valuable to our consumers."

"Applying an outdated and backward-looking Title II common-carriage regime to our services would also stifle innovation and investment and would do a disservice to rural America," the companies noted. "Similarly, Commission adoption of expansive no-blocking rules or 'commercially reasonable' standards for mobile broadband would hinder smaller carriers' ability to engage in practices designed to improve network performance or offer the alternative business models at the heart of competitive differentiation."

Verizon Communications (NYSE: VZ), AT&T (NYSE: T) and T-Mobile US (NYSE:TMUS) have all publicly come out against Title II reclassification, while Sprint (NYSE: S) has declined to comment on Obama's statement. In general, CTIA and wireless carriers have rejected calls that wired net neutrality rules be applied to wireless networks, arguing that wireless carriers should have more flexibility in how they manage their networks due to spectrum and other technical constraints.

T-Mobile, in particular, defended its "Music Freedom" program, which exempts subscribers' usage of a dozen music streaming services from counting toward their data buckets. T-Mobile said the program does not violate net neutrality principles. "All lawful music streaming services can participate, services are not charged to participate, and the music streaming traffic is not treated differently on the network," T-Mobile said in a filing to the FCC. "The Commission should reject any suggestion that such pro-consumer offerings should be restricted--or that such offerings even raise net neutrality concerns."

However, the New America Foundation report rejected the arguments carriers have made. The report included an engineering study, conducted by the foundation's Open Technology Institute (OTI), that concluded that LTE networks are "capable of managing moderate congestion through prioritization protocols that are application-agnostic (e.g., user-directed prioritization). When faced with severe congestion, such as at a major sporting event, LTE networks are able to prioritize delay-sensitive traffic while avoiding discrimination among like applications, content, or services."

Andrew Afflerbach, principal author of the report and CEO and Director of Engineering at CTC Technology and Energy, said the study "shows that moderate congestion can be handled with application-agnostic prioritization, such as offering consumers a premium speed tier. And even when congestion is severe, LTE has the capability to prioritize delay-sensitive applications in a completely non-discriminatory fashion that does not favor carrier-affiliated apps, content or services."

In response, Scott Bergmann, CTIA's vice president of regulatory affairs, said in a statement that "the differences related to mobile broadband that must be reflected in any final rules are not just technical. The competitive nature and dynamic conditions facing wireless providers need to be fully reflected as well. CTIA continues to believe that any effort to shackle the mobile industry with inappropriate regulation would threaten the enormously successful and innovative mobile ecosystem and deter future investment in mobile infrastructure by American providers."

Meanwhile, the FCC has sought to tamp down concerns that Chairman Tom Wheeler is at odds with Obama's stance on net neutrality following a Washington Post report from earlier this week that said Wheeler was "moving in a different direction" than Obama and quoted Wheeler saying he would need to "split the baby" between competing approaches.

The Huffington Post reported that, according to unnamed sources familiar with the matter, Wheeler told a gathering of business representatives and public interest groups that he was taking the president's comments under advisement and that he would need the groups' support in the battle to craft new rules. Wheeler did not say he wanted to go in a different direction than what the White House has pushed for, the report said.

"There was absolutely nothing he said that indicated that he was going to diverge from the president," Gigi Sohn, who serves as special counsel for external affairs to Wheeler and who was at the meeting, told the New York Times. "What he said was all options are on the table."

For more:
- see this letter (PDF)
- see this New America Foundation release and report (PDF)
- see this Huffington Post article
- see this NYT article

Related Articles:
Verizon's Shammo: If net neutrality passes, it will create a litigious environment
As Wheeler pushes against Obama, FCC's net neutrality vote delayed until next year
T-Mobile's Legere opposes reclassifying broadband under Title II in net neutrality debate
Obama calls on FCC to enact 'strongest possible' net neutrality rules, including for wireless
FCC's Wheeler proposes two-tier net neutrality plan for broadband services
Comcast, AT&T swear they don't do fast lanes … as FCC ponders rules that will allow them

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