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In the Matter of Preserving the Open Internet Broadband Industry Practices COMMENTS OF VERIZON AND VERIZON WIRELESS

In the Matter of Preserving the Open Internet Broadband Industry Practices COMMENTS OF VERIZON AND VERIZON WIRELESS

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Published by: John "CZ" Czwartacki on Jan 19, 2010
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10/23/2011

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Before theFederal Communications CommissionWashington, DC 20554
In the Matter of Preserving the Open InternetBroadband Industry Practices))))) GN Docket No. 09-191WC Docket No. 07-52
COMMENTS OF VERIZON AND VERIZON WIRELESS
Of Counsel:
Walter E. DellingerIrv GornsteinO’Melveny & Myers LLP1625 Eye Street, NWWashington, DC 20006Michael E. GloverEdward ShakinWilliam H. JohnsonVERIZON1320 North Court House Road9th FloorArlington, Virginia 22201(703) 351-3060Henry WeissmannMunger, Tolles & Olson LLP355 South Grand Avenue35th FloorLos Angeles CA 90071-1560John T. Scott, IIIWilliam D. WallaceVERIZON WIRELESS1300 I Street N.W.Suite 400 WestWashington, DC 20005January 14, 2010
 
TABLE OF CONTENTSI.
 
Introduction and Summary..............................................................................................1
 
II.
 
The Entire Broadband Ecosystem Is Characterized by Competition,Investment, and Innovation and Is Serving Consumers Well.....................................12
 
A.
 
The Internet Today Is Thriving..........................................................................12
 
B.
 
Broadband Internet Access Services In Particular Are HighlyCompetitive and the Subject of Massive Ongoing Investment........................14
 
1.
 
Competition and Investment in Fixed Broadband Networks andServices......................................................................................................16
 
2.
 
Wireless Competition and Investment...................................................21
 
3.
 
Cross-Platform Competition – Rollout of 4G Wireless........................29
 
III.
 
The Commission Identifies No Problem That Needs To Be Addressed andProvides No Other Valid Rationale for Its Proposed Rules.........................................31
 
A.
 
The Commission Identifies No Factual or Empirical Evidence of HarmRequiring Regulatory Intervention....................................................................31
 
B.
 
The Commission’s Speculation About Broadband Providers’ TheoreticalIncentives and Abilities To Harm Consumers Is Wrong.................................33
 
C.
 
In Any Event, Other Segments of the Internet Ecosystem Would Havethe Same Theoretical Incentives and Abilities the Commission Attributesto Broadband Providers......................................................................................36
 
IV.
 
To Continue the Success of the Internet, the Commission Should Focus onPreserving and Promoting Incentives for Investment and Innovation andEnabling Informed Consumer Choice...........................................................................40
 
A.
 
The Commission Must Preserve and Promote Incentives to Invest andInnovate................................................................................................................40
 
B.
 
The Commission Should Promote Informed Consumer Choice.....................49
 
V.
 
Rather Than Encouraging Consumer Choice, Innovation, and Investment,the Proposed Rules Would Be Affirmatively Harmful To Consumers’Interests.............................................................................................................................50
 
A.
 
 Any
Prescriptive Rules Will Have Unintended Consequences that HarmConsumers............................................................................................................51
 
B.
 
Applying Net Regulation To Wireless Broadband Services Would BeEspecially Unjustified and Harmful To Consumers.........................................58
 
 
 ii
C.
 
The Commission’s Proposed Nondiscrimination Rule – Including ItsUnprecedented and Unjustified Introduction of Price Regulation for theInternet – Would Hamper Innovation and Investment and HarmConsumers............................................................................................................66
 
D.
 
Any Limitations on “Managed” or “Specialized” Services Would StifleInnovation and Limit Competition and Consumer Choice..............................77
 
E.
 
The Proposed Rules Would Place Into Doubt Whether Providers CouldEngage in Network Management Needed To Better Serve and ProtectConsumers............................................................................................................81
 
F.
 
A Decision To Open the Door To Internet Regulation Could HaveSignificant Harmful International Ramifications.............................................84
 
VI.
 
The Proposed Rules Would Be Unlawful.......................................................................86
 
A.
 
The Commission Lacks the Authority To Adopt the Sweeping RulesProposed Here......................................................................................................86
 
1.
 
The Commission May Exercise Ancillary Authority Only inLimited Circumstances............................................................................88
 
2.
 
The Commission Does Not Have Ancillary Authority To Imposethe Proposed Broad Net Neutrality Rules.............................................93
 
3.
 
The Ancillary Authority Theories Used in an Attempt To JustifyNet Regulations, if Accepted, Would Give the Commission Far-Reaching Authority Over the Internet.................................................107
 
B.
 
The Proposed Rules Would Not Withstand Constitutional Scrutiny...........109
 
1.
 
The Presence of Substantial Constitutional Problems Limits theCommission’s Authority to Adopt Net Regulations...........................109
 
2.
 
The Commission’s Proposed Net Neutrality Rules Violate TheFirst Amendment...................................................................................111
 
3.
 
The Commission Lacks Authority To Adopt Rules Because TheyWould Result in an Uncompensated Taking.......................................119
 
C.
 
Adoption of the Proposed Rules Would Be Arbitrary and Capricious........123
 
1.
 
The Commission Lacks a Reasoned Basis for Departing from ItsPrior Orders...........................................................................................124
 
2.
 
The Proposed Regulations Are Arbitrary and Capricious BecauseThey Discriminate Between Similarly Situated Entities....................129
 
VII.
 
Other, Less Restrictive Alternatives Would Better Serve Consumers.....................130
 

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