Can @FCC look at peering arrangements? No

The New York Times yesterday reported that Federal Communications Commission chairman Tom Wheeler wants to take a look at peering arrangements.  Here is a definition of peering provided by

“Peering is the arrangement of traffic exchange between Internet service providers (ISPs). Larger ISPs with their own backbone networks agree to allow traffic from other large ISPs in exchange for traffic on their backbones. They also exchange traffic with smaller ISPs so that they can reach regional end points. Essentially, this is how a number of individual network owners put the Internet together. To do this, network owners and access providers, the ISPs, work out agreements that describe the terms and conditions to which both are subject. Bilateral peering is an agreement between two parties. Multilateral peering is an agreement between more than two parties.

Peering requires the exchange and updating of router information between the peered ISPs, typically using the Border Gateway Protocol (BGP). Peering parties interconnect at network focal points such as the network access points (NAP) in the United States and at regional switching points. Initially, peering arrangements did not include an exchange of money. More recently, however, some larger ISPs have charged smaller ISPs for peering. Each major ISP generally develops a peering policy that states the terms and conditions under which it will peer with other networks for various types of traffic.

Private peering is peering between parties that are bypassing part of the public backbonenetwork through which most Internet traffic passes. In a regional area, some ISPs exchangelocal peering arrangements instead of or in addition to peering with a backbone ISP. In some cases, peering charges include transit charges, or the actual line access charge to the larger network. Properly speaking, peering is simply the agreement to interconnect and exchange routing information.”

I decided to post this definition to give readers a taste of the complexity of peering arrangements.  The FCC may have a bit of time discerning paid from free exchanges of traffic as well as figuring out whether they are looking at a private arrangements circumventing the public Internet or one that is indeed running over networks used by everyone.

Mr. Wheeler may be throwing a ratchet into the definition of net neutrality with this initiative.  Net neutrality has so far focused on the relationship between an end-user of Internet services and her broadband access provider.  Peering arrangements don’t fall into that traditional net neutrality box since the relationship is between broadband providers, edge providers, or content distribution networks. In addition, Mr. Wheeler made clear last week before a House sub-committee on communications and technology that net neutrality was about that “last mile” connectivity between broadband providers and end-users.  If he is changing the definition, does he have a legal leg to stand on?

Well, he can’t look to Title II.  Section 251 of the Communications Act describes interconnection requirements for telecommunications companies and the intent behind that section was to help spur competitive markets for local telephone service.  Unless Mr. Wheeler is ready to make a dangerous Title II reclassification move, I don’t see him going down that road on peering arrangements.

How about under Title I, specifically section 157 which encourages the provision of new services to the public.  I don’t see a winner here either.  Peering arrangements are not services for the public.  They are network management strategies employed by network owners to regulate and manage traffic.  Sure in the end the end-user may benefit when traffic flows to his computer, but peering arrangements may not be for consumer traffic and the FCC would have to determine which portion of traffic is flowing for what purpose.

Finally, section 1302 of the Act, otherwise known as section 706 of the Telecommunications Act of 1996, doesn’t seem to help out Mr. Wheeler either.  Yes, the section calls for incentivizing deployment of advanced telecommunications services through regulatory mechanisms such as price cap regulation, regulatory forbearance, or other methods that remove barriers to investment, but again peering is about network interconnection, not about encouraging local telecommunications competition.  The local competition boat successfully left the regulatory harbor years ago and demand for broadband services and the benefits of the Internet appear to be encouraging infrastructure development on its own.

No, the FCC need not look at peering arrangements.

About Alton Drew

Alton Drew brings a straight forward and insightful brand of political market intelligence. Alton Drew graduated from the Florida State University with a Bachelor of Science in economics and political science (1984); a Master of Public Administration (1993); and a Juris Doctor (1999). You can also follow Alton Drew on Twitter @altondrew.
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