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Federal Internet Law & Policy
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VoIP: Blocking Dont be a FOOL; The Law is Not DIY


Madison River - FCC VoIP Blocking Investigation 2005

Complaint

According to Business Week

"Doug Herring, 48, got a glimpse of that specter last November. Traveling on business in Tennessee, the General Electric (GE) sales manager phoned his wife at their Elberta (Ala.) home. Herring had just signed up with Web-phone provider Vonage Holdings and was pleased with the service. But this time, he couldn't get through. He switched Web-phone providers, but still couldn't make calls. Frustrated, Herring contacted Madison River Communications, the rural phone company that provides his digital subscriber line (DSL) connection. The company said it was blocking calls from Internet phone companies."

[Yang] Some reports indicated that 200 Madison River customers attempted but were not able to use Vonage services. [WAPO 030405] [Vonage NY 2005 p. 14 ("In November 2004, Vonage received complaints from three of its customers that their Vonage service was not functioning. All three customers subscribed to Madison River's tariffed DSL service, and all had Vonage's service up and working before losing service. Vonage assigned engineers to work on the problem but, despite their multiple efforts, was unable to restore the service. Over a more than two week period, Vonage's customers spend hundreds of hours speaking repeatedly with Madison River and Vonage customer service about the problem, and spent thousands of dollars buying and returning unnecessary replacement equipment, only to learn later from Madison River that Madison Rivere management had made the decision to not support competing services, and for that reason the ports that support oIP were blocked on their system.")]

Early 2005, Vonage met with FCC staff concerning alleged blocking by telcos. [Vonage NY 2005 p. 14] News of the investigation broke in February 2005.

Analysis

Madison River provided customers with (1) physical network telecommunications service, (2) broadband Internet service, and (3) PSTN telephone service.

Madison River's telephone service would have been a major source of revenue for the company. Madison River therefore would have had an incentive to protect its telephone service from new entrant OTT VoIP competition such as Vonage (At this time service providers were just beginning to transition from a business plan where PSTN service was the major source of revenue, to a business plan where broadband Internet access is the major source of revenue). [Rosch p. 7 ("The speculation was that Madison River was motivated by its desire to protect its wireline phone service from the competitive threat posed by Vonage.")]

Madison River had the ability to protect its telephone service through its provision and control of the physical network and the use of port blocking. If Madison River blocked ports utilized by Vonage and competing VoIP providers, Madison River could erect a barrier to market entry, as Madison River was the sole route to Madison River customers (a.k.a. a terminating monopoly). [Vonage NY 2005 p. 14 ("By blocking the port associated with VoIP services, a broadband Internet access provider can prevent VoIP providers from providing their services.")]

Investigation

Authority: Investigation into compliance with 47 USC 201(b) ("All charges, practices, classifications and regulations for and in connection with such communications service, shall be just and reasonable, and any such charge, practice, classification, or regulation that is unjust or unreasonable is declared to be unlawful....") (Title II; Common Carriage)

"On February 11, 2005, the Enforcement Bureau issued a Letter of Inquiry (“LOI”) to Madison River, initiating an investigation. Specifically, the Bureau inquired about allegations that Madison River was blocking ports used for VoIP applications, thereby affecting customers’ ability to use VoIP through one or more VoIP service providers. Madison River submitted its initial response to the LOI on February 18, 2005, and supplemented that response on February 22, 2005." [Consent Decree para 3]

Resolution

March 3, 2005 FCC adopted the Consent Decree terminating the investigation. [Order 2005]

As this was a consent decree; no precedent was established. This was also not an APA rulemaking - no rule against this type of behavior was established. [Compare PC World 030805 (Statement of Vonage CEO Citron "It [the Consent Decree] showed clearly that blocking VoIP service violates FCC rules")] [Rosch p. 7 ("The allegations in Madison River, if brought as an antitrust complaint, would most likely have been a refusal to deal claim under the Sherman act.")]

The relevant terms of the Consent Decree where

  • Madison River agreed to pay a $15,000 fine
  • Madison River agreed not to block VoIP ports or otherwise prevent customers from using VoIP applications
  • Madison River waived any objection to the authority of the FCC Enforcement Bureau over this matter

[Consent Decree Paras 4, 5, 8]

Aftermath

Republican FCC Chairman Michael Powell calls for the protection of the open Internet (a.k.a. network neutrality) through consumer protection norms stating “In my view, the surest way to preserve ‘Net Freedom’ is to handle these issues in an enforcement context where hypothetical worriers give way to concrete facts and—as we have shown today —real solutions.” [Powell 2005]

During this time, the FCC's Internet over Wireline proceeding was pending. The FCC released its first articulation of network neutrality, the Broadband Policy Statement, and released its "Consumer Protection in the Broadband Era" Notice of Proposed Rulemaking on Sept. 23, 2005.

Madison River declined to comment to the press on the Consent Decree citing its pending IPO. [WAPO 030405] [Madison River News Archive](no mention of the dispute in its press releases or public relations)] In 2006, Madison River filed with the SEC to go public with an IPO. Centurylink acquired Madison River in 2008, and the IPO application was withdrawn. [Centurytel Press Release 2006] [Linker] [NASDAQ]

Aftermath: Hurricane Katrina hits Gulf Coast; frequently only telephony working is VoIP. Mayor of New Orleans talks to President using VoIP service. [See Madison River Communications Announces Impact Of Hurricane Katrina On Operations In Gulf Coast Region, Press Release Sept. 1, 2005]

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AT&T / Facetime 2012

Background

"In June 2012, Apple announced that FaceTime would be available over cellular data networks, though Apple acknowledged that carrier restrictions may apply.

"In August 2012, AT&T announced that, in the wake of Apple's lifting of its restriction on FaceTime use, AT&T would limit the use of FaceTime over its cellular data network to customers of its MobileShare plans, in which multiple devices share a single limit for total data usage. Customers with "unlimited" data plans would not be able to use FaceTime on AT&T's cellular data network [Open Internet 2015 Order n. 200 (AT&T initially restricted use of Apple’s FaceTime and iPad application to times when the end user was connected to Wi-Fi and thus to another broadband provider)]. The requirement for a specific plan would be enforced directly by the device, based on carrier settings (such as the current data plan or other eligibility information) learned from the carrier when the device authenticates with the cellular network." [OIAC]

"Application management on the device vs. the network: A carrier can block an application by discarding the packets it sends or receives; alternatively, a device such as a smart phone can prevent users from running a particular application, thereby keeping the traffic from ever reaching the network. In the AT&T/FaceTime case study, the usage of FaceTime on AT&T's network was limited directly on the device, rather than inside the network." [OIAC p. 4]

Complaint

Sept. 18, 2012: Public Interest groups served AT&T with a notice of intent to file a formal complaint for violation of the Open Internet Order. [Notice of Intent] [OIAC]

Notice that the facts themselves were not in dispute; merely the justification.

AT&T argued that it had not violated the 2010 Open Internet Rules because, as a mobile broadband Internet service,

Subsequently, AT&T did not argue that the 2010 Open Internet Rules did not apply to pre-loaded applications. Instead, AT&T justified its action based on the potential that Facetime traffic would have an "adverse impact" to the network. [Cicconi ("with the FaceTime app already preloaded on tens of millions of AT&T customers’ iPhones, there was no way for our engineers to effectively model usage, and thus to assess network impact. It is for this reason that we took a more cautious approach toward the app. To do otherwise might have risked an adverse impact on the services our customers expect – voice quality in particular – if usage of FaceTime exceeded expectations. ")]

Resolution

"On November 8, 2012, AT&T announced plans to support FaceTime on all of its tiered data plans for users with an LTE device, over the next 8-10 weeks. AT&T customers with non-LTE devices or unlimited data plans would still not have access to FaceTime over the cellular network. AT&T also began rolling out new billing plans to enable deaf and hard-of-hearing customers to use FaceTime." [OIAC]

"The Commission did not conclude whether such a practice violated open Internet principles" [Open Internet 2015 Order n. 200]

The public interest groups welcomed the developments but stated that would pursue a formal complaint "if AT&T fails to lift the restriction in a timely manner." [Sasso]. No formal complaint was ever filed in this matter.

Aftermath

One year later, the Open Internet Advisory Committee released a case study of the incident. In that report, the OIAC recommended that network management be application agnostic.

"In short, network management should focus on the underlying conditions that cause degraded performance of the network and address those conditions with solutions that optimize performance in a neutral manner for all users and applications. Such approaches -- indeed, all aspects of traffic management and engineering -- may require advanced planning to ensure that they are available when network conditions require them, but that fact makes them no less appropriate from a technical perspective. Application-agnostic network-management approaches should be considered and exhausted before application-specific approaches are even considered on a temporary basis, and customers should be able to have their choice of applications without having to change their data plans. Giving customers choice includes the option for user controlled quality of service, where users decide to favor traffic from one application over another, in allocating whatever share of network bandwidth they receive from the carrier. "

[OIAC p. 5]

Reference

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