Verizon, AT&T split on approach to FCC

After weeks of discussions with the Federal Communications Commission (FCC), the nation's two largest phone companies still have disagreements on what kinds of net-neutrality rules they can swallow.

With FCC Chairman Julius Genachowski preparing to reveal his net-neutrality plans possibly as early as Tuesday, AT&T and Verizon have been split in their approaches to agency deliberations this month.


Verizon has been publicly icier than AT&T about the prospect of an FCC-led net neutrality compromise, making a concerted effort to elbow the decision back into Congress.

AT&T has publicly stated a desire to reach an FCC-led deal. The company has engaged heavily with the FCC this month, unleashing a flurry of activity aimed at shaping the an FCC decision through both public and private maneuverings.

While AT&T posted over 10 net-neutrality ex parte documents with the FCC this month, indicating meetings with agency officials, Verizon posted fewer than half that.

A phone call between Verizon's chief executive Ivan Seidenberg and Genachowski last week did provide a significant sign of Verizon engaging the commission. According to an advance copy of Verizon's ex parte filing, Seidenberg communicated that harmful FCC rules could "effectively dictate the structure of what is a new and evolving industry."

Still, AT&T's chief executive Randall Stephenson beat him to it, talking to Genachowski on the phone on the day before Seidenberg's phonecall.

Beyond their engagement levels, daylight has appeared between AT&T and Verizon on policy.

Verizon is the lone stakeholder pushing the FCC to add a "sunset provision" to net-neutrality rules, causing the regulations to vanish after two years. By contrast, AT&T is opposed to that language, according to industry sources.

A Verizon spokesman said the company likes the sunset idea because it shows deference to Congress, buying time for lawmakers to solve broadband questions on Capitol Hill. 

Some industry sources said Verizon's desire to throw a contentious issue into the potentially gridlocked Congress suggests the company might not want a resolution at all.

Days after it became public that the FCC is trying to reach a solution on its own, Verizon released a statement calling for Congressional action on broadband issues.

"Congress must act to address telecommunications policies that are broken," the statement said.

Verizon's top policy executive Tom Tauke, a former Republican House member from Iowa, has been fervent about addressing the issue through legislation. He has sometimes undermined the prospects of an FCC compromise.

He told Communications Daily this month that "external constraints" would make it difficult "to execute on the net neutrality issue, at least in the foreseeable future."

He also said "action now" could get the FCC off on the "wrong foot" with the Republican House.

(Tauke is not alone in his analysis. As a Democratic House aide told The Hill on Monday, the Republican will go "ballistic" if the FCC tries to push ahead).

While suggesting compromise may be possible, Tauke also said that House Republicans may be miffed that industry is working with the FCC on its regulatory agenda.

It is unclear why or if AT&T might be more amendable to a deal than Verizon, as they share similar business interests.

Analysts suggested some game plans in the net-neutrality fight are coming from a higher power than Washington executives.

"I suspect its a CEO level issue now, " said Paul Gallant, a telecom and media analyst at MF Global. "I wouldn't attribute [potential divergences] to different views of [Verizon's] Tom Tauke and [AT&T's] Jim Cicconi. I would guess the CEOs are are making calls on it as a business issue."

Verizon and AT&T have split on net neutrality in the past. As both companies worked to negotiate with the FCC over the summer on a potential compromise, Verizon worked out a separate agreement with Google. Genachowski said that maneuver worked to slow down the FCC's efforts.

AT&T downplayed any divergences between its net-neutrality stances and Verizon's.

"This industry, wired, wireless and cable, has been united on the net-neutrality issue for years," AT&T spokesman Michael Balmoris said on Monday. "We remain united on all the major substantive points."