FCC faces net neutrality hurdles, questions going forward
As comments on net neutrality pour into the Federal Communications Commission this week, fresh doubt has emerged over whether the agency even has the ability to enforce proposed new rules over broadband Internet service providers.
If a federal court decides that to be true, the FCC will weigh options that would give it clear authority as the watchdog of the on-ramps to the Web: Internet service providers. Among ideas is a broad reclassification of broadband Internet services under phone rules (Title II) that would concretely put ISPs under the scope of the agency, according to sources at the FCC.
Last Friday, three federal judges appeared to question the FCC’s scope of jurisdiction over ISP services when the agency said in 2008 that Comcast had illegally blocked the Internet file-sharing application BitTorrent. The court is continuing to hear Comcast’s appeal, and analysts are betting that the judges will decide in favor of the nation’s biggest cable and Internet service operator on the grounds that the FCC only has “ancillary jurisdiction” over broadband services.
What does that mean going forward? FCC Chairman Julius Genachowski said at the Consumer Electronics Show last week that it will vigorously defend its assertion that it has authority. And the FCC says it is still holding out hope that the federal appeals court in the District will decide in the agency's favor. But short of that, analysts say the FCC has one of two obvious choices: to seek authority from Congress or to overhaul current regulatory frameworks and reclassify broadband access rules under Title II, or common carriage rules.
“Seems like the moment for the FCC to open up questions for wide comment about the regulatory classification of high-speed Internet access services,” wrote Susan Crawford, former White House economic adviser and a University of Michigan law school professor, in her blog.
Such a move would face significant political backlash, particularly by ISPs who have been operating under a less prescriptive framework under Title I, for enhanced communications services.
Under Title II, blocking rules would apply and the FCC could pursue its net neutrality rules to clarify how discrimination rules would apply to different kinds of broadband providers. It could also use that classification to more easily reform the Universal Service Fund for phone subsidies into one that also includes greater contributions to broadband.
But it would also bring greater attention to potential open-access rules that would require the big providers to unbundle their services to be used by new upstarts who would provide more competition and choice. Some economists and scholars say open access rules correlate with greater broadband penetration and adoption. So far the FCC has been reluctant to address such rules in its broadband plan mandated by Congress and expected to be done by the middle of March.
“Clearly the FCC has some role, either directly or tangentially over broadband, such as with USF reform,” said Kyle McSlarrow, president and CEO of the trade group National Cable and Telecommunications Association. He said broadband service providers don’t need to be reclassified and that “to the extent that we need additional regulation – less is more.”
But public interest and consumer advocacy groups say they support a re-classification. They said the confusion over the FCC’s authority stems from a move by former FCC chairman Michael Powell in 2002 to deregulate ISPs. He defined the cable modem as an enhanced telecommunications service under Title I, instead of under Title VI for the rest of cable services. In 2006, then-FCC Chairman Kevin Martin put DSL services from telephone companies in the same Title I basket, making all ISP services on shaky regulatory ground. By moving broadband into Title I, or deregulating those services, a duopoly of telecom and cable services grabbed the lion's share of the Internet service market, they said.
A reclassification of services under Title II could be proposed and voted on within the agency. But it would likely face court battles, analysts said.
But it would be back to the future of sorts, by returning to classifications set forth in the 1996 Telecom Act, public interest advocates say.
“The theory they had was that we should not regulate the cable or telephone industries because they would compete vigorously with each other and we would have a wonderful era of fast broadband and competition would solve everything,” said Marvin Ammori, a law professor at the University of Nebraska and senior adviser to Free Press, a media reform nonprofit organization. “Well, they couldn't have been more wrong."
January 13, 2010; 8:00 AM ET
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