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FCC to strip all but six phone rules for broadband

Update: with more detail on plans by FCC

The FCC on Thursday morning will release details of its announcement that it will move broadband access providers to a new classification for telecommunications services.

The FCC is expected to forebear on all but six of the four dozen or so rules that apply to phones. The agency is expected to strip regulations over the rates of broadband access or requirements for service providers to open their lines to competitors -- two rules for phones that broadband providers will protest. The FCC will keep rules that would allow it to reform a phone subsidy so that it can apply to the expansion of broadband networks. It will also apply phone rules that relate to privacy and security.

The process will likely be lengthy, and critics doubt the agency will be able to forebear on many of those rules. FCC officials on Wednesday briefed broadband services providers on their plan. This morning, before the open of the market, offiicals briefed Wall Street analysts of the plan. The biggest broadband service provdiers include AT&T, Verizon and Comcast.

"The legal basis for reclassification remains uncertain, as does the permissibility of the FCC's plans to forbear from exercising the power under Title II on the vast majority of regulations," said Craig Moffett, an analyst at Bernstein Research.

Analysts said stocks of cable and telecom companies could be pressured in early Thursday trading.

"Depending on how the agency finally implements this, we believe this could be a negative for the broadband providers, but not as apocalyptic as some have suggested," said Rebecca Arbogast, head of tech policy research at Stifel Nicholaus.

Within the agency, an official said FCC Chairman Julius Genachowski will be aided in his plan to plan to reclassify broadband services with support from key lawmakers (Sens. John Rockefeller and John Kerry and Rep. Henry Waxman have thrown their support behind the plan) that could spare the agency from undergoing hearings over the controversial plan.

From today's paper:

The chairman of the Federal Communications Commission plans to seek clear-cut powers to regulate Internet service providers, redefining the government's role over at least parts of the fast-growing industry.

The proposal, to be announced Thursday, is expected to be opposed by broadband network operators such as AT&T, Comcast and Verizon, whose Internet access businesses are becoming their main source of revenue as consumers rely on the Web as a primary communication tool.

Internet companies such as Google and Skype and public interest groups are applauding the move because it would allow the FCC to carry out policies to expand broadband access nationwide. The groups also support the commission's efforts to create a regulation that would force broadband service providers to treat all applications equally over high-speed Internet networks, a concept known as net neutrality.

A senior FCC official said Wednesday that Chairman Julius Genachowski's move would be a "third way," between the industry's current state of deregulation and a more comprehensive regulatory approach. Broadband is now defined as an information service with weak FCC oversight. The proposal would put Internet service providers in a category with telephone service, which is more clearly under the agency's authority.

Read here for full story.

By Cecilia Kang  |  May 6, 2010; 7:21 AM ET
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Next: FCC's Copps, Sen. Dorgan back regulation of broadband


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