FCC takes first step toward broadband regulation

The commission votes to launch a notice of inquiry on reclassifying broadband as a regulated service

The U.S. Federal Communications Commission took a first step toward imposing limited regulations on broadband providers by voting Thursday to launch a notice of inquiry exploring the change.

The commission voted 3-2 to launch the notice of inquiry, or NOI, with its two Republicans voting against the proceeding. The NOI asks for public comment on a proposal by FCC Chairman Julius Genachowski to reclassify broadband as a common-carrier regulated service.

Genachowki's proposal follows a court case earlier this year that cast doubt on the agency's authority over broadband providers. Under the plan, the FCC would refrain from most common-carrier regulations under Title II of the Telecommunications Act of 1996.

Without reclassification, the FCC would likely not be able to create network neutrality rules, protect broadband customers' privacy, or redirect telephone subsidies to broadband deployment, Genachowski said. The limited application of common-carrier rules is a "narrow and tailored" approach that rejects the extremes abandoning FCC oversight of broadband or applying all Title II rules to the service, he said.

"My desire is simply that we restore the status quo and have a workable, light-touch framework for broadband access," he said. "My core focus is on achieving vital national broadband goals to spur investment, innovation, and our global competitiveness."

The notice of inquiry, or NOI, is a preliminary step toward creating new FCC policy. Under the NOI, the FCC will seek public comment on reclassifying broadband, and the agency would have to launch a lengthy rulemaking proceeding before reclassifying broadband as a regulated service. Genachowski said he has no deadline for competing a rulemaking proceeding.

In addition to Genechowski's proposal to apply limited Title II regulations to broadband transport service, the NOI also asks whether the commission should make no changes, and try to rule on broadband provider actions on a case-by-case basis, or whether it should apply all common-carrier rules to broadband.

There are pros and cons to any approach, Genachowski said. "This is not an easy issue, or one without complexity. I remain open-minded; I welcome the possibility of new ideas."

Republican Commissioner Robert McDowell suggested that new regulation would slow investment in the broadband industry. There's been a broad consensus among U.S. policymakers for years that broadband should be lightly regulated, and Genachowki's proposal would upset that long-standing model, he said.

Genachowski's plan would tie broadband to monopoly-busting regulations dating to the late 1800s, McDowell said. "The commission is seeking to impose 19th century-style regulations designed for monopolies on competitive, dynamic and complex 21st century Internet technologies," he said.

A move toward broadband regulation by the FCC could also embolden tyrannical governments to impose their own limits on the Internet, McDowell said. "In short, we will have lost the moral high ground," he said.

Genachowski and other Democrats disputed predictions that limited regulations would deter investment. For years, the U.S. mobile phone industry has been subject to limited regulations similar to those proposed by Genachowski and has seen explosive growth, the chairman said.

The FCC classified cable modem broadband service as a mostly unregulated information service in 2002. The agency then classified DSL as an information service in 2005.

Commissioner Michael Copps, a Democrat, criticized Republican-controlled commissions from the past decade for abandoning their responsibilities to protect broadband customers.

"I, for one, am worried about relying only on the good will of a few powerful companies to achieve this country’s broadband hopes and dreams," he said. "We see what price can be paid when critical industries operate with unfettered control and without reasonable and meaningful oversight. Look no further than the banking industry’s role in precipitating the recent financial meltdown or turn on your TV and watch what is taking place right now in the Gulf of Mexico."

Suggestions by opponents of Genachowski's reclassification plan that the commission regulate broadband on a case-by-base basis don't make sense after the April ruling by the U.S. Court of Appeals for the District of Columbia Circuit, he said. The court ruled that the agency didn't have the authority to enforce informal network neutrality rules in a case involving Comcast's throttling of some peer-to-peer traffic.

"Case-by-case inevitably becomes court case-by-court case," Copps said. "Down this path would be years and years of dead-end delays, years without the most elemental public interest safeguards for broadband, and years of agency paralysis. It would be death by a thousand cuts."

Response to the FCC's vote was immediate. More than 280 of the 535 members of Congress have expressed concerns about reclassifying broadband, noted Tom Tauke, executive vice president for public affairs, policy and communications at Verizon Communications. The FCC should allow Congress to address any issues raised in the Comcast case, he said.

“Reclassifying high-speed broadband Internet service as a telecom service is a terrible idea," Tauke said in a statement. "The negative consequences for online users and the Internet ecosystem would be severe and have ramifications for decades. It is difficult to understand why the FCC continues to consider this option."

The FCC, by reclassifying broadband, could kill one of the "great deregulatory success stories" of recent history, added Adam Thierer, president of the Progress and Freedom Foundation, a free-market think tank.

"Chairman Genachowski’s FCC continues to flaunt the rule of law and magically invent its own authority as it goes along," he said. "If this chairman wants to bring the 'Net under his thumb and regulate broadband networks like plain-vanilla public utilities, he should ask Congress for the authority to pursue such imperial ambitions. As the law stands today, the FCC has no such authority."

Consumer and digital rights group Public Knowledge praised the FCC vote.

“The Federal Communications Commission acted with uncommon courage today to make certain that everyone in the U.S. has a chance to participate in the 21st century economy and that consumers are protected from abuses by large telecommunications companies," said Gigi Sohn, Public Knowledge's president. “The commission’s simple, uncomplicated action today makes certain that the expert agency in telecommunications has the authority to carry out its mission."

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantusG. Grant's e-mail address is grant_gross@idg.com.

Copyright © 2010 IDG Communications, Inc.

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