Obama move gives FCC political cover to regulate broadband

The president's call for reclassification under telephone-style regulations helps nudge the FCC in that direction

obama net neutrality fcc title ii

U.S. President Barack Obama, in a strong net neutrality policy statement, has given the Federal Communications Commission the political cover it needs to move ahead with new rules by reclassifying broadband as a regulated utility.

Obama's policy statement, released Monday, calls on the FCC to take the controversial step of reclassifying broadband and impose telephone-style regulations on the service. While the FCC is an independent agency, Obama's policy statement takes some heat off FCC Chairman Tom Wheeler as he leans toward reclassifying broadband, said several telecom law experts, both for and against reclassification.

Obama's new statement may be intended both to nudge the FCC toward broadband reclassification and give Wheeler some space to make it happen, said Ed Black, president and CEO of the Computer and Communications Industry Association, a trade group that supports strong net neutrality rules.

"There's a real issue of historical legacy here," Black said. "You don't want to be the president, and I don't think you want to be the FCC chairman, who would be looked back upon as the ones who ended net neutrality for the Internet."

Obama's policy statement is the president's most specific net neutrality plan, and his first to directly mention broadband reclassification, since Wheeler moved to pass new net neutrality rules earlier this year.

The statement shows what Obama believes to be "the right answer on a tough policy question," said Alan Davidson, vice president for technology policy at strategy at the New America Foundation, a think tank that supports strong net neutrality rules. Obama has also "given some real political cover to the commission to do the right thing," he added.

In earlier statements, Obama has said he generally supports strong net neutrality rules, but his new proposal comes just days after news reports that Wheeler is considering a hybrid net neutrality approach that would reclassify one piece of broadband as a regulated utility.

Many advocates of strong net neutrality rules decried a hybrid approach, saying it wouldn't go far enough to protect broadband customers. A spokeswoman for Wheeler said he's open to a range of net neutrality approaches, but Wheeler, in a statement Monday, acknowledged that FCC staffers have been exploring hybrid regulatory approaches.

Obama's proposal will become part of the FCC's record in its net neutrality proceeding, Wheeler said in a statement released shortly after Obama's proposal was made public. Still, reclassification raises some legal questions that the commission needs time to address, including what parts of Title II regulations the FCC would apply to broadband, he said.

Wheeler will seek reactions to Obama's plan from Congress and fellow commissioners, he said.

"The more deeply we examined the issues around the various legal options, the more it has become plain that there is more work to do," Wheeler said. "The reclassification and hybrid approaches before us raise substantive legal questions. We found we would need more time to examine these to ensure that whatever approach is taken, it can withstand any legal challenges it may face."

Reclassification of broadband would almost certainly face a legal challenge. Verizon Communications, which challenged net neutrality rules adopted by the FCC in 2010, said in a statement that reclassification "will likely also face strong legal challenges and would likely not stand up in court."

CCIA's Black discounted threats of a lawsuit. "Everybody assumes somebody's going to sue, no matter what happens," he said. "You might as well do the right thing."

Wheeler's quick response to Obama's proposal suggests some coordination between the White House and the FCC, said Geoffrey Manne, executive director of the International Center for Law and Economics, a free market think tank. "I'd say the fix is absolutely in," he said by email.

Obama's statement may be aimed at the two other Democratic FCC commissioners, in addition to Wheeler, he said. Obama's support for Title II may be a way to tie up support among the Democratic majority at the commission for reclassification, he added.

"Especially with Wheeler's response saying he plans to delay the net neutrality vote ... I think it is now clear that Wheeler has decided to go the Title II route in some form," Manne said. "All that remains is shoring up the votes at the FCC, fending off Congress, and building the record to support reclassification in the inevitable legal challenges that will ensue. The president's statement was aimed at the first two. Now the delay is all about building up the record."

Other FCC observers suggested Obama's statement may put pressure on Wheeler, whose first net neutrality proposal this year would have stopped short of reclassification and allowed broadband providers to engage in "commercially reasonable" traffic management.

The president's statement is a "loud dog whistle of sorts," signaling what he expects the FCC to do, said Mike Wendy, operator of free market telecom blog MediaFreedom.org.

Wheeler has a long history of ties to Obama, including working as a fundraising in the last two presidential elections, added Timothy Karr, senior strategy director at Free Press, a digital rights group in favor of strong net neutrality rules.

"While he technically doesn't answer to the president, it seems impossible for Wheeler to dismiss such a strong statement from the White House," Karr said by email.

Obama's message to the FCC seems to be two fold, Karr said: "One, abandon the hybrid approach and any other concoction that doesn't use the agency's Title II authority to prevent discrimination and blocking of online content. And two, I'm giving you the political cover you'll need to pursue Title II."

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

Copyright © 2014 IDG Communications, Inc.

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