The Business of Broadband

Earlier this month the FCC announced their plan for how they will exercise a level of regulatory control over the Internet to enforce Net Neutrality. This effort was primarily motivated by a reversal in the courts last month that ruled the FCC overstepped its authority when it told Comcast in 2007 to stop throttling the traffic of some peer-to-peer applications.

So, the new plan is to reclassify cable and phone Internet lines as a telecommunication service under Title II of the Telecommunications Act of 1996, but using a “third way” that would supposedly provide a lighter touch to the regulation.  To accomplish this, the strategy would incorporate a “notice of proposed forbearance”, which would specify provisions of Title II that would not apply to Internet providers. For example, controversial items such as regulating a provider’s rates or requiring them to share their network or facilities with a competitor would not be enforced.

The most interesting development this week was in Congress. Representatives from both sides of the isle sent letters to FCC Chairman Julius Genachowski telling him not to move forward with his “third way” option of regulating the Internet. In short, 74 House Democrats and 37 Senate Republicans told the FCC to stop their efforts to reclassify broadband, and made it clear that any regulatory efforts should not proceed without their involvement.  In other words, Congress should be the ones to determine these types of communication policies, not an unelected body. To do that, they plan on creating separate rules for broadband Internet, rather than trying to force-fit broadband pieces into an ill-fitting and outdated telecom puzzle.

It didn’t take long before the top attorney at the FCC indicated that they still plan on moving forward with Genachowski’s “third-way” option, and will not wait on Congress to act.  Considering that it took years to get the 1996 Act passed, I guess I can see why the FCC would not want to wait. But, I also understand why service providers do not want any kind of reclassification under the 1996 Act, even with forbearance of most of the provisions.  The problem with forbearance is that it’s voluntary. Anything that is part of the original forbearance could be subject to enforcement later. It’s not hard to imagine the FCC revoking forbearance in the future if they choose to. This provides too much leeway which creates too much uncertainty.

As I’ve said before, there is no evidence that we have a problem with access to broadband content, so there is no pressing need for Net Neutrality regulations. The Internet is open and working just fine, thank you. That being the case, there is no reason to kludge together rules based around an out-of-date telecom Act that was conceived before the Internet was on the radar screen of Congress.  Let’s do it right, and give Congress the time to come up with a set of rules that are specifically designed with broadband services in mind.