Broadband Red Tape: Very Sticky


Activists, politicians and Internet
companies are crying anew for the Federal Communications
Commission to regulate broadband
like traditional phone service.

I’d put that in the “Be Careful What You Wish For" file.

The event triggering the call for heavier government regulation
of the Internet was the U.S. Court of Appeals for the D.C. Circuit’s
ruling this month that the FCC overstepped its authority in ordering
Comcast to stop hindering peer-to-peer file sharing
applications on its network (see “Court Saps FCC’s
Strength on ’Net Protection,” April 12, page 10).

To some, the way around this legal setback — to
“protect” the Internet from cable companies and telcos
— is for the FCC to just reclassify broadband as
a “telecommunications service” (Title II under the
Communications Act) whereas it’s currently regulated
as an integrated “information service” (Title I).

If regulated as Title II carriers, broadband providers
would have to provide “communication service
upon reasonable request therefore”; to charge “just
and reasonable” rates; to refrain from engaging in
“unjust or unreasonable discrimination”; to comply
with FCC requirements for filing and abiding by written tariff s; to
interconnect with other carriers; and to collect fees for the universal
service fund and other programs.

Simple, right? Wrong.

There are several problems with the idea — frst of which is
that it would run contrary to 12 years of precedent at the FCC,
as Mayer Brown partner Howard Waltzman pointed out to Multichannel
News’ John Eggerton.

And it would create a legal mess that would take years to sort
through, according to former FCC chairman Michael Powell. “I
hate the idea of Title II for broadband,” Powell said in an interview
with The Washington Post. “I think we would really regret it because
for a regulator versed in what it means, it means thousands
and thousands of pages that would fall into this space and we
would spend our lifetime trying to clean it up. And the real worry
is that we will enter another prolonged period of litigation.”

Network-neutrality advocates insist the additional regulatory
burden is worth it to “protect” the Internet, and ensure it
remains “open.”

Ironically, however, if broadband were brought under Title
II regulations, companies like YouTube, Netflix, Hulu, Google,
Skype, eBay and — and thousands of others —
could find themselves under the FCC’s regulatory
purview, subject to the same red tape about whether
the rates and terms of their services are “unjust
and unreasonable.”

That’s because the U.S. Supreme Court, in its
Brand X ruling in 2005 affirming cable-modem service
as a Title I information service, said that reclassifying
cable broadband as a telecommunications
service “would subject to mandatory commoncarrier
regulation all information service providers
that use telecommunications as an input to provide
information service to the public.”

And that would prompt uncertainty about the FCC’s
legal authority over all Internet services, regardless of
whether they’re facilities-based. “At best, it would indisputably
mire all aspects of the Internet in years of investment-deterring,
innovation-stunting legal uncertainty while the Commission
and the courts sort through a new generation of mind-glazing
statutory characterization disputes,” a coalition of cable and telco
interests, including the National Cable & Telecommunications
Association, CTIA, Time Warner Cable, Verizon and AT&T,
wrote in a Feb. 22 joint letter to the FCC.

Will the FCC open this can of worms — all in the name of “protecting”
Internet users from hypothetical anticompetitive actions
that broadband providers might take at some point in the future?

I trust cooler heads will prevail, once the “mind-glazing”
ramifications are considered.