FCC opens up for public comment on its new 'third way' to regulate the Internet

Today, the Federal Communications Commission (FCC) issued a Notice of Inquiry that begins the public process of comparing possible frameworks for broadband Internet regulation.

The Commission seeks comment on the following issues:

• Whether the Commission's "information service" classification of broadband Internet service remains legally sound and adequate to support effective performance of the Commission's responsibilities.
• The legal and practical consequences of classifying broadband Internet connectivity as a "telecommunications service" to which all the requirements of Title II of the Communications Act would apply.
• A "third way" under which the Commission would reaffirm that Internet content and applications remain generally unregulated under Title I of the Communications Act; identify the Internet connectivity service that is offered as part of wired broadband Internet service as a telecommunications service; and forbear under Section 10 of the Act from applying all provisions of Title II other than the small number that are needed to implement fundamental universal service, competition and market entry, and consumer protection policies.

In April, a three-judge panel of the Court of Appeals for the DC Circuit overturned the FCC's 2008 citation of Comcast, in which the commission demanded Comcast stop throttling BitTorrent traffic.

The court determined that Congress has never given the FCC the power to regulate an ISP's network management policies, and that net neutrality rules were simply guidelines and not law that the FCC could enforce.

Unfortunately, the laws for what part of broadband access the FCC was allowed to regulate were mostly unwritten. The amended Telecommunications Act of 1996 only gave the FCC the option to regulate broadband internet like a telephone service (Title II) or a teletype service (Title I). For years, the Telecommunications Act gave the Commission "ancillary authority" to protect information services since they worked in conjunction with communications services the FCC had primary authority over, but left significant loopholes for legal dispute such as the Comcast case.

In May, FCC Chairman Julius Genachowski said that the FCC could continue trying to regulate broadband under that ancillary authority clause, or try to apply Title II oversight to the Internet.

Unfortunately, the old way didn't give the Commission enough guidelines, and the other way ran the risk of giving the commission too much power.

"I have serious reservations about both of these approaches," Genachowski said at the time.

So the FCC then introduced its so-called "third way" to regulate broadband, which would reclassify data transmission as a telecommunications service which the commission could regulate, but put meaningful caps on the FCC's power so as to guard against what Genachowski called "regulatory overreach."

The idea was met with mixed feelings. Amazon's Vice President of Public Policy, Paul Misener said, "This whole conversation is about the Commission's legal authority, not the ultimate rules. So when we get to the point of actually debating, discussing how to approach consumer protections via net neutrality, I really hope we can engage the network operators more directly in a way that becomes collaborative."

AT&T and Verizon's public policy representatives were a little more skeptical.

AT&T's Senior Vice President of Public Policy Jim Cicconi said, "If the FCC follows through with the chairman's stated intent, it will have a direct impact on jobs and investment in one of the areas of the US economy that many hoped could help lead the recovery."

"It's not hard to understand why companies subject to an agency's oversight would prefer no oversight at all if they had the chance," Chairman Genachowski said today. "But a system of checks and balances in the communications sector has served our country well for many decades, fostering trillions of dollars of investment in wired and wireless communications networks, and in content, applications, and services -- and creating countless jobs and consumer benefits...And there is no question that we need to pursue a framework and policy initiatives that encourage and unlock massive private investment."

"Now, as we move forward, my focus is not on any particular legal mechanism; my desire is simply that we restore the status quo and have a workable light-touch framework for broadband access," Genachowski continued. "I ask only this of all participants in this discussion, inside and outside the Commission: Let's not pretend that the problems with the state of broadband in America don't exist; let's not pretend that the risk of excessive regulation is not real, or, at the other extreme, that the absence of basic protections for competition and consumers is acceptable...Instead, let's put rhetoric and posturing aside, and work together to solve the problem created by the court case."