Verizon: Current telecom law is 'irrelevant' to the modern Internet

"Thanks to the efforts of the Federal Communications Commission, we now have a National Broadband Plan, which lays out a vision for a vibrant broadband and Internet marketplace," began Verizon Executive Vice President for Public Affairs Tom Tauke, in a speech to the Washington think tank New Democrat Network yesterday. But that's where the perfunctory appreciation stopped: "In my view, the current statute is badly out of date. Now is the time to focus on updating the law affecting the Internet. To fulfill broadband's potential it's time for Congress to take a fresh look at our nation's communications policy framework."

It was an important speech not only for who was speaking, but where it was spoken: NDN is perhaps the furthest thing from a libertarian free-enterprise institute. It's a group of active Democrats who are celebrating the passage of step one of health care reform, and who believe that federal policy reform can reset and reinvigorate the public agenda, on issues including broadband buildout and human rights. Verizon cozying up to NDN would be like allying itself with Google...but then again, it has allied itself with Google.

What Tauke and Verizon appear to be doing is carefully connecting with the audience best equipped to move Verizon's technology agenda forward, with a message that would seem more naturally tailored to suit that group's opposition. In an amazing high-wire act yesterday that appears likely to be deemed successful, Tauke advocated to a group of supporters of FCC Chairman Julius Genachowski's new federal Broadband Plan, a rewriting of telecom laws that could conceivably take the FCC out of the Internet picture altogether.

"Verizon's effort over the last year or two to find common ground with Google and others on the issues of net neutrality, behavioral advertising, privacy protection, and other Internet policies, really brought home to me the dilemma we face," Tauke continued. "Too often these important discussions about policy for the Internet degenerated into disputes over the statutory authority of the FCC. Then, with the Comcast / BitTorrent case, it became clear that the debate over jurisdiction wasn't just an intellectual exercise. The authority of the FCC to regulate broadband providers under the so-called 'Information Services' title, or Title I, of the Communications Act was at best murky."

Title I is the federal statute that effectively created the FCC, giving it the authority to regulate American communications systems. But that was in 1934, when there were the public airwaves and the telephone. That statute was amended in 1996, but the new language inserted a concept of "information services" whose regulation would fall under FCC guidelines. But the Internet isn't just a two-way newspaper; business transactions take place here every moment. And the FCC has never had the authority to regulate business transactions. Title II of the statute applies to telephone networks, and one option under consideration is simply declaring broadband a telephone network.

If you ask the FCC commissioners outright, they'd say they don't want either outcome -- either to be the online equivalent of the FTC, or the modern overseer of the online Bell System. But denying either option, some say, would have the FCC forfeit its right to tell Comcast not to throttle BitTorrent traffic -- the subject of the DC Court of Appeals case to which Tauke referred. There, judges have indicated they may very well rule in Comcast's favor. If they do, the entire question of whether the FCC has the authority to execute the Broadband Plan, would be turned on its ear.

You'd think that would make Verizon happy. But in front of the NDN yesterday, Tom Tauke put a virtual piece of duct tape over that grin.

"One idea recently floated to solidify the FCC's jurisdiction was to place broadband under the old rules that applied to telephone networks under Title II. To us, that clearly was outside the scope of the statute," Verizon's Tom Tauke told the New Democrat Network yesterday. "It also highlighted the danger of attempting to apply statutory provisions intended for the telephone industry of the 1900s to the communications and Internet world of the 21st Century. In confronting this hard question about jurisdictional authority, we also faced this policy question: If Title I and Title II don't apply to the Internet space, what are you saying about the authority of government in this space?"

Long-time followers of the campaign for free enterprise among Internet stakeholders are familiar with the key phrase "light touch" -- a phrase coined by former FCC Chairman Bill Kennard (who served under Pres. Clinton, and who is now US Ambassador to the EU). With respect to broadband, it represented Chairman Kennard's perspective that government should only step in to keep competitors in bounds, but should otherwise let the market decide how the nation's broadband network is built.

It was an ingenious campaign, largely because it quelled the growing arguments of legislators on both sides of the issue of the FCC's role in broadband. Those opposed to the FCC having any role at all, on the grounds that the Internet was not like the public telephone network or the public airwaves, appreciated the FCC saying its own role should be limited. And those who favored more rigorous regulation of the market to stop unfair competition -- for instance, from a potential behemoth such as AOL Time Warner -- appreciated that the FCC would continue to keep a lookout for unfair business practices.
"The approach Bill Kennard talked about years ago of using a light regulatory hand to create a highly competitive marketplace has worked," stated Tauke, praising a well-liked Clinton-era Democrat. "Now, we need to put in place a framework that will continue to encourage ongoing investment and innovation for this vibrant ecosystem we see. This should be the cornerstone for a refreshed policy framework.

"So what's the problem? The problem is that the statute is irrelevant to the ecosystem that has developed. The Internet today hosts a quarter of the world's population -- close to two billion users. The Verizon network alone connects 100 million of these users with over 1.7 billion text messages and 50 million video/pictures exchanged, 400 million e-mails received, 8.7 petabytes of video streamed. There are new pressures and challenges and problems cropping up that policymakers didn't consider a decade ago, such as the 5 billion potential cyber-threats monitored and acted upon each day."

Next: The vision of an Internet without the FCC...