by Tony Romm
Federal Communications Commission Chairman Julius Genachowski on Thursday announced his agency would seek to regain its lost grip on broadband by applying some of the rules that govern phone companies to Internet providers.
Federal Communications Commission Chairman Julius Genachowski testifies in Washington, DC, in March 2010. (AFP/Getty Images/File/Chip Somodevilla) One month to the day since a federal court stripped the FCC of that authority, setting back the agency's dual goals of expanding broadband access and instituting tough rules to ensure open Internet, Genachowski took the first steps in restoring what he described as "the shared understanding" that the FCC should protect broadband consumers.
Genachowski's announcement is sure to satisfy net neutrality proponents -- from public-interest groups to companies like Google and Skype, which have long called on the commission to enforce open Internet rules. But the move will likely put Genachowski, the FCC and the Obama administration on a collision course with broadband providers -- like Comcast, AT&T and Verizon -- which have long questioned the FCC's authority to regulate broadband using its internal, rule-making process.
Those companies and others could choose to challenge Genachowski's proposed "third way" forward in court, setting up a protracted legal fight that only Congress could end with new telecommunications legislation. Comcast, however, noted in a statement on Thursday that it is "prepared to work constructively with the Commission" over the next few months.
The best outcome, Comcast added, would be a series of "limited but effective measures to preserve an open Internet and implement critical features of the National Broadband Plan, but does not cast the kind of regulatory cloud that would chill investment and innovation by ISPs."
The FCC's new legal framework addresses a federal court ruling in April that found the FCC only had chief jurisdiction over Title II, or "telecommunications services," and did not even have "ancillary" authority over Title I, or "information services."
"The opinion therefore creates a serious problem that must be solved so that the Commission can implement important, commonsense broadband policies," Genachowski said of the ruling, which favored Comcast, noting the FCC still hopes to carry out much of the proposals it introduced as part of its National Broadband Plan.
But rather than simply taking broadband and re-designating it as a telecommunications service, as some groups thought the FCC might do, Genachowski's plan would use a procedure called "forbearance" to pick and choose aspects of long-standing phone company rules to broadband providers.
Not all of those regulations that govern telecommunications companies would apply to the Web. For example, some of the "common carrier" restrictions on rates, and others that require phone lines to be shared, would not be imposed on the broadband community. But the bulk of rules that allow the FCC to enforce competition and determine how companies can manage their networks would, ultimately, now target Internet providers too.
However, Genachowski's statement on Thursday does not immediately usher that new broadband regulatory framework. Rather, the FCC must embark on public comment periods, hold hearings, consult with stakeholders and vote on the proposals first. That latter element should prove easiest, as the FCC is comprised of three Democrats who have signaled previously they would support reclassification.
"The Comcast decision has created a serious problem," Genachowski said. "I call on all stakeholders to work with us productively to solve the problem the Comcast decision has created in order to ensure a solid legal foundation for protecting consumers, promoting innovation and job creation, and fostering a world-leading broadband infrastructure for all Americans."
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By Cecilia Kang
Washington Post Staff Writer
Thursday, May 6, 2010
The chairman of the Federal Communications Commission plans to seek clear-cut powers to regulate Internet service providers, redefining the government's role over at least parts of the fast-growing industry.
The proposal, to be announced Thursday, is expected to be opposed by broadband network operators such as AT&T, Comcast and Verizon, whose Internet access businesses are becoming their main source of revenue as consumers rely on the Web as a primary communication tool.
Internet companies such as Google and Skype and public interest groups are applauding the move because it would allow the FCC to carry out policies to expand broadband access nationwide. The groups also support the commission's efforts to create a regulation that would force broadband service providers to treat all applications equally over high-speed Internet networks, a concept known as net neutrality.
A senior FCC official said Wednesday that Chairman Julius Genachowski's move would be a "third way," between the industry's current state of deregulation and a more comprehensive regulatory approach. Broadband is now defined as an information service with weak FCC oversight. The proposal would put Internet service providers in a category with telephone service, which is more clearly under the agency's authority.
However, the move would stop short of subjecting Internet providers to the full range of requirements imposed on telecom companies, such as oversight of price and billing practices or a rule that would force network providers to share lines with competitors. It also would govern only the companies that own the networks, not the services they transmit.
Last month, a federal court cast doubt on the FCC's authority over the Internet, ruling that the agency overstepped its bounds when it sanctioned Comcast in 2008 for blocking an Internet application that the company said was slowing broadband service.
"The Chairman will seek to restore the status quo as it existed prior to the court decision in order to fulfill the previously stated agenda of extending broadband to all Americans, protecting consumers, ensuring fair competition, and preserving a free and open Internet," the FCC official said in a statement.
Sources said Genachowski appeared to have shifted from late last week, when The Washington Post reported that it looked like he was inclined to keep broadband services deregulated.
Two sources with knowledge of the discussions in the FCC this week said a letter that Sen. John D. Rockefeller IV (D-W.Va.) and Rep. Henry A. Waxman (D-Calif.) sent to Genachowski on Wednesday provided political support for the agency to shift Internet lines to a more regulatory framework. The lawmakers said they could support defining broadband as a telecommunications service if the FCC stripped Internet access providers of some of the rules that apply to phone companies.
The sources spoke on the condition of anonymity because of the sensitive nature of the topic and because Genachowski hasn't officially commented on his decision.
Corporate opposition is sure to be fierce to what some view as a strong move to regulate Internet companies.
"If the goal is maximizing broadband deployment and adoption . . . new regulations such as these will not help," said Bruce Mehlman, co-chairman of the Internet Innovation Alliance, an industry group. "This sounds more like a political solution likely to imperil investment than a policy initiative that tackles actual challenges in the marketplace."
Susan Crawford, a law professor at the University of Michigan and a former economic adviser to President Obama, said the move would be a good middle ground for the commission.
"The FCC has clearly thought through all the implications of using its regulatory authority to provide for a level playing field for innovation and job creation in America," she said. "The FCC has reached the right result."
Genachowski's office and general counsel briefed officials Wednesday on his decision. Michael Copps and Mignon Clyburn, Democratic members of the commission, have said they would support a proposal to reclassify broadband, which would give Genachowski enough votes to move forward on the plan.
The proposal must be opened to public comment and then would need three out of five FCC votes to be approved.
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New U.S. Push to Regulate Internet Access
05-06-2010
WASHINGTON—In a move that will stoke a battle over the future of the Internet, the federal government plans to propose regulating broadband lines under decades-old rules designed for traditional phone networks.
The decision, by Federal Communications Commission Chairman Julius Genachowski, is likely to trigger a vigorous lobbying battle, arraying big phone and cable companies and their allies on Capitol Hill against Silicon Valley giants and consumer advocates.
Breaking a deadlock within his agency, Mr. Genachowski is expected Thursday to outline his plan for regulating broadband lines. He wants to adopt "net neutrality" rules that require Internet providers like Comcast Corp. and AT&T Inc. to treat all traffic equally, and not to slow or block access to websites.
The decision has been eagerly awaited since a federal appeals court ruling last month cast doubt on the FCC's authority over broadband lines, throwing into question Mr. Genachowski's proposal to set new rules for how Internet traffic is managed. The court ruled the FCC had overstepped when it cited Comcast in 2008 for slowing some customers' Internet traffic.
In a nod to such concerns, the FCC said in a statement that Mr. Genachowski wouldn't apply the full brunt of existing phone regulations to Internet lines and that he would set "meaningful boundaries to guard against regulatory overreach."
Some senior Democratic lawmakers provided Mr. Genachowski with political cover for his decision Wednesday, suggesting they wouldn't be opposed to the FCC taking the re-regulation route towards net neutrality protections.
FCC Chairman Julius Genachowski, whose authority over broadband lines has been questioned by a federal court, plans to use regulation on traditional phone networks to establish rules for Internet providers.
"The Commission should consider all viable options," wrote Sen. Jay Rockefeller (D, W.V.), chairman of the Senate Commerce Committee, and Rep. Henry Waxman (D, Calif.), chairman of the House Energy and Commerce Committee, in a letter.
At stake is how far the FCC can go to dictate the way Internet providers manage traffic on their multibillion-dollar networks. For the past decade or so, the FCC has maintained a mostly hands-off approach to Internet regulation.
Internet giants like Google Inc., Amazon.com Inc. and eBay Inc., which want to offer more Web video and other high-bandwidth services, have called for stronger action by the FCC to assure free access to websites.
Cable and telecommunications executives have warned that using land-line phone rules to govern their management of Internet traffic would lead them to cut billions of capital expenditure for their networks, slash jobs and go to court to fight the rules.
Consumer groups hailed the decision Wednesday, an abrupt change from recent days, when they'd bombarded the FCC chairman with emails and phone calls imploring him to fight phone and cable companies lobbyists.
"On the surface it looks like a win for Internet companies," said Rebecca Arbogast, an analyst with Stifel Nicolaus. "A lot will depend on the details of how this gets implemented."
Mr. Genachowski's proposal will have to go through a modified inquiry and rule-making process that will likely take months of public comment. But Ms. Arbogast said the rule is likely to be passed since it has the support of the two other Democratic commissioners.
President Barack Obama vowed during his campaign to support regulation to promote so-called net neutrality, and received significant campaign contributions from Silicon Valley. Mr. Genachowski, a Harvard Law School buddy of the president, proposed new net neutrality rules as his first major action as FCC chairman.
Telecom executives say privately that limits on their ability to change pricing would make it harder to convince shareholders that the returns from spending billions of dollars on improving a network are worth the cost.
Carriers fear further regulation could handcuff their ability to cope with the growing demand put on their networks by the explosion in Internet and wireless data traffic. In particular, they worry that the FCC will require them to share their networks with rivals at government-regulated rates.
Mike McCurry, former press secretary for President Bill Clinton and co-chair of the Arts + Labs Coalition, an industry group representing technology companies, telecom companies and content providers, said the FCC needs to assert some authority to back up the general net neutrality principles it outlined in 2005.
"The question is how heavy a hand will the regulatory touch be," he said. "We don't know yet, so the devil is in the details. The network operators have to be able to treat some traffic on the Internet different than other traffic—most people agree that web video is different than an email to grandma. You have to discriminate in some fashion."
UBS analyst John Hodulik said the cable companies and carriers were likely to fight this in court "for years" and could accelerate their plans to wind down investment in their broadband networks.
"You could have regulators involved in every facet of providing Internet over time. How wholesale and prices are set, how networks are interconnected and requirements that they lease out portions of their network," he said.
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