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Thursday, January 28, 2010

Groundhog Day 2010: Should the FCC Reclassify Broadband Internet Service?
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Copyright Urville Djasim
As we approach Groundhog Day, 2010, we are faced with calls for the Federal Communications Commission to re-classify broadband Internet service from an "information service" to a "telecommunications service" under the Communications Act so that it may be more comprehensively regulated by the agency. Public Knowledge has formally requested that the FCC address the question of reclassification of broadband service as a Title II common carrier service as part of its National Broadband Plan, now due to be delivered to Congress by March 17, 2010. A stated reason for this request is to end regulatory uncertainty over the breadth and depth of the FCC's "ancillary jurisdiction" to regulate broadband Internet services. Yet acceding to such a request would take us on a time loop where we are doomed to repeat the regulatory exercises of the recent past with little regard to the lessons learned along the way.

The situation brings to mind the 1993 film, "Groundhog Day," in which an egotistical and sardonic TV meteorologist, Phil Connors must travel to Punxsutawney, Pennsylvania for the hated annual assignment of reporting on the emergence of the groundhog "Phil" from winter hibernation with his weather report. A blizzard, which Phil reported would miss the area, soon strands our meteorologist in Punxsutawney. By virtue of some cosmic loop, Phil discovers that every time he awakens it is February 2nd, Groundhog Day and he must once again repeat the same day. No one but the erstwhile Phil, however, remembers the actions of the day before. Armed with the knowledge that there will be no long term consequences, Phil begins to misbehave. Eventually, he decides to use what he learns each day to improve himself and the lives of those around him. The phrase "Groundhog Day" has since passed into the popular vernacular as a reference to an unpleasant situation that continually repeats, or seems to.

Are we doomed to continually replay the debate over the imposition of common carrier requirements on broadband ISPs, without learning from our past? Or will we, like Phil the meteorologist, learn from regulatory history, and remove, rather than impose, regulatory barriers to investment and innovation? I hope the answer to this question does not depend on whether the sky over Washington is cloudy or sunny the day the D.C. Circuit Court of Appeals issues its ruling in the appeal of the FCC's Comcast P2P Order. It now appears that nearly everyone, including even the most ardent proponents of the agency's ancillary jurisdiction, understands that the expansive jurisdictional theory that the FCC used to justify its 2008 action against Comcast met with a very frosty reception by the panel hearing oral argument in the case. Talk of a jurisdictional "Plan B" was quick to emerge in the press, to be followed in short order by the request for the FCC to take up the reclassification of broadband services as part of its National Broadband Plan.

This would be a mistake. Before the FCC issued its foundational Cable Modem Declaratory Ruling in 2002, the cable industry endured nearly six years of seemingly endless debate, regulatory filings, and court cases examining whether the high speed Internet access service developed by the cable industry would be treated as a Title VI "cable service," a Title II "telecommunications service," or a Title I "information service." Eventually, the FCC determined that the attributes of the high speed Internet over cable service as provided fit the statutory definition of an information service and, in its 2005 Brand X decision, the Supreme Court of the United States agreed. After nine years of legal uncertainty, the FCC proceeded to classify all broadband Internet service, regardless of platform, as Title I information services.

Setting aside the legal question of whether the courts will now simply accept an FCC "reclassification" of that which has already been classified (by no means a slam dunk), reopening the question of how the Communications Act applies to broadband Internet services would recommence the protracted regulatory classification debates that occupied the time of regulators, regulatory attorneys, service providers, and the nation's courts for nearly 10 years. Reams of paper, if not whole forests, were expended in search of an answer. This debate, while unavoidable, had its costs, as will any new effort to breathe life into this settled question. Although Public Knowledge is correct to note that reclassification as a common carrier telecommunications service would solve certain problems, including how to quickly re-direct universal support funding--now restricted to telecommunications services--to the re-classified broadband services, it would likely come at a steep cost to the overarching goal of ubiquitous broadband deployment and service improvement.

The cessation of legal uncertainty concerning the treatment of broadband Internet services has brought benefits to the public in the form of increased investment and deployment of broadband infrastructure and more varied and sophisticated broadband Internet service offerings. In 1999, there were only 2.8 million high-speed Internet connections serving homes and small businesses in the U.S. As of 2008, there were 132.8 million connections and broadband Internet service was available to 96 percent of households that could receive cable TV service. Such forward progress would be put at severe risk were the FCC to re-open the regulatory classification issue, thus forcing itself back into a pre-Brand X time loop. The imposition of common carrier economic regulation on the provision of broadband Internet services would likely chill, rather than thaw, the on-going capital formation necessary to build out broadband capability to the unserved, and would do nothing to enhance the rate of broadband adoption for those who remain off-line today.

The FCC should politely decline the invitation to introduce, at this late date, the shadow of regulatory reclassification into its National Broadband Plan effort. Such an action will invariably be met with a blizzard of responsive filings that re-hash the classification arguments from decades past. This would likely strand the Plan within the corridors of the FCC, where every day will feel like Groundhog Day. Such a course of action, I fear, would not provide a happy ending for the blockbuster National Broadband Plan under development at the agency. It should therefore be avoided at all costs.

posted by Barbara Esbin @ 9:29 PM | Broadband , Communications , Internet , Neutrality , Regulation , The FCC

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The evidence that the "cessation of legal uncertainty concerning the treatment of broadband Internet services has brought benefits to the public" is hardly unequivocal. 10 years ago we had, perhaps, the best broadband access in the world - now we're below average. FCC commissioner's Michael Powell's 2002 reclassification of internet as "information services" is widely seen as a sweetheart deal with DSL and cable operators. Undoing a bad decision is not Groundhog Day - it's It's a Wonderful Life.

Posted by: Michael A Levine at February 1, 2010 7:51 PM

The Supreme Court's Brand X decision was squarely based on giving agencies the freedom to interpret their statutes very freely.

It was a travesty of admin law, frankly, that gives all agencies way too much power.

If you really want to prevent Title II forever, Congress has to step in. Otherwise the Supreme Court has blessed the FCC to switch regulatory categories freely, even though Title I classification was based on mangling the statute.

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