Friday, May 07, 2010

FCC goes public on broadband regulatory plans

Following extensive speculation, the FCC has set out the way it intends to address the issues created by the recent Comcast case in a statement by Chairman Julius Genachowski.

Contrary to previous reports (see this previous post), the FCC has come out in favour of reclassifying broadband as a Title II service, albeit with only a handful of Title II provisions applying to broadband: only the transmission component of a broadband access service would be recognised as a telecommunications service, as opposed to its current status as an information service.

So, the FCC is not seeking to regulate providers in relation to, for example, web-based services and applications, e-commerce sites and online content: "FCC policies should not include regulating Internet content, constraining reasonable network management practices of broadband providers, or stifling new business models or managed services that are pro-consumer and foster innovation and competition."

This so-called "third way" (sounds eerily familiar?) would, according to the FCC, ensure greater regulatory certainty, protect and empower consumers, restore the previous status quo and consensus that existed prior to the Comcast ruling, and, perhaps most importantly, prevent regulatory overreach: " approach consistent with the longstanding consensus regarding the limited but essential role that government should play with respect to broadband communications." The FCC will shortly launch a consultation on their proposals.

Reactions, as ever, are polarised and predictable: pro-consumer groups have welcomed the announcement, while industry has objected strongly. FierceCable predict "a slew of lawsuits and legal action that will tie up any kind of regulation for the foreseeable future." The FT (White House unveils push on broadband rules) report that "telecommunications and cable groups affected by the ruling are not expected to see any silver lining in the FCC’s allegedly “light touch” approach. “You can call it an ice cream sundae, it is still Title II,” said one industry insider in Washington."

In a separate article (Internet groups eye fight on tighter rules), the paper goes on to report that providers will mount a legal challenge to the FCC's proposals, which opponents regard as a "job-killing big government scheme":
"Verizon and AT&T signalled they would mount a legal challenge against the move by the Federal Communications Commission...Republican lawmakers attacked the prospect of tighter rules for cable and telecommunications companies, saying the move represented nothing less than a “government takeover of the internet”...Tom Tauke, Verizon’s executive vice-president of public affairs, on Thursday said the FCC’s approach was “legally unsupported”, a statement that foreshadowed a likely legal challenge against the decision."
Intriguingly, the FT (Congress wants tougher regime for ISPs) also reported that the statements against reclassification previously attributed to the FCC (see this previous post again) may in fact have been leaked as a "trial balloon" in order to "rally liberals to increase pressure on the FCC chairman." The same article also reports that Senator Jay Rockefeller and Congressman Henry Waxman wrote to the FCC Chairman on 5th May (the day before the FCC's statement was released), encouraging consideration of a change in classification "provided that doing so entails a light regulatory touch". Perhaps the previous FCC statement was a stalking horse?

It remains to be seen whether the FCC's proposals turn out to be as apocalyptic as industry opponents claim. It's already had an impact on share prices, prompting heavy falls in cable and telecommunications stocks, again according to the FT (Tougher internet regulation alarms investors). The BBC reports on division within the ranks of the FCC on this issue, as the two Republican FCC commissioners (out of a total of five) both oppose the plan, saying in a joint statement that "this dramatic step to regulate the internet is unnecessary".

Given the facts of the FCC's original grievance against Comcast (see this previous post), I know exactly where my allegiance lies. But one thing's for sure: it's going to be a long, difficult and expensive fight.

Seconds away...

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