November 12, 2014
by Larry Irving and Rick Boucher
Those seeking to impose new regulations on broadband providers offer a seemingly simple approach: Just have the Federal Communications Commission shift broadband Internet regulations from an existing section (Title I) of the Communications Act to another provision (Title II). What’s the danger? Can’t the regulators protect this vital 21st Century technology on which so much of our economy and daily lives depend?
Unfortunately, it’s not so simple.
All participants are in violent agreement on the fundamental need to preserve and protect the open Internet. Everyone agrees that broadband providers should not become content gatekeepers. That’s been clear since 2010 when the FCC initiated its inquiry into how best to maintain an open Internet. Moreover, the facts make clear that the underlying success of the Internet in the two decades since its commercialization has been based on light-touch federal regulation and private sector, commercially-negotiated arrangements among service providers that have led to very few real complaints about supposed “gatekeepers.”
Under section 706, the FCC could prohibit so-called “paid prioritization” anytime such a practice has the effect of slowing down content or degrading the quality of service that any broadband customer receives, and which represent the alleged potential harms that lie at the core of the concerns expressed by activists urging Title II reclassification.
This fall’s intense debate is not about whether to preserve an open Internet. It’s about which of two available approaches the FCC could use is best.
Should the FCC use an axe (Title II) or a scalpel (Section 706) to advance the public interest in a continued vibrant and robust Internet?
There is no real dispute regarding the FCC’s vital role in ensuring that the Internet remains open. The U.S. Court of Appeals for the District of Columbia Circuit said as much in its decision earlier this year in upholding the FCC’s authority to act under Section 706 of the Telecommunications Act.
The FCC’s powers under Section 706 are real and far-reaching. For example, under its “commercial reasonableness” standard, the FCC could prohibit so-called “paid prioritization” anytime such a practice has the effect of slowing down content or degrading the quality of service that any broadband customer receives, and which represent the alleged potential harms that lie at the core of the concerns expressed by activists urging Title II reclassification. In short, the use of section 706 authority to maintain an open Internet would seem to be a complete answer to the Title II activists’ complaints.
Section 706, however, would not extend to things like price regulation, entry and exit from a market, or other types of intrusive Title II regulations that date from the era of copper wire, single-provider telephone service and that are wholly inappropriate for the era of broadband competition. Unlike Title II, Section 706 also would not pose a potential danger of extending unnecessary regulation to the Internet edge companies who offer services that take the place of traditional phone service and that consumers use every day (think Skype, FaceTime and a wide range of applications that involve videoconferencing). And, most importantly, treatment under section 706 would not carry the huge amount of regulatory and litigation uncertainty that would attend Title II reclassification, leading to an inevitable dramatic decline in the willingness of broadband providers to invest in next-generation networks.
Some Title II proponents now contend that the FCC could move forward with a “Title II lite” approach—that is, carry over to broadband Internet access services only certain portions of Title II regulation and allow the FCC to “forbear” from applying certain Title II rules at the outset. Such an effort would be subject to an exceptionally long, heavily lobbied and litigated proceeding, and would face a serious legal challenge, given how one court has already explicitly warned the FCC of the dangers of modifying its forbearance approach. And, in the meantime, the overhang of legal uncertainty will harm the broadband industry, depressing investment and thus delaying the faster, better broadband everyone wants.
Proponents of Title II, no less than their opponents, sincerely desire more broadband for everyone. Then why support a path that leads to less investment to deliver that broadband? In fact, the existing light-touch regulatory approach endorsed by the FCC for well over a decade has made possible the very explosion of broadband, in both reach and speed, which has made America a world leader, far outpacing Europe. An abrupt switch to Title II regulation would endanger that process, essentially freezing the investment on which innovation depends.
Section 706 gets us to the place everyone wants: an open Internet that is innovative and favors investment. The court gave the FCC an open door to promote the open Internet. Let’s take it and end this debate so that the doors of broadband investment and innovation will remain wide open as well.
Originally published at Bloomberg BNA