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FCC needs to protect Net use

April 27, 2010|DAVID LAZARUS

A battle is about to erupt between federal regulators and telecom companies, and nothing less than the future of the Internet could be on the line.

At issue is a seemingly benign question: Is the Net an information service or a telecommunication service?

As it stands, high-speed Internet service is classified by the Federal Communications Commission as a "Title I" information service in the same way that Google is an information service. This means broadband providers such as phone and cable companies are only lightly regulated by the agency.

By reclassifying broadband as a "Title II" telecom service -- like, say, phone service -- the FCC would be able to more closely oversee providers' actions and pricing, and would be better positioned to implement its recently announced 10-year plan to bring high-speed Net access to virtually every U.S. home.

I know: This is wonky stuff. But the stakes couldn't be higher, especially at a time when broadband Internet service is playing an increasingly vital role in a wide variety of areas, including entertainment, education and healthcare.

"This could determine whether the FCC really has the power to act on its broadband plan," said Ben Scott, policy director with Free Press, a communications advocacy group. "It will define who really runs the Net."

The issue has its roots in a ruling this month by the U.S. Court of Appeals for the District of Columbia Circuit that the FCC has only limited power under current law to control the online actions of network operators such as phone and cable companies.

The case grew out of assertions by cable giant Comcast Corp. that it had a right to block Net users from accessing file-sharing websites such as BitTorrent.

The ruling effectively declared that the Net's corporate gatekeepers can claim the last word when it comes to what passes through their pipes -- not a great position for federal regulators seeking to improve the nation's broadband resources.

One possible way to enhance the FCC's jurisdiction over the Net would be a bill from Congress firmly establishing the agency's dominion over broadband networks, just as it oversees phone systems. But with Republicans in full no-more-regulation mode, such a legislative fix seems unlikely.

That leaves reclassification of broadband's status from information to telecom service. The FCC could do this unilaterally, but it would then have to withstand a full-on assault by interest-protecting, deep-pocketed phone and cable companies.

FCC Chairman Julius Genachowski kept mum on the matter when asked about it at a meeting last week. An FCC spokeswoman declined to comment on what the agency intends to do.

But agency insiders tell me that movement toward reclassifying broadband networks as telecom services could come within weeks.

If so, leading telecom companies such as AT&T Inc. and Verizon Communications Inc. would almost certainly mount a vigorous legal challenge, leading to what could be an epic -- and costly -- court battle over who's the cyber-boss.

"It seems clear that the FCC will decide that its experiment with classifying broadband as an information service has failed and that they'll revisit the earlier decision," said Scott at Free Press.

"Because of the court ruling, telecom companies now hold all the cards," he said. "If the FCC does anything they don't like, they can just go back to the courts and say that the agency doesn't have the authority to do it."

The telecom industry has already made clear where it stands on the reclassification issue.

In a February letter to Genachowski, representatives of AT&T, Verizon, Time Warner Cable Inc. and leading industry groups warned that any such move "would be a profound mistake with harmful and lasting consequences for consumers and our economy."

They argued that the current classification of broadband networks as less-regulated information services has promoted investment in new technology and resulted in a variety of economic benefits, such as creation of new jobs.

Classifying broadband networks as telecom services, the industry reps said, "would indisputably mire all aspects of the Internet in years of investment-deterring, innovation-stunting legal uncertainty while the commission and the courts sort through a new generation of mind-glazing statutory characterization disputes."

If that's not a threat, I don't know what is.

The notion of the Net being an information service, rather than a telecommunication service, goes back to 2002, when the Republican-appointed FCC chairman at the time, Michael K. Powell, was grappling with how to regulate the Internet offerings of cable companies.

He decided that cable modems constituted a Title I information service, as opposed to a more stringently regulated Title II telecommunication service.

After several years of litigation, Powell's Republican successor, Kevin J. Martin, applied the classification to all wire-line data networks -- that is, the Internet services of both phone and cable companies.

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