Reclassifying Broadband Would Get Very Sticky

There are new cries for the FCC to regulate broadband like traditional phone service (see Coalition: FCC Needs To Go Title II Route).

Which I’d put in the “Be Careful What You Wish For” file.

Quick recap: Last week the U.S. Court of Appeals for the D.C. Circuit ruled that the FCC overstepped its authority in ordering Comcast to stop hindering peer-to-peer file sharing applications on its network (see Court Saps FCC’s Strength on ‘Net Protection’).

To some, the way around this legal setback — to “protect” the Internet from cable companies and telcos — is for the FCC to just reclassify broadband as a “telecommunications service” (Title II under the Communications Act) whereas it’s currently regulated as an integrated “information service” (Title I).

“The commission should state its case, relabel high-speed Internet access as a ‘telecommunications service,’ and take back the power to protect American consumers,” University of Michigan Law School professor Susan Crawford wrote in this Sunday’s New York Times.

If regulated as Title II carriers, broadband providers would have to provide “communication service upon reasonable request therefore”; to charge “just and reasonable” rates; to refrain from engaging in “unjust or unreasonable discrimination”; to comply with FCC requirements for filing and abiding by written tariffs; to interconnect with other carriers; and to collect fees for universal service and other programs.

Simple, right? Wrong.

There are several problems with the idea — first of which is that it would run contrary to 12 years of precedent at the FCC, as Mayer Brown partner Howard Waltzman, former chief counsel for telecom and Internet of the House Energy & Commerce Committee, told my colleague John Eggerton.

And it would create a complicated legal mess that would take years to sort through, according to former FCC chairman Michael Powell.

“I hate the idea of Title II for broadband,” Powell said in an interview with The Washington Post’s Cecilia Kang. “I think we would really regret it because for a regulator versed in what it means, it means thousands and thousands of pages that would fall into this space and we would spend our lifetime trying to clean it up. And the real worry is that we will enter another prolonged period of litigation.”

But, network-neutrality advocates insist, isn’t the additional regulatory burden worth it to “protect” the Internet, and ensure it remains “open”?

“Free and clear access is important for consumers, for competition and for creativity. Because without it, we’ll be stuck in a ‘57 channels and nothing on’ world, dictated and enforced by the cable monsters,” Jim Louderback, CEO of Internet-video site Revision3, wrote in a blog post on GigaOm, in advocating that the FCC reclassify broadband as a telecommunications service.

Ironically, however, if broadband were brought under Title II regulations, companies like Revision3 — and YouTube, Netflix, Hulu, Google, Skype, eBay, and thousands of others — could also find themselves under the FCC’s regulatory purview and subject to the same red tape about whether the rates and terms of their services are “unjust and unreasonable.”

That’s because the U.S. Supreme Court, in its Brand X ruling in 2005 affirming cable-modem service as a Title I information service, said that reclassifying cable broadband as a telecommunications service “would subject to mandatory common-carrier regulation all information service providers that use telecommunications as an input to provide information service to the public.”

And that would prompt uncertainty about the FCC’s legal authority over all Internet services, regardless of whether they’re facilities-based, according to a Feb. 22 joint letter to the agency from the NCTA, CTIA, USTelecom, TIA, Verizon, AT&T, Time Warner Cable and Qwest.

“[A]ny ‘reinterpretation’ of this statutory scheme could extend full-blown common-carrier regulation to every corner of the Internet ecosystem,” the coalition wrote. “At best, it 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.”

Will the FCC open this can of worms — all in the name of “protecting” Internet users from hypothetical anticompetitive actions that broadband providers might take at some point in the future?

I trust cooler heads will prevail, once the “mind-glazing” ramifications of this are considered.