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FCC on Broadband Regulation: "No, Wait, It Is a Duck After All"

Posted By James Gattuso On May 6, 2010 @ 2:35 pm In Economics | Comments Disabled

The Federal Communications Commission is nothing if not persistant. Exactly one month ago today, a federal appeals court unanimously ruled [1] that the FCC had no authority to regulate the Internet. But yesterday, FCC chairman Julius Genachowski announced the agency would try to do so anyway.

Specifically, Genachowski wants to put into place so-called “net neutrality” [2]rules, restricting how broadband network providers such as Verizon and Comcast can manage traffic on their networks. No statue, however, actually gives the FCC power to regulate broadband networks. Congress has only given the agency to power to regulate “telecommunications,” and the FCC, in a series of much-litigated decisions, has already ruled that broadband is decidedly not a telecommunications service.

The FCC tried to get around this problem by arguing that broadband really is a lot like telecommunications, so it should be able to regulate it too. In last month’s court decision, that argument was smacked down hard, with the judges saying that “close” is not good enough [3].

Now Chairman Genachowski has come back with a new plan.

In a statement yesterday [4], he said said that the agency would take steps to re-classify broadband as a “telecommunications” service [5] (or enough of it to enable the FCC to regulate). It’s a clever move. As the old saying goes, if all you have is a hammer, everything starts to look like a nail. In this case, if all the FCC can regulate is telecommunications, everything may be starting to look like a telephone.

But the plan may be too clever by half. Substantively, it’s unclear whether the statute supports such an interpretation. Moreover, a re-classification would involve a reversal of a years-long decisionmaking process under which the FCC determined that broadband service was NOT telecom service, a determination that was eventually upheld [6] by the Supreme Court. Changing that on a dime would reek of opportunism, and doubtless invite yet another reversal for the FCC in court.

Most importantly, re-classification — and the resulting Internet regulation — would be bad for consumers and for the Internet itself. Unlike the monopoly firms for which telecommunication rules were written, broadband providers operate in a thriving, dynamic, and growing industry. FCC controls would threaten this, hurting broadband and its users.

That’s true no matter how cleverly it is classified.

Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2010/05/06/fcc-on-broadband-regulation-no-wait-it-is-a-duck-after-all/

URLs in this post:

[1] ruled: http://pacer.cadc.uscourts.gov/common/opinions/201004/08-1291-1238302.pdf

[2] “net neutrality” : http://www.heritage.org/Research/Reports/2006/06/Broadband-Regulation-Will-Congress-Neuter-the-Net

[3] “close” is not good enough: http://www.heritage.org/Research/Reports/2010/04/The-FCC-and-Broadband-Regulation-What-Part-of-No-Did-You-Not-Understand

[4] statement yesterday: http://voices.washingtonpost.com/posttech/genachowski.doc

[5] re-classify broadband as a “telecommunications” service: http://www.pff.org/issues-pubs/pops/2010/pop17.8-next_communications_act.pdf

[6] upheld: http://www.law.cornell.edu/supct/html/04-277.ZS.html

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