Tuesday, April 06, 2010

What's Next For Network Neutrality?


Today the D.C. Circuit held that the Federal Communications Commission could not require cable broadband providers to adhere to network neutrality rules under the FCC's ancillary jurisdiction.

What does this mean for the fight over network neutrality?

Less than you might expect. The issues in the case are quite technical, and don't go to the merits of whether network neutrality is good or bad policy or promotes or inhibits freedom of speech or innovation. Instead, the decision simply says that the FCC's jurisdiction to issue rules ancillary to its general authority to regulate telecommunications is not sufficiently broad to include network neutrality rules for broadband providers.

What happens next? There are at least three possibilities for proponents of network neutrality (and three reasons why Comcast and the rest of the broadband industry shouldn't pop the champagne corks just yet).

1. The Supreme Court overturns the D.C. Circuit on the scope of the FCC's ancillary jurisdiction, and the FCC goes on to fight the other issues in the case. One reason why the Supreme Court might reverse is because of its Brand X decision, in which it upheld the FCC's decision in its 2002 Cable Modem Order to treat broadband providers not as common carriers subject to regulation under Title II of the Federal Communications Act, but rather as "information services" which would be subject to much less stringent regulations. Brand X was premised on the assumption that the FCC might still regulate broadband providers, even if they were classified as "information services" and not subject to the more stringent requirements of Title II. The D.C. Circuit has declared these parts of Brand X dicta or read them very narrowly. The Supreme Court might disagree.

2. Congress might amend the Federal Communications Act to create a new source of jurisdiction to regulate broadband. To do this one would need at least 60 votes in the Senate. Good luck with that. Comcast and other broadband providers probably could exert influence in both parties to prevent broad new regulatory authority to the FCC.

3. The FCC might revisit its initial decision in its 2002 Cable Modem Order to treat broadband providers as information services instead of telecommunications services (regulated by Title II of the Communications Act). The Supreme Court let the FCC classify broadband this way in the Brand X decision, but in hindsight it was a big mistake on the FCC's part, because it put the FCC's regulatory authority on a much shakier ground. If the FCC goes through the administrative process of reversing its earlier decision about cable broadband, and places cable and DSL under Title II authority, there is little doubt that it has jurisdictional power to impose network neutrality requirements. And it may create special rules or exemptions for broadband under Title II to the extent that the existing common carriage model of telephone service is inappropriate for broadband. Indeed, under its Title II jurisdiction, the FCC can require open access requirements, which would be even more valuable for purposes of promoting freedom of speech and innovation.

It's possible that the FCC will simply see if it can get a reversal in the Supreme Court. That will take many more years of litigation. But the FCC might decide that the better solution is to retrace its steps, correct the mistake it made in 2002, and reassert Title II authority over broadband. Doing this would give the FCC the tools it needs to deal with the regulatory problems of the future.

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