The Federal Communications Commission, the government agency charged by Congress with regulating communications by air and wire, announced today a sweeping new program that goes far beyond its mandate. The FCC’s move is likely to lead to a lengthy and unnecessary legal battle, create needless uncertainty in the market, and detract from the FCC’s important work in implementing the recently unveiled national Broadband Plan. While the FCC is attempting to create a regulatory framework suitable for the ever changing Internet ecosystem, its proposal is tantamount to going duck hunting with a cannon.
This is a story that has become all too familiar. In the recent past, the courts have struck down punitive FCC orders against the Super Bowl "wardrobe malfunction" and on, April 6, an overwrought ruling against cable operator Comcast, who sought to preserve good Internet performance for those of its customers who use Voice over Internet Protocol (VoIP) services such as Skype and Vonage. This most recent example of FCC over-reach is a proposal that would take broadband Internet services out of their present status as lightly-regulated "information services" (Title I) and plunk them into a regulatory system devised for the monopoly telephone networks of the 1930s (Title II).
The regulatory system the FCC now seeks to abandon was not established in a reckless or ill-conceived manner. The selection of the "information services" classification came from a sober reading of the applicable law that has been upheld by the U.S. Supreme Court. Reclassification is certain to bring about a protracted legal battle that the FCC is unlikely to win. In addition, that battle will create confusion for stakeholders and introduce needless and damaging uncertainty into the market. The Commission is, by its own admission, reacting to its most recent defeat (in the Comcast case) with what amounts to an attempt to change the law under which it operates. This is going too far.
The FCC represents this action as an attempt to find a moderate "Third Way" to regulate Internet services that is neither as loose as the information services defined by Title I of the Communications Act nor as tight as the telephone services defined by Title II. ITIF supports Third Way regulations for the Internet and a revision to the Communications Act that would create a new framework appropriate not just for broadband services, but for Internet-enabled innovations such as VoIP. It has long been evident that Vonage is overburdened by telephone regulations, and competitive services such as Skype are forced to pretend they aren't offering telephone services at all in order to escape the taxes, fees, and other requirements of traditional telephony.
Talking the “Third Way” talk is not the same as walking the walk, however. Whatever the details of a “Third Way,” it cannot be created by the FCC. Putting the Internet in a regulatory straightjacket of Title II and then not enforcing much of it is not the path to a “Third Way.” Only Congress can create a new chapter in the library of communications law. The best the FCC can do to facilitate the exercise is propose a framework. That is the only way new law can be created for a system as novel and innovative as the Internet. ITIF appreciates the FCC's use of the “Third Way” concept we have embraced. However, “third way” is not simply an elegant and highly-nuanced phrase. Rather, the light-touch Third Way is meant to b