Out-Law News 2 min. read
07 May 2010, 3:30 pm
The Federal Communications Commission (FCC) had the legal basis of its regulation of broadband providers undermined by a US federal court earlier this year, which said that in ordering provider Comcast not to distinguish between types of traffic it had over-reached its powers.
The FCC has now examined its legal situation and said that it will reclassify the transmission elements of broadband providers as a 'telecommunications service', and therefore something it can regulate.
The FCC said that this was a 'third way' compromise between industry-opposed full regulation of all parts of their business and the previous hands-off regulation, which was based on an indirect authority over providers.
"The approach is narrow," said FCC chairman Julius Genachowski. "It will treat only the transmission component of broadband access service as a telecommunications service while preserving the longstanding consensus that the FCC should not regulate the Internet, including web-based services and applications, e-commerce sites, and online content."
"This approach would allow the Commission to move forward on broadband initiatives that are vital for global competitiveness and job creation, even as it explores with Congress and stakeholders the possibility of legislative clarification of the Communications Act," he said.
The FCC's role will be crucial in settling the question of net neutrality. Proponents of net neutrality believe that a broadband provider should communicate all traffic equally, because the subscriber has paid for access to all of the internet.
Providers, though, claim that they should be paid not just by their customers but by the content providers that produce material their subscribers consume. They claim that companies such as YouTube owners Google and the BBC should contribute to the infrastructure costs of sending video to millions of users.
The FCC had told Comcast to stop reducing the speed with which peer to peer material travelled over its networks. But a court told the regulator it did not have the power to make that order. That, said Genachowski, could cause major difficulties for industry and ISP customers.
"The Comcast decision has created a serious problem," he said. "I call on all stakeholders to work with us productively to solve the problem the Comcast decision has created in order to ensure a solid legal foundation for protecting consumers, promoting innovation and job creation, and fostering a world-leading broadband infrastructure for all Americans."
"[That ruling] creates a serious problem that must be solved so that the Commission can implement important, commonsense broadband policies, including reforming the Universal Service Fund to provide broadband to all Americans, protecting consumers and promoting competition by ensuring transparency regarding broadband access services, safeguarding the privacy of consumer information, facilitating access to broadband services by persons with disabilities, protecting against cyber-attacks, ensuring next-generation 911 services for broadband communications, and preserving the free and open Internet," he said.
Genachowski said that under his plan the FCC will only regulate part of broadband networks. It will only apply a "handful" of the regulatory powers he claims are at its disposal and will "put in place boundaries to guard against regulatory overreach".
Broadband providers did not welcome the news. "Make no mistake … the FCC is, in fact, and for the first time, regulating the internet itself,” AT&T vice president Jim Cicconi told Wired. “We believe this is without legal basis. We feel confident that if the FCC proceeds down this path, the federal courts will ultimately reach the same conclusion.”