Upcoming NOI will look to the “Third Way”

The FCC has announced that, at its open meeting on Thursday, June 17, 2010, it will take up a Notice of Inquiry (NOI) to consider “possible legal frameworks” for regulation of broadband Internet services. While it could address a number of issues, the FCC is likely to consider regulation of network management, i.e., “net neutrality”. To say this will be controversial is an understatement.

As we have previously reported, the recent Comcast decision in the U.S. Court of Appeals held the FCC lacks jurisdiction to regulate Internet traffic management under Title I of the Communications Act. The FCC had to rely on Title I, having previously declared broadband Internet access to be a Title I “information service”, rather than a Title II “telecommunications service”. In spite of the recent spanking from the D.C. Circuit, the FCC still appears determined to regulate Internet traffic management, and must now find a different and sustainable legal basis for doing so.

Accordingly, the upcoming NOI will ask for public comment on questions including:

  1. Whether the FCC’s “information service” classification remains legally sound and adequate to support effective performance of the FCC’s responsibilities (which themselves are in dispute);
  2. The legal and practical consequences of classifying broadband Internet connectivity as a “telecommunications service”, to which all the requirements of Title II of the Communications Act would apply (much as they do to telephone systems); and
  3. A possible “third way”: the FCC reaffirms that the Internet and Internet-based information services remain generally unregulated under Title I; it identifies the transport component (only) of wired broadband Internet as a Title II telecommunications service; but it forbears from applying any Title II provisions other than those needed to implement “fundamental universal service, competition, and consumer protection policies” – terms that for now remain undefined.

What the FCC’s Public Notice doesn’t mention is that the dice have already been loaded to come up for the “third way”.

 Both Chairman Genachowski and the FCC’s  General Counsel have made public arguments for such an approach. Also, it appears unlikely that the FCC could accomplish net neutrality under a Title I theory after the Comcast decision (though some ISPs have asserted it can be done). And everyone, including the Chairman and other net neutrality advocates, agree that full-blown Title II regulation would be excessively and inappropriately burdensome.

Some of us here are mystified by the FCC’s determination to move forward with the NOI, in light of recent letters to Chairman Genachowski from 74 House Democrats and 37 Senate Republicans opposing the “third-way” approach. They demand the FCC allow Congress to come up with a legislative solution. Is the FCC trying to force Congress to act quickly? Or does it think Congress won’t act at all? 

Also notable is the FCC’s release of an NOI, rather than a notice of proposed rulemaking (NPRM) setting out specific proposals for specific rules. The use of an NOI suggests the Commission is acting tentatively (or wants to appear that way). This is probably appropriate, in light of bipartisan resistance from Congress, as well as from ISPs. Moreover, the NOI calls into question the status of the FCC’s October 2009 NPRM on “Open Internet”/net neutrality rules.  That NPRM was premised on the same Title I “ancillary authority” that the Comcast decision disfavored. Will the NOI merely look to the jurisdictional question, with the FCC plugging that answer into its existing Open Internet substantive proposals? More likely, the substance of those proposals will have to evolve in light of the jurisdictional resolution. The new “third-way” Title II context may require tweaking the six Open Internet rules proposed last October, or even dropping some of those and adding new ones.

In any case, given the strongly held positions both in favor of and opposed to the FCC’s regulation of Internet traffic management, the NOI will certainly trigger pitched battles over the existence or non-existence of a statutory basis for net neutrality regulations.   The battlefield has shifted, but the fighting will continue.