FCC Top Lawyer Outlines Legal Framework Behind Net Neutrality Debate

WASHINGTON, May 6, 2010 – FCC General Counsel Austin Schlick on Thursday outlined the legal framework behind the narrow and tailored approach to broadband communications services that agency Chairman Julius Genachowski introduced for public discussion.

There is bipartisan agreement throughout the FCC, Congress and industry regarding three policy principles.

First, the commission does not regulate the Internet.  Section 230 of the Communications Act says the Internet and other interactive computer services have flourished to the benefit of all Americans with a minimum of government regulation.  Second, dial-up Internet access service is subject to the regulatory rules for telephone service.

This protects the American households that still depend on ordinary telephone service to dial-in to the Internet.

Third, for broadband access services, the commission refrains from regulation when possible, but will step in when necessary to protect consumers and fair competition.  This approach has been expressed in previous FCC decisions such as the Wireline Broadband Order and its Internet Policy Statement in September 2005.

The D.C. Circuit Court decision in the Comcast case recognizes the commission’s ability to adopt rules concerning services specifically addressed in the Communications Act.  However, because the commission classified cable modems entirely as information services, which is not a category subject to any specific statutory rules, it could not enforce Title II’s nondiscrimination and consumer protection principles in the cable modem context.

The commission has three options in the wake of the Comcast decision regarding broadband policy.

First, the commission can continue to address broadband issues under Title I ancillary jurisdiction.  According to General Counsel Schlick, this would not be the ideal solution because it would not allow the commission to directly promote broadband deployment and adoption or protect broadband competition and consumers.

Second, the commission can reclassify broadband Internet access services as telecommunications services and apply the Title II of the Communications Act in full.  According to Schlick, this would not be an effective solution because it is inconsistent with the current consensus approach of regulatory restraint.

The third option is to adopt Justice Scalia’s bifurcated view of broadband Internet access service from the dissent in the Brand X decision.  This view focuses on the idea that the computing functionality and broadband transmission component of retail Internet service must be acknowledged as two separate things.  According to Schlick, this view is consistent with the majority opinion in Brand X, and would also sync up the commission’s legal approach with its policy of keeping the Internet unregulated while exercising some supervision of access connections.

Furthermore, Schlick describes how six provisions in Title II can help the commission implement the consensus policy approach and maintain the same legal framework as under Title I.  Specifically, Sections 201, 202 and 208 collectively forbid unreasonable denials of service and allow the commission to enforce the prohibition.

Applying these sections to broadband access service would hold broadband access providers to standards they agree should be met and would address the problem of secret interference with subscribers’ lawful Internet transmissions.  Section 222 requires providers of telecommunications services to protect the confidential information they receive in the course of providing service and Section 255 requires telecommunications services and equipment to be accessible to individuals with disabilities.

In addition to the reclassification discussion, Schlick outlined how Title II classification has benefited wireless communications.

Schlick then addressed some concerns that industry has already expressed about this possible reclassification.  He clarified that reclassification would not necessarily open the door to new network unbundling authority.  In addition, Schlick stated that there would be no rate regulation regarding prices or pricing structure for broadband access service.  Also, the commission has broad authority to preempt inconsistent state requirements when they frustrate valid federal policies.  Therefore, there should no inconsistent state regulation.

Schlick also states that this forbearance approach would be difficult to overturn and should provide greater, not lesser, protection against excessive regulation than the Title I approach.  In addition, a narrow and tailored forbearance approach to solving the Comcast problem appears to be workable.