The FCC, in a 3-2 vote, opened a formal Notice of Inquiry (NOI) into the matter in June, asking for help as the agency aims to reestablish its authority on broadband rules and policies. The FCC is taking this step because some at the agency, including chairman Julius Genachowski and commissioner Michael J. Copps, believe the Commission's authority and National Broadband Plan was put in jeopardy after a court overturned an earlier FCC order against Comcast Corp. (Nasdaq: CMCSA, CMCSK) over the MSO's earlier treatment of some peer-to-peer Internet traffic. (See FCC Looks to Reclaim Its Broadband Mojo , FCC Declares War on Broadband , Net Neutrality Ruling: FCC Loses, Comcast Wins, and The National Broadband Plan.)
"We need to reclaim our authority," Copps said at the time.
The FCC hasn't issued a formal rule-making procedure on the creation of a new framework for broadband rules, but the NOI is looking for several options that the agency might pursue. However, three possibilities already have been outlined:
- Title I: Retaining status quo classification that defines cable modem service as an information service.
- Title II: Changing broadband classification into a full-blown telecommunications service that would be subject to stricter rules.
- "Third Way": A proposal championed by Genachowski that would apply only the "transmission component" of broadband services, including things such as denial of service and protection of privacy. Third Way, as described, would steer clear of elements such as install rate regulations or network unbundling requirements, and be closely modeled on how the FCC has regulated the mobile phone industry. (See Third Way or Third Rail?)
Applying full Title II rules are sometimes referred to as the "nuclear option." Those in favor of Third Way think it gives the FCC the authority it needs to be effective without having to wield a heavy regulatory hand. Others argue that the option would open the door to broad regulations, cause market uncertainty, and stymie network investments by broadband ISPs. (See Did the Market Overreact? .)
No way on Third Way
The NCTA said it accepts the FCC's intent to create a "legally sustainable" light touch on broadband service regulations, but believes "that the [Third Way] proposal's underlying assumptions are fundamentally flawed. [A] regulatory about-face would likely be reversed in court, and even if implemented exactly as proposed, would not come close to the 'light' regulatory touch that exists today."
Using history partly as its guide, the NCTA is for the status quo, noting that the Commission has examined the matter five times (in 1998, 2002, 2005, 2006, and 2007) and come to the same conclusion -- that cable modem service should be classified under Title I. The classification, the NCTA pointed out, was also affirmed by the Supreme Court in the 2002 Brand X decision.
On that point, the NCTA argued that "nothing material" has changed about broadband Internet access that would now justify a reversal or change in how broadband services are classified in the FCC's eyes.
In the dark
The NCTA also questioned whether the FCC would be able to forebear (not enforce) some of the heavier-handed Title II provisions under the Third Way proposal, claiming that the FCC has yet to offer clear definitions on the matter.
The American Cable Association (ACA) , an organization that represents nearly 900 independent cable ops, echoed that opinion in its comments, urging the FCC to delay the effective date of any reclassification ruling until the Commission can establish the substance of the Title II regulations that it will require carriers to follow.
The ACA also reminded the FCC that it can't proceed with a "self-styled" Third Way approach without first conducting a formal rule-making and complying with the Regulatory Flexibility Act (RFA), which requires the Commission to quantify the burdens reclassification would have on small operators and what steps the agency could take to improve those burdens.
"As it is, the FCC has left ACA and its members in the dark about the precise extent of the new regulatory burdens associated with common carrier status for broadband Internet services, and this uncertainty affects both operations and investment incentives," ACA president and CEO Matthew Polka said.
Thursday (July 15) was the deadline for the first round of NOI comments. Reply comments are due by August 12.
— Jeff Baumgartner, Site Editor, Light Reading Cable