FCC Opens 'Third Way' Internet Regulation For Comment

Response To 'Third Way'

The FCC voted along party lines to move forward with a Notice of Inquiry to solicit comments on regulation of the Internet.  The notice asks the public to weigh in on the "third way" plan proposed by Chairman JULIUS GENACHOWSKI to regulate ISPs as common carriers under Title II for Net Neutrality purposes only, as well as keeping ISPs under the "information service" Title I classification or moving them to Title II as "telecommunications services" in their entirety.

Comments from the public are due on JULY 15th, with reply comments due on AUGUST 12th.

Chairman GENACHOWSKI said, "The Notice of Inquiry we adopt puts out for comment, even-handedly, several possible solutions to the challenge created by the court case -- including a Title I path, a full Title II path, and a middle-ground solution -- the Third Way approach that I have previously described.... The Third Way approach was developed out of a desire to restore the status quo light-touch framework that existed prior to the court case. It was developed as a potential response to the court decision that would reject the extremes—a response that rejects both the extreme of applying extensive legacy phone regulation to broadband, and also rejects the extreme of eliminating FCC oversight of broadband.

"It’s not hard to understand why companies subject to an agency’s oversight would prefer no oversight at all if they had the chance.  But a system of checks and balances in the communications sector has served our country well for many decades, fostering trillions of dollars of investment in wired and wireless communications networks, and in content, applications, and services—and creating countless jobs and consumer benefits.  And there is no question that we need to pursue a framework and policy initiatives that encourage and unlock massive private investment."

GENACHOWSKI concluded, "I ask only this of all participants in this discussion, inside and outside the Commission: Let’s not pretend that the problems with the state of broadband in America don’t exist; let’s not pretend that the risk of excessive regulation is not real, or, at the other extreme, that the absence of basic protections for competition and consumers is acceptable. Instead, let’s put rhetoric and posturing aside, and work together to solve the problem created by the court case, so that we can rise together to the major 21st century challenges of achieving U.S. world leadership in broadband and innovation, fostering sustainable economic growth and job creation, and bringing the benefits of broadband to all Americans."

Commissioner MICHAEL COPPS blamed "the Commission's deregulatory binge" and the previous Republican majority for the industry's woes, saying that "the challenge Commissioner ADELSTEIN and I faced (after deregulation) was to rescue what we could from the accident scene."  COPPS said that "the Commission had moved its authority and oversight of advanced telecommunications to a part of the statute where those services would have a steep hill to climb to win even the most basic consumer safeguards. But let’s be clear here. We still have the original authority the Commission moved away from. It reposes in the statute. It is there for us to use -- by sun-up tomorrow, if we choose. It rests on history and precedent. And, soundly argued in court, it puts us on much firmer legal footing to survive the inevitable industry challenges that are coming anyway than does trying to stand our ground on the quicksand of Title I. We need to reclaim our authority."

"Despite all the spin to the contrary," COPPS insisted, "we are not talking—even remotely—about regulating the Internet. We are talking about meaningful oversight of the infrastructure and services that allow Americans to get to the Internet. This isn’t about government regulating the Internet—it’s about making sure that consumers, rather than a handful of entrenched incumbents, have maximum control over their access to the Internet."

Commissioner MIGNON CLYBURN warned that the opposition to the new regulation involves "a great deal of misinformation being disseminated, which is creating misplaced anxiety."  "(T)he public relations campaign being waged by some may itself be the catalyst for doubts about investment," CLYBURN asserted. "There should be no surprise when the all-out effort to spin the Chairman’s proposal as one that entails extensive regulation scares off potential investors. If you yell 'The sky is falling!' enough times, people will eventually take cover."

In his dissent, Commissioner ROBERT MCDOWELL said, "The ideas put forth for comment in today’s NOI are not new. In fact, they were discussed and discarded in an overwhelmingly bipartisan way in the 1990s.... The regulatory regime suggested by the majority today is likely to create asymmetries in the market place.... the proposed new regime will place the heavy thumb of government on the scale of a free market to the point where innovation and investment in the 'core' of the ’Net are subjected to the whims of 'Mother-May-I' regulators. Although I have a tremendous amount of respect for my colleagues, no one can predict who will occupy these chairs in the future, or how they will act."  He noted that investors may withhold capital from the Internet sector due to the risks inherent in the regulation. 

MCDOWELL charged that "a large bipartisan majority of Congress -- consisting of at least 291 Members -- has weighed in asking the Commission to discard this idea or at least to wait for Congress to act. In other words, a commanding majority of the directly elected representatives of the American people do not want the FCC to try to regulate broadband Internet access as a monopoly phone service....  the Commission has many avenues it can pursue to further the cause of more broadband deployment and adoption without having to take on the risks associated with a Title II classification."

Commissioner MEREDITH ATWELL BAKER also dissented, saying, "Although I generally support building robust public records to bolster the Commission’s work and asking questions that lead to a developed analysis of all sides of an issue, this is the rare case where opening a proceeding creates so much regulatory uncertainty that it harms incentives for investment in broadband infrastructure and makes providers and investors alike think twice about moving forward with network investments under this dark regulatory cloud. This outcome can only harm consumers who need better, faster, and more ubiquitous broadband today."

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