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THE THIRD WAY: A NARROWLY TAILORED BROADBAND FRAMEWORK
Chairman Julius Genachowski Federal Communications Commission May 6, 2010
Many have asked about the FCC’s next steps in view of the recent decision in the Comcast case. I’ll describe here a path forward, which will begin with seeking public comment on a post- Comcast legal foundation for the FCC’s approach to broadband communications services. The goal is to restore the broadly supported status quo consensus that existed prior to the court decision on the FCC’s role with respect to broadband Internet service.
This statement describes a framework to support policies that advance our global competitiveness and preserve the Internet as a powerful platform for innovation, free speech, and job creation. I remain open to all ideas on the best approach to achieve our country’s vital goals with respect to high-speed broadband for all Americans, and the Commission proceeding to follow will seek comment on multiple legal theories and invite new ideas.
The FCC’s Mission
More than 75 years ago, Congress created the Federal Communications Commission with an explicit mission: “to make available, so far as possible, to all people of the United States... A rapid, efficient, Nation-wide, and world-wide wire and radio communications service with adequate facilities at reasonable charges, for the purpose of the national defense, [and] for the purpose of promoting the safety of life and property through the use of wire and radio communication.”
In the decades since, the technologies of communications have changed and evolved—from telephone, radio, and broadcast TV to cable, satellite, mobile phones, and now broadband Internet. With the guidance of Congress, the Commission has tailored its approach to each of these technologies. But the basic goals have been constant: to encourage private investment and the building of a communications infrastructure that reaches all Americans wherever they live; to pursue meaningful access to that infrastructure for economic and educational opportunity and for full participation in our democracy; to protect and empower consumers; to promote competition; to foster innovation, economic growth, and job creation; and to protect Americans’ safety.
The Consensus Understanding of the FCC’s Role with Respect to Broadband
A challenge for the FCC in recent years has been how to apply the time-honored purposes of the Communications Act to our 21st^ Century communications platform—broadband Internet—access to which is generally provided by the same companies that provide telephone and cable television services.
Broadband is increasingly essential to the daily life of every American. It is fast becoming the primary way we as Americans connect with one another, do business, educate ourselves and our children, receive health care information and services, and express our opinions. As a unanimous FCC said a few weeks ago in our Joint Statement on Broadband , “Working to make sure that America has world-leading high- speed broadband networks—both wired and wireless—lies at the very core of the FCC’s mission in the 21 st^ Century.”
Over the past decade and a half, a broad consensus in the public and private sectors has developed about the proper role and authority for the FCC regarding broadband communications. This bipartisan consensus, which I support, holds that the FCC should adopt a restrained approach to broadband
communications, one carefully balanced to unleash investment and innovation while also protecting and empowering consumers.
It is widely understood—and I am of the view—that the extreme alternatives to this light-touch approach are unacceptable. Heavy-handed prescriptive regulation can chill investment and innovation, and a do- nothing approach can leave consumers unprotected and competition unpromoted, which itself would ultimately lead to reduced investment and innovation. The consensus view reflects the nature of the Internet itself as well as the market for access to our broadband networks. One of the Internet’s greatest strengths—its unprecedented power to foster technological, economic, and social innovation—stems in significant part from the absence of any central controlling authority, either public or private. The FCC’s role, therefore should not involve regulating the Internet itself.
Consumers do need basic protection against anticompetitive or otherwise unreasonable conduct by companies providing the broadband access service (e.g., DSL, cable modem, or fiber) to which consumers subscribe for access to the Internet. It is widely accepted that the FCC needs backstop authority to prevent these companies from restricting lawful innovation or speech, or engaging in unfair practices, as well as the ability to develop policies aimed at connecting all Americans to broadband, including in rural areas.
The Broadband Policy Agenda
Consistent with this consensus view of the FCC’s role, Congress last year directed the FCC to develop America’s first National Broadband Plan, which we delivered in March. And I have described over the past months the policy initiatives I believe are of crucial importance to our global competiveness, job creation, and broad opportunity. These include:
∑ Extending broadband communications to all Americans, in rural and urban America and in between, by transforming the $9 billion Universal Service Fund from supporting legacy telephone service to supporting broadband communications service; ∑ Protecting consumers and promoting healthy competition by, for example, providing greater transparency regarding the speeds, services, and prices consumers receive, and ensuring that consumers—individuals as well as small businesses—are treated honestly and fairly; ∑ Empowering consumers to take control of their personal information so that they can use broadband communications without unknowingly sacrificing their privacy; ∑ Lowering the costs of investment—for example, through smart policies relating to rights-of- way—in order to accelerate and extend broadband deployment; ∑ Advancing the critical goals of protecting Americans against cyber-attacks, extending 911 coverage to broadband communications, and otherwise protecting the public’s safety; and ∑ Working to preserve the freedom and openness of the Internet through high-level rules of the road to safeguard consumers’ right to connect with whomever they want; speak freely online; access the lawful products and services of their choice; and safeguard the Internet’s boundless promise as a platform for innovation and communication to improve our education and health care, and help deliver a clean energy future.
At the same time, I have been clear about what the FCC should not do in the area of broadband communications: For example, FCC policies should not include regulating Internet content, constraining reasonable network management practices of broadband providers, or stifling new business models or managed services that are pro-consumer and foster innovation and competition. FCC policies should also recognize and accommodate differences between management of wired networks and wireless networks,
the basic oversight functions, and pursue the basic broadband-related policies, that have been long and widely thought essential and appropriate.
This undermining of settled understandings about the government’s role in safeguarding our communications networks is untenable. Since the decision, lawyers from every quarter of the communications landscape have been debating a difficult and technical legal question: What is the soundest and most appropriate legal grounding to let the FCC carry out what almost everyone agrees to be necessary functions regarding broadband communications?
The Conventional Options
Two primary options have been debated since the Comcast decision:
One, the Commission could continue relying on Title I “ancillary” authority, and try to anchor actions like reforming universal service and preserving an open Internet by indirectly drawing on provisions in Title II of the Communications Act (e.g., sections 201, 202, and 254) that give the Commission direct authority over entities providing “telecommunications services.”
Two, the Commission could fully “reclassify” Internet communications as a “telecommunications service,” restoring the FCC’s direct authority over broadband communications networks but also imposing on providers of broadband access services dozens of new regulatory requirements.
I have serious reservations about both of these approaches.
The FCC General Counsel advises that under the first option, continuing to pursue policies with respect to broadband Internet access under the ancillary authority approach has a serious risk of failure in court. It would involve a protracted, piecemeal approach to defending essential policy initiatives designed to protect consumers, promote competition, extend broadband to all Americans, pursue necessary public safety measures, and preserve the free and open Internet.
The concern is that this path would lead the Commission straight back to its current uncertain situation— and years will have passed without actually implementing the key policies needed to improve broadband in America and enhance economic growth and broad opportunity for all Americans.
Meanwhile, the second option, fully reclassifying broadband services as “telecommunications services” and applying the full suite of Title II obligations, has serious drawbacks. While it would clarify the legal foundation for broadband policy, it would also subject the providers of broadband communications services to extensive regulations ill-suited to broadband. Title II, for example, includes measures that, if implemented for broadband, would fail to reflect the long-standing bipartisan consensus that the Internet should remain unregulated and that broadband networks should have only those rules necessary to promote essential goals, such as protecting consumers and fair competition.
Accordingly, I directed the FCC General Counsel and staff to identify an approach that would restore the status quo—that would allow the agency to move forward with broadband initiatives that empower consumers and enhance economic growth, while also avoiding regulatory overreach. In short, I sought an approach consistent with the longstanding consensus regarding the limited but essential role that government should play with respect to broadband communications.
I am pleased the General Counsel and staff have identified a third-way approach—a legal anchor that gives the Commission only the modest authority it needs to foster a world-leading broadband
infrastructure for all Americans while definitively avoiding the negative consequences of a full reclassification and broad application of Title II.
A Third Way
As General Counsel Austin Schlick explains more fully in his statement today, under this narrow and tailored approach, the Commission would:
∑ Recognize the transmission component of broadband access service—and only this component— as a telecommunications service; ∑ Apply only a handful of provisions of Title II (Sections 201, 202, 208, 222, 254, and 255) that, prior to the Comcast decision, were widely believed to be within the Commission’s purview for broadband; ∑ Simultaneously renounce—that is, forbear from—application of the many sections of the Communications Act that are unnecessary and inappropriate for broadband access service; and ∑ Put in place up-front forbearance and meaningful boundaries to guard against regulatory overreach.
This approach has important virtues.
First, it will place federal policy regarding broadband communications services, including the policies recommended in the National Broadband Plan, on the soundest legal foundation, thereby eliminating as much of the current uncertainty as possible. From reorienting the Universal Service Fund to support broadband in rural America, to adopting focused consumer protection and competition policies, to promoting public safety in a broadband world, this approach would provide a solid legal basis. In particular, it would allow broadband policies to rest on the Commission’s direct authority over telecommunications services while also using ancillary authority as a fallback.
Second, the approach is narrow. 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.
Third, this approach would restore the status quo. It would not change the range of obligations that broadband access service providers faced pre- Comcast. It would not give the FCC greater authority than the Commission was understood to have pre- Comcast. And it would not change established policy understandings at the FCC, such as the existing approach to unbundling or the practice of not regulating broadband prices or pricing structures. It would merely restore the longstanding deregulatory—as opposed to “no-regulatory” or “over-regulatory”—compact.
Fourth, the approach would establish meaningful boundaries and constraints to prevent regulatory overreach. The FCC would invoke only the few provisions necessary to achieve its limited but essential goals. Notably, these are the very same provisions (sections 201, 202, and 254, for example) that telephone and cable companies agree the FCC should invoke, albeit indirectly under an “ancillary authority” approach. The Commission would take steps to give providers and their investors confidence and certainty that this renunciation of regulatory overreach will not unravel while also giving consumers, small businesses, entrepreneurs and innovators the confidence and certainty they need and deserve. Since Congress gave the Commission forbearance authority 17 years ago, the Commission has never reversed or undone a forbearance decision.
