Saturday, April 17, 2010;
LAST WEEK, the D.C. federal appeals court turned back the Federal Communications Commission's recent effort to regulate the Internet. The legal provision cited by the FCC, the judges concluded, does not give the agency authority over Internet service providers (ISPs) such as Comcast and AT&T.
The decision, written by a Bill Clinton appointee and joined by two Republican-named judges, is well-reasoned. It also raises a question: Should the FCC have sway over the Internet? (Disclosure: The Washington Post Co. has interests in broadcast and cable television and businesses that depend on the Internet, all of which could be affected by FCC action or inaction.)
For the past eight years, the FCC has rightly taken a light regulatory approach to the Internet, though it believed it had authority to do more. Now that the agency has lost in court, some advocates in the technology industries are urging the agency to invoke a different section of law and subject ISPs to more aggressive regulation, until now reserved for telephone companies and other "common carriers." Such a move could allow the FCC to dictate, among other things, rates that ISPs charge consumers. This level of interference would require the FCC to engage in a legal sleight of hand that would amount to a naked power grab. It is also unnecessary: There have been very few instances where ISPs have been accused of wrongdoing -- namely, unfair manipulation of online traffic -- and those rare instances have been cleared up voluntarily once consumers pressed the companies. FCC interference could damage innovation in what has been a vibrant and rapidly evolving marketplace.
Some oversight of ISPs would serve the public interest as long as it recognizes the interests of companies to run businesses in which they have invested billions of dollars. Transparency and predictability are essential to encourage established companies and start-ups to continue to invest in technologies dependent on the Internet. ISPs, for example, should be required to disclose information about how they manage their networks to ensure that these decisions are legitimate and not meant to interfere with applications that compete with the ISPs' offerings.
Congress should step in to strike the appropriate balance. Enacting laws would take some time, but the process would allow for robust debate. In the meantime, any questionable steps by ISPs will be flagged by unhappy consumers or Internet watchdog groups. If ISPs change course and begin to threaten the openness of the online world, Congress could and probably would redouble its efforts.