FCC will seek to regulate Internet providers
Thursday, May 6, 2010
The chairman of the Federal Communications Commission plans to seek clear-cut powers to regulate Internet service providers, redefining the government's role over at least parts of the fast-growing industry.
The proposal, to be announced Thursday, is expected to be opposed by broadband network operators such as AT&T, Comcast and Verizon, whose Internet access businesses are becoming their main source of revenue as consumers rely on the Web as a primary communication tool.
Internet companies such as Google and Skype and public interest groups are applauding the move because it would allow the FCC to carry out policies to expand broadband access nationwide. The groups also support the commission's efforts to create a regulation that would force broadband service providers to treat all applications equally over high-speed Internet networks, a concept known as net neutrality.
A senior FCC official said Wednesday that Chairman Julius Genachowski's move would be a "third way," between the industry's current state of deregulation and a more comprehensive regulatory approach. Broadband is now defined as an information service with weak FCC oversight. The proposal would put Internet service providers in a category with telephone service, which is more clearly under the agency's authority.
However, the move would stop short of subjecting Internet providers to the full range of requirements imposed on telecom companies, such as oversight of price and billing practices or a rule that would force network providers to share lines with competitors. It also would govern only the companies that own the networks, not the services they transmit.
Last month, a federal court cast doubt on the FCC's authority over the Internet, ruling that the agency overstepped its bounds when it sanctioned Comcast in 2008 for blocking an Internet application that the company said was slowing broadband service.
"The Chairman will seek to restore the status quo as it existed prior to the court decision in order to fulfill the previously stated agenda of extending broadband to all Americans, protecting consumers, ensuring fair competition, and preserving a free and open Internet," the FCC official said in a statement.
Sources said Genachowski appeared to have shifted from late last week, when The Washington Post reported that it looked like he was inclined to keep broadband services deregulated.
Two sources with knowledge of the discussions in the FCC this week said a letter that Sen. John D. Rockefeller IV (D-W.Va.) and Rep. Henry A. Waxman (D-Calif.) sent to Genachowski on Wednesday provided political support for the agency to shift Internet lines to a more regulatory framework. The lawmakers said they could support defining broadband as a telecommunications service if the FCC stripped Internet access providers of some of the rules that apply to phone companies.
The sources spoke on the condition of anonymity because of the sensitive nature of the topic and because Genachowski hasn't officially commented on his decision.
Corporate opposition is sure to be fierce to what some view as a strong move to regulate Internet companies.
"If the goal is maximizing broadband deployment and adoption . . . new regulations such as these will not help," said Bruce Mehlman, co-chairman of the Internet Innovation Alliance, an industry group. "This sounds more like a political solution likely to imperil investment than a policy initiative that tackles actual challenges in the marketplace."
Susan Crawford, a law professor at the University of Michigan and a former economic adviser to President Obama, said the move would be a good middle ground for the commission.
"The FCC has clearly thought through all the implications of using its regulatory authority to provide for a level playing field for innovation and job creation in America," she said. "The FCC has reached the right result."
Genachowski's office and general counsel briefed officials Wednesday on his decision. Michael Copps and Mignon Clyburn, Democratic members of the commission, have said they would support a proposal to reclassify broadband, which would give Genachowski enough votes to move forward on the plan.
The proposal must be opened to public comment and then would need three out of five FCC votes to be approved.