FCC chairman proposes increased regulation of Internet service providers

By Cecilia Kang
Washington Post Staff Writer
Friday, May 7, 2010

Federal Communications Commission Chairman Julius Genachowski on Thursday proposed putting Internet service providers (ISPs) into the same category as telephone companies, a move aimed at solidifying the agency's authority over the fast-growing broadband industry.

The proposal would impose a fresh layer of rules on a sector that has so far been lightly regulated. By reclassifying broadband providers, the FCC hopes to be able to carry out its plans to greatly expand Internet access nationwide and require companies that get consumers onto the Web to treat all online traffic equally.

Genachowski portrayed his plan as a middle-of-the-road approach to regulating broadband, saying he would exempt providers from dozens of rules that typically apply to phone companies.

"I sought an approach consistent with the limited but essential role that government should play with respect to broadband communications," said Genachowski, who noted that he did not wish to burden the thriving broadband industry with a heavy regulatory hand.

Those concessions notwithstanding, the proposal was met with swift opposition from several of the nation's largest ISPs.

"The fact remains that this approach would subject Internet facilities to some of the most onerous regulatory provisions on the books," said Jim Cicconi, senior executive vice president of external and legislative affairs at AT&T.

The long-awaited decision follows a federal court decision last month that threw into doubt the FCC's ability to regulate ISPs. An appeals court found that the FCC had overreached its authority by sanctioning Comcast for blocking a peer-to-peer application.

ISPs and some analysts said they doubted the agency could strip enough rules from broadband companies in a way that didn't hurt their ability to make business decisions and draw investment. They disagreed with Genachowski's characterization that the proposal would be a middle ground between deregulation and regulation, and they warned that such a course could face significant legal hurdles as companies challenge the plan in court.

"We believe the chairman's stated approach is legally unsupported," said Tom Tauke, executive vice president of public affairs for Verizon Communications. "The regulatory and judicial proceedings that will ensue can only bring confusion and delay the important work of continuing to build the nation's broadband future."

As part of the plan announced Thursday, Genachowski proposed revising an $8 billion yearly rural phone subsidy to help fund the construction of building new broadband networks. The FCC would also apply telephone-sector rules on privacy and access for the disabled. But the agency would exempt broadband providers from rules that force carriers to share their lines with competitors and that make the FCC a government arbiter on pricing.

Genachowski has the support of the two other Democratic commissioners, who would give him enough votes to carry out his order.

The decision is expected to launch a furious round of lobbying from opponents and proponents. Comcast, the wireless trade group CTIA, Qwest and cable trade group NCTA all expressed disappointment with the decision. Silicon Valley firms that depend on the Internet to deliver their services cheered the agency's move in a letter of support sent on Thursday to Genachowski and public interest groups.

Gigi Sohn, president of media public interest group Public Knowledge, said lobbying efforts will intensify in months ahead.

"Look, 10 days ago I came out of the chairman's office feeling very depressed about where things were going, but things changed," Sohn said. "This means supporters will have to drop everything else and keep campaigning for this. If this isn't a seminal moment for the Internet, I don't know what is."

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