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This small loophole could give the FCC much greater control of the Internet

(Brian Fung/The Washington Post)

The nation's top telecom regulator is tipping his hand a bit more on network neutrality.

While FCC chairman Tom Wheeler wouldn't say outright how he intends to respond to a recent court decision overturning his agency's rule barring Internet providers from blocking Web traffic, he appears to be leaning increasingly toward using the FCC's existing legal authority to regulate broadband providers.

Industry watchers say this approach would likely turn on a part of the Communications Act known as Section 706, which gives the FCC authority to promote broadband deployment. Moving in that direction would put more distance between Wheeler and another alternative that's been floated, which is to reclassify Internet service provders (ISPs) as a kind of utility (making them much more like the phone companies the FCC already regulates strongly).

"The court took a look at the anti-discrimniation and non-blocking structure," Wheeler said at a Washington conference Tuesday, "not the concepts. ... I interpret what the court did as an invitation to us, and I intend to accept that invitation."

In the days after the court's decision, some analysts said that making net neutrality work under the FCC's existing legal authority would lead to a weakened standard. Tim Wu, the Columbia Law professor who invented the term net neutrality, said regulators would be able to impose transparency requirements on ISPs but little else.

But over the past week, some insiders, including industry representatives and public advocates, have said that Section 706 actually gives the FCC much more power than we thought.

"The irony here is that some of the content and application providers who were advocating from the perspective of, 'Please regulate my rival — network operators — but not me,' are now realizing they may have taken a regulatory behemoth off of its leash," former FCC commissioner Robert McDowell said in an interview.

While the agency can't lay down a blanket rule prohibiting ISPs from abusing their power, it could go after offending companies on a case-by-case basis. This is exactly what Wheeler has in mind.

"We are not reticent to say, 'Excuse me, that's anti-competitive. Excuse me, that's self dealing. Excuse me, this is consumer abuse,'" said Wheeler on Tuesday. "I'm not smart enough to know what comes next [in innovation]. But I do think we are capable of saying, 'That's not right.' And there's no hesitation to do that."

So long as the FCC can argue that a company is hindering the rollout of broadband or broadband competition (a pretty vague definition), the agency may be able to regulate ISPs, content intermediaries, and possibly Web services like Google and Netflix themselves.

Even some consumer advocates who are typically FCC defenders seem to agree. According to Harold Feld, senior vice president of Public Knowledge, what's unclear now is how far Wheeler's agency can go in invoking Section 706.

While the D.C. Circuit court showed the FCC how it could implement net neutrality regulations without running afoul of its charter — the "invitation" to which Wheeler refers — it placed no constraints on Section 706. This means that even if Wheeler's FCC chooses not to regulate Facebook, the government of the future conceivably might.