ISPs to FCC: Get in Line or Else

Updated: Internet services providers are calling for a Federal Communications Commission with less authority over regulating broadband, just as the FCC reportedly prepares to vote on new neutrality rules. The latest push comes from Verizon (s vz), which called for an overhaul of the Telecommunications Act. Meanwhile, Comcast (s cmcsa) is joining Verizon in advocating for technology industry forums to take on a leading role in building consensus on thorny issues like net neutrality instead of the FCC. It’s all part of a larger attempt by the telecommunications industry to undercut the power of the FCC and reshape its regulatory role. So will this full court press serve as a powerful enough threat to the FCC, forcing it to water down its potential net neutrality rules?

The latest words came from Tom Tauke, Verizon EVP of public affairs, policy and communications, who over the weekend called on Congress to rewrite the Telecommunications Act and establish a new framework policy for a single agency to rule on broadband issues. Tauke, whose comments were taken from a speech at the Federalist Society’s National Conference in Washington, D.C., said the current regulatory framework is unfit to handle the dynamic growth and innovation happening in the Internet ecosystem. He said with the net neutrality debate, the FCC is too preoccupied with network providers because of its current jurisdiction rules, but sidesteps operating systems and applications, where consumers can also face harm. Tauke called for four components as a new policy framework to guide the Internet:

  • The policy should be a federal framework.
  • Because of the innovative nature of the marketplace, the framework should not involve anticipatory rule making, but rather, principles that allow for case-by-case adjudication.
  • The test for government intervention in the marketplace should be to prevent either harm to consumers or anti-competitive activity.
  • A single federal agency should be given clear jurisdiction

By pushing for a new federal framework and case-by-case adjudications instead of anticipatory rule making, Verizon is looking to edge the FCC away from reclassifying broadband carriers as common carriers and give operators more wiggle room as they craft their network management plans. Also, if the telecommunications firms can get case-by-case adjudication, it sets the stage for different levels of enforcement depending on who heads the FCC. It also might lead to rules governing the case-by-case adjudication that limits the FCC’s power or ability to halt the offending practice.

Tauke and others have also been pushing policy makers to let technologists solve the thorny debate around net neutrality instead of the FCC. David Cohen Comcast’s EVP recently called net neutrality an engineering problem that needs to be solved by engineers. Speaking at the Brookings Institution last week, Cohen also championed the newly established Broadband Internet Technical Advisory Group, an industry forum of engineers and technologists, calling it an innovative group that can solve problems, rather than prolong them.

The telecom industry is pulling out all the stops now to head off any attempt by the FCC to assert more power over broadband services. The FCC is expected to vote on new net neutrality rules next month that could ensure ISPs don’t discriminate against any of the content running through their pipes, though officially, the commission hasn’t released its December agenda. The ISPs have new allies in Congress who are calling for the FCC to hold off on any new rules until the new year. But with the FCC apparently forging ahead, what effect will all these threats have on an already compromised commission?

The FCC has already been rebuked by the courts for trying to enforce net neutrality under the current regulatory structure, something that happened under previous FCC chairman Kevin Martin. FCC Chairman Julius Genachowski faces an uphill battle to reclassify broadband under the stricter Title II regime of the Telecom Act. If Genachowski proceeds with his so-called “third way” — which blends some protections with the understanding that the FCC should not regulate the Internet, and ISPs are allowed to employ reasonable network management practices — there’s still no guarantee it will withstand legal challenges. With all the rancor from ISPs lately, how far will the FCC water down net neutrality rules while still claiming some type of victory on the issue? Or will it wait for Congress to come in and lay down the law? Either way, it looks like the ISPs win.

Update: The FCC has pushed back its December meeting back a week to Dec. 21, buying itself time for a possible vote on net neutrality rules. Rebecca Arbogast, managing director for Stifel Nicolaus wrote in a research note that she expects Genachowski is looking to bring new rules that that would generally bar unreasonable wireline broadband discrimination but would allow managed services that could be monitored and dealt with on a case-by-case basis. Genachowski is in a tough spot trying to work out a compromise with ISPs while getting the support of the other two Democrats on the commission, who favor stronger regulation under Title II, said Arbogast.

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