Why FCC faces such skepticism on Title II assurances

May 14, 2010

There are many valid reasons why industry is highly skeptical of the FCC’s many rhetorical assurances that nothing bad will happen from the FCC’s planned regulation of broadband for the first time as a Title II common carrier service.

First, in response to the Comcast court decision, the FCC is hastily gambling away the benefits of broadband’s proven “solid business foundation,” in its longshot bet to win back an unproven “solid legal foundation” for the FCC.

  • The FCC apparently is ignoring that restoring the FCC’s legal “status quo” comes at the expense of the broadband industry’s long-time status quo of being unregulated and the consumer’s status quo of enjoying the benefits of a market driven Internet “unfettered by Federal and State regulation.”
  • Despite employing all the soothing words the FCC thinks the industry wants to hear, industry is much more interested in actions than words, as actions are what affect their businesses — not words.
    • Simply, industry is increasingly watching what the FCC does rather than what it says.
  • The fact is industry is not reassured that nothing bad will happen to them, because the FCC has announced it plans to apply the most onerous foundational common carrier regulations on the broadband industry for the first time without any defensible justification or legal authority to do so.

Second, the assertion that there has never been an instance of FCC “un-forbearance,” is no assurance, because the FCC has never before reversed an entire sector’s regulatory status before either.

  • So why should industry trust that the forbearance process would be any less arbitrary going forward than the FCC’s arbitrary institution of arbitrary Title II sections to an arbitrary set of entities?
  • Simply, if this FCC is willing to turn the classification process on its head in direct opposition to the thrust of the Comcast court case, competition law, and multiple unanimous FCC precedents, what confidence is there that this or a future FCC could not turn the forbearance process on its head in the very same way?
    • If this FCC is intent on flouting the court, Congress and precedent, why would it not flout the forbearance process when and if that time comes?
  • At core here is that there can be no meaningful regulatory assurances in the absence of demonstrable FCC respect for the rule of law.

Third, FCC assurances that price regulation and unbundling are “off the table,” is no assurance either, in that the FCC is pretty clearly not in ultimate control of what agenda items are, or are not, “on the table.”

  • If the Washington Post report was accurate that the FCC was leaning against applying Title II to broadband, but subsequently switched abruptly after enduring withering lobbying pressure from FreePress/Moveon.org and the Google gang, how can the industry be reassured that the next time outside special interests barrage the FCC/White House with special entreaties, un-forbearance would not be put back “on the table” at the FCC?

In sum, what would give industry reassurance that the FCC is not pursuing a new de-competition policy, will not harm private investment/jobs, and is not intent on regulating the Internet, would be for the FCC to:

  • Respect and not ignore the legal message of the Comcast court decision; and
  • Respect the Constitution by explicitly seeking from Congress the authority the FCC would like to have.

 

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