ISPs and the FCC Continue Battling Over Regulatory Classification

Carl Weinschenk

An important ongoing regulatory/legal battle is heating up. It bears watching because it could affect the amount of investment that cable and phone companies make in their networks.

On Monday, a group of ISPs wrote to Federal Communications Commission Chairman Julius Genachowski warning against reclassification of Internet access under Title II of the Communications Act. The ISPs currently are regulated as information services under the less onerous provisions of Title I. Two stories-one at Multichannel News and the other at The Washington Post-explain the complex situation.


The move by the FCC, which is being pushed by net neutrality advocates, would be an effort to ensure that the commission can hold sway over the ISPs even if it lost an important case District of Columbia circuit court. In that case, Comcast is appealing a fine the FCC imposed for throttling the BitTorrent file-sharing service in 2007. If Comcast-which didn't sign the letter the ISPs sent to the FCC, pending disposition of the appeal-wins a reversal, net neutrality advocates fear that the commission would lose the ability to create a net neutrality regime.


The preventive measure of putting the ISPs under Title II-the Common Carrier strictures that ride herd over traditional telephone companies -- may be growing more attractive because things apparently aren't going well for the FCC in the court case.


The ISPs don't want to be under the tighter control of Title II, and said that reclassifying them would lead to lawsuits, "regulatory chaos" and other things that lawyers love. (Actually, they only overly mentioned the first two outcomes; the third is implied.)The ISPs also played their traditional trump card, which is to say they could take their ball and go home if the ground rules aren't to their liking. According to the Multichannel News piece:

[The ISPs] did suggest that reclassification could threaten the billions in investment that would be needed to achieve the government's goal of 100 MBps broadband speeds to 100 million households by 2020.

There certainly are billions of dollars on the table in this high-stakes game of chicken. There really isn't too much chance, however, that the ISPs will pull back on their investments. There are more billions to be made in the broadband arena, whether they are serving it under Title I or II. Indeed, if they did pull back in their investments, there are other carriers-wired and wireless-willing to take their place.

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