So is Federal Communications Commission really going to place common carrier restrictions on Internet service providers? Well, yes, but not too many of them.
FCC Chairman Julius Genachowski Friday said he would move to reclassify ISPs as common carriers, while at the same time insisting that ISPs be exempt from the vast majority of regulations in the current common carrier rules.
In order to accomplish this complicated fete, Genachowski said he will ask the FCC to forebear ISPs from the vast majority of common carrier regulations in Title II of the 1934 Communications Act and the more recent revisions in the 1996 Telecommunications Act. Rather than burdening carriers with all Title II regulations, Genachowski has whittled the total number of applicable regulations down to six, which he said would "treat only the transmission component of broadband access service as a telecommunications service while preserving the longstanding consensus that the FCC should not regulate the Internet."
Before we examine precisely which common carrier regulations Genachowski wants to enforce, we should take a step back and look at why the FCC is in its current predicament. The FCC has been regulating ISPs' traffic management practices in an ad hoc fashion since 2008 when the commission, then headed by former Chairman Kevin Martin, voted to bar Comcast from using peer-to-peer traffic management practices that target individual protocols for slowing or blocking.
Last year, new FCC chief Genachowski tried to expand the commission's role in regulating ISPs' traffic management practices by proposing two new rules that would bar carriers from blocking or degrading lawful Web traffic and that would force carriers to be more open about their traffic management practices. Any hope of ever enforcing those rules came to a screeching halt this past April, however, when the Washington, D.C., appeals court said that the FCC did not have the authority to regulate ISP network management under its current legal framework.
This left the FCC with three options: It could leave ISPs' traffic management practices essentially unregulated; it could go to Congress and ask for a new law that explicitly gave the FCC the duty to regulate ISPs' behavior; or it could reclassify ISPs as common carriers and apply the same rules to ISPs that it applies to phone companies. Genachowski has decided to go with the third option, although he insists that ISPs should not be subjected to all the rules and regulations that apply to telephone companies.
Now that we understand how the FCC got here, we can look at what regulations Genachowski wants to apply to the ISPs:
* Section 201: This section essentially requires carriers to provide access to rival carriers in order to provide through routes. It also lets the FCC establish appropriate rates that the incumbent carriers can charge their rivals for access to the network. The goal here is to give incumbent carriers proper compensation for access to their networks without letting them charge prohibitively high prices that would prevent rivals from having through routes
* Section 202: This is really the guts of net neutrality, as it states that carriers cannot "make any unjust or unreasonable discrimination in charges, practices… or services… or to subject any particular person, class of persons, or locality to any undue or unreasonable prejudice or disadvantage." In terms of the old phone companies, this meant that networks had to connect calls to one another on a neutral first-come-first-serve basis. In terms of broadband, this means handling Internet traffic on a neutral basis and not discriminating against any lawful traffic or content by slowing it down in favor of other content.
* Section 208: This gives carriers, businesses and individuals the right to file complaints with the FCC if they feel an incumbent carrier has violated either of the rules outlined in sections 201 and 202. The carrier then has a specific time to either answer the complaint or resolve it on its own accord. If the carrier fails to do so, then the FCC may open an investigation into whether the carrier violated neutrality regulations.
* Section 222: This section deals mostly with customer privacy, although it's not yet clear how this will translate from the age of the telephone to the age of broadband. Under the old rules, carriers were barred from sharing customers' calling information – i.e., whom they called, how often they called them, at what times they called them. How would this translate to the Web? Would ISPs be barred from sharing information on users' most frequently visited sites? Whom they e-mailed most frequently? The FCC has yet to really flesh out how this would translate.
* Section 254: This is the part of the 1996 revisions dealing with the Universal Service Fund. A major part of the FCC's national broadband plan involved transforming the USF from a fund intended to provide telephone connectivity to underserved areas into a fund that would provide broadband connectivity to underserved areas. But when the court struck down the FCC's right to regulate ISPs' traffic management practices, it also struck down its ability to integrate broadband into the USF. Thus, incorporating USF rules into any new common carrier regulatory scheme would obviously be a top priority for the FCC to implement its plan.
* Section 255: Finally, this section essentially states that common carrier services need to also be accessible to anyone with disabilities as defined by the Americans with Disabilities Act of 1990.
While these six regulations seem relatively simple, the process going forward will not be. Genachowski plans to launch of public comment process that will include commentary from all the usual suspects (cable companies, telcos, Web companies and consumer groups) that will lead up to what is sure to be a contentious and heavily lobbied vote on the proposal. Additionally, the carriers will assuredly not take any FCC action to reclassify them lying down and are already preparing to fight the commission in court.
All of this could lead to a long period of regulatory uncertainty, which is one of the things that businesses of all stripes fear the most. Matthew Polka, the president of the American Cable Association, warned Friday that the reclassification process, "even with numerous forbearances, creates uncertainly in the market and runs the risk of producing unintended consequences, especially for small and mid-sized broadband providers." Although Genachowski waned optimistic Thursday that his "third way" of reclassifying ISPs and then relieving them of the most burdensome regulations would create a broad consensus, the reality is that he still has a long fight ahead of him.