This step comes after the federal D.C. Circuit Court of Appeals in April rebuked the FCC in its attempt to enforce a controversial regulatory doctrine called Net Neutrality, which would allow the government to prevent private Internet providers from deciding which applications to allow on their networks.
The court said that the FCC did not have the authority to prevent Comcast, specifically, from blocking certain peer-to-peer Web sites.
The FCC is now trying to reclassify the Internet to broaden its authority over the Web. Currently, the FCC only has “ancillary” authority, meaning it can regulate Internet access only in the process of regulating another service that it has direct authority over, such as television or cable.
The 3-2 party-line vote on Thursday at the FCC began the formal process of reclassifying the Internet as a telecommunications service instead of an information service – its current classification. This is necessary because, as an information service, the government has little power to regulate Internet networks.
As a telecommunications service, such as a telephone network, the Internet would fall under a much broader regulatory scope – giving the government the power to enforce universal service requirements, making them pay into a federal universal service fund used to provide communications services to poor areas.
The FCC will now begin the mandatory public comment period, where it will solicit input from private companies and citizens about whether it should reclassify the Internet and, if so, how it should do it.
The Commission has three options for going forward. First, it can decide not to reclassify the Internet at all, continuing to treat it as an information service. Second, the FCC can completely reclassify the Internet as a telecommunications service, granting the Commission broad powers over it. Third, it could seek a middle ground, reclassifying the Internet as a telecom service but exempting Internet providers from most of the regulations associated with other telecommunications services.
This last approach, presented at the hearing as the “third way,” is the preferred avenue of Genachowski, who unveiled the plan in May.
The “third way” approach would still allow the government the authority to heavily regulate the Internet because it would be classified as a telecom service. However, under this approach, the FCC claims it will exercise “forbearance,” a regulatory doctrine whereby the government promises not use its regulatory authority in most cases.
Commissioner Michael Copps, at the FCC, sought to frame the issue in terms of consumer protection, claiming that “consumers find themselves in quite a box” because government, he claimed, had been “all but shorn” of the authority to regulate Internet service.
Copps said he was “worried” about relying purely on the private sector for Internet-based innovation, saying that the problems of such an approach could be seen in the 2008 financial collapse and the recent Gulf of Mexico oil spill.
“We need to reclaim our authority,” Copps said.
FCC seal Robert McDowell, the commission’s longest-serving Republican member, said the commission should preserve the free Internet of today, adding that more Internet freedom would be in the public interest.
“An open and freedom-enhancing Internet is what we have today,” McDowell said.
McDowell also said that reclassifying the Internet was “unnecessary” and that the FCC should wait for Congress to grant it explicit authority over the Web, saying, “We are not Congress.”
In fact, the Telecommunications Act of 1996, which gave the government no explicit authority to regulate Internet service, states: “It is the policy of the United States … to preserve the vibrant and competitive free market that presently exists for the Internet and other interactive computer services, unfettered by Federal or State regulation.”
When asked whether the FCC’s plans violated this provision, Genachowski said that the “light touch” nature of his third way approach did not violate the Act’s explicit mandate to “preserve” a free and open market.
“We need to have a [regulatory] framework for broadband access that is a light touch framework,” he said. “That is what we had before – and what everyone assumed was the case – before the Comcast decision. To me, a central purpose of this process is to determine what is a framework that is available to us that restores the status quo.”
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