Yesterday, I was excited to speak with a writer for Crain's Chicago Business, the pre-eminent regional business newspaper and publisher of ChicagoBusiness.com, on the subject of the April 2010 Comcast case, which endangered the policy of the Federal Communications Commission supporting "net neutrality." The U.S. Court of Appeals ruling essentially held that regardless of the desirability of the FCC's goal of limiting broadband companies interference with relatively equal access to, use of and pricing for the Internet for all, it was not clearly authorized by federal law. The interview is for an upcoming special issue in December on important trends.
For a good summation of the background, policies and challenges involved in regulating the Internet, I recommend reviewing The Third Way: A Narrowly Tailored Broadband Framework, which is a May 6, 2010 statement prepared by Julius Genachowski, Chairman of the FCC. He summarizes the legal issue as follows:
The recent court opinion in Comcast v. FCC does not challenge the longstanding consensus about the FCC's important but restrained role in protecting consumers, promoting competition, and ensuring that all Americans can benefit from broadband communications. Nor does it challenge the commonsense policies we have been pursuing.
But the opinion does cast serious doubt on the particular legal theory the Commission used for the past few years to justify its backstop role with respect to broadband Internet communications. The opinion therefore creates a serious problem that must be solved so that the Commission can implement important, commonsense broadband policies, including reforming the Universal Service Fund to provide broadband to all Americans, protecting consumers and promoting competition by ensuring transparency regarding broadband access services, safeguarding the privacy of consumer information, facilitating access to broadband services by persons with disabilities, protecting against cyber-attacks, ensuring next-generation 911 services for broadband communications, and preserving the free and open Internet.
The legal theory that the Comcast opinion found inadequate has its roots in a series of controversial decisions beginning in 2002 in which the Commission decided to classify broadband Internet access service not as a "telecommunications service" for purposes of the Communications Act, but as something different--an "information service."
As a result of these decisions, broadband became a type of service over which the Commission could exercise only indirect "ancillary" authority, as opposed to the clearer direct authority exercised over telecommunications services. Importantly, at the time, supporters of this "information services" approach clearly stated that the FCC's so-called "ancillary" authority would be more than sufficient for the Commission to play its backstop role with respect to broadband access services and pursue all sensible broadband policies.
The Commission's General Counsel and many other lawyers believe that the Comcast decision reduces sharply the Commission's ability to protect consumers and promote competition using its "ancillary" authority, and creates serious uncertainty about the Commission's ability, under this approach, to perform the basic oversight functions, and pursue the basic broadband-related policies, that have been long and widely thought essential and appropriate.
Although the legal underpinning has been threatened, the Chairman believes there is widespread acceptance of the FCC's approach:
Over the past decade and a half, a broad consensus in the public and private sectors has developed about the proper role and authority for the FCC regarding broadband communications. This bipartisan consensus, which I support, holds that the FCC should adopt a restrained approach to broadband communications, one carefully balanced to unleash investment and innovation while also protecting and empowering consumers.
It is widely understood--and I am of the view--that the extreme alternatives to this light-touch approach are unacceptable. Heavy-handed prescriptive regulation can chill investment and innovation, and a do-nothing approach can leave consumers unprotected and competition unpromoted, which itself would ultimately lead to reduced investment and innovation.
The consensus view reflects the nature of the Internet itself as well as the market for access to our broadband networks. One of the Internet's greatest strengths--its unprecedented power to foster technological, economic, and social innovation--stems in significant part from the absence of any central controlling authority, either public or private. The FCC's role, therefore should not involve regulating the Internet itself.
Consumers do need basic protection against anticompetitive or otherwise unreasonable conduct by companies providing the broadband access service (e.g., DSL, cable modem, or fiber) to which consumers subscribe for access to the Internet. It is widely accepted that the FCC needs backstop authority to prevent these companies from restricting lawful innovation or speech, or engaging in unfair practices, as well as the ability to develop policies aimed at connecting all Americans to broadband, including in rural areas.
I am cautiously optimistic that, given the pervasive and fundamental importance of the Internet in the daily life of most Americans, the legal foundation for the FCC's views and policies will be solidified eventually.
Jeremy A. Gibson is a metropolitan Chicago Internet, technology and e-commerce lawyer with substantial expertise in the domain name registration, trademark, marketing, privacy, security, contract and other legal aspects of conducting business online. We would be pleased to discuss your Illinois Internet law or technology law questions or needs. We have a variety of convenient Chicago corporate attorney law office locations and we work with businesses throughout the northern Illinois region, including Arlington Heights, Buffalo Grove, Deerfield, Des Plaines, Evanston, Glenview, Highland Park, Hinsdale, Lake Forest, Libertyville, Mount Prospect, Naperville, Northbrook, Oak Brook, Palatine, Rolling Meadows, Schaumburg, Skokie, Oak Brook, Oak Park, Vernon Hills, Waukegan, Wheeling and Wilmette.
