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31
October
2014

FCC to adopt hybrid approach to broadband regulation

"Back-end" transport deals to be subject to 'common carrier' regulation

According to today's (10.31.2014) Wall Street Journal, Federal Communications Commission Chairman Tom Wheeler is laying the groundwork for expanding the agency’s authority over broadband service. The plan now under consideration would separate broadband into two distinct services: a retail one, in which consumers would pay broadband providers for Internet access; and a back-end one, in which broadband providers serve as the conduit for websites to distribute content. The FCC would then classify the back-end service as a common carrier, giving the agency the ability to police any deals between content companies and broadband providers.

The main advantage of the hybrid proposal, as opposed to full reclassification, is that it wouldn’t require the FCC to reverse earlier decisions to deregulate broadband providers, which were made in the hopes of encouraging the adoption and deployment of high-speed broadband. The authors of the new proposal believe that not having to justify reversing itself would put the FCC on firmer legal ground.

 

The proposal Wheeler is considering now "would leave the door open for broadband providers to offer specialized services for, say, videogamers or online video providers, which require a particularly large amount of bandwidth," the Journal wrote. "The proposal would also allow the commission to explore usage-based pricing at some point, in which consumers are charged based on how much data they use and companies are able to subsidize traffic to their websites or applications."

While not banning prioritization, the plan would "shift the burden" to ISPs to prove that deals benefit consumers and give FCC officials stronger legal authority to block anti-competitive arrangements.

Free Press, a consumer advocacy group, said the proposal won't protect Internet users, and that "any rules that don’t clearly restore the agency’s authority and prevent specialized fast lanes and paid prioritization aren’t real net neutrality.”

http://benton.org/outgoingframe/206111?utm_campaign=Newsletters&utm_source=sendgrid&utm_medium=email

Quick comment: Under the Communications Act "telecommunications service" means the offering of telecommunications for a fee directly to the public, or to such classes of users as to be effectively available directly to the public, regardless of the facilities used." 47 USC § 153(46) (1999).

Because the broadband component to be regulated under Title II is not the "retail" offering to consumers  (i.e., the consumer's connection to the Internet) but rather the "back end" relationship between the content owner (e.g., Netflix) and the transport provider (e.g., Comcast), it's hard to understand how this back-end function can be considered a service provided "directly to the public" per the Federal statute. How then does the FCC propose to subject the back-end transactions to Title II of the Communications Act?

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