Genachowski Still Deciding Whether to Ask FCC to Classify Broadband

All eyes are on Chairman Julius Genachowski on one of the first controversial orders before the FCC since he became chairman: A proposal to reclassify broadband under Title II of the Communications Act in the aftermath of the Comcast v. FCC decision. He faced repeated questions Wednesday, at a Senate Commerce hearing on the National Broadband Plan, about his position on whether the commission needs to reclassify broadband Wednesday. But he offered little beyond what he has said since the decision came down last week. (See related report in this issue).

Genachowski has emerged as the pivotal FCC member on the issue, FCC and industry sources agree. Commissioner Michael Copps made clear last week that he will support reclassification. Commissioner Mignon Clyburn hasn’t staked out her position, but some of her comments have indicated that she would have no problem voting for reclassification if Genachowski seeks a vote, an FCC official said. The FCC’s Republicans, Robert McDowell and Meredith Baker, have qualms about reclassification like the ones they have about net neutrality rules. A decision by Genachowski to push through any change would be expected to set up a 3-2 vote and a contentious debate. “The unknown is the chairman’s office,” a commission official said. AT&T Senior Vice President Robert Quinn called Tuesday on the FCC not to reach any hasty decisions (CD April 14 p2).

Tim Wu, a Columbia University law professor, told us Wednesday he expects a majority of the commissioners to swallow hard and agree to classify broadband as a telecom service, subject to traditional common carrier regulation. “I agree that the FCC is definitely trying to figure out what it thinks,” he said. “I don’t think anyone really put their heads into this, even if it was predictable. Frankly, I think it’s obvious” that former Chairman “Michael Powell thought this would happen.”

Putting “higher principle aside,” one thing is clear if the FCC doesn’t act, Wu said: “Without reclassification, the FCC is back to being the Federal Radio Commission, no one wants to preside over a powerless agency; and common carriage is a deep pool of power. I think that the FCC will sort of go through a ‘what should we do’ thing, and then conclude, ‘hmm, we need the power.'"

Free State Foundation President Randolph May said he expects Genachowski not to embrace reclassification. “Entirely apart from the negative symbolism associated with the commission acting in a backwards-looking way, there are many sound policy and legal reasons not to regulate Internet providers as common carriers,” he said. “Faced with the reality of the Comcast decision, I think Genachowski will find a way to lead his Democratic colleagues back from the precipice to a much more moderate net neutrality position."

"I agree that the commissioners, including the chairman, are still considering the best course of action,” said Public Knowledge Legal Director Harold Feld. “The problem for the Democrats is that the Comcast decision implicates so much of their agenda. This includes not merely items such as USF reform and adoption, but also privacy and other consumer protection issues. Needing to justify Title I authority under the Comcast court’s analysis will make every proceeding touching on broadband longer, more uncertain and far narrower in scope than the Democrats would hope -- a happy state of affairs from the Republican perspective."

Feld said he’s watching Baker most closely. “Will Baker indicate a willingness to show greater flexibility under Title I for things like network neutrality and privacy to avoid stampeding Democrats into Title II?” he asked. “Or will she and McDowell make it clear that any vote on these issues must end up 3-2 whether the Democrats stay within Title I or shift to Title II?” Baker could play the same “pragmatist” role that Powell often played under Chairman William Kennard, leaving McDowell to play the part of former Commissioner Harold Furchtgott-Roth “as champion of pure free market ideology,” Feld said.

"A move to Title II almost certainly would be a 3-2 vote, but something else -- perhaps a different Title I approach -- might open the door to a bipartisan decision,” said Paul Gallant, analyst at Concept Capital. He said the FCC may take some time to work through the issues raised by the Comcast decision. “Even though last week’s ruling seemed likely since January, the Commission has mainly been focused on the Broadband Plan,” he said. “And reclassification raises some tricky legal and political questions, so I don’t think the commissioners feel compelled to rush into a decision."

Sascha Meinrath, director of the New America Foundation’s Open Technology Initiative, said the group will soon release a report that shows Americans pay more for broadband than people in nine other developed nations. Costs vary from $26 for a 100 Mbps connection in South Korea and $60 for 200 Mbps in Japan to $145 for a 50 Mbps connection in the U.S. “I expect that commissioners that believe that the United States has pursued a broadband policy that has not been as effective as it should be will want to reclassify, and those who believe that a broadband market left free from government oversight will lead to the best outcomes will dissent,” Meinrath said. “Since the top broadband countries have actively regulated broadband markets, it’s clear that government oversight has created faster speeds, lower prices, and more broadband adoption than we've seen in the United States."

Chris Riley, policy counsel at Free Press, said, “While it is certainly unlikely the FCC will see a unanimous vote to reclaim authority over broadband networks, we are confident that a majority of the commission will seek to implement the broadband plan and protect consumers on the nation’s dominant communications medium."

"While there are solid arguments to revisit the 1996 Telecom Act in light of technological advances and market shifts since the law was enacted, legislation may not be a practical option in the near term for addressing broadband jurisdictional issues,” said Jeff Silva, analyst at Medley Global Advisors. “Reclassifying broadband as a Title II common carrier service is an equally imperfect option. Such a regulatory reset could prove so politically divisive and litigious as to result in wholesale policy paralysis and protracted uncertainty.” Silva said a “third way” could still emerge based on “negotiations between policymakers and key stakeholders that produce a policy outcome that furthers FCC net neutrality goals without legislation or Title II reclassification.”

The FCC “has the legal authority to implement open Internet rules for the benefit of consumers,” no matter what the court ruled, a tech coalition including Dish Network, eBay, Amazon, EarthLink and XO Communications said Wednesday.