Posted by: Bob Quinn on May 11, 2010 at 4:21 pm
I’ve had some time to step back a bit from last week’s FCC announcement, in which the Chairman and General Counsel laid out a plan to go down the path of applying 75 year-old monopoly voice (Title II) regulation to the 21st century broadband Internet. I have to admit that while some issues have crystallized, others leave me a bit puzzled with the approach outlined by General Counsel Schlick.
For starters, I think analysts and market reaction to the FCC’s decision (as evident by the cable stocks, which have never before lived under the Title II umbrella) confirms our fears from the outset that heavy-handed regulation (however you try to spin it) will inject a great deal of uncertainty into an already jittery marketplace. So, I am left pondering many questions. Most notably, what does the Commission think it will actually accomplish with this proposal?
I will leave aside the perplexing assertion that the proposal appears to be based on the dissenting opinion by Justice Scalia in the Supreme Court Brand X case, in which he and two other justices would have reversed the FCC and not applied Chevron deference to its views. If there’s a SNL for telecom geeks, I know there is a funny skit in there somewhere.
Equally interesting were Commission statements that were pretty clear that reclassification of Title II would not apply to Internet Service Providers (ISPs), but only to the transmission facility used by the ISP to provide Internet access service. Allow me an overly wonkish moment: AT&T sells a DSL transport service to competitive ISPs (in fact, we had a merger commitment on this issue in the AT&T/BellSouth merger after EarthLink raised concerns that we might withdraw that service from the market post merger). The competitive ISP buys that service from us and couples it with its Internet access services and sells the whole package to the consumer as a retail Internet service.
Under the Commission’s “third way” proposal, net neutrality rules will not apply to ISPs like EarthLink or for that matter any other ISPs, including AT&T or cable companies.
