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FCC Chairman Wants to Classify ISPs as Title II 'Common Carriers'

Well, color me shocked. In an essay published today in Wired, FCC Chairman Tom Wheeler backed the strongest-ever plan for net neutrality: Regulating Internet service providers as telecommunications utilities under Title II of the Communications Act of 1934.

The move, if successful, would allow the FCC to regulate broadband ISPs in the same way it regulates phone companies. And as you might expect, the ISPs aren't happy about it, even though it's good for customers.

Regulating ISPs as Common Carriers

Title II of the Communications Act prohibits a "common carrier" from discriminating in "charges, practices, classifications, regulations, facilities, or services." If ISPs were regulated under Title II, then they couldn't create fast or slow lanes for particular traffic. They also couldn't negotiate agreements -- as Netflix has had to with every major ISP -- to pay extra in order to not have ISPs throttle its traffic. (Verizon quibbles with the notion that they're throttling traffic from Netflix specifically, but independent analyses have verified that's exactly what's happening.)

Last year, Verizon succeeded in stripping the FCC of whatever remaining authority it might have had to enforce net neutrality. The D.C. Circuit Court concluded that the FCC lacked the power under Section 706 of the Telecommunications Act of 1996 to enforce net neutrality provisions. That case, in turn, led to the FCC's announcement that it was seeking public comment for a new regulation.

How About No Regulation? Is No Regulation Good for You?

ISPs will, of course, fight whatever regulation is proposed. While they pay lip service to promoting net neutrality, the fact is they've fought against it as hard as they possibly can, whenever they can, both in court and in the press.

When President Obama announced his support for strong net neutrality regulations back in November, AT&T and Verizon acted like the sun had just exploded and predicted the change would spell doom for their investments in telecom infrastructure. When pressed by the FCC to explain specifically which projects the change would impact, Verizon backpedaled and admitted the plan would only affect hypothetical projects yet to be conceived; AT&T insisted that the FCC had misinterpreted what it said.

The ISPs' latest gambit, according to VentureBeat (which was correct about the FCC proposing the Title II reclassification), will be to claim broadband Internet providers don't qualify as telecommunications providers under Title II. An AT&T vice president, Hank Hultquist, wrote Monday on AT&T's Public Policy Blog that its broadband service is actually an "information service" and that the change is driven by "political considerations" (though we're not sure which considerations, of which politicians or political parties, are supposed to be carrying the day here. Hultquist doesn't say).

The ISPs actually won this war back in 2004, when the Supreme Court said that the FCC was well within its rights to conclude that broadband Internet companies don't provide "telecommunications services" and hence weren't subject to Title II regulation as common carriers.

The future has shown, however, that National Cable & Telecommunications Association v. Brand X Internet Services is more of a bane than a boon to ISPs. That's because the Supreme Court acknowledged broadband Internet service was a mix of telecommunications service and information service, thanks to some ambiguity in the statute. And guess who decides what things mean in a statute where there's an administrative agency in charge? "[A]mbiguities in statutes within an agency's jurisdiction to administer are delegations of authority to the agency to fill the statutory gap in reasonable fashion."

If it was reasonable then, there's no reason to think it's not reasonable now. The ISPs are going to balk, but with such strong words applied by no less than both the FCC chairman and the president, it looks like meaningful regulation of ISPs is finally coming to town.

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