FCC Or Comcast? Who Should Control Broadband?

Correction April 6, 2010

We incorrectly identified the court that would be ruling in the case pitting the FCC against Comcast as the 4th Circuit. It is, in fact, the Federal Court of Appeals for the D.C. Circuit. The Web text has been corrected.

Does the Federal Communications Commission have the legal authority to regulate Internet access? It's a question that could throw a monkey wrench into the FCC's national broadband plan. A case brought by Comcast against the FCC is pending before the Federal Court of Appeals for the D.C. Circuit, and the big telecoms are pressing Congress to step in. NPR's Joel Rose reports.

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The Federal Communications Commission spent almost a year and roughly $20 million to come up with a plan to make broadband Internet access in the U.S. faster and cheaper. But some public interest groups worry that the whole exercise could be moot.

Joel Rose explains.

JOEL ROSE: The big question hanging over the FCC is whether it has the power to regulate Internet access. And it's not a new question.

Mr. SASCHA MEINRATH (Director, Open Technology Initiative, New America Foundation): For a decade and a half, we have been playing this Three-Card Monte game with the Internet, where it hasnt been very clear: What are the rules under which the Internet will be regulated and overseen?

Sascha Meinrath directs the Open Technology Initiative at the nonpartisan New America Foundation in Washington. He says the winners in this game are the big phone and cable companies that sell high-speed Internet connections. And the losers are the rest of us.

Mr. MEINRATH: It is clear. The data is in that the United States citizenry pays more for worse service than a growing list of other countries.

ROSE: There was a time when the U.S. was a leader in Internet access. Back in the 1990s, the FCC regulated Internet companies the same way it regulated phone companies: aggressively. But that changed in the early 2000s. That's when the commission adopted a new market-friendly approach to the broadband industry. That encouraged lots of investment.

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ROSE: Comcast drew FCC eyeballs in 2008. That's when the commission voted to censure the cable and Internet provider for discriminating against some traffic on its network. Comcast took the commission to court, arguing that the FCC overstepped its authority. The Fourth Circuit Court of Appeals heard the case in January, and Ben Scott of the Washington nonprofit Free Press says it did not go well for the commission. [POST-BROADCAST CORRECTION: The Federal Court of Appeals for the D.C. Circuit heard the case, not the Fourth Circuit Court of Appeals.]

Mr. BEN SCOTT (Free Press): It wasn't that the FCC's lawyers were bad or their arguments were bad. It's that the judges were just having none of their legal theory. They just didn't buy it at all, and so we all walked out of that room realizing that this entire legal theory was totally worthless.

ROSE: That theory holds that the FCC has the power to regulate Internet service, even though it's fundamentally different from the communications technologies of the past. But some telecom companies say the legal situation is now so clouded that Congress should just start over. That's what Verizon vice president Tom Tauke suggested last week in remarks at the New Democrat Network in Washington.

Mr. TOM TAUKE (Vice President, Verizon): In my view, the current statute is badly out of date. To fulfill the potential of broadband, it's time for Congress to take a fresh look at our nation's telecommunications policy framework.

ROSE: It may be no coincidence that telecom and cable companies spent $100 million lobbying on Capitol Hill last year, but consumer advocates say any action by Congress would just lead to another decade of confusion. Free Press' Ben Scott says we already have an agency that can regulate Internet access.

The FCC recently announced a national broadband plan that aims to make Internet access more affordable for all Americans. Scott says that's a good start. He's just worried that the plan rests on shaky legal ground.

Mr. SCOTT: A number of its most important policy proposals, including privacy protections for consumers, truth in billing, transitioning the universal service fund from telephone supports to broadband supports, all of that is dependent upon this framework that the court is obviously hostile to.

ROSE: Scott and other public interest groups say there's another way. They want the FCC to go back to regulating Internet providers like phone companies, under a part of the original Communications Act of 1934 known as Title II. But Internet companies dont want more aggressive regulation because they're worried, with some reason, that it would cut into profits. Verizon's Tom Tauke says broadband providers would definitely push back.

Mr. TAUKE: I would be a little bit surprised if the FCC would try to move in that direction. If they did, I can assure you it would end up in court.

ROSE: The FCC has already spent plenty of time in court with the telecoms on related issues. The commission hasn't said what it plans to do next. The chairman's office declined our request for an interview. Sascha Meinrath at the New America Foundation says the commission has to decide soon or else...

Mr. MEINRATH: We could end up with a moment where all rules and regulations go out the window. It would have profoundly detrimental impacts on our privacy, detrimental impacts on what we pay every month. It would have detrimental impacts on just creating and maintaining a healthy marketplace.

ROSE: The Fourth Circuit is expected to rule shortly on the Comcast case. When it does, the FCC may be forced to show its hand or fold.

For NPR News, I'm Joel Rose.

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