Policy Documents

Research & Commentary: Internet and Broadband Reclassification

August 22, 2012

The Obama administration’s Federal Communications Commission has undertaken several efforts to increase its regulatory power over the Internet by reclassifying broadband access services from their current status as an informational service to a Title II telecommunications service. 

FCC Chairman Julius Genachowski launched a proposal, known as the “Third Way,” in response to a U.S. Court of Appeals decision (Comcast v. FCC) that the FCC has no regulatory authority over the Internet. Genachowski would soften the reclassification by dividing regulation of the Internet into two segments: the Internet itself, which would stay classified as an information service under Title I, and the connections to the Internet, the service providers, who would be classified as telecommunications services subject to Title II. 

That would be a dramatic change for a medium defined by free and open exchanges of information. Writing for the Heartlander digital magazine, Larry Downes, a fellow with the Stanford Law School Center for Internet & Society, pointed out, “Such a radical change in communications law would mean that all broadband Internet access could be subjected to the complex web of unbundling requirements and common-carrier rules that today apply only to telecommunications.” 

Reclassification proponents say the division into two regulatory segments works around the limits imposed by the Comcast decision and would give the FCC the authority to encourage broadband expansion to underserved areas of the country while creating regulatory certainty. 

Opponents, including U.S. Sens. Jim DeMint and John Thune, argue the reclassification is a regulatory overreach that would place control of the Internet in the hands of unelected bureaucrats. DeMint introduced the Freedom for Consumer Choice Act, which would require the FCC to prove a clear need exists before asserting regulatory authority and would direct the FCC to provide an analysis of the potential costs of any proposed regulatory changes. 

The Internet has thrived because of its open, market-based nature. Imposing a vast new array of government regulations under Title II would stifle what has made the Internet one of the biggest growth sectors of the economy. 

The following articles examine broadband reclassification and the FCC’s “Third Way” proposal from multiple perspectives. 

FCC’s Broadband Reclassification: What’s Next?
http://www.pcworld.com/article/195772/fccs_broadband_reclassification_whats_next.html
Grant Gross of IDG News writes in PC World about FCC Chairman Julius Genachowski’s Third Way proposal and responses to it from several supporters and critics.

The Third Way: A Narrowly Tailored Broadband Framework
http://www.broadband.gov/the-third-way-narrowly-tailored-broadband-framework-chairman-julius-genachowski.html
Genachowski describes his Third Way proposal, stating his goal is to support policies that advance U.S. competitiveness and preserve the Internet as a powerful platform for innovation, free speech, and job creation. 

The Constructive Alternative to Net Neutrality Regulation and Title II Reclassification Wars
http://heartland.org/policy-documents/constructive-alternative-net-neutrality-regulation-and-title-ii-reclassification-wa
Adam Thierer and Mike Wendy of the Progress and Freedom Foundation discuss the FCC’s efforts to “pigeonhole the Internet and broadband networks into the regulatory regime of a bygone era.” Specifically, the agency’s efforts to impose net neutrality regulations on broadband networks, or reclassify them as Title II services under the Communications Act, would likely cause providers to delay or forego investment, discourage innovation, and increase “the politicization and bureaucratization of high-technology policy.” 

Title II for Broadband Is Desperate and Ill-Conceived
http://techliberation.com/2010/07/16/title-ii-for-broadband-is-desperate-and-ill-conceived/
Writing at Technology Liberation Front, Hance Haney, director and senior fellow of the Technology & Democracy Project at the Discovery Institute, argues reclassifying broadband services as a telecommunications service is both outdated and heavy-handed. 

FCC Plows Ahead with Plan to Regulate Internet
http://news.heartland.org/newspaper-article/2010/05/06/fcc-plows-ahead-plan-regulate-internet
Writing in the Heartlander digital magazine, Heartland Institute Communications Director Jim Lakely describes the FCC’s National Broadband Plan and responses to it from several critics of the proposal. 

Lawmakers Oppose FCC Plan to Reassert Net Authority
http://news.cnet.com/8301-30686_3-20006332-266.html
Marguerite Reardon of CNET writes about the legislative reaction to the FCC’s efforts to reclassify broadband as a telecommunications service.

Decline of Title II Common-Carrier Regulations in the Wake of Brand X: Long-Run Success for Consumers, Competition, and the Broadband Internet Market
http://heartland.org/policy-documents/decline-title-ii-common-carrier-regulations-wake-brand-x-long-run-success-consumers
Justin Hedge writes about Title II deregulation of the broadband market, examining how consumers stand to benefit from the FCC’s previous Title II deregulation of the broadband market.

The FCC’s Title II “Lite” (as a Lead Balloon!) & the Looming Broadband Tax
http://heartland.org/policy-documents/fcc%E2%80%99s-title-ii-%E2%80%9Clite%E2%80%9D-lead-balloon-looming-broadband-tax
Writing for the Progress and Freedom Foundation, James E. Dunstan examines what he calls the FCC’s Title II “Lite” proposal and argues it will lead to higher costs for consumers.

FCC Should Not Grab ‘Title II’ Authority over Internet
http://news.heartland.org/newspaper-article/2010/04/08/analysis-fcc-should-not-grab-%E2%80%98title-ii%E2%80%99-authority-over-internet
Larry Downes of the Stanford Law School Center for Internet & Society argues the Title II designation of telecommunications services is a relic of ancient communications history and should not be used to regulate modern Internet communications.

Nothing in this Research & Commentary is intended to influence the passage of legislation, and it does not necessarily represent the views of The Heartland Institute. For further information on this and other topics, visit The Heartlander’s Tech News Web site at http://news.heartland.org/tech, The Heartland Institute’s Web site at www.heartland.org, and PolicyBot, Heartland’s free online research database, at www.policybot.org

If you have any questions about this issue or The Heartland Institute, contact Heartland Institute Senior Policy Analyst Matthew Glans at 312/377-4000 or mglans@heartland.org.