FCC Opens Inquiries on Broadband

Published July 1, 2007

The Federal Communications Commission (FCC) this summer will field comments on three interrelated proceedings on broadband practices, availability, and deployment–widely regarded as code words for the country’s touchy network neutrality battle.

Last year, Congress left the net neutrality ball squarely in the FCC’s court, declining to pass sweeping telecom law reform.

For the net neutrality camps, both pro and con, public input to the U.S. regulator from mid-May through mid-July may constitute this year’s key opportunity for discussing whether a set of existing FCC principles on Internet user choice and freedoms should be extended to industry interconnection and peering among providers of telecom networks, content, and other services.

The FCC’s mid-April actions on broadband used the term “network neutrality” sparingly, with only a handful of direct mentions among 119 pages of documents that take in news releases, commissioner statements, two formal notices of inquiry (NOIs), and a formal notice of proposed rulemaking (NPRM).

‘Net Neutrality’ Debate

The commission’s broadband practices NOI, WC Docket 07-52, looks at whether there are broadband market failures that warrant new enforcement mechanisms. The second NOI and NPRM, grouped under Docket 07-38, ask if broadband services are being deployed to all Americans in a reasonable and timely fashion and about new ways to collect information necessary to set broadband policy in the future.

The debate over whether to impose net neutrality measures is likely to be a core element of the FCC’s broadband policy process. But Adam Thierer, senior fellow with the Progress & Freedom Foundation, questions the wisdom of the FCC’s opening the net neutrality “Pandora’s box.”

“It tees up all the questions that we’ve been asking here for the past few years,” Thierer said. “The difference is, of course, that now the whole world is going to flood the agency with answers, and many of them will entail regulatory action.”

Thierer is concerned about how the FCC frames its questions, and particularly about the wide scope of the investigation, which sweeps up nearly all market participants. “My, oh my, who isn’t under the regulatory spotlight here?” he asked, recalling previous industry-watcher jibes about how net neutrality “would eventually come to cover just about every company under the Internet sun.”

Flexibility vs. Regulation

Thierer suggests “the seeds of a new regulatory regime may have already been planted.” He and others at the Progress & Freedom Foundation maintain the real net neutrality debate is over pricing flexibility versus pricing regulation.

Thierer and his colleagues contend broadband service providers will eventually differentiate themselves through price points related to bandwidth usage, finding ways to deal with the small number of heavy-bandwidth users.

The FCC’s 07-52 NOI addresses what are believed to be routine as well as complex matters in broadband business practices. These include whether service providers prioritize packets for latency (speed)-sensitive applications during times of congestion; prioritize packets for safety/security-related applications; block packets containing child pornography, spyware, viruses, or spam; charge different prices for different speeds, capacities, or premium downloads; give greater availability to bandwidth-intensive applications; charge upstream providers for priority access to end users; or discriminate in the prices they charge to end users and/or upstream providers.

Inquiries aside, the most difficult policy question is whether the commission has the legal authority to enforce its current Internet principles or expand them to enforce net neutrality if it finds market failures or other problems. “Hey, when has that ever stopped them before?” remarked Thierer.

Martin Expresses Doubts

A statement from FCC Chairman Kevin J. Martin, issued to coincide with the NOI and NPRM releases, avoided net neutrality language. He has previously expressed doubts about the need for such regulations. Fellow Republican commissioners Deborah Taylor Tate and Robert M. McDowell, in their statements, also expressed doubt about imposing new rules or even principles. Additional regulatory action at this time, they suggested, would be tantamount to imposing a cure before there has been a disease or even a high fever, and they called for the FCC to resist the temptation to impose regulations based merely on theory.

Democratic Commissioners Michael J. Copps and Jonathan S. Adelstein suggested industry net neutrality should be considered as an addition to the FCC’s existing Internet principles. They expressed concern as to whether consumers will have any control over the quality of their Internet connections, duopoly operator dominance, and a few “broadband behemoths” acting as de facto Internet gatekeepers.

Technological Change

NOI 07-38 seeks to define broadband in light of the rapid technological changes occurring in the marketplace, including the development of higher-speed services and new broadband platforms.

The document says the commission will focus its inquiry on availability of broadband, including in rural and other difficult-to-serve areas; whether consumers are adopting new services; the level of competition in the marketplace; what can be done to accelerate the rollout of broadband services; current investment trends in the industry; external data sources that shed light on broadband prices; the extent to which consumers have a choice of competing providers; and comparative data on speed, price, availability, and adoption in other countries.

Frank Barbetta ([email protected]) writes from Little Falls, New Jersey.

For more information …

Broadband Data Notice of Proposed Rulemaking, Federal Communications Commission, http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-07-17A1.pdf

Broadband Deployment Notice of Inquiry, Federal Communications Commission, http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-07-21A1.pdf

Broadband Market Practices Notice of Inquiry, Federal Communications Commission, http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-07-31A1.pdf