Legal Framework for Broadband Internet Access

Notice of Inquiry

June 17, 2010

OUR MISSION IN THE BROADBAND ERA

Congress created this Commission
so as to make available, so far as possible, to all the people of the United States a rapid, efficient, Nation-wide, and world-wide communication service with adequate facilities at reasonable charges for the purpose of the national defense, and promoting safety of life and property Communications Act § 1

make available, so far as possible, to all the people of the United States . . .
Every American should have a meaningful opportunity to benefit from the broadband communications era . . . . The nearly $9 billion Universal Service Fund . . . should be comprehensively reformed to . . . encourage targeted investment in broadband infrastructure, and emphasize the importance of broadband to the future of these programs.
Joint Statement on Broadband, FCC 10-42 (Mar. 16, 2010)

make available, so far as possible, to all the people of the United States . . .
[W]e will exercise our Title I ancillary jurisdiction to ensure achievement of important policy goals of section 255 [regarding access for persons with disabilities].
DSL Order and NPRM, 20 FCC Rcd at 14920-21, ¶ 123 (2005)

for the purpose of the national defense, [and] promoting safety of life and property . . .
[N]etwork reliability, emergency preparedness, national security, and law enforcement requirements would each be reasonably ancillary to the Commission s obligation [under section 1].
DSL Order and NPRM, 20 FCC Rcd at 14914, ¶ 110

Privacy
Consumers privacy needs are no less important when consumers communicate over and use broadband Internet access than when they rely on telecommunications services.
DSL Order and NPRM, 20 FCC Rcd at 14930, ¶ 148

Comcast Corp. v. FCC (D.C. Cir. Apr. 6, 2010)

Casts serious doubt on the Commission s ability to achieve these goals under its chosen legal framework.

Goal of this Notice of Inquiry A solid legal foundation for continuing Commission policies that promote investment, innovation, and competition and protect consumers.

THE ROAD TO THIS NOTICE OF INQUIRY

Steps Toward A Legal Framework
1960s 1990s 1996 1998 2000 2002 2005 2005 2006 2007 Computer Inquiries Telecommunications Act of 1996 Report to Congress (Stevens Report) AT&T Corp. v. City of Portland (9th Circuit) Cable Modem Declaratory Ruling and NPRM NCTA v. Brand X Internet Services (Supreme Court) DSL Order and NPRM Broadband Over Power Lines Order Wireless Broadband Order

Pre-Comcast: FCC Has Responsibility & Title I Authority
If there are competitive problems, we will step in. If consumers are being denied access to products and services that they want, we can address that as an enforcement matter. -- Chairman William Kennard (1999) The Commission is not left powerless to protect the public interest by classifying cable modem service as an information service. Congress invested the Commission with ample authority under Title I . . . . There is no basis to conclude that Title I is inadequate to strike the right regulatory balance. -- Chairman Michael Powell (2002) As the expert communications agency, it was appropriate for the Commission to adopt, and it is the Commission s role to enforce, this Internet Policy Statement. In fact, the Supreme Court in its Brand X decision specifically recognized the Commission s ancillary authority to impose regulations as necessary to protect broadband internet access. -- Chairman Kevin Martin (2008)

2002: Cable Open Access NPRM

[W]e now seek comment on whether the Commission should exercise its Title I authority here with regard to the provision of cable modem service.
Cable Modem Declaratory Ruling and NPRM, 17 FCC Rcd at 4842, ¶ 77 (2002)

2002

2005: Broadband Consumer Protection NPRM

We have a duty to ensure that consumer protection objectives in the Act are met as the industry shifts from narrowband to broadband services. Through this Notice, we thus seek to develop a framework for consumer protection in the broadband age . . . . [O]ur ancillary jurisdiction under Title I . . . is ample to accomplish the consumer protection goals we identify below, and we will not hesitate to exercise it.
DSL Order and NPRM, 20 FCC Rcd at 14929-30, ¶ 146

2002

2005

2010: Comcast v. FCC

2002 The2005 2010: Comcast v.[its] ancillary Commission may exercise FCC
authority only if it demonstrates that its customers  Comcast secretly degraded its broadband action here traffic lawful barring Comcast from interfering with its customers' use of peer-to-peer networking applications is reasonably to disclose the . . .  Commission ordered Comcast ancillary to its policies effective performance of its statutorily mandated responsibilities. . . . The Commission has failed  Comcast challenged the order in federal court to make that showing.  D.C. Circuit held the Commission went too far when it 600 F.3d 642, 644 (D.C. Cir. 2010) relied on its ancillary authority

authority to the agency to fill the statutory gap in reasonable fashion. Filling these gaps . . .If a statute is ambiguous, and if theagencies are better equipped to make than involves difficult policy choices that implementing agency's construction is reasonable, statute requires a federal the implementing agency's construction is courts. . . . If aChevronis ambiguous, and if court to accept the agency's construction of the statute, even if the a federal court to accept the agency's construction of the reasonable, Chevron requiresagency's reading differs from what the court believes is statute, even if the agency's reading .differs from what the court believes is the best the best statutory interpretation . . . statutory interpretation. . . . The Chevron framework governs our review of the Commission's construction. Act] fails unambiguously to classify the [T]he [Communications . . .

Supreme Court: FCC May Interpret the Act Supreme Court: FCC Has Broad Discretion to [A]mbiguities in statutes within an agency's jurisdiction to administer are delegations of Classify Broadband Internet Service

this technical and complex area to be set by the Commission . . .

telecommunications component of cable modem service as a distinct [T]he statute fails unambiguously to classify the telecommunications component of cable offering. This leaves federal telecommunications policy in this technical and modem service as a distinct offering. This leaves federal telecommunications policy in complex area to be set by the Commission . . . .
NCTA v. Brand X, 545 U.S. 967, 980, 992 (2005)

NCTA v. Brand X, 545 U.S. 967, 980, 992 (2005)

Supreme Court: FCC May Interpret the Act
[A]mbiguities in statutes Court: FCC Has A Duty administer are delegations of Supreme within an agency's jurisdiction to to Reassess authority to the agency to fill the statutory gap in reasonable fashion. Filling these gaps . . .An initial difficult policy choices that agencies arecarved equipped to make contrary, involves agency interpretation is not instantly better in stone. On the than the agency . . must ambiguous, and interpretations and the wisdom of its policy courts. . . . If a. statute isconsider varying if the implementing agency's construction is reasonable, Chevron requires a federal court to accept the agency's construction of the on a continuing basis . . . . statute, even if the agency's reading differs from 545 U.S. at 981believes isChevron) Brand X, what the court (quoting the best statutory interpretation. . . . The Chevron framework governs our review of the The agency need not demonstrate to a court's satisfaction that the reasons for Commission's construction. . . .

the new policy are better than the reasons for the old one; it suffices that the [T]he statute fails unambiguously to classify the telecommunications component of cable new policy is permissible under the statute, that there are good reasons for it, modem serviceagency believes it to be better, which the conscious change policy in and that the as a distinct offering. This leaves federal telecommunications of course this technical and complex area to be set by the Commission . . . adequately indicates. FCC v. Fox Television Stations, 129 S. Ct. 1800, (2005) NCTA v. Brand X, 545 U.S. 967, 980, 992 1811 (2009)

THE NOTICE OF INQUIRY

Information Gathering
Seeks comment on any and all legal approaches to Broadband Internet services, including: 1) Title I: Maintain current legal framework 2) Title II: Apply all regulations applied to telephone networks 3) Third Way Inquiry does not involve Internet content, or other applications or services.

Title I Option 
Maintain classification as unitary information service  Rely on ancillary authority

Link broadband policies to traditional telephone and broadcast/cable services 
Develop additional authority from Act

Title I Option 
NOI seeks comment on how to realize particular goals:

Universal service Privacy Access for individuals with disabilities Public safety and homeland security Addressing harmful practices by ISPs Other approaches to oversight (e.g., third-party standard setting)

Title II Option 
Refresh the factual record on broadband Internet service  Recognize broadband Internet connectivity as a telecommunications service  Apply all Title II provisions

Title II Option 
NOI seeks comment on:

Current facts in the broadband marketplace How to define the telecommunications service Consequences of this approach

Third Way 
Modeled on successful Regulatory Treatment of Mobile Services (Communications Act § 332(c))

Third Way 
Modeled on successful Regulatory Treatment of Mobile Services (Communications Act § 332(c))
Annu zed
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19 99

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200,000,000 150,000,000 100,000,000 50,000,000 0

Source: CTIA

Third Way 
Modeled on successful Regulatory Treatment of Mobile Services (Communications Act § 332(c))

Classify broadband Internet connectivity as a telecommunications service (as currently offered by 840 local telephone companies) Forbear on a nationwide basis from all but a small number of core Title II provisions Lock-in forbearance

Third Way 
NOI seeks comment on:

Provisions from which Commission should and should not forbear Application of statutory forbearance criteria Maintaining forbearance decisions

Other Questions 
How should Commission treat wireless broadband Internet services?  How should Commission treat non-facilities-based ISPs?  What are implications of each approach for state and local regulation?  If the Commission adopts a new approach, what should be the effective date?  Should Commission close its cable open access proceeding?

Comment Cycle 
APA does not require notice and comment for statutory interpretations  NOI nevertheless seeks public input:

Initial Comments: July 15, 2010 Reply Comments: August 12, 2010 
Input also accepted via new media

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