January 13, 2010 9:56 PM

Comcast Isn't the Only One Afraid of a Big Win

Last Friday, the 8th, I did a post on the reports about the Comcast v. FCC oral argument that was held before a skeptical D.C. Circuit that morning.  The point of my post was that the Net Neutrality NPRM (comments are due tomorrow!) might be a "rainout", because most reports suggested the court was less than encouraging about the Commission having authority to enforce its Broadband Policy Statement, based on the two main statutory provisions the Commission relied upon in both defending the Comcast decision, and supporting the current NPRM and proposed rules.  If the court did vacate the Commission's authority to enforce its Policy Statement, or any similar Title I rules, then--my post noted--the Commission would have to start again with new rules based on different statutory authority.   

I also noted that, when asked if it would rather lose on "narrow" (did Comcast have adequate notice?) or "broad" (do the statues the Commission relies upon, really provide the authority to regulate specific Internet practices?) grounds, the FCC said it would prefer a narrowly-written loss.  I failed to note that Comcast agreed.  While I figured a "broad" loss for the FCC would be bad for cable, it seemed kind of speculative and I really didn't want to get into it.

On Monday (the 11th), though, Harold Feld waded into the topic with an excellent post, entitled Does Comcast Fear To Win Too Much? In this post, Harold confirms Comcast's fears by citing a back-pedaling post that appeared on Comcast's policy blog Monday.  The post was an excessive "clarification" of Comcast's "true position" that the FCC does have the authority to regulate Internet practices under Title I.  Now a Shakespeare aficionado might observe, "[Comcast] doth protest too much, methinks."  But, really, who cares what Comcast thinks?  The court's interpretation of the scope of the Commission's authority is going to come out sooner or later, anyway.

Harold suspects that Comcast's true fear might be that, if the Commission has no Title I authority, then Congress might give the Commission the authority it seeks.  Here, I'm the skeptic.  The Speaker of the House is not looking for controversial legislation this year, and is said to be committed to avoiding controversial legislation unless the Senate passes a bill first.  The Senate has even less votes to play with than the House, so I think it's safe to scratch off Congress from Comcast's list of "things that go bump in the night."  

Harold also notes, though, that Title II, as a basis for jurisdiction, might be what Comcast really fears.  Here, I would tend to agree whole-heartedly.  If the FCC is in a corner, then they are already "cleared for take-off" by the Supreme Court (in Brand X)  to regulate Internet practices, simply by classifying broadband Internet access as a "telecommunications service."  Lots of independent LECs, and most CLECs, provide broadband as a "telecommunication service" today, so--from a telecom perspective--a reclassification wouldn't be an alien idea.  I'm not saying telecom carriers would welcome a mandatory re-classification, or even see the need for it.  I'm only noting that they've seen it before.

But, for cable guys, just the mere idea of classifying broadband Internet access as a "telecommunications service" is scary, spooky stuff; like the kind of talk that makes them not even care that the world is going to end in 2012. I'd like to tell you why the reason for the panic, but I can't.  It's not like I know the answer, but can't tell you (not because the cable guys would put out a contract (with no ETF) on me).  No, I just don't know.  There may be a perfectly obvious reason that eludes my little brain, but whether rational, or superstitious, cable's fear of Title II is quite real.

Regardless, though, I believe that Comcast believes that Title II is scary.  Still, I don't think the cable guys need to worry too much about Title II re-classification.  Why?  Well, the main reason is that it's not all about cable.  The FCC knows it could re-classify broadband tomorrow; in fact, they've always known it.  But, unfortunately, it's just no fun.  If the agency classifies broadband Internet access service as a "telecommunications service", the statute--not the Commission--declares the standard of prices and services that regulated firms owe their customers--just, reasonable, and not unreasonably discriminatory.  It's just that simple; no "cool" new rules to write, no new "economics of networks" theories to implement . . . .  No, the only thing left is . . . wake me up, already . . . enforcing the statute as written.  

The only other thing re-classification would do, would be to establish an underlying service for which the Commission to assert ancillary jurisdiction over other providers of Internet services--like applications, content, and content distribution.  But this is no fun for firms that might have consumer protection duties imposed on them by the FCC, and it's certainly no fun for the FCC.  The Commission could have imposed "open Internet" principles on all service providers that comprise the Internet ecosystem when it came out with its proposed Net Neutrality rules in the NPRM.  Yet, in the NPRM and proposed rules, the FCC chose not to apply its principles evenly; so, why do it now?  

Take comfort, Comcast, you're not alone.  The FCC wasn't kidding . . . they want a "narrow" loss just as much as you do--and so do Google, Akamai, and Limelight.  But, if you don't get that narrow loss, don't sweat it, either.  If a "scary", Title II classification was in your future, it would already be in your present.

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