The FCC has asked for comment on whether the Internet should be reclassified as a public utility to preserve net neutrality—but the motion faces political and legal hurdles
May 27 / 2014 |By Roni Jacobson
Credit: Free Press/Flickr. Used under Creative Commons license.
Two weeks ago the Federal Communications Commission proposed new regulations that, if passed, would dramatically alter the Internet as we know it. The proposal, which would permit Internet service providers (ISPs) to set up “fast lanes” that Web sites could pay to access for speedier content delivery, has attracted widespread, vocal opposition from advocates who say that it will strangle the free flow of information around the Web.
The FCC has left itself a way out from this debacle—Chair Tom Wheeler announced that the commission invited comment on whether it should reclassify the Internet as a public utility, a move that would sidestep the need for the proposed regulations—but it is unclear if the FCC is actually willing to take it.
At issue is a concept known as net neutrality, the principle that all Internet traffic should be treated equally to preserve open access to content on the Web. Advocates of net neutrality, including Pres. Obama and hundreds of Silicon Valley companies such as Google, Facebook and Netflix, argue that allowing ISPs to charge differential rates for handling certain kinds of traffic would enable giant corporations such as Amazon to squeeze out sites that don’t have the funds to compete.
The FCC first tried to institutionalize net neutrality in 2010. But this January the U.S. Court of Appeals for the District of Columbia Circuit struck down the regulations on the grounds that the FCC does not have the authority to require ISPs to treat all traffic equally. The new proposal attempts to codify something like net neutrality yet stay within the bounds of the district court decision that severely limits its ability to do so.
Reclassifying the Internet as a public utility, like telephone service, would shift it more firmly under the FCC’s regulatory purview. Many open-Internet advocates have been calling for this reclassification for years as a way to solve the problem, but until now the FCC has strongly resisted the proposal. “The Chairman did something very canny,” says Christopher Yoo, a professor of law, communication and information science at the University of Pennsylvania Law School. By inviting comment on the public utility question, Wheeler made it possible for approval of the fast-lane proposal move forward while preserving a “nuclear” option to establish net neutrality at some future date, if necessary. But Yoo adds that, at this point, several factors make reclassification nearly impossible, including a massive broadband lobby that will do anything to prevent it from happening because it would entail a sharp increase in regulation. So is reclassification actually feasible or is the FCC just paying lip service to net-neutrality advocates?
Classifying the Internet as a public utility would come down to a vote by the five FCC commissioners. “The problem with that is that there is a Supreme Court decision and half a dozen prior FCC decisions that cut the other way, which would severely limit the agency’s ability to move in that direction,” Yoo says.
In the Telecommunications Act of 1996, the first update to U.S. communications law since the 1930s, Congress created separate regulatory statutes for telecommunication and information services, defined as having the capability for “generating, acquiring, storing, transforming, processing, retrieving, utilizing or making available information via telecommunications.” Telecommunications services can be classified as “common carriers,” making them public utilities subject to more regulations, but information services can not be.
In six rulings since 1998 the FCC has consistently decreed that the Internet is an information, rather than a telecommunications, service. Of course, the commission is permitted to change its mind, but that becomes increasingly difficult the more that precedent has been set. The FCC would have to present its reasoning in court. To make their case successfully, it would have to describe what has changed since 2007, when the commission last ruled that broadband access via wireless networks is an information service.
Those rulings make reclassification harder to do, but they are not prohibitive in themselves. A Supreme Court decision from 2005 may pose a more significant hurdle, however. In National Cable & Telecommunications Association v. Brand X Internet Services, the Court held that Internet access is an information service and therefore not subject to the extra regulations around common carriers.
Supreme Court Justice Clarence Thomas noted in his opinion that, because the Telecommunications Act provisions were “vague,” the Court would defer to the FCC’s interpretation of the statute defining what a telecommunications service is, even in the face of past precedent—unless the precedent had determined that the statute’s meaning was unambiguous.
That may be the case. According to Yoo, “The Internet simply doesn’t meet the definition” for a telecom service. As outlined in the statute, a telecom service transports data to an end point chosen by the user without tranforming it. For one thing, Yoo says, the Internet has too much data processing and storage going on, precluding it from being classified as a telecom service. “Points specified by the user” can be problematic as well, Yoo adds. For example, if a person in New York City points his or her Web browser to Google.com, that’s the site that will appear. But if that person then flies to Tokyo and types “Google.com” into a browser, it will be redirected to Google.co.jp. Between the Supreme Court decision and the statute, “as a legal matter I think that it’s going to be almost impossible,” to reclassify the Internet, Yoo says.
Philip J. Weiser, dean of the University of Colorado Law School, agrees that reclassification could be “hard.” He notes, “The second issue is there is a lot of legacy regulation that the FCC would presumably not want to apply.” If the Internet were to be classified as a common carrier, the FCC would need to make exceptions for it and would then have to justify in court why it is treating the Internet differently from other services in the same category.
Not everyone thinks reclassification would be prohibitively difficult, however. Tim Wu, the Columbia Law School professor who coined the term “net neutrality” in 2003, calls Yoo’s legal assessment “flat out wrong.” For one thing, in the 1990s when Internet access was transmitted over telephone lines it was classified as a Title II, or a telecommunications common carrier, “so it would actually be a return to an older approach,” Wu says. “Second, the Supreme Court made it clear in the Brand X decision that Title II classification was obvious and easy.” The problem with reclassification is not a legal one: “It’s political,” Wu says.
At least one former FCC official agrees. Michael Copps, a commissioner from 2001 to 2011, wrote a blog post calling for reclassification and described the process as “pretty simple.” He wrote: “All it requires is an FCC big enough to own up to its previous mistakes and courageous enough to put our communications future back on track," citing court decisions that have granted the FCC considerable deference in its interpretation of the statute.
However easy or hard it would be to make the change internally, “I guarantee it would be challenged in court,” Yoo says, by Internet service providers such as Comcast and Verizon. The proposal also faces significant opposition from Republicans in Congress sympathetic to ISP claims that reclassification would impose onerous regulations that would stifle innovation and hurt jobs.
One thing is clear: Whether the forces against making the Internet a public utility are legal or political, the proposal faces an uphill battle either way.
