On June 17, 2010, the Federal Communications Commission ("FCC" or "Commission") released a Notice of Inquiry ("NOI") seeking comment on its proposed legal framework for the future treatment of broadband service.  Comments are due July 15, 2010 and reply comment are due August 12, 2010. 

The Commission's actions come as a response to the United States Court of Appeals for the District of Columbia Circuit's decision in the Comcast v. FCC case, in which the Court rejected the Commission's attempt to extend its general regulatory jurisdiction over broadband-based services.  Without such authority, the Commission faces significant hurdles to implementing the National Broadband Plan. 

Seemingly, the Comcast decision left the Commission with two choices.  The first option would be for the agency to accept the current classification of broadband Internet access as an "information service" exempt from the Commission's jurisdiction.  In short, it would concede its limited authority under the Comcast decision.  An alternate method for the Commission to react to the Comcast decision would be to reclassify broadband Internet access services as telecommunications services subject to the full suite of provisions established in Title II of the Act.  This would allow the Commission to regulate broadband like traditional telephony services and assess USF contributions on providers.  However, it would also trigger a more burdensome regulatory regime inconsistent with the FCC's policy of regulatory restraint with respect to the Internet.

As an alternative, FCC Chairman Julius Genachowski proposed a so-called "third way" which would separately classify the transmission component of broadband Internet access services as "telecommunications," when offered on a common carrier basis, subject to Title II, while the information component would be subject to a limited set of regulations pursuant to the Commission's ancillary jurisdiction under Title I.  The Chairman also clarified that the historical distinction between private and common carriage will remain preserved.  Private carriers, that is, will be entirely exempt from regulation, whereas common carriers will fall subject to regulatory oversight as described, a sort of "light touch" regulatory approach. 

With regards to the above three regulatory approaches, the FCC's NOI seeks comments on the following issues:

1.  Whether the FCC's current "information services" classification of broadband Internet service remains legally sound and adequate to support effective performance of the FCC's responsibilities;
2. The legal and practical consequences of classifying broadband Internet connectivity as a "telecommunications service" to which all of the requirements of Title II of the Communications Act of 1934 (the "Act") would apply; and
3. The "third way" under which the FCC would reaffirm that Internet content and applications remain generally unregulated under Title I of the Act; classify the Internet connectivity service that is offered as part of a wired broadband Internet service as a telecommunications service; and forebear under Section 10 of the Act from applying all of the provisions of Title II other than those that are necessary to implement fundamental universal service, competition and market entry, and consumer protection policies.

Clients wishing to review this issue in more detail can access the entire text of the NOI at the following link:  

CLIENT ADVISORY

If you have any questions or concerns regarding the FCC's proposed "Third Way" for the treatment of broadband service or would like to file comments in response to the Commission's NOI, please contact the attorney assigned to your account.  Alternatively, you may reply to this message via e-mail and someone will promptly respond to your inquiry.