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 (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 , ¶ 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–1990sComputer Inquiries 1996Telecommunications Act of Report to Congress (Stevens Report) 2000AT&T Corp. v. City of Portland (9 th Circuit) 2002Cable Modem Declaratory Ruling and NPRM 2005NCTA v. Brand X Internet Services (Supreme Court) 2005DSL Order and NPRM 2006Broadband Over Power Lines Order 2007Wireless Broadband Order

Pre-Comcast: FCC Has Responsibility & Title I Authority “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) “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) “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 , ¶ 146

2002 → 2005 → 2010: Comcast v. FCC The Commission may exercise [its] “ancillary” authority only if it demonstrates that its action— here barring Comcast from interfering with its customers' use of peer-to-peer networking applications—is “reasonably ancillary to the... effective performance of its statutorily mandated responsibilities.”... The Commission has failed to make that showing. 600 F.3d 642, 644 (D.C. Cir. 2010) 2002 → 2005 → 2010: Comcast v. FCC  Comcast secretly degraded its broadband customers’ lawful traffic  Commission ordered Comcast to disclose its policies  Comcast challenged the order in federal court  D.C. Circuit held the Commission went too far when it relied on its “ancillary authority”

Supreme Court: FCC May Interpret the Act [A]mbiguities in statutes within an agency's jurisdiction to administer are delegations of authority to the agency to fill the statutory gap in reasonable fashion. Filling these gaps... involves difficult policy choices that agencies are better equipped to make than courts.... If a statute is ambiguous, and if the implementing agency's construction is reasonable, Chevron requires a federal court to accept the agency's construction of the statute, even if the agency's reading differs from what the court believes is the best statutory interpretation.... The Chevron framework governs our review of the Commission's construction.... [T]he statute fails unambiguously to classify the telecommunications component of cable modem service as a distinct offering. This leaves federal telecommunications policy in this technical and complex area to be set by the Commission... NCTA v. Brand X, 545 U.S. 967, 980, 992 (2005) Supreme Court: FCC Has Broad Discretion to Classify Broadband Internet Service “If a statute is ambiguous, and if the implementing agency's construction is reasonable, Chevron requires a federal court to accept the agency's construction of the statute, even if the agency's reading differs from what the court believes is the best statutory interpretation....” “[T]he [Communications Act] fails unambiguously to classify the telecommunications component of cable modem service as a distinct offering. This leaves federal telecommunications policy in this technical and complex area to be set by the Commission....” NCTA v. Brand X, 545 U.S. 967, 980, 992 (2005)

Supreme Court: FCC May Interpret the Act [A]mbiguities in statutes within an agency's jurisdiction to administer are delegations of authority to the agency to fill the statutory gap in reasonable fashion. Filling these gaps... involves difficult policy choices that agencies are better equipped to make than courts.... If a statute is ambiguous, and if the implementing agency's construction is reasonable, Chevron requires a federal court to accept the agency's construction of the statute, even if the agency's reading differs from what the court believes is the best statutory interpretation.... The Chevron framework governs our review of the Commission's construction.... [T]he statute fails unambiguously to classify the telecommunications component of cable modem service as a distinct offering. This leaves federal telecommunications policy in this technical and complex area to be set by the Commission... NCTA v. Brand X, 545 U.S. 967, 980, 992 (2005) Supreme Court: FCC Has A Duty to Reassess “An initial agency interpretation is not instantly carved in stone. On the contrary, the agency... must consider varying interpretations and the wisdom of its policy on a continuing basis....” Brand X, 545 U.S. at 981 (quoting Chevron) The agency “need not demonstrate to a court's satisfaction that the reasons for the new policy are better than the reasons for the old one; it suffices that the new policy is permissible under the statute, that there are good reasons for it, and that the agency believes it to be better, which the conscious change of course adequately indicates.” FCC v. Fox Television Stations, 129 S. Ct. 1800, 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)) 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