Regulating Broadband Under Title II Is Not “Highly Deregulatory”
by Steve Morris and Jennifer McKee As the Commission begins to seriously consider its broadband policies in light of the decision in Verizon v. FCC, we thought it would be worthwhile to take a closer look at what it would mean for the Commission to classify broadband Internet access as a Title II telecommunications service. The descriptions of Title II regulation advanced by parties advocating reclassification bear little resemblance to our experiences in this area over the last two decades. In particular, the portrayal of Title II as a legal framework that offers clear and simple answers to difficult policy questions is simply false. Whether the issue is special access regulation, universal service reform, or network unbundling, the Commission consistently has struggled to develop clear and effective policies because Title II is ill-equipped to deal with the complex reality of today’s marketplace, where multiple providers compete using different technologies, different service offerings, and different coverage areas.
"Title II is ill-equipped to deal with the complex reality of today’s marketplace."
As we will explain in this series of blog posts, moving to Title II regulation of broadband Internet access services and providers would be a hugely disruptive process that is unlikely to produce any of the benefits claimed by its supporters. In this first post, we will address what may be the most outrageous claim yet regarding Title II. Specifically, in its recent comments, Free Press asserts that Title II “is not a burdensome regulatory framework in any respect. It is in fact a highly deregulatory framework . . .” The suggestion by Free Press that imposing Title II regulation on broadband providers is somehow “highly deregulatory” is pure nonsense. To repeat what should be well known at this point, cable operators have never been subject to Title II with respect to their broadband services. Since these services were introduced, they have been subject to limited regulation pursuant to Title I of the Act. By definition, imposing new Title II regulation on these companies is a regulatory act, not a deregulatory one. It is the case, as Free Press points out, that the Commission has a fair amount of discretion in how it applies Title II to entities that are classified as telecommunications carriers. It has, for example, decided not to apply the full panoply of Title II regulations to competitive local exchange carriers and mobile wireless voice services. Reducing Title II regulation in this way has produced substantial benefits for these companies and their customers as compared to applying all of Title II. But that is a far cry from the current debate over how to regulate ISPs, who have been subject to light regulation for two decades and unquestionably would face increased regulation under Title II, even if the Commission granted significant forbearance (and as we will explain in a future post, the forbearance process is a regulatory morass that would occupy the resources of the Commission and the industry for years to come). Given this analysis, the real question facing the Commission is whether it should abandon the Title I regime that has applied since the beginning of the broadband era and instead attempt to develop a new, untested Title II regime for broadband. We look forward to continuing this conversation and explaining the significant risks and challenges the Commission would face in attempting to develop such a regime, the significant costs associated with this approach, and the limited benefits it likely would produce. Steve Morris and Jennifer McKee both serve as Vice President and Associate General Counsel at NCTA