Title II Reality Check Part 3: Forbearance Is Not A Panacea


by Steve Morris and Jennifer McKee

It is widely acknowledged that imposing the full array of Title II regulation on broadband Internet access would be incredibly burdensome and disruptive to ISPs, jeopardizing continued network investment and service innovation. Some parties have suggested that the Commission easily can mitigate this harm by forbearing from any unnecessary requirements imposed by Title II. But as we’ll explain, that is simply not the case. There are a number of significant challenges, which suggest that the entire forbearance process is likely to become a regulatory morass.

First, the sheer complexity of determining whether and how certain statutory provisions and rules will apply will be overwhelming. Those advocating the “Title II plus forbearance” approach are essentially advocating that the Commission create an entirely new regulatory regime for broadband Internet access from whole cloth. Fundamental questions such as whether, and if so how, to regulate market entry (under Section 214), retail prices (under Sections 201, 202, and 203), and network interconnection (under Section 251(a)), would have to be addressed for the first time in the context of broadband Internet access. (While Title II was applied to DSL in the past, that regime does not really provide useful precedent because, as we explained in a prior post, there are significant differences between that previous regime and the regime that Title II advocates are seeking today.)

"The idea that it will be easy for the Commission to decide whether to forbear defies all logic and experience."

Second, there is a fundamental tension between the type of findings that would justify regulating broadband as a Title II service and the findings that would be necessary to justify forbearance.  Given the lack of existing rules applicable to broadband Internet access service, the adoption of new rules under Title II likely will be based on some finding that the current approach might not be sufficient to protect consumers of these services. Conversely, to justify forbearance, the Commission would need to find that rules are not necessary to protect consumers. For example, there could be tension between the arguments that the Commission has made explaining the need for broadband transparency requirements and the findings that would be necessary to justify forbearing from the tariff provisions of Section 203. (A recent paper from the Phoenix Center addresses concerns about the application of Title II tariff provisions to broadband in more detail.) As a result of these significant tensions, the administrative burden on the Commission would be staggering. The forbearance provisions in Section 10 have been on the books for almost two decades and “easy” cases have been few and far between. Virtually all forbearance petitions are opposed, and often opposed vigorously. The Commission routinely extends the 12-month statutory deadline on forbearance petitions by three months, as permitted under the statute, and often makes its decision in these cases on the last week, often on the last day. Further adding to the time and complexity of the forbearance process, it also is possible that the Commission could provide different relief for different types of entities or different locations.  Some of the Commission’s more recent forbearance decisions, specifically its 2010 order denying a forbearance request from Qwest’s Phoenix market, have taken a fairly granular approach to the Section 10 forbearance analysis with respect to service definition and geography. Were the Commission to take a similar approach in the context of broadband Internet access services, it would take years to establish a new regulatory regime.

Given the challenges the Commission faces resolving forbearance petitions when a single carrier requests relief from a single provision or rule, the idea that it will be easy for the Commission to decide whether to forbear with respect to dozens of Title II provisions for hundreds of companies defies all logic and experience. It should be of particular concern to the Commission that many of the parties arguing most loudly that “forbearance is easy” have in fact filed comments suggesting that there are almost no provisions of Title II for which they would support forbearance. There is no escaping the fact that adopting the “Title II plus forbearance” policy will occupy the resources of the Commission and the industry for years to come. Given the entirely speculative benefits this exercise is likely to produce, the Commission should decline to start down this road at all.

Steve Morris and Jennifer McKee both serve as Vice President and Associate General Counsel at NCTA