The Myth That Title II Regulation of Broadband and Wireless Would Be Comparable

by on November 19, 2014 · 0 comments

Supporters of Title II reclassification for broadband Internet access services point to the fact that some wireless services have been governed by a subset of Title II provisions since 1993.  No one is complaining about that.  So what, then, is the basis for opposition to similar regulatory treatment for broadband?

Austin Schlick, the former FCC general counsel, outlined the so-called “Third Way” legal framework for broadband in a 2010 memo that proposed Title II reclassification along with forbearance of all but six of Title II’s 48 provisions.  He noted that “this third way is a proven success for wireless communications.”  This is the model that President Obama is backing.  Title II reclassification “doesn’t have to be a big deal,” Harold Feld reminds us, since the wireless industry seems to be doing okay despite the fact mobile phone service was classified as a Title II service in 1993.

To be clear, only mobile voice services are subject to Title II, since the FCC classified broadband access to the Internet over wireless networks as an “information” service (and thus completely exempt from Title II) in March of 2007.

Sec. 6002(c) of the Omnibus Budget Reconciliation Act of 1993 (Public Law 103-66) modified Sec. 332 of the Communications Act so commercial mobile services would be treated “as a common carrier … except for such provisions of title II as the Commission may specify by regulation as inapplicable…”

The FCC commendably did forbear.  Former Chairman Reed E. Hundt would later boast in his memoir that the commission “totally deregulated the wireless industry.” He added that this was possible thanks to a Democratic Congress and former Vice President Al Gore’s tie-breaking Senate vote.

Lest there be any doubt whether there was widespread bipartisan support for regulating mobile wireless services under Title II so the FCC could deregulate them, the fact is not a single Republican in either chamber voted for the Omnibus Budget Reconciliation Act of 1993.  In the Senate, the vote was 50-50, with six Democrats voting with the Republicans.  The vote was 218-216 in the House of Representatives, with 41 Democrats joining the Republicans.

This convoluted regulatory framework—under which the FCC is not specifically prohibited from changing its mind whenever it wants, reversing course and un-forbearing—was enacted because one party jammed the other.

There was no appetite for regulating wireless services in 1993, since the FCC would be conducting competitive auctions for the first time for assigning four new licenses on top of the two existing licenses in every trading area.  Applying Title II—even though that meant forbearing from applying 45 out of 48 of Title II’s provisions—was a clever manipulation of deregulatory sentiment.

Although in theory limited Title II regulation “doesn’t have to be a big deal,” let’s be clear that’s not what Feld and others are advocating.

The Democrats reserved only three of Title II’s 48 provisions (sections 201, 202 and 208) when they applied Title II to wireless and authorized the FCC forbear from applying everything else.  In comments filed with the FCC, Feld and company clearly oppose what we’re calling doesn’t-have-to-be-a-big-deal regulatory treatment (“blanket forbearance”) of broadband.  In fact, they’ve identified a total of only four of Title II’s 48 provisions that they believe are candidates for forbearance (sections 223, 226, 228 and 260).

Given the forbearance framework and public interest concerns discussed above, and mindful that the existing broadband market is neither as nascent nor as competitive as the wireless market was in 1994, when the Commission engaged in blanket forbearance, Commenters provide this list of specific statutes the Commission should not simply forbear from on the assumption that doing so meets the statutory criteria. As a general matter, these involve Commission authority over interconnection and shut down of service (Sections 251(a), 256, and portions of 214(c)), discretionary authority to compel production of information (Sections 211, 213, 215, and 218-20), provisions which provide explicit power for the Commission to hold parties accountable and prescribe adequate remedies (Sections 205-07, 209, 212, and 216), provisions designed to protect consumers (Sections 203 and 222), or provisions designed to ensure affordable deployment and the benefits of broadband access to all Americans (Sections 214(e), 225, 254, 255, and 257).  These statutes are in addition to the bare minimum recognized in Section 332(c) as the minimum needed to protect consumers—Sections 201, 202, and 208.

On the other hand, it would appear that forbearance from some provisions would serve the public interest, either because they create barriers to deployment and improvement of capacity, or because it is unclear what these provisions would mean in the context of broadband access service—assuming they applied at all (such as Sections 223, 226, 228, and 260).  Commenters express no opinion on statutes not specifically addressed, beyond urging the Commission to apply the general framework discussed above. (references omitted.)

For the proponents of net neutrality regulation, Title II reclassification is not simply about applying sections 201, 202 and 208 of the Communications Act to broadband, and that’s why the wireless analogy is irrelevant and one reason why there’s so much opposition.

Another reason has to do with the basic purpose of the 1996 Telecommunications Act.  As Reed Hundt also pointed out in his memoir, “our policy was to introduce competition and then to deregulate,” and the “purpose of pro-competitive rulemaking ultimately would be the elimination of rules.”  The competition between telephone carriers, wireless providers and cable operators that a few visionaries tried to persuade a skeptical Congress in 1994-96 was just around the corner has come to pass, and with it the justification for the 1934 Title II regulatory framework is gone.

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