FCC Moves to Regulate

On June 17, 2010, the Federal Communications Commission (FCC) voted 3-2 to take the first steps toward regulating the Internet.  This is troubling as this decision from the FCC comes only 2 months after a federal court ruled rather strongly that the agency has no authority to take this next step.

The D.C. Circuit Court of Appeals ruled in April that the Communications Act only allows the FCC to regulate "telecommunications".  The agency early has concluded that broadband Internet is NOT "telecommunications" so the court decided that the FCC could not regulate broadband.

You would think this would be the end of the discussion but FCC Chairman Julius Genachowski purposes to get around this problem by re-defining broadband as a "telecommunication service".  Years have been put into the classification of broadband and now the Commission and at least 3 of the 5 members want to regulate broadband.

This is not just a simply issue of classifications, if the changes go through, it would allow the Commission to impose "net-neutrality" rules, which would put limits on how owners of broadband networks can manage their business on the net.  This could be terrible as according to one study done, the cost of neutrality rules could cost the economy up to 500,000 jobs and $80 billion dollars.

So now the FCC has launched a formal inquire into re-classifying broadband and it is not clear when this will be finalized.  As you can image, opposition to this change has been great not just from the industry businesses to be regulated but by congress, including both sides of the isle.  Approximately 290 members have expressed concerns about this proposal not just from an economic standpoint but from their vantage point as lawmakers. If this decision were to be finalized, it is certain to face fierce battles in the courts.  Of course, this all could take years and until then, we all live with this looming.