Instead of neutrality regulations only, the FCC now plans sweeping regulation of broadband with an uncertain outcome, now and in the future.
While the current FCC promises restraint, once broadband becomes regulated as a common carrier a future FCC would have wide power to make changes far beyond those sought today.
Late Wednesday, the FCC announced it would seek to regulate broadband transmission under Title II of the Communications Act. Such a move would give the FCC sweeping--and some fear heavy-handed--control over broadband, precisely what Comcast hoped to avoid in filing its lawsuit.
Today, FCC Chairman Julius Genachowski said the U.S. District Court's ruling in favor of Comcast left the Commission two options: To not regulate broadband or to classify broadband as a common carrier, subject to potentially much harsher regulation enacted during the heyday of the old Bell System.
Genachowski, after some public wavering, eventually decided broadband required regulation, but promised to exempt the industry from many of Title II's provisions, including a requirement to share lines with competitors.
A "Restrained Approach"
Obama's FCC chief called this a "restrained approach" to achieving net neutrality, without hampering Internet growth. He described his "third way" as being "carefully balanced to unleash investment and innovation while also protecting and empowering consumers."
In response to Thursday's announcement, Comcast said it regretted the Commission's decision.
Genachowski's announcement was a major blow to big telecom and its lobbying power, wrote Josh Silver of FreePress.net in an e-mail to neutrality supporters.
"Today, Chairman Julius Genachowski blinked," Silver wrote. "He backed away from the cliff and announced he was moving to implement broadband policies that will preserve the open Internet and promote universal access.
"This decision was an epic loss for AT&T and Comcast and their multi-million dollar lobbyists, but a solid victory for the rest of us," Silver added.
Corporations applauding Genachowski's action included Google, DISH Network, Amazon.com, Sony, eBay, Netflix, and others.
Business Going Forward
It is expected that the FCC will soon issue a series of notices that will end with a decision to regulate broadband under Title II. These will include a Notice of Inquiry, raising the issue for public comment, to be followed by a Notice of Forbearance, explaining what Title II rules will and will not be applied to broadband.
Genachowski is expected to receive support from the other two Democrats on the FCC, giving him a 3-2 majority over Republicans, who have already expressed reservations.
However, with the clock nearing the halfway point in the first Obama Administration and with Democrats looking over their shoulders in preparation for the mid-term elections, Genachowski may have reason to fast-track broadband regulation as much as possible, particularly if congressional action should at some point become necessary--it is not right now.
My take: Yes, there is a moral to this story, and a simple one. Before filing a lawsuit, it's a good idea to ask yourself, "What happens if we win?"
When Comcast challenged the FCC's ability to impose net neutrality, did it think a win would make the FCC back away?
Comcast got the win, but the FCC's response is likely to leave Comcast and other broadband carriers in a much weaker position than where they started.