In what FCC Chairman Michael K. Powell termed a move away from “policymakers’ rhetoric and hoopla” to “tangible actions,” the commission yesterday issued a notice of proposed rulemaking (NPRM) that could lead to a radical change in how it regulates telcos’ delivery of broadband services.
The FCC said it had tentatively concluded that “wireline broadband Internet access services -- whether provided over a third party’s facilities or self-provisioned facilities -- are information services, with a telecommunications component, rather than telecommunications services.”
This would move regulation of such services out from the common carriage provisions of Title II of the Telecommunications Act of 1996 to the enhanced services rules established under the commission’s Computer Inquiry proceedings some 20 years ago, which allow ILECs to offer enhanced services without common carriage limitations so long as they are not cross subsidized by basic regulated services.
But just how radical this proposal is was anybody’s guess, because the FCC left unclear whether “the telecommunications component” of broadband services would be exempted from Title II. If the deregulation includes the telecom segment, which is to say, the transmission equipment and software that enable local copper loop to carry high-speed data, the proposed rule would wipe out application of unbundling requirements to DSL under the Telecom Act.
Adding further to confusion over what the NPRM means was the commission’s indication that it sought comment on “whether the Computer Inquiry network access requirements should be modified or eliminated.”
Observers on all sides were cautious in their reactions to the NPRM as they sought to decipher vague wording of a press release and accompanying statements from commissioners that will serve as the primary policy descriptions until the commission issues the full NPRM. A spokesman said that could take anywhere from one to three weeks.
“We really won’t know the full extent of what this means until we see the order,” said H. Russell Frisby Jr., president of the Competitive Telecommunications Association (CompTel, www.comptel.org). “The chairman’s office told us to wait until we see the order before we jump to any conclusions, and we will. But I’m very troubled by this proceeding, because it could undermine the entire premise of competitive access as we know it.”
The United States Telephone Association (USTA, www.usta.org), leaning in the opposite direction, was equally reluctant to draw any final conclusions about the NPRM, but, said spokesman Tom Amontree, “if they’re able to pull this off, able to promote competitive and regulatory parity across all modes of broadband service delivery, we’ll be pleased. We’re looking for regulatory parity so that we can compete fairly with cable.”
One clue to how far-reaching the proceeding could be came from the dissenting comments of FCC Commissioner Michael Copps, who said the proposal struck him as being at “odds with current statutory and regulatory requirements.” If it is, he said, “I must dissent.”
“The majority frames this notice as an exploration of the statutory classification of telecommunications, telecommunications services and information services,” Copps said. “But what we are really deciding is whether the transmission component for broadband services, including for Internet access, should be offered outside of the statutory framework that applies to telecommunications carriers.”
Copps added that, “taken to its logical end, the majority’s reading of the [telecom] statute appears to lead to the strange conclusion that Congress intended to remove these services from the numerous competition, universal service and consumer protection provisions that Congress imposed on common carriers providing telecommunications service.”
Copps noted that even he, as a commissioner, was uncertain as to how to read the other commissioners’ thinking. But while he said he didn’t have all the answers as to whether the NPRM would eliminate unbundling of DSL and other protections, he said he had “enough of them to suggest that we’re not ready to go so far as this notice takes us.”
In a concurring statement on the NPRM, Commissioner Kathleen Abernathy underscored how far-reaching the ruling could be while leaving room for some doubt.
“(C)lassifying incumbent LECs’ Internet access services as information services would raise important questions regarding the applicability of existing retail and wholesale regulations,” she said. “On the retail side, since many Title II obligations are premised on the provision of a telecommunications service, concluding that Internet access services include only a telecommunications component, rather than a distinct telecommunications service, might lead us to determine that such Title II duties do not apply or apply only in part.”
Classifying Internet access services as information services would not have “any automatic consequences” on the wholesale side, since, under the Computer Inquiry rules, “incumbent LECs are required to make available to unaffiliated ISPs a broadband telecommunications functionality on an unbundled and nondiscriminatory basis,” Abernathy said.
Nonetheless, she added, this could change as a result of the commission’s request for comments on whether these rules should be changed or eliminated, although the commission’s inquiry on these questions “does not reflect any predisposition toward any particular outcome.”
