Reclassification of Broadband Service by the FCC

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Problem: Federal Communications Commission Chairman Julius Genachowski has proposed a plan to clarify the agency’s authority to regulate Internet service providers such as Comcast, Verizon and AT&T. The move by Genachowski became necessary in the wake of an appeals court decision in favor of Comcast in April. Comcast brought the suit in retaliation for an FCC decision against the company requiring that it stop blocking or slowing down data traffic traveling over its Internet network. Taken to its logical conclusion, the appeals court decision appears to undercut the FCC’s authority to regulate Internet service providers, period. At the same time, the appeals court decision appears to kneecap an FCC National Broadband Plan aimed at bringing high-speed Internet service to unserved and underserved areas, as well as to low and fixed income populations. To address this situation, the FCC is considering “reclassification” of Internet service as a telecom service, similar to traditional landline telephones and other common carriers. Internet service is currently considered an information service, meaning it is subject to virtually no regulation by the FCC. Not surprisingly, big Internet service companies such as Comcast, AT&T and Verizon are fighting hard to avoid reclassification with an all-out lobbying blitz focusing on Congress and the FCC.

Action Requested: It is important for consumers to push hard for the FCC to reclassify Internet service as a telecom service subject to some regulatory oversight rather than the Wild West, consumer-unfriendly industry it has become in recent years.

Why It Matters:

The FCC and possibly Congress need to address a number of situations that harm consumers including:

  • Lack of Competition. The vast majority of Americans have little or no choice when it comes to high-speed Internet service. If they’re lucky, they can get service from either a cable company or a phone company. If they’re not as lucky, they can only get it from one of those providers or can’t get any sort of reliable, reasonably priced high-speed Internet service at all. Despite these facts, the big Internet service providers such as Verizon, AT&T and Comcast argue they operate in a highly-competitive market. The industry is now spending tens of millions of dollars on a full-scale lobbying and public relations blitz in Washington and elsewhere to avoid reclassification, which could increase the chance consumers might enjoy the benefits of true and effective competition in the high-speed Internet market.
  • National Broadband Plan. Without reclassification, it will be virtually impossible for the FCC to implement its well-reasoned and much needed national broadband plan. Internet service providers have shown time and again that they cannot be trusted to when it comes to engaging in anti-consumer and anti-competitive activities. The FCC must act to reclassify high-speed Internet service, which like the railroads and telegraph lines of the past have become the vital backbone of American life including commerce, government, education and entertainment. Unfortunately, Americans are falling farther and farther behind the rest of the world in terms of affordable, high-speed Internet service. That has to change for Americans to remain competitive in and increasingly global economy and society. And it’s clear that won’t happen without reclassification.