By Sara Jerome - 06/17/10 06:28 PM EDT
The Federal Communications Commission (FCC) moved closer to boosting its authority over broadband providers on Thursday in a controversial vote that the panel's Democrats said would protect consumers and its Republicans contended would freeze investment in broadband networks.
The commission voted 3-2 to open an inquiry into how the industry is regulated, the first step toward giving the agency the authority to police broadband service providers such as Comcast, Verizon and AT&T.
Democratic commissioners said at the Thursday meeting that the move to greater FCC authority would protect consumers and ensure competition in the broadband market.
But the FCC’s two Republican voices expressed strong opposition. Commissioner Meredith Baker raised concerns about the financial implications and future broadband deployment, charging that the vote would "subject the Internet and consumers to years of litigation and uncertainty."
"There are significant consequences to even initiating this proceeding," she said.
Commissioner Robert McDowell, the agency's other Republican, said a net 1.5 million jobs could be put at risk as a consequence of agency action.
The process "has already caused harm in the marketplace," he said.
FCC Chairman Julius Genachowski vigorously defended his process, which lays out three potential frameworks for reshaping the agency's legal authority after an April appeals court decision some say severely undercut the agency's position.
"It's not hard to understand why companies subject to an agency's oversight would prefer no oversight at all if they had the chance," Genachowski said.
In the aftermath of the appeals court decision, which Genachowski called a "curveball," he proposed to place broadband services under the same regulatory framework as telephone service, which is more strictly regulated than broadband.
To protect against overregulation, Genachowski wants to prevent the FCC from applying the most onerous rules that currently apply to telephone service. That is in part a concession to broadband providers.
Despite previously endorsing this plan, which he has labeled the "third way," Genachowski said on Thursday he’s not entirely opposed to two other avenues: leaving FCC authority as is or grabbing even more power for the agency.
"There’s no point in having a notice and comment process unless people bring an open mind," Genachowski said, noting that he also supports congressional efforts to update broadband regulations. He said he will devote FCC resources to lending a hand to the Hill.
But Baker charged that the chairman had already made up his mind on which framework he favors: the "third way" plan.
“I have concerns the outcome has been prejudged," she said.
Genachowski's fellow Democratic commissioners added strong support to the move toward greater FCC authority. Failing to act "would be death by a thousand cuts," said Commissioner Michael Copps, arguing that it could put the entire spectrum of FCC actions on shaky legal footing.
Commissioner Mignon Clyburn refuted what she characterized as misinformation about the proceeding. "It will not freeze investment in our networks," she said.
Industry stakeholders were quick to weigh in about the FCC vote. Many have charged that the proceeding is a backdoor way to write net neutrality rules without a congressional mandate. Such rules would prevent broadband providers from favoring certain Internet traffic.
Changing broadband's regulatory status is a "terrible idea," Verizon's top lobbyist, Tom Tauke, said in a statement. "Rather than attempting to make the new world of broadband fit into the regulatory scheme of the old telephone world, the FCC should acknowledge that this is an issue Congress should address."
Consumer-minded interest groups, including Public Knowledge, praised the move as beneficial to consumers. "The Commission’s simple, uncomplicated action today makes certain that the expert agency in telecommunications has the authority to carry out its mission," the group's president, Gigi Sohn, said in a statement.
The majority of congressional members oppose Genachowski's plan, including 77 Democrats who say he should wait for Congress to act.
The leaders of the authorizing congressional committees have indicated that they want to update the Communications Act for its first major rewrite since 1996, but said their process could be complementary to Genachowski's. Experts say congressional action could take years.
Meanwhile, a group of 32 House Democrats led by Rep. Jay Inslee (D-Wash.) sent a letter of support to the chairman on Thursday to coincide with the vote. A handful of Democratic senators have also endorsed the plan, including Senate Commerce Communications Chairman John Kerry (D-Mass).