Net-neutrality authority rests in part on contentious deployment argument, but FCC says it has other arguments, too

Section 706 requires the agency to make an annual report to Congress on whether broadband is being deployed to all Americans in a reasonable and timely manner. In instances when the agency concludes “no,” the act also empowers the FCC to move toward fixing that.

But the notion that net-neutrality rules would help spur deployment is overwhelmingly rejected by rules opponents, who say such regulations would actually hinder investment. Even the most ardent net-neutrality proponents rarely cite deployment as a reason to enact such rules, preferring to wage arguments about promoting free expression and forestalling potential Internet fees.

FCC Chairman Julius Genachowski has made the deployment argument before — during an interview at the Web 2.0 Summit last month, Genachowski touted net-neutrality regulations as one of the most important policies the country can adopt to improve its broadband deployment efforts, which he described as lagging behind other countries.

“One of the basic things we can solve [to] maintain the openness of the pipes is open Internet,” he said, referring to the net-neutrality proceeding.

The argument that net-neutrality rules would promote deployment goes like this: the rules ensure that Internet companies can get their content to users and continue producing more content, increasing the bandwidth demands on broadband providers and spurring them to build out their networks.

But when Genachowski used that logic, net neutrality-opponents balked.

“It is possible that the FCC has new economic research to unveil, but the vast majority of economists, analysts and investors agree that new Internet regulations and policy uncertainty will deter investment, slow job creation and undermine broadband deployment,” Internet Innovation Alliance Co-Chairman Bruce Mehlman told The Hill at the time.

It’s not just industry that questions the use of Section 706.

The public interest community, which wants the agency to use the most solid argument possible to underpin the rules, recoiled at the notion that Section 706 can be used to justify the commission’s net-neutrality actions.

“This argument has procedural problems, legal problems, and no basis in the record. It would apply only to the 14-24 million Americans the FCC found lacked adequate access to broadband,” said Harold Feld, legal director at Public Knowledge.

He added that even though an appeals court decision this year in Comcast v. FCC referenced Section 706, the court did not “greenlight” the use of Section 706 for net neutrality.

“What the Comcast decision said was ‘we don’t have to decide whether Section 706 gives the FCC authority, because the FCC already determined in 1999 that it doesn’t give them any new grant of authority,'” he said. 

That does not mean the court would affirm a contrary determination by the FCC, he said.

Broadband providers have been wary this year that the commission might use Section 706 as a pretext for new regulations. They pushed back hard when the agency issued its 706 report in July and determined for the first time in years that broadband is not being deployed in a reasonable and timely way.

“The commission’s analysis strains credulity,” Walter McCormick, the president of broadband association U.S. Telecom, said at the time.  

The FCC has yet to get formal net-neutrality rules on the books, and will have to find a sound legal argument to prevent any potential enforcement action from getting shot down in court.

Genachowski proposed a net-neutrality framework on Wednesday, but the proposal hinges on the votes of two other commissioners, so the chairman’s office is likely to spend the next three weeks tweaking the plan and negotiating with commissioners’ offices on what they want to see in the rules.

Commissioner Michael Copps, a Democrat, indicated Wednesday that it is important that the plan have a solid legal grounding.

He said he wants the FCC framework to be built on “the most secure legal foundation so we don’t find ourselves in court every other month.”


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