So, Just What Are All of These FCC Broadband Proceedings About Anyway?

December 12, 2002. Historically, the FCC regulated industries have been easily compartmentalized. These industry sectors have included TV and radio broadcasters, phone companies that provided plain old fashioned telephone service (POTS), wireless phone companies that provided voice service with cell phones, and cable companies that piped in programming. Also, there was one category, information services, that remained unregulated.

Regulatory classifications are important because each regulated sector has operated under vastly different rules. The basic rules for each is codified in the Communications Act of 1934, which has been amended on many occasions. The most recent major revision was the Telecommunications Act of 1996. However, the basic regulatory schemes are complex, and the Congress has left it to the FCC to write and update detailed regulations to implement the basic scheme of the Communications Act.

The usual process for the FCC to implement the Communications Act is to conduct a rule making proceeding. The FCC first issues a Notice of Proposed Rulemaking (NRPM), a long document that states the topic, offers the FCC's tentative proposals, and states the subjects upon which it seeks public comment. Then, after receiving and reviewing public comment, the FCC sometimes issues regulations. The process can take many years. And often, the federal courts overturn its rules, and remand the matter to the FCC for a further rulemaking.

Until recently, one usually knew how to classify a company, and what rules applied to it. Today, however, with new technologies, convergence of technologies, and companies providing more diversified services, there is frequently an issue as to how to classify and regulate a particular service. The service provider often seeks a regulatory classification that is advantageous to it. Its competitors often seek a classification is less advantageous to it.

So the question arises, with respect to some new service, "Is is an unregulated information service? Or, is it a cable service to be regulated under the rules applicable to cable services? Or, is it a telecommunications service?" And, so forth.

Today, one of the overarching tasks facing the FCC today is how to classify for regulatory purposes a number of new broadband related services. Several of the broadband proceedings referenced by Commissioner Martin pertain to how to classify certain of these new services. One NPRM, known as the triennial review, addresses regulatory classifications, and the circumstances under which incumbent local exchange carriers (ILECs) must make parts of their networks available to requesting carriers on an unbundled basis pursuant to Section 251 of the Communications Act.

The following is a brief summary of the proceedings addressed by Commission Martin.

Dominant Non-dominant NPRM. This is Docket No. 01-337. The FCC adopted this NPRM [PDF] at its December 12, 2001 meeting. (A word of caution. These PDF files in the FCC web site can take a long time to download.) See also, December 12, 2001 release and notice in the Federal Register, January 15, 2002, Vol. 67, No. 10, at Pages 1945 - 1947.

The FCC's notice in the Federal Register states that "This document seeks comment on changes, if any, the Commission should make to its traditional regulatory requirements for incumbent local exchange carriers' (LECs) broadband service. In particular, it asks: What the relevant product and geographic markets should be for broadband services; whether incumbent LECs possess market power in any relevant market; and whether dominant carrier safeguards or other regulatory requirements should govern incumbent LECs provision of broadband service."

Wireline Broadband NRPM. This is Docket 02-33. The FCC adopted this NPRM [58 pages in PDF] at its February 14, 2002 meeting. See also, the FCC's notice in the Federal Register. This NPRM pertains to the appropriate regulatory framework for broadband access to the Internet over wireline facilities.

This NPRM states that "we examine the appropriate classification for wireline broadband Internet access service. As discussed more fully below, we tentatively conclude that, as a matter of statutory interpretation, the provision of wireline broadband Internet access service is an information service. In addition, we tentatively conclude that when an entity provides wireline broadband Internet access service over its own transmission facilities, this service, too, is an information service under the Act. In addition, we tentatively conclude that the transmission component of retail wireline broadband Internet access service provided over an entity’s own facilities is ``telecommunications´´ and not a ``telecommunications service.´´ We seek comment on these tentative conclusions and ask additional questions with regard to the proper classification of wireline broadband Internet access service."

Cable Modem Service NPRM. This is Docket No. 00-185 and Docket No. 02-52. It is actually both a Declaratory Ruling (DR) and a NPRM. The FCC adopted this Declaratory Ruling and Notice of Proposed Rulemaking [75 pages in PDF] at its March 14, 2002 meeting. See also, March 14 FCC release.

This NPRM addresses the legal classification and the appropriate regulatory framework for broadband access to the Internet over cable system facilities. It states that "we conclude that cable modem service, as it is currently offered, is properly classified as an interstate information service, not as a cable service, and that there is no separate offering of telecommunications service. In addition, we initiate a rulemaking proceeding to determine the scope of the Commission's jurisdiction to regulate cable modem service and whether (and, if so, how) cable modem service should be regulated under the law ..."

Triennial Review. This is Docket No. 01-338. The FCC adopted this NPRM [62 pages in PDF] at its December 12, 2001 meeting. See also, December 12, 2001 release and notice in the Federal Register.

The FCC wrote on December 12 that unbundled network elements (UNEs) "are the portions of the phone networks that incumbent local exchange carriers (LECs) must make available to competing carriers seeking to provide telecommunications services. Recognizing that incumbent LECs control some bottleneck facilities, Congress adopted section 251 of the 1996 Act to overcome the obstacles posed by that control."

The FCC wrote that "Specifically, the FCC will examine the framework under which incumbent LECs must make UNEs available to competing carriers. The Commission's action seeks to ensure that its regulatory framework reflects recent technological advances and marketplace developments and to remain current and faithful to the pro-competitive, market opening provisions of the Telecommunications Act of 1996."

The FCC further elaborated in it NPRM that "In 1996, the Commission first applied the statute and determined which network elements need to be unbundled to permit requesting carriers to compete. Then, in 1999, the Commission revisited its unbundling analysis, on remand from the Supreme Court. Recognizing that market conditions would change and create a need for commensurate changes to the unbundling rules, the Commission determined to revisit its unbundling rules in three years -- a schedule we adhere to by adopting this Notice of Proposed Rulemaking (NPRM) today. In this review, we undertake a comprehensive evaluation of our unbundling rules. We seek to ensure that our regulatory framework remains current and faithful to the pro-competitive, market-opening provisions of the 1996 Act in light of our experience over the last two years, advances in technology, and other developments in the markets for telecommunications services." (Footnotes omitted.)

Recommended Reading. The original NPRMs, other FCC notices, and all written comments submitted to the FCC, for each proceeding, can be viewed in the FCC web site. See, FCC search page titled "Search for Filed Comments". To obtain a list of all filings in a particular proceeding, enter the proceeding's docket number (i.e., "02-52") in the top box titled "Proceeding", and then click on the button titled "Retrieve Document List". This section of the web site is extraordinarily slow, and sometimes does not function. Nevertheless, it is a treasure trove of information.

As of December 12, 2002, Docket No. 01-337 (Dominant NPRM) contained 181 items, Docket No. 01-338 (Triennial Review) contained 857 items, Docket No. 02-52 (Cable Modem Service DR & NPRM) contained 272 items, and Docket No. 02-33 (Wireline Broadband NPRM) contained 1075 items.

Also, FCC Commissioner Kathleen Abernathy has given speeches in which she has summarized some of these same proceedings. See, transcript of speech dated June 28, 2002. See also, story titled "Abernathy Summarizes Pending FCC Broadband Related Proceedings", TLJ Daily E-Mail Alert No. 472, July 18, 2002.