FCC Adopts NOI Regarding Broadband Market Practices

March 22, 2007. The Federal Communications Commission (FCC) adopted, but did not release, a Notice of Inquiry (NOI) regarding broadband market practices. The FCC issued a short release [PDF], and all five Commissioners wrote separate statements.

The FCC release states that the FCC "seeks comment on whether the Policy Statement should incorporate a new principle of nondiscrimination and, if so, how would ``nondiscrimination´´ be defined, and how would such a principle read."

The FCC adopted its policy statement [3 pages in PDF] on August 5, 2005. See, story titled "FCC Adopts a Policy Statement Regarding Network Neutrality" in TLJ Daily E-Mail Alert No. 1,190, August 8, 2005. The FCC released the text of the Policy Statement on September 23, 2005. See, story titled "FCC Releases Policy Statement Regarding Internet Regulation" in TLJ Daily E-Mail Alert No. 1,221, September 26, 2005.

The FCC's release also propounds four questions. First, "How broadband providers are managing Internet traffic on their networks today". Second, "Whether providers charge different prices for different speeds or capacities of service". Third, "Whether our policies should distinguish between content providers that charge end users for access to content and those that do not". Fourth, "How consumers are affected by these practices".

FCC Chairman Kevin Martin wrote in his statement [PDF] that "Although we are not aware of any current blocking situations, the Commission remains vigilant in protecting consumers’ access to content on the Internet. At the same time, I believe that it is useful for the Commission, as the expert communications agency, to collect a record about the current practices in the broadband marketplace."

Commissioner Robert McDowell wrote in his statement [PDF] that "For those who fear or allege market failure, this NOI gives them an opportunity to present detailed evidence, of which we have none, thus far. For those who argue that the market is working well and no further regulation is needed, now is the time to make their case." He said that this NOI will give the FCC "a factual record upon which to make a reasoned determination. He also indicated what authority the FCC would have to write net neutrality regulations, if it choose to do so: "the Commission's ancillary jurisdiction to regulate interstate and foreign communications".

Similarly, Commissioner Deborah Tate wrote in her statement [PDF] that "While it remains important for us to understand the industry structure and the relationships between each of the different elements in the market, we must ensure that our policies promote, not deter, investment, innovation, and new entry in networks, products, and services ..."

She added that "I am skeptical of the present need to impose new rules, or even principles. In many ways, I think this issue has focused too much on the need to define a cure before there has been a disease, or even a high fever.

In contrast, Commissioner Michael Copps wrote in his statement [PDF] that "At issue is whether a few broadband behemoths will be ceded gatekeeper control over the public’s access to the full bounty of the Internet".

It is time for us to go beyond the original four principles and commit industry and the FCC unequivocally to a specific principle of enforceable non-discrimination, ..."

We proceed too leisurely here. Rather than strike out and unflinchingly proclaim this agency’s commitment to an open and non-discriminatory Internet, we satisfy ourselves with one tiny, timid step. Let’s be frank. Putting out a Notice of Inquiry is not the way to sail boldly forth. History shows that Notices of Inquiry like this have a way of disappearing into the regulatory dustbin, putting off decisions that need to be made now."

However, Copps did not dissent.

Also, Commissioner Jonathan Adelstein wrote in his statement that "I would have preferred a more pro-active approach, including the adoption of a Notice of Proposed Rulemaking". He added that "NOIs are often perceived as the Commission's way delaying and downgrading an issue."

He also said that the NOI "is short on analysis and could do far more to draw out discussion about the plans of our increasingly large and concentrated network providers and the implications for consumers".

Reaction. Rep. Joe Barton (R-TX) stated in a release that this NOI "will further demonstrate that deregulatory treatment is the best way to spur broadband deployment. There are no indications of a problem, and if there were the FCC could take appropriate remedial actions on a case-by-case basis. Prophylactic rules are not only unnecessary, they are harmful. That is why my colleagues and I defeated efforts last year to regulate the Internet in a bipartisan vote of 269 to 152."

Gigi Sohn, head of the Public Knowledge, stated in a release that "This bureaucratic process will delay by months if not years the crucial action needed to guarantee that consumers will always have access to an open and non-discriminatory Internet -- assuming that it issues a proposed rule after evaluating the information it receives from the inquiry."

The Progress and Freedom Foundation's (PFF) Scott Wallsten stated in a release that "I am hopeful that a careful review of the network neutrality issue -- including the unimpressive history of price regulations in telecom -- will help convince the FCC that conduct should remain under the watchful eye of antitrust authorities. Subjecting the Internet to precautionary regulations could prove quite costly to the economy and could ultimately be harmful to consumers."

William Kovacs of the U.S. Chamber of Commerce stated in a release that "The information gathered in this proceeding will show that 'net neutrality' regulations are unnecessary ... Federal telecommunications policy should be driven by facts, not by fears, and must recognize the competitive nature of the industry today."

The National Association of Manufacturers' (NAM) Dorothy Coleman wrote in a release that "Until now, much of the public debate on this issue has been about fictional fears and scare tactics ... We appreciate the willingness of the FCC to look at these important issues in order to separate the fact from fiction."

"Consumers reap enormous benefits from the consistent federal policy of not imposing new regulations on the Internet, which has allowed it to grow exponentially", said Coleman. "Restructuring these policies could be like placing a traffic light in the middle of a highway".

This NOI is FCC 07-31 in Docket No. 07-52.