Sections 201, 202, 208 Could Be Burdensome for ISPs
The Title II sections of the Communications Act the FCC would apply to broadband under Chairman Julius Genachowski’s reclassification plan could still burden operators with cumbersome rules and expose them to costly legal challenges, communications attorneys said Friday. Statements from Genachowski and FCC General Counsel Austin Schlick Thursday indicated Sections 201, 202, 208, 222, 254 and 255 would remain in place after a substantial forbearance from other Title II elements (CD May 7 p1). Sections 201 and 202 “are the key provisions of the Communications Act that have sort of kept behavior in check for almost 80 years,” said telecom lawyer Glenn Richards of Pillsbury Winthrop. “Anything that folks do, they're always thinking about it in terms of ‘Will it cause a 201 or 202 issue?'"
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Those two sections and Section 208 “have yet to be applied as to broadband and the facts as they apply to broadband may differ from the law as it’s applied historically in a narrowband context,” said Andrew Lipman, a communications lawyer with Bingham. “It’s absolutely open to interpretation … and that open-ended nature is even further clouded” because all six provisions and especially 201, 202 and 208 haven’t “ever been implemented in the case of broadband,” he said. Enforcement of Section 202 on discrimination “will turn on the individual facts, whether a [conduct in a] case is unreasonable,” Lipman said.
Others are concerned Section 201 use could open the door to price regulation, despite Schlick’s assurances the FCC would not regulate rates. Section 201 “talks a lot about prices, practices [and] classifications,” said Link Hoewing, Verizon Internet and technology assistant vice president, at a Progress & Freedom Foundation forum Friday. “Now I don’t know how the FCC is going to implement that, but that clearly looks like there’s talk there about price regulation."
Satellite broadband executives were not immediately sure how the agency’s reclassification strategy would affect their services. They said they'll watch the proceeding closely. Potential regulation of pricing was raised as one concern by an executive who then said the company was still digesting the issue. Satellite’s concrete bandwidth limitations make network management a necessity and most customers sign agreements limiting bandwidth use when they sign up.
Bringing broadband under Section 208 could open ISPs to expensive legal challenges, lawyers said. The section allows “any person, any body politic or municipal organization, or State commission,” to file a complaint at the FCC for any alleged Communications Act violation. Left open was the question of whether broadband service would be subject to Section 207, which sets up a process by carriers that can be sued in federal court, a communications lawyer said. “That would obviously be a huge concern, considering the litigiousness of the communications plaintiffs bar,” the lawyer said. “Where a number of Supreme Court cases over the last several years have foreclosed antitrust damages suits against telecommunication providers, the application of Section 207 to Internet service providers just exposes them to a whole new level of potential litigation."
Consumer privacy protections under Section 222 could also burden providers, the lawyer said. “Just think back to the VoIP industry prior to the imposition of CPNI regulations, and you can see that resulted in very significant requirements, compliance obligations and numerous enforcement actions,” the lawyer said.
Another source of uncertainty is section 254, which covers universal service. If broadband is reclassified under Title II, ISPs could immediately be required to contribute to the Universal Service Fund, Dow Lohnes attorney J.G. Harrington wrote clients. “In fact, one issue the FCC may have to confront if it adopts the reclassification proposal is ensuring that it does not subject Internet access to existing rules that are not adapted to the service,” he wrote. “Absent a ruling that modified the amount of the payment, this requirement could add as much as $5 or $6 to the typical bill for broadband access.” But ISPs could benefit from Section 254 as recipients of USF funds, lawyers said.
That the six sections referenced by Schlick are open to interpretation worries Lariat.net owner Brett Glass, he said. “So much depends on interpretation. You have these six sections of a big law, and they don’t exist in isolation” because there are many other Title II sections the chairman doesn’t seek to apply to broadband transport, Glass said. “So it’s hard to tell how they could be applied when they are divorced from the remaining sections.” A common-carrier requirement to sell broadband to anyone in a service area also worries Glass, whose company has about 1,000 subscriptions in the Laramie, Wyo., area. “It doesn’t make sense for a small ISP who doesn’t have a fixed government service territory. My territory expands” and changes over time, he said. “The clauses that involve a duty to supply service don’t make sense in that context.” In a post Friday to the FCC’s broadband blog, Glass called Genachowski’s third way a “third rail.”