FCC authority post-Comcast: finding a happy medium in the net neutrality debate.

• Author: Roxberg, Emily R.

1. Introduction II. Background A. Net Neutrality B. The Current Broadband Market C. Congress, the FCC, and Net Neutrality D. The FCC Order Against Comcast E. Comcast v. FCC: The Decision F. Proposed Options for FCC Post-Comcast Decision III. Analysis A. Comcast's Impact on the Net Neutrality Debate B. Comcast's Implications for the FCC's Regulatory Powers C. FCC Proposed Rules Post-Comcast D. FCC National Broadband Plan Post-Comcast E. The Future of the Three Proposed Options F. FCC Appeal G. Congressional Action H. Reclassification I. Arguments Against Expanding the FCC's Authority to Regulate IV. Recommendation V. Conclusion I. INTRODUCTION

   With over 1.7 billion users, the Internet is an indispensable medium, and its increasing speed and ease of access encourage consumer demand. (1) To date, the Internet's success story evolved free from complex government regulation. (2) However, as the market for Internet service changes and Internet traffic increases, a growing number of consumers, scholars, and politicians fear that Internet service providers (IsPs) will alter the accessible, open, and neutral platform upon which the Internet was founded. (3) Today, the future of the Internet and its historically open nature is the issue of a hotly contested debate known as net neutrality, the concept that all web content should be treated equally. (4) Proponents and opponents of net neutrality are at odds over whether the government, via the Federal Communications Commission (FCC), should establish a regulatory regime to monitor ISPs' network management practices. (5)

   On April 6, 2010, the D.C. Court of Appeals issued a decision, Comcast v. FCC, which would drastically change the course of the net neutrality debate and the future of the FCC's authority to regulate ISPs. (6) This Note seeks to analyze the net neutrality debate in the aftermath of the Comcast decision by addressing the FCC's future authority to regulate. Part II of this Note will briefly discuss the nature of net neutrality, the current state of the broadband market, Congress and the FCC's past and present involvement with net neutrality, and the Comcast decision itself. Part III analyzes Comcast's impact on the net neutrality debate, the decision's implications for the FCC's current regulatory goals, the FCC's three proposed options for maintaining authority, and outlines some of the arguments made against expanding FCC authority. Finally, Part IV of this Note recognizes the role of a strong ISP market and offers an alternative approach that includes integrating the Federal Trade Commission's authority.

2. BACKGROUND

   The concept of net neutrality and the discourse concerning Internet regulation involves a myriad of political, social, constitutional, jurisdictional, ideological, and market-based issues. (7) Before addressing the Comcast decision and its impact on the FCC's authority to regulate, it is first important to understand the concept of net neutrality on a technical level, the current state of the broadband market, and the authority the FCC relied on prior to Comcast. This history will serve as a framework for understanding the court's decision in Comcast.

   1. Net Neutrality

      The Comcast decision is the most recent opinion in the growing debate over net neutrality and Internet regulation. (8) The term "net neutrality" embodies the idea of a free and open Internet, one that prevents ISPs such as Comcast, AT&T, and others from using discriminatory network management practices against consumers. (9) Net neutrality seeks to preserve ISPs' role as gateways to the Internet rather than gatekeepers. (10) Today, Internet users have equal access to all websites, large and small. (11) Put another way, all websites appear on a user's screen at the same speed and in the same manner. (12)

      The potential for ISPs to use abusive network management practices has become a reality as demand for high-speed Internet service grows. (13) Net neutrality proponents fear that large ISPs and telecommunications companies will create a "two-tiered" Internet, (14) encouraging a pay-to-play mentality among content and application providers. (15) These discriminatory network management practices may appeal to ISPs as a cost-effective solution to the increased traffic and congestion plaguing their shared networks. (16)

      A rudimentary understanding of how information travels over the Internet is helpful in understanding the concept of net neutrality and discriminatory management practices. Information shared over the Internet is broken down into packets before users transmit it via cable and telephone lines. (17) The amount of time and space on these lines, described as bandwidth, is limited, and only a certain volume of information packets can pass through at any given time. (18) When too many of these packets try to get through at the same time, something similar to an Internet traffic jam occurs. (19) Until now, providers treated these packets equally and transported them in the order in which they arrived. (20) However, as demand for Internet access grows, net neutrality proponents fear ISPs will begin restricting larger information packets during times of peak demand. (21) Additionally, they fear ISPs will create an Internet fast lane for "preferred" packets from content providers willing to pay more. (22)

      Considering the Internet's immense growth and impact, the medium has remained relatively neutral (i.e. free from discriminatory network practices) with minimal to no regulation. (23) However, the introduction of broadband service, the increased complexity of web pages, a lack of ISP competition, and a growing number of Internet users, among other factors, have pushed net neutrality and Internet regulation into the public debate. (24) Broadly speaking, proponents of net neutrality regulation feel that current market forces are not sufficient to prevent ISPs from using discriminatory network management practices and that if such discrimination occurs, the Internet would face reduced competition, growth, and innovation. (25) Opponents of open Internet policies rely on economic market theory, arguing that price and quality discrimination benefit the provider, the public, and the ISP market. (26) The debate also raises issues concerning the Internet and the economy, First Amendment rights, politics, big government, innovation, and America's ability to keep pace internationally. (27)

   2. The Current Broadband Market

      To understand the history of net neutrality regulation, the powers behind it, and the impact of the Comcast decision, it is important to understand the nature of broadband Internet service and the market forces currently at work. Broadband is high-quality, high-speed Internet access that is faster than traditional dial-up service. (28) Broadband is always "on" and, unlike dial-up, it does not require reconnection after logging off, nor does it block phone lines. (29) The greatest benefit of broadband service is its ability to provide high-speed data transmission of large amounts of content, including gaming, Internet phone, and streaming media, among other services, that would not be possible with traditional dial-up. (30) Today, most consumers can gain broadband access through a telephone or cable provider. (31)

      While both opponents and proponents of net neutrality agree that broadband service will continue to grow as the leading form of Internet service, they disagree as to the current state of competition in the broadband market. (32) originally, users could only obtain broadband via cable modem service. (33) Today, the cable modem industry is losing market share to telephone company digital subscriber lines (DSL), suggesting signs of competition in the broadband market. (34) In its 2007 Staff Report on Broadband Connectivity and Competition Policy, the FTC analyzed the competition and use of broadband service, noting a decrease in cost of broadband access, (35) an increase in broadband users, an increase in broadband deployment, and healthy competition existing between cable modem and DSL services. (36)

      While these statistics may prove positive, consumers still have few options when it comes to broadband service providers. (37) Proponents of net neutrality fear that because most markets consist of a duopoly of cable and telephone providers, the market structure will inevitably lead to anticompetitive behavior. (38) Proponents believe that alternatives to broadband, such as high-speed wireless services, are insufficient to compete effectively with cable modem and DSL. (39) As the 2007 FTC Staff Report concluded, "the broadband marketplace is in considerable flux," (40) and although broadband use and technology is evolving at a rapid rate, "effective national competition for broadband customers does not mean that all consumers enjoy competitive local markets." (41) With this very brief overview of the net neutrality debate and the broadband market established, the stage is set to analyze the history of Internet regulation leading up to the Comcast decision.

   3. Congress, the FCC, and Net Neutrality

      Long before the Internet, Congress delineated its role in national communications policy through the Communications Act of 1934 (1934 Act), (42) amended as the Telecommunications Act of 1996 (1996 Act). (43) The 1934 Act established the FCC and charged it with the task of "regulating interstate and foreign commerce in communication by wire and radio." (44) Today, the FCC serves as Congress's primary vehicle for enforcing its Internet policy goals. (45)

      Congress voiced its position regarding the preservation of an open Internet via its national Internet policy found in Section 230(b) of the amended 1934 Act. (46) The Act states that it is the policy of the United States "to promote the continued development of the Internet" and "preserve the vibrant and competitive free market that presently exists...." (47) The FCC claims authority to further these Congressional...