Earlier this week, corporate front group Americans for Prosperity -- the same group that compared health care reform to the Holocaust -- announced a $1.4 million advertising blitz to stop the FCC's "government takeover of the Internet."
Rep. Eric Cantor (R-Va.), whose single largest donor in this election cycle is Comcast Corporation, echoed the theme in a letter to President Obama, calling recent policies proposed by the FCC a "government takeover of yet another sector of our economy." And lawyers for Verizon, AT&T, and Time Warner Cable prophesied that recently proposed policy changes by the FCC would mark a "radical and unlawful" move that "should set off alarm bells in Silicon Valley, on Wall Street, and everywhere in between."
What's behind the fear-mongering? The Federal Communications Commission recently proposed to modernize its policymaking framework for broadband, closing a loophole first created by Michael Powell, FCC Chairman during the Bush Administration.
In 2002, the FCC concluded that when you subscribe to a residential broadband service, your use of that service to go the websites you want to see online (for example, this one) is inextricably intertwined with your use of a broadband provider's e-mail service or that provider's data storage offerings. That is, the FCC decided that consumers couldn't recognize the difference between the basic service that provides connectivity to the Internet and the various add-on services that might be bundled with it. Of course, this view of broadband services doesn't make much sense to the average consumer, who can clearly recognize the difference between access to the Internet and things he might do or use on the Internet.
The FCC made this decision at the behest of the cable companies, who wanted to avoid even minimal government oversight of their businesses. And that's why this semantic battle is so important: the FCC's 2002 action left the agency without the ability to enact basic consumer protections, bring affordable broadband to everyone, and preserve the Internet as a vibrant platform for speech, commerce, creativity, and innovation. As a policy matter, e-mail and websites have always been subject to less government oversight than that accorded to the basic communications infrastructure for two reasons: First, the market for services like e-mail is more competitive than the market for access to the network, so the market is more likely to effectively police itself. Second, the smooth operation of our underlying communications infrastructure is critical to the orderly functioning of our economy and democracy. By deciding to treat residential broadband connectivity like websites, the FCC undermined its ability to protect the twenty-first century's most critical communications networks.
In recent weeks, the FCC proposed to revisit the 2002 decision and acknowledge that when a user subscribes to a residential broadband service, he gets a variety of services. The FCC also proposed to separate its treatment of the basic service -- connectivity to the Internet -- from its treatment of the other services offered by residential broadband providers, like e-mail accounts, data storage, or access to a provider's customer service applications. In recognition of obvious market realities, the FCC will describe these offerings as individual services that are not "inextricably intertwined." And it will adopt basic consumer protections for the connectivity service, while leaving the other services largely unregulated.
Does this amount to a government takeover of the Internet? Does it seem "radical and unlawful"? I don't think so. And neither did Supreme Court Justice Antonin Scalia (not exactly on anyone's short list for "most likely to support a government takeover") when he wrote a landmark dissent effectively recommending the path proposed by the Obama Administration's FCC last week.
When the Supreme Court confronted the FCC's 2002 decision to call the connectivity service and the other applications like e-mail and data storage one jumbled-up, integrated service, Justice Scalia wrote: "The first sentence of the FCC ruling under review reads as follows: 'Cable modem service provides high-speed access to the Internet, as well as many applications or functions that can be used with that access . . . .' Does this mean that cable companies 'offer' high-speed access to the Internet? Surprisingly not, if the Commission [is] to be believed."
Having made his point with devastating logic in the first few paragraphs of the opinion, he went on to offer an instructive analogy:
"If, for example, I call up a pizzeria and ask whether they offer delivery, both common sense and common usage would prevent them from answering: 'No, we do not offer delivery -- but if you order a pizza from us, we'll bake it for you and then bring it to your house.' The logical response to this would be something on the order of, 'so you do offer delivery.' But our pizza-man may continue to deny the obvious and explaining, paraphrasing the [Bush-era] FCC . . .: 'No, even though we bring the pizza to your house, we are not actually "offering" you delivery, because the delivery that we provide to our end users is "part and parcel" of our pizzeria-pizza-at-home service and "integral to its other capabilities."' Any reasonable customer would conclude at that point that his interlocutor was either crazy or following some too-clever-by-half legal advice."
The FCC's recent shift proposes to recognize that the pizza (or websites) is separate from the delivery (or transmission of data). Austin Schlick, the FCC's General Counsel and a former Supreme Court clerk to Justice Sandra Day O'Connor, explicitly stated that the agency intends to follow what Schlick called "the Scalia approach" to broadband policy. And, in an arcane procedural twist, the Supreme Court's majority opinion in 2005 didn't say that Justice Scalia was wrong in his assessment of the nature of these services; it just said that it was up to the FCC, not the courts, to make the determination of whether broadband providers offered one service or multiple services. As a result, the FCC can rely on Justice Scalia's reasoning as persuasive, even though he wrote a dissent and not the majority opinion.
So on one side of this semantic debate you have the intellectual anchor of the Supreme Court's conservative wing, an FCC with three Democratic commissioners, and an FCC General Counsel who has served the agency during both Bush and Obama Administrations. On the other, you have AT&T, Verizon, and the people who compared health care reform to the Holocaust. Who do you think is more likely to offer the right legal interpretations and policy judgments?