Saving Net Neutrality with Finesse or Brute Force

An important lesson learned in my youth was if I use the right tool to repair something then brute force would seldom be necessary. In fact, most of the time using brute force resulted in additional damage. This begat a more deliberate process of studying the problem, developing various alternative solutions examining my tools, and ultimately making the right choice. Immediately, after the FCC lost its net neutrality case with Comcast, one of the alternative fixes under discussion was to alter the manner in which ISPs and ITSPs are regulated. The proposal would have these companies, which includes Broadvox, moved from being regulated by Title 1 of the Communications Act, to Title 2. The difference between the two classifications is startling and the ramifications completely unknown.

Title I states that the FCC "helps to outline the general duties of the telecommunication carriers as well as the obligations of all Local Exchange Carriers (LECs) and the additional obligations of Incumbent Local Exchange Carriers (ILECs)."

Title II: Broadcast Services however gives the FCC a clear and direct mandate. The FCC "Outlines the granting and licensing of broadcast spectrum by the government, including a provision to issue licenses to current television stations to commence digital television broadcasting, the use of the revenues generated by such licensing, the terms of broadcast licenses, the process of renewing broadcast licenses, direct broadcast satellite services, automated ship distress and safety systems, and restrictions on over-the-air reception devices."

While the major carriers with ISP operations are opposed to this change, imagine the potential impact on the smaller competitors like Broadvox and other ITSPs. We could see the erosion of our pricing differential through either the increase in costs or the decrease in allowed pricing. There would be considerable caution displayed by the reduction in expansion plans, new service offerings, investment groups and network upgrades until it is known how the FCC would wield this new power. And that will take some time to discover as the carriers and broadband providers would fight this for years in court. Furthermore, the entire Yin/Yang effect of changing political parties and political camps would be exponentially increased by this expansion of regulatory capability.

Thinking of Title II as the answer is to utilize brute force to repair a problem. The potential collateral damage could affect telecommunications and our global competitive capabilities for decades. FCC Chairman Julius Genachowski has not indicated his preference as to how to respond to the court ruling. I do hope that he will use the right tool with finesse.

See you on Monday...