FCC: “Commercially Reasonable” Broadband Rates?

republished from law.com

Net neutrality is a big issue as the broadband spectrum is becoming increasingly valuable. There is only so much spectrum and most of it is being used by broadband providers for data heavy services such as video. However, how will the FCC regulate while also encouraging competition? When these providers were given broadband, the government looked at them as a “providing” a public good. As a result, so much broadband service was given away for very cheap.

Looking into the history of broadband, you can see that providers were given access to this broadband in exchange for informing the public about what was going on in the country and in the world. If you ever wonder why Walter Cronkite and Peter Jennings were such big household names, it harkens back to a day when there were only a few channels such as ABC, NBC and CBS.

Today, broadband is so highly prized that providers can favor certain content in favor of paid content. They can essentially regulate traffic by curbing content. The FCC is in a dicey corner, as they want to protect competition and innovation; they also aim for the goal of sustaining performance without consumers paying for the privilege.

In the latest ruling, the FCC is looking to reclassify broadband to break it into two pieces – retail broadband and backend broadband. What the FCC is trying to do is create a competitive environment for broadband providers, while curbing what they can actually provide. As part of the ruling, the FCC says that they would allow commercially reasonable rates. In the context of the law, “commercially reasonable” is open to much interpretation. Usually, the public defines this term. In this case, who decides what the term means? According to the first FCC ruling at the beginning of the year, an independent panel created by the FCC would oversee every transaction with every broadband provider across the United States. This may not be reality but, it seems as though the FCC is inviting the public to chime on the term.

Functionally speaking, “commercially reasonable” would mean the level of price increase just below the threshold that would make people write to their congressman. Either way, I do know that the lobbying lawyers are chomping at the bit to tangle any new legislation in court for years to come. As it stands, it seems like the FCC is probing the public to see what price can be borne to balance a level of performance with access to a faster (or slower) internet.

When the FCC is trying to make new rules for an already crowded spectrum, it seems as though no one supports competitive environments. So how do you regulate traffic when you want the performance to the public to be good, but you don’t want have the public pay for such privileges? Tough question to answer but access will likely get more expensive and become faster (or slower) but the rest of the story is unfinished.

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