The FCC’s Fool’s Crusade

Choose your analogy: He pushed the button. He turned the key. He cried havoc and let slip the dogs of war.

FCC Chairman Julius Genachowski Thursday launched what could end up being a decade-long court battle over the government’s power to regulate the Internet. Genachowski’s initiative takes the form of a Notice of Inquiry into reclassifying broadband Internet service under Title II of the 1996 Communications Act, that is, as a regulated telecommunications service akin to single-line dial-up phone service. The Telecom Act currently classifies broadband access under Title I-as an unregulated information service. The decision to move forward with the NoI passed 3-2 by partisan vote.

This is a battle Genachowski can’t win. The only question is how many opportunities, enterprises and jobs his fool’s crusade takes down in the process.

The primary issue isn’t even technical; it’s legal. Whatever opinion Genachowski has about how broadband services should be classified, the U.S. Constitution is quite specific on the process of legislative change. The Title I and II classifications in the Telecom Act were established as law by Congress. They can only be changed or amended by Congress. The FCC, as part of the executive branch, cannot take scissors and paste to legislation.

If Congress fails to put the brakes on the FCC’s attempt at law-by-fiat, and the commission follows through with reclassification, expect a legal challenge on constitutional principles. Unfortunately, the process could last years, and the ensuing regulatory uncertainty will stanch investment. This is all the more unfortunate because, after nearly a decade of incredulity, a nervous Wall Street is coming around to the idea that broadband is going to be the economic engine optimists have long believed. Now that the consumer benefits of innovations such as the iPhone and Droid are palpable and measureable, and larger portions of the populations are opting for platforms such as fiber to the home, the FCC is going to stop all that momentum over what appears to be the Chairman’s personal frustration over his inability to enact network neutrality rules.

Yes, that what this is all about. Ironically, in the face of a court decision, Comcast v. FCC, that specifically said the FCC needs Congressional authorization to enact network neutrality rules, Genachowski has doubled down by attempting to gin up that authorization by rewriting the law himself. Maybe it’s the nature of federal agencies to reach for as much power as they can, but year after year, every time the FCC has tried to stretch the interpretation of its Congressional mandate-be it in terms of broadcast indecency, forced line-sharing or, as with the recent Comcast decision, “ancillary” authority to regulate the Internet, the courts have pushed back, enforcing a much more limited reading. Jurisprudence does not bide well for Genachowski’s tactics here, which go way beyond interpretation of the law to outright amendment of it. The problem is that the fight will be as costly to the economy as it will be unnecessary for the public.

For more, see Reason TV’s video “Three Reasons the FCC Shouldn’t Touch the Internets.”