Bad News on Net Neutrality

| Mon May 3, 2010 11:30 AM EDT

Last month a federal court ruled that the FCC has no authority to enforce net neutrality rules on broadband internet providers. That was a setback, but hardly an insurmountable one: the FCC could overcome it simply by reclassifying broadband internet as a "telecom service," which would leave no doubt about its regulatory authority. Today that option became a lot less likely:

FCC Chairman Julius Genachowski is expected to respond soon to the court ruling. Three sources at the agency said Genachowski has not made a final decision but has indicated in recent discussions that he is leaning toward keeping in place the current regulatory framework for broadband services but making some changes that would still bolster the FCC's chances of overseeing some broadband policies.

The sources said Genachowski thinks "reclassifying" broadband to allow for more regulation would be overly burdensome on carriers and would deter investment. But they said he also thinks the current regulatory framework would lead to constant legal challenges to the FCC's authority every time it attempted to pursue a broadband policy.

Well, reclassifying broadband would be more burdensome on carriers. That's the whole point. And investment in existing telecom companies doesn't seem to have suffered much from the FCC's heavy hand. After all, reclassified or not, the FCC is still allowed to show some discretion in which rules it applies and how it applies them.

Still, Genachowski might be right. Quite possibly, neither classification is really ideal given the existing state of the industry. That's why the best bet is, as it always has been, to have Congress step in. I don't know if they should change the classification rules set down in the 1996 Telecommunications Act, but they could certainly impose net neutrality rules across the board without touching them if they wanted to. They should get cracking on this.