On Monday, 74 Democratic legislators sent a letter urging Federal Communications Commission Chairman Julius Genachowski to reconsider a plan to reclassify broadband Internet service. The legislators oppose the FCC's so-called Third Way approach and have started their own movement to update the Telecommunications Act of 1996.
The Third Way approach would reclassify the transmission of data as a telecom service. That means the FCC could regulate it. The reclassification notion comes in the wake of the Comcast ruling in April, where an appellate court said the FCC's National Broadband plan reached beyond the agency's rightful powers.
Sen. John Rockefeller, chairman of the Senate Committee on Commerce, Science and Transportation; Sen. John Kerry, chairman of the Senate Subcommittee on Communications, Technology and the Internet; and Rep. Henry Waxman, chairman of the House Committee on Energy and Commerce, announced a set of "bipartisan, issue-focused meetings" to begin in June.
Lessons from 1996
Jeff Kagan, an independent telecom analyst, said updating the Telecommunications Act is an important task, but nearly impossible since the industry transforms so quickly.
"The problem was by the time the 1996 Telecommunications Act was signed, the industry had already surpassed the law. That law set the local and long-distance phone companies into competition with each other. That was the model we thought would play out over the next decades. It did not even address the wireless or Internet companies. They just were not important yet," Kagan said.
"Within a few short years the local phone companies won and acquired the long-distance giants. There is no more long distance industry," he noted. "Today, the local phone companies are competing against the cable-television industry. That was not even addressed in the 1996 law."
FCC Sees Opposition
Still, there are many who are trying to update the law and there are clear sides of the telecom fence emerging: Those who agree with the FCC and those who don't. Julius H. Hollis, chairman of the Alliance for Digital Equality (ADE), stands with Congress in its move to review the FCC's reclassification of broadband.
"We believe that the leadership of Rep. (Al) Green (D-Texas) and his 73 colleagues will be instrumental in steering the FCC from a path that will yield higher broadband prices -- essentially keeping the benefits of this great tool out of the reach of those who have the most to gain from it," Hollis said. "Providing access to affordable high-speed Internet to communities that desperately need economic empowerment is essential to closing the digital divide."
According to the National Broadband Plan, millions of Americans still do not have broadband access and many underserved areas need more robust broadband facilities. What's more, both wired and wireless broadband services require increasing speeds.
The ADE estimates this will require about $350 billion in additional private investment and a continued commitment to the stable regulatory environment that has existed for the last dozen years. As the ADE sees it, the FCC's Third Way approach does not support this critical framework.
Moving Too Fast
"Today the wireless and Internet world has grown incredibly in size and importance. Learning from that lesson, we have to realize the industry is transforming even more quickly. In this world, how do you regulate? It's an impossible task. But it may have to be done," Kagan said.
As he sees it, Republicans and Democrats should work together to create a law based not only on the realities of today's rapidly changing marketplace, but also expect that market to be totally different in a few short years. Of course, he added, no one knows what the marketplace will look like in a few years.
"Look at the dramatic changes we have seen in the last few years, from the Apple iPhone to the Google Android. From the plain old cellular telephone to the smartphone. Local phone companies are now competing with cable-television companies and each other nationally," Kagan said. "The industry is transforming itself."