FCC Eyes Recasting DSL as Information Service

A plan by FCC Chmn. Martin to reclassify telecom- provided DSL as an information service is circulating among the other commissioners’s offices, seeking approval, sources said. The new classification would lessen regulation of Internet access service provided by incumbent phone companies. The move was expected after the U.S. Supreme Court’s Brand X ruling, which upheld similar FCC handling of cable modem service (CD June 28 p1).

The telecom item under review by commissioners reportedly is the same notice of proposed rulemaking (NPRM) lurking on a back burner ever since the cable modem order was challenged -- though the 3-year-old document has been updated, sources said. “It’s definitely circulating,” said an industry source who said FCC staffers are asking carriers questions about “things like the transition” from current regulation to classification as an information service. “This will be the next big thing” the Commission does, another source said.

Martin reportedly had hoped to gain enough backing to land the item on the Aug. 4 Commission agenda, but sources voiced doubts. The item wasn’t on an internal list of agenda items circulated 3 weeks before each meeting. Sources said that means Martin is still negotiating with the Commission’s 2 Democrats for their support. With Commission membership down to 4, he needs at least one Democrat to pass anything. The item possibly could be placed on the agenda this week, a source said, but that would have to occur before Thurs., when the official list of agenda items will be released to the public.

The NPRM, approved in Feb., 2002, “tentatively concluded” that DSL and other “telephone-based” Internet Services should be reclassified as information services, which the FCC said would lead to more equitable treatment across platforms (CD Feb 15/02 p1). The cable modem proceeding challenged in the Brand X suit was underway at the time. Martin, then an FCC commissioner, warned that the proposal raised questions of universal service funding.

Telecom reclassification might require the FCC to review regulations based on a provider’s regulatory classification, said a July 18 analysis by Wilmer Cutler Pickering Hale & Dorr. That report gave universal service as an example: “Under the [Communications Act], the obligation to contribute to universal service applies to a ‘carrier that provides interstate telecommunications services.’ If fewer providers are found to fall into this category, the FCC may feel compelled to invoke alternative sources of authority to ensure the adequacy of the universal service fund… such as the FCC’s ancillary jurisdiction under Title 1 of the Act.”