Section 706 or Title II Debated at Net Neutrality Discussion

Basing net neutrality regulations on Title II authority would cause “World War III” and years of litigation, predicted Latham Watkins attorney Matthew Brill, who represented NCTA on a panel Wednesday. Brill predicted, though, the FCC will eventually adopt an approach under Section 706, along the lines of its rulemaking notice. Speaking at a National Regulatory Research Institute Web seminar, Public Knowledge Senior Vice President Harold Feld and Evan Engstrom, policy director for Engine Advocacy, which represents startups, countered that Title II would offer more protections against discrimination by ISPs.

There’s a “good shot” to have rules be based on Title II authority, Engstrom said, citing the “outpouring of support” in the more than 1 million comments made to the FCC. “It’s anybody’s ballgame,” Feld said, though he didn’t see how the FCC could take strong action to prevent discrimination by ISPs without some form of Title II authority. Chairman Tom Wheeler’s proposal to allow negotiations to occur between ISPs and edge providers under a commercially reasonable standard is not workable, Engstrom said. The time and legal work necessary to negotiate with ISPs isn’t available for startups, said Engstrom, saying the process’ uncertainty would “scare off investors who have no idea what commercially reasonable means."

Arguments by Title II opponents that its use would doom broadband to outdated regulations “is so wrong on so many levels, it’s not even in the right time zone of being right,” Feld said. Title II style rules have historically been used to regulate industries like railroads, telephone and electricity when it involved infrastructure “so critical you don’t want to screw it up,” he said. Broadband is the “essential service of the 20th century,” he said. The cable industry -- the nation’s “most annoying service” whose customer service rankings fall below even those of airlines -- has never been regulated under Title II, he noted. Title II regulations could be tweaked and modernized to fit broadband, Feld said. “And we plug and play."

Broadband, under less-stringent Section 706 regulations, has attracted $70 billion-a-year in private investments during the Obama administration, said Jonathan Banks, USTelecom senior vice president-law and public policy. The increased uncertainty of being subject to Title II’s “vast cobweb of requirements that don’t serve any useful role in today’s world” could stifle innovation, Banks said. He predicted the FCC will pass “sensible” regulations under 706 to avoid “upsetting the apple cart” of broadband investments.

Brill said previous talk of basing regulations under Title II caused broadband investment to evaporate. A “morass of regulations with little relevance to cable broadband” would create “tremendous uncertainty” and adversely affect investment, he said. Title II has historically been used in cases in which there is a lack of competition, Brill said, but as of last year, 73 percent of census tracts had a least three fixed broadband providers and 99 percent of tracts had at least two providers."

Feld, though, argued the U.S. Court of Appeals for the D.C. Circuit net neutrality decision earlier this year had said the commission could not impose common carrier rules under 706 such as those barring discrimination on entities the FCC does not consider to be common carriers. “The more the rules do what they are intended to do, the less likely they are to survive in court,” Feld said of the rules approved under 706 authority.