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The FCC has seemingly ignored a recent Washington, D.C., Circuit Court ruling that says it has no power to regulate broadband and will attempt to further insert government into private enterprise under the guise of preserving something called “net neutrality.”

Net neutrality is one of those PC social phrases that sounds good. After all, what could be bad about being neutral? However, a closer examination shows that the real implications of imposing neutrality on communication companies may produce disastrous effects, especially for broadcasters.

As a part of the 1996 Communications Act, Congress defined two types of services: communications and information, each subject to different types of regulation. Congress said the FCC should regulate Title II communications (phone) services, but it gave no such authority to the FCC to regulate Title I information (Internet) services. In addition, Congress did not give FCC bureaucrats the power to change these definitions.

In fact, even the FCC agreed with these separate definitions and regulations when it argued to support that precise interpretation to the U.S. Supreme Court in 2005 in the “Brand X” case and won. So by 2005, all three branches of government had agreed that information services included broadband Internet.

Congress has tried three times to give the FCC the power to micromanage the Internet, much like it manages broadcasters. Twice the Supreme Court voided those attempts on First Amendment grounds, and the third time, the justices scaled back the FCC's authority over the Internet to practically nothing. Basically, the court has told the FCC to leave the Internet alone.

Despite these facts, FCC Chairman Julius Genachowski has decided his commission will use a third way to regulate Internet services. He has proposed to move them under the same Title II regulatory framework as phone companies by using a bureaucratic trick called “forbearance authority.”

Forbearance authority would let the FCC declare what parts of Title II regulations it would not impose on broadband, leaving the commission to fully regulate all other aspects of broadband delivery. However, the result of this sleight of hand would not have the weight of law, merely operations. A future FCC could change any or all of those restrictions at any time.

Genachowski is supported in his efforts for increased regulation by a Democrat Congress, the likes of which include Henry Waxman, D-CA, and John (Jay) Rockefeller, D-WV. These congressmen had this to say in a letter to the FCC: “To accomplish these objectives (regulation of broadband), the commission should consider all viable options. This includes a change in classification, provided that doing so entails a light regulatory touch, with appropriate use of forbearance authority (emphasis added).” In other words, these Democrats told Genachowski, “We don't like the rules either, so ignore them.”

The effect on businesses of the FCC imposing broadband regulations was summarized in a research note published by Stanford Bernstein analyst Craig Moffett. He states in a blog post called “The FCC Goes Nuclear,” “We would expect a profound negative impact on capital investment.”

Why should broadcasters care? Because without capital, no company will invest in new or improved broadband connectivity. Broadcasters' future may depend on having access to new and wider pipes into viewers' homes for next-generation services.

So much for neutrality.

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