The Federal Communications Commission’s proposal in the above-captioned proceeding to reclassify broadband Internet access service as a Title II common carrier service endangers the success of the U.S. broadband ecosystem and the long-term benefits of connectivity to all Americans. Insofar as the Commission is committed to proceeding with reclassification, however, it should minimize the destructive impact of Title II by forbearing from the application of Section 214 of the Communications Act to activities of domestic broadband Internet access service (BIAS) providers.

The Notice of Proposed Rulemaking invokes Section 214 as necessary to protect American national security.[1] As ITIF has argued before, this rationale for Title II is lacking.[2] But, even taking the Commission’s examples at face value, they apply to international market entry by companies controlled by known adversaries of the United States. None of those conditions exist for domestic activities of domestically (or allied) owned ISPs.

Section 214 itself is a vestige of the FCC’s micromanagement of telephone monopolies. When the Commission directly manages the whole market, Section 214-style control is a natural consequence. But the BIAS market is robust and competitive such that Congress and the FCC have maintained a policy against the regulation that accompanied and preserved incumbent advantages in the old telephony market.[3] It would be a radical and harmful step to reverse course and treat the competitive broadband market, which private investment and technological development make more competitive every day, as though it were a monopoly. Even in the 2015 Open Internet Order, the Commission, while finding the BIAS market insufficiently competitive, forbore from the core provisions of Section 214.[4] Regardless of the merits of that finding, it is indisputable that the BIAS market is more competitive now than it was in 2015. BIAS providers have expanded their networks and offerings, and intermodal competition from fixed wireless and low-earth-orbit satellite services has multiplied consumers’ options. Since monopoly-style regulation of entry and exit was inappropriate for BIAS in 2015, it is even less so now.

The European Union is in the process of learning this lesson as its recent whitepaper seeks to reduce “ex ante regulation” of activities, such as market entry and exit, as its countries emerge from government-granted monopolies to more competitive markets.[5] Europe is finding monopoly regulation inimical to competitive markets, and the Commission should take that lesson to heart now rather than learning the hard way by imposing the harms of such regulation on the American people.

The regulatory overhang of applying Section 214 to all domestic BIAS would hinder the expansion and development of broadband services by adding risk to future investment without any countervailing benefit. This effect will be especially pronounced for activities for which the investment case is already a close call, which could include rural or marginalized groups. The Section 214 process would also delay the rollout of upgrades and new technologies that could enhance network security by tying them up in FCC approval while vulnerabilities persist in critical infrastructure. Rather than enhancing national security, therefore, the Commission’s proposal would hinder it, and the United States would be left with less connectivity that is less secure than it would be without Section 214.

Because the Commission cannot identify a rational basis for reversing course, not just from the Restoring Internet Freedom Order but also from the 2015 Open Internet Order, it would be arbitrary and capricious for it not to forbear from domestic application of Section 214 in this proceeding.

Thank you for your consideration.

Endnotes