FCC outlines new 'third way' internet regulatory plan, will split access from content

The FCC's plan to rework how it regulates the internet just got a lot more solid today, as the agency officially announced its "third way" approach to classifying broadband services and opened it up for public comment. We've broken the entire thing down for you -- we're not kidding when we say this will affect how the internet works for all of us in the future, so grab a snack and head past the break for the whole story.

Here's the deal: in 2002, the FCC decided to classify internet access as a Title I "information service," which meant that the agency didn't have specific and direct authority to regulate providers -- instead, it relied on its "ancillary authority," which basically boils down to "we're allowed to do anything reasonable to accomplish the goals Congress lays out for us." After the FCC told Comcast to stop filtering BitTorrent, Comcast sued, and in early April the court ruled that the FCC's ancillary authority wasn't strong enough to impose restrictions on ISPs -- a decision that was obviously a huge blow to net neutrality efforts. However, the conventional wisdom was that Comcast had won itself a battle but would ultimately lose the war in spectacular fashion, since the obvious move for the FCC would have been to reclassify broadband access as a Title II "telecommunications service," which is the same way the agency regulates wireline phones, and ISPs would have suddenly found themselves in a regulatory nightmare. However, the FCC's charter says it's supposed to regulate the internet as little as possible, and a Title II approach seemed like a major overreaction with severe consequences for everyone involved. Hence, the "third way" announced today.

Got all that? Okay, so here's the "third way" plan FCC chairman Julius Genachowski and FCC general counsel Austin Schlick laid out this morning. It's what you might call a hybrid approach: the FCC will say that broadband transmissions -- the flow of data -- are subject to Title II regulations, while broadband "computing functionality" -- the data itself -- remains at most under Title I. (Interestingly, this idea of splitting broadband into components comes from Justice Scalia, who is not the first person who comes to mind when discussing Obama administration policy decisions.) What's more, the FCC says it plans to officially excuse broadband transmissions from many Title II regulations -- it only wants to impose specific provisions of Title II. According to Austin Schlick, that list could be just six provisions long:

• Sections 201, 202, and 208: Together, these provisions "forbid unreasonable denials of service and other unjust or unreasonable practices," and major players like AT&T, Comcast, Sprint and Verizon have all voiced support of them in the past.

• Section 254: This is the Universal Service provision, and it requires the FCC to pursue policies that provide "[a]ccess to advanced telecommunications and information services . . . in all regions of the Nation." Since broadband transmission would be classified as a telecommunications service under the new plan, the FCC could promote universal broadband access under this provision -- something both AT&T and the cable industry have argued for in just the past few months.

• Section 222: This section would require service providers to protect confidential information they receive while providing service.

• Section 255: This section says service providers must make their services and equipment accessible to people with disabilities, unless it's not "reasonably achievable."

Now, those are just the six on the list right now -- the FCC could decide it needs more or less as this process wears on, although it's promising not to regulate pricing. In any event, it's clear that the agency's goal is to impose as little regulation as possible while still trying to achieve the basics of net neutrality, and there's some serious precedent for success with that approach, as it's essentially the same way the FCC regulates wireless services. According to the Commission, this plan would avoid red tape, allow ISPs to operate under clear federal rules without worrying about inconsistent state laws, and generally be amazing and legally-rock solid. It's definitely a good sales pitch, but the next step is for the FCC to invite public comment and have its commissioners vote, and a lot can happen between now and then, so we'll be tracking this one closely.