Broadband Trojan Horse

Health care isn’t the only policy arena in which the Obama Administration aims to ram through controversial new rules. The Federal Communications Commission is set to unveil a “national broadband plan” opposed by industry and without any of the five commissioners voting on it.

Last year, Congress directed the FCC to develop a plan to make high-speed Internet available to more people. But given that 95% of Americans already have access to some form of broadband—and 94% can choose from at least four wireless carriers—rapid broadband deployment is already occurring without new government mandates.

Since 1998, the FCC has classified broadband as an “information service” subject to less regulation than traditional telecom services. The Supreme Court’s Brand X decision in 2005 validated that classification, and the upshot has been more investment, innovation and competition among Internet service providers, all to the benefit of consumers.

In 2009 alone, broadband providers spent nearly $60 billion on their networks. Absent any evidence of market failure, the best course for the FCC is to report back to Congress that a broadband industrial policy is unnecessary. Instead, FCC Chairman Julius Genachowski is moving to increase the reach of his agency and expand government control of the Web.

Among other things, he wants broadband services reclassified so the FCC can more heavily regulate them. The national broadband plan, to be unveiled tomorrow, will call for using the federal Universal Service Fund to subsidize broadband deployment. The USF currently subsidizes phone service in rural areas, and Mr. Genachowski knows that current law prevents it from being used to subsidize broadband unless broadband is reclassified as a telecom service. Congress ought to be wary of letting the FCC expand its jurisdiction through back doors like this.

Mr. Genachowski wants more control over broadband providers so that he can implement “net neutrality” rules that would dictate how AT&T, Verizon and other Internet service providers manage their networks. To date, Congress has given the FCC no such authority. Nor has the agency had success in court. Based on oral arguments last month, the D.C. Circuit Court of Appeals is almost certain to rule against the FCC in a case involving Comcast’s network management.

At the urging of liberal advocacy groups like Free Press and Public Knowledge, Mr. Genachowski also wants to use the national broadband plan as a vehicle for returning to the bad old 1990s era of “open access” regulations. He recommends forcing major broadband providers like Time Warner Cable and Qwest to share their high-speed networks with smaller competitors at federally set rates. We can’t think of a better way to reduce capital investment and slow the build-out of high-speed networks.

Mr. Genachowski’s proposals are meeting resistance from telecom companies and fellow commissioners, which is reason enough to put his broadband plan to an agency vote. Instead, the chairman is urging his colleagues to sign a general statement that endorses the goals of the plan and ignores the details.

“Instead of risking a split vote among the five regulators on approving the plan,” reports National Journal, “Genachowski is seeking consensus on a joint statement, which sources said would provide him with some political cover for the controversies that are certain to be triggered by some of the plan’s recommendations.”

The FCC chairman and his staff have spent the better part of a year preparing a major report while keeping his colleagues largely in the dark. What happened to the Obama Administration’s promise to be open and transparent?