When the D.C. Circuit ruled April 6 in Comcast Corp. v. Federal Communications Commission that the Internet essentially doesn't have a federal regulator, prognosticators expected the FCC to respond with an either/or solution: continue to rely on its ancillary authority to regulate under Title I of the Communications Act of 1934 or reclassify broadband Internet access under Title II.
But one month to the day after the court delivered a decision that gutted significant aspects of the agency's plans for national broadband deployment, FCC Commissioner Julius Genachowski announced a radical shift in broadband classification. Pending a final rule, broadband will neither be regulated solely under Title I or Title II. Instead, Genachowski proposed "The Third Way."
After an FCC investigation and the 2008 order, Comcast ended the practice but filed suit in the D.C. Circuit, arguing the FCC can't regulate ISPs' network management policies. The court ruled that the FCC overstepped its authority by ordering Comcast to stop restricting BitTorrent traffic.
The FCC's defense in Comcast relied on its supposed ancillary authority to regulate the Internet under Title I, where the agency controversially situated it in 2002. But that argument didn't fly in the D.C. Circuit. The court held that the FCC failed to tie its order against Comcast to any legal responsibility, which cast doubt on what right the FCC had to implement many aspects of the recently announced National Broadband Plan, which includes deployment to rural areas and greater ISP transparency.
Despite assurance that reclassification will maintain the status quo, industry members responded with immediate misgivings. Within the FCC, Commissioners Robert M. McDowell and Meredith A. Baker released a joint statement warning that the proposal "will usher in a tumultuous new age of regulatory uncertainty" that will stifle investment in the broadband infrastructure.