The Federal Communications Commission (FCC) yesterday requested a stay from last week’s 9th U.S. Circuit Court of Appeals decision rejecting broadband deregulation. The Justice Department issued a brief in support of the FCC’s position yesterday. The March 31 ruling by the court insisted that cable broadband be categorized as a telecommunications service rather than as an information service, the latter classification being the policy of the Bush administration and FCC Chairman Michael Powell. The 9th Circuit’s decision is a major setback to progress in the information sector.
By essentially calling a cable modem a telephone, the 9th Circuit chains new technology to a huge regulatory system that accumulated over 100 years to protect consumers from monopolistic pricing abuse by Ma Bell. This contradicts the light regulatory burden on Internet technologies that Congress said was national policy when it passed the Telecommunications Act of 1996. The court’s position is illogical. By comparison, the FCC’s logic is simple: Considering that a cable modem gives consumers the Internet, it should be obvious that “information service” is a sensible and accurate definition for the tool.
Last week’s ruling was typical of an out-of-control judiciary that makes its own legislation in contradiction of the stated will of both the legislative and executive branches. In repudiating Congress and the administration, the 9th Circuit asserted that it is the first and last word on national broadband policy. In effect, we have important policy decisions being made by three judges in San Francisco who are not experts in the technology and who are not concerned about how overregulation stifles innovation.
As a result of this decision, the heavy tax burden that applies to phone service will get slapped onto cable modems, jacking up prices. Every single charge a consumer sees on her phone bill will now show up for her cable modem as well. The ruling also means that providers must seek federal government permission before entering or leaving any market. Red tape is growing rather than being cut back.
President Bush has promoted a forward-thinking broadband policy that is based on unchaining technology from government regulation. Last week, a panel of three unelected judges knocked down pro-growth federal policy in favor of a strict regulatory regime. The full appeals court declined to take up the FCC’s appeal. That means the next line for a remedy is either in a new law by Congress or a reversal by the Supreme Court. Both approaches take significant time and trouble to undo what already would be law were it not for the meddlesome 9th Circuit. In an editorial board meeting with us yesterday, U.S. Telecom Association President Walter McCormick said, “It is time to let the free market play out.” We couldn’t agree more.
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