Should the U.S. follow suit? It’s trying to. The Federal Communication Commission is attempting to reform of the Universal Service Fund to ensure that all Americans have access to broadband, as opposed to the current USF program that ensures all Americans have access to a telephone line. However, that reform effort was caught up in the fallout from a lawsuit filed by Comcast over the FCC’s authority to regulate some aspects of broadband, and now the agency is dealing with a big legal battle over whether or not it even has the power to include broadband in USF reform.

The Finns may not have had quite the legislative jumble to deal with as the U.S., but Finland is the first country to declare broadband as a basic right. For those that think the U.S. should do the same, or that the U.S. should implement a Broadband Bill of Rights, the current debate over reclassifying broadband is the place to start.

Related GigaOM Pro research (sub req’d): What Comcast’s Win Against the FCC Means for Broadband

Susan Crawford

The issues of network neutrality and broadband reclassification are big ones for Silicon Valley, but you’d never know it given the head-in-the-sand response from certain executives whose very livelihood depends on their ability to send whatever content they develop to millions of consumers over broadband pipes. Admittedly there are some ardent supporters of network neutrality who think having regulations that forbid ISPs from discriminating against lawful traffic is a good thing, but overall, the region’s response to net neutrality is pretty lame. And few even understand the current efforts to neuter the FCC through the broadband reclassification fight.

Yet interacting with the government, however flawed it may be, is important. The interests of telecommunications and cable firms is not in innovation — it’s in milking big profits out of their existing infrastructure while making minimal investments. That’s the antithesis of innovation. These guys have read the “Innovator’s Dilemma” and realized they didn’t have a dilemma because they own expensive infrastructure that others can’t easily duplicate. Their response didn’t have to be innovate or die, because if push comes to shove, they can kill problematic services through pricing, lawsuits or obsfucation.

And I can assure you the telcos are treating net neutrality and the reclassification debate it as if they were at war. Which means that if Silicon Valley doesn’t show up to fight, Washington is going to buckle. Susan Crawford, a professor at the University of Michigan Law School who co-led the FCC Agency Review team for the Obama-Biden transition team, spoke on the topic last week. She detailed the lobbying spending by ISPs and the impact of the Comcast merger with NBC on online video, and begged Silicon Valley to not take open Internet access for granted. It won’t be the last time you hear you someone do that.

Want to get educated on the topic? Here’s a good list of stories to help:

Comcast vs. FCC: Federal Court Questions FCC’s Ability to Regulate Broadband

How the FCC Plans to Regulate Broadband

Why Net Neutrality Is Too Important to Leave Up to the ISPs

The New Net-Neutrality Debate: What’s the Best Way to Discriminate? (GigaOM Pro sub req’d)

And because some of you may be bored at work — or may really care about the legal issues — The Free Press created a video that explains how the FCC found itself in this position in the first place after the Comcast ruling in early April.

And for those who don’t like policy videos, I can offer you KittehRoulette, a shining example of why no lawful Internet content should be blocked, no matter if it’s bandwidth-intensive video or silly beyond belief.

Related GigaOM Pro Content (sub req’d):

The New Net-Neutrality Debate: What’s the Best Way to Discriminate?

The plan is aimed at giving the agency the ability codify its net neutrality rules, which are designed to prevent Internet Service Providers from discriminating against the packets traversing their networks. Given that network neutrality is fairly controversial, and that the idea of changing a regulatory structure that was endorsed by previous Commissions on four separate occasions is also pretty controversial, folks have a lot of opinions on the issue.

From The Open Internet Coalition, which includes Amazon, Dish Networks, Google and Netflix:

This framework will ensure that consumers have access to an open Internet, one that would preserve a level playing field for all participants. And it does so without regulating the Internet but only applying basic rules of the road to the transmission services that provide access to the Internet.

From Verizon:

“We believe that the chairman’s stated approach is legally unsupported. The regulatory and judicial proceedings that will ensue can only bring confusion and delay to the important work of continuing to build the nation’s broadband future.”

From Democratic Commissioner Michael Copps:

The devil will be in the details as we work to put the Commission back on solid legal footing. For example, it is clear that broadband will merit some forbearance from certain Title II stipulations, but we must avoid another forbearance binge. We experienced a mad rush to forbearance in previous Commissions and it usually created many more problems than it resolved. We must also understand that the world of technology changes at warp speed and we must protect against any unintended consequences of forbearance or closing other doors that may need to be opened down the road.

From the Information Technology and Innovation Foundation:

Putting the Internet in a regulatory straightjacket of Title II and then not enforcing much of it is not the path to a “Third Way.” Only Congress can create a new chapter in the library of communications law. The best the FCC can do to facilitate the exercise is propose a framework. That is the only way new law can be created for a system as novel and innovative as the Internet.

From Ars Technica:

Genachowski’s compromise document—a soon-to-be-issued-if-the-votes-are-there request for public input—will no doubt make for less compelling reading, but it has a similar goal: bring everyone involved into a big tent. The chairman outlined his vision for a “third way” today in a lengthy statement, one not notable for rhetorical subtlety. Genachowski is at pains to argue that there is a “consensus understanding” of how the FCC should regulate broadband. This consensus is bipartisan, carefully balanced, and “light touch” in nature. It is, in essence, not controversial.

From Congressman John Boehner (R-West Chester, Ohio):

“Today’s FCC announcement amounts to a government takeover of the Internet, and yet another government takeover of a large portion of the private sector by the Obama administration. Under this job-killing big government scheme, the Obama administration is seeking to expand the power of the federal government.”

Image courtesy of Flickr user pfly

A statement released by the agency this afternoon said:

The Chairman will seek to restore the status quo as it existed prior to the court decision in order to fulfill the previously stated agenda of extending broadband to all Americans, protecting consumers, ensuring fair competition, and preserving a free and open Internet.

The Chairman will outline a ‘third way’ approach between a weak Title I and a needlessly burdensome Title II approach. It would 1) apply to broadband transmission service only the small handful of Title II provisions that, prior to the Comcast decision, were widely believed to be within the Commission’s purview, and 2) would have broad up-front forbearance and meaningful boundaries to guard against regulatory overreach.

The entire wonky issue was brought to head at the beginning of April with an appeals court decision that the FCC had overstepped its authority when it censured Comcast for blocking P2P files. At the heart of the court’s decision and the entire reclassification debate, is that the FCC has more regulatory discretion on transport services, such as two-way telephone calls, than it does over information services. In a series of rulings dating back to 2002 the FCC had declared broadband service from the cable companies, DSL providers, wireless providers and even anyone offering broadband over power lines to be an information service mostly because in addition to the two-way transfer of packets, those providers also offered email, storage and other “information services.”

This “third way” will likely involve the agency reclassifying high-speed Internet service as transport, but the FCC will also exempt itself from applying certain regulations that are applied to the voice telephone network. Susan Crawford, a professor at the University of Michigan Law School who co-lead the FCC Agency Review team for the Obama-Biden transition, writes on her blog:

The FCC is carefully moving towards a “third way” approach to regulation of high-speed Internet access. Complete deregulation of this essential input no longer makes sense; heavy-handed regulation doesn’t either; the FCC plans to forbear from rate regulation but ensure that the transmission portion — but not Internet applications and content — is subject to basic rules of the road. They still have a lot of work to do to develop the factual record that will support regulatory reclassification of transmission services, but courts will likely defer to their classification if they do their job right. I have every expectation that they will.

So while the FCC’s willingness to step up and reclassify broadband is good news for those hoping that net neutrality rules will be passed, the process itself will take months, and will likely involve more than one proceeding as the FCC tries to make clear which regulations associated with transport services it won’t try to impose. I laid it all out in this GigaOM Pro story for those who need more detail. For those content to relax and hope the Commission can pull this off, settle in to watch the drama as well as the inevitable court fights that this reclassification effort will yield.

The Federal Communications Commission may soon abandon its plan to reclassify high-speed Internet access as a transport service subject to its regulation, according to sources in Washington. Which means everything from the agency’s ability to regulate network neutrality to its planned reform of the universal service fund could end up mired in legal challenges, and may never be completed.

The reclassification debate became an issue in April after an appeals court overturned a 2008 ruling against Comcast for blocking P2P files . I wrote then that most people believed the FCC would have no choice but to classify broadband as a transport service (GigaOM Pro, sub req’d) subject to its authority rather than as an information service that requires more legal justification in order for the agency to get involved.

But I recently heard from two sources that the FCC was considering allowing its recent court defeat over its ability to regulate broadband stand without attempting to reclassify broadband, and today Cecilia Kang of The Washington Post writes that she’s heard — from sources inside the Commission — the same thing being attributed to Chairman Julius Genachowski. However, Jen Howard, the spokeswoman for Chairman Genachowski’s office, said that “no decision has been made.”

That may be true, but the issue here is so large and politically charged that it’s possible we’re seeing multiple sides fight this issue out in the press. The pendulum has perhaps swung the other way, either because of a concerted lobbying effort by the large communications companies that don’t want the FCC to get any more power over their broadband business, or possibly because the legal arguments the FCC needs to make in order to change the way it ruled on cable, DSL and wireless broadband back in 2002, 2005 and 2007 are too complex or politically unfeasible.

The FCC took a beating over its authority to implement net neutrality in the most recent round of comments related to its proposed net neutrality rules. In general, large ISPs attacked the FCC’s authority to implement net neutrality, while promising to self-regulate on the issue (and simultaneously arguing that it’s not even a problem in the first place). Organizations representing the wireless industry did the same.

Reclassification is important to any business that plans to offer services via the web, as it would essentially give the FCC clear regulatory powers over high-speed Internet access and the transfer of bits over the ISP’s pipes. Right now, that authority has been questioned, which means businesses offering services over the web have to rely on the ISPs to act as an impartial delivery service, something they’ve been reluctant to do in the past.