Former FCC Official Sees More Legal Uncertainty
May 21, 2010
| 2:43 PM
Former FCC Commissioner Harold Furchtgott-Roth said Friday that the uncertainty created by a federal appeals court decision earlier this month that cast doubt over the commission's authority over broadband will be exacerbated by the FCC's recent decision to reclassify some aspects of broadband as a telecommunications service.
During a Webinar on broadband regulation sponsored by the Telecommunications Industry Association, Furchtgott-Roth, an economist who served as a GOP appointee to the commission from 1997-2001, discussed the potential impact of FCC Chairman Julius Genachowski's decision to reclassify some aspects of broadband as a telecommunications service under Title II of the Communications act.
He argued that it would inject more uncertainty into that market because the FCC's decision will likely be successfully challenged in court. As a result, Furchtgott-Roth said investors are unlikely to invest in the broadband market if they are unsure of the regulatory landscape. "I don't think investors are going to invest in companies ... if there is not clear legal certainty," he said.
Furchtgott-Roth argued that the FCC seems to be gambling that its latest effort will clear legal muster. Instead, the commission should be sticking to a narrow interpretation of the law that will help provide clear rules of the roads for telecom firms, he said. "The commission has a history of coming up with inventive rules that don't fall narrowly within law," he added.
Furchtgott-Roth, however, did say that had the FCC opted from the beginning to classify broadband as a telecommunications service in the 1990s instead of as a more lightly regulated information service under Title I the commission could more easily defend its stand in court. The fact that the FCC will now have to "go back to the courts and say, 'folks we made a mistake' this not the way to run a government."
However, not everyone agrees with Furchtgott's view that the FCC's reclassification decision will harm investment. Venture capitalist Fred Wilson of Union Square Ventures backs the FCC's move and has encouraged other "business leaders working and investing in the open Internet to stand up and say that net neutrality is pro-business. Because if you don't, the FCC could lose this fight, and we'll be in a much worse place," he wrote in a commentary earlier this month.
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