Open MIC Urges FCC to Adopt "Third Way" Approach to Broadband Internet Regulation

The Federal Communications Commission should continue its “pro-investment, pro-innovation, pro-competition, pro-consumer policies” regarding the Internet by adopting a “third way” approach to broadband Internet regulation recently proposed by FCC Chairman Julius Genachowski, according to a group representing institutional investors.

The recommendation was made in a comment filed with the FCC by the Open Media and Information Companies Initiative (Open MIC),  which organizes shareholders of media and information companies in support of responsible management policies, and Trillium Asset Management Corp., an independent investment management firm dedicated to socially responsible investing.

Members of the Open MIC coalition are investors, investment advisory and mutual fund companies, foundations, shareholder advocacy groups and pension funds with a combined total of more than $130 billion in assets under management.

“As diversified investors, we believe open Internet principles have a major positive impact on the economy by virtue of the fact that they promote free speech, civic participation, democratic engagement, technological innovation and marketplace competition, as well as robust broadband adoption and participation in the Internet community by minorities and other socially and economically disadvantaged groups,” the Open MIC and Trillium filing said.

The FCC is currently evaluating its approach to broadband Internet access in the wake of a recent U.S. Court of Appeals decision in the Comcast case, which raised serious questions regarding the agency’s authority and its current legal framework for regulation.

The Commission is considering three courses of action: to continue regulating broadband Internet access as an “information service” under Title I of the Communications Act; to reclassify broadband access as a “telecommunications service” under Title II of the Act; or adopt a “third way” by reclassifying broadband access as a telecommunications service while eliminating all but a small handful of provisions necessary for effective implementation of universal service, competition and small business opportunity, and consumer protection policies.

Open MIC and Trillium said in their filing that continuing with the current regulatory regime under Title I was “untenable” because that course “would provide neither the consumer protections required for a healthy Internet economy nor a regulatory environment conducive to more transparent and accountable corporate policies and practices.”

However, application of all Title II provisions of the Act presents a danger, as the Commission has suggested, of “overregulation of a service that has undergone rapid and generally beneficial development,” Open MIC and Trillium said.

The filing noted that uncertainty regarding the FCC’s authority, stemming from the Comcast decision, also jeopardizes implementation of the Commission’s National Broadband Plan, which seeks to bring Internet capability to the more than 100 million Americans who do not now have broadband access at home.

In endorsing the “third way” recommended by Chairman Genachoswki, Open MIC and Trillium said the approach would enable the Commission to protect the health of the Internet economy for the benefit of citizens and investors.

The filing said: “It is imperative that there be prohibitions on the ability of Internet service providers to block legal content and to discriminate based on types of content. As we have also previously highlighted in our shareholder proposals to the major service providers, greater transparency regarding Internet network management practices (without disclosure of confidential technical detail) would provide important and valuable benchmarks for investors to assess the impact of the companies’ policies on customers, communities, and society.”

Open Internet principles should also be applied to wireless broadband Internet access, Open MIC and Trillium said.