The FCC’s latest proposal to regulate the Internet just got a little more interesting. The agency announced its “third way” approach to classifying broadband services.

First, a little background: Back in 2002, the FCC decided to classify internet access as an “information service” under Title I, rather than as a “telecommunications service” under Title II of the Communications Act.  

This meant that the FCC would not have specific and direct authority to regulate Internet Service Providers (ISPs), but would reply upon its “ancillary authority.” This essentially says that the agency is allowed to do anything reasonable to accomplish the goals that Congress prescribes, but will not regulate the ISPs with the broad sweeping powers that it exercises under Title II.

Fast forward to the recent decision by the US Court of Appeals for the District of Columbia in April in the case of Comcast v. FCC. The court ruled that the FCC’s “ancillary authority” wasn’t strong enough to impose restrictions on ISPs. Both the FCC and proponents of net neutrality viewed this decision as a huge blow to the cause.

Conventional wisdom saw two possible results:

1)       The FCC would withdraw and ISPs would prevail as beneficiaries of Title I “ancillary authority”, or,

2)       The FCC would move to reclassify broadband access as a Title II “telecommunications service.” If successful, ISPs would suddenly find themselves subject to the regulatory scrutiny of the FCC.

Although that would insure that the FCC would win the battle against Comcast to preserve net neutrality, almost everybody agrees that Title II classification would be far too heavy-handed. Even FCC chairman Genachowski said “prescriptive regulation can chill investment and innovation, and a do-nothing approach can leave consumers unprotected and competition unpromoted, which itself would ultimately lead to reduced investment and innovation.”

So what has the FCC proposed? “The Third Way.” It’s what might be called a hybrid approach: the FCC will say that broadband transmissions — the flow of data — are subject to Title II regulations, while broadband “computing functionality” — the data itself — remains under Title I oversight.

Furthermore, the FCC says it will excuse broadband transmissions from many Title II regulations and only impose a few specific provisions of Title II. Together, these provisions generally include the following:

1)       A collection of provisions to “forbid unreasonable denials of service and other unjust or unreasonable practices.” It is important to comment that AT&T, Comcast, Sprint and Verizon have all voiced support of these provisions in the past.

2)       The Universal Service provision that provide “access to advanced telecommunications and information services in all regions of the Nation.” The FCC would promote universal broadband access under this provision. Again, both AT&T and the cable industry have argued in favor of this provision in just the past few months.

3)       A provision that requires service providers to protect confidential information they receive while providing service. Who would argue against this provision?

4)       A provision that requires that service providers must make their services and equipment accessible to people with disabilities, unless it’s not “reasonably achievable.” Seems like a good idea to me.

It seems clear that the FCC is pursuing its mandate from Congress and remaining true to its goal: Impose as little regulation as possible while still trying to achieve the basics of net neutrality.