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By J. William Gurley
Special to ZDNet
December 22, 2003, 5:39 AM PT
COMMENTARY--In 1998, President Clinton noted that information technology now accounts for more than a third of our economic growth, and government should follow one guiding principle: First, do no harm.
This phrase, which translates from the Latin saying primum non nocere, is a signal to pay just as much attention to the means as to the ends.
In complex political systems, the objective of an action can be honorable, but the impact of an action can be completely at odds with the objective. This is largely because the tools we use to encourage behavior in such systems are often crude and imprecise.
On Oct. 6, the 9th U.S. Circuit Court of Appeals issued an opinion in the case of Brand X Internet v. the Federal Communications Commission that has the potential to delay the progress of the Internet in the United States by certainly years and potentially decades. Through its actions, the 9th Circuit has invited the 50 independent and natural bureaucratic state-based public utility commissions directly into the fold of the Internet.
How the 9th Circuit accomplished this feat is both curious and confusing. Who would benefit from increased regulation of cable modem services? The only clear answer is the 50 state public utility commissions.
The case in question deals with whether cable lines that deliver Internet service can be considered a telecommunications service. This wording is critical, because Congress and the FCC have made it clear that states can regulate telecommunications services, but must keep their hands off information services.
In 1998, the same year Clinton made his declaration, the city of Portland mandated that AT&T, as a requirement for approval of its acquisition of TCI, open up its broadband lines to competitive carriers. Ruling on this in 2000, the 9th Circuit stated that the city of Portland could not mandate this behavior, as its jurisdiction was over cable franchises, and these broadband connections did not technically represent a cable franchise.
But the 9th Circuit did not stop there. It made one more historical but seemingly unnecessary step. It declared cable modem service a telecommunications service.
The FCC was compelled to react to the 9th Circuit Court's assertion, as it flew in the face of the FCC position on this matter, as well as the clear intent of Congress and the Executive Branch. (Both had echoed a desire to keep the Internet unregulated.) In 2002, in an effort to clarify and correct the decision in Portland, the FCC ruled that cable modem services are interstate information services and not telecommunication services. Seven different petitions for review of the FCC's information services ruling were filed in the 3rd, 9th and D.C. Circuits. Under the multicircuit rules, a judicial lottery was held, and the 9th Circuit was ironically elected to rule on the FCC's ruling.
In its Oct. 6 decision, the 9th Circuit noted that the Supreme Court had ruled in Chevron that agencies should be given the benefit of the doubt in interpreting the subtleties of their own provisions, particularly when consistent with the clear intent of Congress. Despite this, and without ever questioning the intent of Congress, the 9th Circuit relied on two key precedents to escape this Supreme Court decision and rule against the FCC. ...............
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