The summer of 2010 is not shaping up as Julius Genachowski had hoped.
The Federal Communications Commission chairman was eager to promote the open, egalitarian Internet that President Obama had championed as a candidate. The FCC outlined a national broadband plan this spring that would expand high-speed Internet coverage to underserved markets, stimulate online learning and develop the infrastructure that would support the Googles of e-medicine. There were catch phrases like "100 squared," shorthand for connecting 100 million U.S. homes with Internet speeds of 100 megabits per second. Then came checks and balances.
The U.S. Court of Appeals for the District of Columbia in April overturned a decision made by the prior FCC, drawing into question the commission's authority over broadband. The court ruled that the agency overstepped its bounds in a 2008 dispute with Comcast Corp. when it enforced "net neutrality," or the principle that broadband providers would not discriminate against data flowing over the Internet. The court did not rule against the principle of net neutrality, but rather the FCC's approach to making and enforcing rules for the Internet. Now, instead of pushing ahead on its ambitious online agenda, the FCC is scrambling to re-establish its regulatory domain over broadband. Genachowski has devised a compromise that he dubs the third way, almost a Buddhist "middle path" of regulatory moderation, that would reclassify broadband as a telecommunications service, over which the FCC has clear authority. The FCC would forbear from all but a few key rules that are applied to traditional phone systems.
The third way, which Genachowski outlined in May, has not generated the level of protest like the big legislative overhauls of financial services and healthcare. But it is creating no shortage of angst among broadband providers and investors.
Craig Moffett of Bernstein Research dubbed the maneuver the nuclear option. An executive from AT&T, in a blog post, compared Genachowski's gambit to Pickett's Charge, the suicide frontal attack by the Confederate army at Gettysburg.