Justifying the Ends: Section 706 and the Regulation of Broadband

Over the past several years, the Federal Communications Commission under Chairman Julius Genachowski has argued that because broadband is not universally ubiquitous, the agency may use the “reasonable and timely” standard contained in Section 706 in the Communications Act as an independent source of legal authority to impose regulation over advanced services. The Phoenix Center looks at the agency’s own data and finds that there is a profound defect with the FCC’s argument.

Specifically, the Phoenix Center demonstrates that FCC’s own financial analysis—conducted as part of its National Broadband Plan—shows that the cost of ubiquitous availability via terrestrial means (i.e., wired and wireless) exceeds any plausible measure of the benefit. In fact, the agency’s National Broadband Plan explicitly recognized that the cost of ubiquitous coverage of terrestrial broadband could not be justified, and recommended the use of “satellite broadband” as an alternative since it is ubiquitously available. Obviously, if the agency wanted to use Section 706 as the foundation for an aggressively regulatory agenda, then it needed to exclude satellite Internet service from the definition of broadband. Not surprisingly, the FCC did so. By ignoring its own evidence and by carefully defining broadband service, the FCC has successfully rigged the game to permit expansive broadband regulation under Section 706.