Justifying the Ends: Section 706 and the Regulation of Broadband
11 Pages Posted: 18 Aug 2012 Last revised: 27 Aug 2012
Date Written: August 13, 2012
Over the past several years, the FCC 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. In this paper, we look at the agency’s own data and finds that there is a profound defect with the Commission’s argument. Specifically, we demonstrate that the Commission’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 Commission 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.
Keywords: Section 706, FCC. broadband, regulation
JEL Classification: K23, L50, L51, L52, L96, O33, O38
Suggested Citation: Suggested Citation