FCC Goes for "Tactical" Nukes in Net Neutrality Fight; ISPs Will React as Though "Strategic" Weapons will Ultimately be Used

Federal Communications Commission officials seem well enough aware that proposed new "network neutrality" rules could lead to a reduction of investment in broadband facilities, which is why, reports the the Wall Street Journal, FCC officials are briefing market analysts who cover cable and telco equities before the market opens on Thursday, May 6.

The fear is that even before the rules have been announced, financial analysts will issue downgrades of cable and telco stocks as future revenue streams are jeopardized. Those analyst briefings will happen even before other FCC officials or congressional members are told how the FCC plans to proceed.

Chairman Julius Genachowski apparently plans to circulate a notice of inquiry to other FCC board members next week on his plans to reclassify broadband Internet access, provided by cable or telco providers, as common carrier services under Title II of the Communications Act.

That would put cable companies under common carrier regulation for the first time, something cable industry executives always have opposed, and will fight. Telco executives are hardly any more likely to support the changes.

The problem with the FCC's approach, which is to apply "some" Title II rules, but not all, is that there are no protections from future action that would simply apply all common carrier rules. The FCC wants to believe it can leave ISPs "sort of pregnant." They either are, or aren't, and can be expected to fight as though the outcomes were binary.

As often is the case, a natural desire for a "third way" is not possible. Title I or Title II is the issue. Forbearance rules or not, one or the other is going to apply. Get ready for war.