Post Net Neutrality

Forbearance is Easy. Seriously.

July 14, 2014 , , ,

It’s a truth universally acknowledged, that a regulated industry in possession of a lobbyist must want deregulation. Sometimes the industry will press Congress to eliminate laws wholesale; other times it will push agencies to repeal rules. And other times, it will simply ask that the agency not enforce certain rules that it feels shouldn’t apply in its particular case.

This last is not in itself a bad thing, and it’s something that the Federal Communications Commission actually does with some regularity. Overseeing as it does a vast number of complex and fast-moving technological issues, occasionally a rule that is essential for one service (for instance, requiring phone companies to file tariff rates) just doesn’t apply to another (cell phone companies don’t have to file tariffs, since there had been more competition in that market). In a case like that, the FCC has the power to forbear from enforcement of the rule.

Neither Congress nor the courts nor your local neighborhood watch committee can force the FCC to enforce an inapplicable rule that it doesn’t want to. The only thing the FCC has to do is find that the rule: (1) isn’t necessary to ensure just and reasonable practices, (2) isn’t needed to protect consumers, or (3) is in the public interest. Once the FCC makes that determination, it simply doesn’t apply that rule in that case.

All of this becomes relevant in the net neutrality debate. Opponents of effective net neutrality rules like to play up the fears that classifying broadband internet services as telecommunication services will saddle ISPs with all sorts of regulations meant for the phone system. They insist that, despite the FCC’s best efforts, those rules will fall into place automatically and result in a thicket to be hacked through.

This simply isn’t true—precisely because of the FCC’s forbearance power. Are tariffs set for phone lines inapplicable to broadband? Has the FCC said it would forbear? Then there’s no reason it wouldn’t. (In fact, the statute says that the FCC “shall” forbear if the statutory conditions are met.)

Telecom companies might have a different experience of forbearance, though—seeing it as something that requires meeting all sorts of factual standards. But that’s not because the FCC must jump through any particular hoops—it’s because the FCC is actually asking the companies trying to exempt themselves from a rule if they actually deserve that exemption. In other words, other forbearance actions are all about convincing the FCC, not about the FCC convincing anyone else.

We can see how this worked in the past. In 2007, the FCC decided that a number of Title II obligations need not apply to AT&T and others’ selling of “special access” lines (basically, broadband access sold to business customers). Even though competing ISPs complained, the law is that the FCC has the power and ability to forbear from regulations so long as it doesn’t do so in an “arbitrary and capricious” way.  The same thing happened in 2003, with other Title II requirements. (Earthlink, Inc. v. FCC, 462 F.3d 1)

Saying that the FCC is prevented from forbearance is to deny the Telecommunications Act’s built-in deregulatory flexibility. Forbearance was created to be easy to establish—it’s supposed to be granted any time the conditions are met, and anyone who asks for forbearance gets it granted automatically if the FCC doesn’t push back on it.

It shouldn’t be surprising that communications companies would claim that forbearance is hard to get—after all, it’s in their interest to constantly ask to be excepted from various rules, and every so often, they won’t get what they want. But it just isn’t borne out by history or the law to say that forbearance is too difficult for Title II and broadband.

Image by Sherwin Siy.