Federal Communications Commission Chairman Genachowski may not be the quintessential politician, but his agency lives within the political system where the incumbent ISPs are accustomed to fighting, and this is where he failed.
The mortal wound to network neutrality -- and the FCC as an agency -- came in April, when a federal appeals court struck down the FCC's ability to make rules pertaining to broadband. This decision, ironically, was tied to the previous FCC's one moment of consumer advocacy: its decision to censure Comcast for blocking P2P files on its network.
Comcast sued, and the results of that lawsuit kicked off the mother of all fights for the FCC: reclassification. At issue was whether the FCC could regulate broadband as an information service , considerably weakening the agency's ability to do anything with regard to broadband, or as a transport service. Reclassification could have given the FCC all kinds of powers that it currently exercises over the analog phone lines. Basically, could the FCC as an agency move its regulatory powers into the modern age?
Suddenly, the issue of reclassification became far more important than network neutrality. The telecommunications firms pulled out the big guns and went to Congress. Congress obliged and started sending the FCC letters saying that it shouldn't "regulate the Internet" and that any changes in telecommunications law needs to come from Congress, rather than the FCC. The FCC proposed a compromise path that would give it more powers but also leave the ISPs relatively unregulated in ways that would be anachronistic, calling the path the "third way". This third way would give the FCC the authority it would need for network neutrality, Universal Service Fund reform, privacy regulation, and other issues. But now, the FCC was stuck between a rock and hard place. Congress was on one side and on the other, years of legal wrangling in the courts if the FCC implemented its third way plan and ISPs subsequently sued (which they would).
So in an attempt to get something out of this mess, the agency focused on network neutrality and toned down its reclassification efforts. Basically, it decided that instead of stitching its mortal wound shut, it would apply a very public Band-Aid and live to fight another day. But given its weak position after the Comcast ruling, that Band-Aid took too long to apply, and Google and Verizon went out on their own. Now it looks like the FCC may not get a bandage after all.
Instead, it will lie there bleeding while the industry takes over the network neutrality regulations and comes up with a compromise that works for Google, Verizon, and possibly those who met behind closed doors at the FCC. Those folks include representatives of Skype, AT&T, the National Cable and Telecommunications association, and the Open Internet Coalition, which is also somewhat neutered because Google is a member, and Google is now in bed with the ISPs.
The FCC has abdicated itself from deciding on these issues by backing off reclassification and now shutting secret negotiations to broker a deal on net neutrality. Perhaps Chairman Julius Genachowski knows the efforts to broker a net neutrality deal are a lost cause, so it may as well be lost out in the open. But absent any agreement, the bigger players in this fight are making their own deals. Instead of acting like a powerful regulator protecting web innovation, Genachowski is letting others take the helm.
But by staying out of Washington politics and pinning its hopes on grassroots efforts, Silicon Valley is squandering its opportunity to have a voice. Right now, Google is the primary voice Silicon Valley has, and as it stands, Google appears to be selling the Valley down the river.
