Legal Challenges In Reclassifying Wireless Broadband

Is Wireless Broadband a “Telecommunications Service?” According to the FCC, it is now. Although the FCC historically classified mobile broadband Internet access service (BIAS) an information service, the Commission made an about-face in the Open Internet Order. To get there, the Commission had to take two steps.

The Commission reviewed the technical and market characteristics of wired and wireless BIAS, generally. Based on changes in technology and the marketplace, as well as changes in how it interprets the definition of “information services,” the Commission reversed its historical interpretations and classified BIAS as a telecommunications service, rather than an information service. For wired service, that’s where the Commission’s reclassification analysis ended.

To reclassify wireless services, however, required an additional step.

The Commission had to find a way to classify mobile/wireless BIAS as a “commercial mobile service” within the meaning of Section 332(c) of the Communications Act. Section 332(c) divides mobile services into:

• “private mobile services” – which are defined as neither commercial mobile service nor “the functional equivalent of a commercial mobile service, as specified by regulation by the Commission,” and are expressly not common carrier services subject to regulation under Title II; and
• “commercial mobile services” – which are subject to regulation under Title II.

So the definition of “commercial mobile service” is key – and it creates problems for the Commission’s reclassification of mobile BIAS. The Act requires “commercial mobile service” to be “interconnected” in nature, and defines “interconnected” service as “service that is interconnected with the public switched network (as such terms are defined by regulation by the Commission).”  The Commission had historically treated the term “interconnected service” to mean a normal telephone service that can make calls to, and receive calls from, normal telephone numbers.  Indeed, the Commission previously defined the “public switched network” as the “public switched telephone network.”

Given these definitions, the Commission’s 2007 ruling classifying mobile BIAS as an information service concluded that mobile/wireless BIAS was not interconnected and therefore was not subject to Title II regulation.

The Order’s reclassification of mobile BIAS created a “statutory contradiction” with the Commission’s earlier conclusion that mobile BIAS was not an interconnected service.  Mobile BIAS is now deemed to be a “telecommunications service,” and thus Title II applies; but if it was still a “private mobile service” under Section 332 – as the Commission had previously decided – application of Title II would be forbidden.

Recognizing this problem, the Commission concluded that mobile broadband Internet access service is an “interconnected service,” and – necessarily – redefined the term “public switched network.”

The Commission previously made no distinction between the “public switched network” and the public switched telephone network, defining it as a service that used the North American Numbering Plan (which assigns normal 10-digit telephone numbers to services) in connection with a switched service.  In the Order, the Commission redefined “public switched network” to include “public IP addresses.”  The Commission said that this change reflected the emergence and growth of packet switched Internet Protocol-based networks.  It asserted that broadband networks use IP addresses to give users a universally recognized format for sending and receiving messages across the country and worldwide (essentially parallel to what traditional telephone numbers do for traditional phone calls).

The Commission justified its new definition of “public switched network” by:

• pointing to changes in technology since the old definition was first adopted in 1994 – though notably it did not explain why those technological changes were not present in 2007;
• arguing that, because of the widespread availability of mobile BIAS, the decision to define it as an “interconnected service” is more consistent with Congressional intent; and
• distinguishing its 2007 decision as being based on the “nascent stage” of the wireless broadband industry at that time.

The Order relied on its conclusion (based on its definitional changes) that mobile BIAS is not a “private mobile service,” to bolster its assertion that mobile BIAS is a “commercial mobile service.”  Specifically, the Order asserted that, even if not technical a “commercial mobile service,” it is at least the “functional equivalent” of a commercial mobile service because, “like commercial mobile service, it is a widely available, for profit mobile service that offers mobile subscribers the capability to send and receive communications on their mobile device to and from the public.”

Finally, the Order anticipated a challenge to its about-face on mobile BIAS.  Although the public notice did not identify that “public switched network” may be redefined, the Commission argued that its action is a “logical outgrowth” of the issues for which it did provide notice.  Specifically, the Order relied on the fact that the Commission sought comment on “the option of revising the classification of mobile broadband Internet access service and on whether it would fit within the definition of commercial mobile service under section 332 of the Act and the Commission’s rules implementing that section.”  That issue, as well as the other challenges to the Order, will be determined in the courts.