FCC creates 'casino environment,' former commissioner charges

A former FCC commissioner accused today’s FCC of creating a “casino environment” with its “third way” proposal to classify the transmission portion of broadband connections as a communications, or Title II, service and to impose Net neutrality and other regulations on those connections.

“What America needs is a commission that writes rules that with absolute certainty will withstand court scrutiny,” said Harold Furchtgott-Roth, an economist who served on the FCC in the late 1990s, on a conference call organized today by the Telecommunications Industry Association. Instead, Furchtgott-Roth said the FCC has a history of creating rules that don’t fall within the law that puts all of the commission’s decisions at risk because no one knows how the courts will view those decisions.

Ten years ago, hundreds of billions of dollars were invested in telecom companies with business plans based on policy that was not upheld by the courts, Furchtgott-Roth said. “A lot of investors were burned 10 or 15 years ago, and a lot of them will never invest [in telecom] again,” he said. “They say ‘This is a crazy place.’”

Furchtgott-Roth predicted that the D.C. Circuit could would look “with skepticism” at the FCC’s plan to reclassify broadband service because that court may see it as an attempt by the FCC to circumvent previous court rulings. The former commissioner also questioned whether the FCC could legally forbear from imposing certain Title II requirements on broadband as the “third way” proposal recommends.

Before the FCC can forbear from applying a particular Title II requirement, it must go through an evidentiary proceeding, Furchtgott-Roth said. The “third way” proposal effectively says “We don’t have a record but we know what we’re going to find,” he said.