Northwest Indian Law & Business Advisor : Northwest Indian & Tribal Lawyer & Attorney : Williams Kastner Law Firm : Tacoma, Seattle, Portland

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Federal Communications Commission Chairman Julius Genachowski, recently conducted meetings with many industry and advocacy groups regarding the pending reclassification of the Internet for regulatory purposes under the Communications Act of 1934. It is likely that these meetings were in response to the recent decision in Comcast v. FCC, where the FCC was found to lack ancillary jurisdiction to regulate the network management actions of an internet service provider. The FCC asserted it possessed the ability to regulate the Internet based upon its ancillary jurisdiction. Therefore, the FCC could require Comcast to grant it the authority regarding the creation of Comcast network management policies so as not to impede access to the Internet by non-Comcast applications. The D.C. Court of Appeals determined the FCC lacked the ancillary jurisdiction to regulate the Internet because the FCC assertion was based solely upon policy statements contained within the Communications Act of 1934 and not specific statutory power contained within the Act. The ruling rejected the FCC’s claim to have authority to regulate the Internet through policy pronouncements and specific congressional approval contained within legislation. FCC network neutrality policy after the Comcast decision was found to be without support or authority.

It is likely that Chairman Genachowski’s meetings were intended to predict political climate which might result if the FCC pursues a reclassification of the Internet. Currently, the Internet is classified as an information service as opposed to a common carrier. Common carriers, are subject to more detailed regulation when it comes to topics such as rates charged for utilizing the communication system, universal service, accessibility, and other network management issues.

It is uncertain if Native American Tribes or Tribally owned telecommunications companies have been included in Chairman Genachowski meetings. Although the policy and legal discussion will still be sent back to Congress for consideration before the FCC can proceed with the reclassification of the Internet, the initial salvo has already begun in important Senate and House Committees. In mid-June, a letter sent from Senator Dorgan to Senator Inouye expressed concern that someone may seek to attach a rider to the 2010 appropriations measure which would severely restrict the FCC’s authority when it comes to network neutrality. In the letter, Dorgan specifically states that the FCC “must move forward to ensure solid legal footing” for policies which reform universal service to support broadband and connectivity to Native Americans on tribal lands among other issues. Tribal interests in the future of the Internet have already been sidelined in favor of large corporate interests because large businesses have established platforms which now control access to the internet, which has become an important part of daily life. Tribal governments and tribally owned telecommunications companies should be focused upon engaging with both the FCC and Congress on the future of the Internet and Network Neutrality.
 

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On June 28, President Obama signed an executive memorandum which commits the government to expand the amount of broadband spectrum available for wireless communications. This follows on the release of the National Broadband Plan by the Federal Communications Commission and the Department of Commerce earlier this spring. The Plan will serve as the basis for the continued development and expansion of wireless communications. The F.C.C. issued action items within the National Broadband Plan which calls for the availability of 500 MHz of spectrum for broadband use within the next ten years. Approximately 300 MHz of the 500 MHz is in the high value spectrum between 225 MHz and 3.7 GHz where mobile use is prevalent. The time frame for making the high value spectrum available for commercial use is within the next five years.

Tribal economies are becoming increasingly dependent upon access to wireless communications such as cellular phones and wireless internet connectionsfor daily business operations. Greater access to broadband spectrum will be essential in providing more avenues for business transactions and economic growth. Wireless communication and internet service providers profit from broadband spectrum as it determines the rates which they can impose upon customers.

Currently, the National Broadband Plan allows for the creation of a Native Nations Broadband Task Force, Office of Native American Affairs, and an increase in mobile communication opportunities within tribal communities. Both this Plan and the Communications Act lack a clear and defined strategy to develop broadband capabilities within tribal communities. One way for tribal entities to increase their bidding power is by utilizing the Tribal Lands Bidding Credits available to them. This tool grants significant discounts to companies bidding on radio spectrum who will be providing improved telecommunications. Without more credits, however, the level of broadband penetration within tribal communities will likely fall by the wayside similar to the manner in which telephone service failed to reach a majority of Native American people. Tribal governments and tribal entrepreneurs have an opportunity here to persuade Congress to adopt tribal prerogatives when it comes to the development and expansion of broadband. The Plan will inevitably be considered by Congress in the near future and tribal broadband advocates should be in a position to influence future legislation. It may be advantageous for tribal governments and tribal entrepreneurs to advance the position that the F.C.C. should make certain spectrum available for sole source bidding by tribal governments and small and disadvantaged business concerns. This position would be similar to preferences in contracting awarded under the Section 8a program.

While consultation with the F.C.C. regarding the Plan is an aspirational goal, the compressed time frame for the auctioning of high value spectrum will force tribal governments and tribal entrepreneurs to bid on spectrum without the F.C.C. having had ample time to develop a clear and defined policy under the Plan for Native Americans. When it comes to the regulation of broadband and net neutrality, tribes should be wary of the F.C.C. overreaching its regulatory authority. In the Comcast v. F.C.C. decision, the court of appeals held that the F.C.C. lacked the ancillary jurisdiction to regulate and impose punitive measures upon an internet service provider when it engages in network management over internet communications. Therefore, logic dictates that tribal governments and tribal entrepreneurs are the most informed and best suited advocates for the use of broadband spectrum within tribal communities.
 

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In a recent decision from the U.S. Court of Appeals for the District of Columbia, the Court held that the Federal Communications Commission lacked the statutory authority under section 4(i) of the Communications Act of 1934 to regulate an Internet service provider’s actions regarding its network.  The case was initiated by the Comcast Corporation to challenge the validity of an adverse order issued to it by the FCC in response to Comcast’s interference with its subscribers’ use of peer-to-peer networking.  The FCC order was based upon its assumption of ancillary jurisdiction over the issue under section 4(i) and its determination that Comcast’s action violated the FCC’s internet policy statement adopted in 2005.  The Court of Appeals overturned the FCC’s assumption of ancillary jurisdiction over Comcast’s interference with its subscribers’ use of peer-to-peer networking applications because the Court held that the FCC lacked the specific delegated powers under the Communications Act of 1934 to regulate an information service provider.  Thus, the FCC internet policy statement did not, in and of itself, confer any authority to the FCC that could be tied directly back to a specific provision in the Communications Act of 1934.  The clear impact of the decision places doubt upon the FCC’s ability to prescribe net neutrality rules and enforce them on Internet service providers such as Comcast when they restrict access to their network.
 
The recent decision has led to reservations about  the ability of the FCC to complete its activities associated with the development of a national broadband plan, which was unveiled earlier this year.  In its  national broadband plan, the FCC has created specific recommendations for Congressional consideration when developing national telecommunications and Internet systems.  The plan represents a determined shift by the FCC away from traditional wire transmittal methods to the wireless broadband spectrum.  Because the plan focuses on broadband as the medium for future Internet systems and applications, the FCC has specifically recommended in Chapter 4 of the plan that Congress consider enacting policies which spur broadband competition and innovation policy.  The Comcast decision should do little to deter continued dialogue on the national broadband plan, but it clearly places pressure upon Congress to review the future development of the Internet and to determine what regulatory authority it will allow the FCC to pursue when ensuring open access to the Internet by users and applications.  While the effort to adopt a national broadband plan is not dead, a major lobbying battle will likely ensue as those for and against net neutrality will have a new forum to debate its provisions. 

There are other areas of the national broadband plan that industry groups, internet service providers, schools, tribal governments, hospitals, and entrepreneurs should be reviewing to create their legislative agendas when Congress convenes to take up the legislation that is likely to follow in the wake of the FCC’s recommendations for policy action.  The Law, Legislative and Government Affairs Practice  Group at Williams Kastner can assist you in formulating and submitting your legislative agenda to members of Congress for inclusion into legislation when the debate on the future of the Internet and wireless broadband communications begins on Capitol Hill.

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While many tribal consumers have a vast array of opportunities to access the seemingly unlimited information on the Internet, many Indian consumers still do not have access to traditional telephone lines for dial-up Internet connection. The gap in access results from the remote location of Indian reservations, and the high cost of running line to homes and businesses there. Broadband services and applications present a solution that could bridge this connectivity gap in Indian Country.

A Wall Street study recently cited by the FCC in a report on wireless broadband access found that consumers increasingly rely upon wireless devices and applications to access the Internet to complete commercial transactions and gaming activities. Tribal governments and entrepreneurs and Indian Country’s other capital investors should focus on developing wireless broadband access on reservations in order to reach tribal consumers and further inject commerce into tribal markets. Indian Country most certainly has the land base, population and energy resources needed to positively impact the Internet network and become a member of the Internet Protocol for transmission of data via the Internet.

One area that should be developed in Indian Country are mesh and edge networks, otherwise known as server farms, which store content for access by end users. The stored content and deployment of high speed fiber optic links connecting various servers to a central database will prevent congestion at choke points in the Internet. This allows the end user to access content and information at faster and more reliable speeds. Server farm projects could be developed using a mixture of tribal, private and federal Recovery Act funding. Tribal entities that become Internet service providers (or “ISPs”) should also explore setting fees for use of the Internet network based upon tiered access. Tiered access would allow a flat fee for a certain level of Internet traffic per month, but impose additional fees for access to extra bandwidth needed to transmit higher volumes of data over the Internet.

The network neutrality debate happening before the FCC is also key for Indian Country. The FCC regulates ISPs as informational service providers, not common carriers. As the FCC has ancillary authority to regulate ISPs, market forces impose conditions, rates and terms upon ISPs’ delivery of Internet access to end users. While an open market should encourage tribal development of ISPs, there are open questions regarding the extent, nature and scope of state regulatory authority of ISPs operating within Indian Country. The federal Communications Act reinforces the view that states have an important and preeminent role in regulating intrastate communications. I fear that if the FCC decides that ISPs are common carriers, rather than informational service providers, such may inadvertently cause state regulation over Tribal ISP transactions occurring on tribal lands within a particular state. Tribal advocates must focus on the net neutrality debate insofar as state, and thus tribal, regulatory authority over Internet communications are concerned.

In sum, Indian Country and potential tribal ISPs can and should seek to influence federal policy by or through advocating for tax incentives to develop broadband capabilities in underserved reservation areas; establishing partnerships with current ISPs to take advantage of Internet-related business opportunities; and pronouncing a clear position on net neutrality and related regulatory issues to the FCC and other policymakers.