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"The Telecommunications Act of 1996 (P.L. 104-104) addressed the issue of whether the federal government should intervene to prevent a “digital divide” in broadband access. Section 706 requires the FCC to determine whether “advanced telecommunications capability [i.e., broadband or high-speed access] is being deployed to all Americans in a reasonable and timely fashion.” If this is not the case, the act directs the FCC to “take immediate action to accelerate deployment of such capability by removing barriers to infrastructure investment and by promoting competition in the telecommunications market.”" --Broadband Internet Regulation and Access: Backbround Issues, CRS Report for Congress, Nov. 21, 2008 (copy acquired through wikileaks)

Telecommunications Act of 1996, Pub. L. No. 104-104, § 706(a), 110 Stat. 56, 153

    SEC. 706. ADVANCED TELECOMMUNICATIONS INCENTIVES.

    (a) In General: The Commission and each State commission with regulatory jurisdiction over telecommunications services shall encourage the deployment on a reasonable and timely basis of advanced telecommunications capability to all Americans (including, in particular, elementary and secondary schools and classrooms) by utilizing, in a manner consistent with the public interest, convenience, and necessity, price cap regulation, regulatory forbearance, measures that promote competition in the local telecommunications market, or other regulating methods that remove barriers to infrastructure investment.

    (b) Inquiry: The Commission shall, within 30 months after the date of enactment of this Act, and regularly thereafter, initiate a notice of inquiry concerning the availability of advanced telecommunications capability to all Americans (including, in particular, elementary and secondary schools and classrooms) and shall complete the inquiry within 180 days after its initiation. In the inquiry, the Commission shall determine whether advanced telecommunications capability is being deployed to all Americans in a reasonable and timely fashion. If the Commission's determination is negative, it shall take immediate action to accelerate deployment of such capability by removing barriers to infrastructure investment and by promoting competition in the telecommunications market.

    (c) Definitions: For purposes of this subsection:

      (1) Advanced telecommunications capability: The term 'advanced telecommunications capability' is defined, without regard to any transmission media or technology, as high-speed, switched, broadband telecommunications capability that enables users to originate and receive high-quality voice, data, graphics, and video telecommunications using any technology.

      (2) Elementary and secondary schools: The term 'elementary and secondary schools' means elementary and secondary schools, as defined in paragraphs (14) and (25), respectively, of section 14101 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 8801)

Pursuant to Sec. 706, the FCC has taken two primary actions. First, the FCC has engaged in a series of inquiries that have resulted in reports to Congress. Second, the FCC gathers data from telecommunications services on an ongoing basis and releases data reports to the public twice a year. The Sec. 706 Reports have considered a wide range of issues:

Authority to Act

Through out the Sec. 706 proceedings, parties had petitioned the FCC to take action in light of some problem in the deployment of advanced services to all Americans. The FCC repeated responded that Sec. 706 confers the FCC with the authority to report, but is not authority to take regulatory action.

The FCC first sought to assert that Sec. 706 granted it authority to act in the Comcast case where the FCC sought to enforce the Four Broadband Principles. However, the D.C. Circuit concluded that the FCC was bound by its own decision in the Advanced Services Order that Sec. 706 granted it no such authority, and there had been no APA proceeding to change that conclusion.

In the Open Internet proceeding, the FCC again concluded that Sec. 706 does confer it with authority to take action. On appeal, the D.C. Circuit uphelp with the FCC's interpretation under Chevron (although the court also reversed the FCC, holding that the FCC cannot treat ISPs as common carriers (non discrimination) where the FCC has concluded that they are not common carriers).

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