Taking net access

As it becomes more difficult to imagine drafting a network neutrality legislative command that will be both meaningful and easily enforceable, it becomes easier to imagine a wholly different kind of legislative action: enforced separation.

In 1992 a FERC Order (No. 636, known generally as the Open Access Order) made pipeline unbundling a requirement, mandating that pipelines separate transportation from the services they offer.  Order 636 meant that the transport pipelines could no longer engage in gas sales or sell any product as a bundled service.  Thus, no advantages in terms of (among other things) the timing of gas transportation could be afforded by a pipeline to its affiliates.  This set of actions has had generally beneficial effects on gas customers. 

It was expensive to achieve:  FERC recognized that pipeline companies would incur costs as a result of complying with Order 636, and allowed them to charge customers for them.  The initial plan was to allow pipeline companies to charge exit fees and surcharges to recover 100 percent of their “prudently incurred” transition costs; later, FERC issued Order 636-A on August 3, 1992, which required pipeline companies to recover 10 percent of these transition costs through the rates they charged for gas transportation.  (Note — these are transition costs, not “what we could have gotten if we could have soaked everyone for every dime” costs.) 

It is true that having the FCC work on such a “prudently incurred” cost-assessment regime would take a great deal of time and would be heavily regulatory.  But the cost might serve a higher public value — access to the internet-as-ocean.