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The Federal Communications Commission plans to announce tomorrow that it will seek to reclassify broadband as a transport service, opening up a way for the agency to enforce network neutrality recommendations and implement some aspects of the National Broadband Plan. It will also open the way for some bitter lobbying and court fights as the big ISPs try to keep the FCC from “regulating the Internet.”

A statement released by the agency this afternoon said:

The Chairman will seek to restore the status quo as it existed prior to the court decision in order to fulfill the previously stated agenda of extending broadband to all Americans, protecting consumers, ensuring fair competition, and preserving a free and open Internet. The Chairman will outline a ‘third way’ approach between a weak Title I and a needlessly burdensome Title II approach. It would 1) apply to broadband transmission service only the small handful of Title II provisions that, prior to the Comcast decision, were widely believed to be within the Commission’s purview, and 2) would have broad up-front forbearance and meaningful boundaries to guard against regulatory overreach.

The entire wonky issue was brought to head at the beginning of April with an appeals court decision that the FCC had overstepped its authority when it censured Comcast (s cmcsa) for blocking P2P files. At the heart of the court’s decision and the entire reclassification debate, is that the FCC has more regulatory discretion on transport services, such as two-way telephone calls, than it does over information services. In a series of rulings dating back to 2002 the FCC had declared broadband service from the cable companies, DSL providers, wireless providers and even anyone offering broadband over power lines to be an information service mostly because in addition to the two-way transfer of packets, those providers also offered email, storage and other “information services.”

This “third way” will likely involve the agency reclassifying high-speed Internet service as transport, but the FCC will also exempt itself from applying certain regulations that are applied to the voice telephone network. Susan Crawford, a professor at the University of Michigan Law School who co-lead the FCC Agency Review team for the Obama-Biden transition, writes on her blog:

The FCC is carefully moving towards a “third way” approach to regulation of high-speed Internet access. Complete deregulation of this essential input no longer makes sense; heavy-handed regulation doesn’t either; the FCC plans to forbear from rate regulation but ensure that the transmission portion — but not Internet applications and content — is subject to basic rules of the road. They still have a lot of work to do to develop the factual record that will support regulatory reclassification of transmission services, but courts will likely defer to their classification if they do their job right. I have every expectation that they will.

So while the FCC’s willingness to step up and reclassify broadband is good news for those hoping that net neutrality rules will be passed, the process itself will take months, and will likely involve more than one proceeding as the FCC tries to make clear which regulations associated with transport services it won’t try to impose. I laid it all out in this GigaOM Pro story for those who need more detail. For those content to relax and hope the Commission can pull this off, settle in to watch the drama as well as the inevitable court fights that this reclassification effort will yield.