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Global Media and Communications Watch The International Legal Blog for the Tech, Media and Telecoms Industry
Posted in Internet, Policy & Regulation, Telecoms & Broadband Michele Farquhar

US net neutrality principles emerge from FCC staff presentation

fcc-logo_light-blue-gradient-on-grayOn February 26, the Federal Communications Committion (FCC) voted 3-2 along party lines to adopt Open Internet rules.  The FCC Bureau requested to retain “editorial privileges” to the order, which the Chairman granted, meaning that drafting of the text of the order itself will continue for the next several days if not weeks.  According to press reports, the text of the order itself is not expected to be available for potentially a few more weeks, due to delays in the Commissioners providing edits to the text of the order.  Consequently the subtleties of the FCC’s new order will remain a mystery for a number of weeks, until the order is actually published.

Nevertheless, based on the verbal FCC staff presentation and the FCC press release, many of the key principles of the Open Internet order are new clear.

Internet access service now reclassified as “telecommunications.” The revised rules reclassify both mobile and fixed (wired and wireless) broadband Internet access services as Title II telecommunications services. The FCC bases its authority in Title II of the Communications Act and Section 706 of the Telecommunications Act of 1996; the Order’s provisions on mobile broadband are also based on Title III of the Communications Act.   This brings the US into phase with Europe, which has long considered Internet access as a form of telecommunications service.

Key principles.  The revised rules include three primary provisions:

  • No blocking of lawful content, services, applications or non-harmful devices.
  • No impairment/degrading (“throttling”) of lawful Internet traffic on the basis of content, services, applications or non-harmful devices.
  • No paid priorization or favoritism of certain lawful Internet traffic over other traffic for consideration (ie., no “fast lanes”); this rule also bans ISPs from prioritizing content and services of their affiliates.

Future conduct standard. The rules include a future conduct standard prohibiting broadband ISPs from unreasonably interfering with or unreasonably disadvantaging the abilities of consumers to select, access, and use the lawful content, applications, services, or devices of their choosing; or of edge providers to make lawful content, applications, services, or devices available to consumers.

Reasonable network management. All rules other than paid prioritization are subject to an exception for reasonable network management. In assessing reasonable network management, the Commission takes into account the particular engineering attributes of the technology involved (e.g., fiber, DSL, wireless, unlicensed WiFi, cable, etc.). Reasonable network management must be primarily used for and tailored to achieving a legitimate network management—and not business—purpose.  For example, a provider cannot cite reasonable network management as a basis for reneging on its promise to supply a customer with “unlimited” data.

Transparency. The Order also enhances the existing transparency rules, and grants smaller providers with 100,000 or fewer subscribers a temporary exemption from these enhanced transparency requirements, subject to future review. In addition to the existing transparency requirements (which are still in effect), broadband providers must now disclose, in a consistent format, promotional rates, fees and surcharges, and data caps; disclosures must also include packet loss as a measure of network performance, and provide notice of network management practices that can affect service. The Order provides a “safe harbor” process for the format and nature of required consumer disclosures.

Application to mobile. The rules are technology-neutral, and apply equally to both fixed and mobile broadband providers.  The rules further deem mobile Internet services to be “commercial mobile radio services” under Section 332 of the Communications Act.

Mass market vs. enterprise connections. In a press conference subsequent to the vote, FCC staff clarified that the scope of “broadband internet access services” covered by the rules includes only mass-market, and not enterprise, broadband Internet access connections.

Interconnection. The future conduct standard applies to Internet interconnection agreements and practices, and the presentation clarified that the FCC retains enforcement authority to intervene in disputes over peering and interconnection practices.  The Commission did not endorse or proscribe specific interconnection practices.

Forbearance. The rules forbear from 27 provisions of Title II of the Communications Act, and over 700 regulations adopted under that statute.  The rules do not require USF contributions from broadband providers, and no new taxes are imposed.

Major provisions of Title II that will apply:

  • “Core” provisions—no unjust or unreasonable practices or unreasonable discrimination (Sections 201 and 202)
  • Allow investigation of consumer complaints and related enforcement actions (e.g., Section 208 and related provisions of the Communications Act).
  • Consumer privacy provisions (Section 222)
  • Ensures fair access to poles and conduits (pole attachments)
  • Accessibility requirements will apply (Sections 225 and 255)
  • Bolster universal service fund support for broadband service in the future through partial application of Section 254

Major provisions that are subject to forbearance and will not apply:

  • Rate regulation
  • Universal service contributions
  • Broadband service will remain exempt from state and local taxation under the Internet Tax Freedom Act

Non-broadband Internet access services. The rules do not apply to certain services not considered to be within the definition of broadband Internet access services, which had been exempted from the former 2010 Open Internet rules as so-called “specialized services” (e.g., facilities-based interconnected VoIP services). The FCC retains authority to intervene as needed to prevent such non-broadband Internet access services from undermining the Open Internet rules.

Enforcement. The FCC made clear that it anticipates undertaking case-by-case review of alleged open Internet violations. The Commission will also create a new position of ombudsman, provide enforcement advisories, and invite voluntary requests for advisory opinions from FCC staff on the permissibility of particular practices. The Enforcement Bureau can request objective written opinions on technical matters from outside technical organizations, industry standards-setting bodies and other organizations.