Thursday, February 26, 2015

A Very Preliminary and Tentative Summary of the FCC’s Open Internet Order

            I have prepared a tentative summary of the FCC’s Open Internet Order based on pre-release documents as well as what transpired at the Commission meeting today (Feb. 26, 2015). I expect to read the entire 300+ page document as soon as it is released.  Until then, here are the main points:

            The FCC opted not to construct an order solely applying Section 706 of the Communications Act as the foundation for creating narrowly calibrated non-common carrier rules applicable to ISPs in their capacity as information service providers.  Despite a finding by the D.C. Circuit Court of Appeals that Section 706 grants the FCC an independent right of authority to examine broadband availability with an eye toward removing barriers—financial and regulatory--, the Commission decided to reclassify Internet access so that Title II applies.  The Order goes to extraordinary lengths to emphasize that it will forbear from applying most common carrier regulations, [1] but opponents have objected to the regulatory options the Commission now make available. [2] The FCC voted on party lines to adopt the order that staff emphasized would provide necessary safeguards without imposing unnecessary public utility requirements, but which the Republican Commissioners consider micromanagement, including rate regulation. [3]

            The Order expresses the view that reclassifying Internet access as a telecommunications service provides the strongest legal foundation for the Open Internet regulations, coupled with a secondary reference to Section 706 of the Telecommunications Act of 1996.  By using the more muscular Title II foundation, the FCC asserts that it can establish clear and unconditional statutory authority, but also use the flexibility contained in Title II to forbear from applying most common carrier requirements not relevant to modern broadband service just as occurs for wireless telephone service.  However with a Title II regulatory foundation, the Order makes it possible for the FCC to create an Open Internet conduct standard asserting that ISPs cannot harm consumers or edge providers with enforcement tools available to sanction violations.

           The Order defines “broadband Internet access service” as a telecommunications service under Title II, with emphasis on the “retail” link between an ISP and broadband subscribers. However the FCC does apply the Title II classification to upstream ISPs and content providers, commonly referred to as “edge providers.”  This means that the FCC will have jurisdiction to examine ISP carriage both downstream to broadband subscribers and upstream to edge providers, but the nature and type of such oversight and the applicable regulations may differ.  Additionally the Commission will have direct statutory authority to consider complaints and to resolve disputes, including ones claiming that interconnection and compensation terms are unjust and unreasonable.

           The Order deviates from previous open Internet initiatives by opting to apply the same requirements on wireline and wireless broadband.  Previously the Commission had imposed less burdensome requirements on wireless broadband based on its comparatively recent availability, as well as the potential for spectrum scarcity and other technological factors that might necessitate deviation from absolute access neutrality. The FCC also rebuts claims that Title III does not allow classification of mobile broadband as a telecommunications service, noting that the Commission has asserted Title II oversight of wireless telephone service, termed Commercial Mobile Radio Service by Congress in amendments to Title III.

           While the debate over network neutrality has become quite contentious and hyperbolic, the three core requirements imposed by the Order have generated much popular support.  With the common carrier reclassification, the FCC considers it lawful to impose explicit requirements that ISPs not: block, legal content, applications, services, or non-harmful devices; throttle, impair or degrade lawful Internet traffic on the basis of content, applications, services, or non-harmful devices; and offer paid prioritization that would favor some lawful Internet traffic over other lawful traffic in exchange for additional compensation, or based on corporate affiliation.

           The Order addresses the need for ISPs to have the ability to manage their networks and to offer specialized services not available to all users.  The FCC seeks to promote flexibility without allowing these options to provide a loophole for practices that violate network neutrality policy. Coupled with requirements that ISPs operate with transparency in terms of how they provide service, the FCC will permit deviations from absolute neutrality on a case-by-case basis taking into consideration the particular engineering attributes of the technology used as well as the rationale supporting the legitimacy of the practice.  

 

 




[1]              The major provisions subject to forbearance include no rate regulation: the Order makes clear that broadband providers shall not be subject to tariffs or other form of rate approval, unbundling, or other forms of utility regulation, no last-mile unbundling, no burdensome administrative filing requirements or accounting standards, no requirement to contribute to
universal service funding under Section 254, and no new taxes or fees.
 
[2]           The major provisions of Title II that  the Order will apply are: nondiscrimination and no unjust and unreasonable practices under Sections 201 and 202; authority to investigate complaints and resolve disputes under section 208 and related enforcement provisions, specifically sections 206, 207, 209, 216 and 217; protection of consumer privacy under Section 222; fair access to poles and conduits under Section 224, protection of people with disabilities under Sections 225 and 255; and providing universal funding for broadband service through tpartial application of Section 254.
 
[3]              The presentation of the order before the Commissioners noted that 27 customary common carrier requirements would not apply to ISPs, nor would they have to tariff their services, unbundle offerings into separate elements and make financial contributions to universal service funding.

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