Federal Communications Commission considering rolling back its net neutrality rules

In the spring of 2015, the Federal Communications Commission (FCC), under then-President Obama, promulgated its rules pertaining to an “open Internet,” also known as “net neutrality,” classifying broadband Internet services, such as AT&T, CenturyLink, Verizon, and Windstream, as utilities. The FCC justified its rules on the ground that they “are designed to protect free expression and innovation on the Internet and promote investment in the nation’s broadband networks…ensuring consumers and businesses have access to a fast, fair, and open Internet.”

The “bright line rules” apply to forbid:

1. Blocking: broadband providers may not block access to legal content, applications, services, or non-harmful devices;
2. Throttling: broadband providers may not impair or degrade lawful Internet traffic on the basis of content, applications, services, or non-harmful devices; and
3. Paid Prioritization: broadband providers may not favor some lawful Internet traffic over other lawful traffic in exchange for consideration of any kind—in other words, no “fast lanes.” This rule also bans ISPs from prioritizing content and services of their affiliates.

A fourth rule, the “General Conduct Rule,” prohibits broadband providers from “unreasonably” interfering with or disadvantaging end users’ ability to use broadband Internet access services, and also prohibits broadband’s interference with edge providers’ ability to make its content and services available to end users.

As the D.C. Circuit Court explained, it is through a broadband provider, like those named above, that most consumers connect to the Internet, using a modem, a digital subscriber line (DSL), or fiber optics. These broadband providers deliver their services through fiber optic links or high speed routers, in contrast to the so called “[e]dge providers, like Netflix, Google, and Amazon, which provide content, services, and applications over the Internet.

In June 2016, in the case US Telecom Association v. FCC, a three judge panel for the United States Court of Appeals for the District of Columbia Circuit denied petitions for review submitted by three separate groups of petitioners, consisting primarily of broadband providers and their associations. The above-mentioned AT&T, CenturyLink, Verizon, and Windstream, among many others, are members of one of the petitioners, the US Telecom Association.

The petitioners were challenging the FCC’s 2015 Open Internet Order (Order), in which the FCC 1) reclassified broadband service as a telecommunications service, subject to certain common carrier regulations; 2) refrained from applying many of these regulatory provisions to broadband service; and 3) promulgated the bright line rules to promote Internet openness.

The petitioners argued that the FCC lacked the authority to reclassify broadband service in the first place, but even if it did have such authority, the classification of mobile broadband as a commercial mobile service was impermissible.

After the June 2016 decision upholding the FCC’s net neutrality scheme, the petitioners asked the entire panel of judges to rehear their case, and last month, the Court declined. This means that the FCC’s actions stand.

Now what?

According to Bloomberg Technology, net neutrality is a win for the edge providers, but a setback for the telecommunications providers who oppose “intrusive government oversight and threatened investment and innovation.” But this may be short-lived, because the new FCC chairman, Ajit Pai, had already promised to make net neutrality less neutral by, for instance, making it possible to speed up Internet access for companies who are willing to pay more for it.

In late April, the FCC circulated a document titled Restoring Internet Freedom Notice of Proposed Rulemaking (NPRM) for tentative consideration at its May meeting. The effort is designed to “end the utility-style regulatory approach that gives government control of the Internet and to restore the market-based policies necessary to preserve the future of Internet Freedom, and to reverse the decline in infrastructure investment, innovation, and options for consumers put into motion by the FCC in 2015.”

More specifically, the NPRM proposes to “return to the light-touch regulatory framework first established on a bipartisan basis during the Clinton Administration,” by doing the following, among other things:

• Reinstate the information service classification of broadband Internet access service;
• Reinstate the determination that mobile broadband Internet access service is not a commercial mobile service;
• Return authority to the Federal Trade Commission to police the privacy practices of Internet service providers;
• Eliminate the vague Internet conduct standard;
• Re-evaluate the Commission’s enforcement regime to analyze whether regulatory intervention in the market [based on forecasts rather than actual results] is necessary.

Interested parties may provide their feedback on or before July 17, 2017.

Consumer Reports opined that the movement to undo the net neutrality rules, approved by a 2 to 1 vote of the FCC, “should be chilling to everyone who values the Internet as a platform for free speech, commerce, entrepreneurship, and citizen engagement…Preserving the open Internet has prompted an unprecedented response from consumers on multiple occasions, with millions voicing their continued support for net neutrality rules. We implore Chairman Pai to listen to the interests of the public the Commission was tasked with protecting.”

Further, Consumer Reports pointed out, “much of the tech industry” supports the current net neutrality system. The Internet Association, on behalf of edge providers like Apple, Google, and Netflix, declared that the “Internet industry is uniform in its belief that net neutrality preserves the consumer experience, competition, and innovation online. In other words, existing net neutrality rules should be enforced and kept intact.”

The broadband providers, however, assert that, “they are suffering under an unneeded layer of regulation…the current regulatory regime ‘raises costs, which are ultimately born by consumers, and threatens the continued growth and expansion of Internet networks throughout America.’”

Unfortunately, the magazine acknowledged, “this is just the start of a drawn-out rule-making process.”