What the Net Neutrality Rules Say

13 Mar 2015 | Author: | No comments yet »

Document Drop: FCC reveals the full text of open Internet rules for net neutrality.

Today, the FCC published its new order [PDF] on net neutrality. The Federal Communications Commission posted the full text of its open Internet plan online Thursday, putting on full display the agency’s net neutrality ruling approved 3-2 last month.The release of the rules, which regulate broadband Internet service as a public utility, had been eagerly anticipated by advocates and lawmakers, as well as broadband and technology companies.Federal regulators released details of the new rules governing Internet traffic in a 400-page tome that also lays out the justification for tough measures and gives critics the fodder for their expected court appeals.

As promised, the rules start by putting net neutrality on the right legal footing, which means they have a much stronger chance of surviving the inevitable legal challenge. The lengthy, 400-page document, details how the agency reclassifies both wired and mobile broadband Internet as a utility “telecommunications service,” which regulates it similarly to traditional phone lines. By classifying providers in this way, the FCC gives itself more power to mandate that providers treat all traffic flowing across their networks more or less equally. The rules ban paid prioritization, which is the idea of an Internet service provider (ISP), such as Time Warner Cable, charging a content provider, such as Netflix, for better access to consumers over another content provider that does not pay up. A highly public dispute over network pricing last year helped nudge into the mainstream the debate over net neutrality—the principle that all Internet traffic should be treated equally.

Providers may not prioritize certain services or applications over others, nor may they create “fast lanes” for those companies willing to pay to have their content delivered to consumers faster. But the FCC says in the rules that it won’t be jumping in right away, because it lacks experience in evaluating such deals. “We find that the best approach is to watch, learn, and act as required, but not intervene now, especially not with prescriptive rules,” the commission wrote in the rules. This evenhanded treatment of Internet traffic is what’s meant by the term “net neutrality.” What’s most surprising about the bill is the extent to which the FCC won’t regulate providers. The rules revealed how the strict laws would be modified for Internet providers, exempting the companies from the sort of price controls typically applied to utilities, for example. The rules, for example, give the FCC new powers to oversee “interconnection” deals between companies like Netflix Inc. and Internet service providers like Verizon Communications Inc., common arrangements that let companies share network traffic.

Title II allows it to take measures such as setting retail rates and even mandating that providers lease (or “unbundle”) portions of their networks to competitors. Their aim is to protect the open Internet, advancing principles of so-called Net neutrality by prohibiting broadband providers from elevating one kind of content over another.

The regulator is taking a similarly uncertain stance on sponsored data programs—ones where content companies like Google Inc. could pay the cost of data so their services could be delivered to mobile users free. For example, an ISP cannot degrade customers’ access to services that compete with its own offerings and cannot charge tolls to privilege traffic from one web service over others. Critics say such plans give an advantage to deep-pocketed companies that can afford the cost at the expense of startups or other weaker rivals. “Given the unresolved debate concerning the benefits and drawbacks of data allowances and usage-based pricing plans, we decline to make blanket findings about these practices,” the commission said.

The FCC also listened to our advice to forbear from applying numerous aspects of its authority, aspects that are not necessary to address the critical but narrow problems posed by ISP gatekeepers. The order also does not make specific rules about interconnect points – the places at which the networks of content providers meet those of broadband providers, such as Comcast and Verizon. Last year, Netflix paid large sums to both of those companies to be able to hook directly into their networks, bypassing the Internet backbone and avoiding congestion.

The “just and reasonable” provision, said Roger Entner, the lead analyst at Recon Analytics in Boston, “can be stretched like chewing gum.” He suggested that it would inspire a flood of proactive, permission-seeking petitions from businesses large and small. Some Democrats have expressed interest in working with them because legislation would provide more certainty than a regulatory decision. “Our six-page draft legislation could prevent abuses and promote robust Internet investment — all without the overreach included in the FCC’s order,” Sen. Today’s order creates no new taxes or fees, although there is a possibility those will emerge following subsequent hearings and rulemaking regarding disabilities access or a universal service fund to expand broadband coverage. With respect to privacy, the FCC is not forbearing from protecting consumer privacy, but wisely will not import existing rules relating to phone service privacy to broadband providers.

Some question whether the FCC, which has not requested an increase to its legal budget for next year, has the capacity to manage and adjudicate one-time petitions. The order does allow broadband providers to prioritize traffic in the interest of “reasonable network management,” but it imposed strict rules concerning what is and is not “reasonable.” Throttling an application that is slowing down network access for everyone during peak hours might be considered reasonable.

But the issue picked up momentum in the last year, with President Obama taking the unusual action of publicly urging the independent agency to approve strong regulation. Last week, Representative Marsha Blackburn, a Tennessee Republican, introduced a bill in the House, with 19 original cosponsors, to limit the FCC’s authority and undo its new rules. AT&T criticized the order on the grounds that it could disincentivize companies from improving Internet access for their customers. “Unfortunately, the order released today begins a period of uncertainty that will damage broadband investment in the United States,” AT&T executive Jim Cicconi wrote in a statement. “Ultimately, though, we are confident the issue will be resolved by bipartisan action by Congress or a future FCC, or by the courts.”

The commission was careful to write its rules so that they wouldn’t quickly become outdated as technologies evolve, said Kevin Werbach, a professor of legal studies at the University of Pennsylvania’s Wharton School who has advised the FCC on open Internet policies. “It’s a reasonable and logical approach given the degree of uncertainty about what is going to happen in the marketplace,” Mr. When we first learned of the FCC’s intent to rely on a vague “general conduct rule” to evaluate provider conduct on a case-by-case basis, we pointed out the risks inherent in such an approach. Speta, a law professor at Northwestern University who specializes in telecommunications and Internet policy, said some legal challenges would most likely focus on the reclassification itself. In the next few weeks, the order will be published in the Federal Register and nearly all the provisions will take effect 60 days after that unless a court steps in with a preliminary injunction.

The rule does lay out factors that will help guide the analysis of whether a given practice violates the rules, such as the effect on innovation, free expression, and end-user control. He said the question could become: Are the companies more defined by their infrastructure, qualifying them as telecommunications services, or by what is transmitted over it?

FCC officials said the length of the order, which included 1,950 footnotes, was partly in response to many of the arguments made in the nearly 4 million public comments the agency received on the issue last year. The F.C.C. itself has previously argued against the very reclassification it has just approved, most notably in a case that was affirmed by the Supreme Court in 2005. What has made this set of net neutrality rules so much more controversial than past efforts was the FCC’s major policy shift in treating broadband providers as more highly regulated telecommunications services. The expense and expertise to raise and respond to issues on that basis could tilt the process in favor of big and established players, like major ISPs and content providers. Unfortunately, the FCC has maintained the “lawful content” limitation, and gone farther to state that it does not intend “to prohibit or discourage voluntary practices undertaken to address or mitigate the occurrence of copyright infringement.” The danger of this limitation has already been demonstrated.

The order says paid prioritization could be allowed, with approval, though it explicitly forbids companies from paying to prioritize the content of an affiliate. That decision could have major implications for telecommunications regulation as the types of Internet-connected devices expand, said Robert McDowell, a former Republican FCC commissioner who voted against the 2010 net neutrality regulations. “As we see the Internet of everything starting to explode, it’s more than just your computer, your tablet, your smartphone. But Tom Wheeler, the commission chairman, has expressed confidence in the agency’s ability to handle the unexpected. “We don’t know where things go next,” he said after the commission voted on the rules last month. “We have created a playing field where there are known rules, and the FCC will sit there as a referee and will throw the flag.” For example, T-Mobile zero-rates certain music services and Facebook and Wikipedia have a variety of deals around the world creating zero-rated access to their services.

We recognize the value of providing low-income users with access to knowledge and the ability to interconnect, but these objectives are better achieved by promoting competition and removing access barriers to neutral Internet access. The rules will likely withstand the inevitable court challenges, and their bright-line prohibitions on blocking, throttling, and paid prioritization will go a long way towards protecting Internet users.

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