FCC publishes net neutrality rules, takes hard line on network management practices

The FCC published its full net neutrality rules and gave wireless carriers insight into three key elements of the regulations: what constitutes "reasonable network management;" how future wireless data practices will be evaluated to make sure they comply with the rules; and why wireless networks are covered in the first place.

The debate over reasonable network management has been a fierce one, since CTIA and wireless carriers have long argued that, because of spectrum constraints and the dynamic nature of mobile networks, carriers need more flexibility to manage traffic on their networks than wired ISPs. The rules take these differences into account but also take a hard line against changing subscribers' data experience just based on the plan they purchase.

According to the rules, which run more than 300 pages, a network management practice will be considered reasonable if it is primarily aimed at "achieving a legitimate network management purpose, taking into account the particular network architecture and technology of the broadband Internet access service." The practice needs to be related to a "technical network management justification" and not business practices.

Carriers won't be allowed to engage in practices that permit "different levels of network access for similarly situated users based solely on the particular plan to which the user has subscribed," which seems to indicate that a carrier won't be able to throttle the speeds of a subscriber simply because they have a grandfathered unlimited data plan, for example.  

The FCC acknowledges that wireless carriers "may have a greater need to apply network management practices, including mobile-specific network management practices, and to do so more often to balance supply and demand while accommodating mobility." The FCC said that it expects carriers "will continue to be able to use a multitude of tools to manage their networks, including an increased number of network management tools available in 4G LTE networks."

In addition to bans on blocking content, throttling content and paid prioritization, the regulations also include what had previously been described as a "standard for future conduct," but that the rules now call "a no-unreasonable interference/disadvantage standard." The standard is designed to protect the ability of consumers and content providers to use the Internet and connect to each other without being unreasonably interfered with or disadvantaged. This is the standard the FCC will use to judge whether future practices of broadband providers, such as zero-rating or sponsored data plans, should be allowed.

Wireless carriers will not have to go the agency and ask permission every time they want to introduce a new offering or mobile broadband plan, but they can go to the FCC to get an "advisory opinion" on whether a new proposed mobile data business plan meets the standard, and customers can file complaints.

The FCC laid out several factors it will consider in determining whether a practice meets the standard. Those include whether the new plans "empower meaningful consumer choice;" the effects the plans will have on market competition, whether consumers are protected; the plans' effect on innovation, investment and broadband deployment; whether the plans threaten free expression; whether the practices are "application agnostic" and unreasonably harm content providers; and whether the plans conform to best practices as set by industry standards.

Carriers have argued that such a standard will stifle innovation but the FCC said it does not think wireless carriers will be unable to differentiate themselves in the market. "We have crafted the standard we adopt today to prohibit these practices that harm Internet openness while still permitting innovation and experimentation," the rules state. "Nothing in the standard restricts carriers from developing new services or implementing new business models."

The rules are likely to spark litigation, perhaps from a carrier like AT&T (NYSE: T) or Verizon (NYSE: VZ). 

Indeed, AT&T indicated its displeasure with the FCC's rules: "Unfortunately, the order released today begins a period of uncertainty that will damage broadband investment in the United States," Jim Cicconi, AT&T's senior executive vice president of external and legislative affairs, said 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."

For more:
- see this FCC order

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