FCC's proposed new net neutrality rules won't apply to wireless

FCC Chairman Tom Wheeler plans to circulate a draft proposal on new net neutrality regulations that could allow broadband providers to give preferential treatment to traffic from some content providers who pay for the privilege on "commercially reasonable terms." However, the new proposal would not apply to wireless carriers, according to an FCC official familiar with the proposal.

fcc tom wheeler

Wheeler

According to multiple media reports, the FCC's new proposal would allow ISPs to put content in a faster Internet lane from some content providers, as long as such arrangements are made available on "commercially reasonable" terms for all interested content companies. According to the Wall Street Journal, the FCC would decide whether the terms are commercially reasonable on a case-by-case basis. Net neutrality advocates have long feared that such a standard would allow wealthy content companies to pay ISPS to get their content into a faster lane of Internet service, putting smaller companies with fewer resources at a disadvantage.

The proposal will seek comment on whether mobile broadband providers should be subject to a similar "commercially reasonable" standard when making deals with content providers, according to an FCC official.

The FCC's new proposal, a Notice of Proposed Rulemaking, comes after a federal appeals court in January threw out most of the FCC's 2010 rules aimed at crafting net neutrality regulations. Net neutrality rules are designed to ensure that providers of legal Internet content should not face unreasonable discrimination in providing content to consumers, and that consumers should have equal access to see any legal content they want.

In a blog post issued today, Wheeler wrote that "incorrect" reports have said the FCC is abandoning its 2010 net neutrality policies. Instead, Wheeler argued the FCC's new proposal seeks to protect Internet access in line with the appeals court's ruling. 

Wheeler also blasted the notion that the FCC's new proposal will result in higher prices for consumers. "That is exactly what the 'commercially unreasonable' test will protect against: harm to competition and consumers stemming from abusive market activity," he wrote.

Wheeler wrote that under the FCC's new proposal, "all ISPs must transparently disclose to their subscribers and users all relevant information as to the policies that govern their network," that "no legal content may be blocked," and that ISPs "may not act in a commercially unreasonable manner to harm the Internet, including favoring the traffic from an affiliated entity."

Public interest groups blasted Wheeler's new net neutrality proposal. "The FCC is inviting ISPs to pick winners and losers online," Michael Weinberg, vice president of Public Knowledge, said in a statement. "The very essence of a 'commercial reasonableness' standard is discrimination. And the core of net neutrality is nondiscrimination. This is not net neutrality. This standard allows ISPs to impose a new price of entry for innovation on the Internet. When the Commission used a commercial reasonableness standard for wireless data roaming, it explicitly found that it may be commercially reasonable for a broadband ISP to charge an edge provider higher rates because its service is competitively threatening."

The full FCC will vote on the new net neutrality proposal on May 15, and the proposal will then be subject to public comment and could be changed before final rules are voted on later. Wheeler wrote in the blog post that he hopes to have the new rules finalized by the end of 2014.

Under the FCC's 2010 rules, wireless carriers were barred from blocking services such as Google Voice and Skype that compete with their own voice and video offerings, as well as those in which they have an attributable interest. However, wireless carriers did not face the same restrictions wired operators did on blocking Web traffic and other applications--a ban on unreasonable discrimination in transmitting lawful network traffic.

Wireless carriers also faced transparency requirements on network management policies and a basic "no-blocking" rule on lawful content and applications. The no-blocking rule did not generally apply to carriers that operate application storefronts. The rules did allow for reasonable network management, which is defined as actions that are "appropriate and tailored to a legitimate network management purpose, taking into account network architecture.

For more:
- see this FCC blog post
- see this WSJ article (sub. req.)
- see this NYT article
- see this GigaOM article
- see this The Verge article
- see this Washington Post article

Related Articles:
Wheeler takes 'prism' view on net neutrality, retrans, process reform
AT&T's de la Vega: Netflix, other video players should pay for traffic costs - not consumers
FCC won't appeal net neutrality loss, Wheeler outlines new plans for net neutrality rules
FCC's Wheeler vows to 'fight' after net neutrality rules struck down
Verizon, AT&T reiterate 'open Internet' support, while FCC mulls net neutrality options
Federal appeals court strikes down FCC's net neutrality rules

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