WASHINGTON--The FCC voted to approve draft net neutrality rules that would re-examine whether to treat wireless networks differently from wired broadband networks as the commission seeks to craft new rules that would ensure consumers get equal access to all Internet content.
As when the FCC last tried to adopt net neutrality rules in 2010, wireless carriers would face a transparency rule that would require them to disclose if they are treating traffic differently on their networks. The newly proposed rules would enhance the transparency requirements and would, as FCC Chairman Tom Wheeler said, require that networks disclose any practices that could change a consumer's or content provider's relationship with the network.
The FCC voted at its open meeting on a 3-2, party-line basis on what is known as a "notice of proposed rulemaking" on net neutrality. The three Democrats on the panel approved the rules, with the two Republicans, Commissioners Ajit Pai and Michael O'Rielly, voting against the proposed rules.
The commission will open up the proposal to comment starting today and initial comments are due on July 15 and reply comments due Sept. 10, with the aim of voting on final rules by the end of the year.
Wheeler's initial proposal released late in April was revised after it sparked a thunderous debate, with consumer advocates and Internet companies worried that the agency would undermine the fundamental principles of net neutrality. Three protestors who said the FCC should regulate the Internet strongly were escorted out of the room before the start of the meeting.
The FCC's notice adopts a "no-blocking" rule that prohibits broadband providers from depriving content providers of "a minimal level of access to the broadband provider's subscribers."
Perhaps most controversially, for content not prohibited by the "no-blocking rule" the proposed rules would require broadband providers to adhere to a still-to-defined standard of "commercially reasonable" practices. The proposed rules seek comment on whether "paid prioritization" agreements that would allow content providers to pay ISPs for faster access should be banned altogether.
Wheeler sought to lay out starkly what would not be considered commercially reasonable, perhaps in part to assuage the concerns that were raised by his initial embrace of that approach.
Nothing in the proposal, Wheeler said, authorizes paid prioritization. "The potential for there to be some kind of a fast lane, available to only a few, has many people concerned," he said. "Personally, I don't like the idea of the Internet divided between haves and have-nots. I will work to see that that does not happen."
Wheeler said that the "speed and quality of the connections the consumer purchases must be unaffected by the content he is or she is using." He said if ISPs slowed the speed below what consumers bought, "it would be commercially unreasonable, and therefore prohibited." Wheeler also said it would not be commercially reasonable to charge content providers such as Netflix (NASDAQ: NFLX) to use the bandwidth for which consumers had already paid.
In terms of its legal foundation, the new proposed rules rely on Section 706 of the Telecommunications Act of 1996, which Wheeler has said gives the FCC "the ability to encourage broadband deployment by, among other things, removing barriers to infrastructure deployment, encouraging innovation and promoting competition." The notice seeks comment on the best source of legal authority for the FCC and whether it should use Title III for wireless services.
Importantly, the new rules will also seek comment on whether the FCC should reclassify broadband as a Title II common-carrier telecommunications service, and not an information service. The notice also seeks comment on whether and how the FCC should abstain from imposing some Title II obligations. The embrace of Title II is favored by net neutrality proponents because it could put the rules on firmer legal footing, and it is strongly opposed by carriers and ISPs, which have warned that treating the Internet as a utility would strongly harm innovation and investment and be immensely complicated to figure out.
The FCC is reworking its net neutrality rules following a ruling in January from a federal appeals court that said the FCC overstepped its authority in issuing its earlier rules. The FCC in 2010 decided to classify broadband as an "information service" and not as a "telecommunications service," the classification used for traditional telephone companies, which must follow common carrier rules. By doing so, the court said the FCC could not then impose its rule against "unreasonable discrimination" and "anti-blocking" rules on Internet providers that said ISPs couldn't block lawful traffic and wireless carriers couldn't block competing over-the-top services. Essentially, because the FCC did not use the right classification, it couldn't then impose common carrier rules on "information service" providers.
The notice also provides for a "multi-faceted" process to resolve disputes, including an ombudsperson to act as a watchdog for consumers, startups and other small businesses.
The Republicans questioned the FCC's authority to even make new rules and voiced their strong opposition. "While courts can recognize that an agency may legally reverse course as long as it adequately explains the reasons for changing its position, I am concerned about the real world impact that such a decision could have on the communications industry and the economy as a whole," O'Rielly said. "The current framework has provided a climate of certainty and stability for broadband investment and Internet innovation. Upending that framework could disrupt the tremendous progress that has been made over the last decade."
Rosenworcel said she would have chosen to defer action on net neutrality but agreed that "we cannot have a two-tiered Internet with fast lanes that speed the traffic of the privileged and leave the rest of us lagging behind."
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