Net neutrality rules won't force carriers to get FCC permission for new plans, officials say

Under the FCC's newly approved net neutrality rules, wireless carriers and other ISPs will not have to go the agency and ask permission every time they want to introduce a new offering or mobile broadband plan, such as a new zero-rating plan, according to FCC officials.

The FCC adopted three so-called "bright line" rules for net neutrality: no blocking of legal content; no throttling of Internet traffic on the basis of content; and no paid prioritization of content. For everything not covered by those rules, the FCC approved a catchall "standard for future conduct," which will used to ensure that broadband providers are not "unreasonably interfering with or unreasonably disadvantaging" the ability of consumers and content providers to use the Internet and connect to each other. Future practices will be judged on a case-by-case basis.

At a press conference following the FCC's 3-2 vote to approve net neutrality rules, FCC Chairman Tom Wheeler said the blocking, throttling and paid prioritization regulations can be bright line rules "because we know about those issues. But we don't know where things go next."

FCC officials made clear that carriers will not need approval from the agency to launch new business models and service offerings like sponsored data or zero-rated data. But the officials said carriers may ask for the FCC's opinion on whether the plans meet the future conduct standard. Wheeler and other FCC officials also described some of the criteria they will use in determining the standard, which will include an offering's effect on competition, innovation, consumer protections and user control. The full list of criteria will not be known until the FCC publishes the rules.

"There is no requirements to come to the FCC to seek approval" for a new plan, said Julie Veach, chief of the FCC's Wireline Competition Bureau. "There are opportunities to do so if a provider wants to. And there are opportunities for customers to file complaints."

If a carrier comes to the FCC before it releases a new offering to see whether it will pass muster under the future conduct standard, the FCC will offer what is called an "advisory opinion" to the carrier. That is a non-binding opinion of the FCC staff about a particular plan, according to Jonathan Sallet, the FCC's general counsel. The goal would be to give a carrier a "timely response" on whether a prospective offering meets the standard, he said.

Unless the company requests that confidential information be withheld, such an opinion would be made public; however, carriers are likely to ask for confidentiality if they are disclosing new business models.

Roger Sherman, chief of the FCC's Wireless Telecommunications Bureau, said the net neutrality order the FCC adopted does not take an opinion on existing plans that use zero-rating, such as T-Mobile US' (NYSE:TMUS) Music Freedom plan, which exempts more than two-dozen streaming music services from counting toward a customer's data usage. The order also does not opine on existing sponsored data plans; AT&T Mobility (NYSE:T) has such a plan, in which companies subsidize users' data costs for the companies' apps or services.

"There are positive aspects about programs like zero-rated and there are some areas of concern," Sherman said. He said it "would be premature" to say whether certain future plans would be allowed or not.

Since T-Mobile's Music Freedom plan is inclusive and supports numerous streaming music services, and since T-Mobile does not receive compensation from any company for not counting music streaming traffic against customers' data limits, such a plan is likely going to be fine by the FCC, since it benefits consumers. However, if a zero-rating plan were exclusive to one company that offers a particular type of service, that likely would draw more scrutiny from the FCC.

Sallet said that the FCC may decide on its own that a new plan that has been introduced in the market does not meet the future conduct standard, or a consumer could make an informal or formal complaint to the FCC. The FCC's Enforcement Bureau would conduct an investigation and come to a factual determination, and then its staff would recommend what actions should be taken. Those could include monetary damages or an assessment that the entire practice is not lawful. Or, the FCC may decide there is actually no problem at all, he said. In conducting such investigations to determine what action to take, the FCC always "looks carefully at the nature and severity of offenses," Sallet said.

For more:
- see this FCC release (PDF)

Special Report:Net neutrality for wireless and wireline carriers

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