FCC Adopts Notice of Proposed Rulemaking to Revise Open Internet (Net Neutrality) Rules

May 15, 2014

The FCC today voted, by a 3-2 margin, to issue a proposal seeking comment on its latest effort to adopt enforceable rules designed to promote an Open Internet. The proposed rules would reinstate, with some changes, the no-blocking rule for ISPs that was vacated by the D.C. Circuit in January and revise the anti-discrimination rule consistent with the guidance the D.C. Circuit provided in its January opinion. The Chairman and other Commissioners emphasized that much of the media attention has been misleading; the NPRM contains no final rules, but begins the process of considering new rules enforcing the Open Internet principles the FCC has had in place since 2004. The FCC also made clear that the NPRM does not address the peering and interconnection relationship between content providers and ISPs (such as those arising between Comcast, Netflix, Cogent etc.) but only the delivery of traffic from the ISP to its subscribers. The NPRM also seeks comment on the “digital divide” by by asking how the proposals would affect groups who disproportionately use mobile broadband service and whether any parts of the nation are being left behind in the deployment of new broadband networks. Initial comments are due July 15, 2014.

The full text of the NPRM has not yet been released, but according to the summary released by the FCC, it will contain six core proposals:

  1. Retain the scope and definitions adopted in the 2010 Open Internet Order
  • These were not affected by the Court’s January opinion. The NPRM, however, seeks comment on whether wireless providers should be subject to the same rules as wireline providers, even though the 2010 Order did not impose the anti-discrimination rule on wireless providers.
  • The 2010 order applied to broadband Internet access service providers, but not enterprise services, Internet traffic exchange and specialized services.
  1. Enhance the transparency rule that survived the DC Circuit review
  • Broadband providers would be required to provide consumers, edge providers, and the FCC with tailored disclosures, including information regarding congestion that impacts consumers’ online experience and timely notice of new practices
  • Asks whether broadband providers should be required to disclose specific network practices, performance characteristics (e.g., effective upload and download speeds, latency and packet loss) and/or terms and conditions of service to end users (e.g., data caps)
  • Tentatively concludes that broadband providers should disclose “meaningful information” about the service, including (1) disclosures to end users, (2) congestion that may adversely impact the experience of end users, including at interconnection points, and (3) information about new practices, like any paid prioritization, to the extent that it is otherwise permitted
  1. Adopt the text of the 2010 “no blocking” rule so that ISPs must provide a minimum level of access to their subscribers
  • Proposes a requirement that all users must have access to fast and robust service: consumers must have access to the content, services and applications they desire. Innovators and edge providers must have access to end-users so they can offer new products and services
  • Considers ensuring that these standards of service evolve to keep pace with of innovation
  1. Replace the “anti-discrimination” rule with a rule barring discrimination that is not “commercially reasonable,” consistent with the DC Circuit’s opinion
  • The NPRM seeks comment on what types of discrimination should be prohibited and what discrete factors (such as whether conduct hurts consumers, competition, free expression and civic engagement) the FCC should consider in evaluating whether an arrangement between an ISP and a content provider is reasonable.
  • Tentatively concludes that priority service offered exclusively by a broadband ISP to an affiliate is unlawful until proven otherwise
  • Seeks comment on whether FCC can bar all paid prioritization
  • The Chairman stated clearly that nothing in the NPRM authorizes “paid prioritization.” He expanded on this by suggesting that it would be unreasonable for an ISP to deny its customer the “contracted for pathway” by either blocking third party content or reducing the speed. In other words, the Chairman suggests it would be unreasonable for an ISP to charge a third party content provider for bandwidth for which the ISP’s subscriber has already paid. Left unstated was whether it would be reasonable for the content provider to pay extra to enhance the delivery of its content by increasing the bandwidth above the level for which the ISP’s subscriber has paid. While Chairman Wheeler emphasized that there is only “one Internet,” not a fast Internet and a slow Internet, and that he opposes any effort to divide the Internet into “haves and have nots,” the NPRM will seek comment on paid prioritization agreements. He stated Further details on these issues will be forthcoming once we review the NPRM.
  1. Legal Framework
  • Proposes to continue relying on Section 706 of the 1996 Act as its source of legal authority since the DC Circuit endorsed that analysis
  • In response to the torrent of criticism from Net Neutrality proponents and fellow Commissioners, the Chairman revised the NPRM to seriously consider whether the FCC should reclassify broadband Internet Service to include a Title II telecommunications service, in order to enhance the chances that the proposed rules prohibiting blocking and certain types of traffic discrimination survive judicial review.
  • Seeks comment on the benefits of both Section 706 and Title II, including the benefits of one approach over the other to ensure the Internet remains an open platform for innovation and expression. Also explores other available sources of legal authority, including also Title III for wireless services
  1. Speed enforcement by creating an Ombudsperson position within the FCC
  • Ombudsperson would have significant enforcement authority to serve as a watchdog and advocate for start-ups, small businesses and consumers.
  • Seeks comment on how to ensure that all parties, and especially small businesses and start-ups, have effective access to the Commission’s dispute resolution and enforcement processes
  • Considers allowing anonymous reporting of violations to alleviate fears by start-ups of retribution from broadband providers

We will provide further details on the FCC’s proposals once we receive the NPRM.

This article was originally published by Bingham McCutchen LLP.