Thursday, May 15, 2014

FCC Moves to Amend Net Neutrality Rules as it Asserts Authority over Broadband

The FCC voted 3-2 to approve a Notice of Proposed Rulemaking covering how broadband providers should be regulated in the United States.  With this proposal, the FCC proposes is seeking to impose rules based on a legal blueprint set out by the United States Court of Appeals for the District of Columbia Circuit in its January decision in Verizon v. FCC and its authority to promote broadband deployment under Section 706 of the Telecommunications Act of 1996.  The FCC is still considering a legal route to assert authority over broadband operator under Title II of the Communications Act.

The Proposed Rulemaking seeks to defend previously established principles of an Open Internet by enforcing a "no-blocking" requirement on network operators.  The FCC is also seeking to codify the principle that priority service offered exclusively by a broadband provider to an affiliate should be considered illegal "until proven otherwise."

The FCC is seeking public input over the next four months.

The full text of the Notice of Proposed Rule Making (99 pages) is posted here:
http://www.fcc.gov/document/protecting-and-promoting-open-internet-nprm

The video of the FCC meeting is posted here (3 hours and 13 minutes):
http://www.fcc.gov/events/open-commission-meeting-may-2014




In January 2014, the United States Court of Appeals for the D.C. Circuit ruled that the FCC overstepped its boundaries in setting Net Neutrality rules that compel broadband providers to treat all Internet traffic the same regardless of source.  
The court found that even though the FCC has general authority to regulate the Internet, it has previously chosen to classify broadband providers in a manner that exempts them from treatment as common carriers and the Communications Act expressly prohibits the Commission from regulating them as such. The court therefore decided to vacate portions of the Open Internet Order because broadband providers do not have to meet common carrier obligations.

In December 2010, the FCC approved new Open Internet rules governing the management of Internet traffic, with the three Democrats on the commission voting in favor of the measure and the two Republicans voting against.

Key elements of the Open Internet Order included:

Rule 1: Transparency -- A person engaged in the provision of broadband Internet access service shall publicly disclose accurate information regarding the network management practices, performance, and commercial terms of its broadband Internet access services sufficient for consumers to make informed choices regarding use of such services and for content, application, service, and device providers to develop, market, and maintain Internet offerings.

Rule 2: No Blocking -- A person engaged in the provision of fixed broadband Internet access service, insofar as such person is so engaged, shall not block lawful content, applications, services, or non-harmful devices, subject to reasonable network management. A person engaged in the provision of mobile broadband Internet access service, insofar as such person is so engaged, shall not block consumers from accessing lawful websites, subject to reasonable network management; nor shall such person block applications that compete with the provider's voice or video telephony services, subject to reasonable network 

Rule 3: No Unreasonable Discrimination -- A person engaged in the provision of fixed broadband Internet access service, insofar as such person is so engaged, shall not unreasonably discriminate in transmitting lawful network traffic over a consumer's broadband Internet access service. Reasonable network management shall not constitute unreasonable discrimination.

Significantly, "reasonable network management" was defined as follows: "A network management practice is reasonable if it is appropriate and tailored to achieving a legitimate network management purpose, taking into account the particular network architecture and technology of the broadband Internet access service. Legitimate network management purposes include: ensuring network security and integrity, including by addressing traffic that is harmful to the network; addressing traffic that is unwanted by users (including by premise operators), such as by providing services or capabilities consistent with a user's choices regarding parental controls or security capabilities; and by reducing or mitigating the effects of congestion on the network." The FCC rules go on to say that "Pay for Priority" delivery of packets on wireline broadband networks is likely to run afoul of the "no unreasonable discrimination" clause because it would represent a significant departure from current practices.

Mobile broadband was largely exempt from the "reasonable network management" clause, as the document acknowledges that this market is an earlier-stage platform than fixed broadband, and it is rapidly evolving. 

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