FCC Chief Proposes What He Calls Strongest Net Neutrality Rules Ever

Industry officials concerned about the proposal conceded the momentum is all in the direction of a 3-2 vote in favor of the rules, largely as proposed by Wheeler, at the FCC’s Feb. 26 meeting. A senior FCC official wouldn't say specifically that the FCC won’t seek comment on parts of the rules but clarified the FCC’s goal is to answer all questions in the February order.

The FCC released a fact sheet outlining the order's broad parameters. FCC officials said Wheeler will propose rules giving the FCC, for the first time, authority to regulate interconnection, forbearing from all but eight core parts of Title II (see 1502040052). The draft order proposes bright line rules against blocking, throttling and paid prioritization, officials said. The FCC’s 2010 rule on transparency would remain in effect. On interconnection issues, a company would still have to bring a complaint to the FCC for it to consider in more depth, officials said.

A senior official clarified the order will rely on Section 706 and Title III, the radio title, of the Communications Act in addition to Title II, giving the FCC what it sees as firm legal footing. Officials also made clear the rules will apply equally to mobile and fixed broadband. The officials said the rules allow all companies, not just wireless carriers, to utilize reasonable network management practices, provided that they're aimed at achieving legitimate network management and not to benefit an ISP commercially.

The FCC won't prohibit zero-rating, per se, though such practices could be blocked if they're found to be anticompetitive or unreasonably harm consumers under the agency’s new general conduct standard, a senior official said. A second senior official said the order doesn't put the FCC on the path to rate regulation of the Internet.

Wheeler wrote in Wired he originally believed the FCC could “assure internet openness through a determination of ‘commercial reasonableness’ under Section 706 of the Telecommunications Act of 1996.” The U.S. Court of Appeals for the D.C. Circuit’s decision last year in Verizon v. FCC (see 1401150046) “seemed to draw a roadmap for using this approach,” Wheeler said. But then he “became concerned that this relatively new concept might, down the road, be interpreted to mean what is reasonable for commercial interests, not consumers.” Wheeler said the Internet would have never emerged in the first place “if the FCC hadn’t mandated open access for network equipment in the late 1960s.” President Barack Obama in November encouraged the FCC to reclassify broadband as a Title II service.

“I strongly oppose the President’s plan, which will raise consumers’ broadband bills, slow broadband speeds, and reduce competition,” said Republican FCC Commissioner Ajit Pai, saying he would voice his "concerns in more detail in the days to come.”

"While the Chairman has not yet shared the draft order, it is disheartening to see just how far he intends to stray from the hands-off regulatory approach that has allowed the Internet to thrive," Commissioner Mike O'Rielly said in a statement.

Michael Copps, an FCC commissioner when the original rules were approved in 2010, told us there’s no question the proposed rules are the strongest ever because the earlier rules were “weak porridge.” The FCC is now headed in the right direction, he said. “It strikes me as kind of the right mix of general policymaking with some specifics, but also recognizing that technology evolves and circumstances evolve and public policy will evolve too.”

“The FCC has made it crystal clear that it is not resurrecting the retail price regulation of the 1992 Cable Act,” said former FCC Chairman Reed Hundt in an interview. Hundt had to implement those rules as chairman and now is a board member for a rural cable company. “Cable should rest easy that this order will have zero impact on the economics of cable broadband.”

Reclassification is now “inevitable,” said Hal Singer, senior fellow at the Progressive Policy Institute. “I have no faith [Wheeler] could refrain from embracing those horrific policies if Free Press were to send a few more protestors to his house and John Oliver were to make an impassioned plea for unbundling,” Singer said. “Tweaking this order would be like putting lipstick on a pig. The order is destined to be vacated by the D.C. Circuit. There is no saving it. Let the litigation begin.” Oliver is the HBO TV host who made fun of the originally proposed rules last summer, leading to massive public response (see 1406030041).

Free Press Policy Director Matt Wood said in a statement the move came after “a decade of dedicated grassroots organizing and advocacy.” With the Wheeler statement, “We’re now one step closer to restoring real public interest protections to our nation’s communications policies,” Wood said. The rules have to apply equally to mobile because most Internet traffic will soon be on wireless devices, said Michael Calabrese, director of the Wireless Future Project at New America’s Open Technology Institute.

Internet Association President Michael Beckerman welcomed the development in a statement. “The details and implementation of the proposal matter, and we look forward to seeing the text of the order to ensure that a free and open Internet is fully protected,” he said.

AT&T Senior Executive Vice President Jim Cicconi said he hopes the FCC, working with industry, can find a middle ground. “We were able to find such a path in 2010, and will do our very best to seek such a path today,” he said.

Opponents of reclassification issued statements warning of the negative implications of the rules. Mobile Future Chairman Jonathan Spalter said the rules “could have grave implications for mobile innovators, investors and consumers.” Verizon said reclassification was “unnecessary and counterproductive.” USTelecom President Walter McCormick called reclassification “unnecessary and unwise.”

“The Internet economy, developed without federal regulation, is one of the few bright spots in an otherwise stagnant American economy,” said former FCC Commissioner Harold Furchtgott-Roth. “Regulating the Internet will not help America. It will hurt. It will discourage investment in networks. It will discourage the development of a faster, more consumer-friendly Internet.”

“Wheeler’s Wired op-ed repeats false claim that mobile broadband [was] regulated under Title II,” tweeted Richard Bennett, visiting fellow at the American Enterprise Institute. “Just causes don’t need lies.”