Last month an appeals court ruling had everyone wondering if Internet as we know it was over. Verizon successfully stopped implementation of the Federal Communications Commission’s Open Internet Rules, which would have required all broadband providers to grant equal access to content. In its ruling the court said that while the FCC had some authority, they could not make rules that mandated certain behavior because Internet providers are not telecoms.
Now the FCC is going to try again.
One of the options discussed at the time of the ruling was rewriting the rules more narrowly. On February 19, 2014 – just one month after the ruling – the FCC Chairman Tom Wheeler issued a statement announcing they were once again focusing on the issue. The announcement was more of an outline of steps to be taken and geared towards avoiding the pitfalls of the previous efforts.
First on the list are proposing new rules.
In an effort to ensure content providers are given equal access, the FCC is focusing on three areas they feel will not violate previous court rulings. The first is to increase transparency of network operations. They are going to examine ways to better enforce already existing transparency rules and look for ways to enhance. The goal would be to inform content providers how network traffic is managed by network operators so that they can better adjust their content and make informed business decisions.
The FCC will also examine how to address the court’s opinion that the FCC did not provide a sufficient legal rationale to ban the actual blocking of Internet traffic. They also will look into ways to justify their authority to enforce the non-discrimination rules, an authority the court ruled they did not have. The court understood the need for both actions, but agreed with Verizon that current law does not allow the FCC to do so in the manner previous rules required. To address both issues, the Commission is looking into the authority of a different section of the Telecommunications Act of 1996 that would allow them to do so.
While the rules still have to be written and public opinion sought, the Commission is also planning to pursue an interesting legal angle that was suggested in a separate judge’s opinion. Many cities have tried to create a broadband public utility. When they approach an existing telecom, many refuse to do so as they do not wish to have competition. Some cities have gone as far as building their own infrastructure, only to be stopped – or at least slowed down – by lawsuits initiated by commercial broadband providers. Many states, under the lobbying efforts of broadband and wireless providers, have laws on the books that prevent cities from providing broadband services to their residents.
The question is, do they have a right to?
The Internet is complicated network of interconnected parts that work to transmit data efficiently. Content providers use numerous content delivery networks (CDNs) to get their content to their audience as quickly as possible. ISPs (Internet Service Providers) control the so-called “last mile” of the network – the one that reaches millions of consumers. Content providers have numerous choices of CDNs, who they pay to deliver their content to the part of the network controlled by a company like Verizon or AT&T, for example.
While the CDNs pay to access the ISP’s network (there are various types of arrangements within the industry), the content providers do not pay the ISPs directly. The recently announced deal between Comcast and Netflix is a rare example of a content provider paying an ISP to connect directly to that last mile. Netflix usually goes through CDNs, but is building its own delivery network to bypass them.
An ISP that is a public utility could provide better access to that last mile for less cost — even for free. Residents would benefit as the related cost charged by the local government would not have a profit incentive. The FCC will look into the legality of state bans against cities providing these networks.
Of course, the FCC could just reclassify broadband providers as a utility.
Prior to 2005, broadband was classified as a telecom. With that came strict regulatory oversight and a requirement to be nondiscriminatory when providing access – much like the goal of net neutrality. That year, which was during the Bush administration, they changed the classification to an information service. In the absence of Congress changing the law to give the FCC more regulatory authority over information services, the current commission does have the option to do the reclassification.
Wheeler’s statement made sure to point that out.
The new enforcement rules will contain language to deal with violations that are deemed discriminatory or otherwise antithetical to the concept of an open Internet by noting that it will be done on a case by case basis instead of an overall mandate. This would keep in line with the judge’s order that ruling by mandate as regards to ISPs is not within their authority. For now, the commission’s plan for net neutrality is one of gentle coercion, while carrying the big stick of reclassification.