Net Neutrality

After a down-to-the-wire push, the Federal Communications Commission recently approved by 3-2 its long-awaited regulatory proposal on net neutrality. We haven’t finished combing through the actual rules document, all 200 pages of which were recently released, but nonetheless the summary documents gave us some important hints about what the rules contain.

Contrary to some expectations, the FCC is offering new theories for its basis for regulating the Net, opting not to re-assert the “ancillary” legal theory rejected by the D.C. Circuit Court of Appeals. Following the ‘throw it against the wall and see what sticks’ approach, the FCC has volunteered a smorgasbord of potential justifications, the sum of which apparently demonstrates that "[b]roadband Internet access services are clearly within the Commission’s jurisdiction." The lead argument appears to be Section 706 of the Telecommunications Act, which requires the FCC to report to Congress and take steps to help create universal broadband availability. We’ll see if the courts agree that this allows the FCC to create broad rules of the road for the Internet.

The merits of the specific net neutrality proposals not withstanding, the FCC’s continued attempt to find a broad, unfocused basis for jurisdiction is a disconcerting strategy. An ungrounded rationale for regulatory authority is easily abused, opening the door to other, undesirable regulation.

Now to the substance. From what we’ve learned from FCC statements and bulletins, the rules appear to be riddled with loopholes and exemptions, to the point where the FCC’s declaration that the order represents bright-line rules and a framework for predictability is hard to reconcile. It’s likely there won’t be much clarity around the rules’ application until they get invoked in FCC enforcement actions or otherwise.

Following are the main points previewed in the FCC’s release:

(1) Carve-outs for wireless. The FCC order creates a subset of less restrictive rules that apply exclusively to wireless services: Wireless operators need only ensure that consumers are able to access lawful websites and also apps that compete with the providers’ own services (both requirements subject to ‘reasonable network management’ needs). In addition, the rule against unreasonable discrimination does not apply to wireless services. Similar to past proposals, only a transparency requirement in the current order applies equally to wireless and wireline. This is significantly disappointing. From a consumer perspective, we don’t see a valid distinction between wired and wireless internet use.

Reporting for FDL, David Dayen writes that FCC Commissioners Michael Copps and Mignon Clyburn, "slammed the Google-Verizon joint policy and strongly endorsed net neutrality last night at a hearing before hundreds of citizens in Minneapolis giving the Chairman of the federal agency Julius Genachowski all of the support he would need to regulate broadband Internet if he so chose." The commissioners, Dayen continues, criticized the Google-Verizon proposal saying if adopted it "would eliminate any openness provision over wireless, which is where all Internet applications are going."

Critics of the Google-Verizon proposal say it is an affront to net neutrality, which calls for information via the Internet to be easily and fairly accessible to all people. The proposal offered earlier this month maintains that net neutrality should not apply to wireless access.

The FDL post notes that Sen. Al Franken has also criticized the Google-Verizon proposal. FDL includes video of Franken addressing the two companies' ideas. "We can't let companies write the rules that we the people are supposed to follow. Because if that happens those rules will be written only to protect corporations," Franken said.

Google's team-up with Verizon sparked great consternation among supporters of net neutrality principles, with several claiming that Google had abandoned its commitment to those principles.

Jordon Rohan, an Internet analyst at Stifel Nicolaus, told The New York Times, "I don't know that Google pondered the moral decision this time. I think the business decision to cooperate with Verizon superseded the other complications and side effects that it may cause."