An earlier Davis Wright Tremaine advisory described the requirements of the Federal Communications Commission’s new “net neutrality” rules—transparency, no blocking, and no unreasonable discrimination. It also noted that the legal analysis in the Net Neutrality Order (NNO) “may stretch the FCC’s logic and authority beyond the breaking point.” This advisory expands on that observation. It also addresses the business, legal, and political context in which the rules were issued.
Net Neutrality Prior to the NNO
The rules are based on the FCC’s determination that regulation is necessary to assure the continued growth and development of the Internet. That is a departure from previous FCC administrations, for whom, with a few exceptions, “Hands off the Internet” was not just a slogan, but a policy.
Among those deregulatory programs, most relevant for present purposes are those classifying broadband Internet access as an “information service,” rather than a “telecommunications service.” The “classification orders” reflected the FCC’s view that broadband should be exempt from traditional common carrier / public utility regulation (e.g., the obligation to provide just, reasonable, and nondiscriminatory service upon request, transfer of control oversight, and possible regulation of rates, among others). The FCC viewed such regulation as a deterrent to broadband investment. (See this DWT advisory for analysis of the first of these orders, the 2002 Cable Modem Declaratory Ruling.)