FCC Commences "Net Neutrality" Rulemaking
The Federal Communications Commission (FCC) voted Thursday, Oct. 22, 2009, over two partial dissents, to commence a rulemaking designed to impose “network neutrality” rules on Internet service providers, including nondiscrimination obligations, limits on network management techniques, and disclosure requirements. Although only an opening step in adopting regulatory controls on the Internet, the proposal has already generated impassioned debate as an underlying battle continues between those who operate at the “edge” of the Net and those who operate the broadband facilities that enable today’s Web experiences.
This proposal continues a long slide away from the express national policy of fueling Internet development by keeping it free of government regulation. By 1996 statute, Congress declared it to be U.S. national policy to keep the Internet “unfettered by Federal or State regulation.” In 2005, the FCC adopted four “principles” of Internet openness, which included the right of consumers to access lawful Internet content, and to run applications, and use services, of their choice. At the time, the FCC announced that these principles were not rules. In 2008, the FCC issued an Order (by 3 to 2 vote) that Comcast discontinue a network management technique that had the effect of giving slightly lower priority to some peer-to-peer (P2P) upload sessions so that the latency-sensitive applications of the vast majority of its Internet customers would remain uninterrupted. The legality of that Order was challenged and remains on appeal in the U.S. Court of Appeals for the D.C. Circuit. As in 2008, today’s announcement did not clarify the basis in current law to regulate “net neutrality.” Like the earlier Comcast Order, this Notice infers regulatory authority from the prefatory provisions of Title I of the Communications Act, which have historically been used only as “ancillary” authority to support other, express grants of authority to the Commission.
The proposed rules
The Commission has published a detailed Notice of Proposed Rulemaking and a two-page set of draft regulations that propose to convert the existing FCC “principles” of Internet openness into enforceable regulations. These rules would require Internet service providers: (1) to permit users to access and send lawful content of the user’s choice; (2) to run lawful applications and services of the user’s choice; (3) via lawful devices that do not harm the network; and (4) not to deprive users of competition among providers of networks, applications, services and content. To these four rules, the Commission would add an obligation to provide access in a nondiscriminatory manner; the right to employ reasonable network management practices; and a duty to disclose the information reasonably necessary for users as well as content, application, and service providers to enjoy the protections established in the regulations. By “nondiscriminatory,” the Commission means specifically that no charge should be applied to content, application, or service providers for enhanced or prioritized access to Internet subscribers. By “lawful,” the Commissioners say they mean that principles of openness cannot be used as a shield against copyright infringement, or against management techniques that protect end users against unwanted malware and spam. The rules are also subject to the obligations that Internet service providers may have for law enforcement, emergency communications, public safety, and national and homeland security needs.
Discussion among the Commissioners revealed familiar fault lines between those who are prone to see innovation without permission as unique to the “edge,” and those who see innovation and investment as being equally essential in the core of the network. Also in play are reciprocal warnings about the need for prophylactic rules against gatekeepers with the presumed incentive to discriminate, and warnings against centralized government controls, which are anathema to the Internet and to its democratization power generally. Chairman Julius Genachowski has tried to bridge those extremes, at least in approach. “Tentative conclusions” were purged from the item in the weeks preceding the vote; rules have been published as first drafts for comment; ample questions are raised—even about potential obligations of providers at the edge; and procedures have been kept open. Chairman Genachowski is trying to position the either/or positions as false choices and the role for government intervention as carefully limited but essential, and conducive to investment and innovation both at the edge and the core of intelligent networks.
The proposed regulations are subject to “reasonable network management.” This includes techniques to reduce or mitigate congestion, to address quality of service concerns, to protect end users against unwanted or harmful traffic, to prevent unlawful content like child pornography, to address copyright infringement, and “other” reasonable network management practices. Missing from the proposal was what the FCC had announced in its 2008 Comcast BitTorrent order, where it overlaid a new principle of “strict scrutiny” that would be applied to management techniques the FCC considered to discriminate among protocols. New was an explicit recognition by Chairman Genachowski and Commissioner Michael Copps that management techniques that might have been appropriate for congestion avoidance in the past may no longer be appropriate in a world of P2P and video streaming, and that any regulation should be flexible enough to accommodate continued evolution in techniques.
Wireless and other platforms
The proposed Notice proposes to apply these regulatory principles of openness to all broadband (not dial-up) platforms, including mobile wireless and satellite. But the Notice asks how, when, and to what extent the rules should apply to non-wireline platforms operating with different technologies, market structures, consumer usage, and regulatory differences. The Notice also clarifies that “openness” would not necessarily prohibit handset locking, and repeatedly contemplates a different time line for wireless regulation than for wireline.
The order also invites comment on the policy approach toward “managed” or “specialized” Internet Protocol (IP) services. The proposed regulations appear open to applying different principles to managed services such as voice, subscription video, enterprise and business services, telemedicine, smart grid and e-learning, and other services. Policymakers have previously acknowledged the legitimacy of IP managed services. For example, the FCC’s 2007 AT&T-BellSouth merger order carved out managed services from the merger condition of network neutrality. The broadband stimulus Notice of Funds Availability (NOFA) likewise carves out “managed services … such as telemedicine, public safety communications, and distance learning” from the NOFA obligation not to favor any lawful Internet applications and content over others. But some have also expressed concerns that the widespread deployment of such networks could create an Internet “fast lane” that discriminates in favor of particular providers or that diminishes the utility of "best efforts" Internet service. A net neutrality bill recently introduced by Reps. Edward Markey and Anna Eshoo seems to start from the opposite premise, contemplating that “private transmission capacity” and Internet access service would both be subject to non-discrimination requirements. The proposed regulations appear to be more sensitive to allowing innovation in IP managed services outside of “open Internet” regulations.
Technical outreach and comments
Julius Knapp, chief of the Office of Engineering & Technology, will be leading a simultaneous technical advisory outreach to provide solid engineering advice on: reasonable network management; transparency and disclosure; and quality of service.
The text of the Notice is available here. Comments will be due Jan. 14, 2010, with replies due March 5, 2010. Other avenues for comment will include workshops, blogs, and other on-line vehicles.