FCC Chairman Wheeler Outlines Proposal for Net Neutrality Regulations

On Feb. 4, 2015, Federal Communications Commission (FCC) Chairman Tom Wheeler published an opinion piece on Wired outlining new Net Neutrality regulations coming from the FCC.¹ Net Neutrality is a hot button topic, and the Wheeler proposals are a dramatic new development.

Ensuring Net Neutrality means adopting policies that prevent Internet Service Providers (ISPs) from blocking or slowing normal commercial content on the Internet or charging access fees to content providers to get “prioritization,” that is, faster or better service than competitors for specified content. While almost nobody will publicly disagree with the broad principles of Net Neutrality, the ISPs argue in favor of a free market approach to achieving it, while content providers and consumer groups seek government assurances that anti-discriminatory principles will be followed.

In 2002, the provision of Internet and broadband access was classified as an information service under Title I of the Communications Act of 1934. As a result, there was no legal protection for Net Neutrality. The FCC twice published Net Neutrality principles under Title I, losing to ISP challenges each time. In Verizon v. FCC, 740 F.3d 623 (D.C. Cir. 2014), the Court of Appeals for the District of Columbia Circuit rejected the FCC’s second set of proposed Net Neutrality regulations because the rules treated broadband providers as entities regulated under Title II of the Act.² The court held that the FCC had regulatory power to impose Net Neutrality standards, but not under Title I.³ The court effectively invited the FCC to adopt a Title II regulatory program.

The newly-proposed rules accept the court’s invitation by declaring the Internet to be a public utility under Title II. The regulations under the Wheeler proposal would:

1. Ban paid prioritization: providers may not favor some lawful Internet traffic over others due to consideration paid, providers are also banned from prioritizing content and service of affiliates;⁴
2. Ban blocking of Internet: providers may not block “legal content, applications, services, or non-harmful devices”;⁵ and
3. Ban throttling of content and services: providers will not able to impair or degrade lawful Internet traffic “on the basis of content, applications, services, or non-harmful devices.”⁶

Under the proposed rules, the FCC will also modernize the application of Title II. Through a process known as “forbearance,” the FCC will decline to impose the most familiar, traditional and onerous telecommunications industry regulations on ISPs: there will be no tariffs or rate regulation, and ISPs will not be required to share their infrastructure with competitors.⁷ Other Title II provisions, however, will apply, including consumer complaint investigations and guaranteed access to utility poles and conduits for deployment of broadband networks.⁸ The FCC will encourage investment in broadband networks under its statutory authority in Section 706 of the Communications Act. Under the proposed rules, the application of the “just and reasonable” standard under Title II and application of Section 706 will allow the FCC to block actions that violate Net Neutrality principles.

The Wheeler proposals are a major step in the public debate about the future control of the Internet. ISPs are expected to challenge the proposals in court and congressional Republicans have introduced bills proposing a different route to Net Neutrality. The debate will continue.