FCC Doubles Down on Open Internet: Title II Regulation Brings Bright Line Rules for Broadband Providers

In a Fact Sheet released February 4, 2015, the Federal Communications Commission ("FCC") provided a preview of its next foray into the controversial Open Internet debate. Following up on its proposal from one year ago, the FCC reports that new rules are being prepared that would reclassify broadband internet as a telecommunications service, which is regulated under Title II of the Communications Act of 1934, thus definitively bringing broadband internet clearly within the FCC's oversight.

The forthcoming order is a direct response to the 2010 case Verizon v. FCC, in which the U.S. Court of Appeals for the DC Circuit struck down the bulk the FCC's attempt to codify network neutrality principles into its rules. The DC Circuit ruled that common carrier-style regulations simply could not be applied to a service that was not regulated under Title II. In this order, the FCC will seek to conclusively assert jurisdiction over "broadband Internet access service," the retail internet service that Americans buy from cable, phone, and wireless providers, by reclassifying it as a telecommunications service under Title II. The FCC will also reassert its existing authority under Section 706, which survived judicial review, to protect and promote the "virtuous circle" of network innovation and infrastructure development.

This proposed order would restore and expand the applicability of the Open Internet rules that were struck down in 2010, broadening their effect from only fixed broadband providers to all providers of broadband internet, including wireless carriers. The FCC explains that these "bright line" rules would "ban practices known to harm the Open Internet":

• No Blocking: Broadband providers may not block access to legal content, applications, services, or nonharmful devices.
• No Throttling: Broadband providers may not impair or degrade lawful internet traffic on the basis of content, applications, services, or nonharmful devices.
• No Paid Prioritization: Broadband providers may not favor some lawful internet traffic over other lawful traffic in exchange for consideration—in other words, no "fast lanes." This rule also bans internet service providers ("ISPs") from prioritizing content and services of their affiliates.

In addition to these bright-line rules, the FCC also proposes several broad principles to elaborate on the its theme of protecting consumers.

• "Do No Harm": Because of the constant growth and change of the internet, myriad fact-specific questions will arise that cannot be covered by specific rules. The FCC therefore seeks to establish a "known standard" by which new practices can be judged. The FCC proposes a general Open Internet conduct standard that "ISPs cannot harm consumers or edge (content) providers."
• Greater Transparency: The FCC announces that its forthcoming order will enhance the broadband transparency rules that require ISPs to disclose information regarding their network management practices, performance, and commercial terms.
• Reasonable Network Management: The FCC makes clear that reasonable network management must be "legitimate" and not invoked to justify a "commercial purpose," such a reneging on a promise to supply a customer with "unlimited" data.

Out of deference to concerns from industry that increased oversight will bring increased regulatory burdens, the FCC clarifies that it will forbear from enforcing elements of Title II regulation that are not in the public interest. In particular, the FCC intends to categorically refrain from regulating the rates of broadband internet providers, or imposing new taxes or fees, such as Universal Service Fund contribution obligations that currently apply to providers of telecommunications. The order also seeks to promote broadband deployment by ensuring access to poles and conduits, and increasing Universal Service Fund support for broadband service.

The order will be on the agenda for the upcoming February 26, 2015, FCC Open Meeting, and it will likely pass on a party-line vote. At least one broadband provider, AT&T, has already signaled that it would challenge the new rules in court, arguing that the throttling, blocking, and prioritization functions are reasonable network management, even when applied for business reasons, and that broadband internet is inherently an information service that may not be arbitrarily reclassified. Thus, the FCC's forthcoming order is likely be a decisive new chapter in the Open Internet debate but will certainly not be the end of the story.