Radical – and imminent – changes in broadband regulation revealed by FCC chair

by Steve Blum • , ,

A turning point in the battle.

“Retail broadband service Americans buy from cable, phone, and wireless providers” and “the service that broadband providers make available to ‘edge providers'” will be classified as common carrier services, according to a press release from FCC chair Tom Wheeler this morning. The draft ruling that’s circulating at the FCC now would regulate pretty much any kind of Internet access or service using both title II (the common carrier section) and section 706 (the current source of the FCC’s broadband authority) of federal telecoms law.

The short version is…

Bright Line Rules: The first three rules would ban practices that are known to harm the Open Internet:

  • No Blocking: broadband providers may not block access to legal content, applications, services, or non-harmful devices.
  • No Throttling: broadband providers may not impair or degrade lawful Internet traffic on the basis of content, applications, services, or non-harmful 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 ISPs from prioritizing content and services of their affiliates.

Wheeler is also proposing to set a general standard to guide future decisions, but didn’t say what it is, and wants more transparency from providers. There’s also a loophole of sorts, which allows ISPs to “other than paid prioritization … engage in reasonable network management”. Whether it’s a reasonable balance of technical necessity and network neutrality interests, or a gift to Wheeler’s lobbyist colleagues is unclear – details weren’t released – but some restrictions were outlined…

  • In assessing reasonable network management, the Commission’s proposed standard would take account of the particular engineering attributes of the technology involved—whether it be fiber, DSL, cable, unlicensed wireless, mobile, or another network medium.
  • However, the network practice must be primarily used for and tailored to achieving a legitimate network management—and not commercial—purpose. For example, a provider can’t cite reasonable network management to justify reneging on its promise to supply a customer with “unlimited” data.

Wheeler’s statement also includes some details about what will and won’t be included in the new rules – what will be subject to “forbearance” in the jargon. The new rules won’t include…

  • Rate regulation: the Order makes clear that broadband providers shall not be subject to tariffs or other form of rate approval, unbundling, or other forms of utility regulation
  • Universal Service Contributions: the Order DOES NOT require broadband providers to contribute to the Universal Service Fund under Section 254
  • The Order will not impose, suggest or authorize any new taxes or fees – there will be no automatic Universal Service fees applied and the congressional moratorium on Internet taxation applies to broadband.

But other aspects of common carrier regulations will apply, such as a ban on “unjust and unreasonable practices”, investigation and enforcement authority regarding consumer and industry complaints, consumer privacy protections, and some measure of universal service fund support.

“Data services” that “do not go over the public Internet, and therefore are not ‘broadband Internet access’ services” will be addressed somehow – it sounds like Wheeler wants to avoid a loophole in this case – but not under common carrier rules. Heart monitoring and “VoIP from a cable system” are given as examples. One huge question will be whether digital video service – cable, telco and satellite – fall into that category too.

Wheeler also proposes to apply section 224 of the telecoms law to the broadband world, which, he says, “ensures fair access to poles and conduits…which would boost the deployment of new broadband networks”. That’s a provision that Google particularly requested.

Wheeler seems to be heading toward a harmonisation of the rules that separately govern wired and wireless technologies, and broadband and telephone service. It’s a radical change in the way the digital world is run, and it will take years to sort out the impact on monopoly-scale behemoths and local ISPs alike. There’s also the huge issue of what role the states will play in the new game – telecoms law splits responsibility for managing common carrier regimes between the FCC and state regulators, such as the California Public Utilities Commission.

Based on past statements, and the assumption that an experienced political operator like Wheeler counts votes before he speaks, two commissioners – Rosenworcel and Clyburn – will vote to approve the chairman’s draft, which is all that’s needed. The vote is scheduled for 26 February 2015.