The FCC finally has control over broadband Internet Service Providers (ISPs) such as Comcast, Verizon, and Sprint. On February 26, 2015, the agency decided to employ Title II of the Communications Act of 1934, empowering itself to implement net neutrality rules.
The dramatic rise of Internet video, occupying a rapidly growing share of our aggregate bandwidth, fueled this raging debate over the rules of the road. The discourse devolved into a conflated cacophony of political and technical jargon, all under the guise of net neutrality.
Just about everyone favors an open Internet. But by picking this particular path, did the FCC undermine another critically important objective for our nation’s broadband future: a more competitive market, leading to much higher Internet speeds at lower prices? To understand how this occurred, and what it means, a brief chronology is in order.
- In 2002, the FCC classified broadband cable modem access as a lightly regulated “information service,” citing national priorities of capital investment and innovation.
- In 2005, the Supreme Court affirmed the FCC classification in a 6–3 decision (the “Brand X” case), and DSL-based Internet access was included the next month.
- In 2010, the FCC issued its Open Internet Order governing traffic policies of broadband ISPs. These net neutrality rules dictated “no blocking” of legal content, services, and apps; “no unreasonable discrimination”; and “transparency” with respect to business policies and network management.
- In 2014, the US Court of Appeals for the DC Circuit voided the FCC’s preexisting net neutrality rules (in Verizon v. FCC), finding the “no blocking” and “no unreasonable discrimination” rules beyond the agency’s authority.
- On February 26, 2015, the FCC voted 3–2 to regulate broadband ISPs under Title II of the Communications Act of 1934. Two weeks later, the FCC issued the specific rules in a new Open Internet Order. It’s a lengthy document, mandating “no blocking” and “no throttling” (no degradation) of legal content, in both cases, subject to “reasonable network management,” and “no paid prioritization” (i.e., ISPs can’t accept money in exchange for establishing “fast lanes”).
In this far-reaching decision, the FCC apparently concluded that its best recourse was to invoke portions of an 80-year-old law designed for monopoly public utilities. The rules sound reasonable on the surface, but the implications are less clear. For example, there is a fine line between reasonable network management and traffic interference, a fuzzy distinction for which the FCC will be the arbiter on a case-by-case basis.
There may have been more modern methods for ensuring that broadband ISPs would not misbehave, such as using the Telecommunications Act of 1996, or even pursuing a new law. And it remains to be seen whether Title II will legally hold water with respect to banning paid prioritization (express lanes). But given the current dysfunction in DC, it is no wonder that the FCC jumped on the Title II bandwagon.
Does the FCC’s Title II remedy match the situation, or is it a solution chasing a problem? Similarly, are the new rules mostly preventative, or are they based on a pattern of specific and substantial transgressions by broadband ISPs? Finally, what will be the long-term effects on the US market and broadband infrastructure?
Clearly, the Internet has become a fundamental and essential resource for the general population. But that does not mean that Title II is the optimal approach for achieving our country’s future Internet.
Our primary goals going forward should be:
- Sustaining an open Internet
- Encouraging more competition and innovation, and
- Creating an environment conducive to massive new infrastructure investment, especially with respect to bandwidth expansion and maximal reach.
Title II was certainly one way to achieve the first goal, an open Internet. But did the FCC just hit a simple nail with a crude sledgehammer, potentially undermining the second and third goals?
Stay tuned for Part II.