FCC adopts Net Neutrality guidelines in opposition to service providers

Despite protests from communications service providers, the FCC today adopted Net Neutrality guidelines by a three-to-two partisan vote, with Democratic commissioners—including Chairman Julius Genachowski—voting in favor of the guidelines and the two Republican commissioners dissenting.

Three high-level rules

As FCC officials told reporters in a preview announcement yesterday, the new guidelines include three basic rules. These include transparency, as well as prohibitions on content blocking and unreasonable discrimination. The rules apply to both wireless and landline carriers, but the blocking requirements will be a bit more lenient for wireless service providers.

Although the three high-level rules do not specifically prohibit service providers from charging more for paid content, FCC officials told reporters yesterday that the detailed guidelines, which have yet to be released, will show that paid-for prioritization will be prohibited as part of the “no unreasonable discrimination” requirements. And in his remarks at the FCC meeting today, Genachowski said, “We are making clear that we are not approving so-called ‘pay for priority’ arrangements involving fast lanes for some companies but not others.”

The legal justification

The new guidelines do not involve a reclassification of broadband as a communications, rather than an information service. Instead, FCC General Counsel Austin Schlick at the FCC meeting said the FCC draws its authority from Section 706 of the 1996 Telecommunications Act, which says the FCC has “authority and discretion to settle on the best regulatory or deregulatory approach to broadband.”

FCC Chairman Julius Genachowski said the new rules will “preserve Internet freedom and openness,” “foster an ongoing cycle of massive investment, innovation and consumer demand,” “strengthen the Internet job-creation engine” and “advance our goal of having America’s broadband networks to be the free-est and fastest in the world.”

But dissenting commissioner Robert McDowell had a harsh rebuttal, accusing colleagues of making law, rather than enforcing it, and acting as a bad example to other nations. “Instead of acting as a cop on the beat, the FCC looks more like a regulatory vigilante . . . and has plotted a collision course with the legislative branch,” he said.

McDowell also argued that the use of the word “reasonable” is highly subjective, that it is the single most litigated term with highly subjective definitions and that its use in the guidelines could set a bad example in the international arena.

What happens next

Moving forward, here’s what’s likely to happen:

- The order adopted today has not yet been made public but FCC officials said it would be available in a few days, at which point more detailed reactions from stakeholders will be made known.
- AT&T, Verizon and the major cable companies undoubtedly will fight the new guidelines, arguing that the FCC does not have authority to implement them. Although wireless carriers have been relatively quiet on this topic to date, there is a possibility they could join with their landline competitors.
- Service providers have said Net Neutrality guidelines would cause them to reduce investment in network infrastructure and potentially threaten jobs. They will now need to demonstrate whether or not that claim will be true.
- The new guidelines also will have little support from the more heavily Republican Congress that was elected in November. The new chair of the House commerce committee, for one, has vowed to end an “unfettered two-year assault” on the telecommunications sector.
- Meanwhile, traditional Net Neutrality supporters are likely to argue that the new guidelines do not go far enough because they do not prevent paid-for prioritization as explicitly as those supporters would have liked.
- The guidelines call for consumers to be able to lodge a complaint with no fee through a web site, which sounds like a great way to open the FCC up to a flood of new work. Few additional enforcement details are known at this time.