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The Federal Communications Commission (FCC) approved its Net neutrality policy by a vote of three to two on Thursday. This unsurprising outcome follows years of contentious debate over the best way to ensure that Internet service providers (ISPs) treat all online data and services equally, without favoring one type of content over another.
Rhetoric on both sides had been remarkably similar in recent months as the vote approached but was punctuated by mutual mistrust. By the end of Thursday’s debate—which is by no means the end of the matter—the parties agreed on the Net neutrality approach, although through different means. Expect the FCC’s decision to regulate the Internet as a utility to be challenged in the courts, through additional Congressional hearings and, ultimately, through legislation that would mitigate the agency’s authority to regulate broadband providers.
The route to Net neutrality involves a governmental reclassification of Internet access under Title II of the Communications Act. Those in support claim to be promoting “innovation” and “openness” online by preventing broadband providers from offering paid prioritization of Internet traffic as well as the blocking or throttling certain online information and services. Opponents of the FCC’s decision—large ISPs and affiliated politicians, for the most part—claim to want the same innovative and open Internet but say that these qualities can prevail only if ISPs are free to invest in network upgrades and new services, without excessive governmental oversight.
Both sides likewise base their arguments heavily on hypotheticals. Supporters of Title II reclassification point to, among other things, so-called data “fast lanes” that only large corporations—Google, Yahoo and Netflix, for example—would be able to afford. Start-ups and entrepreneurs, they say, would be relegated to delivery of data or content at slower, more affordable speeds. Opponents, meanwhile, point out that Title II is an extensive regulatory document that could, for example, enable the FCC to control the rates that ISPs charge their customers or compel broadband providers to share their networks with competitors.
The Net neutrality debate goes back more than a decade but it was the U.S. Court of Appeals for the District of Columbia Circuit’s move last year to strike down the existing Net neutrality rules in Verizon v. FCC that helped rally efforts to change broadband classification. The decision vacated parts of the FCC's 2010 Open Internet Order. The court stated that the agency did not have the authority to regulate broadband providers because it had classified them under Title I of the Communications Act as providers of an "information service."
This lit a fire under grassroots efforts by businesses and civil rights organizations, which targeted the FCC (and Chairman Tom Wheeler in particular). Their protests were followed by Pres. Barack Obama’s call for broadband service reclassification and Congress’s inability to pass its own version of a Net neutrality law. “The FCC came to the conclusion that it very much wanted to create a robust nondiscrimination rule for the Internet and decided the only way to do that without offending the ruling in the Verizon case was reclassification under Title II,” says Jim Speta, a professor at Northwestern University School of Law.
The FCC’s reclassification vote essentially codifies and preserves Net neutrality under more stringent governmental guidelines than Title I classification of the Telecommunications Act could provide, says Columbia University Law School professor Tim Wu, who coined the term “Net neutrality” in a 2003 research paper.
Wu makes no secret of his support for broadband reclassification as a means of preserving the Internet as a forum for “experimenters and entrepreneurs.” One of the problems with tiered content prioritization is that “start-ups, nonprofits and many other organizations—Wikipedia, for example—that use the Internet do not have the deep pockets of, say, Fox News or NBC to spend on enhanced access to their content,” Wu adds.
A common argument from those opposing the FCC’s invocation of Title II is that increased government regulation will discourage ISPs from investing in their networks. This rhetoric eased a bit in recent days as ISPs and reclassification opponents prepared themselves for the inevitable outcome of Thursday’s vote. Put another way, “their bluff has been called,” Wu says. ISPs have been operating under an existing system of Net neutrality for years, yet they’re still investing in their networks and still making a lot of money, he adds. “They’ve been more or less cooperating with Net neutrality already, and it’s been lucrative for them.”
The FCC’s Open Internet Order—which was approved Thursday but has not yet been released to the public—also gives the agency the ability to address any “questionable” ISP behavior regarding consumer access to online content, although the FCC did not specify how it might do this. In addition, ISPs with more than 100,000 subscribers must now disclose their promotional rates, fees and surcharges as well as data caps. ISPs will also have to disclose packet loss—when data does not reach its intended destination—as a measure of network performance.
The order does not subject broadband providers to utility-style regulation, which includes rate regulation, tariffs and last-mile unbundling, according to Wheeler. Nor do these providers need to contribute to the phone companies’ Universal Service Fund or charge their customers a local and state Internet tax.
Before casting his dissenting vote, FCC Commissioner Ajit Pai reiterated his position that a “free Internet” is one whose development is dictated by the free market and predicted that Title II reclassification would lead to slower, more expensive Internet service. Pai and fellow dissenting commissioner Michael O’Reilly also criticized the FCC for pushing the reclassification vote at the behest of Obama rather than making the decision independently. Both commissioners called the Open Internet Order an attempt by the FCC to regulate prices as well as an unfair burden to small ISPs, despite Wheeler’s claims to the contrary.
The fundamental issue is whether the FCC should be putting itself in a position to regulate the Internet, Speta says. Even if Wheeler says that his FCC will not enforce its authority to regulate charges, practices or classifications, there are no assurances that a future FCC will follow those same rules. “It is a very high-stakes matter, so it’s not surprising the vote played out this way,” Speta adds.