Rather than appeal its defeat in an appellate court last month, the FCC plans to use the judicial rebuke as guidance for a new set of rules to preserve net neutrality.
In a judgment issued Jan. 14, the U.S. Court of Appeals agreed with Verizon that the FCC could not enforce rules it had set forbidding Verizon, Comcast and other ISPs from blocking or throttling content from other providers on their networks. The judgment was based on a technicality, however, not on the court’s belief that the FCC genuinely had no power to regulate the Internet access or content businesses of phone and cable companies.
The Telecommunications Act of 1996 expanded the powers of the FCC to cover cable television and Internet access, creating two classes of service provider in the process: traditional common carriers and information providers. But by defining broadband Internet as an information service rather than a telecommunications service, the court ruled, the FCC had inadvertently made Verizon, Comcast and other ISPs immune from regulations designed to ensure the companies that owned the wires running to millions of American homes and businesses didn’t abuse their power to keep Netflix or other content providers from competing with them.
That was just one part of the Jan. 14 appellate court ruling. The full decision not only upheld the FCC’s power to regulate both common carriers and information providers to prevent such anti-competitive behavior, but invited the FCC to try again with new rules requiring that all providers be treated equally regardless of who owns the wires over which their services travel.
The FCC won’t challenge the court’s decision, partly to avoid vacating the court’s confirmation that the FCC does hold jurisdiction over broadband providers just as it did when they sold only telephone service. “I intend to accept that invitation by proposing rules that will meet the court’s test for preventing improper blocking of and discrimination among Internet traffic, ensuring genuine transparency in how Internet Service Providers manage traffic, and enhancing competition,” FCC Chairman Tom Wheeler said in a public statement posted Feb. 19. “Preserving the Internet as an open platform for innovation and expression while providing certainty and predictability in the marketplace is an important responsibility of this agency.”
Wheeler, a Democrat appointed by President Obama, pledged to restate the Open Internet Order of 2010 in a way that allows it to enforce the transparency rule requiring that carriers disclose details of how they manage Internet traffic, including any effort to throttle bandwidth used by competitors or set priorities on traffic from other companies.
The court’s decision will force the FCC to reconsider the legal underpinnings of its no-blocking rule, which is designed to keep carriers from blocking the content of competitors from reaching consumers. However, Wheeler added, the FCC is as committed to making the no-blocking rule work as it is to maintaining its Data Roaming Order, which requires that wireless carriers provide reasonable roaming costs and arrangements to guarantee mobile users can connect to any available wireless network even when their own is unavailable. The same D.C. appellate court upheld that order in 2012.
Wheeler is likely to face opposition from Republicans in Congress who have opposed greater regulatory powers for the FCC. He is already fielding questions and opposition from FCC commissioners holding seats on the commission reserved for Republicans. FCC Commissioner Ajit Pai (former Deputy General Counsel for the FCC and former Associate General Counsel for Verizon) issued a statement warning that the Chairman’s efforts could run into the same problems the previous round of regulations encountered, rather than preserving the independence of the Internet “unfettered by Federal or State regulation.”
Commissioner Michael O’Rielly, former aide to the Senate Republican Whip and Republican National Committee analyst for banking, technology, trade and commerce, issued a statement saying he was “deeply concerned by the announcement that the FCC will begin considering new ways to regulate the Internet.” His view “is that section 706 does not provide any affirmative regulatory authority. We should all fear that this provision ultimately may be used not just to regulate broadband providers, but eventually edge providers.”
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