The Federal Communications Commission (FCC) said last week that it intends to craft new net neutrality rules in response to Verizon v. FCC [PDF], in which the United States Court of Appeals for the District of Columbia Circuit struck down the Commission’s “Open Internet Order.” The Order had set forth various regulations to ensure that internet service providers maintain an “open internet,” including disclosure, anti-blocking, and anti-discrimination rules that would prevent ISP’s from treating websites differently based on the type of content they provide.

Last month, Judge Tatel, writing for the DC Circuit, struck down the FCC’s Open Internet Order because the Commission had previously classified cable broadband companies as “information-service providers,” rather than “telecommunications carriers.” Under the Telecommunications Act of 1996, telecommunications carriers are subject to strict Title II common carrier regulations, whereas information-service providers are not. Importantly, the Communications Act of 1934 states that a service cannot be regulated like a common carrier unless it is classified as a common carrier. The DC Circuit held that the Open Internet Order imposed per se common carrier obligations, and consequently, the court concluded that cable broadband companies could not be regulated like common carriers because the FCC classified them as internet-service providers.

In the wake of the DC Circuit’s decision, the FCC had three options. First, it could simply reclassify cable broadband companies as telecommunications carriers, which would ostensibly give it the authority it needs to regulate freely. Second, it could appeal the DC Circuit’s decision. Third and finally, the FCC could draft new regulations that appease the court’s concerns.

In a statement released last Wednesday, FCC Chairman Tom Wheeler announced that he intended to draft a new series of enforceable rules. Specifically, Wheeler relies on language in Verizon v. FCC that suggests the Commission retains authority under Section 706 of the 1996 Telecommunications Act to regulate ISP’s. A senior FCC official said Wheeler will not attempt to reclassify internet providers or appeal the court’s decision.

Wheeler’s announcement has drawn criticism from groups such as Free Press, which urged the Commission to reclassify cable broadband. “Section 706 doesn’t work for net neutrality or any of the FCC’s stated policy goals,” said Free Press CEO Craig Aaron, “If the agency really wants to stop censorship, discrimination and website blocking, it must reclassify broadband as a telecommunications service under Title II.”

There is merit to such criticism. Toward the end of Verizon v. FCC [PDF], Tatel stated that the FCC lost because it failed to establish that its Open Internet Order was any different from the non-discrimination standard that applies to common-carriers. The FCC attempted to distinguish its regulations, arguing that the Open Internet Order prohibited only “unreasonable” discrimination. The DC Circuit responded, “The Commission has provided no basis for concluding that in permitting ‘reasonable’ network management, and in prohibiting merely ‘unreasonable’ discrimination, the Order’s standard of ‘reasonableness’ might be more permissive than the quintessential common carrier standard” (emphasis added).

That’s a problem for proponents of net neutrality. Chairman Wheeler stated that he “intend[s] to accept” the DC Circuit’s invitation to issue new and enforceable rules. However, given the court’s decision, accepting that invitation probably means more permissive net neutrality regulations and a less open internet.

Chris Martucci

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