Last week, Federal Communications Commission (FCC) Chairman Tom Wheeler announced in an op-ed his plan proposing that the FCC use its Title II authority to “implement and enforce open Internet protections.” This plan follows closely the one described in President Obama’s net-neutrality statement released last November which recommended the use of Title II authority to implement several bright line rules that would prevent internet service providers (ISPs) from restricting or expanding the quality and scope of service provided for specific servers and addresses. To exercise its Title II authority over broadband ISPs, the Commission must first reclassify Internet service as a “telecommunications service” rather than an “information service” under the Telecommunications Act of 1996.

This new plan to protect net neutrality comes after a federal court struck down the Commission’s 2010 Open Internet Order last year in Verizon v. FCC. The Order set forth several new regulations including disclosure requirements, anti-blocking provisions, and anti-discrimination rules. Judge Tatel wrote for the D.C. Circuit concluding that the anti-blocking and anti-discrimination provisions imposed per se common carrier obligations on the ISPs in violation of § 153(51) because previous FCC rulings that remained legally binding classified internet service as an “information service” and explicitly refused to recognize any “telecommunications services” component. Under § 153(51), telecommunications carriers can only be regulated as common carriers to the extent they are engaged in providing “telecommunications services.”

Initially the Commission announced plans to design new regulations that focused on exercising its powers, recognized by Judge Tatel, under § 706 to realize its goal of imposing anti-blocking and anti-discrimination measures. In this early statement, the Chairman reserved reclassification as an option to be considered but seemed to focus on alternative regulatory approaches. Senior FCC officials emphasized the Commission’s reluctance to reclassify Internet services under Title II.

Against this backdrop President Obama released a statement last November urging the FCC to take the stronger position of reclassification. Republican commentators have clamored to point out the influence the President seems to be exercising over the FCC, which is an independent agency. While some of these accusations may be disturbing, reclassification and the net neutrality agenda are consistent with the Commission’s long-standing policies and objectives, and there is no reason that the President cannot influence an independent agency.

There will still be significant barriers to the reclassification of Internet services:

  • ISPs will fight reclassification on any and all grounds. The Commission will need to carefully define all of its terms and explicitly support every statement.
  • The FCC has excluded Internet services from Title II classification for several decades. Reclassification will require a comprehensive consideration of decades of rulemaking, and the Commission will need to provide some justification of why circumstances or policies have changed to explain the adoption of an entirely new regulatory framework.
  • Reclassification may require a new understanding and unbundling of exactly what services are offered by broadband ISPs. For instance, a court may find that certain data processing services performed by ISPs are explicitly excluded from classification under Title II, and the FCC may need to separate out these services to preserve its rule.
  • Both the President and the Chairman have emphasized that the Commission should exercise its forbearance powers to limit the extent of its regulation of internet service, but the scope of these forbearance powers is limited and uncertain. The proposed exercise of forbearance may create additional legal and political challenges.
  • Title II classification is a powerful but blunt regulatory instrument. There may be unanticipated consequences and pushback.
  • There may be Constitutional issues under the First Amendment’s free speech protections or the Fifth Amendment’s takings clause.
  • The Republican-controlled congress may enact new legislation prohibiting FCC regulation of ISPs under Title II. Alternatively, Title II regulation can be extremely expensive, and Congress may restrict the agency’s power by refusing make allowances for these new costs.
  • Formal rulemaking can take time and strong public opposition may become overly burdensome.

In spite of these legal and political obstacles, the Commission does enjoy a breadth of legal support. The Supreme Court has recognized broad regulatory discretion to define and classify “internet services” in precisely this area. Ironically, the Commission’s original refusal to classify broadband internet services as telecommunications services subject to Title II prompted litigation leading all the way to the Supreme Court. The Court noted the arguments in favor of Title II regulation but ultimately deferred to the FCC under a Chevron analysis.

The Chairman’s plan has yet to be voted on, and it will remain to be seen how the Commission approaches this reclassification. Setting aside legal considerations, it may be worth wondering who we trust to control our access to the internet. The Internet has become a core feature of our lives and access to it seems almost like a fundamental right and privilege that should be protected at all costs. Would we rather entrust the government or private actors with the ultimate responsibility to protect that right? Is there any other option?

Edmund Semmes

2 Responses to FCC Chairman Announces Intention to Follow President’s Proposed Net Neutrality Plan

  1. Jackson Sattell says:

    I think the point you make in the last paragraph is incredibly important. I hope people don’t get too bogged down in the complexities of regulation or frustrated by the long process something like this takes. Who controls the Internet — seemingly the most important tool in our lives today — should not be taken lightly. Thank you for summarizing the latest on this topic!

  2. Alneada Biggers says:

    Net neutrality is and will continue to be an fascinating issue to watch play out both in the government as well as in the market. It should be particularly interesting to see how Google’s support of net neutrality reshapes the debate. Just a few weeks ago, Google suggested that net neutrality rules could encourage rather than stifle its ability to innovate in the broadband internet and television space, a statement that directly contradicts sentiments expressed by most of the telecom behemoths. Could Google’s support for net neutrality help bolster support in Congress and at the FCC? Could Google Fiber be the lone market advocate we’ve been waiting for, saving us from the subpar broadband service of AT&T and Comcast? We can only hope.