FCC Set to Act on Net Neutrality at May 15th Meeting

An image of Tom Wheeler, Chairman of the FCC,.
FCC Chairman, Tom Wheeler (image courtesy of FCC.gov)

On April 23rd, Federal Communications Commission Chairman Tom Wheeler said that he’d circulate his net neutrality proposal to other commissioners on Thursday of this week, in preparation for a vote at the FCC’s May 15 meeting. The draft rules will then be formally proposed and available for public comment.

We’ve been waiting for a definitive net neutrality proposal from Wheeler for well over two months. While speaking at Silicon Flatirons/ University of CO Law School on February 10th, Wheeler said he’d be outlining his plans “in the coming days.”  Or was that “coming months?”

“In its Verizon v. FCC decision, the Court of Appeals invited the Commission to act to preserve a free and open Internet. I accept that invitation, and in the coming days, I will be outlining how I propose to proceed.”

The proposed FCC rules are expected to ensure that network operators disclose exactly how they manage Internet traffic and do not restrict consumers as they surf the Web.  In particular, the rules would prevent the service providers from blocking or discriminating against specific websites, but would allow broadband providers to give some traffic preferential treatment, so long as such arrangements are available on “commercially reasonable” terms for all interested content companies. Whether the terms are commercially reasonable would be decided by the FCC on a case-by-case approach in reviewing the practices adopted by Internet providers.

However, the FCC rules are not expected to address the issue of interconnection, or agreements in which content companies pay network providers for faster access to their sites or services.  In the past, Wheeler has said that net neutrality rules would not regulate deals between businesses on connections before they reach the user.  That’s because the scope of the net neutrality rules is limited to the “last mile” of the (broadband access) network that reaches the consumer or business customer.

The Wall Street Journal reported today that

“The FCC’s proposal would allow some forms of discrimination while preventing companies from slowing down or blocking specific websites, which likely won’t satisfy all proponents of net neutrality, the concept that all Internet traffic should be treated equally. The Commission has also decided for now against reclassifying broadband as a public utility, which would subject ISPs to much greater regulation. However, the Commission has left the reclassification option on the table at present.

In addition, the FCC plans to significantly increase the disclosure requirements for broadband providers, which could include details such as the speed and congestion of their service along the last mile. The proposal wouldn’t cover wireless carriers, but it will ask whether mobile broadband providers should be subject to a similar commercially reasonable standard when striking deals with content providers.”

Here are few recent facts related to net neutrality:

  1. This January, the U.S. Court of Appeals for the District of Columbia Circuit struck down the FCC’s previous version of the open Internet order.  It was the second time the court took such action.
  2. However, the Court ruled that the FCC has the legal authority to issue enforceable “rules of the road” to preserve Internet freedom and openness.  It affirmed that Section 706 of the Telecommunications Act of 1996  gives the FCC authority to encourage broadband deployment by, among other things, removing barriers to  infrastructure deployment and promoting competition. It also found that the goals of the Open Internet Order are within the scope of authority granted to the Commission.
  3. The court opinion specifically included that the Commission was justified in concluding that an open Internet would further the interest of broadband deployment by enabling the virtuous cycle of innovation that unites the long-term interests of end-users, broadband networks and edge-providers. After all, it explained, when edge-providers are prevented from reaching end-users, demand for both those upstream applications and for network expansion suffer.  The upshot here is that the preservation of an “open Internet” is within the FCC’s authority.
  4. Comcast, through conditions placed on its 2011 merger with NBC Universal, is the only Internet provider still bound by the earlier FCC net neutrality rules through 2018.  Comcast has now proposed to buy its biggest rival Time Warner Cable Inc and Netflix has come out in opposition of the $45.2 billion merger, arguing that the Internet provider should be banned from charging fees for delivering its content.  Comcast has said that Netflix’s opposition was “based on inaccurate claims and arguments.”
  5. Netflix, which accounts for much of Internet traffic during peak hours (some say over 50%), in February struck a deal to pay Comcast for faster online delivery of its movies and TV shows.
  6. Indeed, Netflix, Skype (now owned by Microsoft), Hulu/ Hulu +, Amazon, Google/You Tube, and other content providers that offer video, voice, or audio services that rely on broadband Internet connections could take advantage of such arrangements by paying the broadband providers to ensure that their traffic reaches consumers without disruption. Those companies would be paying for preferential treatment on the “last mile” of broadband networks that connects directly to consumers’ homes.

To reiterate, the FCC’s net neutrality proposal is not expected to address the separate issue of “back-end interconnection” or “peering” between content providers and broadband network providers.  It’s new rules will only apply to the “last mile” broadband access network.


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0 thoughts on “FCC Set to Act on Net Neutrality at May 15th Meeting

  1. Thanks Alan for the excellent job summarizing what to expect at the May 15 FCC meeting regarding Net Neutrality. Lots of things in play right now and Wheeler is trying to move things along as fast as he can and somehow get the FCC to catch up to the pace of technological change.

    On a somewhat related note, as it involves freeing up spectrum, Wheeler emphasized after this morning’s FCC open meeting the importance of rapidly moving forward for getting rules of the rule for 3.6 GHz spectrum and clearing it out to create a “Citizens Broadband Service”.

    http://www.viodi.tv/2014/04/23/a-cloud-solution-to-rural-4g/

    The best solution to net neutrality may be to let people use their own spectrum as has been advanced by the ideas of a SocialMesh

    http://www.viodi.tv/2013/12/27/an-indestructible-wireless-broadband-network-for-all-part-1/

  2. A couple very interesting comments from Tom Wheeler’s speech at the 2014 NCTA show regarding Net Neutrality rules:

    “One of the most effective tools for ensuring Internet openness is competition.”

    And he suggests that the FCC has the power to overturn state rules preventing municipal utilities from entering the broadband market.

    “One place where it may be possible is municipally owned or authorized broadband systems. I understand that the experience with community broadband is mixed, that there have been both successes and failures. But if municipal governments—the same ones that granted cable franchises—want to pursue it, they shouldn’t be inhibited by state laws. I have said before, that I believe the FCC has the power – and I intend to exercise that power – to preempt state laws that ban competition from community broadband.”

    http://transition.fcc.gov/Daily_Releases/Daily_Business/2014/db0430/DOC-326852A1.pdf

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