FCC's Net Neutrality Remains on Shaky Legal Footing, Skimpy Industry Support

By Fahmida Y. Rashid  |  Posted 2010-12-02

FCC's Net Neutrality Remains on Shaky Legal Footing, Skimpy Industry Support

The Federal Communications Commission's new net neutrality framework clarified some points from its 2009 plan, but the latest proposal still is receiving scant support in Congress and from Internet service providers. 

FCC chairman Julius Genachowski offered a sneak peek at the draft net neutrality proposal on Dec. 1. More details will be available when the FCC discusses the proposal at its next open meeting on Dec. 21. 

A few things remain the same from the initial 2009 net neutrality proposal: the FCC is still committed to protecting an "open Internet" and Internet service providers would still be banned from discriminating against specific applications or Websites. The wireless industry is still subject to net neutrality rules. 

In his public statement, Genachowski did not satisfactorily address whether or not the FCC can even make these rules. While he said the new framework is "grounded in a variety of provisions of the communications laws," he also said there is no need to "reclassify broadband as a Title II telecommunications service." He said there was "sound legal basis" for the framework. 

However, the Washington D.C. appeals court ruled in the spring that the FCC did not currently have legal authority to regulate ISP network management. The case centered on whether the FCC could force Comcast to not block peer-to-peer file-sharing site BitTorrent on its network. 

Under current FCC rules, ISPs are classified as Title I "information services" and are, therefore, not subject to FCC regulations involving issues such as rate setting and universal service obligations. The FCC has authority over Title II telecommunications services, which include public utilities, such as telephone companies. 

With the appellate decision, the FCC must either wait for Congress to enact net neutrality legislation or reclassify the ISPs. Genachowski initially supported the latter option-and the reclassification is entirely within the FCC's authority-but there was a lot of industry opposition and hints of legal challenges, similar to what happened in the Comcast case

As for Congressional legislation, the net neutrality bill failed to come to vote before the mid-term elections in November, and it is unlikely to pass in a Republican-controlled House of Representatives. As CNN/Money noted, all 95 House and Senate candidates who'd supported the proposal lost on Election Day. 

"I want to emphasize that moving this item to a vote at the Commission is not designed or intended to preclude action by Congress," said Genachowski. 

FCC Proposals Finding Scant Support from ISPs, Wireless Carriers


As for network management, Genachowski reiterated that ISPs cannot outright ban or slow down Websites or applications using a lot of bandwidth-or for any other reason, for that matter. However, he did support a usage-based pricing model that would charge users extra for exceeding bandwidth limits. Comcast has been capping residential broadband usage to 250 GB since 2008, and wireless providers such as Verizon and AT&T have recently rolled out tiered pricing and metered data-usage plans.  

However, Genachowski muddied the network-management question by suggesting that ISPs can do "reasonable network management" to deal with traffic that is "harmful to the network or unwanted by users," such as viruses and or graphic sexual content, or to "address the effects of congestion." In other words, banning bandwidth-hogs outright is unreasonable, but monitoring and adjusting bandwidth available to those applications during peak usage times would be allowed. 

Despite his previous stance that it didn't "make sense to have one Internet when your laptop is plugged into a wall and another when accessing the Internet through a wireless modem," Genachowski appears to have backed off wireless carriers in the new proposal. Instead, the FCC would "closely monitor the development of the mobile broadband market and be prepared to step in to further address anti-competitive and anti-consumer conduct as appropriate," he said.  

Wireless carriers had argued that fixed and mobile broadband networks can't be regulated in the same manner because they are fundamentally different. 

Under the new plan, the FCC would require wireless carriers to be transparent and disclose "network management practices" and to commit to a basic no-blocking rule for competing Websites or applications, such as cell phone VoIP services.  

The joint net neutrality proposal pitched by Google and Verizon over the summer only required transparency. 

While the wireless industry trade group CTIA said it still prefers no oversight, it said the group welcomed Genachowski's acceptance of the differences between markets. However, any new rules adopted for the wireless industry should be reviewed again in two years, the group said. 

Net neutrality is not just relevant to the United States; the Europe Union is concerned about it as well. The European Commission opened a consultation into net neutrality in June. Content creators, such as Google, Yahoo, Amazon, and eBay, have largely supported net neutrality. ISPs, namely Comcast, AT&T and Time Warner Cable, have generally not, seeing potential new revenue streams based on striking deals to offer a "fast lane" to preferred-read, "paid"-content.

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