Summary of the FCC’s Open Internet Order

This is an historic ruling because it purports to “regulate the Internet.”  Here’s a summary.

First, the Order reclassifies fixed and mobile broadband Internet access service as a “telecommunications service.”  Under that classification the Commission may regulate the service under “Title II,” the common carrier portion of the Communications Act.  Title II, which was originally intended to regulate telephone companies and later extended to wireless carriers, authorizes the Commission to prohibit “unreasonable discrimination” in a carrier’s terms of service.  Earlier FCC attempts to regulate ISP service were called “net neutrality.”

The Order imposes on the fixed and mobile ISPs certain “bright line” rules of non-discrimination.  Essentially, the covered entities may not engage in blocking, throttling, or paid prioritization of Internet traffic.  In addition, they may not hinder consumers from accessing the Internet content of their choice or stop “edge providers” (including content delivery networks like Netflix and Google) from making available the Internet content of their choice.  The goal is to prevent ISPs from leveraging their Internet gatekeeper role, otherwise known as a “last mile” position, to preclude or degrade the Internet services of their competitors.

For now the Commission declined to adopt rules governing Internet “interconnection,” which is the exchange of Internet traffic between ISPs and edge providers.  It decided to wait and see how that part of the market evolves.

Despite the nondiscrimination rules, the Commission permits ISPs to engage in “reasonable network management” that may cause service inequities.  For example, an ISP may prioritize VoIP packets over online browsing packets to ensure the quality of VoIP service.

The Commission also decided to “forebear” from imposing various Title II provisions.  For example, the agency will not regulate ISP rates.

Also unchanged are the Title II rules that implement CALEA.  The Commission recognized that its reclassification decision did not change the CALEA statute, so it found no need to change its CALEA rules.  In any event, no commenters asked to change the CALEA rules.

Long before the Open Internet Order reclassified ISPs as Communications Act “telecommunications carriers” it had already reclassified those same entities as CALEA “telecommunications carriers,” thus making them subject to CALEA.  The Order makes the two statutes more consistent because both now regard ISPs as telecommunications carriers.

On the other hand, the Order preserves two-way interconnected VoIP service under the alternative classification called “information services,” even though that service was classified as a CALEA “telecommunications carrier.”  So the two statutes remain somewhat inconsistent.

If law enforcement and the FCC want to classify some future Internet service as a CALEA telecommunication service for purposes of subjecting the service to CALEA, today’s Open Internet Order will not make the process any easier.  The FCC will still need to explain why the new service constitutes a “substantial replacement” for local exchange service, as required by CALEA.  It’s difficult to see how any emerging Internet service would meet that definition.

Verizon, Comcast and other ISPs have vowed to appeal the Open Internet Order in federal court.  They don’t think it’s lawful, necessary or desirable for ISPs to be subject to nondiscrimination rules.  Consequently, the historic regulatory fight is not over yet.

The FCC will stand a better chance of defending its Open Internet rules in court today than it did in years past.  The courts struck down the earlier attempts because they relied on more dubious jurisdictional grounds than Title II.

It’s also possible that Congress will intervene.  The Republicans are now trying to decide whether to amend the Communications Act in a way that overturns or dilutes the Open Internet rules.  The Communications Act has not been significantly amended since 1996.  Many members consider it ripe for a major update.