Special Edition March 2015 Print Version For more information, please contact: Samuel Kramer Partner, Chicago +1 312 861 7960 Samuel.Kramer@bakermckenzie.com Brian Hengesbaugh Partner, Chicago +1 312 861 3077 Brian.Hengesbaugh@bakermckenzie.com The U.S. FCC votes in favor of Net neutrality Recent development On 26 February, the United States Federal Communications Commission (FCC) voted 3-2 along party lines in favor of new Net neutrality regulations that would result to the treatment of broadband as a public utility under Title II of the 1996 Communications Act (Title II). The approved FCC order reclassifies broadband Internet access service, both fixed and mobile, as a "telecommunications service" under Title II, compelling Internet service providers (ISPs) to adhere to the same "common carrier" regulations as wireline telephone service providers. Title II, which bans companies from participating in "unjust or unreasonable discrimination" in the provision of Internet services to customers, aims to prevent unfair Internet practices as a means to guarantee Net neutrality. What is Net neutrality? Net neutrality, also called the Open Internet, is a principle that Internet service providers should be impartial gateways that treat all Internet traffic equally and fairly. ISPs are prohibited from engaging in conduct that discriminates against content by blocking, slowing transmission speeds or seeking payments in exchange for faster lanes of their Internet networks. The following are the core Net neutrality provisions advanced by the approved order: No blocking: "Broadband providers may not block access to legal content, applications, services, or non-harmful devices." No throttling: "Broadband providers may not impair or degrade lawful Internet traffic on the basis of content, applications, services, or non-harmful devices." No paid prioritization: "Broadband providers may not favor some lawful Internet traffic over other lawful traffic in exchange for consideration of any kind. This also prohibits ISPs from prioritizing content and services of their affiliates. This means that there should be no "fast lanes", though there are limited exceptions, including public services like remote heart monitoring and voice over the Internet from a cable system."
Joyce Smith Partner, San Francisco +1 415 984 3851 Joyce.Smith@bakermckenzie.com Peter George Partner, Chicago +1 312 861 6587 Peter.George@bakermckenzie.com Michael Stoker Partner, Chicago +1 312 861 2870 Michael.Stoker@bakermckenzie.com
The new proposed regulations would create open Internet conduct standards, protect user privacy, protect people with disabilities, increase pricing transparency between ISPs and customers, and ensure reasonable network management. The FCC rules would also expand its oversight powers to cover interconnection deals, which will allow the agency to hear complaints and take appropriate enforcement action after a determination that the interconnection activities of ISPs are not just and reasonable. On several prior occasions, the FCC promulgated rules to achieve Net neutrality that were blocked by the courts. The federal courts have found that the FCC did not have the authority to impose Net neutrality rules on broadband providers because they had been classified under previous FCC rules as "enhanced service providers" and not as "common carriers." The FCC order would impose Net neutrality obligations pursuant to the agency's broader authority to regulate "common carriers." The FCC order requires the agency to refrain from enforcing 27 provisions of Title II and more than 700 existing Title II regulations with respect to broadband service. This means that there will be no rate regulation, no filing of tariffs and no network unbundling. ISPs also do not have to contribute to the Universal Service Fund. In addition, broadband services will remain exempt from state and local taxation under the Internet Tax Freedom Act. When will the new rules take effect? The 317-page Net neutrality rules have not yet been publicly released. The rules will take effect 60 days after publication on the Federal Register. However, some broadband providers have stated they will challenge the rules in court, while some legislators have stated they would introduce open Internet legislation that would override the FCC regulations.
This e-mail was sent by www.bakermckenzie.com If you wish to opt out of these communications, please click here This client alert is prepared for information purposes only. The information contained therein should not be relied on as legal advice and should, therefore, not be regarded as a substitute for detailed legal advice in the individual case. The advice of a qualified lawyer should always be sought in such cases. In the publishing of this alert, we do not accept any liability in individual cases. Baker & McKenzie International is a Swiss Verein with member law firms around the world. In accordance with the common terminology used in professional service organizations, reference to a "partner" means a person who is a partner, or equivalent, in such a law firm. Similarly, reference to an "office" means an office of any such law firm. This may qualify as "Attorney Advertising" requiring notice in some jurisdictions. Prior results do not guarantee a similar outcome. Before you send e-mail to Baker & McKenzie, please be aware that your communications with us through this message will not create a lawyer-client relationship with us. Do not send us any information that you or anyone else considers to be confidential or secret unless we have first agreed to be your lawyers in that matter. Any information you send us before we agree to be your lawyers cannot be protected from disclosure.