Two weeks after voting by a 3-2 margin to reclassify broadband Internet services as telecommunications services that are subject to regulation under Title II of the 1934 Communications Act, the FCC yesterday publicly released the full, 313-page text of the order, which details the new open Internet rules and the agency’s rationale for adopting those rules. As it encouraged the public “to read the order, which reflects the input of millions of Americans,” the FCC also issued a fact-versus-fiction news release which attempts to dispel many of the “myths” surrounding the order by highlighting areas where the FCC intends to forbear from applying rate, unbundling, and other Title II common carrier regulations to fixed and wireless Internet service providers (ISPs).
The rules contained in the FCC’s order prohibit blocking, throttling and other limitations on access to lawful web content and the impairment of connectivity on the basis of content. They also bar paid prioritization arrangements between ISPs and websites and the establishment of web traffic “fast lanes.” With the exception of modifications to the FCC’s transparency rule for broadband ISPs, which require separate OMB approval, the rules will go into effect 60 days after they are published in the Federal Register. The window for seeking judicial review also opens on the date of Federal Register publication, at which time a host of broadband ISPs and others are expected to challenge the rules in court.
In the accompanying fact-versus-fiction document, the FCC explained that the order is premised on “multiple sources of authority” that include the broadband advancement mandates of Section 706 of the Telecommunications Act as well as Title II. Declaring that the order “takes a modernized approach to Title II, tailored for the 21st century,” the FCC emphasized that the order “bars the kinds of tariffing, rate regulation, unbundling requirements and administrative burdens that are the hallmarks of traditional utility regulation.” The order does not subject ISPs to Universal Service Fund (USF) contribution requirements but stipulates that the FCC will consider that issue in separate proceedings to reform the USF system. Among other things, the fact sheet also points out that (1) Internet services, content and applications will not be regulated, (2) ISPs will remain free to offer a variety of services and rates to customers without FCC approval, and (3) specialized or managed data services, such as cable-based Voice over Internet protocol and mobile Voice over LTE services, that are not transmitted over the public Internet will not be regulated. Asserting, “there has always been a ‘just-and-reasonable’ standard for telecommunications service—and investment has flourished,” the fact sheet further argues that application of the “just and reasonable” standard to broadband ISP behavior will not chill innovation. Other Title II provisions, such as Section 222, which requires carriers to protect the confidentiality of customer proprietary information, and Section 224, which requires utilities to provide non-discriminatory access to poles, conduits and rights-of-way, will not be subject to forbearance.
Although FCC Chairman Tom Wheeler again maintained that the order places the FCC more in the role of a referee over “a playing field where there are known rules” than as a regulator, Commissioners Ajit Pai and Michael O’Rielly dissented on partial grounds that the corresponding rulemaking notice issued by the FCC—which, in the words of Pai, had been “tailored to avoid reclassification” -- did not adequately inform the public of the possibility that the FCC would adopt a Title II track. Confirming that all five FCC commissioners are scheduled to discuss the order at House and Senate hearings next week, Senate Commerce, Science, and Transportation Committee Chairman John Thune (R-SD), House Energy and Commerce Committee Chairman Fred Upton (R-MI), and House Communications & Technology Subcommittee Chairman Greg Walden (R-OR) announced in a joint statement: “we look forward to working our way through the 300-plus pages of this Washington manifesto.”