ARL Policy Notes
Federal Communications Commission (FCC) Issues Notice of Proposed Rulemaking on Open Internet/Net Neutrality

At an Open Meeting held on May 15, 2014, the Federal Communications Commission (FCC) considered the issue of “Protecting and Promoting the Open Internet,” or net neutrality. It voted on a Notice of Proposed Rulemaking (NPRM), which proposes new rules in accordance with the decision of the Court of Appeals for the D.C. Circuit that overturned the FCC’s 2010 Open Internet Rules regarding anti-discrimination and anti-blocking.

As a result of the decision, service providers could allow priority delivery for those willing to pay to promote their content, advancing commercial interests over research library and higher education interests. ARL, together with the American Libraries Association and EDUCAUSE, filed a letter with the FCC on February 13, 2014 advocating for an open Internet and expressing disappointment and concerns with the D.C. Circuit ruling.

An official from the FCC noted that there are currently no legally enforceable rules governing the Internet and the agency seeks to restore rules to ensure that the Internet remains an open platform for communication and growth. Six key elements to the NPR were mentioned:

  1. Maintains the definition and scope of the 2010 rules. The FCC does, however, seek comment regarding whether that scope is still appropriate or whether it should be expanded, for example, to include mobile networks.
  2. Seeks to enhance the transparency rule upheld by the D.C. Circuit.
  3. Intends to institute a no-blocking rule, with clarification on the minimum level of access to broadband subscribers.
  4. For conduct not prohibited by the no-blocking rule, would create a legal rule on commercially reasonable practices. The NPRM seeks comment on whether paid prioritization should be banned outright.
  5. Seeks to implement a multifaceted dispute resolution system, including an ombudsman to act on behalf of consumers and start-ups.
  6. Asks what legal authority provides the most effective path to an open Internet. While the NPRM relies on Section 706 as the source of authority, it seeks comment on whether Section 706 or Title II (or Title III) is most effective.

The sixth point addresses one of the most controversial issues in the wake of the D.C. Circuit’s ruling. Title II reclassification may be the most effective way to ensure that anti-blocking and anti-discrimination rules are permitted. The D.C. Circuit suggested that such rules, particularly with respect to anti-discrimination, looked like “common carrier” rules that are only permitted under Title II. Commissioner Wheeler previously stated his preference to continue under Section 706 authority, while making clear that all options remained on the table.

After the general overview of the NPRM, each commissioner made a statement.

Commissioner Clyburn

Commissioner Clyburn stated her belief that all content should be treated equally and that small startups should have equal footing as large entities. She said that without the open Internet, providers would be free to block or discriminate, noting that as a result of the D.C. Circuit’s ruling, no enforceable rules remain.

Clyburn mentioned specific calls and letters that she received from the public regarding the issue of net neutrality, including concerns from educators. She noted that many comments expressed concerns that the lack of enforceable rules to ensure an open Internet would lead to a stifling of free speech.

Clyburn noted that in Europe, which has not had the same protections, content has been degraded and apps have been blocked. She noted that even in the U.S., apps are blocked by wireless providers.

Finally, Clyburn stated that she had significant concerns about Chairman Wheeler’s initial proposal, but that proposal changed significantly over the past several weeks and included some of the changes that she requested.

Commissioner Rosenworcel

Commissioner Rosenworcel stated that she supported an open Internet, but that she would have handled the process differently. She expressed her opinion that the current process moved too quickly and the FCC should have taken more time to better understand the Internet and seek public input.

Rosenworcel praised the Internet economy in the U.S., calling it the “envy of the world.” She also said that the Internet was the most dynamic platform for free speech ever created and that it promotes our essential values.

Rosenworcel called for the FCC to ensure that going forward, new rules honor transparency, do not allow blocking, and do not permit unreasonable discrimination. She specifically advocated against a two-tiered system, saying that dividing the Internet into fast lanes and slow lanes was unacceptable.

She also spoke positively of the Chairman’s changes to the proposal, including seeking comments to expand the scope of the rules and keeping all options on the table, including Title II reclassification.

Commissioner Pai

Commissioner Pai argued that the FCC was not the appropriate venue for creating rules to govern the Internet, stating that we should be wary of five unelected officials deciding the fate of the Internet. Instead, Pai recommended that the FCC should seek guidance from Congress on this issue. He stated that this issue should be decided by elected representatives who are held accountable by the public, expressing his disappointment that the FCC did not turn the issue over to Congress.

Pai noted that there is bipartisan consensus in favor of a free and open Internet and he is committed to protecting the “four Internet freedoms” of freedom to: access to lawful content, use applications, attach personal devices to their connections, and obtain service plan information.

He argued against Title II reclassification, stating that he agreed with President Clinton that it was inappropriate and would not allow growth of the Internet. Pai also stated that the Internet must be free from government control, asking if we want “smart networks or dumb pipes.”

Pai agreed with Commissioner Rosenworcel that the process was rushed and advocated for a better process moving forward. He said that any rules should be based on sound economics and engineering. Pai suggested that the FCC should ask ten distinguished economists, with each commissioner selecting two, to conduct studies regarding the Internet and growth, and that these studies should then be peer-reviewed and subject to a series of hearings. He also suggested that the FCC should also engage with computer scientists and technologists whose studies should similarly be subjected to peer-review and hearings.

Commissioner O’Rielly

Commissioner O’Rielly stated that the NPRM was based on a “faulty foundation” and “make-believe statutory authority,” arguing heavily against the reliance on Section 706. He suggested that, despite the D.C. Circuit’s ruling, Congress never intended Section 706 to be an affirmative grant of authority and that the language actually supports deregulation.

O’Rielly called the proposal “absurd” and stated that reclassification under Title II would bring back the monopoly era telephone rules to impose “defective” net neutrality rules. He said that Title II represented arcane provisions and an inappropriate framework. He also said that he worried about the credibility of an agency that appeared to be open to such obsolete rules.

O’Rielly questioned the evidence of any specific market failure that needed to be addressed. He said that some have pointed to bad conduct outside of the U.S., but have not shown how it has harmed actions in the U.S.

He also asserted that prioritization is important and even the strongest supporters of net neutrality concede that we must prioritize voice over e-mail and have reasonable network management.

O’Rielly argued that the proposal was not narrowly tailored, would stifle innovation and provide no help to consumers.

Chairman Wheeler

Chairman Wheeler concluded with a statement of his own, asserting from the outset that the FCC supports an open Internet. He said that there is only one Internet, and that it is not a fast Internet or a slow one, but rather, a single Internet.

Wheeler pointed to the D.C. Circuit’s opinion, which observed that there was “little dispute” that broadband providers can distinguish and discriminate. He pointed to examples of abuses from individual cases, including mobile services denying apps.

Wheeler stated that the NPRM starts an important process. He said that it begins with the simple and obvious premise that protecting an open Internet is important for consumers and economic growth. He emphasized that what we are dealing with today is a proposal and not a final rule.

Addressing criticisms of the proposal, he stated that nothing in the proposal would authorize paid prioritization and expressed his displeasure over the idea of having fast lanes which would break the Internet down into haves and have-nots. He noted that the NPRM asks whether and how to prevent paid prioritization.

Wheeler emphasized that the Internet needs to maintain a level playing field to allow for new ideas, small companies and startups to flourish. He said that the prospect of a gatekeeper on the Internet, which chooses winners and losers is unacceptable.

Wheeler stated that it would be commercially unreasonable for a broadband provider to not provide for the contracted pathway. Giving specific examples, he noted that it would not be commercially reasonable if a slower speed than the one the consumer purchased is provided, if a provider blocks content, or if the provider requires the consumer to pay for bandwidth that has already paid for. He said that consumers must have full connectivity.

Wheeler also highlighted two specific aspects of the NPRM, which include an enhanced transparency rule and the creation of an ombudsperson for those that cannot afford a lawyer.

Wheeler explained that he intended to use Section 706 authority because this authority was upheld by the D.C. Circuit and he believed that it provided a quicker roadmap to get rules in place. He noted, however, that it is just one of two primary avenues to reach the goal of preserving an open Internet and that the FCC was also seeking input on Title II reclassification. He concluded that he was looking forward to receiving public feedback and the issue is not about whether the Internet must be open, but rather, about how and when we will have these rules.

Conclusion

The NPRM passed by a vote of 3-2. Chairman Wheeler and Commissioner Clyburn voted in favor of the Notice of Proposed Rulemaking. Commissioner Rosenworcel concurred. Commissioners Pai and O’Rielly dissented.

Comments from the public are due on July 15, 2014.

The FCC press release on this NPRM is available here.

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