Now let’s consider, for example, the 20-year debate over how to ensure a prosperous Internet ecosystem where many businesses and individuals can thrive and add billions of dollars of value to the economy. Recently, FCC Chairman Pai concluded the comment round of a Notice of Proposed Rulemaking (NPRM) to return to the 1990 era of regulation hoping to ensure more investment in broadband networks. He stated, “Today we propose to reinstate the information service classification of broadband Internet access service and return to the light-touch regulatory framework first established on a bipartisan basis during the Clinton Administration” (NPRM at 24). JSI expects the FCC will remove the Title II treatment of Broadband Internet Access Service (BIAS) that was adopted in its 2015 Open Internet Order.
Readers of earlier JSI News & Commentary editions may recall that the Bush Administration established four freedoms in 2004 and a robust Internet Policy Statement in 2005. The Bush Administration attempted to enforce the principles in its Internet Policy Statement when it found Comcast had “contravened federal policy” by “significantly impeding consumers’ ability to access the content and use the applications of their choice.” Comcast appealed and a federal appellate court held that the FCC had not justified its actions. After another attempt to enforce basic principles of no-throttling, no-blocking, and non-discrimination through a new FCC Order, Verizon appealed. The Obama Administration was told by the same federal appellate court its new attempt at the no-blocking and no-unreasonable discrimination rules “impermissibly regulated providers as common carriers.” In response to the Verizon decision, the FCC ultimately adopted its 2015 Open Internet Order.
The 2015 Open Internet Order reclassified providers as common carriers under Title II of the Communications Act. This was done to ensure that no-blocking, no-throttling, and non-discrimination polices would have sufficient legal support to withstand the inevitable legal challenge—and a three-judge panel at the federal appellate court upheld the FCC’s 2015 reclassification.
The Trump Administration now proposes to revert to the policies of the 1990s when the nascent Internet was not a force in social and economic interaction in every modern society. Most commenters to the FCC’s NPRM suggest that no-blocking, no-throttling, and non-discrimination policies are vital to content and app suppliers, as well as to users. Exactly how the FCC will ensure adherence to these policies while undermining its Title II authority to require such behavior remains uncertain.
This Internet policy example provides a history of risk and uncertainty since 2005. Most providers abhor uncertainty. The knowledge that no-blocking, no-throttling, and non-discrimination polices were established and were enforceable by the FCC allowed providers to assess the risk of investments. However, the inability to quantify repeated uncertainty due to multiple carrier challenges in court has led to an environment where too much uncertainty affects investment in the industry. The degree to which investment is affected is subject to heated debate. Despite the outcome of this debate, it is clear that uncertainty on what will be the ultimate Washington, D.C., regulatory policy dampens investment.
When looking at the current state of the FCC’s NPRM, we are reminded of Shakespeare’s tragic play King Lear where upon seeing seeming chaos and confusion, the Duke of Albany says “Striving to better, oft we mar what’s well.” This guidance would benefit the FCC when it begins to address the issues outlined in its NPRM. This NPRM has generated considerable attention in the national press with millions of comments being filed in response to the FCC’s proposal.
Comcast and Verizon would have been much better off in 2017 if they had accepted the 2005 Internet Policy Statement and voluntarily abided by its principles instead of forcing the FCC to ratchet up its authority and enforcement of well-established Internet principles. Moreover, the trinity of consumer protections (no-blocking, no-throttling, and non-discrimination) now includes an ambiguous general conduct rule that has many interpretations and has increased uncertainty in the industry. JSI expects more uncertainty for Internet policy until Congress enacts legislation that establishes a rational framework for the policy trinity of no-blocking, no-throttling, and non-discrimination.
The FCC now proposes to adopt a three-part “light-touch regulatory framework” which (1) classifies BIAS as an information service inseparable from the retail Internet service purchased in the marketplace; (2) determines that mobile BIAS is not a “commercial mobile service”; and (3) tasks the Federal Trade Commission (FTC) with policing the privacy practices of ISPs. In addition, the FCC is exploring how to retain the four Internet Freedoms first expressed in 2004, which include the freedom to access lawful content, use applications, use devices, and obtain service plan information.
Many parties commenting in this proceeding have expressed doubt that the FCC can adopt a light-touch framework while at the same time ensuring that there is (1) no blocking of lawful content, (2) no throttling of network speeds accessing lawful content, and (3) no discrimination of providers’ content. Hence, the most straightforward and common-sense approach is to have Congress establish “bright-line rules” for ISPs under specifically tailored legislation. Let’s be clear: The proverbial “fitting a square peg in a round hole” approach is not working. Some commenters argue that the Title I light-touch approach fails to provide sufficient legal foundation for the four Internet Freedoms and the no blocking, no throttling, and no discrimination policies embraced at one time by the FCC and that are needed in today’s marketplace.
We believe that absent congressional action, the industry will experience continued uncertainty on how the FCC, the court, and the states wrestle these issues. Meanwhile, consumers are wary of ISPs because of all the press in recent years about “bad actors” violating net neutrality principles, even though much of the hype is hypothetical. Consumers have an expectation that their ISP will not block, throttle, or discriminate. So, uncertainty at the highest policy level will not keep consumers from demanding quality and affordable services that adhere to net neutrality rules.
In the meantime, reply comments filed by NTCA–The Rural Broadband Association and Home Telephone Company highlight an issue affecting rural carriers that is important to note and keep an eye on. That issue is rural carrier interconnection with larger ISPs and the Internet backbone providers. Under Title II regulation, the FCC expressed its intent to watch interconnection between networks and showed a willingness to resolve issues that arise. This authority is valuable for rural carriers that have or may have Internet interconnection issues with larger carriers. In the NPRM, the FCC warned that under Title I regulation it will not have the authority to intervene if a rural carrier has interconnection issues with larger providers. JSI agrees with NTCA and Home that preserving this backstop for interconnection is important. Given that the FCC admits that it won’t have authority if it moves to Title I light-touch regulation, JSI is concerned that this clear benefit will be lost as the FCC adopts its proposal. Again, the solution to this common-sense problem is for Congress to intervene and give the FCC clear and defined authority to address this issue if BIAS doesn’t remain under Title II regulation.
The FCC is reviewing comments and reply comments in this proceeding. We expect to see an Order from the FCC sometime in 2018. ISPs, carriers, and the nation await the FCC’s decision.