With lots of input, including from the founder of the Internet, but no real surprises, a contentious FCC voted 3-2 along party lines Thursday (Feb. 26) to reclassify broadband as a telecom service under some Title II regulations, a move that prompted cheers from net activists who have been pushing for Title II for over a decade, but will prompt lawsuits that could tie up the rules in court for years.
Republican commissioners blasted the order, suggesting it was utility-style regs in Title II-lite clothing and that the rate regs and unbundling and new taxes that the FCC said it was forbearing would materialize regardless.
The order creates bright-line rules against blocking, throttling, or paid prioritization— so-called "fast lanes." It also allows a case-by-case review of interconnection complaints as potential network neutrality violations.
The rules will not become official until published in the Federal Register, which will take a few weeks, and will then be challenged in court, though they will remain in effect unless stayed by the FCC (unlikely) or a court.
The rules apply to mobile and fixed broadband, but Melissa Kirkel, senior attorney in the Wireline Competition Bureau, who presented the item for a vote, said they do not represent utility style regulation and do not include unbundling, rate regulation, or any new taxes or fees, including contributions to the Universal Service Fund. In addition to the bright-line rules, the order includes a general conduct standard to be enforced on a case-by-case basis to identify any practices that interfere with the relationship between end users and edge providers — ISPs are considered to be the potential bad actor and the rules do not apply to those edge providers — like a Google or Netflix.
The order applies Title II, but forbears from 27 provisions, the bureau said.
The FCC cites various forms of authority for the new rules, including Title II common carrier regs and Sec. 706 authority to regulate in order to spur deployment of advance telecom, the same justification it used to support preempting state broadband laws in an earlier decision at Thursday's public meeting votes.
The presentation of the Title II item was preceded by comments from an Etsy exec, a TV show producer and World Wide Web founder Tim Berners-Lee all praising the reclassification.
Berners-Lee said that the FCC's actions would preserve the ethos of limitless innovation and the ability of others to innovate without permission, as he was able to do. He said the vote was about consumer rights, free speech and democracy, but also about a platform for business. As to whether the reclassification would empower foreign governments, Lee said that the fact that some repressive regimes tried to stifle Internet expression should not deter the FCC from protecting speech.
Commissioner Mignon Clyburn particularly praised the erasure of the mobile/fixed distinction in the new rules. Clyburn said the 4 million comments in the docket helped frame the item.
In explaining her support for reclassification, Rosenworcel said: "We cannot have a two-tiered Internet with fast lanes that speed the traffic of the privileged and leave the rest of us lagging behind. We cannot have gatekeepers who tell us what we can and cannot do and where we can and cannot go online. And we do not need blocking, throttling and paid prioritization schemes that undermine the Internet as we know it."
She said the item honored the open Internet vision of Berners-Lee, and was responsive to the 4 million comments. "Whatever our disagreements on network neutrality are, I hope we can agree that’s democracy in action and something we can all support," she said. Wheeler added that every voice matters.
Commissioner Pai, in his strong dissent, said he also relished Internet freedom, but sad it was sad to witness the FCC's attempt to replace that freedom with government control. He said the only reason the FCC "flip-flopped" on Sec. 706-based rules to reclassify under Title II was that the President had told it to.
Pai also said that should the decision survive the inevitable court challenges, it would result in higher prices, slower speeds, less innovation and less deployment. He said the FCC would also be regulating rates, setting some rates at zero.
He said the FCC would have almost unfettered authority to determine what business practices were acceptable.
Pai said that the FCC's forbearance is hardly a light-touch regulatory approach. He says the order states that the FCC is only forbearing "at this time" and "for now."
The FCC does say it cannot envision going further, but he said to expect forbearance, what he called "fig leaf forbearance," to fade and regs to ratchet up under "President Obama's" plan to regulate the Internet.
He said billions in new taxes and fees "will" be applied. "When it comes to broadband, read my lips: More new taxes are coming.It’s just a matter of when," said Pai.
Literally nothing in this order will increase competition among ISPs, he said. "If you liked the Ma Bell monopoly in the 20th century, you’ll love Pa Broadband in the 21st," he said.
Pai also again criticized the chairman for not publishing the language of the draft before it was voted.
Wheeler commented that he had tried to keep score on things he disagreed with in Pai's statement, but joked that he had him "undecided but leaning against" Title II.
Commissioner O'Rielly also laid Title II at the President's feat in his dissent. "I am just sick about what chairman Wheeler was forced to go through during this process," he said. "It was disgraceful to have the Administration overtake the Commission’s rulemaking process and dictate an outcome for pure political purposes."
"Today a majority of the Commission attempts to usurp the authority of Congress by re-writing the Communications Act to suit its own 'values' and political ends," he said.
O'Rielly took aim at the FCC's case-by-case standard for reviewing potential violations that don't fall under the three bright line rules. "[T]he bulk of this rulemaking will be conducted through case-by-case adjudication, mostly at the Bureau level and in the courts. To be sure, there are three bright line rules: no blocking, no throttling, and no paid prioritization. But those are mere needles in a Title II haystack."
He also took aim at making interconnection a net neutrality issue. "This shift to regulate Internet traffic exchange highlights that the Commission’s real end game has become imposing Title II on all parts of the Internet, not just setting up net neutrality rules," he said. "In subjecting a thriving, competitive market to regulation in the name of net neutrality, the Commission is trying to use a small hook and a thin line to reel in a very large whale. This line will surely break."
O'Rielly called the Title II decision a "monumental and unlawful power grab."
Wheeler said the Title II proceeding was the most open in history and that input — 4 million comments —made the decision stronger. He said the FCC had "listened and learned." Wheeler said the FCC's action meant that no government or corporation should control free access to the Internet, and that the Internet was too important not to have rules or a "referee on the field." It is too important to allow broadband providers to be the ones making the rules.
Wheeler said the rules were no more a plan to regulate the Internet than the First Amendment was a plan to regulate speech. He said it was about protecting an open Internet.
He said broadband providers have an incentive to threaten Internet openness, as the courts themselves have said.
He said the majority of commissioners have said that will not come to pass with a 1-2 punch of Title II and Sec. 706, using all the tools in the toolbox to protect consumers from an Internet divided into haves and have-nots. Wheeler called them enforceable bright-line rules. He also talked about the general conduct rule that will get at “new and novel threats.”
The chairman said the rules do not alter the model for continued expansion, and that ISPs revenue stream will be the same tomorrow as it was yesterday. He said that was why Sprint, T-Mobile, Google Fiber, and others, support the Title II approach.
Wheeler pointed out that the rules for the first time reach to interconnections, protecting values both at last mile and point of interconnection.