Neutered Net Neutrality?
Updated: Sep 5, 2018
FCC Landmark Decision Subject to Being Overhauled and Overturned
By John Pellegrin, December 2017
The Federal Communications Commission (FCC) under its new Chairman appointed by the new Administration is looking to roll back the FCC’s current rules on Internet neutrality, commonly referred to as “Net Neutrality.” Basically, the concept of net neutrality is to level the playing field for smaller, less well-healed users of bandwidth and through-put speed to ensure there will not be any favoritism or untoward discrimination between allied Internet Service Providers (ISPs) when it comes to fast speed/sufficient bandwidth for the various and growing number of users/providers.
The current Network Neutrality Notice of Proposed Rulemaking filing date for both Comments and Reply Comments passed in mid-August. The full Commission is scheduled to vote on Net Neutrality December 14th.
Existing FCC Rules Akin to Common Carrier Rules/Policies. The current rules adopted in 2015 impose Title II common carrier-like Communications Act of 1934 prohibitions on discrimination by ISPs. Subject only to any limitation of FCC licensed total bandwidth of an ISP, an ISP may not refuse carriage nor unduly discriminate in pricing for any would-be users of its spectrum.
Thrust of New FCC Approach to Network Neutrality. The Notice of Proposed Rulemaking proceeding (NPRM) (WC Docket No. 17-108) contains the usual tropes, aphorisms and buzz phrases, such as “Restoring Internet Freedom” (in the very title of the NPRM), and “Bridging the Digital Divide.” The proposed “light-touch regulatory approach” would replace the current Rules under the 2015 “Open Internet Order.” The current FCC Commissioners, by a 3-2 vote have made it very clear that the vote along party lines is to essentially gut the current net neutrality rules and policies, replacing Title II Common Carrier regulation with a complaint procedure for alleged anti-competitive/bad behavior by ISP bandwidth suppliers. The FCC would also like the Federal Trade Commission (FTC) to take over enforcement of any alleged discriminatory practices under these newly proposed rules. One FCC Commissioner has had his comments printed by The Washington Post. He argues that the FCC is not really changing anything regarding net neutrality; rather, additional consumer protection will be available (through the FTC), strong consumer privacy and data security protections will remain, federal antitrust laws will still apply to prevent ISPs from acting in concert to block, throttle (slow down), or discriminate against Internet traffic, and state consumer-protection laws will continue to apply. (As to this last point, many commentators have asked the FCC to exercise exclusive jurisdiction, overturning any contrary state laws.)
Legal/Regulatory Issues. In proposing changes to the current net neutrality rules, this course-correction rulemaking proceeding, literally hundreds of thousands of comments have been filed, so many that the FBI is investigating “ghost/phantom” filings from a few email addresses on both sides of the issue. Having any one’s position heard in this seeming cacophony of voices/disparate interests will be a challenge for the FCC. In the past, the FCC has found it better to rely on the marketplace to set operative terms/conditions/availabilities of spectrum vs. seemingly heavy-handed and invariably out of date regulations, since technology changes have always been well ahead of any regulatory response/reaction. Of course the FCC, Federal Trade Commission (FTC), Small Business Administration (SBA), and/or Department of Justice can step in with respect to any given situation to threaten, ameliorate or simply prohibit anti-competitive behavior by any entity or entities in combination with each other. The problem may be that if any such alleged bad behavior is cited, it may take months or years to be interdicted with catastrophic losses in the interim.
Various Industry Players Participating: Virtually every communications-related industry and trade association has staked out a position/floated regulatory scheme trial balloons in this rulemaking proceeding. Affected parties include large and small users, industries such as Hollywood with its concern with streaming of shows/movies, as well as bundlers of large bandwidth video services such as Netflix, and would-be competitors such as Amazon and Google. Companies contemplating mergers/acquisitions with disparate communications entities such as AT&T (spectrum service provider) and Time Warner (content provider), as well as the Writers Guild, are also voicing their concerns.
Related and Unintended Consequences of Potential Policy/Rule Changes. Robust, speedy throughput and availability of Internet services to rural areas remain difficult problems which this net neutrality rulemaking proceeding is unlikely to resolve or even seriously address. (The FCC has a separate proceeding trying to deal with this rural have-nots problem, as it appears that domestic satellites do not have sufficient bandwidth nor speed to accomplish this anticipated explosion of Internet usage. Cybersecurity and hacking will also still be present, if not expanded upon if the net neutrality rules are changed without considering these other potential unintended consequences. (For some background on cybersecurity issues, see Pellegrin’s BriefCase blog on Cybersecurity, Vol. 1, Issue #1, July 2017)
The current network neutrality NPRM filing date for both comments and reply comments passed in mid-August. The full Commission is scheduled to vote on net neutrality December 14th. Comments on this blog posting by readers of Pellegrin’s BriefCase are welcome.
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Volume I, Issue #3, December 2017
Author’s Background and Caveats: ADVERTISING MATERIAL. The author has a robust communications and IT/IP legal practice and is available to assist on the Network Neutrality legal front, as well as serve as an expert witness in certain situations. He is well positioned to represent entities in various forums & before various government agencies, including the FCC. Nothing contained in Pellegrin’s BriefCase is to be taken as the last word on this subject nor relied upon as legal advice; rather, the author’s comments on emerging trends in business and prescient decisions in the law and government regulations/interpretations/policy are meant to make the reader more aware of trending issues and risks.
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Volume I, Issue #3, December 2017