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FCC Pushes Cable’s Buttons

Reclassifies ISPs as Common Carriers, Pre-empts State Laws 3/02/2015 8:00 AM Eastern
TakeAway

In a one-two punch with plenty of theatrics, the FCC last week voted in favor of Title II and pre-emption of state broadband laws.

WASHINGTON — Accompanied by some political theater and against a backdrop of stinging minority dissents, a divided Federal Communications Commission voted 3-2 along party lines to reclassify Internet access as a telecom service subject to both Title II regulations and the FCC’s Section 706 authority to promote high-speed broadband.

 

There was no real suspense around the vote given that FCC chairman Tom Wheeler had tipped his Title II hand three weeks earlier.

 

The FCC majority voted to establish brightline rules against blocking, throttling and “prioritized fast lanes,” as Wheeler called them, extending all the rules for the first time to mobile as well as fixed broadband. The agency also adopted a general conduct standard to deal with case-by-case complaints about conduct that does not fit under those rules — such as sponsored data plans or zeroed rating plans — as well as “new and novel” threats to consumers, competition or innovation, Wheeler said last week.

 

ROOM FOR RATES

 

Internet-service providers said they see a lot of room in that standard for FCC intervention, including ex post facto rate regulation.

 

The FCC’s Enforcement Bureau will respond to both formal and informal complaints, and can generate its own investigations into those new and novel practices. If asked, the bureau will also provide guidance, though nonbinding, to companies wanting to know whether their practices might not pass muster.

 

For the first time, the FCC is also asserting authority over interconnections in the context of net neutrality and will investigate complaints, under the Title II just-and-reasonable standard, on a case-bycase basis.

 

The rules apply to commercial broadband, not enterprise business services.

 

“The Internet is simply too important to allow broadband providers to be the ones making the rules,” Wheeler said, making it clear that he did not think comparisons to past treatment of broadband held up to what is inarguably one of the most transformative technologies in history.

 

Now the waiting begins, first for the final order to be released, then for publication in the Federal Register, then for the rules to take effect 60 days after that (all but the enhanced transparency rules, whichmust be vetted by the Office of Management and Budget). The FCC may be asked to stay the rules, which it will not. A court will definitely be asked to stay the rules, which is a slightly harder call. Wheeler said last week he thinks a stay would be a high hurdle.

 

CTIA-The Wireless Association and USTelecom, representing mobile and fixed telco ISPs, last week told the FCC they would see the agency in court.

 

The five FCC commissioners — or at least the three Democrats who voted for Title II — are already slated to defend their decision at a March 18 Hill hearing before the Senate Commerce Committee, and the House Energy & Communications Committee is trying to line them up as well. Republicans in both houses will push their bill to block the Title II vote. But even if it passed both GOP-controlled houses of Congress, President Obama will almost certainly veto it, since he came out strongly for Title II.

 

A few of inches of snow delayed, but did not prevent, the FCC from holding the historic vote Feb. 26, or what Title II advocate Sen. Ed Markey (D-Mass.) had christened “Internet Innovation Freedom Day.” Wheeler called it “the proudest day of his public policy life.”

 

PRE-EMPTION PUSH

 

While Title II was getting all the attention, the FCC delivered something of a one-two punch at the Feb. 26 meeting, voting to preempt state laws limiting the expansion of municipal broadband.

 

The FCC signaled it could not pre-empt state laws that prevent municipal broadband, but that if a state had authorized a city’s buildout, the agency could prevent states from limiting the network’s expansion beyond the footprints of the public utilities providing the service.

 

Dissenting Republicans called the move illegal and a threat to state sovereignty.

 

The decision only applied to petitions for pre-emption by Chattanooga, Tenn., and Wilson, N.C., but Wheeler has suggested it gives a signal of what the FCC can and would do in similar circumstances.

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