Policy

Stuck in Neutral

12/06/2010 9:42 AM Eastern

Washington — After a stormy debate, aborted compromises and several half-starts, the U.S. government’s plan to enforce network neutrality seems nearly set, with the Federal Communications Commission ready to vote on the matter in two weeks (Dec. 21).

Multichannel News cover story, Dec. 6, 2010Despite the dire warnings and arguments
from both sides, the plan put forth by chairman
Julius Genachowski — which has been
begrudgingly embraced by cable operators
— doesn’t really change much in terms of basic
regulation. In many ways, it codifies the
status quo.

The new proposal would generally require
broadband providers to afford all subscribers
access to all legal online content via their
networks. Advocates say the net-neutrality
rules are essential to preserving an open Internet
and making sure cable operators and
phone companies don’t slow down or block
online content from competing companies.

Genachowski said the FCC has an “obligation
to be a cop on the beat to protect broadband
consumers and foster innovation,
investment, and competition.”

“I believe the proposed framework advances
this mission, and that its adoption
will provide increased certainty and benefi
ts to the American public,” he
said.

Industry players, such as
National Cable & Telecommunications
Association president
Kyle McSlarrow, lined up
last week essentially to dub the
compromise an imperfect but
acceptable solution.

CRITICS WEIGH IN

Public-interest groups aren’t
thrilled with the result,
though. That’s because it allows
cable operators more
flexibility to manage their
own traffic, so long as it’s done
in public.

Some critics say the plan is a compromise
that allows broadband providers
the ability to set usage-based
pricing, which might allow
them to discriminate against
competitors who are vying for
space on the network. Still,
many public-interest groups
were pleased Genachowski
was actually scheduling a vote
on the item.

While cable operators would
still prefer that the FCC not
adopt the network-neutrality
rules at all, they know Genachowski
has the three votes
he needs to adopt such regulation.
One wild card: Democratic
commissioner Michael
Copps, a strong backer of Title II, who may feel the order is too weak.

Verizon and the telephone-industry
trade group, USTelecom, were not happy
with the fact that the FCC’s proposed
net-neutrality regulations do not sunset,
as they would have under a similar legislative
compromise that failed to gain Republican
support.

While Republicans on the commission
were critical of the draft, neither Copps nor
Democrat Mignon Clyburn endorsed the
proposal in their statements, saying instead
that there was work that still had to be done.

But if the FCC does OK the order,
McSlarrow said, what it does at baseline is
codify the standards the industry already
follows.

In addition to Republicans flexing their
oversight muscle, there will be the inevitable
court challenges. The NCTA, AT&T and
other industry parties that support the compromise
are unlikely to lead that charge, but
that would not stop opponents from taking
legal action.

COURT BATTLE AHEAD?

A key question — and one that has publicinterest
groups complaining about the approach
— is whether the FCC can justify its
decision in federal court. That would be a
high mountain to climb, as signaled by the
U.S. Court of Appeals for the D.C. Circuit’s
April decision blocking the FCC from regulating
Comcast’s management of Internet
traffic generated by the peer-to-peer filesharing
service BitTorrent.

FCC chairman Julius Genachowski said
last week that part of the reason for the vote
was to provide some regulatory certainty to
the industry.

But it is still unclear how solid the FCC’s
authority over
broadband access
under Title I of the
Telecommunications
Act is, despite the
contention by senior
agency officials
that they had come
up with a legally sustainable defense under
the Title I information-services classifi cation
that does not carry the same mandatory access
requirements as the Title II commoncarrier
classification.

In outlining his initial “third way” proposal
for reclassifying Internet access under
Title II back in May, Genachowski said
FCC general counsel Austin Schlick had advised
him that tying net neutrality to ancillary
authority under Title I would likely fail
again in court. The chairman called Title I “a
protracted, piecemeal approach to defending
essential policy initiatives.”

In a blog post ing last May, Schlick
spelled out the problems with trying to tie
authority to Title I.

“This is a recipe for prolonged uncertainty,”
he said of the suggestion by “big
cable and telephone companies ... [to]
stick with the information-service classification, try to adapt [FCC] policies to the
new restrictions announced by the Comcast
court, and see how it goes.”

Schlick added that “[any] action the Commission
might take in the broadband area —
be it promoting universal service, requiring
accurate and informative consumer disclosures,
preserving free and open communications,
ensuring usability by persons with
disabilities, preventing misuse of customers’
private information, or strengthening
network defenses against cyber-attacks
— would be subject to challenge on jurisdictional
grounds, because the relevant provisions
of the Communications Act would
not specifically address broadband-access
services.”

The appeals court did not say the FCC
could not find the authority under Title I,
but suggested it could be a tough sell. “Even
if the Commission won every case,” Schlick
said, “there would be implementation delays
of months or years while legal challenges
worked their way through the courts
— eons in what the 9th Circuit has called
the ‘quicksilver technological environment’
of broadband.”

The FCC is proposing to codify the following
guidelines, which it adopted when it classified Internet access under Title I because
that classification meant ISPs were not subject
to mandatory access provisions: “Consumers
are entitled to access the lawful
Internet content of
their choice; to run
applications and
use services of their
choice, subject to
the needs of law enforcement;
to connect
their choice of
legal devices that do not harm the network;
and are entitled to competition among network
providers, application and service providers,
and content providers.” To those the
FCC is adding transparency and nondiscrimination
principles, all subject to reasonable
network management and enforced on
a case-by case basis.

The announcement of a network neutrality
vote made it less likely the FCC would be
able to get the Comcast/NBCU deal out the
door by the end of the year. A senior commission
source said they had yet to see a draft on
the decision, but said it was several hundred
pages. An industry and FCC source shared
the sentiment that January or February was
looking more likely for a decision.

October
November