FCC Proposes Allowing Last Mile Priority Service

New Net Neutrality Rules Would Also Set Baseline to Subs 4/23/2014 6:15 PM Eastern

Proposed new rules would allow OTT providers to negotiate with ISPs for enhanced last mile access

The commission's proposed new network neutrality rules, being circulated Thursday (April 24), would allow for Internet content providers to negotiate with ISPs for enhanced last mile service to Web users, according to an FCC official speaking not for attribution. The news drew harsh criticism from net neutrality advocacy groups.

But the proposed rules will also reimpose the no-blocking rule essentially verbatim, provide for a baseline of service that must be provided to all broadband subs, as well as a review process for anticompetitive conduct, combined with enhanced disclosure for network management practices.

"There are reports that the FCC is gutting the Open Internet rule," said FCC Chairman Tom Wheeler in a statement late Wednesday. "They are flat out wrong. Tomorrow we will circulate to the Commission a new Open Internet proposal that will restore the concepts of net neutrality consistent with the court's ruling in January. There is no 'turnaround in policy.' The same rules will apply to all Internet content. As with the original Open Internet rules, and consistent with the court's decision, behavior that harms consumers or competition will not be permitted."

“The FCC will be seeking comment on adopting Open Internet rules that achieve the goals of the 2010 Open Internet Order in a manner consistent with the D.C. Circuit’s decision in Verizon v. FCC," said the official. "The NPRM will propose, consistent with the Court’s analysis, that broadband providers would be required to offer a baseline level of service to their subscribers, along with the ability to enter into individual negotiations with content providers. In all instances, broadband  providers would need to act in a commercially reasonable manner subject to review on a case-by-case basis. Exactly what the baseline level of service would be, the construction of a 'commercially reasonable' standard, and the manner in which disputes would be resolved, are all among the topics on which the FCC will be seeking comment.”


According to an FCC official familiar with the proposal, it would reinstate the same no blocking rule as in the FCC's 2010 rules, but with stronger legal rationale. The "baseline" service above which ISPs could negotiate for paid priority on reasonable terms, stems from the FCC's explanation to the D.C.Circuit that the 2010 rules barred blocking of content, but were also intended to establish a minimum leval of service above which negotiation could be conducted.


The NPRM recommends a new legal standard for commercial reasonableness that would be applied to broadband nets to protect Internet openness.


The Wall Street Journal first reported that the network neutrality proposal, which FCC Chairman Tom Wheeler confirmed would be circulated Thursday, included allowing ISPs to charge for enhanced access to consumers, so long as it was an commercially reasonable rates available to all. ISPs can already charge for access to the backbone network, although Netflix, which struck such a paid peering agreement with Comcast, has argued that such paid priority has network neutrality implications.


The FCC also plans to require enhanced disclosure about how networks are managing traffic. Chairman Tom Wheeler has said the FCC would look at charges of discrimination on a case-by case basis. That review, combined with enhanced disclosure could allow the commission to police anticompetitive discrimination.


Net neutrality advocates were almost universally unhappy with the proposal.


"The FCC is inviting ISPs to pick winners and losers online," said Michael Weinberg, Vice President at Public Knowledge. "The very essence of a 'commercial reasonableness' standard is discrimination. And the core of net neutrality is nondiscrimination. This is not net neutrality. This standard allows ISPs to impose a new price of entry for innovation on the Internet."


"When the Commission used a commercial reasonableness standard for wireless data roaming, it explicitly found that it may be commercially reasonable for a broadband ISP to charge an edge provider higher rates because its service is competitively threatening. It is hard to see how the commercial reasonableness standard, which inherently offers less protection than the standard in the previous Open Internet Rules, can serve the same policy goals."


Free Press was even tougher on the commission, as was Common Cause.


"With this proposal, the FCC is aiding and abetting the largest ISPs in their efforts to destroy the open Internet," said Free Press President Craig Aaron. "Giving ISPs the green light to implement pay-for-priority schemes will be a disaster for startups, nonprofits and everyday Internet users who cannot afford these unnecessary tolls. These users will all be pushed onto the Internet dirt road, while deep pocketed Internet companies enjoy the benefits of the newly created fast lanes."


“If it goes forward, this capitulation will represent Washington at its worst,” said Todd O’Boyle, program director of Common Cause’s Media and Democracy Reform Initiative. “Americans were promised – and deserve – an Internet that is free of toll roads, fast lanes, and censorship – corporate or governmental. If Wheeler’s rules deliver anything less, that would be a betrayal.”


"These proposed rules would undermine the Open Internet by allowing Internet Service Providers to extort fees out of web platforms, and thereby advantage certain services," said Demand Progress Executive Director David Segal.


"If published reports are accurate, we may be on the cusp of a new era of the Internet, ruled by powerful gatekeepers and manipulated to the detriment of the millions of voices that, to this point, have made the Internet the democratizing force that it is today," said Jessica Gonzalez, EVP and general counsel of the National Hispanic Media Coalition.


The D.C. Circuit, which remanded the network neutrality rules to the FCC, signaled that it could take a cue from those data roaming rules in crafting rules that would pass muster.


"The NPRM is consistent with the framework laid out in February, follows the blueprint of the DC Circuit opinion in Verizon v. FCC, and seeks broad public comment on the adoption of final rules," said an FCC official on background.


The chairman plans to vote on the item at the May 15 meeting, which could be loaded with high-profile items, including an incentive auction framework, spectrum aggregation, and wireless microphone issues.


Want to read more stories like this?
Get our Free Newsletter Here!