What it means: The FCC's net neutrality vote

FCC net neutrality discussion
FCC Chairman Tom Wheeler and commissioner Jessica Rosenworcel discuss net neutrality before the agency voted in favor of Wheeler's proposed rules on Thursday. Credit: REUTERS/Yuri Gripas

In addition to expected legal challenges, experts say a profusion of private networks will emerge

Net neutrality has been debated for a decade, but the Federal Communications Commission's historic vote on Thursday signals only the beginning of further battles and likely lawsuits.

At issue is how best to keep the Internet open and neutral to all while still giving Internet service providers sufficient incentive to expand their networks to serve more customers and to support an exploding array of data-hungry applications as futuristic as holographic videoconferencing used for home-based medical exams.

The FCC voted 3-to-2 to create a series of sweeping changes, including three open Internet conduct rules that block broadband providers, both wired and wireless, from blocking or throttling Internet traffic. The rules also ban broadband providers from taking payments to prioritize content and services over their networks.

The vote followed party lines, with Democrats Tom Wheeler, the chairman, and commissioners Mignon Clyburn and Jessica Rosenworcel voting in favor. Republican commissioners Ajit Pai and Michael O'Rielly dissented.

The main legal instrument used by the FCC to put these rules in place comes through Title II of the Communications Act of 1934. Many cable, phone and wireless providers, including prominent voices at AT&T and Verizon, objected to the use of Title II, saying the rules would subject them to arduous and costly reviews -- the same as other utilities like phone service -- that will detract from their investments in growth and expansion.

Opponents also predict that future FCC commissioners will try to impose tariffs and fee-setting regulations on Internet providers, although the newly adopted rules don't  explicitly say so. An FCC summary states that broadband providers "shall not be subject to utility-style rate regulation." (The full ruling of the FCC is not expected for weeks.)

Title II supporters included FCC Chairman Tom Wheeler, President Obama and many of the 4 million people, public interest groups and companies who submitted comments to the FCC on the issue. These supporters maintain that reclassifying broadband providers under Title II puts broadband, appropriately, in the category of other utilities, akin to a 21st century version of electricity or telephone service. The FCC outlined these so-called "Bright Line Rules" and other details in an online fact sheet and a press release.

Where it started

The primary motivation for Wheeler to propose these Open Internet rules was a U.S. Court of Appeals decision on Jan. 14, 2014 in the now-famous Verizon vs. FCC case which vacated existing FCC rules that preventing Internet blocking and unreasonable discrimination. Those earlier FCC rules had stemmed from two oft-cited FCC decisions: In 1995, the FCC found Madison River Communications had blocked Vonage Voice over IP services to some customers; In 2008, the FCC said Comcast was arbitrarily throttling BitTorrent traffic in violation of FCC principles. The FCC has outlined some of this history on its website.

Other provisions of new FCC rules

Also in its vote, the FCC decided to use Section 706 of the Telecommunications Act of 1996 to supplant Title II in its adoption of Open Internet rules. Section 706 was specifically cited by the Court of Appeals in the 2014 Verizon case as giving the commission an independent grant of authority to support such rules.

By using both Section 706 and Title II to invoke new rules, FCC senior officials have said they are employing a "tailored" approach to Open Internet enforcement that will withstand the inevitable lawsuits threatened by multiple ISPs. Title II allows the FCC to use a broad "just and reasonable" standard in its regulation of Internet providers.

One area that is sure to stir up controversy and lawsuits is how the FCC uses its Title II "just and reasonable" standard to act on complaints by so-called "edge" companies, such as Netflix, that connect their services to Internet providers like AT&T, Comcast and other broadband providers. For example, an edge provider could complain to the FCC that its Internet capacity was unreasonably limited by an Internet provider, opening up an FCC inquiry and possible ruling.

Title II also allows competitors to an Internet provider in a community to access the same utility poles and underground conduits, in hopes of boosting the deployment of new broadband networks.

What some supporters and opponents say

Supporting the new FCC order are a range of public interest groups that point to the Internet as the primary medium of free speech today.

In congratulating the grassroots movement that spurred the FCC's action, U.S. Sen. Ed Markey, D-Mass., called the effort a 21st-century battle where supporters acted as modern-day Paul Reveres. "You have sounded the alarm and called us to arms ... to advocate for this new set of rules," Markey said in a conference call with reporters. "This revolution was not only televised but it was tweeted ... around the world."

The new rules will help protect the economy and are as important as keeping our air, water and roads safe, Markey added. "Reclassifying under Title II is a major victory for consumers," he said.

During the FCC hearing, Tim Berners-Lee, founder of the World Wide Web, in a pre-recorded video statement , gave his support to the Title II reclassification as the means to keep "permissionless innovation" alive on the Web.

Etsy CEO Chad Dickerson also testified about the value of keeping an unrestricted Internet to support businesses like Etsy, a peer-to-peer e-commerce Web site that supports sales by online artists and designers. In an emotional highlight, Dickerson read a letter from a woman identified only as Nancy from California who had been injured in a traffic accident and was relying on sales of her goods from her chair at home via Etsy. "My dream is alive and viable because of the free Internet," she said.

Producer and writer Veena Sud described at the hearing how her video series The Killing had been canceled on AMC television but gained renewed life with online streaming over Netflix. Such online series are able to promote more programming competition and bring more women into executive video production roles, she said.

Malkia Cyril, director of the Center for Media Justice, said the FCC order helps keep the Internet open to protect civil rights and promote fair policing in cities such as Ferguson, Mo., as well as fair wages in workplaces. "The Internet is where movements like Black Lives Matter are born and where dissent is protected and where underserved communities can plead our cause," she said in a conference call.

Like many other supporters, Cyril argued that enforcement of the FCC's rules will matter as much as the creation of the new rules.

Opponents to the FCC's new rules, meanwhile, have thrown out a wide range of objections.

Most critics call the FCC rules an over-regulation of a thriving Internet industry. A group of congressional Republicans had urged the FCC to delay its vote, while U.S. Rep. Marsha Blackburn, R-Tenn., described reliance on Title II as an outdated, 1930s-style utility regulation.

Picking up on that theme, Verizon posted a blog shortly after the FCC vote that was composed using old-fashioned Morse Code and titled, "FCC's 'Throwback Thursday' Move Imposes 1930s Rules on the Internet." (The blog includes a translation of the press release with a 1934 dateline and the typeface of a manual typewriter.)

Blackburn also argued that in the future, the FCC could impose rate regulation on Internet providers.

Pai and O'Rielly, the Republican FCC commissioners, both hammered on the likelihood of future FCC rate regulation on Internet service providers. Pai predicted $11 billion each year in new fees would be imposed on consumers. O'Reilly argued that the "just and reasonable" review clause can be interpreted to grant the FCC the ability to regulate rates set by Internet providers.

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