Breaking News

FCC Invites Comments on Proposed Network Neutrality Rules:

Comments due: January 14, 2010; Replies due March 5, 2010

October 22 , 2009
printable version

The Federal Communications Commission (“FCC”) today adopted its long-anticipated Notice of Proposed Rulemaking (“NPRM”) inviting comments on draft rules that would codify and supplement existing Internet openness (also known as “Network Neutrality”) principles. Comments are due January 14, 2010. Replies are due March 5, 2010.

I. SUMMARY OF THE FCC’S PROPOSED RULES

A. The Six Network Neutrality Principles.

At the core of the draft proposal, the FCC seeks to codify the “Network Neutrality Four Principals” that it adopted in a policy statement in 2005. These four principles stand for the proposition that no provider of broadband Internet access service to end users is allowed to: 1) prevent its users from sending or receiving the lawful content of the user’s choice over the Internet; 2) prevent any of its users from running the lawful applications or using the lawful services of the user’s choice; 3) prevent any of its users from connecting to and using on its network the user’s choice of lawful devices that do not harm the network; and 4) deprive any of its users of the user’s entitlement to competition among network providers, application providers, service providers, and content providers.

In addition (and as anticipated), the NPRM also contains two “new” principles, under which all broadband Internet access service providers would be required to: 5) treat lawful content, applications, and services in a nondiscriminatory manner; and 6) disclose its network management practice information as reasonably required for users and content, application, and service providers to enjoy the protections specified in the network neutrality rules.

B. Reasonable Network Maintenance Practices.

The draft rules contemplate that broadband Internet access service providers would be permitted to address harmful traffic and traffic unwanted by users, such as spam, and prevent both the transfer of unlawful content, such as child pornography, and the unlawful transfer of content, such as a transfer that would infringe copyright. Specifically, the proposed rules expressly state that the network neutrality principles are subject to reasonable network management practices, which expressly include: 1) practices to reduce or mitigate the effects of network congestion, or address network quality-of-service concerns; 2) mitigate problems with spam and viruses; 3) prevent the transfer of unlawful content; 4) prevent the unlawful transfer of content; and 5) any other reasonable network management practices.

C. Regulatory Treatment of “Managed” Services.

The FCC also seeks comments on how it should address “managed” services, which are Internet-Protocol-based offerings provided over the same networks used for broadband Internet access services. Such services could include voice, video, and enterprise business services, as well as applications like telemedicine, smart grid, or eLearning offerings. The NPRM seeks comments on how the FCC should define these managed services, what policies should apply to them, and how to ensure that broadband providers’ ability to innovate, develop valuable new services, and experiment with new technologies and business models, and how they can co-exist with the network neutrality principles.

D. Applicability to all Broadband Platforms.

The Notice affirms that the six principles it proposes to codify would apply to all platforms for broadband Internet access, including mobile wireless broadband, while recognizing that different access platforms involve significantly different technologies, market structures, patterns of consumer usage, and regulatory history. To that end, the Notice seeks comment on how, in what time frames or phases, and to what extent the principles should apply to non-wireline forms of broadband Internet access, including mobile wireless.

E. Enforcement.

The FCC also invites comments on the critical question of how these rules are to be enforced. There are a number of possibilities, ranging from simply using the current FCC complaint processes, to establishing a new process specific to the network neutrality rules. The FCC is also investigating whether there should be different processes for different classes of defendants. In addition, the FCC will consider whether it can or should award damages to claimants.

II. FCC REACTION TO RECENT CRITICISMS

These proposed rules are widely viewed as beneficial to providers of “hosted” or “edge” services (i.e. services that are hosted by servers at the edge of the network, rather than imbedded within the network), at the expense of service providers that own and operate their own networks. In the days prior to today’s vote on the NPRM, the FCC’s efforts to adopt these proposed network neutrality rules had been the focus of criticism, particularly from network operators and certain members of Congress, who believed that the FCC has telegraphed that the outcome of this proceeding is pre-determined, regardless of any legitimate concerns that may be voiced by broadband network service providers.
In apparent response to this criticism, the NPRM contains several questions that appear aimed at quieting concerns that the FCC has already determined the outcome of this proceeding even before it has completed the notice and comment process. Specifically, the FCC has stated that it will also consider whether the network neutrality rules should apply to Internet application and content providers, such as Google, Amazon and Youtube, in addition to broadband Internet service providers. In addition, the NPRM elicits comments on questions that arise when a broadband Internet service provider also provides its own “managed” services over a single network, or when other providers want to provide managed services over a third-party network. These questions include whether such services should be included within the definition of a “broadband Internet access” service to which the network neutrality rules apply.

Further and from a rhetorical standpoint, FCC Chairman Genachowki released an accompanying statement in which he attempts to reassure the regulated community that the outcome of the proceeding is not pre-determined and that all viewpoints are important and will be considered on the merits. However, in the NPRM it is treated as a given that the absence of enforceable network neutrality rules is a problem that needs to be, and will be, fixed. With regard to the concerns of broadband Internet access service providers, upon whom the limitations of these rules will fall, the Chairman comments in his statement that he believes that “the idea that [the FCC] must choose between innovation and investment on the ‘edge’ of the network, where content applications are developed, or innovation and investment in the ‘core’ network, where broadband providers operate, is a false choice.” Nevertheless, the Chairman did not indicate how the network neutrality rules could be crafted so as to have an equal effect on each segment of the industry.

We would be pleased to respond to any questions regarding this proceeding.