On March 12, 2015, the Federal Communications Commission (“FCC”) released its order captioned In re Protecting and Promoting the Open Internet, (“Open Internet Order”). This order, one of the most important in the history of the Internet in the United States, reclassifies broadband Internet access services from an “information service” to a “telecommunication service,” thereby being subject to the common carrier provisions of Title II of the Telecommunication Act of 1996. With these provisions the FCC intends to secure that internet service providers (“ISP”) do not discriminate or favor the content of a provider over another banning the “paid prioritization” or payment for “fast lanes” practice.

The Road Towards the Open Internet Order

The first attempt of the FCC to create a legal framework for net neutrality was in 2005 with the Appropriate Framework for Broadband Access to The Internet Over Wireline Facilities. Grounded in their ancillary authority given by the Title I of the Telecommunication Act, the FCC issued this policy statement establishing some principles to encourage the broadband deployment and secure an open internet. Those principles were that consumers are entitled a) to access the lawful Internet content of their choice, b) to run applications and use services of their choice, c) to connect their choice of legal devices that not harm the network, and d) to benefit from the competition among network providers, application and service providers, and content providers. Although this public policy was the first step towards a net neutrality regime, in Comcast Corp. v. FCC the court held that it was not enforceable because the framework only contained guidelines and principles not linked to a specific legal provision of the Telecommunication Act.

The second attempt was the FCC Open Internet Order of 2010 struck down in 2014 by the United States Court of Appeals for the District of Columbia Circuit in the Verizon v. FCC decision. That order intended to adopt the “transparency,” “no blocking,” and “no unreasonable discrimination” rules to protect the freedom and openness of the Internet. However, despite the court upholding of the FCC’s use of section 706 of the Telecommunication Act as a substantive source of legal authority to adopt open Internet protections, the court vacated the “no blocking” and “no unreasonable discrimination” rules stating that those rules imposed common carrier (i.e. telecommunication services) obligations to ISPs, even though the ISPs were already classified as “information services” by the FCC in the Brand X decision. This decision was the push that the FCC needed in order to reclassify ISPs as telecommunication services.

The Open Internet Order

Before the issuance of the Open Internet Order, the Chairman of the FCC, Tom Wheeler, disclosed a fact sheet with the main points that the order will include. Among them were some “bright line rules” that prohibited practices to be considered damaging to the open Internet. Those rules are the following:

  • No Blocking: broadband providers may not block access to legal content, applications, services, or non-harmful devices.

  • No Throttling: broadband providers may not impair or degrade lawful Internet traffic on the basis of content, applications, services, or non-harmful devices.

  • No Paid Prioritization: broadband providers may not favor some lawful Internet traffic over other lawful traffic in exchange for consideration – in other words, no “fast lanes.”  This rule also bans ISPs from prioritizing content and services of their affiliates.

In order to impose the above rules to the ISPs (and in line with the Verizon decision), the FCC reclassified the broadband Internet access services from an “information service” to a “telecommunication service,” grounded in the authority given by section 706 and Title II of the Telecommunication Act. The FCC concluded that since “telecommunications” means “the transmission, between or among points specified by the user, of information of the user’s choosing, without change in the form or content of the information as sent and received,” companies that provide broadband Internet access services were offering telecommunications for a fee directly to the public, fitting within the definition of “telecommunication service” provided by the Telecommunication Act.

As a “telecommunication service,” ISPs are now subject to common carrier duties which basically means that sections 201 and 202 of the Telecommunication Act, among others provisions, apply to them. These sections provide that common carriers are obligated to provide communication services upon reasonable request; that all charges, practices, classifications, and regulations for and in connection with such communication service, shall be just and reasonable, and without unjust or unreasonable discrimination or preferences. On the other hand, the FCC excluded the application to ISPs of some provisions like the ones related to rate regulation, universal service contributions, and also makes clear that the Open Internet Order will not impose, suggest or authorize any new taxes or fees.

This order was approved in a 3-2 decision and was celebrated by those who believed that an open Internet will promote market competition and innovation. They argue that industry self-regulation has not been enough to prevent ISPs from affecting Internet traffic, like when Comcast was involved in a controversy for interfering with a peer-to-peer application, or the agreements that Netflix had to reach with Comcast and Verizon in order to improve the quality of its streaming service. On the contrary, there are others that argue that the Open Internet Order will affect investment in the telecommunication industry and will degenerate into rate and price regulation.

The Kick Off Against the Open Internet Order

On March 23rd, 2015, two “protective petitions for review” were filed against the Open Internet Order. One of them was filed by US Telecom, a trade group that include ISPs, before the U.S. Court of Appeals for the District of Columbia (that issued the Verizon decision). The other was filed by a local ISP before the U.S. Court of Appeals for the Fifth Circuit.

According to Jon Banks, the Vice President of US Telecom,

The focus of our legal appeal will be on the FCC’s decision to reclassify broadband Internet access service as a public utility service after a decade of amazing innovation and investment under the FCC’s previous light-touch approach. As our industry has said many times, we do not block or throttle traffic and FCC rules prohibiting blocking or throttling will not be the focus of our appeal.

If the lawsuits are dismissed then these and other companies will have another opportunity to challenge the Open Internet Order within 10 days after the order is published in the Federal Register. With this legal scenario, the only certainty is that the final outcome of the net neutrality debate remains in the distance.

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