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June 25-July 1: The Return of Network Neutrality

June 25-July 1: The Return of Network Neutrality

In late December 2010, the Federal Communications Commission adopted rules aimed at preserving the Internet as an open network enabling consumer choice, freedom of expression, user control, competition and the freedom to innovate. The rules, the FCC promised then, would ensure that Internet openness will continue, providing greater certainty to consumers, innovators, investors, and broadband providers, including the flexibility providers need to effectively manage their networks. But for six months, observers have asked "Where's the rules?" This past week, we've seen renewed activity at the FCC that could help make the rules a reality.

The rules, based on a set of principles adopted in 2005, are an attempt to provide regulations that will keep ISPs from discriminating against traffic on their networks, so a broadband provider couldn't block content from Yahoo, for instance, or play favorites with certain web sites or services. The FCC had started this process in September 2009.

On June 24, Broadcasting & Cable's John Eggerton reported that the FCC would soon send its network neutrality rules to the Office of Management Budget for Paperwork Reduction Act vetting. The rules cannot be published in the Federal Register -- and made official -- until OMB completes its review which will include a 30 day comment period to decide if they create unduly burdensome paperwork requirements for broadband providers. On June 30, we learned, the FCC finally sent the rules to the OMB.

Observers breathlessly await the Federal Register publication of the rules because that will allow interested parties to challenge the rules in court. FCC Commissioner Robert McDowell, who dissented from the rules back in December, says he thinks that there is a "better than average chance" that a court, likely the DC circuit, will stay the rules. It is likely to be a legal battle that ends up at the Supreme Court.

Monday, June 27 was the last day the Supreme Court's term. A number of decisions were released that day including the High Court's decision to strike down a California law that limited the sale of violent video games to minors, ruling the restriction violated the free-speech principles in the 1st Amendment. Some observers say that the pro-free speech ruling could have a counterintuitive result: it could give broadband providers a boost in their fight against network neutrality.

"Today's opinion may further strengthen the carriers' arguments that any nondiscrimination requirement imposed on them should be struck down," writes Cardozo Law School professor Susan Crawford, a prominent neutrality proponent and former White House advisor. The key issue, says Crawford, centers on whether the FCC's rules are interpreted as "content-based." If so, then broadband providers can argue that the rules are invalid unless they meet the "strict scrutiny" standard -- meaning that they are as narrow as possible and further a compelling interest. Crawford adds that content-based rules are "always" struck down by the Supreme Court. Crawford argues that the carriers will be able to argue the rules are impermissible because they require providers to transmit certain content.

"Even though today's [video game] opinion is about regulations prohibiting speech rather than regulations requiring speech, it's likely that the carriers will be able to frame the debate their way: We'd like to speak, to use all of our pipes the way we want to, without restriction. By forcing us to fairly carry speech with which we don't want to be associated, you're restricting our free use of our private communications medium," she writes. She notes Commissioner McDowell's dissent in her post:

“[W]hile rules governing the act of routing data packets might arguably be content neutral regulations, application of the rules in the real world may effectively dictate antecedent speaker-based and content-based choices about which data packets to carry and how best to present the speech that they embody.”

Of course, the courts are not the only arena in which the FCC's rules will be challenged. Earlier this month, the House Committee on Appropriations adopted a FY12 Financial Services Appropriations bill with language that would prohibit money for the agency’s Open Internet Order. This week, a number of Senate Democrats called on their colleagues to block the effort.

Despite the opposition, the FCC continues to move forward on implementation. On June 30, the FCC's Enforcement Bureau and Office of General Counsel offer initial guidance regarding specific methods of disclosure that will be considered to comply with the transparency rule adopted in the FCC’s Open Internet Order. The guidance is intended for broadband providers seeking additional clarification about disclosure practices that will satisfy the rule when it becomes effective.

On June 30, the FCC also released a Public Notice seeking nominations for membership on its Open Internet Advisory Committee (OIAC) from the following types of groups and individuals:

  • Consumers, consumer advocates, and/or organizations representing consumer interests;
  • Internet engineering experts;
  • Providers and developers of online content, applications, or services;
  • Network equipment providers, developers, manufacturers, and suppliers;
  • End-user device developers, manufacturers, and suppliers;
  • Investors in Internet-related technologies, services, and products, including investors in broadband providers and/or online content, application, and services providers;
  • Broadband Internet access service providers; and
  • Other individuals with appropriate expertise.

Nominations are due before September 2, 2011.

The OIAC will aid in tracking and evaluating the effects of the Commission’s Open Internet rules. Specifically, it is anticipated that “[t]he Committee will observe market developments regarding the freedom and openness of the Internet and will focus in particular on issues addressed in the FCC’s Open Internet rules, such as transparency, reasonable network management practices, differences in treatment of fixed and mobile broadband services, specialized services, technical standards, and the state of competition.”

The open Internet also appeared on the international stage this week. On June 29, the Organization for Economic Co-operation and Development released the Communiqué on Principles for Internet Policy-Making. The new principles, agreed by OECD member governments, business representatives and technical experts, aim to advance the debate on Internet governance and:

  • Promote and protect the global free flow of information
  • Promote the open, distributed and interconnected nature of the Internet
  • Promote investment and competition in high speed networks and services
  • Promote and Enable the Cross-Border Delivery of Services
  • Encourage multi-stakeholder co-operation in policy development processes
  • Foster voluntarily developed codes of conduct
  • Develop capacities to bring publicly available, reliable data into the policy-making process
  • Ensure transparency, fair process, and accountability
  • Strengthen consistency and effectiveness in privacy protection at a global level
  • Maximize individual empowerment
  • Promote Creativity and Innovation
  • Limit Internet intermediary liability
  • Encourage co-operation to promote Internet security
  • Give appropriate priority to enforcement efforts

Assistant Secretary for Communications and Information and National Telecommunications and Information Administration (NTIA) Administrator Lawrence E. Strickling said the agreement is a "major achievement that will support the continued innovation and growth of the global Internet economy. The policy-making principles provide a shared framework for addressing Internet issues while promoting an open, interconnected Internet that encourages investment and the trust of its users."

But a coalition of more than 80 civil society organizations refused to endorse the communiqué because the document’s emphasis on protecting intellectual property and the policies recommended to achieve that aim discarded basic principles such as due process and free expression rights. Many groups did salute the OECD's focus on access and openness.

At the same OECD meeting, telecommunications regulators in the UK and US said they plan to stay out of a dispute between mobile-phone operators and Internet companies such as Google over who should pay for high-speed wireless networks.

“I think it’s premature to regulate,” Ed Vaizey, the UK communications minister, said. “Right now this really is a matter to be considered between companies.” The operators face mounting costs for building next-generation networks, and have rarely succeeded in offering their own video or social-networking services over those conduits. Vaizey joined FCC Chairman Julius Genachowski at a summit in Paris this week in ruling out regulatory intervention for now to help wireless operators share network costs.

Writing for Engadget, Rick Karr explored this week why Internet speeds and prices are better in the Netherlands and the UK than in the United States. His short answer: The government. Not government spending. The UK's administration hasn't invested a penny in broadband infrastructure, and most of the network in the Netherlands has been built with private capital. (The city government in Amsterdam took a minority stake in the fiber network there, but that's an investment that will pay dividends if the network is profitable -- and the private investors who own the majority share of the system plan to make sure that it will be.) The game-changer in these two European countries has been government regulators who have forced more competition in the market for broadband.

Looking ahead to the post-4th agenda, the AT&T/T-Mobile debate could heat up -- in California (also). Back in DC, the House Commerce Committee DC examines Federal Government Spectrum Use and FCC Regulatory Reform.

Have a great holiday; see you after the break.