FCC Acts to “Restore Internet Freedom”

On December 14, 2017, the FCC reversed it’s 2015 Open Internet Order and re-reclassified broadband Internet access service as an information service. The Declaratory Ruling and Report and Order did the following:

Declaratory Ruling

• Restores the classification of broadband Internet access service as an “information service” under Title I of the Communications Act—the classification affirmed by the Supreme Court in the 2005 Brand X case.  Reinstates the classification of mobile broadband Internet access service as a private mobile service.  

• Finds that the regulatory uncertainty created by utility-style Title II regulation has reduced Internet service provider (ISP) investment in networks, as well as hampered innovation, particularly among small ISPs serving rural consumers.  

• Finds that public policy, in addition to legal analysis, supports the information service classification, because it is more likely to encourage broadband investment and innovation, thereby furthering the goal of closing the digital divide and benefitting the entire Internet ecosystem.

• Restores broadband consumer protection authority to the Federal Trade Commission (FTC), enabling it to apply its extensive expertise to provide uniform online protections against unfair, deceptive, and anticompetitive practices. 

Report and Order

• Requires that ISPs disclose information about their practices to consumers, entrepreneurs, and the Commission, including any blocking, throttling, paid prioritization, or affiliated prioritization.  

• Finds that transparency, combined with market forces as well as antitrust and consumer protection laws, achieves benefits comparable to those of the 2015 “bright line” rules at a lower cost.  Eliminates the vague and expansive Internet Conduct Standard, under which the FCC could micromanage innovative business models.

The FCC’s new transparency rules must be approved by the Office of Information and Regulatory Affairs in the White House’s Office of Management and Budget. The process will likely take months.