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FCC Adopts Title II Rules

Alan Breznick
2/26/2015
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In a historic move, the FCC has decided to reclassify US broadband service as a telecom service under Title II of the Communications Act, making broadband potentially subject to utility-style regulations for the first time.

By a 3-2 vote conducted along strictly partisan lines, the Democratic-led Federal Communications Commission (FCC) approved the Open Internet order proposed by Commission Chairman Tom Wheeler early Thursday afternoon. The 317-page order attempts to establish long-sought tough net neutrality rules for the Internet by banning such practices as traffic blocking, throttling and paid prioritization and enforcing those restrictions by applying the much stricter regulatory regime used for telecom services.

Flanked by his two Democratic colleagues in blue, FCC Chairman Tom Wheeler (third from right) shepherded tough net neutrality rules through a sharply divided Commission.
Flanked by his two Democratic colleagues in blue, FCC Chairman Tom Wheeler (third from right) shepherded tough net neutrality rules through a sharply divided Commission.

The move by the FCC, which was widely expected following earlier public statements on the issue by both President Obama and FCC Chairman Tom Wheeler, will apply a specially streamlined Title II regulatory regime to both fixed wireline and mobile broadband service. Thus, both types of broadband service will be regulated in the same fashion for the first time.

In a related action just before adopting the new net neutrality rules, the FCC voted by a similar 3-2 margin to pre-empt state laws in North Carolina and Tennessee that restrict municipal broadband network builds. We'll have more on that in a separate story later.


Read more about Gigabit Cities and the potential impact of regulation in our Gigabit Cities section here on Light Reading.

As spelled out by Wheeler earlier, the new Open Internet order, while calling for a utility-style regulatory regime for broadband providers, would exempt them from rate regulations, tariffs, last-mile network unbundling and other types of pricing restrictions that they have long dreaded and opposed. Following through on his earlier comments on the order, Wheeler said today that the mandate would take "a modernized regulatory approach" to the Internet, applying "21st century," not utility-style, rules to the medium. (See The Sound of One Hand Clapping.)

Most major broadband providers, however, are very uneasy at best about the idea because of the potential for rate regulations and other restrictions to be imposed down the line. "Nothing in this order alters the economic model for network expansion," Wheeler said, seeking to re-assure the anxious providers, some of which have already threatened to sue the Commission. "Nothing we do today changes the equation for consumer revenues to ISPs tomorrow."

Likening the new net neutrality rules to the Bill of Rights in the US Constitution, Wheeler forcefully disputed the notion advanced by critics that the new rules will strangle the Internet or impose federal government control over it. "The action we take today is about the protection of Internet openness," he said, arguing that the Internet is "simply too important to be left without rules or a referee." He added that the web is also "too important to allow broadband providers to be the ones to make the rules."

Just as forcefully, Republican commissioners Ajit Pai and Michael O'Rielly fiercely opposed the measure passed by their Democratic colleagues, contending that the Title II reclassification is unnecessary and will do far more harm than good. They also contended that the FCC is overreaching its legal authority, reversing decades of a bipartisan "hands off" approach to the Internet and flouting the will and intent of Congress, as expressed in the 1996 Telecom Act, among other things.

Terming the new rules "a Kingsbury Commitment for the digital age," Pai argued that they will lead to higher broadband rates, worse consumer service, less investment and innovation and less competition, not the reverse. "If you loved Ma Bell in the 20th century, you will love Pa Broadband in the 21st," he declared.

O'Rielly and Pai also predicted that the rules will be overturned by the federal courts, Congress or a future Commission, just as the last set of weaker net neutrality rules were thrown out by a federal court four years ago. "I do believe its days are numbered," Pai said.

Naturally, reactions to the FCC's action are now pouring in from all sectors. We'll have more on that in stories later today.

— Alan Breznick, Cable/Video Practice Leader, Light Reading

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SachinEE
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SachinEE,
User Rank: Light Sabre
2/28/2015 | 2:24:22 PM
Re: Verizon does "throwback Thursday" response
Eyder wrote for the Two-Way, "Without net neutrality rules, ISPs could theoretically take money from companies like Netflix or Amazon to speed up traffic to their sites."

Thursday's vote comes after Commissioners Michael O'Rielly and Ajut Pai asked that the FCC "immediately release the 332-page Internet regulation plan publicly and allow the American people a reasonable period of not less than 30 days to carefully study it."

That request was denied. Obviously.
SachinEE
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SachinEE,
User Rank: Light Sabre
2/28/2015 | 2:19:00 PM
Re: Impact on IP VPN services
The dissenting votes came from Michael O'Rielly and Ajut Pai, Republicans who warned that the FCC was overstepping its authority and interfering in commerce to solve a problem that doesn't exist. They also complained that the measure's 300-plus pages weren't publicly released or openly debated.

The new policy would replace a prior version adopted in 2010 — but that was put on hold following a legal challenge by Verizon. The U.S. Court of Appeals for the D.C. Circuit ruled last year that the FCC did not have sufficient regulatory power over broadband.
dhmorgen
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dhmorgen,
User Rank: Light Beer
2/27/2015 | 3:15:13 PM
Impact on IP VPN services
I would appreciate an informed interpretation of the impact Broadband Title II Rules on IP VPN services. Under these new rules does it become impossible to offer specific Quality of Service within an SLA agreement? Dennis Morgen
brooks7
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brooks7,
User Rank: Light Sabre
2/27/2015 | 12:50:08 PM
Re: Verizon does "throwback Thursday" response
Duh!,

It is better than my proposed release:

"To protect our clients from security issues, we are constraining our peering to a single T-1 line. We, of course, will treat that traffic with neutrality."

seven

 
Duh!
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100%
Duh!,
User Rank: Blogger
2/27/2015 | 12:11:18 PM
Re: Verizon does "throwback Thursday" response
Disappointing and not even remotely funny.  One expects adolescent political theater from activists.  Usually, corporate relations-types express concern like adults.
asusag
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asusag,
User Rank: Light Beer
2/27/2015 | 11:54:43 AM
Re: Verizon does "throwback Thursday" response
Ha! Saint Verizon eh? Well played though...
ponnnn
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ponnnn,
User Rank: Lightning
2/27/2015 | 12:41:26 AM
focus?
Could this message from the FCC get carriers to focus back on the network?  It seems to me like they were distracted lately with trying to figure out clever ways to increase margin a bit by prioritizing traffic.  Obviously I understand why they want to increase margin (although it may hurt long term), but I think they spent so many cycles on it they neglected investing in their basic product to a large degree.

Perhaps this is overly optimistic. 
brooks7
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brooks7,
User Rank: Light Sabre
2/26/2015 | 6:42:52 PM
Re: Uncomfortable but
 

So Mitch...how does this make a company build a new wireline or wireless network?

Not reuse - not resell - but overbuild the US.

 

seven

 
Mitch Wagner
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Mitch Wagner,
User Rank: Lightning
2/26/2015 | 5:30:55 PM
Uncomfortable but
I'm uncomfortable with this degree of government oversight, but haven't seen a better alternative. Consumers have a lack of choice in broadband providers, and the US trails behind other markets with more regulated economies. 
cnwedit
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cnwedit,
User Rank: Light Beer
2/26/2015 | 3:55:05 PM
Verizon does "throwback Thursday" response
The Verizon policy blog posted its response in Morse code -- you can see it here: http://publicpolicy.verizon.com/blog/entry/fccs-throwback-thursday-move-imposes-1930s-rules-on-the-internet.

If you click on "21st century" version, it displays the comments in manual typewriter fonts, here: http://publicpolicy.verizon.com/assets/docs/VZ_NR_--_2-26-15_VZ_Statement_on_Open_Internet_Order_FINAL_1.pdf.

I'm still waiting for what the details look like on this. Seems like al the responses are exactly what we'd expect. 
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