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Net Neutrality Rules Pass on Interconnection

Carol Wilson

The FCC got specific today on net neutrality, releasing 400 pages of rules and text of the Open Internet Order it issued two weeks ago, which applies Title II classification to broadband Internet service for the first time. The new rules promise a "'light-touch' regulatory framework" for broadband Internet but don't address interconnection issues at all, for lack of FCC expertise.

The executive summary of the new Federal Communications Commission (FCC) rules states -- perhaps optimistically -- that "our decision today -- once and for all -- puts into place strong, sustainable rules, grounded in multiple sources of our legal authority, to ensure that Americans reap the economic, social, and civic benefits of an open Internet today and into the future." (For summary of our previous coverage, see The Title II Ruling: A 'Wow' Moment.)

There are multiple promises/threats of legal action from major incumbent carriers and trade groups that would challenge that statement. (See AT&T, Verizon CFOs Predict Title II Litigation.)

You can find all 400 pages of the new rules here.

Right upfront, in the 50-plus page executive summary, the FCC promises not to apply 27 provisions of Title II of the 1934 Communications Act and more than 700 of its own rules and regulations.

The document lays out a group of "clear bright-line rules" that prohibit blocking, throttling and paid prioritization of Internet traffic on fixed and mobile broadband Internet access lines. "Consumers who subscribe to a retail broadband Internet access service must get what they have paid for -- access to all (lawful) destinations on the Internet," the FCC states. Access providers cannot block "lawful content, applications, services, or nonharmful devices, subject to reasonable network management."

Read more about OTT video strategies and the impact of regulation in the OTT content channel here on Light Reading.

The provision against throttling prohibits impairment or degradation of Internet content, applications and services but also includes the reasonable network management clause. The rules specify, however, that throttling of a service that competes with a broadband operator's own services is specifically not allowed, which would seem to protect over-the-top video services.

The provision against paid prioritization says broadband access providers cannot "directly or indirectly favor some traffic over other traffic" by using "traffic shaping, prioritization, resource reservation, or other forms of preferential traffic management" either for money or to benefit an "affiliated entity."

The new rules go on to provide protections for what the FCC calls "edge providers." But the rules specifically don't cover interconnection, which is where OTT video providers such as Netflix Inc. (Nasdaq: NFLX) say they are running into big problems.

In deciding not to include interconnection at this time, the FCC cites its lack of experience in an area that is rapidly evolving. But the threat of future rules is clearly implied.

"While we have more than a decade's worth of experience with last-mile practices, we lack a similar depth of background in the Internet traffic exchange context," the order reads. "Thus, we find that the best approach is to watch, learn, and act as required, but not intervene now, especially not with prescriptive rules. This Order -- for the first time -- provides authority to consider claims involving interconnection, a process that is sure to bring greater understanding to the Commission."

The agency does weigh in on defining "reasonable network management" and promises to take into account the additional constraints that wireless broadband carriers face, due to spectrum limitations. For now, reasonable network management is what operators use for "achieving a legitimate network management purpose," in a technical fashion, and not related to business objectives.

The FCC doesn't appear to have tackled what some are calling "reverse network neutrality," i.e., the ability of content owners to block the subscribers of specific broadband services from accessing their content. For example, when Viacom Inc. (NYSE: VIA) and Suddenlink Communications failed to reach an agreement on content licensing fees, Viacom prevented Suddenlink's broadband customers from accessing the online version of its content. (See Suddenlink: We Still Love Video and Small Cablecos Reject High-Cost Content.)

We'll have a lot more coverage of the new net neutrality rules in the coming days as all interested parties delve much deeper into the Open Internet Order.

— Carol Wilson, Editor-at-Large, Light Reading

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3/23/2015 | 11:21:04 AM
Re: Still seems ambiguous...

Ambiguity should be expected -- keeps lawyers in business. It also enables those on each side to attempt to tweak the law to serve their own needs in future years. My grandkids -- and I don't have any yet -- will probably be grown before this is defined or replaced. Look at how long telecom act of 1934 was the law of the land, and how long different components of it were debated.
Joe Stanganelli
Joe Stanganelli
3/16/2015 | 12:18:22 AM
Promises, promises
> the FCC promises not to apply 27 provisions of Title II of the 1934 Communications Act and more than 700 of its own rules and regulations.

LOL, how adorable.  They "promise."

3/13/2015 | 10:37:26 PM
haven't read 400 pages yet...
Ambiguity is going to prolong the process of lawsuits that have been predicted (or promised)... Hopefully there is some clarification in those hundreds of pages that circumvents the court systems. But I doubt so, it probably just digs a deeper hole for the lawyers to extend their cases. In the end, though, the status quo will remain while the legal uncertainties aren't resolved, but will that mean no investment in the meantime? That will be the real travesty.
3/13/2015 | 1:07:57 PM
Article correction
The artcile indicates that the new FCC rules have a "50-plus page executive summary."

In actuality, the Executive Summary is 14 pages with 53 paragraphs. The core of the new rules are covered in little over one page (7-8), with the rest being justifications and legal authority.

3/12/2015 | 4:59:58 PM
Again, Interconnection will be tackled - Comptel
There seems to be a big 'if" here, in what Comptel CEO Chip Pickering has to say:


"COMPTEL is pleased the Commission's Open Internet Order confirms that consumers should get what they pay for and that broadband Internet access service providers cannot evade the protections through their interconnection and traffic exchange practices.


Interconnection is the first amendment for the open Internet. As such, we look forward to the Commission fulfilling the promise of today's order by promptly adjudicating disputes regarding interconnection and traffic exchange practices and confirming that ISPs' attempts to extract tolls for the delivery of Internet traffic are unlawful."


3/12/2015 | 4:21:43 PM
Level 3 Weighs in with a different opinion
So here's one party's take on this. 

Mike Mooney, senior vice president and general counsel for regulatory policy at Level 3, says the FCC is tackling interconnection in this order:  

The Order does cover interconnection, and adopts a flexible process for addressing complaints regarding Internet traffic exchange practices that are not just and reasonable, or where interconnection is being used by ISPs to evade the last mile no blocking, no throttling and no paid priority protections. The Order also makes clear that when ISPs sell broadband access to their customers promising them a connection to all lawful content on the Internet that requires the ISPs to have the interconnection arrangements necessary to provide that access.   

So there you go. He thinks it's perfectly clear. 
3/12/2015 | 2:04:58 PM
Re: Still seems ambiguous...
Based on the language they used, it seems like they might be saying "later, dude" when it comes to regulating interconnection:

"But this Order does not apply the open Internet rules to interconnection. Three factors are critical in informing this approach to interconnection. First, the nature of Internet traffic, driven by massive consumption of video, has challenged traditional arrangements—placing more emphasis on the use of CDNs or even direct connections between content providers (like Netflix or Google) and last-mile broadband providers. Second, it is clear that consumers have been subject to degradation resulting from commercial disagreements, perhaps most notably in a series of disputes between Netflix and large last- mile broadband providers. But, third, the causes of past disruption and—just as importantly—the potential for future degradation through interconnection disputes—are reflected in very different narratives in the record.

31. While we have more than a decade's worth of experience with last-mile practices, we lack a similar depth of background in the Internet traffic exchange context. Thus, we find that the best approach is to watch, learn, and act as required, but not intervene now, especially not with prescriptive rules. This Order—for the first time—provides authority to consider claims involving interconnection, a process that is sure to bring greater understanding to the Commission."
3/12/2015 | 1:37:40 PM
Re: Still seems ambiguous...
Yes, many argue that MOST Of the net neutrality fisticuffs is now occurring at the interconnection point, given most ISPs realize blocking or throttling end users isn't going to fly. So if the new rules don't actually govern the new frontier for net neutrality, I'm not entirely sure of the benefit -- outside of giving the FCC the legal authority to act in the most extreme instances of anti-competitive abuse?
3/12/2015 | 1:02:19 PM
Re: Still seems ambiguous...
I haven't read all 400 pages although I did wade through most of the 51-page executive summary. I admit my eyes frequently crossed. 

Ambiguity abounds. "Reasonable network management" is a term that couldn't get more vague and the efforts to explain basically seem to say that if you are managing traffic for a technical reason, fine, but if it's to accomplish a business purpose, that's not fine. 

But can you always separate those two?

On interconnection, the FCC seems to be saying they don't know enough to regulate - if so, that's refreshing honesty. But if the interconnection point is where the throttling happens, how do these rules help prevent that?

I think there is much more to be decided here. 

3/12/2015 | 12:58:11 PM
Re: Still seems ambiguous...
Ambiguous is right -- especially when the FCC admits it lacks expertise on interconnections! So basically they're saying that if you get into a dispute over interconnections, we don't have any real rules and we don't know much but bring the dispute to us and we'll learn as we go and then hand down a decision. Sounds expeditious, eh? 

Damn, it's times like this that I wish I was a communications lawyer because I'd be drawing plans for the new wing on my house. 





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