Net Neutrality Rules Pass on Interconnection
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."
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