Yesterday, by a 3-2 party-line vote, the FCC adopted network neutrality rules “to preserve the Internet as an open network enabling consumer choice, freedom of expression, user control, competition and the freedom to innovate.”  While the text of rules is not yet available, the FCC provided a high-level summary of the three principles that will guide the FCC’s regulation of Internet activity, including Transparency, prohibitions on blocking traffic and no undue discrimination.  The FCC proposes somewhat different treatment of wireline and wireless broadband Internet providers, citing the still developing mobile broadband network as reason for introducing network neutrality rules in phases.  Both wireline and wireless broadband providers will be subject to a transparency rule, which requires providers to make available their network management policies, and to versions of a prohibition against blocking access to certain services or content.  Only wireline providers will be subject to a rule prohibiting “unreasonable discrimination.” 

All of the rules will be subject to “reasonable network management” as long as such practices are appropriate and tailored to achieving a legitimate network management purpose.  The FCC noted that certain activities, including ensuring network security and integrity, including by addressing traffic that is harmful to the network; addressing traffic that is unwanted by users (including by premise operators), such as by providing services or capabilities consistent with a user’s choices regarding parental controls or security capabilities; and by reducing or mitigating the effects of congestion on the network, are legitimate network management practices.  However, determination of what constitutes a reasonable network management activity in practice will likely be a fact-sensitive analysis handled on a case-by-case basis, presumably in the context of a complaint proceeding.

The FCC also noted that one of the more controversial issues raised by parties on both sides of the net neutrality debate, the ability of broadband Internet access providers to permit their customer to pay for priority access, would be unlikely to satisfy the FCC’s “undue discrimination” test and would, therefore, likely be prohibited by the new rules.

The FCC described its rules as follows:

Rule 1: Transparency - A person engaged in the provision of broadband Internet access service shall publicly disclose accurate information regarding the network management practices, performance, and commercial terms of its broadband Internet access services sufficient for consumers to make informed choices regarding use of such services and for content, application, service, and device providers to develop, market, and maintain Internet offerings.

Rule 2: No Blocking - A person engaged in the provisioning of fixed broadband Internet access service, insofar as such person is so engaged, shall not block lawful content, applications, services, or non-harmful devices, subject to reasonable network management.

A person engaged in the provisioning of mobile broadband Internet access service, insofar as such person is so engaged, shall not block consumers from accessing lawful websites, subject to reasonable network management; nor shall such person block applications that compete with the provider’s voice or video telephony services, subject to reasonable network.

Rule 3: No Unreasonable Discrimination - A person engaged in the provisioning of fixed broadband Internet access service, insofar as such person is so engaged, shall not unreasonably discriminate in transmitting lawful network traffic over a consumer’s broadband Internet access service. Reasonable network management shall not constitute unreasonable discrimination.

Copies of the FCC’s Press Release and the Commissioners’ Statements are available here:

Press Release

Chairman Genachowski Statement

Commissioner Copps Statement

Commissioner McDowell  Statement

Commissioner Clyburn Statement

Commission Baker Statement

CLIENT ADVISORY

It is difficult to tell at this junction the effect these new rules will have on the day-to-day operations of broadband Internet access providers or the ability of application, content or other providers to obtain unfettered access to these networks.  Several parties have already announced their intent to appeal the FCC’s order, and  any appeal likely will also seek a stay of new rules and any FCC enforcement.  Moreover, until the FCC issues an order addressing a specific network management practice or other activity and provides more guidance as to the types of behavior that will be considered reasonable, the industry will be operating under a cloud of uncertainty.  Nonetheless, it is clear that at least a majority of the FCC is prepared to move forward with some level of regulation of the Internet.  Consequently, broadband service providers, application and content providers and consumers should closely monitor whether the FCC is able to and, if so, how its implements the new rules. 

Clients with comments or questions regarding this Advisory should contact Jonathan S. Marashlian at jsm@commlawgroup.comor (703) 714-1313.