United States: New FCC Rules Proposed For Broadband Internet Access Service Providers

Protecting the Open Internet or a Solution Without a Problem?

On October 19, 2023, the Federal Communications Commission ("FCC") led by Democratic Chairwoman Jessica Rosenworcel adopted a Notice of Proposed Rulemaking ("NPRM") to initiate a new "Open Internet" or "Net Neutrality" proceeding.¹ The FCC's NPRM reaches certain tentative conclusions and proposes specific rules applicable to providers of mass-market retail broadband Internet access service ("BIAS"). The NPRM was adopted by a 3-2 vote with the Republican commissioners dissenting, and Republican Commissioner Brendan Carr calling the approach "a solution that won't work to a problem that does not exist." Comments on the FCC's tentative conclusions and proposed rules are due December 14, 2023, and replies are due January 17, 2024.

Bottom Line Up Front

The FCC proposes to re-establish greater regulatory authority over BIAS by reclassifying the service as a telecommunications service subject to Title II of the Communications Act of 1934, as amended (the "Communications Act"), and adopting "bright-line" rules to protect Internet openness. The FCC proposes to forbear from all provisions of Title II that would otherwise permit rate regulation of BIAS. The FCC instead will depend on other statutory provisions to address non-rate related issues. The FCC also proposes to forbear from the requirements that BIAS contribute to the federal universal service fund or other federal funds (such as the telecommunications relay service fund) at this time.

Although classification as a telecommunications service normally would subject BIAS to all of Title II, the FCC proposes to use the same forbearance framework previously adopted in 2015 plus the statutory authorities necessary to advance the FCC's goals of national security and public safety.² The FCC proposes not to forbear from application of the following requirements (but seeks comment on those proposals):

• Sections 201 and 202 (unjust, unreasonable, or unreasonably discriminatory practices)
• Section 208 (complaints to the FCC)
• Section 214 (foreign ownership, oversight of networks)
• Sections 218 and 220 (seeking information from common carriers)
• Section 222 (privacy)
• Section 224 (access to pole attachments and rights-of-way)
• Sections 225, 255, and 251(a)(2) (disability access)
• Sections 254 and 214(e) (advancing universal service)
• Section 706 (deployment of advanced services)
• Wireless licensing requirements.

History as a Guide

There has been a long history of efforts to alter the regulation of BIAS. Beginning in 2005, the FCC, led by then Chairman Michael Powell, approved an Internet Policy Statement, which identified four guiding principles to encourage broadband deployment and preserve and promote the open and interconnected nature of the public Internet. From 2005 to 2010, these principles were incorporated as conditions into merger orders and applied in enforcement proceedings.

In 2010, the United States Court of Appeals for the D.C. Circuit ("D.C. Circuit") rejected the FCC's application of the Internet Policy Statement principles in a complaint proceeding against Comcast.³ The court found the FCC lacked authority to regulate Comcast's network management practices using only guiding principles adopted pursuant to the FCC's ancillary jurisdiction. The FCC, led by then Chairman Julius Genachowski, later adopted the 2010 Open Internet Order to codify the Internet Policy Statement's principles and adopt three rules governing Internet service providers: (i) no blocking; (ii) no unreasonable discrimination; and (iii) transparency. On appeal, the D.C. Circuit upheld a portion of the 2010 Open Internet Order, but vacated the no blocking and anti-discrimination rules.⁴ The court found those rules imposed de facto common carrier status on BIAS providers in violation of the FCC's classification of those services as information services.

In 2015, the FCC, led by then Chairman Tom Wheeler, adopted the 2015 Open Internet Order, which reclassified BIAS as a telecommunications service. The FCC adopted rules to prevent specific practices harmful to Internet openness – blocking, throttling, and paid prioritization – as well as a strong standard of conduct designed to prevent new practices that would harm Internet openness and enhancements to the transparency rule. In 2016, the D.C. Circuit upheld the 2015 Open Internet Order in full.⁵

In 2018, the FCC, led by then Chairman Ajit Pai, eliminated the majority of the rules adopted in 2015. The 2018 Restoring Internet Freedom Order maintained the transparency rule, but reclassified BIAS as an information service. On review, the D.C. Circuit remanded certain aspects of the decision to the FCC, but upheld the classification of BIAS as an information service.⁶ In response to the remand, the FCC issued the 2020 Restoring Internet Freedom Remand Order, which found there were no grounds to depart from the determinations made in the 2018 decision.

BIAS to Become a Telecommunications Service Once Again

With the recent NPRM, the FCC again proposes to reclassify BIAS as a telecommunications service under Title II of the Communications Act.⁷ The FCC finds BIAS has become "essential" to consumers for work, health, education, community, and everyday life, and the COVID-19 pandemic has increased the importance of BIAS. The FCC explains that developments in the importance of the Internet to consumers demonstrates that consumers perceive and use BIAS as a standalone service that provides telecommunications.

Effect on Investment. The FCC states that the 2018 conclusions that Internet investment is closely tied to the classification of BIAS were unsubstantiated. The previous record demonstrated there were opposing views on the long-term effects on investment, and no party can quantify with any reasonable degree of accuracy how classification would affect future investment.

Internet Openness. The FCC finds the open Internet must be protected to ensure consumers can use their BIAS connections in all the lawful ways they see fit, and reclassification of BIAS as a telecommunications service would allow the FCC to rely on its authority in Sections 201 and 202 of the Communications Act⁸ to address practices that are unjust, unreasonable, or unreasonably discriminatory. Reclassification would enable the FCC to establish a nationwide framework of open Internet rules. Differing state requirements may be burdensome, especially for small providers, and hinder the broadband market while also failing to ensure all consumers are protected from harmful conduct. Reclassification would put the FCC's authority to preempt any inconsistent state laws on substantially stronger legal footing.

National Security and Public Safety. According to the FCC, the demonstrated need to address national security and public safety concerns makes it necessary and timely to revisit the statutory classification of BIAS. Authority under applicable Title II provisions, reinforced by the FCC's existing authority, would enhance efforts to protect the national defense and the nation's communications networks. The FCC has used its authority under Section 214 of the Communications Act⁹ to revoke or deny licenses to entities that raise national security and law enforcement concerns,¹⁰ and those concerns equally apply to BIAS. The FCC asks whether there are specific national security and law enforcement threats in connection with the provision of BIAS. The FCC notes it has taken significant steps to improve supply chain security, and asks how reclassification of BIAS would support those efforts. Reclassification also would reinforce the FCC's authority to enhance cybersecurity in the communications sector, including security and integrity of the Border Gateway Protocol. Reclassification would enhance the FCC's jurisdiction over providers, which could be used to ensure BIAS meets the needs of public safety entities and individuals when they use BIAS for public safety purposes. The FCC suggests reclassification would further other public safety initiatives, such as Wireless Emergency Alerts, Telecommunications Service Priority, CALEA, and supplements to traditional 911 communications. Finally, the FCC finds reclassifying BIAS would enhance the FCC's ability to ensure the nation's communications networks are resilient and reliable.

Footnotes

1. WC Docket No. 23-320, Safeguarding and Securing the Open Internet, Notice of Proposed Rulemaking, FCC 23-83 (rel. Oct. 20, 2023).

2. BIAS would also remain subject to provisions of the Communications Act that apply irrespective of the Title II classification, such as the Communications Assistance for Law Enforcement Act ("CALEA"), liability limitations, preemption provisions, and provisions that simply reserve state authority.

3. Comcast Corp. v. FCC, 600 F.3d 642 (D.C. Cir. 2010).

4. Verizon v. FCC, 740 F.3d 623 (D.C. Cir. 2014).

5. U.S. Telecom Ass'n v. FCC, 825 F.3d 674 (D.C. Cir. 2016), reh'g denied, 855 F.3d 381 (D.C. Cir. 2017), cert. denied, 139 S. Ct. 453 (2018).

6. Mozilla v. FCC, 940 F.3d 1 (D.C. Cir. 2019).

7. 47 U.S.C. §§ 201 et seq.

8. 47 U.S.C. §§ 201, 202.

9. 47 U.S.C. § 214.

10. See, e.g., China Telecom (Americas) Corporation, 36 FCC Rcd 15966 (2021), aff'd China Telecom (Americas) Corp. v. FCC, 57 F.4th 256 (D.C. Cir. 2022).

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