Is the FCC Poised to Destroy Net Neutrality?

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After a January court ruling on net neutrality that raised fears about radical changes to the internet, the Federal Communications Commission is floating new rules that are being attacked as insufficient.

The Federal Communications Commission is circulating a proposal for net neutrality rules that would replace rules thrown out by a federal appeals court in January. The commission will not officially vote on proposing the rules until next month, but FCC Chairman Tom Wheeler is already falling under heavy criticism in the media.

Initial reports in The New York Times and other mainstream media outlets indicated that the new rules would gut a crucial net neutrality protection by allowing some big Internet service providers (ISPs) like AT&T and Verizon to charge websites like Netflix premium fees to deliver content to consumers faster, and these fees could be passed on to consumers. Small web firms and startups that could not afford the fees would be put at a competitive disadvantage.

Open Internet advocates issued scathing statements in response to the reports.

“With this proposal, the FCC is aiding and abetting the largest ISPs in their efforts to destroy the open Internet,” said Craig Aaron, president of Free Press, a pro-net neutrality watchdog group. “Giving ISPs the green light to implement pay-for-priority schemes will be a disaster for startups, nonprofits and everyday Internet users who cannot afford these unnecessary tolls.”

Wheeler, however, said the initial news reports on the proposed rules were “flat out wrong.” In a blog post posted Thursday, Wheeler said the proposed rules would reinstate the same Open Internet concepts adopted by the commission in 2010 under legal authority outlined by the court that threw them out earlier this year. He indicated that the FCC would be able to intervene on a case-by-case basis and stop ISPs from harming the Internet with pay-to-play fast lanes for wealthy companies seeking to reach consumers faster.

Wheeler wrote that, like the old rules brought down by legal challenges, the new net neutrality proposal would require ISPs to keep their network policies transparent, prevent them from blocking legal content, and prevent them from acting “in a commercially unreasonable manner to harm the Internet, including favoring the traffic from an affiliated entity.”

Wheeler is hanging his regulatory hat on a legal “roadmap” for reinstating the rules included in same court decision that threw them out in January. The court, Wheeler wrote, made it clear that the FCC did have the authority to stop ISPs from harming the Internet if there conduct was found not to be “commercially reasonable.”

Wheeler said the proposed rules would set a “high bar for what is ‘commercially reasonable,'” allowing the FCC to step in when ISPs display anti-competitive behavior, such as selling priority fast lanes to web firms that can afford premium fees.

“The allegation that it will result in anti-competitive price increases for consumers is also unfounded,” Wheeler wrote. “That is exactly what the ‘commercially unreasonable’ test will protect against: harm to competition and consumers stemming from abusive market activity.”

Free Press and other net neutrality proponents, however, worry that Wheeler’s plan is bound to fail.

“This approach is almost certain to be rejected by the courts,” Aaron said. “Contrary to statements by Chairman Wheeler, the court did not invite the FCC to pursue this path.”

Free Press argues that the FCC will not have the authority to implement strong net neutrality rules until it reclassifies the Internet as a telecom service that can be regulated more like a public utility like telephone lines. The FCC changed this classification during the Bush administration, providing the foundation for the legal challenges that thwarted the FCC’s attempts to establish the authority to enforce net neutrality.

An unnamed FCC official told PC World that the FCC is not taking the reclassification route because the court’s roadmap that Wheeler is relying on would allow the commission to restore net neutrality faster.

Timothy Karr, a spokesperson for Free Press, said he did not understand the FCC’s legal calculus, but with midterm elections looming on the horizon, there may be political elements at play. Wheeler is a former industry insider who was appointed by President Obama last year. The Obama administration supports net neutrality regulation in theory, but has not directed the FCC on how to implement it. Karr said that Democrats might be wary of losing campaign donations from the powerful telecom lobby.

“If we truly support net neutrality, as Obama has said on several occasions, then we have to find the right remedy to make net neutrality enforceable,” Karr said.

Whether Wheeler’s remedy will work remains to be seen, but Wheeler said it his intention to establish net neutrality rules by the end of the year. The FCC is expected to vote on introducing the proposed rules for public comment on May 15.