Broadband Internet Access as a Public Utility: Another Attempt at Net Neutrality

February 12, 2015

Federal regulators at the Federal Communications Commission (“FCC”) announced on February 5, 2015 that were planning to reclassify broadband internet as a utility to ensure net neutrality. The FCC and internet service providers (“ISPs”) have been struggling with the idea of net neutrality as digital media and internet usage continues to increase demands for internet bandwidth. Major ISPs responded to the FCC’s press release that they would fight the potential rules’ implementation and were willing to file suit against the FCC were the rule to take effect.

FCC Chairman Tom Wheeler announced the proposed rule to regulate broadband internet access under Title II of the Communications Act and Section 706 of the Telecommunications Act of 1996.

This proposed rule will be voted on by the FCC at if February 26 open meeting. This new proposal comes in the wake of the U.S. Court of Appeals for the District of Columbia Circuit striking down a previous FCC rule regarding Net Neutrality on January 14, 2014.
The FCC proposal follows the Obama Administration’s stated goal to move toward net neutrality as a protection for consumers. By classifying broadband internet as a public commodity, the FCC will have greater control over ISPs actions. FCC control under the proposed rule will allow the agency to prohibit ISPs from creating fast lanes for internet sites willing to pay additional fees to the ISPs or throttle internet speeds to high content users or providers. Additionally, as a public utility, the FCC would be able to dictate pricing schemes for ISPs.
The FCC proposal is beneficial for internet users no matter whether they access the network through hardwired connections, or through wireless networks as is now more common—55% of internet traffic is carried over wireless networks. First the FCC proposes three bright line rules: (1) no blocking, (2) no throttling, and (3) no paid prioritization. Second, by creating a firm set of rules, broadband access will have a standard to operate in as it continues to expand and evolve. Third, it will expand transparency rules which were not struck down amid previous rules. Fourth, it allows ISPs to perform “reasonable network maintenance,” based on the form of access.
ISPs have stated that treating broadband internet access as a public utility would negatively impact investment and innovation in the field. As a result, several ISPs have publicly stated that they will challenge the proposed rule. Ironically, AT&T is one of the ISPs publicly stating their challenge to broadband under Title II of the Telecommunication Act as the Act itself was created to protect consumers from AT&T’s monopoly status in the long distance phone service in 1934. As a result of its monopoly status and its regulation under the Telecommunication Act of 1934, AT&T remained the sole long distance provider for over half a century until it was broken up into the Baby Bells.
In its response to the FCC, AT&T stated that the FCC cannot treat broadband internet as a public for two main reasons. First, the FCC labelled ISPs as “information providers” in 2002. Second, the FCC has not provided a study demonstrating that ISPs are acting as “monopolistic common carriers.” In a letter from AT&T’s lawyer to the FCC, it noted:
The elimination of mutual exclusivity could empower the FCC to regulate virtually every tech company that combines transmission with information to deliver digital goods and services to customers. Social networks, digital music, video chat, and even Internet search are all examples of information services that are provided via telecommunications, and thus have a transmission component that could be segregated and regulated under Title II if the mutual exclusivity of information and telecommunications services were breached.
If the FCC accepts the proposed rule at its meeting on February 26, net neutrality advocates will be excited. However, as per previous net neutrality rules, the regulations will likely result in long term litigation. The end result of ISP neutrality will be decided in the court system.