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FCC Approves First Net Neutrality Rules

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The Federal Communications Commission on Tuesday voted on party lines to approve rules that would prohibit Internet service providers from unreasonable discrimination against lawful content on their networks, the first time the agency has enacted binding net neutrality regulations.

In a three-to-two vote over forceful opposition from the Republicans on the panel, the FCC approved Chairman Julius Genachowski’s open Internet framework, though many advocacy groups, and his fellow Democratic commissioners, said the rules don’t go far enough to prevent ISPs from playing favorites with their network traffic.

Genachowski billed the order as a compromise, the culmination of more than a year of negotiations among the FCC, lawmakers and industry and advocacy groups. He said that the long-running debate, which was revived in earnest with the FCC’s move last October to initiate the rulemaking proceeding that culminated today, “has often produced more heat than light.”

“On one end of the spectrum are those who say government should do nothing at all on open Internet. On the other end are those who would adopt extensive, overly detailed and rigid regulations. A few on each side impose litmus tests. To some, unless their test is met open Internet rules are ‘fake net neutrality.’ To others unless their test is met, open Internet rules are, quote, ‘a government takeover the Internet,'” Genachowski said.

“For myself, I reject both extremes in favor of a strong and sensible non-ideological framework, one that protects Internet freedom and openness and promotes robust innovation and investment throughout the broadband ecosystem.”

The order established a transparency requirement for both fixed and mobile broadband providers mandating that they make disclosures about how they manage their networks, their performance characteristics and commercial terms.

The item also includes a no-blocking rule that would require wireline ISPs to transmit all lawful content, services and applications, and allow users to connect any non-harmful device to the network. For wireless providers, the rule would be limited to a ban on blocking access to websites and applications that compete with their own core services, such as voice and video telephony offerings, though the commission said it will continue to monitor the evolving mobile sector to evaluate if more rigid rules are necessary.

The final set of rules included in today’s order carries a nondiscrimination requirement that seeks to prevent ISPs from unreasonably slowing or degrading certain traffic on their network, though it exempts wireless operators, to the great disappointment of ardent net neutrality backers. Under that provision, ISPs would be generally prohibited from striking side deals with content providers to guarantee faster delivery, a scenario net neutrality advocates worry could result in a balkanized Internet where service providers slow or degrade the transmission of rivals’ content.

The rule presumes that paid prioritization arrangements are unacceptable, though there are some allowances for managed services that depend on delivery guarantees, and the commission will evaluate complaints on a case-by-case basis, which critics contend will only add to the very regulatory uncertainty the rules are intended to eliminate.

Both Republicans on the panel, Commissioners Robert McDowell and Meredith Attwell Baker, made uncommonly strenuous and lengthy statements of opposition at this morning’s meeting, assailing the order on a variety of fronts.

Both complained that they only received the final order, with substantive changes from the previous draft, minutes before midnight on Monday, and argued that the FCC lacks the legal mandate to enforce the rules it adopted today.

In April, a federal appeals court ruled that the FCC did not have the statutory authority to punish Comcast for secretly throttling traffic on its network. Genachowski and commission attorneys said today that they had based the new order on a different legal framework that put the rules on a solid foundation, but McDowell predicted that a court would eventually strike them down on the same grounds that the Comcast order was vacated.

“The FCC is not Congress. We cannot make laws. Legislating is the sole domain of the elected representatives of the American people,” McDowell said, noting that a majority of lawmakers had signed their names to letters to the commission urging it to shelve an earlier proposal to reclassify broadband as a regulated telecommunications service. While Genachowski ultimately abandoned that idea in favor of today’s more modest order in a bid to garner industry support, the Republican commissioners argued that today’s vote was nonetheless a violation of the will of Congress.

“The FCC has provocatively charted a collision course with the legislative branch,” McDowell said, calling this “one of the darkest days in recent FCC history.”

That collision is likely to occur very early in the next session of Congress, when a Republican majority in the House and a strengthened minority in the Senate move to undo the rules.

Sen. Kay Bailey Hutchison (R-Texas), who last week submitted an amendment to an appropriations bill that would block the FCC from using public funding to enforce net neutrality rules, today announced her plan to introduce a resolution of disapproval that would seek to roll back the commission’s new order.

Meantime, Fred Upton (R-Mich.), the incoming chairman of the House Energy and Commerce Committee, pledged “immediate action” in the next session of Congress to overturn the FCC’s action.

“The FCC’s hostile actions toward innovation, investment and job creation cannot be allowed to stand,” Upton said in a statement. “We must use every resource available, including the Congressional Review Act, to strike down the FCC’s brazen effort to regulate the Internet.”

While Genachowski’s proposal has been hammered by Republicans at the commission and in Congress, it has also alienated many of the advocacy groups that have long championed firm net neutrality rules. Public Knowledge called today’s action a “lost opportunity.” The Media Access Project said it is “riddled with loopholes.” The groups object to the nondiscrimination exemption for wireless providers, and warn that other exceptions and vaguely defined terms will enable providers to unfairly meddle with the flow of content on the Web.

Ultimately, Commissioners Michael Copps and Mignon Clyburn cast votes of partial approval, saying that the order, though imperfect, is preferable to no rules governing service providers at all. Both said they would like to see the rules adopted today strengthened in the future.

“In my book today’s action could and should have gone further. Going as far as I would have liked was not, however, in the cards,” Copps said. “The simpler and easier course for me would have been dissent, and I considered that very, very seriously. But it became ever more clear to me that without some action today, the wheels of network neutrality would grind to a screeching halt for at least the next two years.”

Now, the next two years will in large measure determine the impact Genachowski’s framework has on ISPs and Web companies, and whether it can survive the expected legal and congressional challenges, according to Stifel Nicolaus analyst Rebecca Arbogast, a former division chief at the FCC.

“Because the rules are very high-level, their meaning and impact will be determined by how the facts on the ground develop over the next few years, and thus we expect the battle will continue in the marketplace and through FCC case-by-case enforcement, as well as in Congress and the courts,” Arbogast wrote in a research note.

Kenneth Corbin is an associate editor at, the news service of, the network for technology professionals.

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