Net Neutrality: Your Cheat Sheet to the FCC's Proposal

Updated on 5/19/2014 at 9:25 AM

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By Dan Rowinski

In net neutrality, as in so many other walks of life, what people do is much more important than what they say.

Consider, for instance, FCC chairman Tom Wheeler, who repeatedly insists that the commission's proposed rules for preserving "net neutrality" don't inherently allow for Internet "fast lanes." Such fast lanes — known in FCC parlance as paid prioritization — would allow Internet services providers like Comcast or Verizon charge companies more for faster Internet connections directly to consumers.

"There is nothing in this proposal that authorizes fast lanes. In the blocking section of the proposal we ask the question, should there be a ban in paid prioritization as an action of blocking?" Wheeler said. "In the nondiscrimination section of the proposal we ask if there should be a ban on paid prioritization."

Yet the FCC proposal doesn't actually rule out paid prioritization, either, which means it could be allowable under certain circumstances. In reality, the FCC is simply asking for comments as to whether it should ban paid prioritization entirely; the option for Internet fast lanes is still very much on the table, despite Wheeler's apparent denial.

That's far from the only head-scratcher hidden away in the thicket of jargon and political rhetoric around the FCC's net-neutrality proposal. Here's a shorthand guide to the major issues at stake as the FCC ponders how — and how hard — to preserve an open Internet. (You can also see the full text of the FCC's proposed rules at the end of this post.)

The Paid Prioritization Puzzle

Imagine that you are Netflix. You deliver television and movies straight into the homes of consumers via the Internet. You want the biggest and fastest pipes you can get, because your business depends on providing responsive, high-quality video on demand.

Cable companies want to be able to charge companies like Netflix higher fees for these faster, more reliable connections directly to consumers. If they get their way, wealthy companies like Netflix or Google could afford to pay for better Internet services; smaller companies and individuals may not be so lucky. Hence the term "fast lanes" for paid, privileged Internet channels.

The FCC's proposal asks specifically for comments as to whether it should ban such "paid prioritization" outright. But as it currently stands, the proposal doesn't go that far. In fact, it would technically make it possible — and desirable, at least if you're a broadband provider — to implement the fast lanes.

"Let's be clear. Any proposal to allow fast lanes for the few is emphatically not net neutrality," said former FCC commissioner Michael Copps in a statement through Common Cause, a policy reform group. "The clear common-sense prerequisite for an Open Internet is Title II reclassification, guaranteeing the agency's authority to protect consumers and ensure free speech online."

What's Title II? See below.

The Rebuttable Presumption

The FCC's fact sheet about the open Internet proposal contains a curious statement. With respect to rules that would prevent practices that threaten an open Internet, the sheet states that the draft "includes a rebuttable presumption that exclusive contracts that prioritize service to broadband affiliates are unlawful."

This is a loaded statement, so let's break it down. Priority service for broadband affiliates means that the cable companies could give their own properties faster service while throttling or providing slower service to competitors. For instance, Comcast owns NBC Universal. The cable company could provide perfect delivery of NBC content to consumers while slowing down service for competitors, like CNN or ReadWrite.

The FCC proposal does suggest that this priority service — which directly ties to the notion of paid prioritization — is a bad thing, and making it unlawful sounds like pretty strong medicine. But that pesky term "rebuttable presumption" is a giant loophole. The FCC itself describes a rebuttable presumption as "a presumption that is taken to be true unless someone comes forward to contest it and proves otherwise."

That means priority service is bad unless you can prove to me that it is good. And you know that broadband providers will be lining up their lawyers to prove that it is good. If they succeed, then poof! The paid prioritization genie is out of the bottle. As Gigaom's broadband reporter Stacy Higginbottom writes, "Yes, that is a house the FCC is building on sand."

Title II and Section 706

One important thing to bear in mind in this fight is that much of the discussion actually has little to do with consumers or broadband providers. But it has everything to do with what the FCC can and cannot do to regulate the Internet by law.

You're going to hear a lot about Title II. This is a reference to Title II of the Communications Act of 1934, the first major US law to regulate telephones and transmission media. Title II is known as the "common carrier" provision of law. If a company falls under the designation of Title II, it is considered a public utility subject to FCC rules that guarantee public access to service.

This entire battle over net neutrality stems from two actions by the FCC in the last 10 years. The first was in 2004 when then FCC chairman Michael Powell outlined four basic Internet freedoms that became the framework of net neutrality. The second was the FCC's 2010 Open Internet Order, which created the first net official neutrality regulation in the US.

Broadband providers weren't all that pleased with the 2010 Open Internet Order. Verizon sued, claiming that the FCC lacked authority to regulate broadband providers, because they were (and are) classified as information services — not public utilities (or, technically, as "common carriers"). Verizon won its fight in January this year; ever since, the FCC has been struggling to figure out if it has any power at all in this arena.

So when you hear about Title II, what net neutrality advocates want is to classify broadband as a public utility which would then give the FCC power to enforce net neutrality as it sees fit. But the FCC knows that if it tries to go down the Title II route, the broadband providers are going to sue yet again. (In all honesty, of course, they're likely to sue no matter what.)

Still, the prospect seems to alarm the commission. The FCC's preference to date has been to apply net neutrality rules under Section 706 of the Telecommunications Act of 1996 because it upsets fewer applecarts. But it's also legally ambiguous. The federal appeals court gave Verizon its victory recommended that the FCC use its Title II authority if it wants to pursue net-neutrality regulation.

The FCC's notice for rulemaking specifically asks for comment on which avenue is preferable to creating policy to regulate an open Internet, with initial comments due by July 15. Here's where you can leave a comment for the FCC.

The No Blocking Rule

The "No Blocking Rule" is a provision with the proposal that "proposes ensuring that all who use the Internet can enjoy robust, fast, and dynamic Internet access." That means broadband providers couldn't deny fast Internet service to consumers, businesses or organizations on any basis and would be forbidden to purposefully provide slower service.

The No Blocking Rule is the flip side of paid prioritization. Broadband providers could feasibly slow down an Internet service (like Netflix) to make it basically unusable. No Blocking would create rules for the minimum viable service that broadband companies provide so that Internet services are guaranteed to work.

Expanded Transparency

An ombudsman is a watchdog that oversees an organization or an industry to make sure that all participants are acting fairly. The FCC wants to create an ombudsman position to take formal and informal complaints against Internet service providers and to act as arbiter for conflict resolution.

The FCC also wants broadband providers to self-police by providing regular reports about network congestion, data speeds and possibly even paid prioritization practices.

Wireless Net Neutrality

The FCC essentially wants to bring back the full force of the 2010 Open Internet Order that the courts struck down. But the 2010 order had a glaring loophole itself: It set different rules for wireline broadband (like DSL) and wireless Internet, which would include 4G LTE.

Wireless broadband was effectively exempted from net neutrality in the 2010 order, which allowed carriers like Verizon, AT&T, Sprint and T-Mobile to block or slow down services as they saw fit. We saw this happen in practice when Verizon blocked the Google Wallet payments app from smartphones on their networks in favor of their own payments solution, called Isis. (This example would also fall under the category of giving priority service to broadband provider affiliates, something the FCC is considering banning.)

The FCC doesn't plan to make that mistake again; this time around, it wants to subject wireless service to the same net-neutrality rules as fixed, wired networks. The FCC is discussing how it can achieve this, either through employing Title III of the Communications Act of 1934 (which governs wireless transmission like radio or television) or through existing measures like Section 706 or Title II.

Here's the FCC's notice of proposed rulemaking:

FCC net neutrality Notice of Proposed Rulemaking