TAKEAWAYS

• If adopted, the FCC will have expanded authority to regulate Broadband Internet Access.
• The FCC is not proposing to regulate rates, but it would have authority to review changes in ownership, as well as jurisdiction to rule on complaints alleging unreasonable service terms or discriminatory practices.
• The Commission seeks comment on the proposals by December 14, 2023, and reply comments by January 17, 2024.

At its October 2023 Open Meeting, the Federal Communications Commission (FCC) proposed rules that, if adopted, would reclassify Broadband Internet Access Service (BIAS) as a telecommunications service and reinstate the Commission’s authority adopted in 2015 but discarded in 2018. The item was supported by the three Democrats on the Commission and opposed by the two Republican commissioners. Since 2005, when the FCC adopted its Internet Policy Statement, Commission leaders have sought to regulate or deregulate BIAS through policy statements, by placing conditions on internet access companies seeking to merge, and, most notably, by classifying internet access service as either an information service, which affords the FCC limited regulatory authority, or a telecommunications service, which gives the FCC more robust tools to regulate service provider conduct.

The Commission cites the COVID-19 pandemic and Americans’ increasing reliance on BIAS for education, work, health, communication and everyday life during the last five years as reasons for regulating BIAS, and its cybersecurity and national security mandate to protect “life and property” as an underpinning of its authority to regulate BIAS. In its Notice of Proposed Rulemaking (NPRM), the Commission relies heavily on principles and reasoning developed as part of the proceeding that resulted in the 2015 Open Internet Order. The Commission seeks comment on the questions, proposals and tentative conclusions raised in the NPRM. Comments and reply comments will be due by December 14, 2023, and January 17, 2024, respectively. The FCC is also seeking comment on petitions for reconsideration of the Commission’s 2020 Restoring Internet Freedom Order on Remand. Comments and reply comments on the petitions will be due by December 14, 2023, and January 17, 2024, respectively.

In short, the NPRM proposes to:

• Again, as the FCC did in 2015, classify BIAS as a telecommunications service and classify mobile BIAS as a commercial mobile service, enhancing the FCC’s ability to regulate terms and conditions, prohibit unreasonable discrimination and review proposed changes in ownership;
• Establish a national regulatory approach to protect the internet by preventing BIAS providers from engaging in practices like blocking, throttling or engaging in paid or affiliated prioritization arrangements, and unreasonably interfering or unreasonably disadvantaging consumers or edge providers;
• Clarify that the FCC will not regulate rates or require network unbundling under its proposed rules; and
• Retain the information disclosure requirements under the current transparency rule.

Proposed Classification of Broadband Internet Access Service
In light of Americans’ increased use of and reliance on BIAS, the Commission tentatively concludes that BIAS should be classified as a telecommunications service instead of as an information service. The Commission notes that the Act’s definition of telecommunications tracks with how it believes Americans use and understand BIAS: a conduit to “transmi[t], between or among points specified by the user, of information of the user’s choosing, without change in the form or content of the information as sent and received.” The NPRM states that fixed BIAS providers generally advertise transmission speeds while mobile BIAS providers advertise speed, reliability and network coverage—all attributes of a pipeline used for transmitting information, not providing information itself. The NPRM finds that the content, apps, and other add-on services that consumers use a BIAS connection to reach are more appropriately classified as “information services” subject to Title I classification.

In the Commission’s view, the reclassification of BIAS will “ensure that the Internet is open and fair, including by establishing a national regulatory approach that would provide consistent protections for consumers and certainty for ISPs ... [and] enhance the Commission’s ability to safeguard national security and protect public safety.” Since 2015, the Commission has been concerned about a patchwork of state-level internet regulations that are difficult for consumers and BIAS providers to navigate; the rules proposed in the NPRM are intended to preempt state-level rules and primarily govern BIAS with a national framework administered by the FCC. The Commission proposes to continue using the definition of “broadband Internet access service” as a “mass-market retail service by wire or radio that provides the capability to transmit data to and receive data from all or substantially all internet endpoints, including any capabilities that are incidental to and enable the operation of the communications service, but excluding dial-up internet access service.”

Proposed Open Internet Rules
If adopted, the proposed rules would prohibit BIAS providers from blocking, throttling or engaging in paid or affiliated prioritization arrangements and reinstate the 2015 Order’s general conduct standard, which prohibits practices that cause unreasonable interference or unreasonable disadvantages to consumers or edge providers (“edge providers” are content, application, service and device providers that operate at the edge of a network, not at the core); steps taken as part of reasonable network management will not be considered violations of the prohibitions on blocking and throttling, or the general conduct rule. The NPRM also seeks to retain the current disclosures required of BIAS providers.

With respect to blocking, the FCC proposes to adopt a bright-line rule prohibiting BIAS providers from blocking lawful content, applications, services or non-harmful devices, finding that “the freedom to send and receive lawful content and to use and provide applications and services without fear of blocking is essential to the Internet’s openness.”

The Commission proposes the following language:

A person engaged in the provision of broadband Internet access service, insofar as such person is so engaged, shall not block lawful content, applications, services, or nonharmful devices, subject to reasonable network management.

The Commission proposes the following “no-throttling” rule language:

A person engaged in the provision of broadband Internet access service, insofar as such person is so engaged, shall not impair or degrade lawful Internet traffic on the basis of Internet content, application, or service, or use of a non-harmful device, subject to reasonable network management.

The proposed rules would also ban arrangements in which a BIAS provider accepts money or other consideration to manage its network for the benefit of particular content, applications, services or devices, or does so on behalf of an entity affiliated with the provider. The Commission believes that such practices “harm consumers, competition, and innovation, as well as create disincentives to promote broadband deployment.” The NPRM proposes the following paid prioritization rule language:

A person engaged in the provision of broadband Internet access service, insofar as such person is so engaged, shall not engage in paid prioritization. “Paid prioritization” refers to the management of a broadband provider’s network to directly or indirectly favor some traffic over other traffic, including through use of techniques such as traffic shaping, prioritization, resource reservation, or other forms of preferential traffic management, either (a) in exchange for consideration (monetary or otherwise) from a third party, or (b) to benefit an affiliated entity.

The Commission’s proposed general conduct standard is, in its view, intended to act as a backstop measure that will allow the Commission to regulate conduct that is not in violation of the blocking, throttling or paid prioritization rules but that which uses other means to harm the open internet. The Commission’s proposed rule language is:

Any person engaged in the provision of broadband Internet access service, insofar as such person is so engaged, shall not unreasonably interfere with or unreasonably disadvantage (i) end users’ ability to select, access, and use broadband Internet access service or the lawful Internet content, applications, services, or devices of their choice, or (ii) edge providers’ ability to make lawful content, applications, services, or devices available to end users. Reasonable network management shall not be considered a violation of this rule.

The Commission’s transparency rule, as adopted in 2010 and modified over more than a decade, requires BIAS providers to disclose to consumers information sufficient for consumers to make informed decisions about their internet connections, including information on speed and pricing. The information provided must be truthful and accurate. Relatedly, the rule requires disclosures about network management practices, performance and commercial terms of service, and applies to service descriptions, pricing and fees. Recognizing that the FCC’s recent broadband label requirements are aimed at BIAS transparency, the NPRM seeks comment on how, if at all, the proposed transparency requirements should be modified.

Proposed Forbearance
The Commission proposes to forbear from all laws and rules that permit regulation of rates, finding that its authority allows it to promote BIAS competition and deployment without the need to regulate rates. Similarly, the FCC proposes to forbear from Title II provisions that give it authority to require network unbundling. The Commission, however, does not propose to forbear from Title II provisions of Section 214, which authorizes domestic and international telecommunications companies to provide such services in the United States. The Section 214 process could include review of applications with reportable foreign ownership by a multi-agency group known as Team Telecom.

Enforcement and Investigations
As currently proposed, there would be three ways through which the FCC would receive complaints or initiate investigations about potential violations of its open internet rules: (1) parties could file informal complaints; (2) parties could file formal complaints; and (3) the Commission could initiate enforcement actions on its own. The Commission seeks comment on whether it should continue its practice, as adopted by the 2015 Order, to release enforcement advisory opinions.

Constitutional Considerations
In anticipation of First Amendment challenges to its proposed rules, the Commission notes that the 2015 open internet rules have already withstood constitutional scrutiny by the Court of Appeals for the DC Circuit and that regulation of common carrier conduct as applicable in this case to telecommunications services poses no concerns. Further, the FCC foresees no Fifth Amendment takings considerations, as the proposed rules do not grant any third party physical access to a BIAS provider’s property.

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