FCC Reaffirms Deregulation of Internet Access Services

Davis Wright Tremaine LLP

On Thursday, October 29, the Federal Communications Commission (FCC) released its Order on Remand (adopted at its October 27 meeting), responding to the D.C. Circuit's remand of certain aspects of the agency's earlier Restoring Internet Freedom Order (RIF Order). The RIF Order re-classified broadband internet access service as an unregulated information service, thus eliminating all federal regulatory "network neutrality" obligations beyond requiring broadband providers to accurately disclose network management practices, performance, and commercial terms of service.

This decision was upheld in its core aspects by the D.C. Circuit in Mozilla Corp. v. FCC, but the court remanded certain issues to the FCC. The Order on Remand addresses those issues. We note that the issue of the appropriate regulatory treatment of broadband services has become highly politicized, as the 3-2 party-line vote adopting the ruling illustrates. As a result, the agency may revisit the policies reaffirmed by the Order on Remand, depending on the outcome of the upcoming election.

Public Safety 

The court held that the RIF Order had not adequately considered the impact of deregulating broadband on the ability of public safety agencies to perform their duties, such as their ability to receive real-time information (including video) from citizens experiencing or observing emergency situations. The FCC devotes substantial attention to explaining why treating broadband as an information service will not negatively affect public safety/emergency response entities,1 likely because it was a matter of significant focus at oral argument in the D.C. Circuit, as well as in the court's decision.

The discussion focuses on the facts that:

  • (a) Many public safety agencies have enterprise-level contracts for their internet access, which were never covered by the agency's former rules treating broadband as a telecommunications service;
  • (b) The broadband capabilities available to retail customers have continued to increase, mitigating concerns regarding citizen access to public safety agencies via the internet; and
  • (c) There is no evidence of public safety problems arising due to the absence of open internet/network neutrality rules.

Pole Attachments

The Mozilla court held that the FCC had not adequately considered the impact of deregulating broadband service on the pole attachment rights of broadband providers. The underlying concern is that under 47 U.S.C. § 224, only cable operators and "telecommunications carriers" have the right to access investor-owned utility poles, and pure broadband providers—if broadband is not classified as telecommunications—do not.

On this issue, the FCC agrees with the court that pure broadband providers are not covered by Section 224, but explains that this does not warrant keeping broadband classified as a telecommunications service, for three reasons:

  • First, it notes that its authority over pole attachments is limited and does not cover a large fraction of poles in any event (by virtue of the fact that when a state certifies that it regulates pole attachments, the FCC loses jurisdiction, and by virtue of the fact that Section 224 does not cover poles owned by cooperatives and/or municipal utilities).
  • Second, it notes that most broadband is provided by entities that are either cable operators or telecommunications carriers, and that under the Supreme Court's Gulf Power ruling, those entities do not lose pole access rights under Section 224 if they provide information services too.
  • Finally, the FCC notes that even without statutory pole attachment rights, pure-play broadband entities (such as Google Fiber) have been able to negotiate access deals with pole owners anyway.2 

Lifeline Service

The Mozilla court was concerned that by treating broadband as an information service, the FCC would be unable, going forward, to include broadband services within the set of services that "eligible telecommunications carriers" must offer in order to receive subsidies when providing services to consumers of limited means. Addressing this issue, the agency essentially concludes that (a) Lifeline funding depends on the status of the entity receiving support as a telecommunications carrier, and that therefore (b) the FCC can require, as a condition of a carrier entity getting funding, that the entity offer non-carrier broadband service as one of the supported services.3 

A particularly interesting point in this discussion is the agency's statement in ¶ 103 that it would affirm Title I (unregulated) treatment of broadband even if a court were to rule that the result would be that the FCC could not include broadband within the list of supported Lifeline services. This holding puts any reviewing court that might disagree with the agency's logic in the position of, in effect, depriving low-income consumers of access to subsidized broadband service. This puts a certain pragmatic pressure on any party that would challenge the ruling and, indeed, on a court asked to consider such a challenge to the Order on Remand.

Finally, the FCC in the Order on Remand chose not to try to revive the agency's prior effort in the RIF Order—vacated by the Mozilla court—to simultaneously declare that although it has no regulatory authority over broadband access service, it nonetheless has the authority to expressly preempt state and local governments from imposing regulations (including neutrality regulations) on that service.

That portion of the RIF Order was vacated rather than remanded, with the D.C. Circuit concluding that the Commission's preemption directive "lies beyond its authority"—and thus it is unclear whether the agency even could have revisited this aspect of the RIF Order. After noting the court's decision vacating the preemption ruling, the agency's sole statement on the issue is "This Order does not address preemption."4 The federal government is nonetheless challenging state-level efforts (such as California's) to impose network neutrality obligations on broadband providers based on conflict-preemption theories, however, as are various broadband providers.

FOOTNOTES

1 Order on Remand at ¶¶ 19-67.
2 Order on Remand at ¶¶ 68-81.
3 Order on Remand at ¶¶ 82-102.
4 Order on Remand at ¶ 8 note 29.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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