What the new FCC open Internet rules could mean for net neutrality

The Federal Communications Commission adopted new rules for regulating Internet access at a hearing today in Washington. After FCC commissioners Michael Copps and Mignon Clyburn said yesterday they will not stand in the way of Chairman Julius Genachowski’s modified order, it paved the way for a 3-2 vote to approve new rules of the road for the Internet. The tech policy reporters at Politico made the following assessment of the rules in their excellent Morning Tech newsletter this morning and got it about right.

1) Transparency for both wireline and wireless services, requiring disclosure to consumers, content and device providers,
2) Wireline providers are prohibited from blocking any lawful content, apps, services or devices; wireless providers, from blocking websites and competing telephony services, 3) Wireline providers are prohibited from unreasonably discriminating against any traffic (but no such rule for wireless). Paid prioritization is not explicitly banned, though any such regime would likely raise red flags for the commission under the “no unreasonable discrimination” test. That will be determined on a case-by-case basis.

Below are key excerpts from the report and order the FCC voted on yesterday. (The full order still hasn’t been released to the public; more on that later in this post.)

Rule 1: Transparency

A person engaged in the provision of broadband Internet access service shall publicly disclose accurate information regarding the network management practices, performance, and commercial terms of its broadband Internet access services sufficient for consumers to make informed choices regarding use of such services and for content, application, service, and device providers to develop, market, and maintain Internet offerings.

Rule 2: No Blocking

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

A person engaged in the provision of mobile broadband Internet access service, insofar as such person is so engaged, shall not block consumers from accessing lawful websites, subject to reasonable network management; nor shall such person block applications that compete with the provider’s voice or video telephony services, subject to reasonable network

Rule 3: No Unreasonable Discrimination

A person engaged in the provision of fixed broadband Internet access service, insofar as such person is so engaged, shall not unreasonably discriminate in transmitting lawful network traffic over a consumer’s broadband Internet access service.  Reasonable network management shall not constitute unreasonable discrimination.

Wired’s Sam Gustin may have the best one sentence summary of what the FCC compromise will mean:

The three new rules, which will go into effect early next year, force ISPs to be transparent about how they handle network congestion, prohibit them from blocking traffic such as Skype on wired networks, and outlaw “unreasonable” discrimination on those networks, meaning they can’t put a competing online video service in the slow lane to benefit their own video services.

As Politico reported, these are widely regarded as the first enforceable net neutrality rules. The compromise they have produced widespread reaction on both sides of the issue. As Brian Stelter reported for the New York Times, the new FCC net neutrality rules are going down well with anyone interested in the issue.

The debate over the rules, intended to preserve open access to the Internet, seems to have resulted in a classic Washington solution — the kind that pleases no one on either side of the issue. Verizon and other service providers would prefer no government involvement. Public interest advocates think the rules stop far short of ensuring free speech. Some Republicans believe the rules are another instance of government overreach.

Nancy Scola posted a typically thoughtful analysis of what the FCC did to net neutrality today. The whole thing is worth reading but there are two key grafs:

…for sure, some of the provisions in this proposal do seem designed to be responsive to industry worries that don’t seem to have actually been justified in the record. But looking at this whole debate, it starts to look much bigger than Genachowski, and much like we’ve reached the point to where any sort of meaningful incursion onto the corporate right to influence and even dominate the Internet would seem like a downright radical act of political bravery. That’s a reality of the U.S. communications landscape, circa 2010. That we’re debating just how powerful a say telecom company’s should have over how the Internet works is a sign of how the Internet has, as a medium, shifted since its earlier days.

Writing for Wired in 2005, Kevin Kelly recalled how one of the early debates in the Internet’s evolution was whether or not to allow any sort of commerce at all on the activity layer of the Internet. (That is, e-commerce websites and the like.) “It’s hard to believe now,” writes Kelly, “but until 1991, commercial enterprise on the Internet was strictly prohibited.” The idea that the Internet should be so pure probably seems laughable to many of us now. Watching the net neutrality process unfold at the FCC and on Capitol Hill over the last many months has made clear that the reality is that, very quickly, corporate interests have acquired such a level of influence over the evolution of the Internet where the debate can sometimes seem to be far more concerned with their interests than the public interest.

The Center for Democracy & Technology released the following statement in response to the Federal Communications Commission vote to approve a set of “rules of the road” for preserving the open nature of the Internet.

“The Commission took a vital first step today by voting to adopt rules designed to sustain the open nature of the Internet,” said CDT President Leslie Harris. “The Internet is and should remain a place where innovators and upstarts can experiment and thrive, without needing to seek permission or approval from established network operators,” she said. “Today, after a long debate, the FCC affirms that it can and will play a crucial role in protecting that open environment.”

“This is a big day, but the true test of these rules will depend on how they are implemented and interpreted over time,” said CDT Senior Policy Counsel David Sohn. “It appears the rules will leave a number of important open questions, including how the FCC will approach openness for wireless. Ultimately, the kind of Internet users get should not depend on whether they happen to access it via a wireline or wireless connection.”

“To be sure, there is more to be done,” Harris said. “But this is how we make progress on policy, one step at a time, each step building on the one before it. This isn’t the end of the Internet neutrality debate, it’s just the end of the beginning.”

The Washington Post’s Cecilia Kang, who reported live all day on the FCC’s new neutrality rules, went on the PBS News Hour to talk about the new rules tonight:

The FCC’s press release follows. Look for the tech journalism community to be teasing more details from this over the coming days, including mentions of Android and how the FCC will handle the app stores

FCC Press Release 12-12-2010 Open Internet

The meeting was livestreamed at FCC.gov/live. An archive of the liveblog on this post embedded below; the FCC itself liveblogged the meeting at Blog.OpenInternet.gov.

A note on transparency

Before the hearing, another writer approached me for my thoughts on how transparency played into today’s hearing. Amy Gahran considered why the FCC ‘net neutrality’ rule was still secret at CNN.com today. While she included most of my statement, here’s the full version:

Chairman Genachowski made a commitment to a more open, transparent and data-driven F.C.C. under President Obama’s Open Government Directive. In many respects, in its first year of open government, the agency made commendable progress, with strides towards taking public comment through e-rulemaking at OpenInternet.gov, Broadband.gov and Reboot.FCC.gov. The sites were deployed by an able new media team that has used online communications in unprecedented ways. The chairman and his managing director, Steven Van Roeckel, both deserve credit for their plans to reboot FCC.gov as a platform for government including the use of APIs and open source technologies like Drupal.

That said, when it comes to the question of whether the public has a right to see the net neutrality proposal before the commissioners vote upon it, however, the agency has fallen short of its transparency pledge. I have not found a legal precedent that explicitly gives the agency authority to keep the text of a proposed rule secret until it is voted upon by the Commission. While it is true that conversely the F.C.C. does not appear to be under no legal obligation to do so, given that the members of the commission presumably had to negotiate on the details of the final rules for vote, the decision not to share a version publicly may have made such discussion more flexible. That said, the choice not to post the proposed rules online before the vote is an example less government transparency in the creation of important regulation, not more.

UPDATE: Ryan Singel obtained and posted the following snippets of what looks like the new open Internet rules, below:
Net Neutrality Order Snippets

UPDATE: The New York Times Brian Stelter obtained a copy of FCC Chairman Genachowski’s remarks. They are embedded below. His initial coverage of the FCC net neutrality rules remains some of the best online.
Net neutrality statement by Julius Genachowski, the FCC chair, on Dec. 21, 2010

UPDATE: Here are all five prepared statements from the FCC commissioners, as posted on FCC.gov as PDFs.

Copps Statement

Clyburn Statement

Genachowski Statement

McDowell Statement

Baker Statement

UPDATE: The FCC released the full version of the new open Internet rules online on the Friday before Christmas.

FCC proposes new framework for an open Internet and net neutrality

Today in Washington, FCC Chairman Genachowski delivered a statement on a new net neutrality proposal that he says will preserve an open Internet. The statement, which was shared with selected media outlets last night, has already received considerable attention. As Wired reported, the FCC now has a net neutrality order for its December meeting on the 21st. According to the New York Times, this proposal for a net neutrality framework will “will allow broadband companies to impose usage-based pricing.” It will not reclassifiy broadband services under Title 2. The new net neutrality proposal will, according to the Washington Post, “bars the operators of broadband lines into homes from blocking Web sites, applications or any devices that attach to their networks. It would also prevent carriers from “unreasonable discrimination” that would, for example, serve up Comcast’s Internet video service Xfinity faster and at better quality than that of rival Netflix.”

The Center for Democracy & Technology released the following statement on the proposal: “We commend Chairman Genachowski for recognizing that the time to act is now,” said CDT President Leslie Harris. “The Internet is and should remain a medium that is open to innovation, not one where big network operators get to pick winners and losers.  This rulemaking is about preserving the characteristics that have made the Internet such an overwhelming success. It is a first step but a critical one. At the same time, adopting these historic rules will not be the end of the Internet Neutrality debate, it will be just the end of the beginning. The Commission will need to vigorously enforce the new rules. And it will need to address the critical question of protections for wireless Internet users, which appear limited in the current proposal.”

Genachowski’s full remarks are available at OpenInternet.gov or posted below.

FEDERAL COMMUNICATIONS COMMISSION
CHAIRMAN JULIUS GENACHOWSKI
REMARKS ON PRESERVING INTERNET FREEDOM AND OPENNESS WASHINGTON, DC
December 1, 2010

Good morning. After months of hard work at the FCC, in other parts of government, in the private sector, and in the public interest community, and after receiving more than 100,000 comments from citizens across America, we have reached an important milestone in our effort to protect Internet freedom and openness.

Yesterday, I circulated to my colleagues draft rules of the road to preserve the freedom and openness of the Internet. This framework, if adopted later this month, would advance a set of core goals: It would ensure that the Internet remains a powerful platform for innovation and job creation; it would empower consumers and entrepreneurs; it would protect free expression; it would increase certainty in the marketplace, and spur investment both at the edge and in the core of our broadband networks.

I am gratified by the broad support this proposal has already received this morning — including from leading Internet and technology companies, founders and investors; consumer and public interest groups, unions, civil rights organizations, and broadband providers.

The proposed rules of the road are rooted in ideas first articulated by Republican Chairmen Michael Powell and Kevin Martin, and endorsed in a unanimous FCC policy statement in 2005. Similar proposals have been supported in Congress on a bipartisan basis. And they are consistent with President Obama’s commitment to “keep the Internet as it should be – open and free.”

Their adoption would culminate recent efforts to find common ground — at the FCC, in Congress, and outside government, including approaches advanced by both Democrats and Republicans, and by stakeholders of differing perspectives. In particular, this proposal would build upon the strong and balanced framework developed by Chairman Henry Waxman, which garnered support from technology and telecommunications companies, big and small, as well as from consumer and public interest groups.

The animating force behind all of these efforts is a shared appreciation for the Internet’s wondrous contributions to our economy and our way of life.

Millions of us depend on the Internet every day: at home, at work, in school — and everywhere in between. The high-speed networks we call broadband are transforming health care, education, and energy usage for the better. It’s hard to imagine life today without the Internet — any more than we can imagine life without running water or electricity.

The Internet has been an unprecedented platform for speech and democratic engagement, and a place where the American spirit of innovation has flourished. We’ve seen new media tools like Twitter and YouTube used by democratic movements around the world.

Not only is the Internet becoming a central part of the daily lives of Americans, the Internet has been a strong engine of job creation and economic growth.

Internet companies have started as small start-ups, some of them famously in dorm rooms and garages with little more than a computer and access to the open Internet. Many have become large businesses, providing high-paying, high-tech jobs in communities across our country. It’s the American dream at work.

Small businesses and start-ups have accounted for more than 22 million new American jobs over the last 15 years. And broadband has played a central part, enabling small businesses to start, to lower their costs, and to reach new customers in new markets around the country and, indeed, the globe.

Why has the Internet proved to be such a powerful engine for innovation, creativity and economic growth? A big part of the answer traces back to one key decision by the Internet’s original architects: to make the Internet an open platform.

It is the Internet’s openness and freedom — the ability to speak, innovate, and engage in commerce without having to ask anyone’s permission — that has enabled the Internet’s unparalleled success.

This openness is a quality — a generative power — that must be preserved and protected. And the record in the proceeding we’ve run over the past year, as well as history, shows that there are real risks to the Internet’s continued freedom and openness. Broadband providers have natural business incentives to leverage their position as gatekeepers to the Internet. Even after the Commission announced open Internet principles in 2005, we have seen clear deviations from the Internet’s openness — instances when broadband providers have prevented consumers from using the applications of their choice without disclosing what they were doing.

The proposed open Internet framework is designed to guard against these risks, while recognizing the legitimate needs and interests of broadband providers.

In key respects, the interests of edge innovators – the entrepreneurs creating Internet content, applications and services — broadband providers, and American consumers are aligned.
Innovation at the edge catalyzes consumer demand for broadband. Consumer demand spurs private investment in faster broadband networks. And faster networks spark ever-cooler innovation at the edge.

A central goal of the proposed open Internet framework is to foster this cycle of massive investment in both the edge and the core of broadband networks, to the benefit of consumers and our economy.

Protecting Internet freedom will drive the Internet job creation engine.

The crux of the proposal, which would establish open Internet rules for the first time, is straightforward:

First, consumers and innovators have a right to know basic information about broadband service, like how networks are being managed. The proposed framework therefore starts with a meaningful transparency obligation, so that consumers and innovators have the information they need to make smart choices about subscribing to or using a broadband network, or how to develop the next killer app. Sunshine can help solve problems early, reducing the number of issues that even come to the FCC.

Second, consumers and innovators have a right to send and receive lawful Internet traffic — to go where they want and say what they want online, and to use the devices of their choice. Thus, the proposed framework would prohibit the blocking of lawful content, apps, services, and the connection of non-harmful devices to the network.

Third, consumers and innovators have a right to a level playing field. No central authority, public or private, should have the power to pick which ideas or companies win or lose on the Internet; that’s the role of the market and the marketplace of ideas. And so the proposed framework includes a bar on unreasonable discrimination in transmitting lawful network traffic.

The proposed framework also recognizes that broadband providers must have the ability and investment incentives to build out and run their networks. Universal high-speed Internet access is a vital national goal that will require very substantial private sector investment in our 21st century digital infrastructure. For our global competitiveness, and to harness the opportunities of broadband for all Americans, we want world-leading broadband networks in the United States that are both the freest and the fastest in the world.

To this end, broadband providers need meaningful flexibility to manage their networks — for example, to deal with traffic that’s harmful to the network or unwanted by users, and to address the effects of congestion. Reasonable network management is an important part of the proposal, recognizing that what is reasonable will take account of the network technology and architecture involved.

Our work has also demonstrated the importance of business innovation to promote network investment and efficient use of networks, including measures to match price to cost such as usage-based pricing.

The record in our proceeding reflects both the importance of openness principles to mobile broadband, and the appropriateness of recognizing differences between fixed and mobile broadband. This is not a new point, but one that I’ve made consistently since the beginning of this proceeding. For example, mobile broadband is at an earlier stage of development than fixed broadband, and is evolving rapidly.

Accordingly, the proposal takes important but measured steps in this area — including transparency and a basic no blocking rule. Under the framework, the FCC would closely monitor the development of the mobile broadband market and be prepared to step in to further address anti-competitive or anti-consumer conduct as appropriate.

The work of the FCC staff on this proceeding has been exceptional, no more so than in connection with the complex legal issues. Informed by the staff’s additional legal analysis and the extensive comments on this issue over the past year, the proposal is grounded in a variety of provisions of the communications laws, but would not reclassify broadband as a Title II telecommunications service. I am satisfied that we have a sound legal basis for this approach.

I want to emphasize that moving this item to a vote at the Commission is not designed or intended to preclude action by Congress. As always, I welcome the opportunity for the Commission to serve as a resource to Congress.

The Commission itself has a duty and an obligation to fulfill — a duty to address important open proceedings based on the record, and an obligation to be a cop on the beat to protect broadband consumers and foster innovation, investment, and competition. I believe the proposed framework advances this mission, and that its adoption will provide increased certainty and benefits to the American public.

I look forward to ongoing work with my Commission colleagues on this and other issues. We have very important work to do for the American people in the months ahead, as we strive to harness the opportunities of broadband and communications for the benefit of our economy and for all Americans.

Thank you.