By: Alexa Esposito 

 

Introduction:

On February 26th, the Federal Communications Commission (“FCC”) voted to regulate broadband Internet service as a public utility, proposing a series of “strong, sustainable rules” intended to protect the Open Internet from the threats of broadband Internet Service Providers’ (“ISPs”) economic incentives.

The new rules proposed by the FCC prohibit ISPs from (1) blocking content, (2) throttling or impeding Internet traffic, and (3) offering faster Internet services to those who can afford such services and slower Internet services to everyone else.[1] The FCC also imposes a new standard for future conduct of ISPs, mandating against unreasonable interferences and practices that would inhibit either (1) the ability of consumers to select and use services or devices of their choice or (2) the ability of edge providers, such as website and application developers, to make lawful content, services, applications or devices available to consumers.[2] Through these prohibitions and new standards for ISP conduct, the FCC seeks to ensure that America’s broadband networks be fair, fast, and open today and in the future.[3]

As the bedrock of its authority to regulate the Internet in this manner, the FCC primarily cites Sections 201 and 202 of Title II of the Communications Act. Although Title II was once seen as precluding broadband Internet, the FCC notes that Title II is very much applicable to the present status of broadband Internet service access as a transmission platform. The remainder of this article will be dedicated to examining the core provisions of Title II of the Communications Act, Sections 201 and 202; how these sections give rise to the FCC’s power to regulate the Open Internet; and the implications of this regulatory power.

 

Regulatory Power under Title II and its Implications:

Title II of the Communications Act, enacted in 1934, gave the FCC the power to regulate interstate and foreign commerce in communication by radio and wire and make available a “rapid, efficient, Nationwide and world-wide radio communication service” to all Americans.[4] Sections 201 and 202 are at the core of the FCC’s order. Section 201 requires that common carriers engaged in interstate or foreign communication by wire or radio must furnish such services “upon reasonable request therefor” and in accordance with the public interest. They must also charge reasonable rates and charges for such services.[5] The second core section of Title II to the FCC’s order is Section 202, which makes unreasonably discriminatory rates, services, or any other discriminatory practices in relation to the communication service unlawful.[6]

The FCC has decided to reclassify ISPs as common carriers and the broadband Internet access services they provide as telecommunications services under Title II in light of two factors: (1) The Internet is presently used as a transmission platform for third-party content and services like other traditional Title II utilities such as the radio, and (2.) ISPs, now more than ever, have economic incentives that may impede the speed and equality of the Internet services provided to consumers.[7] By reclassifying the broadband Internet access providers as common carriers and the Internet services they provide as telecommunications services under Title II, the FCC has broader regulatory power to ensure that the Internet is open, fair, and in accordance with the “public interest”.

What is unclear right now is at what cost the FCC’s broader regulatory power to promote fair and fast Internet services will come. Will the FCC also regulate the rates at which Internet services can be charged and thus define what is considered a “reasonable” rate for Internet services under Title II? This seems likely in light of the fact that the FCC makes a point to note what rate-regulation will not be. The FCC states that the Order will not apply outdated, utility-style rate regulation under Title II to the regulation of the Open Internet in the 21st century but stops short of indicating what kind of rate regulation will be applied.[8] Therefore, how great of an economic burden the FCC’s broader regulatory power will impose on ISPs and how much of this burden will be transferred to consumers through higher service prices remains to be seen.

 


 

[1] Press Release, Federal Communications Commission, FCC Adopts Strong, Sustainable Rules to Protect the Open Internet (Feb. 26, 2015); Rebecca R. Ruiz and Steve Lohr, FCC Approves Net Neutrality Rules, Classifying Broadband Internet Service as a Utility, N.Y. Times (Feb. 26, 2015), http://www.nytimes.com/2015/02/27/technology/net-neutrality-fcc-vote-internet-utility.html?_r=1.

[2] Press Release, Federal Communications Commission, FCC Adopts Strong, Sustainable Rules to Protect the Open Internet (Feb. 26, 2015).

[3] See id.

[4] See 47 U.S.C. § 151(a).

[5] According to 47 U.S.C. § 153(11), the term “common carrier” or “carrier” means any person engaged as a common carrier for hire, in interstate or foreign communication by wire or radio or interstate or foreign radio transmission of energy, except where reference is made to common carriers not subject to this chapter; but a person engaged in radio broadcasting shall not, insofar as such person is so engaged, be deemed a common carrier.

[6] See 47 U.S.C. § 202(a).

[7] Federal Communications Commission, supra note 1.

[8] See id.