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FCC Acts On Net Neutrality

by Glen Shapiro, LawAndTax-News.com, New York

27 December 2010


In its broadband regulatory role, the United States’ Federal Communications Commission (FCC) has approved, by majority vote, rules aimed at ensuring ‘net neutrality’.

The US Court of Appeals ruling earlier this year in favour of Comcast’s management of its network capacity by restricting certain subscribers’ use of peer-to-peer applications, had cast doubt on the FCC’s ability to continue its broadband policies, including preserving the free and open internet, protecting consumers and promoting competition by ensuring transparency regarding broadband access services, and safeguarding the privacy of consumer information.

After the decision, the FCC’s chairman, Julius Genachowski, disclosed that, in his opinion, the way forward was not to reclassify all of internet communications but only the transmission component of broadband access service as a telecommunications service, and apply only the handful of provisions under Title II of the Communications Act that, prior to the Comcast decision, were widely believed to be already within the FCC’s purview for broadband.

In announcing its new rules under this process, the FCC said that “broadband providers have taken actions that endanger the internet’s openness by blocking or degrading disfavored content and applications without disclosing their practices to consumers. Finally, broadband providers may have financial interests in services that may compete with online content and services.”

“The rules ensure that internet openness will continue, providing greater certainty to consumers, innovators, investors, and broadband providers, including the flexibility providers need to effectively manage their networks. These rules were developed following a public rulemaking process that began in fall 2009 and included input from more than 100,000 individuals and organizations.”

The rules require all broadband providers to publicly disclose network management practices, restrict broadband providers from blocking internet content and applications, and bar fixed broadband providers from engaging in unreasonable discrimination in transmitting lawful network traffic. The FCC pointed out that the rules will ensure much-needed transparency and continued internet openness, while making clear that broadband providers can still effectively manage their networks and respond to market demands.

In particular, for example, with regard to transparency, anybody engaged in the provision of broadband internet access services must publicly disclose accurate information regarding the network management practices, performance, and commercial terms of its 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.

Anybody engaged in the provision of a fixed broadband internet access service must also not block lawful content, applications, services, or non-harmful devices. In addition, anybody engaged in the provision of a mobile broadband internet access service must not block consumers from accessing lawful websites, nor may any such person block applications that compete with the provider’s voice or video telephony services.

In the provision of a fixed broadband internet access service, there must also be no unreasonable discrimination in transmitting lawful network traffic over a consumer’s broadband internet access service.

The provider of a broadband internet access service is, however, allowed to practice reasonable network management. The FCC defines a network management practice as reasonable if it is appropriate and tailored to achieving a legitimate network management purpose, taking into account the particular network architecture and technology of the broadband internet access service.

Legitimate network management purposes include: ensuring network security and integrity, including by addressing traffic that is harmful to the network; addressing traffic that is unwanted by users, such as by providing services or capabilities consistent with a user’s choices regarding parental controls or security capabilities; and by reducing or mitigating the effects of congestion on the network.

However, the FCC considers that a commercial arrangement between a broadband provider and a third party to directly or indirectly favour some traffic over other traffic in the connection to a subscriber of the broadband provider (i.e., “pay for priority”) would be unlikely to satisfy the rules on ‘no unreasonable discrimination’.

On learning of the FCC’s announcement, President Obama said that the new rules “will help preserve the free and open nature of the internet while encouraging innovation, protecting consumer choice, and defending free speech. This decision is an important component of our overall strategy to advance American innovation, economic growth, and job creation.”

However, the Computer and Communications Industry Association (CCIA) considered that, while the FCC’s rules did indicate that internet access providers (IAPs) should not set up toll roads on the internet or unreasonably discriminate among streams of internet traffic, they do not guarantee anyone’s right to an open internet or ban paid prioritization by IAPs.

Ed Black, CCIA President & Chief Executive Officer, said: “We are glad for the tweaks closing a few loopholes, the enhanced transparency measures and expedited process for consumer complaints against discrimination. We are deeply disappointed, however, it did not include equal protections for wireless internet customers and a ban on paid prioritization.”

TAGS: court | compliance | business | law | internet | United States | regulation

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