FCC Proposes Net Neutrality 2.0 Amid Firestorm of Debate

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In a closely-watched meeting that drew protesters, the FCC voted 3-2 in favor of proposing a newly revised set of rules in its Open Internet (or net neutrality) proceeding.  The Notice of Proposed Rulemaking (NPRM) proposes several revised rules focusing on broadband transparency disclosures and prohibitions on blocking and “commercially unreasonable practices,” but also solicits comment regarding the scope and authority of the FCC’s Open Internet rules.  As expected, the NPRM relies on the FCC’s authority under Section 706 of the Communications Act (Act), which is in line with the D.C. Circuit Court’s January 2014 Verizon v. FCC decision that overturned the FCC’s previous Open Internet rules adopted in 2010.  However, the FCC also emphasized that the NPRM’s contemplation of invoking authority under Title II of the Act is a “viable alternative.”  Section 706 authority, which pertains to the FCC’s specific obligation to encourage broadband infrastructure deployment, is narrower than Title II authority, which would necessitate the classification of broadband as telecommunications and bring broadband providers under the FCC’s common carrier regulatory regime. Many net neutrality proponents believe Section 706 could still allow broadband providers to create a premium fast lane for content providers of their choice, whereas Title II would give the FCC broader regulatory authority to prohibit and enforce against such activity.  Conversely, some broadband providers including large ISPs Comcast and Verizon argue that bringing broadband services into the Title II regulatory fold could stifle broadband investment and innovation.  As for Internet traffic exchange issues such as interconnection or peering, which recently have been in the spotlight due to Netflix entering into controversial paid peering arrangements with Comcast and Verizon, the FCC has declined to address any traffic exchange issues in the NPRM but asks whether the FCC should expand the scope of the Open Internet rules to cover such issues.  Comments on the NPRM are due by July 15, 2014 and reply comments by September 10, 2014.

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