Analysis FCC chairman Tom Wheeler has set off another frenzied storm of net neutrality speculation.
At a packed session at CES on Wednesday, Wheeler was interviewed about a range of issues but most significantly over how the FCC plans to classify broadband: something that will have huge implications for internet access across the US.
Wheeler was not precise in his comments, talking instead about what he hoped to achieve – some aspects of which appeared contradictory. But overall, given that the FCC only really has two choices, it would appear that it will vote on regulating broadband under an older 1934 communications law (Title II) rather than under the more recent (and updated) 1996 telecoms legislation (Section 706) at a meeting on 26 February.
The question then becomes: which parts of Title II should be removed (or "forebeared" in the lingo) in order to avoid lumbering the broadband and cable industry with unnecessary and restrictive rules.
This approach is a win for net neutrality advocates and also for President Obama who publicly advocated for Title II, but it will undoubtedly face legal action from ISPs. The key issue at that point is whether a judge will decide that the move to Title II should be held off until the (likely lengthy) court battle has resolved itself, or whether it can move forward while the legal wrangling plays out.
But to scale back a bit: what did Wheeler, a former lobbyist for the ISP industry, actually say, and why does everyone believe this points to Title II classification?
In his own words
Talking to the president of the Consumer Electronics Association (CEA), Gary Shapiro, Wheeler outline some of his general thinking about the balance between competition and regulation:
I was standing at one of the booths and there was an Ethernet port in their router that has to go into the router of the ISP, who may offer - and in this case was offering - a competitive service. How do you make sure that that pathway stays open? And make sure that the ISP has an opportunity to get a fair return on investment?
Highlighting the lead arguments for opposing sides on the net neutrality debate, Wheeler said the FCC had to find a balance between "innovation and the need to incentivize ISP's continued investment in broadband."
He also briefly covered the impact of President Obama's unexpected video address strongly advocating for broadband to be put under Title II classification: "There was an effort to say Wheeler and the president are pulling in opposite directions. But that wasn't exactly the reality because we're both pulling in the same directions," the chairman said at CES.
And then to the bones of it:
We’re going to propose rules that say that no blocking, no throttling, no paid prioritization, all that list of issues, and that there is a yardstick against which behavior should be measured. And that yardstick is 'just and reasonable'.
Wheeler also said the following in relation to his earlier hybrid plan that would separate broadband into wholesale and retail, with the former under the older Title II legislation and latter under Section 706:
It became obvious that 'commercially reasonable' [note: he likely meant 'commercially viable'] could be interpreted as what is reasonable for the ISPs, not what’s reasonable for consumers or innovators. And that’s the wrong question and the wrong answer. Because the issue here is how do we make sure that consumers and innovators have access to open networks.
You can decode that sentence in the same way as "just and reasonable": the phrase "commercially viable" appears in both sets of legislation, but not in section 706.
This is what section 706 actually says:
The Commission and each State commission with regulatory jurisdiction over telecommunications services shall encourage the deployment on a reasonable and timely basis of advanced telecommunications capability to all Americans (including, in particular, elementary and secondary schools and classrooms) by utilizing, in a manner consistent with the public interest, convenience, and necessity, price cap regulation, regulatory forbearance, measures that promote competition in the local telecommunications market, or other regulating methods that remove barriers to infrastructure investment.
So, broadly, the more Wheeler talks about things other than broadband rollout and promoting competition, the further away from section 706 he wanders, and the closer to Title II.
Why does it have to be one or the other?
Because this whole mess originated when the FCC created its own new set of rules for open internet access that were then successfully challenged by Verizon in court and struck down. The FCC is highly unlikely to want to repeat that again, and so needs to fit broadband within existing legislation. The idea of getting new telecoms legislation through Congress is so unrealistic that no one is seriously contemplating it.
Just as a final indicator, Wheeler told the audience he had had an "aha moment" when he looked at how the 1996 law treats wireless networks: Wi-Fi can fall under the rules of Title II. (In 2007, before Wheeler was chairman, the FCC pulled wireless networks out of Title II's remit; perhaps the chief wants to put them back under that legislation.)
So what this all means is that we are looking at some kind of flavor of Title II for broadband networks, and the key question is then: what parts should apply and which should not.
In an earlier analysis of Title II, we estimated that just six of the 76 sections will likely apply:
- 201: Services and charges – companies have to charge a reasonable sum for the broadband service
- 202: Discrimination – you can't discriminate against competing services
- 208: Complaints – people can complain
- 222: Privacy – people's privacy has to be respected
- 254: Universal service – you have to provide the service across the country
- 255: Disability access – make it possible for people with disabilities to use it
But it would appear that the big arguments will now begin to focus on exactly which parts of Title II should be applied and which dropped. ®