FCC tries 'commercially reasonable' net neutrality compromise

Warning the tech press ahead of time to get the facts right, FCC Chairman Wheeler gives the public a taste of some interesting revisions to its Open Internet policy

The concept we now call "net neutrality" was coined in 2006 out of opposition to a bill authored by Congressman Joe Barton (R--Texas). That bill sought to create national licenses for broadband service, but to give providers the incentive to seek such licenses--and compete with municipal- or state-licensed incumbents--Rep. Barton suggested that restrictions on Internet service quality be eased for federal licensees. It would have created a "fast lane" for anyone affording the nationwide option.

The opposition, led by Sen. Ron Wyden (D--Oregon), coined "net neutrality" as a rallying cry against the fast lane. This is what the phrase originally meant.

It's incredible how things get turned around the other way once they come full circle. On Thursday, the Democrat leading the Federal Communications Commission insisted that proposed rules reinstituting a form of net neutrality amenable to Congress must enable the creation of the very thing that provoked net neutrality in the first place.

In a statement issued early Thursday afternoon, FCC Chairman Tom Wheeler paid his now-regular tribute to what he calls "misinformation" about the revised Open Internet rules (indeed, some sources do say the proposals were issued Wednesday, and more than one source says the proposals were revoked altogether). But the two key revisions--which become obvious when you compare Wheeler's digested version of the new framework to the version put forward by former chairman Julius Genachowski in September 2011, are:

  1. The expansion of focus away from regulating broadband Internet, toward encompassing the Internet as a whole; and
  2. The insertion of the phrase "commercially unreasonable" as a legal distinction describing the class of conduct which the FCC may disallow.

It is the latter which has become the wedge which, quite likely, provides an opening for the allowance of commercial agreements between content and service providers for preferential treatment. If such agreements result in the blockage of legal content, then they may certainly be disallowed. But if the final rules resemble the framework that Wheeler spells out--which include transparent disclosure to subscribers, and favoring traffic from affiliated entities (apparently wary of the possibility of Comcast favoring NBC content)--then "fast lanes" may yet become feasible under the premise of net neutrality.

"The Court of Appeals made it clear that the FCC could stop harmful conduct if it were found to not be 'commercially reasonable,'" Wheeler writes. "Acting within the constraints of the Court's decision, the Notice will propose rules that establish a high bar for what is 'commercially reasonable.'"

Whether that's what the D. C. Court of Appeals actually found may still be debated. In its January 14 decision in Verizon v. FCC, the Appeals Court found that the FCC could not regulate Internet traffic in the same way it regulates telephone traffic, specifically by treating ISPs like common carriers. In so doing, it repeated a caution to the FCC not to apply the "commercially reasonable" standard of judgment in the same way it legally applies the "just and reasonable" standard to telephone carriers--in which case, wrote the court (.PDF), "the rule might impose obligations that amounted to common carriage per se."

The Court disagreed with the FCC's argument that broadband providers are not common carriers because they have flexibility in determining what grades of service to offer customers, and thus any rule that applies to them cannot be a common carrier rule. It noted that an edge provider might also be a customer of a broadband provider, and it would be unreasonable to impose end user-style obligations on an agreement between these two classes of parties.

"In contending otherwise," wrote the Appeals Court, "the Commission appears to misunderstand the nature of the inquiry in which we must engage. The question is not whether, absent the Open Internet Order, broadband providers would or did act as common carriers with respect to edge providers; rather, the question is whether, given the rules imposed by the Open Internet Order, broadband providers are now obligated to act as common carriers."

Using the Court's logic, the question before Chairman Wheeler is not whether his proposed rules properly encompass existing "commercially reasonable" conduct, but rather whether they would redefine the Internet in such a way as to apply common carrier-like oversight henceforth. It's important to note that Wheeler's notice Thursday did not include the word "broadband."

The Commission is scheduled to debate the proposed revisions on May 15.

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