The Internet Distinction

(Original post at EFF)

[. . .]

The FCC’s Basis for Regulating: Contrary to some expectations, the FCC is offering new theories for its regulatory authority, opting not to re-assert the “ancillary” legal theory rejected by the D.C. Circuit Court of Appeals. Following the ‘throw it against the wall and see what sticks’ approach, the FCC has volunteered a smorgasbord of potential justifications, the sum of which apparently demonstrates that “[b]roadband Internet access services are clearly within the Commission’s jurisdiction.” The lead argument appears to be Section 706 of the Telecommunications Act, which requires the FCC to report to Congress and take steps to help create universal broadband availability. We’ll see if the Court agrees that this allows the FCC to create broad rules of the road for the Internet.

The merits of the specific net neutrality proposals notwithstanding, the FCC’s continued attempt to find broad, unfocused basis for jurisdiction is a disconcerting strategy. An ungrounded rationale for regulatory authority is easily abused, opening the door to other, undesirable regulation.

Now to the substance. From what we’ve learned from FCC statements and bulletins, our anticipated concerns were right on target. The rules appear to be riddled with loopholes and exemptions, to the point where the FCC’s declaration that the order represents bright-line rules and a framework for predictability is hard to reconcile. It’s likely there won’t be much clarity around the rules’ application until they get invoked in FCC enforcement actions or otherwise.

The FCC’s release previews several points from the final order. Here’s how EFF’s list-to-watch-out-for compares:

(1) Carve-outs for wireless. [. . .]

(2) Loopholes for “unlawful content.” [. . .]

(3) “Reasonable network management” exceptions. Under the order, ‘no blocking’ and ‘no unreasonable discrimination’ rules may be superseded where there are “reasonable network management” requirements. While the order defines reasonable network management in what appears to be a content neutral way, it remains to be seen whether this will be the case in practice or whether, as we have warned, the exception may swallow the rule.

(4) Allowances for “managed” or “special” services.” Consistent with our concerns, the order leaves room for non-neutral “specialized services” immune from nondiscrimination rules, without clear boundaries on what those encompass. The rules state that this exemption will be monitored by the FCC for discriminatory and anticompetitive practices. We’ll be monitoring it, too.

(5) Pay for priority. The FCC statement notes that commercial pay-for-priority business arrangements are not likely to pass muster under the “no unreasonable discrimination” rule. This is the main element excerpted from the current order that was not on EFF’s list of concerns. It’s another one that will require close monitoring, however, and may be especially difficult to detect in the midst of complex peering and other relationships between various internet entities.

With the caveat again that we haven’t reviewed rules themselves in entirety, it appears that Chairman Genachowski is dodging resolution on the more difficult determinations, leaving them to future enforcement actions and underscoring our speculation that he may be pursuing political image first and substantive change second, if at all, since the regulations are certainly going to be challenged in court.

[. . .]