Experts: FCC will adopt net neutrality rules in early 2015

Yet, it's unclear whether the agency will reclassify broadband as a regulated utility

The U.S. Federal Communications Commission will adopt net neutrality rules in early 2015, maybe as soon as February, several observers believe, but few people want to predict what those rules will look like.

The FCC is under pressure from President Barack Obama and a majority of the nearly 4 million people who have submitted comments to the agency to adopt strong rules prohibiting broadband providers from paid priority traffic arrangements.

It appears that the FCC will move forward with net neutrality rules in the first quarter of 2015, just over a year after an appeals court struck down a large portion of net neutrality rules the FCC passed in late 2010, said Chris Lewis, vice president of government affairs at Public Knowledge, a digital rights group in favor of strong rules.

"We don't want it to be 18 months or two years," given the interest of some broadband providers in paid traffic priority arrangements, he said. "We shouldn't be going any longer without net neutrality rules."

There's no consensus about the direction the FCC should take, however. Congressional Republicans, large broadband providers and a significant number of people filing comments with the agency have urged commissioners to back away from reclassifying broadband as a regulated public utility, like Obama and other strong net neutrality advocates have called for.

Indeed, American Commitment, a conservative group with links to billionaire activists the Koch brothers, delivered more than 808,000 comments to the FCC along the theme of, "the Internet isn't broken and doesn't need to be fixed."

American Commitment declared itself the winner of one net neutrality comment period, but analysis published in December by the Sunlight Foundation was based an incomplete data set from the FCC.

Based on earlier analysis of net neutrality comments, it appears that about two-thirds of people filing comments called for strong net neutrality rules.

So where does this leave the FCC? Chairman Tom Wheeler said recently he has no set timeline for moving forward on net neutrality rules. The FCC should act quickly, but also make sure any rules it creates will stand up to potential court challenges, he told reporters in early December.

Wheeler also said he's open to a range of options, although some recent reports have him leaning toward a hybrid regulatory approach that would split broadband into two distinct services, with broadband providers' relationship with Web content and services companies regulated as a common carrier under Title II of the Telecommunications Act.

A hybrid approach seems mostly likely at this point, said Mike Wendy, director of free-market advocacy group MediaFreedom. The FCC seems poised to adopt rules that allow some "special arrangements" on traffic priority between providers and Web services, but that also provide "a backstop to protect against egregious behavior," he said by email.

Part of Wheeler's aversion to full Title II reclassification appears to be the nearly inevitable lawsuit, although most observers believe a hybrid approach would also lead to lawsuits from broadband providers. Verizon Communications, which filed a lawsuit challenging the FCC's 2010 net neutrality rules, has in recent months called on the FCC to adopt rules based on Section 706 of the Telecommunications Act, a section giving the agency authority to encourage broadband rollout.

The U.S. Court of Appeals for the District Columbia Circuit, while throwing out part of the 2010 rules early this year, pointed to Section 706 as a possible foundation for new rules, but also noted Title II as an option.

Full reclassification of broadband to Title II would leave broadband providers with "no choice but to fight the sudden reversal of two decades of settled law," Randal Milch, Verizon's general counsel for public policy, wrote in a November blog post. "By departing from the judicially sanctioned Section 706 approach, the FCC will have increased both the likelihood -- and the likelihood of success -- of any legal challenge."

But a hybrid approach "also fairly guarantees litigation," Milch added.

On the other side, if the FCC passes net neutrality rules seen as too weak, "the public interest organizations would likely sue," Cathy Sloan, vice president of government relations at the Computer and Communications Industry Association, a tech trade group in favor of strong net neutrality rules.

So the FCC may be in for a legal fight either way, even after FCC attempts to enforce net neutrality rules were challenged in court twice in recent years. "After all this work, we may go around a third time," Sloan said.

Wendy agreed that a lawsuit is likely whatever the FCC does. "The only way to stop that would be for Congress to step in and pass something before the '16 elections, which, in my mind, seems unlikely," he said. "There are just too many plates in the air and issues to be settled for something comprehensive to come about."

If the FCC reclassifies broadband as a regulated utility, Congress will likely attempt to push back, however. With Republicans now in control of both the House and the Senate, opponents of new regulations will likely push to head off FCC action in the new year. Republicans could also push to pass a resolution of disapproval if the FCC reclassifies broadband early in 2015.

Obama, however, would almost certainly veto any congressional action to negate strong net neutrality rules.

Some Republican lawmakers are also considering compromise legislation that would allow the FCC to prohibit broadband providers from selectively blocking or slowing Web traffic or offering paid prioritization arrangement. The so-called Title X legislation, pushed by some broadband providers, would also prohibit the FCC from reclassifying broadband and exposing it to common carrier rules such as universal service and price regulation.

Even with the threat of Congress going its own way, "the FCC acting as soon as possible is our best opportunity to get rules back," said Lewis, with Public Knowledge.

Sloan questioned any attempts at a compromise, saying some broadband providers don't want any regulation. Regulations based on Section 706 wouldn't likely support rules against Web content discrimination, she said.

Broadband providers "keep changing their story," she said. "Now they say Section 706 might be OK. It's not a compromise, it would be a total capitulation to their side. The bottom line is they don't want any open Internet regulations with teeth in them."

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's email address is grant_gross@idg.com.

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Tags telecommunicationCathy SloanMike WendyU.S. CongressRandal MilchBarack ObamainternetInternet service providersPublic KnowledgeMediaFreedomTom WheelerChris LewisU.S. Federal Communications CommissiongovernmentU.S. Court of Appeals for the District Columbia CircuitVerizon CommunicationsComputer and Communications Industry AssociationbroadbandAmerican CommitmentregulationYEAR END

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Grant Gross

IDG News Service
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