Net neutrality rules let FCC police future ISP conduct

The agency's future conduct standard raises questions about business models for broadband providers

The U.S. Federal Communications Commission's new net neutrality rules allow the agency to police future network management practices and business models rolled out by broadband providers, raising concerns among critics that an activist commission will inject itself into ISP board rooms.

The so-called future conduct standard in the FCC's new rules leave questions about what ISP practices the agency will allow, critics say. Following the FCC's publication of the new rules last week, the future conduct standard has raised perhaps the most objections, other than complaints about the agency's decision to reclassify broadband as a regulated, common-carrier service.

"We don't really know where this is going to go, but the FCC is going to sit there as a referee," Republican FCC member Ajit Pai said Wednesday, during a Senate hearing. "The problem is, nobody even knows what the game is, what the rules are."

The future conduct standard will create questions about investing in the broadband market, Senator Deb Fischer, a Nebraska Republican, said during the hearing. "How can any business that's trying to innovate have any kind of certainty that they're not going to be regulated by the FCC under what I view as a very vague rule?" she said.

FCC Chairman Tom Wheeler and other supporters of the net neutrality rules have defended the future conduct standard, saying it's an attempt by the agency to keep an eye on ISPs without adopting overly restrictive bans on business plans.

The net neutrality regulations contain so-called bright-line rules prohibiting broadband providers from selectively blocking or throttling legal Web traffic and from charging Web-based services from paying for prioritized traffic, but the future conduct standard gives the FCC the authority to prohibit other practices going forward.

Beyond those rules, it's difficult to predict what new ISP business models will emerge, but broadband users and Web firms need the FCC looking out for them, Wheeler told the Senate Commerce, Science and Transportation Committee Wednesday.

"We do not want to be in a situation where we have overly proscriptive rules," Wheeler said. "Ok, let's ask a couple of questions: What's the impact on consumers of this action? What's the impact on content providers? And what's the public interest?"

Wheeler and other supporters of net neutrality have noted that several large ISPs, in the debate leading up to the vote on the new rules, called for the FCC to enforce net neutrality standards on a case-by-case basis, similar to the approach taken with the future conduct standard.

But those ISPs called for a case-by-case process as an alternative to the FCC reclassifying broadband as a regulated telecom service, noted one telecom lobbyist, who spoke on background.

Having reclassification of broadband and the future conduct standard both included in the new rules "is sort of the worst of both worlds," the telecom lobbyist said. "Any benefit to the ISP community with bright-line rules is eviscerated by this very broad, we'll-know-it-when-we-see-it type standard."

The future conduct standard is outlined in pages 59 to 64 of the FCC's 400-page net neutrality order. The FCC can prohibit, "on a case-by-case basis, practices that unreasonably interfere with or unreasonably disadvantage the ability of consumers to reach Internet content ... or of edge providers to access consumers using the Internet," the order says.

The FCC will look at several factors when applying the future conduct standard, the rules say. Factors include the impact on end-user control, competition with providers' own services, and effects on innovation and broadband deployment and on free expression.

Just following the description of the future conduct standard, the order discusses data caps and plans offered by some mobile carriers to exempt data such as music downloads from monthly data allowances. While the order does not prohibit data caps or sponsored mobile data, it "casts some doubts" on those practices, the telecom lobbyist said.

The net neutrality rules, beginning on page 106, outline a process for staff to give advisory opinions to broadband providers who want to run a proposed business model past the agency before rolling it out. But those advisory opinions won't have the weight of an official commission decision.

The FCC's Enforcement Bureau will be able to reconsider, rescind or revoke those advisory opinions, and the commission itself will be able to overrule them, according to the order.

"It's unclear what you're supposed to do when you have a new innovation or a new service," the telecom lobbyist said. "There's just a lot of ambiguity."

Even the Electronic Frontier Foundation, one of the most vocal proponents of strong net neutrality rules, urged the commission to jettison its future conduct standard.

A case-by-case future conduct standard, "may lead to years of expensive litigation to determine the meaning of 'harm' (for those who can afford to engage in it)," the EFF wrote in a February letter to the FCC. "What is worse, it could be abused by a future commission to target legitimate practices that offer significant benefits to the public but could also be construed to cause some harm to a specific provider or consumer."

Other net neutrality supporters defended the future conduct clause. The standard is "simply a restatement" of a traffic nondiscrimination standard found in common carrier regulations that now cover broadband service, said Matt Wood, policy director at digital rights group Free Press.

Several broadband providers first argued net neutrality rules wouldn't work because the Internet "is too dynamic and evolves too quickly," Wood said.

Then, as the FCC appeared ready to reclassify broadband, providers called for the agency to adopt a few bright-line rules "and never touch it again," he added. "What [the ISPs] really don't like is effective power to prevent harm."

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 governmentmobilebroadbandregulationinternettelecommunicationfree pressInternet service providersU.S. Federal Communications CommissionElectronic Frontier FoundationMatt WoodU.S. SenateTom WheelerAjit PaiDeb Fischer

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