AT&T will probably be one of the first companies to file a lawsuit if the Federal Communications Commission follows through on a plan to impose stricter rules on broadband. But FCC officials say they’re on solid legal ground.

In a call with reporters to discuss Chairman Tom Wheeler’s net neutrality proposal this week, an FCC official said that AT&T’s threatened lawsuit isn’t a surprise and FCC officials don’t expect it to be successful. AT&T is arguing that broadband has to be considered an information service and not a telecommunications service. This is important because only telecommunications providers can be treated as common carriers under Title II of the Communications Act, a designation that Wheeler will use to impose net neutrality rules.

The FCC official said it’s a simple matter: broadband providers offer, for a fee, a service to the public consisting of the transmission of packets. That makes it telecommunications in Wheeler’s view.

Using the common carrier status of telecommunications providers, Wheeler intends to apply net neutrality rules that prevent Internet providers from blocking or slowing down Web content or prioritizing it in exchange for payment.

But the very acts of blocking, throttling, or prioritizing Web content can’t be telecommunications under the Communications Act, AT&T argues. Instead, they must be considered information services, leaving them free of common carrier rules.

"[T]he capabilities that allow prioritization... involve the use of an ISP’s 'computing functionality' to provide 'the capability of getting, processing, and manipulating information,'" AT&T General Attorney Christopher Heimann wrote to the FCC.

The Communications Act says an information service is “the offering of a capability for generating, acquiring, storing, transforming, processing, retrieving, utilizing, or making available information via telecommunications, and includes electronic publishing, but does not include any use of any such capability for the management, control, or operation of a telecommunications system or the management of a telecommunications service.”

Telecommunications is “the transmission, between or among points specified by the user, of information of the user's choosing, without change in the form or content of the information as sent and received.” A telecommunications service is the offering of telecommunications for a fee directly to the public.

Do these definitions lend credence to AT&T's argument? Barbara Cherry, who was once an attorney for AT&T and is now a professor at Indiana University's department of telecommunications, says no. Cherry and Jon Peha, a former FCC Chief Technologist who now is a professor at Carnegie Mellon University, told the FCC in a December filing that the Telecommunications Act of 1996 requires the FCC to classify commercial Internet access as a telecommunications service.

In an e-mail to Ars, Cherry summarized the argument:

Classification of a service as a Title II "telecommunications service" is based on two types of functionality—technical and commercial.

The paper explains why broadband Internet access service—and particularly the function of IP packet transfer—satisfies these two types of functionality.

The paper also explains why commercial Internet access service is NOT an "information service." Critically, the definition of "information service" includes an exclusion. After listing several functional capabilities, the definition further states that information service "does not include any use of any such capability for the management, control, or operation of a telecommunications system or the management of a telecommunications service."

AT&T's argument ignores the exclusion in the definition of an information service, she said.

John Bergmayer, senior staff attorney for pro-net neutrality advocacy group Public Knowledge, agrees.

"Either an information service is an integral part of offering telecommunications or it isn’t," he told Ars in an e-mail. "If it is, it’s considered to be part of the telecom service. The carriers started making these 'but we added a computer!' arguments a long time ago.

"If the information service is not part of the telecom service and is just this other thing, hey, great," Bergmayer continued. "That doesn’t mean you get to use it to interfere with the nondiscriminatory telecommunications service."

AT&T is trying to “spook” the FCC

AT&T, which has decades of experience with common carrier rules because of its wireline telephone and mobile voice businesses, also says broadband providers can’t be classified as common carriers unless they already act like common carriers.

The FCC has to "assess whether [an ISP] offers to serve indifferently, or whether it retains the ability to decline to serve customers," AT&T said. There simply is not enough evidence in the FCC's record "to determine that any ISP, let alone every ISP, holds itself out to serve customers indifferently. And in some markets, such as for peering and interconnection, the record is in fact quite clear that ISPs do not operate as common carriers, and expressly retain the right to refuse to provide service."

But even if providers offer service under "private carriage" terms today, "the FCC has the discretion to require that it be provided on a common carriage basis," Cherry and Peha wrote in their filing with the FCC.

AT&T argued that the FCC must find that a provider has market power in a particular geographic market in order to reclassify broadband.

"It seems to me that AT&T is trying to 'spook' the FCC into fearing the need for granular, market-specific analyses—such as what the courts required when FCC developed its unbundling rules under Section 251 [of the Communications Act]," Cherry told Ars.

Although the FCC plans to reclassify broadband, it doesn't intend to enforce unbundling rules that would force providers to share their infrastructure with competitors. "The statutory requirements of Section 251 are unrelated to the Title II classification issue," according to Cherry.

There's also a much simpler argument that disputes AT&T's claims, said Georgetown Law lecturer Andrew Schwartzman, an attorney who specializes in media and telecommunications policy.

"The notion that broadband could never be a common carrier service is at odds with history," he told Ars in an e-mail. "Until 2005, DSL service was regulated as common carriage, so it is very hard to argue that common carriage is completely at odds with the statute."

Schwartzman also noted that when statutory language is deemed ambiguous, courts give deference to the FCC's reading of the statute under the "Chevron Doctrine."

"However much AT&T argues that this is the only possible result, the fact is that the language is susceptible to multiple readings and, therefore, an FCC decision to reclassify would get deference," he wrote.

AT&T is far from alone in arguing against imposing common carrier rules on broadband providers. The National Cable & Telecommunications Association (NCTA) is among those making the case that stricter rules will ultimately harm consumers. The NCTA agrees with AT&T's legal argument, a group spokesperson told Ars.

"We share the concerns raised by AT&T," the NCTA said. "AT&T is correct that, from the beginning of the dial-up era until today, the Commission always has treated the computing functionality offered by an ISP as an information service. AT&T also is correct that today’s ISPs do not offer broadband service on a common carrier basis and cannot be compelled to do so. As NCTA has noted previously, the Commission unfortunately seems to be heading down an uncharted path that entails significant legal risk.”

In a blog post in September, the NCTA also argued that prior to 2005, the FCC only regarded the "wholesale transmission capability provided by telephone companies to ISPs as a 'telecommunications service.'" Retail broadband access was not viewed as telecommunications, the NCTA said.

Wheeler has promised that he will write neutrality rules that can survive a legal challenge, unlike the FCC's previous attempt that was thrown out in court. So far, Wheeler has revealed just the broad strokes of his plan. A much lengthier order will become available after the commission votes on February 26 and should give us a better idea of how the FCC might defend its rules in court.