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The Federal Communications Commission doesn’t want companies like Netflix or Viacom to have to pay to get their content to end users of broadband networks, but it doesn’t see a way (or maybe even a reason) to ban the practice. In a call with reporters on Thursday, FCC officials laid out the agency’s thinking on new network neutrality rules and tried to address concerns that the internet as we know it is broken.

The agency’s hope is to have new rules in place by the end of this year, and it plans to release a public document called a Notice of Proposed Rule Making (NPRM) outlining its thinking and asking questions about the new rules. It plans to release this NPRM in three weeks at its May 15 open meeting. Once the documents are released, the public will have a chance to comment on them.

What was once unreasonable discrimination now becomes commercially unreasonable

Since some of the content of that document was released Wednesday, the media and public interest groups have been concerned about what the new network neutrality framework would allow — namely, how the agency planned to ensure that ISPs won’t discriminate against the packets flowing across their networks. The answer? The agency will replace the “unreasonable discrimination” clause from the original net neutrality rules that were defeated in court this year with standards associated with “commercial reasonableness.”

It’s a subtle shift, but an important one. When the U.S. Court of Appeals gutted the Open Internet Order that set forth the net neutrality rules in January, it did so on the basis that the agency didn’t use the right justification for its rules. It tried to turn ISPs into common carriers and regulate them that way, but the court declared that the FCC couldn’t put that burden on the ISPs without changing the law or going through regulatory process that was bound to cause a fight.

Instead we get a compromise by which the FCC attempts to honor the original intent of the 2010 Open Internet Order with a new test for discrimination. That test is the “commercial reasonableness” standard. Here’s how the FCC wants to do it.

If the devil is in the details, here are the details



First, the net neutrality rules that were gutted by the courts made a distinction between wireline broadband and wireless broadband. For a history on why, check out this post or this one. The FCC plans to keep those distinctions intact for the new rules. With this understanding, let’s hit the three main topics the FCC plans to cover, saving the most complicated element for last.

Transparency: Both the original and the new Open Internet Order make a provision for transparency, namely that network operators must share how they are managing their network traffic with the consumer. This applied to both wireline and wireless networks, so if your ISP is treating certain traffic differently, it has to tell you. The FCC’s upcoming documents also ask if this transparency could go further.

When asked if the order could require greater transparency about company networks such as how congested they might be or if ISPs are charging for prioritization or access because the market is uncompetitive, an FCC official said, “The answer is yes.” He added that the agency believes that greater transparency will help consumers and the commission determine how the broadband networks are functioning. That’s a pretty exciting promise if the FCC can wrangle that type of data from ISPs. Right now, ISPs view that data as competitive and proprietary.

Blocking: The courts struck down the original order’s anti-blocking provision that said ISPs on wireline networks couldn’t block lawful traffic and wireless ISPs couldn’t block competing over-the-top calling and texting services. The new FCC documents will make the case that because blocking traffic interrupts the “virtuous cycle” of broadband access — namely that people use broadband because it gives them access to a variety of services, and because broadband access is beneficial, anything that makes people less inclined to use broadband would cause harm.

This new reasoning would allow the FCC to implement a no-blocking position without resorting to calling ISPs common carriers. Another interesting tidbit here is that the FCC plans to ask about establishing a baseline of broadband service and view anything that goes below this baseline as blocking. This might seem esoteric, but in 2007 when Comcast was interfering with the delivery of BitTorrent packets, it argued that it wasn’t actually blocking them. Instead it was delaying delivery so the routers in effect dropped the packets and customers couldn’t access their files.

Commercial reasonableness: Here is the heart of last night’s controversy and where the FCC is walking its finest line. The agency wants to ensure that the spirit of network neutrality lives on, but legally it has to use a standard that opens the door to prioritization. The FCC even seems okay with prioritization in certain cases, with an agency official offering up the example of packets coming from a connected heart monitor as a protected class that could be prioritized over other traffic.

However, it will seek to avoid the obvious examples of Netflix having to pay an ISP to see its traffic priorititzed over another content provider’s. It will do this using the standards the FCC set forth in a 2011 cell phone roaming order that has been tested in court. As part of that order, which dictated that mobile carriers have an obligation to offer roaming agreements to other such providers on “commercially reasonable” terms, the agency created a class of behaviors that were commercially unreasonable.

Does this practice have an impact on future and present competition?

How does vertical integration affect any deals and what is the impact on unaffiliated companies?

What is the impact on consumers, their free exercise of speech and on civic engagement?

Are the parties acting in good faith? For example is the ISP involved in a good faith negotiation?

Are there technical characteristics that would shed light on an ISP practice that is harmful?

Are there industry practices that can shed light on what is reasonable?

And finally, a catch all that asks if there are any other factors that should be considered that would contribute to the totality of the facts?

Of course, one challenge with this format is that it requires an ISP to behave badly before the FCC can act. The agency said it will be on the lookout for such violations, it will accept formal complains and that it will accept informal complaints. Once a problem is registered the FCC the agency will ask about how it should handle the complaint, and whether a time limit should be imposed for a resolution.

Finally, the official acknowledged that the agency asks in its documents if there is ever a reason for a flat prohibition against certain behaviors even if an ISP isn’t a common carrier. The agency would have to make the case that paid prioritization is such a consumer or industry harm that it should be prohibited altogether. But based on the thinking and attention devoted to the commercial unreasonableness standard, as well as the heart rate monitor example, it feels like the FCC isn’t keen to walk this path.

So these are the topics and questions on which the FCC will vote on May 15 and, if approved, pass for public comment. At that point the agency typically offers a 30 or 90-day comment period.

So get ready, internet: the FCC does want to know your stance on this issue.