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The FCC's net neutrality rules: What we know so far

Grant Gross | March 2, 2015
The U.S. Federal Communications Commission voted Thursday to pass new net neutrality rules and reclassify broadband as a regulated telecommunications service, but the text of the full order may not be released for several weeks. Here's what we know so far:

The new rules go beyond those three prohibitions, however. The rules allow the FCC to address "questionable" ISP practices that the agency hasn't yet anticipated on a case-by-case basis. The rules will provide some guidance on the factors the FCC will consider, with ISPs prohibited from unreasonably interfering or disadvantaging consumers and edge providers, the FCC said.

The future conduct standard will allow the FCC to be a "referee on the field," FCC Chairman Tom Wheeler said.

The commission's Republicans criticized the future conduct standard as ill-defined. "If you are an entrepreneur, what does that mean?" Republican Commissioner Ajit Pai said. "If you are a company looking to make a splash in the marketplace, what does that mean? Nobody knows."

Reclassification of broadband as a telecom service

The FCC's action reclassifies broadband as a regulated telecommunications service, reversing more than a decade of agency policy treating broadband as a lightly regulated information service. The FCC would, however, forbear from most traditional telecom regulations, including price regulation and forced sharing of networks with competitors.

The commission voted to retain parts of Title II of the Telecommunications Act, the section of the law that applies common-carrier telecom regulations. The new rules include Title II prohibitions on unjust and unreasonable practices, and they retain the law's provisions allowing FCC investigations of consumer complaints.

The new rules also retain consumer privacy rules, and they enforce pole attachment rules related to broadband network deployment.

What Title II rules are scrapped?

The FCC will forebear from applying Title II rules related to rate regulation and last-mile network sharing, the FCC said. But some critics, including Pai, have questioned the assertion that there's no rate regulation. The prohibition on traffic prioritization deals amounts to rate regulation because it kills any possibility for that business model, Pai said.

Will there be new taxes?

Critics of the FCC's action have warned that Title II regulation will open up broadband service to new taxes. Most notably, the Progressive Policy Institute, a think tank aligned with moderate Democrats, suggested that Title II rules will expose broadband to US$15 billion in new taxes a year.

Those projections are speculative. The think tank based its numbers on two major factors: the FCC's Universal Service Fund and new state telecom-style taxes.

The FCC's new rules do not require broadband providers to contribute to USF, a 16 percent fee on traditional telephone service that helps subsidize telecom service in rural areas and at schools and libraries. The FCC is looking, in a separate proceeding, at whether broadband providers should contribute to USF, so subscribers may end up paying some new fees eventually, but that decision is not directly related to the reclassification of broadband.

 

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