Restoring Internet Freedom Order Repeals Net Neutrality Rules, Imposes Revised Transparency Requirements
The Federal Communications Commission (“FCC” or “Commission”) has released the text of the Restoring Internet Freedom Order that returns broadband Internet access service to a lightly-regulated Title I information service classification.[1] The Order repeals net neutrality prohibitions on blocking, throttling, and paid prioritization, as well as the general conduct standard that were established in 2015.[2] In their place, the Order imposes a transparency rule nearly identical to the one adopted by the FCC in the 2010 Open Internet Order,[3] but with certain modifications.
The Restoring Internet Freedom Order will become effective after the revised rules are approved by the Office of Management and Budget. When that happens, the FCC will publish a notice in the Federal Register announcing OMB approval and the effective date of the new transparency rule.
Short Background on The 2010 and 2015 Open Internet Orders
In the 2010 Open Internet Order, the FCC adopted three basic net neutrality rules that applied to providers of retail, mass-market broadband Internet access service: (1) a no blocking rule that applied to fixed and mobile broadband providers; (2) a no unreasonable discrimination rule that applied to fixed providers; and (3) transparency requirements for fixed and mobile providers. The anti-blocking and anti-discrimination rules were ultimately struck down in court, but the transparency rule was upheld.[4]
In the 2015 Open Internet Order, the FCC reclassified broadband as a telecommunications service, for both fixed and mobile services, subjecting broadband Internet service providers (“ISPs” or “broadband providers”) to some of the Communications Act’s Title II regulations. The FCC adopted bright-line rules prohibiting blocking, throttling, and paid prioritization, along with a “general conduct standard” prohibiting unreasonable interference or unreasonable disadvantage to consumers or edge providers. Each prohibition is subject to a reasonable network management exception. The 2015 order also enhanced existing transparency requirements by obligating broadband ISPs to publicly disclose additional details about their services, including for example, information on packet loss and performance characteristics for specific geographic areas. Small providers were later exempted from the enhanced transparency requirements. The 2015 Open Internet Order was challenged in court by numerous parties, but was upheld in its entirety.[5]
When Donald Trump was sworn in as president, majority control of the FCC moved from the Democratic party to the Republican party. Four months later, newly-appointed FCC Chairman Ajit Pai issued a Notice of Proposed Rulemaking starting the process to unwind the previous administration’s net neutrality rules. Following a highly publicized and highly controversial notice and comment period, the FCC adopted the Restoring Internet Freedom Order repealing existing net neutrality rules by a party-line vote of 3-2.
Transparency Disclosures – How The FCC Will Ensure Net Neutrality
The Restoring Internet Freedom Order repeals the existing FCC net neutrality rules, and replaces them with a light-touch, market-based approach that relies on transparency. Broadband ISPs will be required to publicly disclose specific details about their broadband services and how they provide those services.[6] The information is intended to help consumers select an ISP and use broadband services. According to the Order, the transparency disclosures also will provide businesses, entrepreneurs, and edge service providers with information necessary “to create and maintain” services, content, applications, and devices. Moreover, the information disclosed pursuant to the transparency rule will allow consumers, interest groups, FCC staff, and others to ascertain whether and when ISPs are engaging in problematic and harmful conduct. The codified transparency rule reads as follows:
Any person providing broadband Internet access service shall publicly disclose accurate information regarding the network management practices, performance characteristics, and commercial terms of its broadband Internet access services sufficient to enable consumers to make informed choices regarding the purchase and use of such services and entrepreneurs and other small businesses to develop, market, and maintain Internet offerings. Such disclosure shall be made via a publicly available, easily accessible website or through transmittal to the Commission.[7]
The broadband transparency rule requires all broadband ISPs to disclose accurate information about their services that fall into three categories: (1) network management practices, (2) performance characteristics, and (3) commercial terms. The Restoring Internet Freedom Order explains the specific information ISPs will be required to disclose under each category when the new transparency rule becomes effective.
1. Network Management Practices
Broadband providers will be required to disclose the following information about their network management practices:
· Blocking. Any practice (other than reasonable network management elsewhere disclosed) that blocks or otherwise prevents end user access to lawful content, applications, service, or non-harmful devices, including a description of what is blocked.
· Throttling. Any practice (other than reasonable network management elsewhere disclosed) that degrades or impairs access to lawful Internet traffic on the basis of content, application, service, user, or use of a non-harmful device, including a description of what is throttled.
· Affiliated Prioritization. Any practice that directly or indirectly favors some traffic over other traffic, including through use of techniques such as traffic shaping, prioritization, or resource reservation, to benefit an affiliate, including identification of the affiliate.
· Paid Prioritization. Any practice that directly or indirectly favors some traffic over other traffic, including through use of techniques such as traffic shaping, prioritization, or resource reservation, in exchange for consideration, monetary or otherwise.
· Congestion Management. Descriptions of congestion management practices, if any. These descriptions should include the types of traffic subject to the practices; the purposes served by the practices; the practices’ effects on end users’ experience; criteria used in practices, such as indicators of congestion that trigger a practice, including any usage limits triggering the practice, and the typical frequency of congestion; usage limits and the consequences of exceeding them; and references to engineering standards, where appropriate.
· Application-Specific Behavior. Whether and why the ISP blocks or rate-controls specific protocols or protocol ports, modifies protocol fields in ways not prescribed by the protocol standard, or otherwise inhibits or favors certain applications or classes of applications
· Device Attachment Rules. Any restrictions on the types of devices and any approval procedures for devices to connect to the network.
· Security. Any practices used to ensure end-user security or security of the network, including types of triggering conditions that cause a mechanism to be invoked (but excluding information that could reasonably be used to circumvent network security).
2. Performance Characteristics
Broadband providers will be required to disclose the following information on the performance characteristics of their services:[8]
· Service Description. A general description of the service, including the service technology, expected and actual access speed and latency, and the suitability of the service for real-time applications. (For purposes of satisfying this requirement, fixed ISPs that choose to participate in the Measuring Broadband America (MBA) program may disclose their results as a sufficient representation of the actual performance their customers can expect to experience. Fixed ISPs that do not participate may use the methodology from the MBA program to measure actual performance, or may disclose actual performance based on internal testing, consumer speed test data, or other data regarding network performance, including reliable, relevant data from third-party sources.)
· Impact of Non-Broadband Internet Access Service Data Services. If applicable, what non-broadband Internet access service data services, if any, are offered to end users, and whether and how any non-broadband Internet access service data services may affect the last-mile capacity available for, and the performance of, broadband Internet access service. (“Non-broadband Internet access service data services” are also referred to as “specialized services.”)
3. Commercial Terms
Broadband providers will be required to disclose the following information on the commercial terms of their services:[9]
· Price. For example, monthly prices, usage-based fees, and fees for early termination or additional network services.
· Privacy Policies. A complete and accurate disclosure about the ISP’s privacy practices, if any. For example, whether any network management practices entail inspection of network traffic, and whether traffic is stored, provided to third parties, or used by the ISP for non-network management purposes.
· Redress Options. Practices for resolving complaints and questions from consumers, entrepreneurs, and other small businesses.
Means and Format of Transparency Disclosures
Broadband providers will have two options for publicly disclosing the information required by the FCC’s transparency rule: (1) ISPs may disclose the information on a publicly available, easily accessible website; or (2) ISPs may transmit their disclosures to the FCC, which will make them available on a publicly available, easily accessible website.[10]
The first compliance option permits an ISP to publish the required transparency disclosures on a publicly available, easily accessible website. ISPs do not need to distribute hard copy versions to subscribers. At the point of sale, an ISP may direct a potential subscriber to the website containing its transparency information. ISPs do not need to submit copies to the FCC. Commission staff will review transparency disclosures as needed on ISPs’ websites.
In an effort to provide further guidance to ISPs electing to disclose transparency information via a website, the FCC has reaffirmed the means of disclosure requirement from the 2010 Open Internet Order and the clarification found in the FCC’s 2011 Advisory Guidance for complying with the 2010 transparency rule.[11] At a minimum, ISPs must “prominently display or provide links to disclosures on a publicly available, easily accessible website that is available to current and prospective end users and edge providers as well as to the Commission, and must disclose relevant information at the point of sale.”[12] Consistent with existing precedent, the FCC expects ISPs to make their transparency disclosures in a manner accessible by people with disabilities.
The Restoring Internet Freedom Order eliminates the direct notification requirement that was added to the transparency rule as an enhancement in the 2015 Open Internet Order, finding it unduly burdensome and unnecessary.[13] It required a broadband provider to “directly notify[] end users if their individual use of a network will trigger a network practice, based on their demand prior to a period of congestion, that is likely to have a significant impact on the end user’s use of the service.”[14]
As for format, the FCC has eliminated the consumer broadband label safe harbor for form and format of disclosures. In other words, there is no mandated format for how the information must be displayed or arranged. Broadband providers will be able to present the information required by the transparency rule as they see fit.
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[1] Restoring Internet Freedom, WC Docket No. 17-108, Declaratory Ruling, Report and Order, and Order, FCC 17-166 (rel. Jan. 4, 2018) (Restoring Internet Freedom Order). The Order was adopted during the FCC’s December 2017 open meeting.
[2] Protecting and Promoting the Open Internet, GN Docket No. 14-28, Report and Order on Remand, Declaratory Ruling, and Order, FCC 15-25 (Mar. 12, 2015) (2015 Open Internet Order), available at https://apps.fcc.gov/edocs_public/attachmatch/FCC-15-24A1.pdf.
[3] Preserving the Open Internet, GN Docket No. 09-191, Broadband Industry Practices, WC Docket No. 07-52, Report and Order, FCC 10-201 (Dec. 23, 2010) (2010 Open Internet Order), available at https://apps.fcc.gov/edocs_public/attachmatch/FCC-10-201A1.pdf.
[4] See Verizon v. FCC, 740 F.3d 623 (D.C. Cir. 2014).
[5] United States Telecom Ass’n v. FCC, 825 F.3d 674 (D.C. Cir 2016).
[6] See Restoring Internet Freedom Order at ¶¶ 207-238.
[7] 47 C.F.R. § 8.1(a).
[8] Restoring Internet Freedom Order at ¶ 222.
[9] Restoring Internet Freedom Order at ¶ 223.
[10] Restoring Internet Freedom Order at ¶ 229.
[11] FCC Enforcement Bureau and Office of General Counsel Issue Advisory Guidance For Compliance With Open Internet Transparency Rule, GN Docket No. 09-191, WC Docket No. 07-52, Pubic Notice, DA 11-1148, 26 FCC Rcd 9411 (June 30, 2011), https://apps.fcc.gov/edocs_public/attachmatch/DA-11-1148A1.pdf.
[12] 2010 Open Internet Order at ¶¶ 57.
[13] Restoring Internet Freedom Order at ¶ 230.
[14] 2015 Open Internet Order at ¶ 171.
