The major issue would be to challenge the FCC’s 2015 classification of Internet Service Providers (ISPs) under Title II of the Communications Act of 1934 that emphasized common carriage, the commercial obligation to serve all customers equally and fairly. This post recaps the development of net neutrality rules for Internet broadband under the FCC during the Obama administration to their immediate dissolution under the Trump administration’s FCC.

The FCC’s Computer Inquiries were conducted from the 1960s to the 1980s and identified three layers of technological services for data communications. The telecommunication market offering basic services to homes and businesses would be classified as regulated Title II companies because of their monopoly positions. Data communications and processing service providers operating on top of the telco infrastructure would be lightly regulated Title I “enhanced” companies. The content companies that would offer information services were not included in the regulations. This legal framework allowed the Internet to take off in the 1990s, including the creation of over 7,000 ISPs in the US. But this was before the higher speed broadband services became available.

Broadband companies became Title I “information services” during George W. Bush administration’s FCC. Telephone companies that had carved up America during the breakup of AT&T in the 1980s became unregulated ISPs. Cable television companies had also developed IP broadband capabilities in the late 1990s and, with cable modems, competed or merged with telephone companies to provide “triple play” (TV, broadband, and voice) services to households. In 2009, cable companies were also deregulated by classifying them under Title I.

The result of these two decisions was a highly oligopolistic market structure for broadband services. These companies began to acquire smaller ISPS, often after making it difficult for them to interconnect to their facilities as they had been required as Title II companies. Customers soon found themselves limited to monopoly or duopoly ISPs in their area.

These newly deregulating companies also wanted to expand into new digital services, including payment systems and providing information, video, and search content. These actions violated the “maximum separation” rules that restricted these companies from competing with their customers. They also had designs to operate as gateways that would package games, social media, geo-locational data, and email services into bundles that they would offer at various prices. Concerns proliferated about pricing and service issues and this led to the movement for “net neutrality” and the return of common carriage.

During the first Obama administration, The FCC began a major study the broadband market structure of ISPs in the US.

In 2010, the FCC passed six broad “net neutrality principles:”

Transparency: Consumers and innovators have a right to know the basic performance characteristics of their Internet access and how their network is being managed;

No blocking: This includes a right to send and receive lawful traffic, prohibits the blocking of lawful content, apps, services and the connection of non-harmful devices to the network;

Level playing field: Consumers and innovators have a right to a level playing field. This means a ban on unreasonable content discrimination. There is no approval for so-called “pay for priority” arrangements involving fast lanes for some companies but not others;

Network management: This is an allowance for broadband providers to engage in reasonable network management. These rules do not forbid providers from offering subscribers tiers of services or charging based on bandwidth consumed;

Mobile: The provisions adopted today do not apply as strongly to mobile devices, though some provisions do apply. Of those that do are the broadly applicable rules requiring transparency for mobile broadband providers and prohibiting them from blocking websites and certain competitive applications;

Vigilance: The order creates an open Internet advisory committee to assist the commission in monitoring the state of Internet openness and the effects of the rules.[1]

The new rules faced a judicial challenge. The courts, while sympathetic to the goals of net neutrality, questioned the FCC’s authority to regulate Title I companies. After an appeal by Verizon, the DC circuit court sent the FCC back to the drawing boards. Judge David Tatel said that the FCC did not have the authority under the current regulatory conditions to treat telcos as “common carriers” that must pass data content through their networks without interference or preference.

The result of Verizon vs. the FCC was that without a new regulatory classification, the FCC wouldn’t have the authority to actually enforce restricting the big ISPs from banning or blocking of legal websites, throttling or degrading traffic on the basis of content, and enacting “paid prioritization” for Internet services. The latter, the so-called “fast lanes” for companies like Google and Netflix were particularly contentious.[2]

President Obama got involved and supported reclassifying ISPs as common carriers under Title II of the Communications Act of 1934. This would give the FCC the authority they needed to regulate the ILEC ISPs. In February 26, 2015, the FCC passed the new Title II Net Neutrality Rules in a 3–2 party-line vote that went into effect in the summer of 2015. The FCC’s open internet rules applied to both wired and wireless Internet connections.

Trump’s new FCC Chairman, Ajit Pai, argued that the web was too competitive to regulate effectively. Ignoring the impacts of deregulating cable and telephone companies on broadband competition, he argued ISPs did not have the incentive to throttle web speeds or restrict other services. He compared regulating ISPs with regulating websites, a clear deviation from the regulatory layers set out in the computer inquiries. Subsequently, the FCC began seeking comments on eliminating the Title II classification for broadband and removing the Obama era net neutrality rules.

On December 14, 2017, the Federal Communications Commission (FCC) voted in favor of repealing these policies, 3–2, along party lines. Pai voted with the majority of the FCC to reverse the decision to regulate the Internet under Title II of the Communications Act of 1934. Called the Restoring Internet Freedom Order, it repealed the net neutrality rules that were put in place two years earlier.

Pai’s justification speech argued that the Internet was not broken and didn’t need to be fixed. His contention was that the bureaucratic complexity of net neutrality was a burden on small ISPs and a disincentive to invest in new facilities and digital pipes. The new FCC voted to begin eliminating Obama’s net neutrality rules as it reclassified home and mobile broadband service providers as Title I information services.

The both Democrats and Republicans responded with several strategies to reverse the rule. In 2018, they attempted to invoke the Congressional Review Act (CRA) to undo the FCC order. This would bypass the filibuster and allow Congress to repeal recent administrative regulations. The motion passed the Republican-controlled vote Senate by 52–47, but did not get the necessary votes in the Republican-controlled House.

The Democrats tried after gaining a majority in the 2018 midterm elections with the Save the Internet Act of 2019 bill. It codified no blocking or throttling websites, or bundle websites or apps like a cable packages. It designated network access a “utility” under Title II of the 1996 Communications Act.

Rep. Mike Doyle (D-PA), the bill’s main sponsor and chair of the Subcommittee on Communications and Technology within the House Committee on Energy and Commerce, said he believes Internet access is a right for all and that “We want that gatekeeper to be neutral.” It passed the House 232-190 but was declared dead on arrival by Mitch McConnell, Senate Majority Leader.

Pai resigned with Trump’s departure in 2020, leaving behind a mixed legacy. While he was acknowledged for some internal changes, including creating the FCC’s Office of Economics and Analytics (OEA) that collected FCC economists in a central think tank, instead of the separate bureaus. But the FCC was slow on 5G deployment and making available the much needed supply of spectrum in the mid-band (2 GHz-6 GHz) range. Rural buildout was weak with the FCC caught working with telcos to reclassify mobile broadband requirements lower. This meant they could count lower mobile bandwidth capabilities as broadband. But, by far, the so-called Restoring Internet Freedom order that repealed net neutrality will be the legacy of the Trump era, with the central question being was it a capitulation to telco lobbyists?

In the next post, I will examine the challenges for the Biden Administration in addressing broadband policy, including net neutrality, but also the Internet of Things, and the expansion of broadband infrastructure in rural and other underserved areas.

Notes

[1] Gustin, S. (2018, September 11). FCC Passes Compromise Net Neutrality Rules. Wired. https://www.wired.com/2010/12/fcc-order/.
[2] Finley, Klint. (2017, May 18) Internet Providers Insist They Love Net Neutrality. Seriously? Wired. Conde Nast, 18 May 2017. Web.

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Anthony J. Pennings, Ph.D. is Professor of the Department of Technology and Society, State University of New York, Korea. From 2002-2012 was on the faculty of New York University. Previously, he taught at Marist College in New York, and Victoria University in New Zealand. He keeps his American home in Austin, Texas and has taught there in the Digital Media MBA program at St. Edwards University He joyfully spent 9 years at the East-West Center in Honolulu, Hawaii.

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Category: smart new deal, telecom policy and net neutrality
Tags: Ajit Pai > Federal Communications Commission's (FCC) > maximum separation > Net Neutrality > Title I Classification > Title II Classification > Title II Net Neutrality Rules

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