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Moving Towards Net Neutrality

Net neutrality refers to the principle that Internet service providers and governments should treat all Internet traffic equally, regardless of the source. Among other implications, net neutrality includes the idea that a website should not be given the option to pay an Internet service provider a premium to speed up its connection at the expense of slowing down the connections for other, non-paying websites. While this concept may seem fair enough, it is more of an ideal than a reflection of reality.

What Are the Applicable Regulations?

Under the Telecommunications Act of 1996, the Federal Communications Commission (FCC) is authorized to regulate “telecommunications services” as common carriers, like public utilities, while “information services” are exempt from utility-like regulation. Historically, broadband Internet service providers have been classified as “information services,” and thus the FCC has not been allowed to regulate the Internet with certain rules that it may legally impose on businesses classified as “telecommunication services.”

For instance, on January 14, 2014, in Verizon v. FCC, the United States Court of Appeals for the District of Columbia Circuit held that the classification of Internet service providers as “information services” precluded the FCC from requiring providers to employ equal treatment of Internet traffic. The court held that such federal rules constituted an attempt to regulate broadband Internet service providers as “telecommunication services,” and thus were outside the realm of the FCC’s authority under the Telecommunications Act of 1996. It follows that to achieve net neutrality with regards to Internet trafficking speeds, the FCC would need to reclassify broadband Internet service providers as “telecommunication services.”

On February 4, 2015, FCC Chairman Tom Wheeler proposed a reclassification, announcing the FCC’s plan to reclassify the Internet as a public utility, so as to regulate broadband Internet service providers’ treatment of Internet traffic in support of net neutrality. Specifically, reclassifying Internet service providers as “telecommunications services” would allow the FCC to impose regulations prohibiting them from charging a premium to speed up or slow down specific website connections.

What Are the Legal Implications?

While equal treatment of Internet traffic would arguably help to ensure Internet openness and innovation by essentially putting all websites on equal footing, broadband Internet service providers would inevitably be subject to the cost of complying with any resultant regulations. Although, possibly well founded, these concerns may be premature, as the FCC has yet to officially vote on the proposal.

Furthermore, assuming the FCC votes to adopt the proposed reclassification, broadband Internet service providers negatively impacted by Internet trafficking regulations could file a lawsuit challenging the federal rules as outside of the FCC’s authority under the Telecommunications Act of 1996. Moreover, in addition to potential private lawsuits, Congress has the authority to prohibit the FCC from regulating broadband Internet service providers as public utilities should it find the reclassification unfounded.

Thus, although the FCC’s announcement undoubtedly signifies its stance in favor of net neutrality, the impact of the proposed classification is unclear. Should the proposal result in reclassification of the Internet as a public utility, and consequently a ban on selling speedier connections, it will be up to broadband Internet service providers, or even Congress, to challenge these new regulations.

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