The U.S. Federal Communications Commission (FCC) has narrowly voted in favour of enforcing net neutrality under Title II of the Communications Act, drawing praise from consumer advocates and ire from industry players.
The new rules reclassifies broadband access as a telecommunication service as opposed to an information service, subjecting it to stricter rules governing how operators manage traffic on their networks.
Specif ically, broadband providers will be prevented from blocking access to legal content, applications, and services. ‘Non-harmful’ devices must also not be prevented from connecting to networks.
Broadband providers will also be banned from degrading the performance of Internet services on the basis of content, application or service.
In addition, broadband providers may not favour some lawful Internet traffic over others in exchange for consideration of any kind – otherwise known as paid prioritisation.
The rules do permit service providers to carry out reasonable network management to ensure the smooth running of their services, but the FCC said it must not be used for commercial purposes.
Title II also gives the FCC the authority to weigh into interconnection disputes and take enforcement action if it determines that the actions of an ISP in regard to exchanging traffic with another provider are not just or reasonable.
Under the full scope of Title II, the FCC would also have the power to impose rules governing tariffs; however, the watchdog emphasised that broadband providers will not be subject to these regulations.
"This modernised Title II will ensure the FCC can rely on the strongest legal foundation to preserve and protect the open Internet," said FCC chairman Tom Wheeler, in a statement on Thursday.
For the first time, the rules will apply equally to fixed and mobile networks.
"Wireless networks account for 55% of Internet usage," said Wheeler. "We cannot have two sets of Internet protections – one fixed and one mobile – when the difference is increasingly anachronistic to consumers."
The new rules were met with cheers from consumer advocacy groups that want to maintain the Internet as a level playing field where companies of any size can succeed, and jeers from one telco in particular.
Verizon pulled out all the stops with a statement written in Morse code to emphasi se the fact that Title II of the Communications Act was originally drawn up in 1934. In a version translated for "readers in the 21st century," Michael Glover, Verizon’s senior vice president of public policy and government affairs, said the FCC decision "presages a time of uncertainty for consumers, innovators and investors."
He reiterated the telco’s commitment to the open Internet but warned the move will have unintended consequences for consumers.
"History will judge today’s actions as misguided," he said.
Representatives from other telcos were less forthright in their opinions.
"As the consumer advocate, we have always believed in competition and in a free, open Internet with rules that protect net neutrality – no blocking, no discrimination and transparency," said T-Mobile US chief executive John Legere. "I am hopeful that the FCC’s new rules will let us continue to offer innovative services to consumers."
And Sprint "commends the FCC for its hard work in arriving at a thoughtful, measured approach" on net neutrality.
Meanwhile, consumer advocacy group Public Knowledge branded the decision a victory for net neutrality.
"By embracing its Title II authority and creating clear, bright-line rules against blocking and discrimination, chairman Wheeler and the FCC have earned a reputation as defenders of an open Internet," said Michael Weinberg, senior vice president of Public Knowledge.
However, one analyst claimed that the new rules are unsustainable and unenforceable.
Net neutrality "is incompatible with the notion of a high growth knowledge economy because it does not provide adequate capital returns to those charged with investing in the high-speed broadband infrastructure that makes it all possible," said Cyrus Mewawalla, managing director of CM Research.
In order to keep pace with the growing demand for data, he said ISPs must be allow ed to charge all parties that benefit from the bandwidth the supply, which means over-the-top (OTT) service providers as well as end users.
"Under the FCC’s new rules, it is illegal for ISPs to charge Internet content providers. This, in turn, means that content providers like Google or Netflix have no incentive to maximise efficiency because they receive the scarce resource – Internet bandwidth – for free," he explained.
Mewawalla also said that overregulation of ISPs could lead to underinvestment, putting greater strain on networks as Internet traffic increases. As a consequence, ISPs will be forced to routinely prioritise some Internet traffic over others, breaking the concept of net neutrality.
"Since the FCC does not have the power to force ISPs to invest, it may soon find itself unable to enforce these new net neutrality rules," he said.
Unsurprisingly, the FCC sees it differently.
"Investment analysts have concluded that Title II with appropriate forbearance is unlikely to have any negative on the value or future profitability of broadband providers," the watchdog said.
