The comment period has ended in the ongoing FCC proceeding to reinstate the federal Net Neutrality rules in Docket 23-320. There should be no doubt that despite the vehement opposition from broadband providers, the Commission has already decided to (1) reclassify broadband Internet access service (BIAS) as a Title II telecommunications service; (2) forbid blocking, throttling and paid prioritization of Internet traffic: and (3) control the overall Internet conduct of all carriers. There is nothing ISPs can do or say to dissuade the Commission from these actions.
While reclassification is a lost cause at the FCC, and is sure to be decided by the courts, ISPs will almost certainly have to live with the Net Neutrality rules for a period of time, therefore they are vigorously lobbying the Commission to ensure it does not use Title II to impose a bunch of heavy-handed rules to further hamstring their service offerings.
Here are some of the potential areas ISPs are concerned about:
Preemption
ISPs want the FCC to make clear that only its requirements and not individual states requirements are the uniform nationwide framework for broadband. The last thing ISPs want is for states to impose their own individual broadband rules in addition to the federal ones. This is especially true for Internet pricing.
Section 214 Requirements
Broadband providers make it clear that the international section 214 requirements should not apply to them. In April 2023, in Docket 23-119, the agency released an Order increasing its control over international telecommunications in the name of national security. The Order adopted a one-time collection of foreign ownership information from international Section 214 authorization holders (i.e., telecom providers). International section 214 authorization holders are required to identify their 10 percent or greater direct or indirect foreign interest holders and are also required to submit information based on the extent of their foreign ownership, including that held by foreign adversaries. In addition to this one-time data collection, providers must continually update this information to the FCC. USTelecom in a March 20, 2024, ex parte meeting with the Commission emphasized that few parties support imposing Section 214 requirements on broadband providers and those who do failed to identify any benefits that would justify the resulting massive costs. Moreover, they emphasized that “there is no track record of consumer harm from the decades-long absence of Section 214 requirements for broadband providers, [therefore] the Commission could not justify the undermining of providers’ investment-backed expectations that would result from applying Section 214 requirements to broadband.”
Internet Traffic Exchange
Verizon in a March 15, 2024, meeting with the FCC noted that it is “entirely unnecessary for the Commission to prescriptively regulate providers’ internet traffic exchange arrangements. The record demonstrates that the marketplace is functioning well, and there is no evidence in the record of issues that would warrant regulatory intervention. Interconnection and traffic exchange agreements have always been privately negotiated, and the flexibility of that approach has worked well in allowing the Internet to evolve in ways that accommodate new and changing usage patterns.”
Wholesale Broadband Obligations
The industry is divided over whether the Commission should apply Net Neutrality rules to wholesale broadband offering. INCOMPAS in a March 14, 2024, meeting with the FCC asserted that the Commission should exercise jurisdiction over wholesale broadband Internet access services because doing so would enable the Commission to ensure that all consumers are protected by the rules. It argued that the Commission asserting “jurisdiction over only the retail resold service would be insufficient to ensure that resold service complies with the Commission’s regulatory regime for BIAS without clarifying that wholesalers must also comply with the net neutrality protections.” Many ISPs are opposed to this. For example, NCTA in its March 21, 20 24, FCC meeting claimed that it “is a thinly veiled effort to subject facilities-based broadband providers to forced resale and other unbundling-style mandates, as is evident from INCOMPAS’s references to promoting “resale competition” through “mandated resale” obligations. INCOMPAS’s proposal also would risk expanding the Commission’s regulation of BIAS beyond mass market services, given its focus on business services. There is no basis in the record to regulate enterprise services, and in any event the NPRM did not provide notice of any potential expansion of regulation beyond mass-market services.”
Pricing
All ISPs are united in requesting the FCC to forebear from imposing Internet price controls under Title II. They argue that any such control would styme innovation and investment in their companies and the Internet.
The Net Neutrality Order will be released later this year. It remains to be seen if ISPs are able to moderate the FCC’s march toward total Internet control.