FCC Seeks Comment on Agreed Draft Net Neutrality Rules

One day after Canadian regulators allowed network management—under certain conditions—the Federal Communications Commission (FCC) has passed draft rules on network neutrality, which will add to and codify the "principles" under which ISPs are already obliged to operate (see United States: 22 September 2009: FCC Proposes Increasing and Codifying U.S. Net Neutrality Principles). Similarly, the rules seek to allow "reasonable network management" to mitigate network congestion, while preventing certain types of discrimination in an attempt to balance the objective of a safe, secure and open internet. There are six draft rules determining what ISPs are not allowed to do that essentially hand users a number of rights (all subject to the caveat of "reasonable network management"). As such, ISPs:

• would not be allowed to prevent any users from sending for receiving the lawful content of the user's choice over the internet.
• would not be allowed to prevent any users from running lawful applications or using lawful services of the user's choice.
• would not be allowed to prevent any users from connecting to and using on their network the user's choice of lawful devices that do not harm the network.
• would not be allowed to deprive any users of entitlement to competition among network providers, application providers, service providers and content providers.
• would be required to treat lawful content, applications and services in a non-discriminatory manner.
• would be required to disclose such information concerning network management and other practices as is reasonably required for users and content, application and service providers to enjoy the protections specified in this rulemaking.

Comment is also sought on how "managed" or "specialised" services—such as VoIP-based voice over cable, IP TV and certain business services—as well as more putative services, such as telemedicine and smart grid applications running on the same networks, should be addressed. The category of managed or specialised services will itself need to be defined and the development of business models co-existing with the openness of the core internet services determined.

The rules would be applied to all platforms, although it is recognised that they have different capabilities, usage patterns and regulatory history. However, there looks to be some leeway given for exceptions in the wireless platform as comment is sought on "timeframes or phases and to what extent the principles should apply to non wireline forms of broadband internet access, including mobile wireless". The FCC notes that any decisions will be based on realities, with extensive technical advice sought from network engineers.

Service providers are allowed to inhibit unlawful and unwanted traffic—including spam, child pornography and copyright infringing material—indicating that Deep Packet Inspection techniques, which may help to identify such content, is permitted and even encouraged. Similar to the rules now implemented in Canada, "reasonable network management" remains allowed, but will need to be applied in a highly discriminatory manner (see Canada: 22 October 2009: CRTC Allows Network Management, But Requests Transparency).

Outlook and Implications

Whatever the outcome, some forms of network management will be allowed, such as slowing services down at peak times, capping and charging for excess bandwidth, and possibly banning certain use cases, such as VoIP contractually—"lawful ….of their choice" could be used to frame allowed and banned services under specific contracts. Outside of these possibilities, classes of applications and services such as Peer-to-Peer (P2P) file transfers cannot be degraded under these rules; only specific, identified illegal content. The heavy use of P2P for illegal, copyright infringing content and the heavy bandwidth requirements it entails have been factors held up by ISPs in mitigation for targeting such services with throttling the speeds available to these applications. Deep Packet Inspection has attracted some criticism on privacy issues, but this notice appears to promote such network monitoring and filtering tools with a deeper level of inspection than merely identifying the application/protocol being used. The wireless industry also looks likely to be only progressively covered by these rules.

Commentators will be able to submit opinions until 14 January 2010, with reply comments due by 5 March 2010. While consent is almost unanimous, there is a partial split along party lines: Chairman Julius Genachowski and Commissioners Copps and Clyburn passed the draft rules while Commissioners McDowell and Baker concurred in part and dissented in part, the latter based on concerns that stricter regulation is not needed where there is no evidence a problem exists under current provisions, the impact on innovation in specialised services and the drawing of "bright line" distinctions between networks and applications, and concerns over the extension to mobile broadband. McDowell also highlighted the problems with increasing state control of the internet as precedent setting on the international stage. His consent was largely based on the fact that this is just the first step in shaping and implementing net neutrality rules. He see debate as necessary and there is an extensive comment and debate period ahead, while the courts will also provide some guidance by deciding on the Comcast case in this period.