Network Neutrality and Internet Service Providers in the US

Changes at sight for the Trump Era?

Since Trump’s election, it has been strongly discussed possible changes on net neutrality rules implemented by the Federal Communications Commission (FCC) in 2015, on Obama’s presidency. These changes can have a deep impact on citizens, internet governance actors, internet service providers, internet companies, etc. Despite of an immediate impact on US citizens, United States’ economic and political influence on the internet can stimulate changes in other country’s’ net neutrality rules. So it is important to pay attention on possible changes in US regulations on net neutrality.

In this text I’ll explain how ISPs have been regulated in the US, what are the current net neutrality rules applied by FCC, and what are the possible changes in these rules for 2017.

Federal Communications Commission (FCC)

FCC is an independent federal agency in the US created in 1934. Its main goal is to regulated “interstate and international communications by radio, television, wire, satellite, and cable”. And it is “responsible for implementing and enforcing America’s communications law and regulations.”

In Obama’s second term, his administration was in favor of classifying the internet as a public utility by FCC. Therefore ISPs would be considered common carriers, being subject to a more rigorous regulation.

Common carrier is a law concept which was created by the romans and was later developed in common law countries mainly in the XIX and XX centuries, influenced by new public services like railroads and telephone. Common carrier’s regulations seek to enhance consumer protection by demanding that companies must provide services to the general public without discrimination, being able to be impartial toward the public’s interest.

ISP regulation in the United States between 1990 and 2015

The Telecommunications Act of 1996, which amended the Communications Act of 1934, establishes different regulation categories for media. Focusing on the net neutrality debate we must comprehend Title I and Title II categories.

Title I category is a softer one, limiting what FCC can regulate and enforce. Information Services are the object of this category. The Act defines “information services” as:

“the offering of a capability for generating, acquiring, storing, transforming, processing, retrieving, utilizing, or making available information via telecommunications, and includes electronic publishing, but does not include any use of any such capability for the management, control, or operation of a telecommunications system or the management of a telecommunications service.”

By contrast Title II is a more restrictive category, giving more powers to FCC. Telecommunications services are the object of this category. And the Act defines “telecommunications” as:

“the transmission, between or among points specified by the user, of information of the user’s choosing, without change in the form or content of the information as sent and received.”

From the mid 90s to 2015, in general, ISPs were classified by FCC as information services, so they were not submitted to a more restrictive regulations of common carriers. FCC traditionally justified this position by affirming that a stricter ISP regulation would stifle innovation and economic competition.

This position had begun in the 90s as part of a larger movement of economic liberalization in Clinton’s term.

During this period other economic sectors were liberalized, losing their classification of common carriers, like the transport sector (trains, airplanes, etc).

Internet Service Providers should be regulated as Title II?

When ISPs were regulated as Title I many internet governance actors criticized this soft regulation approach. Some have argued that less regulation in fact have diminished competitiveness,  which have led to oligopolies or even monopolies. FCC’s data reveals that for higher broadband speeds american domiciles had just one or no ISP available.

Some ISPs were also been accused of using anti-competitive practices by throttling or even blocking access to some sites and services. A famous case was of Comcast degrading user’s traffic when they were using BItTorrent services, because it was competing with Comcast video on demand services. Despite of FCC attempts to prohibit these practices in 2010 a court ruled in favor of Comcast. The court declared that FCC had not this kind of regulatory jurisdiction since ISPs were  categorized as Title I.

One attempt of a stricter regulation was made in 2010 when FCC approved the Open Internet Order,  based on the 4 principles of internet use approved in 2005. The Order establishes a set of net neutrality rules and creates two categories of broadband ISPs, fixed and wireless, ensuring a stricter regulation to the first.

The three basic rules were:

• Transparency. Fixed and mobile broadband providers must disclose the network management practices, performance characteristics, and terms and conditions of their broadband services;
• No blocking. Fixed broadband providers may not block lawful content, applications, services, or non-harmful devices; mobile broadband providers may not block lawful websites, or block applications that compete with their voice or video telephony services; and
• No unreasonable discrimination. Fixed broadband providers may not unreasonably discriminate in transmitting lawful network traffic.

But ISP classification as Title I  continued to block FCC from imposing these rules. In 2014 the U.S. Court of Appeals for the D.C District overturned the Open Internet Order with a very similar argument used in the Comcast case.

Therefore in 2014 FCC begun to change its soft regulation approach and initiated a process to classify ISPs as Title II. With Obama’s administration support, the process was finished in 2015, classifying fixed and wireless broadband providers as Title II. In addition the Open Internet Rules were complemented with more norms.

Throttle internet user’s traffic was prohibited if it was utilised without reasonable justifications of network management. And it was also prohibited to pay to prioritize traffic for certain contents.

Trump Era

After Trump’s election a new FCC director was indicated by the republican party named Ajit Pai, a declared oppositor of net neutrality rules in force. So in 2017 was initiated a new process of public consultation to change net neutrality rules, similar to the one which happened in 2015.

One of main changes proposed by Ajit is to reclassify ISPs again as Title I. He justifies his opinion claiming that there was a great decrease in network infrastructure investments. To reverse this trend he believes it is necessary to diminish ISP regulations

The public consultation also seeks to discuss if the regulation must be made before (ex ante) or after a violation occurs (ex post). Besides it will be also a topic of debate if 2015 net neutrality rules will be maintained, modified or eliminated.

However there are strong arguments in favor of the current rules, many internet governance actors claim that they promote innovation by ensuring a level playing field for new entrants, and also by protecting consumer choices. To Tim Wu net neutrality rules are associated with democratic countries, since they strengthen freedom of expression and open societies by protecting the free flow of information.

Thus, it is expected to happen intense debates this year. The FCC will receive comments until August 16, 2017. And, it is very likely that the outcomes of this process is will influence other countries’ rules.