FCC Chairman: Agency Considering ‘Generic Concept Rules' to Enforce Net Neutrality

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By Bryce Baschuk  

Jan. 28 --The Federal Communications Commission is considering a set of new governance principles to update the agency's recently defeated net neutrality rules rather than pursuing more controversial proposals for regulating broadband Internet access.

FCC Chairman Tom Wheeler said the agency is weighing new “generic concept rules” to govern how Internet service providers operate after a federal appeals court threw out key parts of the FCC's 2010 Open Internet Order. His comments, delivered in a Jan. 28 speech at the State of the Net conference, echoed recent remarks by FCC Commissioner Mignon Clyburn, who said she is cooperating with Wheeler to adopt “a high-level set of six principles that set clear signals both to the consumers and companies”

“I do think it is possible to establish some concepts,” Wheeler said. “The court made its decision around a set of concepts that were established by my predecessor and they have taken on a life of their own. I think it is entirely possible to have that same kind of 'establishing the foundation' that will prevail over time.”

Though the chairman declined to offer specifics on what new rules the commission might create, his comments offered the agency's most specific endorsement for action since the U.S. Court of Appeals for the District of Columbia Circuit vacated the anti-blocking and anti-discrimination provisions of the open Internet order. New rules, if enacted by the commission, would obviate the need for the FCC to appeal the court's decision and might suppress calls for the agency to reclassify broadband Internet access under Title II of the Communications Act.

Case-by-Case Enforcement

The FCC might be inclined to address alleged net neutrality violations on a case-by-case basis, Wheeler said. The commission will “look at the cases that develop and look at them inside the construct that the court told us, [which] is, 'What does this do for the expansion and growth and furtherness of the Internet?'--and add to that our consumer protection responsibilities and address issues in a dynamic, rather than a static, way,” he said. “Case-by-case is a dynamic approach rather than 'everyone has to go through the eye of this needle,’ and that is how we hope to approach this.”


“We believe that markets should be innovative and, at the same point in time, we are not reticent to say, 'Excuse me, that's anticompetitive; excuse me, that's self-dealing; excuse me, this is a consumer abuse,’ and to make those kinds of judgments.”  

 

Tom Wheeler
FCC Chairman

“We believe that markets should be innovative and, at the same point in time, we are not reticent to say, 'Excuse me, that's anticompetitive; excuse me, that's self-dealing; excuse me, this is a consumer abuse,’ and to make those kinds of judgments,” Wheeler said.

“We want to encourage the dynamism,” he said. “And we want to have the oversight that does two things: Enables the broad canvas that says, 'Here are the kinds of concepts we want to operate in, the four corners on which everybody can paint inside those corners,' and also gets really specific and says, 'No, that's anticompetitive.' We are capable of saying 'that's not right.' And there is no hesitation to do that.”

Wheeler's comments build upon concepts he outlined in a Jan. 14 blog post in which he said the agency has the authority to conduct oversight of broadband access in the U.S.

“My strong preference is to do it in a common law fashion, taking account of and learning from the particular facts that have given rise to concern,” Wheeler wrote.

Wheeler said the court's decision to preserve FCC authority over Internet governance was a “positive step.” Though the court threw out two of the commission's key net neutrality rules, D.C. Circuit Judge David Tatel affirmed that Section 706 of Telecommunications Act of 1996 (Pub. L. No. 104-104) provided the FCC with adequate authority to create rules governing broadband Internet access.

Section 706 requires the FCC to encourage “the deployment on a reasonable and timely basis of advanced telecommunications capability to all Americans.”

Some Agency Observers Skeptical

TechFreedom President Berin Szoka told Bloomberg BNA that he's concerned about the concept of a case-by-case regulatory approach to net neutrality violations.

“Critics of the agency have always talked about how the FCC should be focused on real harms and operate on a case-by-case basis, and that is exactly what Wheeler is now saying,” Szoka told Bloomberg BNA. “The difficulty, or the challenge, is that there is a third element to any approach, which is what the underlying legal standard is.

“If the underlying legal standard is a very open-ended, loose one, you could do case-by-case enforcement and you could say you are focusing on real harms and use all the right words, and yet the approach could still be quite destructive,” Szoka said. “That's why it is essential that the commission not just use words like anticompetitive, but actually define those terms in a real way.”

Matt Wood, a policy director at Free Press, told Bloomberg BNA that Wheeler's comments aren't sufficient to protect consumers from marketplace abuse.

“Reclassification would mean nothing more than treating broadband like the essential communications service it is,” Wood said via e-mail. “The FCC needs solid legal footing, not continued compromises, to accomplish all of its broadband goals--preventing discrimination, promoting competition and interconnection, and ensuring that the network works for everyone.”

Public Knowledge Senior Vice President Harold Feld said pursuing the agency's response via Section 706 is “certainly the path of least resistance. The most tempting way to handle this is to hold Title II in reserve again and see how far Section 706 goes,” he told Bloomberg BNA. “As is always the case, the path of least resistance is also the path of greatest uncertainty. So we will go down another rulemaking, under undefined authority, to face an inevitable lawsuit on the new rules.”

The approach suggested by Wheeler is “infeasible, and it hasn't worked prior to this,” said Sascha Meinrath, vice president of the New America Foundation. “This notion that you can post hoc regulate--by then the damage is already done,” he said in an interview. “It could take months to weed through everything. Eventually people get tired of fighting the same battle.”

Others Prefer Wheeler's Approach

Richard Bennett, a visiting fellow at the American Enterprise Institute, praised Wheeler for seeking a case-by-case approach to net neutrality enforcement.

“The D.C. Circuit eliminated a major barrier to the creation of modern telephone services when it vacated these rules,” Bennett told Bloomberg BNA. “It's good that Chairman Wheeler seems to realize this.”

“From his perspective, it is important for the chairman to keep open as many options as possible,” Robert McDowell, a visiting fellow at the Hudson Institute, told Bloomberg BNA. “A bona fide, peer-reviewed market analysis before acting would better inform him when looking at his list of options, however.” McDowell was formerly an FCC commissioner and wrote a dissent to the 2010 open Internet order.

Free State Foundation President Randolph May said he was encouraged that Wheeler “seems to be saying he wants to employ a case-by-case approach to handle any alleged net neutrality complaints that arise. This is certainly preferable to trying to adopt new regulations by reclassifying Internet providers as Title II carriers,” May told Bloomberg BNA. “That not only would lead to a tremendous diversion of commission resources, it is a fundamentally unsound approach because, inevitably, it would lead to marketplace rigidity and over-regulation.”

To contact the reporter on this story: Bryce Baschuk in Washington at bbaschuk@bna.com

To contact the editor responsible for this story: Heather Rothman at hrothman@bna.com