IP-Driven Growth Strategies

On Thursday, February 26, the Federal Communications Commission (FCC) voted 3-2 along party lines to approve the policy known as "net neutrality" or "open Internet." But, as history has shown, the new rules are bound to face legal challenges in the near future.

We recently discussed the background on net neutrality and why it is important. Now that the Internet has been declared "open," we must discuss how the new rules will affect both businesses and consumers.

What Do the New Rules Mean to Us?

The following are key provisions and rules of the FCC's Open Internet Order:

• Application to fixed and mobile broadband – protects consumers no matter how they access the Internet, whether on a desktop computer or a mobile device.
• No Blocking – broadband providers may not block access to legal content, applications, services, or non-harmful devices.
• No Throttling – broadband providers may not impair or degrade lawful Internet traffic on the basis of content, applications, services, or non-harmful devices. But, there is nothing that prevents a carrier from throttling your service once you've reached your data cap.
• No Paid Prioritization – broadband providers may not favor some lawful Internet traffic over other lawful traffic in exchange for consideration of any kind (i.e. no "fast lanes") and it also bans ISPs from prioritizing content and services of their affiliates.
• New Authority – the Commission can hear complaints and take appropriate enforcement action if it determines the interconnection activities of ISPs are not "just" and "reasonable."

Political Divide

In a general press release, the FCC declared the new regulations establish "basic ground rules and a referee on the field to enforce them" and that "if an action hurts consumers, competition, or innovation, the FCC will have the authority to throw the flag." It went on to say, "Under the Order we adopt today, open Internet protections would – for the first time – apply equally to both fixed and mobile networks." But, the split Commission vote and separate press releases tell a much different story.

FCC Chairman, Tom Wheeler, states in a press release, "The American people reasonably expect and deserve an Internet that is fast, fair, and open. Today they get what they deserve: strong, enforceable rules that will ensure the Internet remains open, now and in the future." Chairman Wheeler has two other Democratic members of the Commission in his corner, including Mignon Clyburn and Jessica Rosenworcel, in addition to President Obama, consumer advocates and Internet companies – like Google, Twitter and Netflix. As expected, the two dissenting votes offer a different perspective.

Michael O'Rielly and Ajut Pai, the two Republicans on the Commission, warned that the FCC was overstepping its authority and interfering in commerce to solve a problem that doesn't exist. Commissioner Pai stated in a press release, "Americans love the free and open Internet . . . The Internet has become a powerful force for freedom, both at home and abroad. So, it is sad this morning to witness the FCC's unprecedented attempt to replace that freedom with government control." Republican Congressional members, in general, as well as large broadband service providers, including AT&T, Verizon and Comcast, have adopted Commissioners O'Reilly and Pai's position.

What Now?

The new rules are certain to make their way through the court system. Why? The two previous versions of net neutrality rules each faced legal challenges for starters and both were overturned. While the fate of the new rules will likely remain in flux for some time, the FCC's application of the two previous court rulings may help improve the rule's chances of survival this time around.