FCC Releases Lengthy Draft Net Neutrality Order Ahead of April Meeting

"Access to broadband Internet is now an unquestionable necessity," the draft item said. "We also exercise broad forbearance" for broadband providers as part of the Title II reclassification, it said. The draft order would adopt "conduct-based rules" in the commission's net neutrality framework, establishing "bright-line rules to prohibit blocking, throttling, and paid prioritization" by ISPs. An accompanying draft report and order would also reinstate a general conduct standard and establish a "multi-faceted enforcement framework."

The draft declaratory ruling would officially reclassify broadband as a Title II service, saying the step would allow the commission to "more effectively safeguard the open internet" and establish a nationwide framework. The draft would largely adopt the commission's 2015 rules on forbearance, making clear that the record "does not convincingly show that imposing universal service contribution requirements on BIAS is necessary at this time."

The commission in the draft defended reclassification as a national security matter, noting it has previously taken action under Title II to address national security threats against voice services. "The nation’s communications networks are critical infrastructure, and therefore too important to leave entirely to market forces that may sometimes, but not always, align with necessary national security measures," the item said.

The draft declaratory ruling also addresses the impact of reclassification on the commission's universal service goals under section 254 of the Communications Act. Reclassification "will put the commission on the firmest legal ground to promote the universal service goals of section 254 by enabling the commission and states to designate BIAS-only providers" as eligible telecom carriers, the draft said, adding that BIAS-only providers would be allowed to participate in the high-cost and Lifeline programs.

The draft notes comments disagree an exemption for 5G network slicing, the subject of numerous filings in recent weeks (see 2404010032). Slicing lets providers create multiple virtual networks on top of a shared network. The major carriers are at various stages in making slicing available on their networks.

“The record reflects that the potential use cases for network slicing are still under development” and that carriers “are in the early stages of adopting the technique, with some moving more quickly than others,” the draft said: “Given the nascent nature of network slicing, we conclude that it is not appropriate at this time to make a categorical determination regarding all network slicing and the services delivered through the use of network slicing.” But the document also says it agrees with NCTA “that we ‘should not allow network slicing to be used to evade [the] Open Internet rules.’”

To the extent slicing falls “outside of BIAS, we will closely monitor these uses to evaluate if they are providing the functional equivalent of BIAS, being used to evade our open Internet rules, or otherwise undermining investment, innovation, competition, or end-user benefits in the Internet ecosystem,” the draft said.

The draft elaborates on the importance of reclassifying broadband to the agency’s authorities under Section 214 of the Communications Act, another issue raised by industry (see 2403070040). Reclassification “enhances the Commission’s ability to protect the nation’s communications networks from entities that pose threats to national security and law enforcement.”

“We find that reclassification will significantly bolster the Commission’s ability to carry out its statutory responsibilities to safeguard national security and law enforcement,” the draft said: “There can be no question about the importance to our national security of maintaining the integrity of our critical infrastructure, including communications networks.” It noted that Congress created the FCC “for the purpose of the national defense.”

The agency dismissed arguments that reclassification isn’t justified for national security purposes: “The nation’s communications networks are critical infrastructure, and therefore too important to leave entirely to market forces that may sometimes, but not always, align with necessary national security measures.” Arguments about potential costs “are unpersuasive given that, at this point, they represent only speculation about hypothetical costs and burdens.”

A draft order on reconsideration included with Thursday’s item said the net neutrality order would resolve four outstanding petitions for reconsideration filed against the FCC’s 2020 net neutrality remand order (see 2010270035) by Incompas, California's Santa Clara County, Public Knowledge, and jointly several public interest groups including Common Cause. “As a procedural matter, we find that we have effectively provided the relief sought by each of the Petitions through a combination of the 2023 Open Internet NPRM and today’s actions,” the draft order said. “In light of the Commission’s actions today, we grant in large part and otherwise dismiss as moot” all four petitions for reconsideration. “We agree with the petitioners that the Commission’s analysis in the [Restoring Internet Freedom] Order and RIF Remand Order was insufficient in addressing the public safety, pole attachment, and Lifeline-related repercussions of classifying BIAS as a Title I service,” the draft said.

House Commerce Committee ranking member Frank Pallone, D-N.J., and Communications Subcommittee ranking member Doris Matsui, D-Calif., praised Rosenworcel “for moving to finalize rules that reflect reality: broadband internet service is critical infrastructure and an indispensable part of American life, and it must be treated that way.” The FCC’s move for Title II reclassification shows the commission is “recognizing this reality and asserting its rightful authority over broadband providers in order to protect this vital service and the hundreds of millions who rely on it each day,” Pallone and Matsui said. The two lawmakers “have confidence that a court reviewing this action will uphold it, just as courts have done in the past.” Sens. Ed Markey, D-Mass., and Ron Wyden, D-Ore., also lauded the proposal Thursday after earlier urging Rosenworcel to prevent loopholes in the rules.

The House Commerce GOP majority was tight-lipped after the draft’s release Thursday. Republican members tweeted Wednesday that the net neutrality proposal showed the commission “continues pushing Biden's Broadband Takeover by imposing unnecessary heavy-handed regulations.”

FCC Wouldn’t Preempt California

The FCC would consider preempting state net neutrality laws on a case-by-case basis, under the draft order. For example, the commission said it wouldn’t immediately preempt California’s 2018 law.

“We decline requests to categorically preempt all state or local regulation affecting broadband in the absence of any specific determination that such regulation interferes with our exercise of federal regulatory authority,” the draft said. “Where state or local laws do unduly frustrate or interfere with interstate communications, however, we have ample authority to address and preempt those laws on a case-by-case basis as they arise,” the draft said. “We will not hesitate to exercise that authority.”

The FCC may invoke the “impossibility exception to state jurisdiction” to preempt state laws deemed to interfere, the draft said. The D.C. Circuit held in its 2019 Mozilla decision that the FCC couldn’t invoke that doctrine after classifying broadband as Title I. But because the proposed order would move to Title II, “Mozilla does not cast any doubt on the Commission’s power, under the impossibility exception as well as ordinary principles of conflict preemption, to preempt state law when exercising -- or when forbearing from -- our affirmative regulatory authority over broadband.”

But California’s net neutrality law “appears largely to mirror or parallel our federal rules,” so the FCC sees “no reason at this time to preempt it,” the draft said. “Nor do we see any reason at this time to preempt California from independently enforcing the requirements imposed by our rules or by the state’s parallel rules through appropriate state enforcement mechanisms … However, should California state enforcement authorities or state courts seek to interpret or enforce these requirements in a manner inconsistent with how we intend our rules to apply, we will consider whether greater preemption is needed at that time.” Also, the proposed order disagrees that California law goes further than federal rules on interconnection and zero-rating.

The FCC can’t find the internet to be “exclusively interstate,” despite previously describing it as jurisdictionally or predominately interstate, noted the draft. “BIAS providers operate in and significantly affect local markets, and there are intrastate aspects of BIAS providers’ operations that could reasonably be handled differently in different jurisdictions.” The FCC noted that “state enforcement generally supports our regulatory efforts by dedicating additional resources to monitoring and enforcement, especially at the local level, and thereby ensuring greater compliance with our requirements.”

State enforcers of net neutrality disclosed no legal action against ISPs more than five years after state laws took effect, our March 25 report found (see 2403220019).