01 May 2014

Net neutrality (postscript): the FCC twists and turns

by Geoff Hoffman, Linda Evans, Hugh Brolsma

There is much interest in how the FCC will seek to define acting in a "commercially unreasonable manner"

Just after our last examination of net neutrality developments here and overseas, the US Federal Communications Commission (FCC) announced last week that it will propose new rules governing net neutrality.

The Wall Street Journal first reported that "Regulators are proposing new rules on Internet traffic that would allow broadband providers to charge companies a premium for access to their fastest lanes".

The intense public conjecture that followed prompted FCC to make a statement in an effort to clarify its position. In that statement the FCC said that the rules will not be a reversal of policy and that they will propose the following:

"1. That all ISPs must transparently disclose to their subscribers and users all relevant information as to the policies that govern their network;

2.  That no legal content may be blocked; and

3.  That ISPs may not act in a commercially unreasonable manner to harm the Internet, including favoring the traffic from an affiliated entity."

The statement also says that the proposal will work within the constraints of the Court of Appeals' prior ruling[1] (suggesting that the FCC will not seek to reclassify ISPs as "common carriers", at least for now).

However, there is much interest in how the FCC will seek to define acting in a "commercially unreasonable manner" – given that the answer generally depends on whose commercial interests are preferred.

The reference to favouring "traffic from an affiliated entity" is also telling – and suggests that the FCC is still committed to restricting the ability of ISPs use traffic discrimination as a means of supporting their own content offerings in a manner that might be considered to be anti-competitive.

The FCC plans to consider the proposed rules on 15 May 2014 and hopes to have enforceable rules in place by the end of the year.



[1] Verizon v Federal Communications Commission, No. 11-1355 (D.C. Cir, 2014)Back to article

 

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.