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FCC Adopts First Open Internet Regulations

The FCC voted along strict party lines Tuesday to adopt regulations on Internet access.

The meeting was characterized by cordial delivery of scathing dissents by the Republicans and a less-than enthusiastic concurrence by swing vote Michael Copps, who said he had seriously considered dissenting before concluding it was at least a first step in the right direction. Republican commissioners said the order would be overturned by the courts, as the FCC's BitTorrent ruling had been.

The rules prevent Internet service providers from discriminating against content and applications, subject to reasonable network management, and will enforce that on a case-by-case basis with what FCC officials have said will be a fast-track complaint process. Providers must tell consumers how they are managing their networks.

They are billed by the FCC majority as a way to provide increased certainty to broadband users that networks will not be able to interfere with their traffic. The FCC is basing their legal authority on various congressional directives to deploy broadband and ensure competition, including with the broadcasters and other competitors, whose online content delivery could potentially be discriminated against.

The chairman called them first-time Internet rules of the road and a "strong and balanced order," and argued that the rules will spur innovation and investment. The Republicans counter that those first-time rules will impede both. He said the order does not approve paid prioritization, but in fact presumes it is not acceptable.

FCC Chairman Julius Genachowski called the vote a choice between two unacceptable extremes. "We are told by some not to try to fix what isn't broken, and that rules of the road protecting Internet freedom would discourage innovation and investment," he said. "But countless innovators and investors say just the opposite, including many who generally oppose government action. Over the course of this proceeding we have heard from so many entrepreneurs, engineers, venture capitalists and others working daily to maintain U.S. leadership in innovation. Their message has been clear: the next decade of innovation in this sector is at risk without sensible rules of the road."

He said the vote was neither "fake net neutrality" nor a government takeover of the sector, as those two extreme positions suggest.

"At the same time, while acting to preserve Internet freedom and openness, government must not overreach by imposing rules that are overly restrictive or that pretend to knowledge about this dynamic and rapidly changing marketplace that we simply do not possess."

The chairman said the vote delivered on a number of promises, including to the next dorm room entrepreneur. Commission Republicans countered that it was fulfilling a campaign promise at the expense of Internet investment, innovation, court precedent and the evidence in the public record.

Senior Republican Robert McDowell called it a radical step and one of the darkest days in the FCC's recent history. He called the decision arbitrary and capricious and said it was destined to be overturned by the courts, providing none of the regulatory certainty the FCC was seeking.

McDowell said his dissent was based on his conclusion that: 1) Nothing was broken that needed fixing; 2) the FCC does not have the authority to impose the rules; 3) they are likely to cause irreparable harm; and 4) existing laws provide ample consumer protections. Baker agreed. "Respectfully, I really, really, really dissent," said Commissioner Meredith Attwell Baker, a strong opponent of the rules. She said the FCC had "blurred the line between legislator and regulator." She said the new regs would send the wrong message: "Innovate at your own risk."

She said there was not a problem that needed fixing and that "[g]iven the nonexistent factual record of consumer harm, the majority is left to grandiose declarations mask the clear deficiencies in its analysis."

Baker suggested it was regulatory overreach that even the FCC majority itself had signaled as much in the order. "When the Federal Communications Commission feels compelled to explicitly 'decline to apply our rules directly to coffee shops, bookstores, [and] airlines," she said, "it illustrates the broad scope of these rules, and the lack of any ascertainable outer limits to our claimed authority."

McDowell and Baker both said the FCC's legal underpinnings were faulty, with Baker calling it an "everything but the kitchen sink" approach that tried to compensate with quantity what it lacked in quality. Both said the order put no limits on the FCC's authority. Both also said the FCC was acting as a legislator, not regulator. The order stems from a failed legislative attempt at compromise network neutrality regulations.

Commissioner Michael Copps said he had pushed as hard as he could for the Title II reclassification approach FCC Chairman Julius Genachowski initially proposed, and thought seriously about dissenting, which would have defeated the rules, but said: "[I]t became ever more clear to me that without some action today, the wheels of network neutrality would grind to a screeching halt for at least the next two years." He also noted that the Title II reclassification docket remains open. Senior FCC officials have said that they are not using Title II to support the rules, but have not ruled that out as a fallback position if this approach runs into legal troubles, as did the FCC's previous effort to support its broadband authority in the BitTorrent case.

The original draft was changed during edits among the Democrats to address some of Copps' concerns, but left some of those concerns intact. "I would have preferred a general ban to discourage broadband providers from engaging in 'pay for priority'--prioritizing the traffic of those with deep pockets while consigning the rest of us to a slower, second-class Internet," he said. "I also believe we should have done more to strip loopholes from the definition of 'broadband Internet access service' to prevent companies falsely claiming they are not broadband companies from slipping through. We've made some improvements on the definition, but I still have some worries. I also argued for real parity between fixed and mobile-read wireline and wireless-technologies. After all, the Internet is the Internet, no matter how you access it, and the millions of citizens going mobile nowadays for their Internet and the entrepreneurs creating innovative wireless content, applications and services should have the same freedoms and protections as those in the wired context. I had other areas of concern about something less than a bright-line nondiscrimination rule, keeping 'reasonable network management' within bounds, and the substitution of monitoring for the certainty of enforcement in too many areas."

Citing Shakespeare, McDowell said past is prologue, and that the court decision in BitTorrent was the prologue to this attempt to circumvent the will of Congress by exceeding the FCC's legal authority. "We cannot make laws," he said. He said the majority was ignoring calls from the Hill and appearing to be a "regulatory vigilante."

He said the FCC was on a collision course with the courts, and complained that the commission had dumped 3,000 pages into the docket only days before the public comment period ended, all in a "misguided" attempt to deliver on President Barack Obama's campaign promise. He also pointed out that his staff was still vetting the order since they did not see it until almost midnight the night before the vote.

Not only was Dec. 21 the darkest day of the year (the winter solstice), but one of the darkest days in recent FCC history, he said. Baker said that not getting the order until 11:30 p.m. was "inexcusable," and told the chairman he had not lived up to his transparency pledge. The chairman said those criticisms had been "trotted out" before, and said he would instead deal with fact, not fiction. To the suggestion nothing was wrong, he said that the lack of basic rules of the road was hampering innovation and growth, a point made to him by top technology CEOs. He said tech leaders recognize, as he does, investment in infrastructure. He said they had pointed out that networks will have incentive to deviate from open practices.

The chairman pointed to the potentially irreversible nature of some practices as supporting the rule of the FCC as the cop on the Internet beat. He said the rules had a "strong and sound" legal footing.