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Net Neutrality: Red Flags on Route 706

WASHINGTON — Federal Communications Commission chairman Tom Wheeler has opted not to employ the nuclear option of classifying Internet access under Title II of the Communications Act, for which cable operators and other Internet- service providers are grateful.

Instead, Wheeler will rely on section 706 to get to new network- neutrality rules.

It is the FCC’s latest attempt to preserve an Open Internet by foreclosing practices like blocking access to websites or favoring (or disfavoring) online content for anticompetitive purposes. President Obama campaigned on network neutrality and is backing Wheeler’s efforts find a new path to openness.

But ISPs saw some red flags on that road. The biggest of those flags — call it a banner — is how the FCC defines nondiscrimination. The others are what the chairman means by expanding transparency and promoting municipal broadband.

Wheeler suggested last week that Google Fiber was a great idea, and said municipal fiber should be “encouraged and not thwarted.”

It remains to be seen just how happy ISPs will be with Wheeler’s blueprint of the plan, which he only sketched out last week. Section 706 empowers the FCC to promote the deployment of advanced telecom services, and the U.S. Court of Appeals for the D.C. Circuit confirmed the FCC could use that authority to regulate broadband.

The court left the transparency rule alone, but Wheeler does not plan to. Municipal broadband is also something of an add-on, addressing Wheeler’s “competition, competition, competition” mantra. It is almost as though the chairman were adding those two items as conditions on not going the Title II route.

The chairman appeared confident the FCC could find a way to re-craft rules that would pass muster with the D.C. Circuit. But just in case, said he would leave the Title II docket open; that’s the threat of classifying Internet Service as a common carrier subject to mandatory-access provisions.

Without the old rules in place, ISPs are technically free to block access to websites or speed up or slow down broadband services for a price. ISPs have generally pledged not to block, or discriminate anticompetitively, but managing their networks in an over-the-top video world clearly implies discrimination, and all want to be able to experiment with new business models, so pledges of nondiscrimination are less definitive until the ISPs decide just what that means.

That is the challenge for the FCC, too. It must allow for some discrimination, for legitimate business or network-management purposes, for example. That’s because if the new rules smack of a de facto ban on discrimination, they stray back into the same common-carrier territory that got the first rules thrown out.

Cable operators, who have no desire to face the Title II option if this effort fails, will likely be part of the process of coming up with the new rules, as they were last time around, also under the threat of Title II.

Comcast has pledged its support for new rules, but it is already subject to the antidiscrimination and no-blocking rules per an NBCUniversal merger condition.

Wheeler has not given the FCC much time to turn around the new rules. He pledged to have them ready by spring, and the snow in Washington was melting fast last week.