FCC to Propose Net Neutrality Rules That Allow for Special Delivery of Content

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FCC chairman Tom Wheeler plans to circulate proposed new rules of the road for the Internet on Thursday, including provisions that will allow content companies to negotiate with broadband providers for faster speeds and improved transmissions to consumers.

The proposal would allow for such pacts as long as broadband providers “act in a commercially reasonable manner subject to review on a case-by-case basis,” according to an FCC spokesman. Internet service providers would be required to offer a “baseline level of service” to their subscribers, the spokesman said.

“Exactly what the baseline level of service would be, the construction of a ‘commercially reasonable’ standard, and the manner in which disputes would be resolved are among the topics on which the FCC will be seeking comment,” the spokesman said.

The proposal, along with others having to do with such issues as disclosure of Internet speeds and traffic, is scheduled to come to a vote before the FCC at its May 15 meeting, after which there will be a period of public comment. Wheeler’s proposals will be delivered to other commissioners on Thursday.

The proposal raises the prospect of Netflix or Amazon paying an ISP for preferential treatment when it comes to delivering their content to the so-called last mile of a broadband network.

But Wheeler and the rest of the FCC are tasked with devising new rules that will survive a court challenge. In January, the D.C. Circuit Court of Appeals overturned the FCC’s previous open Internet rules that prevented providers from blocking content or discriminating against certain types of traffic. The court said that the FCC’s rules could not be put in place unless the commission classified broadband as a public utility like a phone company. The new rules do not take that regulatory step, although the plan is for the commission to still take comments on the possibility of doing so.

The judges did say that the FCC would have legal standing to write new rules under a provision of the 1996 Telecommunications Act that gave the agency the power to “encourage broadband deployment.”

Late on Wednesday, Wheeler issued a statement in which he said that reports that the FCC is “gutting” the net neutrality rule “are flat out wrong.”

He said, “There is no ‘turnaround in policy.’ The same rules will apply to all Internet content. As with the original Open Internet rules, and consistent with the court’s decision, behavior that harms consumers or competition will not be permitted.”

Word of the new proposal was first reported by the Wall Street Journal on Wednesday.

There was immediate dismay over reports of the proposal from some public interest groups.

Todd O’Boyle, program director of Common Cause’s Media and Democracy Reform Initiative, said that “if it goes forward, this capitulation will represent Washington at its worst. Americans were promised — and deserve — an Internet that is free of toll roads, fast lanes and censorship — corporate or governmental. If Wheeler’s rules deliver anything less, that would be a betrayal.”

The Writers Guild of America East said that they have “long opposed higher-cost ‘fast lanes’ available only to those with deep enough pockets to take advantage of their speed and quality.” Such special access “would squander the promise of an open Internet.”

Sen. Cory Booker (D-N.J.) sent a tweet saying that the FCC net neutrality “reversal could create pay-to-play system 4 Internet content that would adv fortunate & imperil content access 4 millions.”

But an FCC official said that the proposals would still “fulfill the goals” of the rules passed by the agency in 2010. Internet providers still would be prevented from blocking content. The anti-discrimination rule would be replaced by a new legal standard prohibiting “commercially unreasonable” practices, with a case-by-case review of disputes.

The purpose of the proposals, the FCC official said, “is plain: to end the Commission’s decade-long quest for legally enforceable rules that will protect and promote the Internet as a platform for economic growth, innovation, competition, free expression and broadband investment and deployment.”

Wheeler’s latest net neutrality proposals do not address the issue of interconnection between  different entities for the capacity to carry content. That has gained some visibility after Netflix reached an agreement with Comcast in February to ensure that video content wasn’t being constrained, as consumers have complained of long buffering times and other disruptions.

Netflix CEO Reed Hastings has since charged that ISPs are “extracting a toll because they can” by charging for such interconnectivity. Wheeler, however, has said that such interconnectivity issues are a separate element of the ecosystem, but it is something the agency is studying.