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FCC girds for legal attacks on net neutrality order

Matt Hamblen | March 16, 2015
The Federal Communication Commission's 400-page official order on net neutrality, released Thursday, will undoubtedly elicit lawsuits on various fronts once it is officially published in the Federal Register.

Broad rules, new authority

The basics of the FCC's order call for no blocking, throttling or paid prioritization of Internet traffic, either over wired or wireless connnections.

While the order pertains to the public Internet primarily, it does give the agency new authority to address interconnection disputes between two companies. If Netflix, theoretically, says a particular Internet Service Provider has somehow failed to provide enough bandwidth to allow a quality viewing of House of Cards to its customers, Netflix could complain to the FCC. The FCC can hear the complaint and take enforcement actions based on what it considers to be "just and reasonable" interconnection activities.

Reasonable network management activities will, however, be allowed by the FCC. In the call with reporters, senior FCC officials said recent concerns that AT&T could be throttling traffic for some unlimited wireless data customers would have to be judged as to whether the throttling was for business reasons or network management, but specific criteria was not divulged.

FCC observers expect the order could result in a steady number of complaints and the need for future case-by-case decisions.

FCC members Ajit Pai and Michael O'Rielly dissent

Both of the Republicans on the FCC, Ajit Pai and Michael O'Rielly, provided long dissents to the FCC order that could become a blueprint for some legal attacks.

Pai called the order an "unlawful power grab" and argued that when the agency sets itself up to decide whether a rate is lawful (such as paid prioritization). That act in itself is "the very definition of rate regulation."

Senior staff at the FCC discounted that logic and said in the myth-breaking memorandum that "broadband providers will be able to adjust retail rates without commission approval and without having to wait even a minute." That language won't necessarily apply to reviews of interconnection disputes between companies, however.

As for worries by many that future FCC commissions might change course on rate regulation, senior FCC staffers admitted that is possible. But they argued the current order helps build a strong precedent for why rate regulation isn't needed.

Even so, Roger Entner, an analyst at Recon Analytics, agreed with Pai that the FCC is setting up rate regulation by outlawing paid prioritization.

"Outlawing paid prioritization is, by default, rate regulation because you are saying the rate must be zero," he said. Entner, a long-time telecommunications analyst, is not an attorney and said he is not advising any of the parties involved on legal strategy in the FCC order.

Entner also said that amendments to the Communications Act of 1934, specifically in Section 332, subsection C1a, don't allow the FCC to regulate mobile services like those described in the order.


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