Obama Calls for Title II Reclassification: Same Rules for Wireless; Wheeler Says Open Internet Proceeding Needs “More Time”

President Obama today called on the FCC to reclassify broadband Internet access service as a telecommunications service subject to common carrier regulation under Title II of the 1934 Communications Act, while forbearing from rate regulation.  He also said the same rules should apply to wireless and wireline services and called for “an explicit ban on paid prioritization and any other restriction that has a similar effect.”

In a response to the president’s statement, FCC Chairman Tom Wheeler said that use of the agency’s Title II authority, whether by itself or in a “hybrid” approach with Telecommunications Act section 706 (advanced telecommunications capability) authority, raises “substantive legal issues” that will take more time to resolve—a statement that suggests that an order in the proceeding won’t be voted this year.

In a statement released by the White House this morning, the president acknowledged that the FCC “is an independent agency, and ultimately this decision is theirs alone.” However, he added, “I believe the FCC should create a new set of rules protecting net neutrality and ensuring that neither the cable company nor the phone company will be able to act as a gatekeeper, restricting what you can do or see online.”

The president emphasized the importance of an open Internet “to the American economy, and increasingly to our very way of life.  By lowering the cost of launching a new idea, igniting new political movements, and bringing communities closer together, it has been one of the most significant democratizing influences the world has ever known.”  He recalled that he had committed to supporting a free and open Internet during his campaign for the presidency.

As the FCC considers how to address the federal appeals court decision earlier this year that struck down its no-blocking and anti-discrimination open Internet rules as the imposition of de facto common carrier regulation on services the agency has designated as information services, it should adopt “simple, common-sense steps that reflect the Internet you and I use every day, and that some ISPs already observe,” President Obama said.

Specifically, he said that the FCC should adopt rules barring the blocking of any legal content; barring throttling “based on the type of service or your ISP’s preferences”; increasing transparency by making “full use of the transparency authorities the court recently upheld, and if necessary to apply net neutrality rules to points of interconnection between the ISP and the rest of the Internet”; and barring paid prioritization.

“If carefully designed, these rules should not create any undue burden for ISPs, and can have clear, monitored exceptions for reasonable network management and for specialized services such as dedicated, mission-critical networks serving a hospital,” the president said.

Wireless carriers have argued that “wireless is different,” in terms of  both network management requirements and degree of competition, and that their services should not be subject to the same open Internet rules as wireline services.  President Obama largely rejected that argument.

“I believe the FCC should make these rules fully applicable to mobile broadband as well, while recognizing the special challenges that come with managing wireless networks,” the president said.

As for the legal basis on which the FCC should ground its rules—Title II or section 706 of the 1996 Telecommunications Act—the president said, “To be current, these rules must also build on the lessons of the past.  For almost a century, our law has recognized that companies who connect you to the world have special obligations not to exploit the monopoly they enjoy over access in and out of your home or business.  That is why a phone call from a customer of one phone company can reliably reach a customer of a different one, and why you will not be penalized solely for calling someone who is using another provider.  It is common sense that the same philosophy should guide any service that is based on the transmission of information—whether a phone call, or a packet of data.

“So the time has come for the FCC to recognize that broadband service is of the same importance and must carry the same obligations as so many of the other vital services do.  To do that, I believe the FCC should reclassify consumer broadband service under Title II of the Telecommunications Act—while at the same time forbearing from rate regulation and other provisions less relevant to broadband services.  This is a basic acknowledgment of the services ISPs provide to American homes and businesses, and the straightforward obligations necessary to ensure the network works for everyone—not just one or two companies,” the president said.

FCC Chairman Tom Wheeler, who proposed a section 706 approach in a notice of proposed rulemaking adopted by the Commission earlier this year, with rules that net neutrality advocates have argued would allow paid prioritization, welcomed the president’s statement and said that it would be incorporated into the record of the open Internet proceeding.  “We welcome comment on it and how it proposes to use Title II of the Communications Act,” he said.

Chairman Wheeler noted that in adopting the pending open Internet notice of proposed rulemaking, “I promised that in this process all options would be on the table in order to identify the best legal approach to keeping the Internet open. That includes both the Section 706 option and the Title II reclassification. Recently, the Commission staff began exploring ‘hybrid’ approaches, proposed by some members of Congress and leading advocates of net neutrality, which would combine the use of both Title II and Section 706.”

Chairman Wheeler added, “The more deeply we examined the issues around the various legal options, the more it has become plain that there is more work to do. The reclassification and hybrid approaches before us raise substantive legal questions. We found we would need more time to examine these to ensure that whatever approach is taken, it can withstand any legal challenges it may face.  For instance, whether in the context of a hybrid or reclassification approach, Title II brings with it policy issues that run the gamut from privacy to universal service to the ability of federal agencies to protect consumers, as well as legal issues ranging from the ability of Title II to cover mobile services to the concept of applying forbearance on services under Title II.”

“We must take the time to get the job done correctly, once and for all, in order to successfully protect consumers and innovators online,” Chairman Wheeler concluded.

Sen. Edward J. Markey (D., Mass.) and Reps. Doris Matsui (D., Calif.) and Anna G. Eshoo (D., Calif.), as well as net neutrality advocates at Public Knowledge, Free Press, Common Cause, and Demand Progress, welcomed President Obama’s statement in support of Title II reclassification.

Senate Communications, Science, and Transportation Committee ranking member and chairman presumptive John Thune (R., S.D.), as well as Verizon Communications, Inc., CTIA, the National Cable & Telecommunications Association, and the Telecommunications Industry Association opposed the idea of Title II reclassification as did TechFreedom and the Information Technology and Innovation Foundation. —Lynn Stanton, lynn.stanton@wolterskluwer.com

Courtesy TRDaily