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““NET” NEUTRALITYNET” NEUTRALITY
Presentation forPresentation for
Kennesaw State University Kennesaw State University Michael J. Coles College of BusinessMichael J. Coles College of Business
November 7, 2010 November 7, 2010
Walt SapronovWalt SapronovSapronov & Associates, P.C.Sapronov & Associates, P.C.400 Northridge Road, Suite 515400 Northridge Road, Suite 515Atlanta, Georgia 30350Atlanta, Georgia 30350Telephone: 770-399-9100Telephone: 770-399-9100Facsimile: 770-395-0505Facsimile: 770-395-0505Email: [email protected]: [email protected]
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ContentsContents
I. Overview
II. Net Neutrality Basics
III. FCC Authority
IV. Origins of the Comcast Decision
V. D.C. Circuit Court Reversal
VI. FCC “Third Way” Proposal
VII. Net Neutrality By Other Means
VIII. Future Developments
IX. Final Thoughts
OverviewOverview
Historically: Federal Communications Commission (FCC)
Has asserted jurisdiction over: Telecommunications Wireless Cable
BUT NOT OVER: Information Services
What about Internet?
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OverviewOverview
Internet Content (the “Cloud”) Clearly an unregulated information service
Internet Access (the “Pipes”) Classification not so clear Cable, DSL, Wireless
Are all regulated services? Provided by regulated cable and telcos But when combined with Internet Content?
They Create an Information Service (U.S. Supreme Court “Brand X” Decision)
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Current Internet Regulation (Title I)Current Internet Regulation (Title I)
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Computer processingAccess component
Title I
“Information Service”
Unregulated
Cloud
Pipe
Portal
OverviewOverview
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Net Neutrality BasicsNet Neutrality Basics
Neutral and open public network (the “Internet”) No restrictions on equipment or modes of
communication Principles do not permit discrimination, either in pricing
or access, of the type, quantity, content, sites, or applications
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Net Neutrality BasicsNet Neutrality Basics
Fundamental Principles Consumers are entitled to:
Access the lawful Internet content of their choice; Run applications and services of their choice subject
to the needs of law enforcement; Connect to their choice of legal devices that do not
harm the network; and Enjoy positive externalities of competition among
providers (network, application, service, and content)
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Net Neutrality BasicsNet Neutrality Basics
Fundamental Principles (con’t) Other Proposed Principles
Balance customer’s need for unfettered access to content/applications with Internet Service Provider’s (ISP’s) network management needs
Ensure transparency of ISP’s network management practices
BUT Does FCC have statutory authority to enforce Net
Neutrality principles?
FCC AuthorityFCC Authority
Federal Communications Act Title I (Ancillary Jurisdiction) Title II (Common Carrier)
Telecommunications Carriers Rate, Entry, Complaint Procedures
Title III (Wireless) Broadcast Commercial Mobile Service
Title VI Cable Companies
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FCC AuthorityFCC Authority
Ancillary Jurisdiction General FCC Policy Making Authority under Title I Used by FCC to Deregulate Enhanced Services
Computer Inquiry II, III Basic (Regulated – Title II) v. Enhanced
(Unregulated -- Title I) 96 Act:
Telecommunications Service/Information Service (Same as Basic/Enhanced)
FCC now has Forbearance Authority May forbear from regulating under certain conditions
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Origins of the Comcast Decision
Background Comcast customers complained -- difficult to use “P2P”
applications (e.g. BitTorrent) FCC investigation -- Comcast monitored customer’s
content, not destination Result: Comcast blocked Internet traffic and limited
customers’ Internet use
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Origins of the Comcast DecisionOrigins of the Comcast Decision
The FCC required Comcast to: Disclose its network management practice details; Submit a compliance plan by end of year (2008); and Present new, non-discriminatory network management
practices to customers and the Commission
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Origins of the Comcast DecisionOrigins of the Comcast Decision
Enforcing an “Open” Internet -- Concerns Bypassing open Internet protections
Specialized services offered in bundles? Specialized services -- circumventing the rules
Network capacity not expanded as intended Anti-competitive conduct among broadband
providers The FCC labeled Comcast’s failure to disclose their
practices as “anticompetitive”
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Comcast argued that the FCC: Asserted its authority based on provisions of the
Communications Act which do not apply to Comcast Did not abide by notice and comment procedures in
adopting rules applied against Comcast
D.C. Circuit Court ReversalD.C. Circuit Court Reversal
D.C. Circuit Court ReversalD.C. Circuit Court Reversal
D.C. Circuit Court Holding: FCC Has No Jurisdiction Over Comcast Network
Management Practices Ancillary Jurisdiction Must Be “Ancillary” to Other
FCC Statutory Authority e.g. to Title II (Telecom), or Title VI (Cable) Not a Standalone Grant of Authority
Reversed and Vacated FCC Comcast Decision Did not reach other issues
e.g., whether FCC may enforce a policy and not just its own rules
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FCC “Third Way” ProposalFCC “Third Way” Proposal
FCC Response to D.C. Circuit Reversal “Third Way” Approach to Internet Access Regulation
Proposed by FCC Chairman - Public Notice Regulate Broadband Internet Access by:
Transmission Component (“Pipes”) Regulate as Title II “telecommunications service” (currently
unregulated under Title I) Forbearance
Piecemeal application of Title II (USF, consumer protection) Network Processing (“Cloud”)
Leave unregulated
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FCC “Third Way” Proposed RegulationFCC “Third Way” Proposed Regulation
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Cloud
Still “info” service(Title I)
Portal
Regulate as “Telecommunications
Service” (Title II)- Forbearance
- USF
Pipe
FCC “Third Way” ProposalFCC “Third Way” Proposal
Practical Application and Questions Does the FCC have statutory authority to make this
change or do they need Congressional approval? Internet and Title II
Legal and practical implications?
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Net Neutrality By Other Means Net Neutrality By Other Means
Policy Enforcement: FCC Proposal - Case by case basis
Citations Forfeiture penalties
FCC policy making authority (“Third Way”)? FCC released “Framework for Broadband Internet
Service” NOI on June 17, 2010.
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Net Neutrality By Other MeansNet Neutrality By Other Means
National Broadband Plan (NBP) Part of the 2009 American Reinvestment and
Recovery Act (“Broadband Stimulus Bill”) $7.2 billion allocated for national broadband
deployment Will the Internet be subject to USF assessment?
NBP contemplates USF, access and intercarrier compensation schemes should be reformed together
Implications for 21st century communications -- wireless applications (Google voice)
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Net Neutrality By Other MeansNet Neutrality By Other Means
Meanwhile “Third Way” NOI -- Awaiting Public Comments
FCC spectrum management – a “back door” approach to net neutrality?
A Republican controlled Congress will likely chill Net Neutrality legislative initiatives Sept. 2010 -- Open Internet Act of 2010 failed to make
it out of the House Commerce Committee
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Final ThoughtsFinal Thoughts
FCC agenda will emerge in the future – but meanwhile:
Clear emphasis on broadband deployment (especially wireless)
Belief in merits of net neutrality Agency’s focus for now is on data gathering and
broadband stimulus funding USF enforcement will almost certainly be a priority
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Final ThoughtsFinal Thoughts
All of this is very complicated – and a bit fuzzy…All of this is very complicated – and a bit fuzzy…
BUT… DO REMEMBER:BUT… DO REMEMBER:
WHEN IN DOUBT – ASK YOUR LAWYER!WHEN IN DOUBT – ASK YOUR LAWYER!
Sapronov & Associates, P.C.
400 Northridge Rd., Suite 515
Atlanta, Georgia 30350
Telephone: 770-399-9100
Facsimile: 770-395-0505
Email: [email protected]
Website: www.wstelecomlaw.com