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The three options for the future of net neutrality

FCC Chairman Tom Wheeler has three options for the future of internet regulation.
FCC Chairman Tom Wheeler has three options for the future of internet regulation.

President Barack Obama wants the Federal Communications Commission to adopt strong network neutrality regulations. A Tuesday report from the Washington Post suggested that FCC Chairman Tom Wheeler is planning to chart his own course on the issue. But others who attended the same meeting told the Huffington Post that Wheeler didn't appear to have made up his mind.

Chairman Wheeler has a big decision ahead of him. Here are the three paths he is most likely to decide among.

Weak net neutrality


Wheeler's original proposal, which he unveiled in May, is designed to get network neutrality rules in place as quickly as possible with a minimum of controversy.

The proposal: Wheeler first unveiled this approach back in May. He was trying to figure out how to respond to a January ruling by the DC Circuit Court of Appeals, which held that the FCC's 2010 network neutrality rules (drafted by Wheeler's predecessor, Julius Genachowski) were illegal. Wheeler's plan was basically to get as much network neutrality regulation as the courts would allow — without invoking a controversial legal tactic called reclassification.

The January ruling suggested that a network neutrality rule would pass legal muster if it was limited to banning "commercially unreasonable" network discrimination. So the regulations Wheeler proposed in May did just that.

The case for: The big selling point for this approach is that it has the best shot at actually going into effect with a minimum amount of litigation. It's also less likely to provoke a backlash from telecom companies and Congressional Republicans. There are other issues Wheeler would like to deal with in the remaining two years of his term. He may believe that this kind of compromise position will pacify his critics and give him more room to maneuver on those other issues.

The case against: Most net neutrality supporters say this proposal doesn't do enough to protect network neutrality. No one knows how "commercially reasonable" network discrimination will be defined, and network neutrality diehards think it will become a huge loophole that will allow big broadband providers to tilt the online playing field in favor of big companies.

Will it happen? In May, this proposal seemed like the most likely outcome. But since then, Wheeler has faced intense pressure — from liberal activists, internet companies, and the president himself — to take a stronger stance. He may also be facing pressure from his fellow Democratic FCC commissioners, whose support he will need to get his proposal approved. At this point, most insiders think Wheeler will adopt a stronger version of network neutrality than the one he proposed in May.

Strong network neutrality with reclassification

(Pierre Fridel)

This approach, which is favored by President Obama and many network neutrality supporters, would use a controversial legal maneuver to gain broader regulatory authority for the FCC.

The proposal: In its January ruling, the DC Circuit held that the FCC's 2010 network neutrality regulations were illegal because the agency had classified broadband as an "information service," a legal category that doesn't allow much regulation. However, the FCC can change its mind and and put broadband into a different category that allows strict utility-style regulation. Once the FCC does that, it would likely have ample authority to establish and enforce strong network neutrality rules.

The case for: For network neutrality supporters, this is the gold standard. It provides the best chances of getting strong network neutrality regulations that stand up in court. And of course, advocates of this approach argue that network neutrality will promote innovation and free speech on the internet.

The case against: Obviously, network neutrality opponents hate the idea. They think network neutrality rules in general would discourage investment in new infrastructure and innovation. But they also have specific objections to reclassification. They say it would open up a pandora's box: reclassification would put broadband internet under a legal framework that was designed for old-fashioned telephone service. It's full of burdensome rules that may not be a good fit for modern internet services. (Net neutrality supporters have an answer for this: the FCC can choose not to enforce regulations that are counterproductive.)

But for Wheeler, an avowed network neutrality supporter, the arguments against reclassification are more pragmatic. First, it will take a lot of legal legwork to shoehorn network neutrality rules into this new regulatory framework. That will not only eat up FCC staff time, but also could trigger years of litigation. While the courts are likely to eventually uphold the rules, that might not happen until long after Wheeler is out of office.

Also, reclassification could cause Republicans and industry lobbyists to declare war on Wheeler's FCC. And while these forces don't have the power to stop him on this issue, there are lots of ways they can make his life miserable over the next two years.

Will it happen? The president's endorsement of this approach on Monday made it seem more likely, but Wheeler isn't sold yet. The FCC is an independent agency, and Wheeler may resent Obama trying to tell him what to do. On the other hand, Wheeler needs the support of the other two Democrats on the commissioner to get network neutrality rules approved. They are believed to be stronger network neutrality supporters than Wheeler is, and they may be able to force Wheeler's hand.

The "hybrid" approach


This approach would use a creative legal theory to chart a middle course between full reclassification and the incremental approach Wheeler unveiled back in May.

The proposal: Two weeks ago, the Wall Street Journal reported that the FCC was working on a new network neutrality approach. Here's how it would work.

We usually think of broadband providers as providing a single service: delivering information to residential customers. But under an approach first articulated by the Mozilla Foundation (the nonprofit that makes the Firefox browser), the FCC could instead think of this as two distinct markets. In one market, broadband providers offer internet connectivity to consumers. But at the same time, broadband providers are offering to deliver packets on behalf of online services like Netflix and Facebook.

Mozilla's proposal is that the FCC should treat these as two different services, for legal purposes, and then classify only the sender-side service (e.g. the one ISPs provide to Netflix and Facebook) as a public utility.

The case for: To be clear, these are not actually two different services, but two different ways of looking at the same service. But adopting the legal fiction that broadband providers are offering two different services could solve some thorny problems for the FCC.

For one thing, the FCC has never previously regulated this new, second market. So the agency could apply strong utility-style regulations to this "sender-side" market without having to overrule its previous decision to put consumer-facing broadband services in the low-regulation category. This approach also helps to address concerns that reclassifying broadband will subject the internet to excessive regulation. Leaving the consumer-facing service in the low-regulation category reduces the risk that it will be over-regulated.

The case against: This strategy is the most complicated option the FCC is considering, and it would put the FCC into uncharted legal waters. How well it works would depend on exactly how the line between sender-side and consumer-side services was drawn. There's a lot of room for confusion, about which rules apply to which aspects of broadband service. There's also a risk that the courts will reject this approach, or will decide that this partial reclassification doesn't give the FCC sufficient authority to enact strong network neutrality regulations.

Will it happen? This hybrid approach is being actively studied inside the the FCC, and it might serve Wheeler's objectives better than the alternatives. It could give Wheeler the authority he wants, while antagonizing Republicans and telecom companies less than full reclassification. So it might be the most likely of the three options.

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