FCC Releases Adopted Net Neutrality Order

On May 7, 2024, the FCC released a  Declaratory Ruling, Order, Report and Order, and Order on Reconsideration reclassifying broadband Internet access service (“BIAS”) under Title II of the Communications Act, reinstating the 2015 blocking, throttling, and paid prioritization prohibitions and the general conduct standards, establishing new transparency requirements, and dismissing several petitions for reconsideration of the 2018 order abolishing net neutrality.  The item was adopted at the April Open Meeting on April 25, 2024.  Below we provide a high-level summary of the Commission’s findings and actions:

Declaratory Ruling: Reclassifying BIAS as a Title II Service

In the Declaratory Ruling, the FCC reclassifies BIAS under Title II as a telecommunications service and reclassifies mobile broadband as a commercial mobile service.  Specifically, the FCC finds as follows:

1. Need for Reclassification – The FCC finds reclassification of BIAS is necessary to ensure an open Internet, defend national security, promote cybersecurity, safeguard public safety, monitor network resiliency and reliability, protect consumer privacy and data security, support consumer access to BIAS, and improve disability access.  The FCC further finds that BIAS would be properly classified as a telecommunications service due to the way consumers understand BIAS and how the technology that enables the delivery of BIAS functions.  It also affirmatively concludes that BIAS is not an information service.
2. Scope of BIAS Reclassification – Consistent with the 2015 Open Internet Order, the FCC defines “broadband Internet access service” as “a mass-market retail service by wire or radio that provides the capability to transmit data to and receive data from all or substantially all Internet endpoints, including any capabilities that are incidental to and enable the operation of the communications service, but excluding dial-up Internet access service.”  The term also includes: (1) “any service that. . . provide[s] a functional equivalent” of BIAS and the exchange of internet traffic by an edge provider or an intermediary with the BIAS provider’s network (i.e., Internet peering, traffic exchange, or interconnection), to the extent that the exchange is consistent with the above definition.
   1. Technology Neutral: The definition is technology neutral and applies to services provided over any technology platform, including wire, terrestrial wireless (including fixed and mobile wireless services using licensed or unlicensed spectrum), and satellite.
   2. Exclusions: As in the past, the scope of BIAS excludes non-BIAS data services (“specialized services”), which are “certain services offered by BIAS providers that share capacity with broadband Internet access service over BIAS providers’ last-mile facilities but are not broadband Internet access service or another type of Internet access service, such as enterprise services, Business Data Services, and other services that do not provide access to all, or substantially all, Internet endpoints, among other factors.  It also does not apply to wholesale services, but cautions that broadband wholesalers should not engage in anticompetitive practices or sell or operate their wholesale offerings in a manner that prevents resellers from offering BIAS in compliance with the BIAS rules.  The FCC also excludes “edge service,” premises operators, and end users who provide access to their BIAS connections but do not offer it on a mass-market, retail basis.
   3. Network Slicing: The FCC declines to categorize network slicing or services delivered through network slicing as inherently either BIAS or non-BIAS at this time.  Rather, the FCC instructs MNOs to evaluate whether their particular use of network slicing falls into the definition of BIAS, and if so, ensure their uses are consistent with the FCC’s Net Neutrality rules.
3. Mobile Broadband Internet Access Service – The FCC reclassifies mobile BIAS as a commercial mobile service and further concludes that even if mobile BIAS does not meet this definition, it is the functional equivalent of a commercial mobile service, and therefore, not private mobile service and thus, should be treated as common carrier service.  The FCC also finds that it is an interconnected service, defined as “a service that gives subscribers the ability to communicate to or receive communications from other users of the public switched network.”
4. Preemption – The FCC declines to broadly preempt existing state net neutrality laws and instead “will exercise [its] authority to preempt any state or local measures that interfere or are incompatible with the federal regulatory framework” established by the FCC. The FCC also declined to address state broadband affordability programs, but did clarify that states have a critical role to play in affordability and that the mere existence of a state affordability program is not rate regulation.
5. Other Findings – The FCC finds that reclassification is consistent with Commission and court precedent, is lawful, and will not lead to an adverse impact on BIAS investment.

Order: Forbearance Provisions

In the Order, the FCC forebears from applying certain provisions of Title II to BIAS providers.  Specifically, the FCC takes the following actions:

1. Retains Authority to Protect Consumers and Promote Competition (Sections 201 and 202) – The FCC declines to forebear from applying sections 201 and 202, “the heart of consumer protection under the Act.”  The FCC also declines to forebear from section 208 and certain enforcement provisions necessary to ensure just, reasonable, and non-discriminatory conduct by BIAS providers.
   • Multiple Tenant Environments (“MTEs”) – Specifically, the FCC notes it will be applying its MTE rules to BIAS-only providers, including section 64.2500 of its rules, which prohibits common carriers from entering into certain types of agreements with MTE owners.  BIAS providers are required to comply with the rule for all new contracts entered into after the effective date of the Declaratory Ruling.  For existing contracts, the FCC grants a temporary, 180-day waiver to allow providers to bring pre-existing contracts into compliance with the rule.
2. Retains Enforcement Authority (Sections 206, 207, 208, 209, 216, and 217) – The FCC declines to forebear from applying the complaint proceeding rules and fundamental Title II enforcement provisions with respect to BIAS.
3. Retains Entry Certification Requirement, but Forebears from Applying Implementing Rules and Exit Certification Requirement (Section 214) – The FCC declines to forebear from entry certification requirements of section 214.  Blanket 214 authority is granted to all current and future BIAS providers (apart from those providers that the FCC has identified are a national security risk).  This grant of blanket section 214 authority includes authority for entry, acquisitions (including transfers of control and assignments), and temporary or emergency service and related requirements.  While the FCC finds 214 applies to BIAS providers, it forebears from applying the FCC’s implementing rules and the exit certification requirements (e.g., discontinuance, reduction, or impairment of BIAS) to such providers.
4. Retains Information Collection and Reporting Requirements (Sections 218, 219, 220(a)(1) & (c)-(e)) – The FCC declines to forebear from the information collection and reporting requirements in Title II, finding they are necessary to the national security and for public safety.  The FCC notes this will enhance its ability to require BIAS providers to report outages in NORS and DIRS, require reporting of foreign ownership information, and require BIAS providers to establish cybersecurity risk management plans and best practices.
5. Retains Consumer Privacy Authority, but Waives Implementing Rules (Section 222) – The FCC declines to forebear from section 22, which requires telecommunications providers to protect consumer proprietary network information.  The FCC waives, however, the rules implementing section 222, noting they are designed to address concerns in the voice context.
6. Retains Authority over Access to Poles, Ducts, Conduit, and Rights-of-Way (Section 224) – The FCC declines to forbear from section 224 and the FCC’s implementing rules for BIAS providers.  The FCC explains this will grant BIAS-only providers the same statutory protections for pole attachments as those currently offered to telecommunications and cable providers.
7. Forbears Universal Service Fund (“USF”) Contributions (Section 254) – The FCC forebears from requiring BIAS providers to contribute to the USF or assessing new USF contributions on BIAS service.  The FCC notes, however, that it does not disclaim its authority to require new USF contributions in a future rulemaking and its decision is not intended to prejudge or limit how the FCC will take action in the future.
8. Retains Accessibility Requirements (Sections 225, 255, and 251(a)(2)) – The FCC declines to forebear from the provisions in Title II that ensure access to BIAS by individuals with disabilities.
9. Forebears from Rate Regulation – Although the FCC declines to forebear from sections 201 and 202 in full, it does forbear from applying these sections to BIAS providers to the extent that they would permit rate regulation.  The FCC also finds “it in the public interest to forebear from applying sections 201 and 202 insofar as they would permit the adoption of such rate regulations for BIAS in the future.”
10. Retains Authority to Limit Foreign Ownership of Wireless Licensees Providing BIAS-Only Service (Section 310) – The FCC declines to grant forbearance from the foreign ownership limits in section 310 for BIAS-only wireless licensees, except to extend the FCC’s existing section 310(b)(3) forbearance policy to not require the filing of a petition for declaratory ruling or similar request where and to the extent the Commission has already found the foreign ownership at issue to be in the public interest.  The FCC will temporarily forebear from applying these rules for a period of 12 months to allow such providers to come into compliance with the FCC’s foreign ownership caps.
11. Other Title II Provisions – The FCC declines to grant forbearance consistent with the 2015 order, including sections 223, 229, 230(c), 231, 253, 257, and 332.  For the sections not explicitly named, the FCC grants broad forbearance for the remaining provisions in Title II, including tariffing, and the subscriber change rules.

Report and Order: Open Internet Rules

In the Report and Order, the FCC reinstates the 2015 Open Internet Rules.  Specifically, the FCC:

1. Prohibits Blocking of Lawful Content, Applications, Services, and Non-Harmful Devices – The FCC reinstates its bright-line rule prohibiting BIAS providers from blocking lawful content, applications, services, or non-harmful devices.  This applies to “all traffic transmitted to or from end users of a broadband Internet access service, including traffic that may not fit clearly into any of these categories.”
2. Prohibits Throttling of Lawful Content, Applications, Services, and Non-Harmful Devices – The FCC reinstates its bright-line rule prohibiting BIAS providers from impairing or degrading lawful Internet traffic on the basis of content, applications, service, or use of non-harmful devices.   This rule does not apply to choices made by end users that slow down their own internet speeds.
3. Prohibits Paid or Affiliated Prioritization – The FCC reinstates its prohibition on paid or affiliated prioritization practices, subject to a narrow waiver process.  The FCC reinstates its waiver standard for this rule, explaining that a waiver is appropriate only when the petitioner demonstrates a significant public interest benefit and that the practice would not harm the open nature of the Internet.
4. Adopts a General Conduct Rule – The FCC reinstates its “no-unreasonable interference/disadvantage standard, under which the Commission can prohibit practices that unreasonably interfere with the ability of consumers or edge providers to select, access, and use broadband internet access service to reach one another, thus causing harm to the open Internet.”  This standard will operate on a case-by-case basis that will consider the totality of the circumstances when analyzing whether conduct meets the standard.  The FCC will consider the following, non-exhaustive list of factors when making this determination: “(i) whether a practice allows end-user control and enables consumer choice; (ii) whether a practice has anti-competitive effects in the market for applications, services, content, or devices; (iii) whether a practice affects consumers’ ability to select, access, or use lawful broadband services, applications, or content; (iv) the effect a practice has on innovation, investment, or broadband deployment; (v) whether a practice threatens free expression; (vi) whether a practice is application agnostic; and (vii) whether a practice conforms to best practices and technical standards adopted by open, broadly representative, and independent Internet engineering, governance initiatives, or standards-setting organizations.”  The FCC notes it will analyze zero rating programs and data caps under this rule.
5. Modifies the Transparency Rule – The FCC modifies the existing transparency rule by restoring the enhancements adopted by the 2015 Open Internet Order to disclose certain network practices and performance characteristics eliminated by the RIF Order, and adopting changes to the means of disclosure, including adopting a direct notification requirement.  Specifically, the modified rule requires BIAS providers to “publicly disclose accurate information regarding the network management practices, performance, and commercial terms of its broadband Internet access services sufficient for consumers to make informed choices regarding the use of such services for content, application, service, and device providers to develop market, and maintain Internet offerings.”  This information must be provided on a publicly available, easily accessible website, in a machine-readable format.  Additionally, providers will be required to notify end users if their individual use of a network will trigger a network practice.   The information to be disclosed includes:
   • Network Management Practices, such as: (1) congestion management; (2) user-based practices; (3) affiliated prioritization; (4) paid prioritization; (5) zero rating; (6) application-specific behavior; (7) device attachment rules; and (8) security.
   • Performance Characteristics, such as: (1) service descriptions, including expected and actual access speed and latency; and (2) the impact of non-BIAS data services.
   • Commercial Terms, such as: (1) pricing; (2) privacy policies; and (3) redress options.
6. Maintains an Exception for Reasonable Network Management – The FCC retains an exception to the blocking, throttling, and general conduct rule, to allow for reasonable network management practices for both fixed and mobile BIAS providers.  Thus, when considering whether a practice violates the no-blocking, no-throttling, or general conduct rule, the FCC may first evaluate whether the practice falls within the exception for reasonable network management.  This will be applied on a case-by-case basis.
7. Extends FCC Oversight to BIAS Providers’ Arrangements for Internet Traffic Exchange – The FCC concludes that disputes involving a BIAS provider regarding Internet traffic exchange that interfere with the delivery of a BIAS end user’s traffic are subject to the Commission’s authority.
8. Adopts Enforcement Provisions – The FCC continues to encourage parties to resolve disputes on their own but notes it is prepared to enforce its Open Internet rules as the need arises.  The FCC notes that its enforcement framework includes advisory opinions and enforcement advisories, Commission-initiated investigations, and informal and formal complaints.
9. Addresses Other Issues:
   • Legal Authority – The FCC concludes it has legal authority to address these issues under Title II, section 706, and Title III.
   • Costs and Benefits – The FCC concludes that the benefits of Title II reclassification outweigh the costs.
   • Constitutional Considerations – The FCC concludes the rules it adopts comply with the Constitution.

Order on Reconsideration

 In the Order on Reconsideration, the FCC denies as moot several petitions for reconsideration seeking reconsideration of the 2017 RIF Order repealing net neutrality.

Effective Date

The item will be effective 60 days after publication in the Federal Register, except for those amendments that contain new or modified information collection requirements, which will not become effective until after the Office of Management and Budget completes any review required by the Paperwork Reduction Act.

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