Protecting and Promoting the Open Internet

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 8

[WC Docket No. 14-28, FCC 14-61]

Protecting and Promoting the Open Internet

AGENCY:

Federal Communications Commission.

ACTION:

Notice of proposed rulemaking.

SUMMARY:

The Federal Communications Commission initiates a rulemaking seeking public comment on how best to protect and promote an open Internet following the D.C. Circuit Court of Appeals' remand of portions of the Commission's

2010 Open Internet Order,

76 FR 59192 (Sept. 23, 2011). In this document, among other things, we propose enhancements to the transparency rule, adopting the text of the no-blocking rule from the

Open Internet Order

with a revised rationale, and creating a separate screen that requires broadband providers to adhere to an enforceable legal standard of commercially reasonable practices. The proposed rules and the comment process that follows will help the Commission determine the right public policy to ensure that the Internet remains open.

DATES:

Submit comments on or before July 15, 2014. Submit reply comments on or before September 10, 2014. Written comments on the Paperwork Reduction Act proposed information collection requirements must be submitted by the public, Office of Management and Budget (OMB), and other interested parties on or before September 2, 2014.

ADDRESSES:

You may submit comments, identified by WC Docket No. 14-28, by any of the following methods:

Federal Communications Commission's Web site:

http://fjallfoss.fcc.gov/ecfs2/

. Follow the instructions for submitting comments.

People with Disabilities:

Contact the FCC to request reasonable accommodations (accessible format documents, sign language interpreters, CART, etc.) by email:

FCC504@fcc.gov

or phone: 202-418-0530 or TTY: 202-418-0432.

FOR FURTHER INFORMATION CONTACT:

Kristine Fargotstein, Competition Policy Division, Wireline Competition Bureau, at (202) 418-2774 or by email at

Kristine.Fargotstein@fcc.gov

. To submit Paperwork Reduction Act (PRA) comments, send an email to

PRA@fcc.gov

. For further information concerning the Paperwork Reduction Act information collection requirements contained in this document, contact Les Smith at (202) 418-0217.

SUPPLEMENTARY INFORMATION:

Pursuant to §§ 1.415 and 1.419 of the Commission's rules, 47 CFR 1.415, 1.419, interested parties may file comments and reply comments on or before the dates indicated on the first page of this document. Comments may be filed using the Commission's Electronic Comment Filing System (ECFS).

See Electronic Filing of Documents in Rulemaking Proceedings,

63 FR 24121 (1998).

Electronic Filers: Comments may be filed electronically using the Internet by accessing the ECFS:

http://fjallfoss.fcc.gov/ecfs2/

.

Paper Filers: Parties who choose to file by paper must file an original and one copy of each filing. If more than one docket or rulemaking number appears in the caption of this proceeding, filers must submit two additional copies for each additional docket or rulemaking number. Filings can be sent by hand or messenger delivery, by commercial overnight courier, or by first-class or overnight U.S. Postal Service mail. All filings must be addressed to the Commission's Secretary, Office of the Secretary, Federal Communications Commission.

All hand-delivered or messenger-delivered paper filings for the Commission's Secretary must be delivered to FCC Headquarters at 445 12th St. SW., Room TW-A325, Washington, DC 20554. The filing hours are 8:00 a.m. to 7:00 p.m. All hand deliveries must be held together with rubber bands or fasteners. Any envelopes and boxes must be disposed of

before

entering the building.

Commercial overnight mail (other than U.S. Postal Service Express Mail and Priority Mail) must be sent to 9300 East Hampton Drive, Capitol Heights, MD 20743.

U.S. Postal Service first-class, Express, and Priority mail must be addressed to 445 12th Street SW., Washington DC 20554.

People with Disabilities: To request materials in accessible formats for people with disabilities (Braille, large print, electronic files, audio format), send an email to

fcc504@fcc.gov

or call the Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-418-0432 (tty).

Synopsis

In this Notice of Proposed Rulemaking (NPRM), we address the D.C. Circuit Court of Appeals' remand of portions of the Commission's 2010

Open Internet Order

and seek comment on the right public policy to ensure that the Internet remains open.

I. Introduction

1. The Internet is America's most important platform for economic growth, innovation, competition, free expression, and broadband investment and deployment. As a “general purpose technology,” the Internet has been, and remains to date, the preeminent 21st century engine for innovation and the economic and social benefits that follow. These benefits flow, in large part, from the open, end-to-end architecture of the Internet, which is characterized by low barriers to entry for developers of new content, applications, services, and devices and a consumer-demand-driven marketplace for their products. As the Commission explained in its 2010

Open Internet Order,

the Internet's open architecture allows innovators and consumers at the edges of the network “to create and determine the success or failure of content, applications, services and devices,” without requiring permission from the broadband provider to reach end users. As an open platform, it fosters diversity and it enables people to build communities.

2. We start with a fundamental question: What is the right public policy to ensure that the Internet remains open? This Notice of Proposed Rulemaking (NPRM), and the comment process that follows, will turn on this fundamental question.

3. Today, there are no legally enforceable rules by which the Commission can stop broadband providers from limiting Internet openness. This NPRM begins the process of closing that gap, by proposing to reinstitute the no-blocking rule adopted in 2010 and creating a new rule that would bar commercially unreasonable actions from threatening Internet openness (as well as enhancing the transparency rule that is currently in effect).

4. The goal of this proceeding is to find the best approach to protecting and promoting Internet openness. Per the blueprint offered by the D.C. Circuit in its decision in

Verizon v. FCC,

the Commission proposes to rely on Section 706 of the Telecommunications Act of 1996. At the same time, the Commission will seriously consider the use of Title II of the Communications Act as the basis for legal authority. This Notice seeks comment on the benefits of both Section 706 and Title II, including the benefits of one approach over the other. Under all available sources of legal authority (including also Title III for mobile services), the Commission seeks

comment on the best ways to define, prevent and punish the practices that threaten an open Internet. We emphasize in this Notice that the Commission recognizes that both Section 706 and Title II are viable solutions and seek comment on their potential use.

5. It is important to always remember that the Internet is a collection of networks, not a single network. And that means that each broadband provider can either add to the benefits that the Internet delivers to Americans—by maintaining Internet openness and by extending the reach of broadband networks—or it can threaten those benefits—by restricting its customers from the Internet and preventing edge providers from reaching consumers over robust, fast and continuously improving networks. This is a real threat, not merely a hypothetical concern.

6. In its 2010

Order,

the Commission found that providers of broadband Internet access service had three types of incentives to limit Internet openness. First, broadband providers may have economic incentives to block or disadvantage a particular edge provider or class of edge providers. Second, broadband providers may have incentives to increase revenues by charging edge providers for access or prioritized access to the broadband provider's end users. In particular, excessive fees could reduce edge provider entry, suppress innovation, and depress consumer demand. Third, if providers could profitably charge edge providers they would have an incentive “to degrade or decline to increase the quality of service they provide to non-prioritized traffic.”

7. Those threats are even more important today because Americans and American businesses have become even more dependent on the Internet. For example, according to the Pew Research Internet Project, as of January 2014, 87 percent of Americans used the Internet, compared to 14 percent in 1995. And it is a critical route of commerce, supporting an e-commerce marketplace that now boasts U.S. revenues of $263.3 billion.

8. Of particular concern are threats to American innovation. In “the end-to-end architecture, different economic actors can independently choose their innovation projects.” Innovation is the chief driver of American economic growth, which means that all Americans lose if the opportunity to innovate is curbed. For example, an economic study originally released in February 2012 and updated in July 2013 reported that the app economy is responsible for roughly 752,000 jobs in the United States, which is an increase from zero in 2007 when the iPhone was introduced. But equally important are the jobs that could be—but might not be—created if edge innovation and investment were to be chilled by doubt that the Internet will remain open or, even worse, if openness were defeated.

9. Although the Commission has emphasized for almost a decade the importance of legally enforceable standards, the United States Court of Appeals for the District of Columbia Circuit has twice invalidated the Commission's attempts, most recently in

Verizon

v.

FCC

, decided this January. It is in the absence of these protections for the open Internet that the Commission must act to ensure that new legally enforceable rules are put in place. That is a gap that must be closed as quickly as possible.

10. The remainder of the NPRM proceeds as follows. First, we generally propose to retain the definitions and scope of the 2010 rules. Second, we tentatively conclude that the Commission should enhance the transparency rule that was upheld by the D.C. Circuit so that the public and the Commission have the benefit of sunlight on broadband provider actions and to ensure that consumers and edge providers—indeed, the Internet community at large—have the information they need to understand the services they are receiving and to monitor practices that could undermine the open Internet. Third, we tentatively conclude that the Commission should adopt the text of the no-blocking rule from the

Open Internet Order

with a revised rationale, in order to ensure that all end users and edge providers can enjoy the use of robust, fast and dynamic Internet access. Fourth, and where conduct would otherwise be permissible under the no-blocking rule, we propose to create a separate screen that requires broadband providers to adhere to an enforceable legal standard of commercially reasonable practices, asking how harm can best be identified and prohibited and whether certain practices, like paid prioritization, should be barred altogether. Fifth, we propose a multi-faceted dispute resolution process to provide effective access for end users, edge providers, and broadband network providers alike and the creation of an ombudsperson to act as a watchdog to represent the interests of consumers, start-ups, and small businesses. Sixth, and finally, we ask how either Section 706 or Title II (or other sources of legal authority such as Title III for mobile services) could be applied to ensure that the Internet remains open.

II. Background

11. Today's NPRM rests upon over a decade of consistent action by the Commission to protect and promote the Internet as an open platform for innovation, competition, economic growth, and free expression. At the core of all of these Commission efforts has been a view endorsed by four Chairmen and a majority of the Commission's members in office during that time: That FCC oversight is essential to protect the openness that is critical to the Internet's success. In recognition of this, the Commission has demonstrated a steadfast commitment to safeguarding that openness.

12. In 2004, former Chairman Michael Powell first articulated basic guiding principles for preserving Internet freedom in an address at Silicon Flatirons. Chairman Powell recognized that “consumers' hunger for an ever-expanding array of high-value content, applications, and devices” fueled investment in broadband networks as the “impressive generators of economic growth, innovation, and empowerment.” He explained that “ensuring that consumers can obtain and use the content, applications and devices they want . . . is critical to unlocking the vast potential of the broadband Internet.”

13. A year later, reinforcing Chairman Powell's guidance, the Commission unanimously approved the

Internet Policy Statement

setting forth four general Internet policy principles intended “[t]o encourage broadband deployment and preserve and promote the open and interconnected nature of the Internet.” Specifically, subject to “reasonable network management,” the principles entitle consumers to (1) “access the lawful Internet content of their choice;” (2) “run applications and use services of their choice, subject to the needs of law enforcement;” (3) “connect their choice of legal devices that do not harm the network;” and (4) enjoy “competition among network providers, application and service providers, and content providers.”

14. The Commission incorporated these open Internet principles in a series of merger proceedings. In 2005, the Commission conditioned approval of the SBC/AT&T and Verizon/MCI mergers on the merged entities' compliance with the

Internet Policy Statement.

Although the Commission did not adopt any formal open Internet conditions on the Adelphia/Time Warner/Comcast transactions, the Commission made clear that its

Internet

Policy Statement

“contains principles against which the conduct of Comcast [and] Time Warner . . . can be measured.” So too, in 2006, the Commission accepted the AT&T and BellSouth commitment to “maintain a neutral network and neutral routing in [the merged entity's] wireline broadband Internet access service,” as a formal condition of the merger. Likewise, in the 2011 Comcast-NBCU merger, the Commission adopted the commitments of the merged entity to not “prioritize affiliated Internet content over unaffiliated Internet content . . . [or] treat affiliated network traffic differently from unaffiliated network traffic” as well as to comply with the Commission's open Internet rules, regardless of the effect of “any judicial challenge” affecting those rules.

15. The Commission likewise incorporated openness principles for mobile services, adopting an open platform requirement for licensees in the Upper 700 MHz C Block in 2007. Specifically, the rules require Upper 700 MHz C-Block licensees to allow customers, device manufacturers, third-party application developers, and others to use or develop the devices and applications of their choice for Upper 700 MHz C-Block networks, provided those devices and applications meet all applicable regulatory requirements and comply with reasonable conditions related to management of the wireless network (i.e., do not cause harm to the network). Further, the Commission prohibited Upper 700 MHz C-Block licensees from disabling features or functionality in handsets where such action is not related to reasonable network management and protection, or compliance with applicable regulatory requirements.

16. Also in 2007, the Commission unanimously adopted the

Broadband Industry Practices Notice of Inquiry,

explaining that vigilance and a willingness to act were necessary to keep the Internet open. The

Broadband Industry Practices Notice

specifically sought comment on whether the

Internet Policy Statement

should be amended or expanded.

17. Meanwhile, the Commission applied open Internet principles in the context of particular enforcement proceedings. Just before the Commission adopted the

Internet Policy Statement,

the Enforcement Bureau had entered into a consent decree with Madison River Communications, a telephone company and provider of digital subscriber line (DSL) service, arising from complaints by Vonage that Madison River was blocking ports that were typically used by Vonage customers to make Voice over Internet Protocol (VoIP) telephone calls. The consent decree required Madison River to stop blocking VoIP ports and refrain from otherwise inhibiting customers from using the VoIP applications of their choice.

18. In 2007, several parties filed complaints with the Commission alleging that Comcast was interfering with its customers' use of peer-to-peer applications in violation of the

Internet Policy Statement.

Such applications allow users to share large files directly with one another without going through a central server, but also can consume significant amounts of bandwidth. In response, Comcast asserted that its conduct was a reasonable network management practice necessary to ease congestion. The Commission disagreed and, in a 2008 Order, concluded that the company's practice “contravene[d] . . . federal policy” by “significantly imped[ing] consumers' ability to access the content and use the applications of their choice.” As the Commission explained, Comcast's “practice unduly squelch[ed] the dynamic benefits of an open and accessible Internet,” harm that was further compounded by Comcast's failure to disclose its practice to its customers. In the

Comcast Order,

the Commission asserted ancillary jurisdiction under Title I of the Communications Act and concluded that it could resolve the dispute through adjudication rather than rulemaking.

19. Comcast challenged that decision in the D.C. Circuit, arguing (among other things) that the Commission lacked authority to prohibit a broadband Internet service provider from engaging in discriminatory practices that violate the four principles the Commission announced in 2005. On April 6, 2010, the D.C. Circuit granted Comcast's petition for review and vacated the Commission's enforcement decision. As to Section 706 of the Telecommunications Act of 1996, the court noted that the agency had previously interpreted Section 706 as not constituting a grant of authority and held that the Commission was bound by that interpretation for purposes of the case.

20. While the Comcast case was pending, the Commission issued a Notice of Proposed Rulemaking seeking comment on whether the Commission should codify the four principles stated in the

Internet Policy Statement,

plus proposed nondiscrimination and transparency rules, all subject to reasonable network management.

21. In December 2010, the Commission released the

Open Internet Order,

adopting three basic rules grounded in the Commission's prior decisions and broadly accepted Internet norms. First, the

Order

imposed a transparency rule, requiring both fixed and mobile providers to “publically disclose accurate information regarding the network management practices, performance, and commercial terms” of their broadband Internet access service. The rule specified that such disclosures be “sufficient for consumers to make informed choices regarding the use of such services and for content, application, service, and device providers to develop, market, and maintain Internet offerings.” Second, the

Order

adopted anti-blocking requirements. The rule barred fixed providers from blocking “lawful content, applications, services, or non-harmful devices subject to reasonable network management.” It prohibited mobile providers from blocking “consumers from accessing lawful Web sites,” as well as “applications that compete with the provider's voice or video telephony services,” subject to “reasonable network management.” Third, the

Order

adopted an anti-discrimination rule for fixed providers, barring them from “unreasonably discriminat[ing] in transmitting lawful network traffic,” subject to “reasonable network management.”

22. Verizon challenged the

Open Internet Order

in the D.C. Circuit on several grounds. It argued that the Commission lacked statutory authority to adopt the rules, that the blocking and non-discrimination rules violated the Communications Act by imposing common carriage regulation on an information service, that the

Order

was arbitrary and capricious, and that the rules violated the First and Fifth Amendments to the U.S. Constitution.

23. On January 14, 2014, the D.C. Circuit ruled on Verizon's challenge to the

Open Internet Order.

As discussed further below, the court upheld the Commission's reading that Sections 706(a) and (b) of the Telecommunications Act grant the Commission affirmative authority to encourage and accelerate the deployment of broadband capability to all Americans through, among other things, measures that promote competition in the local telecommunications market or remove barriers to infrastructure investment. The court further held that the Commission could utilize that Section 706 authority to regulate broadband Internet access service. It concluded that the Commission had adequately justified the adoption of open Internet rules by finding that such rules would preserve and facilitate the “virtuous

circle” of innovation, demand for Internet services, and deployment of broadband infrastructure and that, absent such rules, broadband providers would have the incentive and ability to inhibit that deployment. The court therefore rejected Verizon's challenge to the transparency rule. However, the court struck down the “anti-blocking” and “anti-discrimination” rules, explaining that the Commission had chosen an impermissible mechanism by which to implement its legitimate goals. Specifically, the court held that the Commission had imposed

per se

common carriage requirements on providers of Internet access services. Such treatment was impermissible because the Commission had classified fixed broadband Internet access service as an information service, not a telecommunications service, and had classified mobile broadband Internet access service as a private mobile service rather than a commercial mobile service. The court remanded the case to the Commission for further proceedings consistent with its opinion.

24. Today, we respond directly to that remand and propose to adopt enforceable rules of the road, consistent with the court's opinion, to protect and promote the open Internet. As the above history demonstrates, our action builds on the foundation begun under Chairman Powell, continued under Chairmen Martin and Genachowski, and reinforced by a decade of Commission policy.

III. Discussion

A. The Continuing Need for Open Internet Protections

1. An Open Internet Promotes Innovation, Competition, Free Expression, and Infrastructure Deployment

25. In the

Open Internet Order,

the Commission reiterated the conclusion underlying its prior policies—that the Internet's openness promotes innovation, investment, competition, free expression and other national broadband goals. The Commission also found that the Internet's openness is critical to its ability to serve as a platform for speech and civic engagement and can help close the digital divide by facilitating the development of diverse content, applications, and services. Further, the

Order

found that the benefits of Internet openness—increased consumer choice, freedom of expression, and innovation—applied to end users accessing the Internet using mobile services as well as fixed services.

26. In the

Open Internet Order,

the Commission specifically found that the Internet's openness enabled a “virtuous circle of innovation in which new uses of the network—including new content, applications, services, and devices—lead to increased end-user demand for broadband, which drives network improvements, which in turn lead to further innovative network uses.” For example, the Commission explained that innovative streaming video applications and independent sources of video content have spurred end-user demand, which, in turn, has led to network investments and increased broadband deployment. By contrast, the Commission reasoned, “[r]estricting edge providers' ability to reach end users, and limiting end users' ability to choose which edge providers to patronize, would reduce the rate of innovation at the edge and, in turn, the likely rate of improvements to network infrastructure.” As discussed further below, the Commission found that, despite the advantages of the virtuous circle, broadband providers have short-term incentives to limit openness, generating harms to edge providers and users, among others. Thus, the risk of broadband provider practices that may reward them in the short term but over the long run erode Internet openness threatens to slow or even break the virtuous circle—chilling entry and innovation by edge providers, impeding competition in many sectors, dampening consumer demand, and deterring broadband deployment—in ways that may be irreversible or very costly to undo. Also, innovation that does not occur due to lack of Internet openness may be hard to detect.

27. The

Open Internet Order

acknowledged that there were tradeoffs to consider in adopting the 2010 rules. The Commission concluded, however, that any small costs of imposing the rules were outweighed by the positive effect on network investment from the preservation of the openness that drives the virtuous circle, as well as the increased certainty in continued openness under the rules.

28. The D.C. Circuit held that “the Commission [had] more than adequately supported and explained its conclusion that edge provider innovation leads to the expansion and improvement of broadband infrastructure.” The court also found “reasonable and grounded in substantial evidence” the Commission's finding that Internet openness fosters the edge provider innovation that drives the virtuous circle.

29. We believe that these findings, made by the Commission in 2010 and upheld by the court, remain valid. If anything, the remarkable increases in investment and innovation seen in recent years—while the rules were in place—appear to have borne out much of the Commission's view. Both within the network and at its edges, investment and innovation have flourished while the open Internet rules were in force.

30. According to a June 2013 report by the White House Office of Science and Technology Policy, for example, nearly $250 billion in private capital has been invested in U.S. wired and wireless broadband networks since 2009. USTelecom reports that broadband capital expenditures have risen steadily, from $64 billion in 2009 to $68 billion in 2012. Wireline providers alone invested $25 billion in 2012. And venture capital financing of “Internet-specific” businesses has doubled in the past four years, from $3.5 billion in 2009 to $7.1 billion in 2013. Annual investment in U.S. wireless networks grew more than 40 percent between 2009 and 2012, from $21 billion to $30 billion, and exceeds investment by the major oil and gas or auto companies.

31. Whole new product markets have blossomed in recent years, and the market for applications has both diversified and exploded. A total of $8.33 billion has been raised since 2007 on mobile media ventures, a majority of the funds ($4.7 billion) to companies that provide software services, including mobile Web development, carrier-backend software, app development, and cloud-based services in the United States. In April 2010, Apple released the first version of the iPad, which launched the tablet market. The number of tablet users in the United States has increased from 9.7 million in 2010 to almost 70 million by the end of 2012, and is projected to grow to more than 160 million (approximately 50 percent of the U.S. population) by 2016. In 2013, over $1 billion in venture capital funding was invested in mobile media startups, and overall app use in 2013 posted 115 percent year-over-year growth. According to CTIA, in 2012 there were more than 20 independent non-carrier mobile application stores, offering over 3.5 million apps for 14 different operating systems. The Wall Street Journal reported in March 2013 that Apple and Google each offered about 700,000 apps, and that application sales were approaching $25 billion.

32. Finally, we have seen tremendous growth in the online voice and video markets. The number of hours Americans spend watching video over the Internet has grown 70 percent since June 2010. Between 2010 and 2013, revenues from online video services

grew 175 percent, from $1.86 billion to $5.12 billion. Real-time entertainment (that is, programming that is viewed as it is delivered, such as video streamed by Netflix and Hulu) grew from 42.7 percent of the downstream fixed access traffic at peak time (generally 8:00 p.m. to 10:00 p.m.) in 2010 to 67 percent of the downstream fixed access traffic at peak time by September 2013. VoIP usage has similarly continued to increase. The number of global over-the-top mobile VoIP subscribers increased by 550 percent in 2012.

33. We have also, however, witnessed a growing digital divide that threatens to undo the work of the Commission's open Internet policies. As certain cities get connected with fiber or other technologies capable of providing broadband speeds of 25 Mbps up to 1 Gigabit, rural America and even some parts of urban America are falling farther and farther behind. Recent data suggest that a majority of Americans living in urban areas (64 percent) have access to at least 25 Mbps/10 Mbps service, while only a substantial minority of Americans residing in rural areas (only 21 percent) have access to that same 25 Mbps/10 Mbps service. We are similarly concerned as to whether advanced networks are being deployed to all Americans in urban areas, as the construction of new networks, especially competitive networks, is an outcome that must be encouraged.

34. In light of developments in the Internet ecosystem since 2010, we wish to refresh the record on the importance of protecting and promoting an open Internet. We seek comment on the current role of the Internet's openness in facilitating innovation, economic growth, free expression, civic engagement, competition, and broadband investment and deployment. Particularly, we seek comment on the role the open Internet rules have had in investment in the broadband marketplace—networks and edge providers alike. We are similarly interested in understanding the role that the open Internet may play in the promotion of competition or in identifying barriers to infrastructure investment that an open Internet may eliminate or lessen. We also seek comment on the role that the open Internet has for public institutions, such as public and school libraries, research libraries, and colleges and universities.

35. Additionally, we seek comment on the impact of the openness of the Internet on free expression and civic engagement. For example, the percentage of Americans who use the Internet reached 87 percent in 2014—an increase of 8 percent from 2010, the year in which the

Open Internet Order

was adopted—marking “explosive adoption” that has had “wide-ranging impacts on everything from: the way people get, share and create news . . . the way they learn; the nature of their political activity; their interactions with government; the style and scope of their communications with friends and family; and the way they organize in communities.” In light of the important role that the Internet now plays as a vehicle for communication of all sorts—both for consumers and content providers—how should we consider the potential impact on social and personal expression of an Internet whose openness was not protected? For example, would there be particular impacts on political speech, on the ability of consumers to use the Internet to express themselves, or on the Internet's role as a “marketplace of ideas” that serves the interests of democracy in general, serving even the interests of those Americans who listen even if they do not actively speak? Are there other ways in which we should understand free-expression interests and whether they may be impaired by a lack of openness?

36. At the same time, we are mindful of the possible tradeoffs the Commission recognized at the time it adopted the

Open Internet Order.

When it adopted the rules in 2010, the Commission's primary focus was on the market between broadband providers and their end-user subscribers. The record contained no evidence of U.S. broadband providers engaging in pay-for-priority arrangements, in which the broadband provider would agree with a third party to directly or indirectly prioritize some traffic over other traffic to reach the provider's subscribers. As such, the Commission found that such arrangements would be a “significant departure from historical and current practice.”

37. In the years since, this second side of the market—between broadband providers and edge providers or other third parties—has gotten increasing attention. In its arguments challenging the

Order,

Verizon expressed interest in pursuing commercial agreements with edge providers to govern the carriage of the edge providers' traffic. We also note that such arrangements between broadband and edge providers have begun to emerge. In January 2014, for example, AT&T launched a new sponsored data service, in which an edge provider enters an agreement with AT&T to sponsor and pay for data charges resulting from eligible uses of the sponsor's content by an AT&T mobile subscriber.

38. We seek comment on the potential for, and development of, new business arrangements in the market between broadband providers and edge providers. What does the multi-sided market look like, and what are its effects on Internet openness? Do some types of broadband and edge provider arrangements (or aspects of such arrangements) raise greater concerns about Internet openness than others?

2. Broadband Providers Have the Incentive and Ability To Limit Openness

39. The

Open Internet Order

found that broadband Internet providers had the incentives and ability to limit Internet openness, and that they had done so in the past. And the D.C. Circuit found that the Commission “adequately supported and explained” that absent open Internet rules, “broadband providers represent a threat to Internet openness and could act in ways that would ultimately inhibit the speed and extent of future broadband deployment.” As discussed further below, we seek to update the record to reflect marketplace, technical, and other changes since the 2010

Open Internet Order

was adopted that may have either exacerbated or mitigated broadband providers' incentives and ability to limit Internet openness. We seek general comment on the Commission's approach to analyzing broadband providers' incentives and ability to engage in practices that would limit the open Internet, as well as more targeted comment as addressed below.

40. As noted above, the Commission has pursued policies to safeguard Internet openness for over a decade. Thus, while the number of existing cases has been relatively few, we believe this to be primarily due to the fact that the Commission has had policies in place during the period in question that it has been ready to enforce. This is different from the experience under the European legal framework, which for the most part has not contained rules or policies prohibiting blocking and discriminatory practices like the Commission's open Internet regulatory policies. In the absence of such rules and policies, commenters note more instances of broadband providers engaging in some level of restriction in Europe than the Commission has witnessed in the United States under its open Internet policies. The European Parliament voted to adopt net neutrality rules in April 2014 that will now be considered by the 28 European Union Member States in order to become binding regulation. To date, among European countries only the

Netherlands and Slovenia have net neutrality regulations. For example, a survey conducted by the Body of European Regulators for Electronic Communications (BEREC) shows that European Internet service providers reported engaging in specific restrictions such as traffic degradation as well as blocking and throttling when accessing “specific applications (such as gaming, streaming, email or instant messaging service) and, to a much lesser extent, when [accessing] specific content and application providers.” We seek comment on this analysis and ask whether there is some other explanation to account for this phenomenon.

41. We also note that concerns related to the open Internet rules and norms have continued to occur. For example, in 2012, the Commission reached a $1.25 million settlement with Verizon for refusing to allow tethering apps on Verizon smartphones, based on openness requirements attached to Verizon's Upper 700 MHz C-Block license. In the same year, consumers also complained when AT&T refused to permit Apple's FaceTime iPhone and iPad application to use its mobile network, restricting its use to times when the end user was connected to Wi-Fi and thus to another broadband provider, although the Commission did not conclude whether such a practice violated our open Internet principles. We seek identification of, and comment on, actions taken by broadband providers—both domestically and internationally—since the adoption of the

Open Internet Order

that have threatened or could potentially threaten the Internet's openness. How should such incidents inform how we craft our rules on remand?

a. Economic Incentives and Ability

42. In the

Open Internet Order,

the Commission found that providers of broadband Internet access service had multiple incentives to limit Internet openness. The

Order

concluded that the threat of broadband provider interference with Internet openness would be exacerbated by—but did not depend on—such providers possessing market power over potential subscribers in their choice of broadband provider. However, the Commission found that most residential customers have only one or two options for wireline broadband Internet access service, increasing the risk of market power, and found the future of mobile Internet access service as a competing substitute remained unclear. Moreover, the Commission emphasized that customers may incur significant costs in switching from one provider to another, thus creating “terminating monopolies” for content providers needing high-speed broadband service to reach end users.

43. The D.C. Circuit found that the Commission's assessment of broadband providers' incentives and economic ability to threaten Internet openness was not just supported by the record but also grounded in “common sense and economic reality.” It affirmed the Commission's conclusions that vertically integrated broadband providers have incentives to interfere with competitive services and that broadband providers generally have incentives to accept fees from edge providers. And the court cited with approval the Commission's conclusion that a broadband provider would be unlikely to fully account for the harms resulting from such practices. The court also upheld the agency's conclusion that such incentives could “produce widespread interference with the Internet's openness in the absence of Commission action.” Finally, the court agreed that the Commission need not engage in a market power analysis to justify its rules, explaining that broadband providers' ability to block or disadvantage edge providers depended on “end users not being fully responsive to the imposition of such restrictions,” not on “the sort of market concentration that would enable them to impose substantial price increases on end users.”

44. We seek to update the record underlying the

Open Internet Order'

s conclusion that broadband providers have incentives and the economic ability to limit Internet openness in ways that threaten to weaken or break the virtuous circle. How have changes in the marketplace or technology since 2010 affected broadband providers incentives and economic ability to engage in such practices? To what extent do broadband providers today have economic incentives and mechanisms to block or disadvantage a particular edge provider or class of edge providers? To what extent do vertically integrated providers have particularized incentives to discriminate—on price, quality, or other bases—in favor of affiliated products? What are broadband providers' incentives to increase revenues by charging edge providers for access or prioritized access to the broadband provider's end users? Are there features of the Internet ecosystem that facilitate or impede a broadband provider's ability to internalize the harms caused by practices that limit openness? Are there justifications for charging fees to edge providers that were not present in 2010? We seek comment on these and other economic incentives and abilities that broadband providers may have to limit openness.

45. We generally seek comment on what economic tools broadband providers utilize to manage traffic on their networks. Broadband providers may address traffic management through commercial terms and conditions on end users, such as pricing for different levels of throughput or through the use of “data caps.” To what extent and in what ways do broadband providers use such tools to manage traffic, such as by excluding certain content from such an end user data cap? Might these tools be used to exploit market power or reduce competition?

46. In addition, we seek comment on end users' ability to switch providers if a particular broadband service does not meet their needs. What is the extent of switching costs, and how do switching costs affect the incentives and economic ability of providers to limit Internet openness? As discussed in the

Open Internet Order

and affirmed by the D.C. Circuit, both edge providers seeking access to end users and end users seeking access to edge providers are subject to the gatekeeper effect of a retail broadband provider. Absent multi-homing, an end user has only one option to reach a given edge provider's content. To reach any given end user, an edge provider must ensure that it or its broadband provider can reach the end user's broadband provider. Terms and conditions, price, or lack of other broadband providers, among other factors, can raise switching costs to the point where switching is inefficient, infeasible, or even impossible. We seek comment on these conclusions. To what extent do consumers face significant switching costs in choosing to change broadband access providers? Which services, if any, are most vulnerable to a broadband provider's market power because of the inability to effectively reach subscribers through other means? To the extent that such switching costs exist, to what extent, if any, are they exacerbated by additional factors, such as the difficulty consumers may have in effectively monitoring the extent to which edge providers have difficulty reaching them, the number of effective substitutes a consumer may have among broadband providers, or the impact of bundled pricing and switching costs attached to the purchase or use of bundled services, such as a combined offering of broadband access along with video services and voice telephony? Would all likely alternatives have similar incentives to limit openness, possibly for a different set of services? We also seek comment on an end user's ability to switch broadband providers in

response to specific broadband provider practice, for example a broadband provider's decision to charge an edge provider to reach the customer. Are switching costs relevant to an edge provider's interaction with a broadband provider and, if so, how? Finally, what are the implications when consumers have no ability to switch providers because there is only one provider offering service to the consumer's location?

47. We also seek comment on the state of competition in broadband Internet access service, and its effect on providers' incentives to limit openness. We seek comment on the appropriate view of whether broadband services with substantially different technical characteristics are competitive substitutes. For example, how should we regard the ability of DSL service with speeds of, for example, 3 Mbps downstream and 768 kbps upstream to constrain conduct by a provider of high-speed broadband with speeds of, for example, 25 Mbps downstream and 3 Mbps upstream (or higher)? How should we regard the geography of broadband competition? From an end user's point of view, do national practices or market shares have any impact on edge providers, without regard to the definition of a geographic market?

48. In the fixed broadband context, we have seen evidence of limited choice between broadband providers in many areas of the country. As the speed threshold increases to 6 Mbps downstream and 1.5 Mbps upstream, the number of households that are located in census tracts with at least three providers that report serving customers at those higher speeds dips down to a mere 34 percent. In many areas of the country, with respect to fixed Internet access, consumers may have only limited options, i.e., one or two fixed providers available. We seek comment on the extent to which commercial practices differ in places where consumers have only one choice of a wireline broadband provider, two choices, or more than two choices. We therefore also seek comment as to whether increased spectrum availability and technological developments in the mobile broadband marketplace, e.g., growth in 4G/LTE availability, would affect the market power of fixed broadband providers.

49. We further seek general comment on our approach towards analyzing broadband provider incentives. Under the Commission's reading, which the court upheld, our Section 706 authority is not predicated on a finding of market power, specifically, that broadband providers need not be found to be “benefiting from the sort of market concentration that would enable them to impose substantial price increases on end users.” Nor do we believe that the open Internet concerns described above solely arise in markets where broadband providers possess market power over subscriber prices. We recognize, however, that the presence or absence of market power—over broadband subscriptions, over end users once they have chosen a broadband provider, and over content providers who wish to reach those end users—may inform an understanding of a broadband provider's behavior in the Internet marketplace and its incentives to engage in practices that limit Internet openness. Thus, we seek comment on whether the Commission should engage in a market power analysis with respect to broadband providers and, if so, how we should go about that analysis.

50. We further seek comment on whether there are other economic theories that the Commission should consider to better understand and assess broadband providers' incentives to engage in practices that affect the Internet's openness. For example, do broadband providers have an incentive to extract rents from upstream services whose price significantly exceeds the marginal cost of delivering those services to an additional customer? Are there positive network effects from widespread adoption of broadband services by consumers that we should recognize? Do edge providers that incur significant sunk costs in the delivery of their output face “lock-in” problems if they become dependent on a particular pathway to their current or potential users? In the absence of open Internet protections, would those edge providers face uncertainty that would hamper their ability to attract capital? Does the trend towards the caching of content closer to end users either increase such lock-in problems or, separately, limit the number of pathways by which an edge provider's output can effectively reach current or potential end users? We seek comment on whether and how other theories and new evidence may supplement or supplant the original

Open Internet Order

analysis.

b. Technical Ability

51. The

Open Internet Order

likewise found that broadband providers have the technical ability to limit Internet openness. As the

Order

explained, increasingly sophisticated network management tools enable providers to identify and differentiate the treatment of traffic on their own broadband Internet access service networks. We recognize that broadband providers also have the ability to impact traffic and congestion in ways that go beyond the management of traffic within their networks. In particular, we understand that broadband providers also manage traffic in the context of their relationships with other autonomous networks. For example, traffic and congestion may be affected by interconnection arrangements for the exchange of Internet traffic between two networks as well as CDN-type arrangements in which third parties place equipment in or adjacent to the providers' network. As discussed in Section III.B, the rules we propose today reflect the scope of the 2010

Open Internet Order,

which applied to broadband provider conduct within its own network. The D.C. Circuit agreed, finding “little dispute that broadband providers have the technological ability to distinguish between and discriminate against certain types of Internet traffic.” We seek comment on this general conclusion and on how this ability to impose restrictions on edge providers and end users has increased or decreased with further developments in technology or business practices since the

Open Internet Order.

We also seek comment on provider abilities that were not identified in the

Open Internet Order

or elsewhere in this NPRM, including identifying the particular ability and its relevance to this proceeding. For example, one commenter has expressed concern about broadband providers offering prioritized service in a manner that may harm rural or minority end users. Is it technically feasible for a broadband provider to block or degrade based on the location or neighborhood of the end user? Is it likely that it would do so? If so, how should our rules address this concern?

52. We seek comment on broadband providers' ability to limit Internet openness through management of traffic on their own networks and limitations imposed on their end users. Providers generally have the ability to manage traffic and congestion on their own networks and have developed a number of techniques to do so. For example, a provider can use technical methods like packet classification, admission control and resource reservation, rate control and traffic shaping, as well as packet dropping and packet scheduling to identify and manage traffic on its network. Such techniques may provide additional ability to discriminate in a way that is largely opaque to edge providers and end users. We note that other forms of discrimination in the Internet ecosystem may exist, but such conduct is beyond the scope of this

proceeding. We seek comment on the technical tools broadband providers can and do use to manage traffic on their networks.

53. The

Open Internet Order

found that providers had in fact used their ability to limit openness, citing several instances where broadband providers had been subject to Commission enforcement proceedings for violating open Internet norms. In the

Order,

the Commission cited the Madison River case, the Comcast-BitTorrent case, as well as various mobile wireless Internet providers' refusal to allow customers to use competitive payment applications, competitive voice applications, and remote video applications. The Commission also noted other allegations of blocking or degrading peer-to-peer traffic, but did not determine whether those specific practices violated open Internet principles. The D.C. Circuit noted these examples along with the Commission's as persuasive justification for adopting open Internet rules.

B. Scope of the Rules

54. The rules adopted in the

Open Internet Order

applied to “broadband Internet access service,” which was defined 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. This term also encompasses any service that the Commission finds to be providing a functional equivalent of the service described in the previous sentence, or that is used to evade the protections set forth in this Part.

The

Order

defined “mass market” to mean a service marketed and sold on a standardized basis to residential customers, small businesses, and other end-user customers such as schools and libraries, including services purchased with support of the E-rate program.

55. The

Verizon

decision upheld the Commission's regulation of broadband Internet access service pursuant to Section 706 and did not disturb this aspect of the

Open Internet Order.

Thus, the definition of “broadband Internet access service” remains a part of the Commission's regulations. We tentatively conclude that we should retain this definition without modification. We seek comment on that conclusion. The court in

Verizon

also stated that, apart from the service provided to end users, “broadband providers furnish a service to edge providers, thus undoubtedly functioning as edge providers' `carriers.' ” We seek comment on whether this should be identified as a separate service and, if so, how we should define that service and what the regulatory consequences are, if any, of that definition.

56. We also seek comment on the following issues that arise in connection with the scope of the application of the rules we propose today.

57.

Specifically Identified Services.

The

Open Internet Order

excluded certain categories of services from the definition of broadband Internet access service, such as dial-up Internet access service and multichannel video programming, the latter of which the Commission understood not to meet the definition of “provid[ing] the capability to transmit data to and receive data from all or substantially all Internet endpoints.” We tentatively conclude that we would maintain this approach, but seek comment on whether we should change this conclusion.

58.

Enterprise Services.

The

Open Internet Order

excluded enterprise service offerings, which are typically offered to larger organizations through customized or individually negotiated arrangements. Similarly, the

Open Internet Order

excluded virtual private network services, hosting, or data storage services. The Commission explained that such services “typically are not mass market services and/or do not provide the capability to transmit data to and receive data from all or substantially all Internet endpoints.” We also note that our rules apply only as far as the limits of a broadband provider's control over the transmission of data to or from its broadband customers. The

Open Internet Order

also established that the rules did not apply to: (1) Edge provider activities, such as the provision of content on the Internet; and (2) premise operators, entities like coffee shops or bookstores, which offer Internet access services to their patrons. We tentatively conclude that we would maintain this approach, but seek comment on whether we should change this conclusion.

59.

Internet Traffic Exchange.

The

Open Internet Order

explained that its rules did not apply beyond “the limits of a broadband provider's control over the transmission of data to or from its broadband customers.” In other words, the

Order

applied to a broadband provider's use of its own network but did not apply the no-blocking or unreasonable discrimination rules to the exchange of traffic between networks, whether peering, paid peering, content delivery network (CDN) connection, or any other form of inter-network transmission of data, as well as provider-owned facilities that are dedicated solely to such interconnection. Thus, the

Order

noted that the rules were not intended “to affect existing arrangements for network interconnection, including existing paid peering arrangements.” We tentatively conclude that we should maintain this approach, but seek comment on whether we should change our conclusion. Some commenters have suggested that we should expand the scope of the open Internet rules to cover issues related to traffic exchange. We seek comment on these suggestions. For example, how can we ensure that a broadband provider would not be able to evade our open Internet rules by engaging in traffic exchange practices that would be outside the scope of the rules as proposed?

60.

Specialized Services.

In the

Open Internet Order,

the Commission recognized that broadband providers may offer “specialized services” over the same last-mile connections used to provide broadband service. The Commission stated that these services can benefit end users and spur investment, but also noted the potential for specialized services to jeopardize the open Internet. Due to these concerns, the Commission stated that it would monitor these services, but that its rules would “not prevent broadband providers from offering specialized services such as facilities-based VoIP.” We tentatively conclude that we should maintain this approach and continue to closely monitor the development of specialized services to ensure that broadband providers are not using them to bypass the open Internet rules or otherwise undermine a free and open Internet. We seek comment on this tentative conclusion. How can we ensure that the specialized services exception is not used to circumvent our open Internet rules? In addition, should specialized services be addressed within the scope of the “commercially reasonable” rule either as a safe harbor or among the factors for consideration? Should the Commission define “specialized services”? The

Open Internet Order

did not formally define “specialized services,” but described them as “services that share capacity with broadband Internet access service over providers' last-mile facilities.” By contrast, the net neutrality rules that the European Parliament voted to adopt in April 2014 included a specific definition for “specialized services” as “an electronic communications service optimised for specific content, applications or services, or a combination thereof, provided over logically distinct capacity, relying on

strict admission control, offering functionality requiring enhanced quality from end to end, and that is not marketed or usable as a substitute for internet access service.”

61.

Reasonable Network Management.

Although the

Open Internet Order'

s definition of broadband Internet access service did not itself address reasonable network management, the concept was incorporated into each of the 2010 rules. Specifically, the transparency rule “does not require public disclosure of competitively sensitive information or information that would compromise network security or undermine the efficacy of reasonable network management practices.” The 2010 no-blocking rule was made expressly subject to “reasonable network management.” And the unreasonable discrimination rule expressly provided for reasonable network management, which was defined as follows: “A network management practice is reasonable if it is appropriate and tailored to achieving a legitimate network management purpose, taking into account the particular network architecture and technology of the broadband Internet access service.” The Commission further concluded that it would “develop the scope of reasonable network management on a case-by-case basis.” We tentatively conclude that we should continue the same approach. We seek comment on this conclusion as applied to an enhanced transparency rule, our re-adoption of the no-blocking rule, and the proposal to adopt a “commercially reasonable” standard. How can we ensure that the ability of providers to engage in reasonable network management is not used to circumvent the open Internet protections implemented by our proposed rules?

62.

Mobile Services.

The

Open Internet Order

also adopted definitions for “fixed” and “mobile” Internet access service. It defined “fixed broadband Internet access service” to expressly include “broadband Internet access service that serves end users primarily at fixed endpoints using stationary equipment, . . . fixed wireless services (including fixed unlicensed wireless services), and fixed satellite services.” It defined “mobile broadband Internet access service” as “a broadband Internet access service that serves end users primarily using mobile stations.” The impact of this distinction varied by rule. The transparency rule applies equally to both fixed and mobile broadband Internet access service. The no-blocking rule applied a different standard to mobile broadband Internet access services, and mobile Internet access service was excluded from the unreasonable discrimination rule. We tentatively conclude that we should maintain the same approach in today's NPRM. We seek comment on this approach, which is discussed in more detail in the context of each of the proposed rules below. We recognize that there have been significant changes since 2010 in the mobile marketplace, including how mobile providers manage their networks, the increased use of Wi-Fi, and the increased use of mobile devices and applications. We seek comment on whether and, if so, how these changes should lead us to revisit our treatment of mobile broadband service. Specifically, we seek comment below on whether the no-blocking rule should continue to distinguish between fixed and mobile broadband and whether, under the commercially reasonable rule, mobile networks should be subject to the same totality-of-the-circumstances test as fixed broadband. In addition, how should the definitions of “fixed” and “mobile” services be applied to a fixed broadband provider's commercially deployed Wi-Fi service that is made available to the provider's fixed broadband customers? How should such changes affect our treatment of reasonable network management for mobile providers? Similarly, how should we treat mobile services that are deployed and/or marketed as express substitutes for traditional telecommunications or broadband services? Finally, have there been changes in technology or the marketplace for the provision of satellite broadband Internet access service that should lead the Commission to reassess how its rules should apply to such services?

C. Transparency Requirements To Protect and Promote Internet Openness

1. The 2010 Transparency Rule

63. In the

Open Internet Order,

the Commission concluded that effective disclosure of broadband providers' network management practices, performance, and commercial terms of service promotes competition, innovation, investment, end-user choice, and broadband adoption. To that end, the Commission adopted the following transparency rule:

A person engaged in the provision of broadband Internet access service shall 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 and for content, application, service, and device providers to develop, market, and maintain Internet offerings.

64. The Commission determined that the best approach to implementing the transparency rule was to allow broadband providers flexibility, while providing guidance concerning effective disclosure. The Commission stated that “effective disclosures will likely include” information concerning “some or all” of the following topics: (1) Network practices, including congestion management, application-specific behavior, device attachment rules, and security measures; (2) performance characteristics, including a general description of system performance (such as speed and latency) and the effects of specialized services on available capacity; and (3) commercial terms, including pricing, privacy policies, and redress options. In 2011, the Commission's Enforcement Bureau and Office of General Counsel issued advisory guidance to further clarify compliance with the transparency requirements regarding point-of-sale disclosures, service descriptions, security measures, and the extent of required disclosures, while noting that “these particular methods of compliance are not required or exclusive; broadband providers may comply with the transparency rule in other ways.”

65. The D.C. Circuit's decision in

Verizon

v.

FCC

upheld the transparency rule, which remains in full force, applicable to both fixed and mobile providers. In today's NPRM, we inquire as to ways that the transparency rule can be improved, taking into account changes in the nature of the provision of broadband services since 2010. We believe we have ample authority not only for our existing transparency rule, but also for the enhanced transparency rule we propose today, whether the Commission ultimately relies on Section 706, Title II, or another source of legal authority. We seek comment on whether and how—if at all—the source of the Commission's legal authority relied upon to adopt other open Internet rules would affect the authority or authorities that provide the strongest basis for any improvements to the transparency rule or otherwise would inform how we define the goal of transparency in general.

2. Enhancing Transparency To Protect and Promote Internet Openness

66. “Sunlight,” as Justice Brandeis has explained, “is . . . the best of disinfectants.” If designed correctly, disclosure policies are among the most effective and least intrusive regulatory measures at the Commission's disposal.

Applied here, the Commission continues to believe that access to accurate information about broadband provider practices encourages the competition, innovation, and high-quality services that drive consumer demand and broadband investment and deployment. The transparency rule thereby reflects the “virtuous circle” that, in the long term, unites the interests of end users, edge providers, and the broader Internet community. As the Commission explained in the

Open Internet Order,

disclosures under the rule: (1) Help end users make informed choices regarding the purchase and use of broadband services and increase end users' confidence in broadband providers' practices; (2) ensure that edge providers have access to broadband providers' network information necessary to develop innovative new applications and services; and (3) inform the Internet community and the Commission about broadband providers' practices and conduct that could impact Internet openness. In today's NPRM, we seek comment on the effectiveness of the existing transparency rule and on whether and, if so, how the rule should be enhanced to meet its goals with respect to end users, edge providers, the Internet community, and the Commission.

67. Today, we seek general comment on how well the Commission's existing transparency rule is working. We are especially interested in comments that describe the current operation, benefits, and shortcomings of the existing rule, how broadband providers are complying with it, and how we should measure such compliance. We note that an informal review of broadband provider disclosures conducted by Commission staff found that the majority are providing some form of disclosure statements, but that many do not appear to provide all the information the rule was designed to disclose. We are also mindful that the additional rules we propose today to protect Internet openness consistent with the D.C. Circuit's decision may place even greater importance on the extent to which information about broadband providers' practices is disclosed to end users, edge providers, and the Commission. Taking all of that into account, we tentatively conclude that we should enhance the transparency rule to improve its effectiveness for end users, edge providers, the Internet community, and the Commission. We seek comment on this tentative conclusion and on what burdens or compliance issues may be associated with this approach, including for smaller providers.

68.

Tailored disclosures.

In the

Open Internet Order,

the Commission stated that broadband providers may be able to satisfy the transparency rule through use of a single disclosure, and therefore did not require different types of disclosures to different parties such as individual end users, edge providers, the broader Internet community, and the Commission. We have concerns that a single disclosure may not provide the required disclosures in a manner that adequately satisfies the informational needs of all affected parties. For example, some recent research suggests that consumers have difficulty understanding commonly used terms associated with the provision of broadband services. Edge providers, however, may benefit from descriptions that are more technically detailed. We therefore tentatively conclude that it would be more effective to require broadband providers to more specifically tailor disclosures to the needs of these affected parties. We seek comment on this tentative conclusion, on the nature of the disclosures that should be tailored, and on what burdens or compliance issues, if any, may be associated with more targeted disclosures.

a. Transparency to End Users

69. Since the Commission adopted the transparency rule, we have received hundreds of complaints from consumers suggesting that, under the rule, broadband providers may not be providing end user consumers the accurate information they need and have a right to receive. Our analysis of consumer complaints received since the transparency rule took effect shows a significant number of consumer complaints about provider speeds, charges, and other commercial practices that the rule was designed to disclose. In some cases, however, it is difficult to discern whether the consumer's frustration is with slow speeds or high prices generally, or instead with how the service as actually provided differs from what the provider has advertised. Of particular concern to many consumers is that the speed of their service falls short of the advertised speed. Many consumers complain that they have been charged amounts greater than advertised rates, including fees and charges beyond basic rates. We have also received a number of consumer complaints raising questions about the source of slow or congested services. Consumers have also reported surprise at broadband providers' statements about slowed or terminated service based on consumers' “excessive use.” Other consumers report confusion about how data consumption is calculated for purposes of data caps.

70. We seek comment on the extent to which the existing transparency rule is effectively informing end users. We are interested both in what information broadband providers are disclosing to end users and how that information is being disclosed. In addition, we seek comment on the incentives and ability of broadband providers to provide service at lower quality or higher prices than their subscribers expected when they enrolled, and on the incentives and ability of subscribers to choose other options if their broadband providers fail to live up to these expectations. If a subscriber is locked in to a particular provider, how can transparency rules bring the performance of that provider up to the subscriber's expectations?

71. In light of the consumer complaints discussed above, we also consider enhancements to the existing rule with respect to the content, form, and method of broadband providers' disclosures to end users.

72.

Content and Form of Disclosure.

We seek comment on whether there are ways to make the content and format of disclosures more accessible and understandable to end users. With respect to content, should the Commission require the disclosure of specific broadband provider network practices, performance characteristics (e.g., effective download speeds, upload speeds, latency, and packet loss), and/or terms and conditions of service to end users (e.g., data caps)? We are particularly interested in whether there are network practices, performance characteristics, or commercial terms relating to broadband service that are particularly essential but not easily discoverable by end users absent effective disclosure. With respect to format, both academic research and the Commission's experience with consumer issues have demonstrated that the manner in which providers display information to consumers can have as much impact on consumer decisions as the information itself. We therefore seek comment on best practices for displaying and formatting relevant disclosures for end users, including any potential costs and burdens to broadband providers. For example, the Open Internet Advisory Committee (OIAC) has proposed the use of a standardized label for Internet service that includes basic information such as performance speed (i.e., upload and download speed), price (i.e., monthly fee averaged over three years), and usage restrictions (i.e., any points at which the

applicable terms of service change, including data usage caps and any charges, speed reductions, or other penalties for exceeding a cap) that consumers can use to comparison shop for service. Are there lessons we can learn regarding effective disclosure practices from independent consumer research or disclosure in other approaches to standardized labels? Should the information be made available in a machine-readable format, such as XML, that might allow the Commission, industry associations, or other organizations to easily access and synthesize information for consumers?

73.

Network Practices.

With respect to data caps, should we require disclosures that permit end users to identify application-specific usage or to distinguish which user or device contributed to which part of the total data usage? Should we require disclosure of any type of traffic exempted from any data caps, and how end users can find their current consumption levels? Should we require that disclosures explain any restrictions on tethering for mobile devices? Should the Commission expand its transparency efforts to include measurement of other aspects of service such as packet loss, packet corruption, latency, and jitter in addition to upstream and downstream speed? Should the Commission require the reporting of actual achieved results for each category? If providers offer different tiers of service to their end users, should providers be required to make disclosures by tier? What should be the required timing of any such disclosures? Is it important that network practices be disclosed in advance of their implementation?

74.

Method of Disclosure.

The

Transparency Compliance PN

advised broadband providers that they can comply with the point-of-sale disclosure requirement by, for instance, “directing prospective customers at the point of sale, orally and/or prominently in writing, to a web address at which the required disclosures are clearly posted and updated.” We seek comment on whether that approach is adequate or whether the Commission should consider alternative approaches.

b. Transparency to Edge Providers

75. As noted above, the Commission also adopted the transparency rule to ensure that broadband providers would disclose sufficient information to permit “content, application, service, and device providers to develop, market, and maintain Internet offerings.” Some commenters have suggested that current disclosures provide insufficient information for edge providers. We seek comment on how the existing transparency rule is working and how we can enhance its effectiveness with respect to edge providers. Should we view some categories of edge providers, such as start-up companies, as having distinct needs and, if so, what would be the implications for an enhanced transparency rule?

76. We also seek comment on the extent to which the transparency rule does, or should, disclose useful information to providers who seek to exchange traffic with broadband provider networks. In other words, should we view transit, CDN, or other providers engaged in Internet traffic exchange as a class of persons whose interests are similar to those of edge providers who wish “to develop, market, and maintain Internet offerings,” perhaps because they may have such edge providers as their customers? For instance, many edge providers utilize the services of an intermediary CDN, such as Akamai, EdgeCast, Limelight, or Level 3, or cloud service providers such as Amazon, Microsoft, or RackSpace, which provide the servers upon which the applications run and also interconnect directly with broadband providers. Other edge providers bypass these networks and interconnect directly with broadband providers through peering arrangements. Some edge providers, such as Google or Amazon, may act both as content providers for their own services and as CDNs or cloud service providers for other services. We seek comment on whether these subgroups have distinguishable needs for information that could be provided through disclosure and, if so, what kind of information would be most useful.

c. Transparency to the Internet Community and the Commission

77.

The Common Interests of End Users, Edge Providers, and the Broader Internet Community.

We seek comment on the extent to which the existing transparency rule fully reflects the “virtuous circle” that, in the long term, unites the interests of end users, edge providers, the broader Internet community, and the Commission. Are there ways to enhance the transparency rule to further facilitate the virtuous circle? What other disclosures might encourage and improve the deployment of broadband in the United States?

78. We also seek comment—relevant to all stakeholders—on whether and, if so, how the Commission should enhance the existing transparency rule to ensure the effectiveness of, and compliance with, the other rules we propose in today's NPRM. For example, to ensure the effectiveness of the no-blocking rule proposed below, should the Commission mandate that broadband providers disclose—in a more rigorous and consistent way—the expected performance end users can expect from their broadband service? To improve information about broadband provider practices for end users, edge providers, and the broader Internet community, we tentatively conclude that broadband providers must disclose in a timely manner to consumers, edge providers, and the public (and, of course, the Commission) when they make changes to their network practices as well as any instances of blocking, throttling, and pay-for-priority arrangements, or the parameters of default or “best effort” service as distinct from any priority service.

79.

Measuring Broadband Performance.

The

Open Internet Order

requires broadband providers to disclose accurate information regarding network performance for each broadband service they provide. The accuracy and availability of such network performance information is a common linchpin for end users, edge providers, and all stakeholders in the Internet community. As noted in the

Order,

the Commission launched a broadband performance measurement project called “Measuring Broadband America” (MBA) to accurately measure key performance metrics, including baseline connection speed and latency. To satisfy their obligations under the transparency rule, all of the 12 largest fixed broadband providers chose to participate in the measurement program. Last year the Commission expanded its MBA program to include mobile broadband by releasing a Mobile Broadband Speed Test App, an open-source, crowdsourcing program to assess mobile broadband network performance nationwide. The app measures mobile broadband and Wi-Fi network performance and delivers to consumers an in-depth view of key metrics related to their mobile broadband experience. We seek comment on the effectiveness of this approach for providing consumers with useful information regarding the performance of both fixed and mobile broadband networks. We seek comment on whether participation in MBA should continue to satisfy the requirement that actual speeds be disclosed. Are there areas of this program that can be improved to provide more useful information to consumers?

80. More generally, are there more efficient or more comprehensive ways to

measure network performance metrics, including for broadband providers not participating in MBA? For example, could the ability to measure and report network performance be included in the end user's own network modem or residential gateway? Do such functionalities currently exist, or are they in development? Are there academic or other external research organizations that could assist the Commission in collecting and analyzing information about traffic, congestion, and other features of the Internet? Should the Commission mandate the use of monitoring devices, like those used in MBA? How can performance metrics most accurately measure the actual download and upload speeds a consumer can expect to experience, rather than “up to” speeds or “last-mile” performance? Should the Commission look to an external advisory group to aid in the development and feasibility of performance metrics and measurement?

81.

Congestion.

The

Open Internet Order

highlighted the value of providing end users with information about the sources of congestion that might impair the performance of edge-provider services. As the

Open Internet Order

explained, “it is often difficult for end users to determine the causes of slow or poor performance of content, applications, services or devices.” At the same time, the Commission recognized that “congestion management may be a legitimate network management purpose.” But the Commission also emphasized the importance of the disclosure to end users of “descriptions of congestion management practices” including “indicators of congestion” and “the typical frequency of congestion.”

82. Since the 2010

Open Internet Order,

some have suggested that sources of congestion that impact end users may originate beyond the broadband provider's network or in the exchange of traffic between that network and others. An end user's inability to ascertain the source of congestion could lead to confusion, for example, to the filing of an unjustified complaint against a broadband provider (if the source of the congestion were elsewhere) or a mistaken decision by the end user to purchase additional bandwidth to improve performance (again, if the source of congestion were elsewhere). Edge providers and other stakeholders also have expressed a need for greater information about network congestion.

83. In light of these concerns, we tentatively conclude that we should require that broadband providers disclose meaningful information regarding the source, location, timing, speed, packet loss, and duration of network congestion. We seek comment on this tentative conclusion, including on how to implement it in a practical manner that provides meaningful information to end users, edge providers, and other stakeholders without causing undue burden on broadband providers. For example, should the information to be disclosed be based upon a sampling taken at given points in time, and if so, what would be an appropriate interval for such sampling? We note that Cogent has made suggestions about enhancements to the transparency rule along these lines and proposing specific means of implementation, upon which we seek comment. In making the foregoing tentative conclusion and seeking comment on how to implement it, we emphasize that we are positing that the public would be served by additional information concerning the existence and duration of congestion, regardless of its cause, so that there is greater understanding of the impact of that congestion on the performance of a broadband provider's network, if any. We do not, however, propose to expand the scope of the open Internet rules in any fashion to regulate traffic exchange, though, as noted above, we ask for public input on this tentative conclusion.

d. Transparency for Mobile Broadband

84. The Commission currently applies the same transparency requirement to both fixed and mobile providers, reasoning that end users need a clear understanding of “network management practices, performance, and commercial terms, regardless of the broadband platform they use to access the Internet.” We seek comment on how we should assess the effectiveness of the existing rule in the mobile broadband context. For example, most mobile broadband plan offerings have generally had lower data usage limits than those offered for fixed broadband services. Accordingly, do mobile broadband subscribers have an enhanced need to understand, monitor, and more flexibly adjust their mobile data usage needs than the fixed broadband users?

85. We seek comment on whether and, if so, how enhancements to the transparency rule should apply to mobile broadband network providers. Would the enhanced transparency requirements described herein, or others, help meet the information needs of mobile broadband device and application developers as well as the needs of end users? How can we make sure that the disclosure requirements discussed above are appropriate and effective for mobile broadband in view of the many operational factors that may influence performance of mobile broadband networks, including the mobile access technology, the weather, the distance to the serving cell site, the number of users in a cell site, and device capability? Should the nature of disclosure to customers of wireless networks be different if the wireless service is provided by a network as an explicit substitute for copper-based, traditional service, including voice and DSL?

e. Burdens of Enhanced Transparency on Broadband Providers

86. We seek comment on the extent to which adopting enhanced transparency requirements would create particular burdens in either the fixed or the mobile broadband environment and whether and how such burdens would affect the pace of innovation, investment, and growth. How can we achieve the public benefits of enhanced disclosure requirements without imposing unreasonable burdens on the broadband providers? Are there ways to minimize the costs and burdens associated with any enhanced disclosure requirements? Are there ways the Commission or industry associations could reduce any such burdens, for example through the use of a voluntary industry standardized glossary, or through the creation of a dashboard that permits easy comparison of the policies, procedures, and prices of various broadband providers throughout the country?

3. Compliance and Enforcement

87. In the

Open Internet Order,

the Commission noted that a key objective of the transparency rule is to enable the Commission to collect information necessary to assess, report, and enforce the open Internet rules. As discussed further below, we seek comment on how the Commission can best design a process for enforcing the transparency rule that provides certainty, flexibility, and access for all affected parties. Should the Commission permit individuals to report possible noncompliance with our open Internet rules anonymously or take other steps to protect the identity of individuals who may be concerned about retaliation for raising concerns? We propose that the consequences of a failure to comply with our transparency rule should be significant and include monetary penalties. We seek comment on the most effective methods to ensure ongoing compliance with the transparency rule. How can we ensure that these disclosure requirements are as

effective and effectively enforced as disclosure requirements in other areas of the law, such as disclosures to the Securities and Exchange Commission? Should the Commission require broadband providers to certify that they are in compliance with the required disclosures, particularly if the current flexible approach is amended to require more specific disclosures? Should we also require broadband providers to submit reports containing descriptions of current disclosure practices? If so, should we modify our existing process for protecting the confidentiality of competitively sensitive information?

88. We also seek comment on whether the Commission can better promote transparency through its own outreach and reporting mechanisms. Should the Commission establish and make public a list of those broadband providers that block or otherwise limit certain types of traffic? Should the Commission collect and publish information on pay-for-priority arrangements? In what timeframe should the Commission require providers to report such changes in their traffic management policies to the Commission? We invite comment on the merits of these options, and any other suggestions commenters may deem relevant, to ensure full compliance with the transparency rule, including identification of any regulatory burdens this might entail for broadband providers.

D. Preventing Blocking of Lawful Content, Applications, Services, and Nonharmful Devices

89. We believe that, as the Commission found in the

Open Internet Order,

“the freedom to send and receive lawful content and to use and provide applications and services without fear of blocking is essential to the Internet's openness and to competition in adjacent markets such as voice communications and video and audio programming.” The D.C. Circuit acknowledged the validity of this policy rationale for the no-blocking rule adopted in the

Open Internet Order,

but vacated the rule because it found that the Commission had failed to provide a legal rationale under which the prohibition would not impermissibly subject broadband providers to common carriage regulation. To address the ongoing concerns with the harmful effects that blocking of Internet traffic would have on Internet openness, we propose to adopt the text of the no-blocking rule that the Commission adopted in 2010, with a clarification that it does not preclude broadband providers from negotiating individualized, differentiated arrangements with similarly situated edge providers (subject to the separate commercial reasonableness rule or its equivalent). So long as broadband providers do not degrade lawful content or service to below a minimum level of access, they would not run afoul of the proposed rule. We also seek comment below on how to define that minimum level of service. Alternatively, we seek comment on whether we should adopt a no-blocking rule that does not allow for priority agreements with edge providers and how we would do so consistent with sources of legal authority other than Section 706, including Title II. See infra Section III.F. For example, to the extent the Commission relies on Title II, would Sections 201(b) and 202(a) of the Act compel a different result than provision of a minimum level of service? See 47 U.S.C. 201(b) (prohibiting unjust or unreasonable “charges, practices, [or] classifications”); 47 U.S.C. 202(a) (prohibiting “unjust or unreasonable discrimination in charges, practices, classifications, regulations, facilities, or services”).

90. It is important to understand the relationship between the proposed no-blocking and commercial reasonableness rules. Although the proposed no-blocking rule only establishes a minimum level of service, and thus allows room for individualized negotiations, the proposed commercial reasonableness rule separately applies to any and all conduct, including by asking whether paid prioritization can be barred outright and by asking whether to bar practices that harm competition, consumers, and the free exercise of speech.

1. The 2010 No-Blocking Rule

91.

2010 Open Internet Order.

In the

Open Internet Order,

the Commission adopted a no-blocking rule to preserve the openness that was and remains a core expectation of end users. The

Open Internet Order

noted that a no-blocking principle had been broadly accepted since its inclusion in the Commission's 2005

Internet Policy Statement,

and the

Internet Policy Statement

itself reflected expectations and practices of how the Internet should and did work. A more limited variation of the rule applied to mobile broadband providers, due to the operational constraints that affect mobile broadband services, the rapidly evolving nature of the mobile broadband technologies, and the generally greater amount of consumer choice for mobile broadband services than for fixed.

92.

D.C. Circuit Opinion in Verizon

v.

FCC.

The D.C. Circuit struck down the no-blocking rule after finding that the Commission had failed to provide a legal justification that would take the rule out of the realm of impermissible common carriage. The court stated that it was “somewhat less clear” whether the no-blocking rule constituted

per se

common carriage regulation than whether the antidiscrimination rule did. Nonetheless, the court concluded that the no-blocking rule, at least as described in the

Open Internet Order,

required broadband providers to serve edge providers indiscriminately. The no-blocking rule thereby imposed

per se

common carriage rules and thus violated the Communications Act's prohibition on the imposition of common carrier obligations on providers of information services.

93. The court intimated that the no-blocking rule could pass scrutiny, however, if broadband providers could engage in individualized bargaining while subject to the rule. The court reasoned that “if the relevant service that broadband providers furnish is access to their subscribers generally, as opposed to access to their subscribers at the specific minimum speed necessary to satisfy the anti-blocking rules, then these rules, while perhaps establishing a lower limit on the forms that broadband providers' arrangements with edge providers could take, might nonetheless leave sufficient `room for individualized bargaining and discrimination in terms' so as not to run afoul of the statutory prohibitions of common carrier treatment.” Such a practice would allow for individualized bargaining where providers would not be required “to hold themselves out to serve all comers indiscriminately on the same or standardized terms.” If the Commission's no-blocking rule allowed individualized bargaining above the minimum level of service necessary, then the rule might not create

per se

common carriage obligations. The court noted that although the Commission had asserted this interpretation of the rule at oral argument, the court could not consider it as a possible basis for upholding the rule because the Commission had not advanced this position in the

Open Internet Order.

2. Proposal To Adopt a No-Blocking Rule

94. We continue to believe that safeguarding consumers' ability to access and effectively use the lawful content, applications, services, and devices of their choice on the Internet is an essential component of protecting and promoting the open Internet. Therefore, we tentatively conclude that we should adopt the text of the rule that

the Commission adopted in the

Open Internet Order,

which provided:

A person engaged in the provision of fixed broadband Internet access service, insofar as such person is so engaged, shall not block lawful content, applications, services, or non-harmful devices, subject to reasonable network management. Consistent with the 2010 rule, the phrase “content, applications, services” in the proposed rule for fixed broadband service “refers to all traffic transmitted to or from end users of a broadband Internet access service, including traffic that may not fit cleanly into any of these categories.” A person engaged in the provision of mobile broadband Internet access service, insofar as such person is so engaged, shall not block consumers from accessing lawful Web sites, subject to reasonable network management; nor shall such person block applications that compete with the provider's voice or video telephony services, subject to reasonable network management.

95. We believe this to be the public policy that will best serve Internet openness. While maintaining this rule text, we propose to make clear that the no-blocking rule would allow individualized bargaining above a minimum level of access to a broadband provider's subscribers—the revised rationale the court suggested would be permissible rather than

per se

common carriage—but, also consistent with the court's analysis, separately subject such practices to scrutiny under the commercially reasonable practices rule (or its equivalent). We believe that by preserving end users' ability to access the Internet content of their choice, reinstating a no-blocking rule would increase demand for broadband services and thus increase investment in broadband network infrastructure and technologies. We seek comment on the proposed no-blocking rule and its potential effect on broadband investment and deployment, including whether and under what circumstances broadband providers have incentives to block content. We also seek comment on possible approaches other than adopting the text of the 2010 rule. Should we modify the text of the rule to explicitly address the minimum level of access required, as discussed below?

96. Alternatively, we seek comment on whether we should adopt a no-blocking rule that either itself prohibits broadband providers from entering into priority agreements with edge providers or acts in combination with a separate rule prohibiting such conduct. As discussed below, the record in this proceeding reflects numerous public concerns about the potential for priority agreements to harm an open Internet. How could we address such concerns in the context of the no-blocking rule? If the Commission were to proceed down this alternative path, how should the Commission define “priority”? Are “priority” agreements broader than “pay-for-priority,” possibly including the exchange of consideration other than money? Are there other arrangements between broadband providers and edge providers that have the potential to harm Internet openness and should be addressed within the no-blocking rule? Commenters should address the legal bases and theories, including Title II, that the Commission could rely on for such a no-blocking rule, and how different sources of authority might lead to different formulations of the no-blocking rule.

3. Establishing the Minimum Level of Access Under the No-Blocking Rule

97. As noted above, the D.C. Circuit suggested that the Commission's 2010 no-blocking rule could be interpreted as requiring broadband providers to “furnish . . . access to their subscribers generally” while “establishing a lower limit on the forms that broadband providers' arrangements with edge providers could take”—and that under that interpretation the rule might not impose common carrier status on broadband providers. Consistent with the court's ruling, we tentatively conclude that the revived no-blocking rule should be interpreted as requiring broadband providers to furnish edge providers with a minimum level of access to their end-user subscribers. Such actions, permissible under the no-blocking rule, would, of course, be separately subject to the proposed commercially reasonable practices standard set out below. We tentatively conclude that our proposed no-blocking rule would allow broadband providers sufficient flexibility to negotiate terms of service individually with edge providers, consistent with the court's view that we must permit providers to “adapt . . . to individualized circumstances without having to hold themselves out to serve all comers indiscriminately on the same or standardized terms.” In this regard, we view the operation of the no-blocking rule separate from any other impact on broadband providers that might arise from application of the legal standard, factors, and dispute resolution framework discussed below. We reiterate that, as discussed further below, under the proposed rules contained herein such individualized arrangements for priority treatment would be subject to scrutiny under the proposed commercial reasonableness rule and prohibited under that rule if they harm Internet openness. We seek comment on these tentative conclusions.

98. Requiring this minimum level of access under the no-blocking rule will ensure that all users have access to an Internet experience that is sufficiently robust, fast, and effectively usable. This includes both end-user consumers and edge providers of all types and sizes, including those content providers who do not enter into specific arrangements with broadband providers. In short, our approach will enable consumers to access the content, services, and applications they demand and ensure that innovators and edge providers have the ability to offer new products and services. We seek comment on this analysis.

99. Under the approach described by the D.C. Circuit, “broadband providers [would] have no obligation to actually provide an edge provider with the minimum service necessary to satisfy the rules,” because they could instead “deliver all edge providers' traffic” in a manner that exceeds that minimum, and they would then be free to “negotiate separate agreements with each individual edge provider” and also to “charge similarly-situated edge providers completely different prices for the same service.” We note that a broadband provider's discretion in setting rates could be constrained to some degree by the commercially reasonable standard and dispute resolution framework discussed below, if adopted by the Commission. As we explain below, that proposed standard would not constitute per se common carriage. Are there alternative approaches that, consistent with the

Verizon

decision, would avoid

per se

common carriage? Are there forms of price discrimination that, even if appropriate under the no-blocking rule, should be separately subject to the commercial reasonableness rule or its equivalent?

100. We also seek comment on how, consistent with this interpretation, we should define or clarify the minimum level of access required by the rule, or otherwise define what provider conduct would constitute “blocking” under the rule. In our view, a defined minimum level of access provides assurances both to end users, by helping them understand the potential uses of their service, and to edge providers. Such assurances should enhance consumer demand, which drives investment both in the network and at the edge.

101. We also seek comment on how “minimum level of access” should be defined to provide the robust, fast, and effectively usable access discussed above. Should we define the minimum

level of access from the perspective of end users, edge providers, or both? Should the minimum level of access be dynamic, evolving over time, and if so, how can that flexibility be incorporated into the rule? In the following paragraphs, we describe in alphabetical order several possible options by which we may define a minimum level of access under the no-blocking rule. We seek comment on these options and on any approaches by which the Commission should define the minimum level of access. For each of these potential options, we seek comment on its advantages and disadvantages, on its legal sustainability under

Verizon,

and on how effective it would be at protecting the open Internet, including the ease or difficulty with which violations can be identified and remedied. We seek comment on how the Commission should implement, monitor compliance with, and enforce the rule, under each of the options described. For each option, we also seek comment on whether the minimum level of access should be reflected in providers' disclosures under an enhanced transparency rule. Under any of these options, we seek comment on how the minimum level of access should be measured. Should the Commission measure technical parameters, based on a sample, focusing on speed, packet loss, latency, or other factors? Where in the network should such measurement take place to ensure an accurate measure of the broadband provider's performance? Finally, we recognize that from time to time a provider may be unable to provide such a minimum level of access temporarily for a variety of reasons. Aside from complete outages (which are not the subject of this NPRM), we note that in some cases inadvertent action or circumstances outside a provider's control may cause a subset of traffic to be blocked. For example, if a connection with one of several peering partners is severed, some Internet traffic may seem unacceptably slow while other traffic appears normal. Alternatively, a provider engaged in reasonable network management (such as blocking the source of a distributed denial of service attack) may inadvertently block other traffic due to a transcription error. If steps are taken in a timely manner to correct such problems, we would not anticipate considering such action to violate a no-blocking rule. We seek comment on how the Commission should distinguish such temporary inadvertent failures from intentional or prolonged blocking, including whether the Commission should consider exempting incidents of blocking that last for less than a specified amount of time.

102.

Best Effort.

One way to define a minimum level of access is as a requirement that broadband providers apply no less than a “best effort” standard to deliver traffic to end users. For any particular type of Internet traffic, best-effort delivery would represent the “typical” level of service for that type of traffic—in effect, routing traffic according to the “traditional” architecture of the Internet. Broadband providers would be free to negotiate “better than typical” delivery with edge providers, and would be prohibited (subject to reasonable network management) from delivering “worse than typical” service in the form of degradation or outright blocking. We seek comment on this potential approach. Would “best effort” be measured against the technical capacity of a particular broadband provider's network capacity and characteristics?

103.

Minimum Quantitative Performance.

Another way to define a minimum level of access is through specific technical parameters, such as a minimum speed. To the extent that commenters believe that the Commission should promulgate a rule that establishes specific technical parameters for the required minimum level of access, what should those parameters be? Should they identify specific speeds of service, or would it be preferable to identify specific problems that a minimum level of service would avoid (such as preventing latency and jitter for services that tolerate them poorly)? Would the Commission need to differentiate between different broadband access technologies? While this approach would provide greater certainty than other approaches, a specific technical definition of minimum access could become outdated as available broadband network technologies change and available broadband speeds improve. How frequently would we need to revisit a specific technical definition of minimum access to ensure that it keeps up with advances in broadband service?

104.

An Objective, Evolving “Reasonable Person” Standard.

Another approach to defining a minimum level of access to broadband providers' end users is to think of it as the level that satisfies the reasonable expectations of a typical end user. We might think of this as a “reasonable person” standard of access. For example, a typical end user may reasonably expect the ability to access streaming video from any provider, place and receive telephone calls using the VoIP service of the end user's choosing, and access any lawful web content. Under this approach, a broadband provider that satisfies these and other reasonable expectations would be in compliance with the no-blocking rule. One possible advantage of this approach to defining minimum access is flexibility: the absence of a specific technical definition means that the standard for compliance can evolve as the expectations in the marketplace change without further Commission action. On the other hand, this approach may create less certainty than other approaches might and could be more difficult to enforce. We seek comment generally on a “reasonable person” standard for defining minimum access, and in particular, how this standard could be crafted to be sufficiently objective and predictable to provide certainty to broadband providers and edge providers.

4. Application of the No-Blocking Rule to Mobile Broadband

105. As noted above, the 2010 no-blocking rule applied differently to mobile broadband providers than to fixed, and today's NPRM would maintain that approach. The previous rule prohibited mobile broadband providers from blocking consumers from accessing lawful Web sites or blocking applications that compete with the provider's voice or video telephony services. We propose to adopt the same approach as in the 2010 obligation, which would prohibit mobile broadband providers from blocking lawful web content as well as applications that compete with the mobile broadband providers' own voice or video telephony services, subject to reasonable network management. We seek comment on this proposal.

106. In addition, we seek comment on whether it would serve the public interest to expand the rule's scope to include reasonable access to all applications that compete with the mobile broadband Internet access provider's other services, not just those that compete with voice or video telephony services, subject to reasonable network management practices. Should the application of the no-blocking rule to mobile broadband providers turn on whether mobile service was marketed to consumers as a substitute for a fixed telecommunications service previously offered by the provider or its affiliate? How would treating mobile broadband differently from fixed broadband affect consumers in different demographic groups, including those who rely solely on mobile broadband for Internet access? How should the Commission consider applying a no-blocking rule to

facilities-based mobile providers versus resellers?

107. We also seek comment on whether and how we should define a minimum level of access in the context of the proposed no-blocking rule for mobile broadband, or otherwise clarify what constitutes “blocking,” and whether that definition should be different for mobile broadband than for fixed. For each of the approaches discussed above to define a “minimum level of access,” we seek comment on any particular benefits or difficulties that such approach would present.

108. We recognize that there have been substantial mobile marketplace changes and developments since 2010, including the increased use of Wi-Fi technology, and seek comment on whether and how such changes should impact our no-blocking rule for mobile broadband. We seek comment on the extent to which we should take into account the increasing provision of Wi-Fi by broadband providers, and the growing use of Wi-Fi by end users for the off-load of wireless broadband, as we consider the application of the no-blocking rule to mobile broadband services.

5. Applicability of the No-Blocking Rule to Devices

109. The 2010 no-blocking rule prohibited fixed broadband providers from blocking non-harmful end-user devices, and the rule we propose today would do the same. We seek comment on how this treatment of non-harmful devices fits into the

Verizon

court's interpretation of the rule. Should the ability to attach non-harmful devices to broadband service be included among the reasonable end-user expectations listed above, or should we analyze non-harmful devices differently?

E. Codifying an Enforceable Rule To Protect the Open Internet That Is Not Common Carriage

Per Se

110. Separate and distinct from the no-blocking rule, we believe that establishing an enforceable legal standard for broadband provider practices is necessary to preserve Internet openness, protect consumers, and promote competition. While the D.C. Circuit vacated the Commission's rule prohibiting “unreasonable discrimination” by fixed broadband providers on the theory that it “so limited broadband providers' control over edge providers' transmissions that [it] constitute[d] common carriage

per se,

” the court underscored the validity of the “commercially reasonable” legal standard the Commission used in the data roaming context and the court upheld in

Cellco.

111. Today, we tentatively conclude that the Commission should adopt a revised rule that, consistent with the court's decision, may permit broadband providers to engage in individualized practices, while prohibiting those broadband provider practices that threaten to harm Internet openness. Our proposed approach contains three essential elements: (1) An enforceable legal standard of conduct barring broadband provider practices that threaten to undermine Internet openness, providing certainty to network providers, end users, and edge providers alike, (2) clearly established factors that give additional guidance on the kind of conduct that is likely to violate the enforceable legal standard, and (3) encouragement of individualized negotiation and, if necessary, a mechanism to allow the Commission to evaluate challenged practices on a case-by-case basis, thereby providing flexibility in assessing whether a particular practice comports with the legal standard. We seek comment below on the design and justification of this rule.

112. Alternatively, we also seek comment on whether the Commission should adopt an alternative legal standard to govern broadband providers' practices. How can we ensure that our proposed rule sufficiently protects against harms to the open Internet? How would the rule we propose today change if the Commission were to rely on Title II (or other sources of legal authority) to adopt rules to protect and promote Internet openness? We seek comment on how the goal of the proposed rule—to prevent those broadband provider practices that limit Internet openness—could best be achieved.

1. The 2010 No Unreasonable Discrimination Rule

113.

2010 Open Internet Order.

The Commission adopted a no unreasonable discrimination rule to prevent fixed broadband providers from engaging in harmful conduct when transmitting lawful network traffic over a consumer's broadband Internet access service. The rule stated, “A person engaged in the provision of fixed broadband Internet access service, insofar as such person is so engaged, shall not unreasonably discriminate in transmitting lawful network traffic over a consumer's broadband Internet access service. Reasonable network management shall not constitute unreasonable discrimination.” The antidiscrimination rule prohibited fixed broadband providers from unreasonably discriminating against network traffic subject to reasonable network management. Unlike the transparency and no-blocking rules the Commission adopted in 2010, the no unreasonable discrimination rule did not apply to mobile broadband Internet access service providers.

114.

D.C. Circuit Opinion in Verizon

v.

FCC.

The D.C. Circuit vacated the antidiscrimination rule because it found that the rule improperly relegated fixed broadband providers to common carrier status. This violated the statutory ban on common carrier treatment of information service providers because the Commission had classified broadband providers “not as providers of ‘telecommunications services' but instead as providers of `information services.’ ” The court disagreed with the Commission's interpretation to the contrary, finding that by compelling fixed broadband providers to serve all edge providers who provided content, services, and applications over the Internet without unreasonable discrimination, the rule compelled those providers to hold themselves out “to serve the public indiscriminately”—thus treating them as common carriers.

115. In making its determination, the court relied on its previous decision in

Cellco,

where it upheld the Commission's data roaming requirements against a common carrier challenge. The court suggested that had the Commission shown that the “no unreasonable discrimination” standard adopted in the

Open Internet Order

differed from the “nondiscrimination” standard applicable to common carriers, the rule might have withstood judicial review similar to the data roaming rule at issue in

Cellco.

This is because the rule in

Cellco

“expressly permit[ted] providers to adapt roaming agreements to ‘individualized circumstances without having to hold themselves out to serve all comers indiscriminately on the same or standardized terms.’ ” The court went on to suggest that, unlike the data roaming rules at issue in

Cellco,

which listed specific factors to consider in a case-by-case determination of whether a data roaming provider's conduct and offerings were commercially reasonable based on the totality of the circumstances, the

Open Internet Order

did not attempt to “ensure that [the] reasonableness standard remains flexible.” The D.C. Circuit suggested that a rule preventing certain types of conduct by broadband providers might be acceptable, given the manner in which the Commission has classified broadband providers, if the Commission articulated a discrete, flexible standard that prohibited

practices that could reasonably be understood to harm Internet openness, while allowing individualized broadband provider practices, akin to the “commercially reasonable” standard adopted by the Commission in the data roaming context.

2. Proposed Elements of an Enforceable Legal Rule

a. Prohibiting Only Commercially Unreasonable Practices

116. Sound public policy requires that Internet openness be the touchstone of a new legal standard. Accordingly, we tentatively conclude that the Commission should adopt a rule requiring broadband providers to use “commercially reasonable” practices in the provision of broadband Internet access service. Our proposed approach is both more focused and more flexible than the vacated 2010 non-discrimination rule. It would prohibit as commercially unreasonable those broadband providers' practices that, based on the totality of the circumstances, threaten to harm Internet openness and all that it protects. At the same time, it could permit broadband providers to serve customers and carry traffic on an individually negotiated basis, “without having to hold themselves out to serve all comers indiscriminately on the same or standardized terms,” so long as such conduct is commercially reasonable. The D.C. Circuit explained that such an approach distinguished the data roaming rules at issue in

Cellco

from common carrier obligations. We seek general comment on this approach, and more targeted comment below.

117. With respect to this approach in general, we tentatively conclude that it should operate separately from the no-blocking rule that we also propose to adopt. In other words, the presence or absence of the no-blocking rule would have no impact on the presence or absence of the “commercially reasonable” standard, and vice versa. This would mean that conduct acceptable under the no-blocking rule would still be subject to independent examination under the “commercially reasonable” standard. We seek comment on this approach.

118. The core purpose of the legal standard that we wish to adopt, whether the “commercially reasonable” standard or another legal formulation, is to effectively employ the authority that the

Verizon

court held was within the Commission's power under Section 706. In essence, the court upheld the Commission's judgment that (1) Section 706 grants substantive power to the Commission to take actions, including removing barriers to infrastructure investment and promoting competition in telecommunications markets, that will promote the deployment of broadband networks; (2) the Commission was within its authority to conclude that the “virtuous circle” can be adversely impacted by broadband network practices that, over the long term, depress end user demand, which then threatens broadband deployment; and (3) threats to the open Internet, such as limitations on users to access the content of their choice or speak their views freely, are therefore within the authority of the Commission to curb. In selecting a legal standard, the Commission not only wishes to avoid subjecting broadband networks to common carriage

per se,

it also wishes to choose a legal standard whose valid adoption renders unnecessary the adjudication of any question other than whether the adopted legal standard has been violated. This is the distinction between the authority to adopt a standard and its subsequent application. It is axiomatic that an as-applied challenge to a rule would invalidate an application of the rule, but the rule itself may otherwise remain broadly applicable.

See Brockett

v.

Spokane Arcades, Inc.,

472 U.S. 491, 504 (1985). Thus, assuming the rule is facially sustained by a reviewing court, the Commission would not be required to re-litigate its underlying determination that adoption of the rule will promote deployment. 47 U.S.C. 1302(b). Because the commercially reasonable practices rule requires a determination that an entity did not act in a commercially reasonable manner, the inquiry is, then, not whether the Commission has authority to adopt the regulation, but whether the Commission may enforce the regulation in a particular set of circumstances.

See Colo. Right to Life Comm., Inc.

v.

Coffman,

498 F.3d 1137, 1146 (10th Cir. 2007) (holding that an as-applied challenge is limited to testing “the application of [a regulation] to the facts of a plaintiff's concrete case”). For example, the D.C. Circuit determined that the Commission's data roaming rule—the legal standard adopted—was facially valid and within the Commission's authority, but that the application of that standard could still be subject to subsequent challenge.

See Cellco,

700 F.3d at 548.

119. Are there alternative legal standards, whether in analogous contexts or otherwise identified by commenters, that the Commission should consider? Is there an existing standard that would serve a similar purpose to what we propose here and that would prevent the harms to Internet openness? If so, how, and if not, what would any differences be? Could the Commission modify its approach to “reasonable network management” in ways that would establish a more flexible legal standard that would not constitute common carriage

per se

? Commenters advocating alternative legal standards should explain why they are preferable, both in terms of the substantive requirements of the alternative standard (such as how they would address providers' conduct, offerings, and practices) and its implementation (such as whether and how it may permit individualized decision-making), and how they would protect an open Internet. And, as to the “commercially reasonable” standard or any other, we seek comment on whether there are sources of law or practice the Commission should rely upon in explaining the meaning and application of that standard.

120. We also seek comment on how a rule requiring broadband providers to engage in commercially reasonable practices with respect to delivery of traffic to and from end users should apply in circumstances in which no individualized negotiation occurs between the edge provider and the broadband provider. To cite just a few of many possible examples, consider a start-up VoIP service, a politically oriented Web site with an audience of fewer than 100 unique visitors per day, a social networking application narrowly focused on a particular demographic, or peer-to-peer communications among individuals. Not all of those actors may seek to enter into a contract with a broadband provider; they may simply wish to reach its subscribers. We seek comment on the impact of this difference on the selection and/or application of the general legal standard.

121. As an alternative to our proposed approach, we seek comment on whether the Commission should adopt a different rule to govern broadband providers' practices to protect and promote Internet openness. As mentioned above, a number of parties have expressed concerns about the effect of pay-for-priority agreements on Internet openness. How can the Commission ensure that the rule it adopts sufficiently protects against harms to the open Internet, including broadband providers' incentives to disadvantage edge providers or classes of edge providers in ways that would harm Internet openness? Should the Commission adopt a rule that prohibits unreasonable discrimination and, if so,

what legal authority and theories should we rely upon to do so? If the Commission ultimately adopts a Title II approach, how should the Commission define the rule in light of the requirements under Sections 201 and 202 of the Act?

b. Factors To Guide Application of the General Legal Standard

122. Similar to the Commission's approach in the data roaming context, we propose to identify factors the Commission can use to administer the proposed commercially reasonable practices standard. We recognize that there are significant differences between the open Internet and the data roaming contexts, including a broader range of open Internet practices at issue and a greater diversity of parties affected by such practices. Thus, while we look to our data roaming approach for guidance, we propose to develop factors specific to the open Internet context. These pre-defined factors would provide guidance to encourage commercially reasonable individualized practices and, if disputes arise, provide the basis for the Commission to evaluate whether, taking into account the totality of the circumstances on a case-by-case basis as discussed below, a particular practice satisfies the enforceable legal standard.

123. We seek comment on this approach and what factors the Commission should adopt to ensure commercially reasonable practices that will protect and promote Internet openness. We discuss below several categories of factors, noting that there is considerable overlap between these categories, and that they are not mutually exclusive. As with the data roaming rule, we tentatively conclude that a review of the totality of the circumstances should be preserved through the creation of a “catch all” factor designed to ensure that rules can be applied evenly and fairly in response to changing circumstances and that all users have an Internet experience that affords them access to a minimum level of service sufficient to protect and promote an open Internet. Further, we seek comment on providers' experiences with the “commercially reasonable” practices standard in the data roaming context, and on how such experiences might inform our thinking as we develop the “commercially reasonable” practices standard for the open Internet.

124.

Impact on Present and Future Competition.

The Commission has previously observed that unfair competitive advantages can jeopardize innovation on the edge and impair otherwise lawful delivery of products and services. For that reason, we seek comment on how we should construct factors in applying the commercially reasonable legal standard to assess the impact of broadband provider practices on present and future competition. We understand this competition inquiry to extend beyond an application of antitrust principles to include, for example, the predicted impact of practices on future competition.

125. To what extent should such competition-oriented factors focus on market structure and the extent of competition in a given market? For example, should we consider factors that the Commission has used in case-by-case adjudications under Section 628(b) of the Act, which proscribes certain “unfair methods of competition” by cable operators and certain programming vendors? Are there other competition-oriented standards in other contexts (including those outside of telecommunications) that we should look to for guidance?

126. We propose that the competitive factors should also examine the extent of an entity's vertical integration and/or its relationships with affiliated entities. For example, broadband providers sometimes offer an affiliated streaming video service over their broadband network in competition with many other third-party broadband and edge providers' services. How can we ensure that competition is not harmed in such situations? We note that the no-blocking rule as applied to mobile Internet access service specifically prohibits broadband providers from blocking “applications that compete with the provider's voice or video telephony services.” And the Commission looked to a similar restriction to address harms raised by the Comcast-NBCU transaction. In light of such concerns, we propose to adopt a rebuttable presumption that a broadband provider's exclusive (or effectively exclusive) arrangement prioritizing service to an affiliate would be commercially unreasonable. We seek comment on this proposal.

127. More generally, we seek comment on the use of rebuttable presumptions as a tool to focus attention on the likely impacts of particular practices. What source or law, either within the Communications Act or in other statutes, would help us craft the creation and use of rebuttable presumptions? Are there particular rebuttable presumptions that should be used, for example, dealing with some or all forms of exclusive contracts, or particularized degradation of services?

128. How can the Commission ensure that parties are acting in a commercially reasonable manner without foreclosing the creation of pro-competitive opportunities through certain forms of price discrimination or exclusivity agreements? Should we develop factors modeled in part after those that the Commission uses in determining whether an exclusive contract between a vertically integrated cable operator and cable-programming vendor would serve the public interest? Should the Commission adopt a rebuttable presumption that broadband provider conduct that forecloses rivals (of the provider or its affiliates) from the competing marketplace is commercially unreasonable?

129.

Impact on Consumers.

In addition to the competitive factors, the Commission proposes to adopt factors to examine the extent to which broadband providers' practices could harm consumers. In the

Open Internet Order,

the Commission looked to, among other things, the extent of transparency and end-user control in assessing whether a practice is unreasonably discriminatory. We believe these factors would likewise be relevant to assessing whether a practice is commercially reasonable. What continued role does the existing or enhanced transparency rule have in ensuring that consumers are receiving correct information from broadband providers and not being misled?

130. We believe that consumers of broadband access service should have the ability to exercise meaningful choices. How can we factor consumer choice into our analysis of what is commercially reasonable? Should the Commission look for guidance to Section 628 of the Act, which makes it unlawful for cable operators and their affiliated satellite cable programming vendors to engage in “unfair or deceptive acts or practices” with certain purposes and effects?

131.

Impact on Speech and Civic Engagement.

The open Internet serves as a critical platform for speech and civic engagement. As noted above, the ability of citizens and content providers to use this open platform to communicate with one another and express their views to a wide audience at very low costs drives further Internet use, consumer demand, and broadband investment and deployment. We therefore propose to adopt a factor or factors in applying the commercially reasonable standard that assess the impact of broadband provider practices on free exercise of speech and civic engagement.

132.

Technical Characteristics.

We also propose to examine the relevant technical characteristics associated with broadband providers' practices. In the

Data Roaming Order,

76 FR 26199 (June 6, 2011), for example, the Commission

looked to the technical characteristics of the service at issue, including the technical feasibility of a requested service as well as the technical compatibility of providers' networks. We seek comment on how the Commission should consider such technical characteristics in assessing whether a broadband provider's practice is commercially reasonable. The application of the legal standard to satellite Internet access service presents one example. How should the Commission account for the technical differences between satellite and terrestrial broadband services when examining commercially reasonable behavior for satellite broadband providers?

133.

“Good Faith” Negotiation.

The Commission has imposed good faith negotiation requirements in a variety of contexts. For example, the Commission explicitly requires television broadcasters and multichannel video programming distributors (MVPDs) to negotiate retransmission consent agreements in good faith. The Commission also mandated good faith negotiations for dealings between certain spectrum licensees. Would adopting a similar framework for evaluating negotiations between parties in the open Internet context serve the public interest, convenience, and necessity? How should such a “good faith” test be applied where parties do not seek to enter into contractual relationships with each other?

134.

Industry Practices.

How, if at all, should the fact that conduct is an industry practice impact the application of the “commercially reasonable” rule? What should be treated as an “industry practice”? For example, should that term be limited to express standards adopted by standards-setting organizations or similar entities? If so, should the make-up or processes used by such a standards-setting organization be considered? If not, how should the existence of an “industry practice” be effectively established for purposes of the application of the “commercially reasonable” rule, and how should the Commission best evaluate potential harms to competition arising from coordinated conduct in a market with a limited number of participants?

135.

Other Factors.

We seek comment on any additional factors the Commission should consider in assessing whether a particular practice or set of practices by a broadband provider is commercially reasonable, given the importance of preventing harms to an open Internet. Are there other factors that the Commission adopted in the

Data Roaming Order

that we should incorporate here? How can the Commission best include a factor to capture special or extenuating circumstances to ensure that it can take into account the totality of the circumstances, particularly given the rapid evolution of the Internet marketplace and technology?

c. Case-by-Case Evaluations for Commercial Reasonableness

136. As discussed, we tentatively conclude that we will adopt a case-by-case approach, considering the totality of the circumstances, when analyzing whether conduct satisfies the proposed commercially reasonable legal standard, or another legal standard ultimately adopted. We believe that, in conjunction with the factors listed above, this approach will provide the advantage of certainty and guidance to broadband providers and edge providers—particularly smaller entities that might lack experience dealing with broadband providers—while also allowing parties flexibility in their individualized dealings. We seek comment on whether there is another avenue or mechanism we should use when evaluating commercial reasonableness.

3. Potential Conduct That Is

Per Se

Commercially Unreasonable

137. In

Southwestern Cable,

the Supreme Court concluded that a Commission requirement that cable systems carry local broadcast signals did not constitute common carriage even though the Commission's rule applied to all cable systems in defined circumstances. As the Supreme Court later noted, that holding “was limited to remedying a specific perceived evil [that] did not amount to a duty to hold out facilities indifferently for public use.” In

Verizon,

the D.C. Circuit likewise explained that the

Southwestern Cable

regulation “imposed no obligation on cable operators to hold their facilities open to the public generally, but only to certain broadcasters if and when cable operators acted in ways that might harm those broadcasters.” Thus, consistent with Supreme Court precedent and the

Verizon

decision, the Commission may be able to identify specific practices that do not satisfy the commercially reasonable legal standard. For example, we note that the data roaming rule upheld by the D.C. Circuit's

Cellco

decision states that “[c]onduct that unreasonably restrains trade . . . is not commercially reasonable.” Similarly, the Commission recently concluded that certain joint activities between certain television stations, which are not regulated as common carriers, in the negotiation of retransmission consent fees are a

per se

violation of the requirement of “good faith” negotiation. Are there any practices that, consistent with the

Verizon

court's reasoning, could be viewed as

per se

commercially unreasonable?

138. Some have suggested that the Commission go even beyond the requirements of the

Open Internet Order

to impose flat bans on pay-for-priority service. We seek comment on these suggestions, including whether all pay-for-priority practices, or some of them, could be treated as

per se

violations of the commercially reasonable standard or under any other standard based on any source of legal authority. We emphasize that Section 706 could not be used to reach some conduct under this judicially recognized approach to circumvent the principle that the proposed rules will not, in any circumstances, constitute common carriage

per se.

If the Commission were to ultimately rely on a source of authority other than Section 706 to adopt a legal standard for broadband provider practices, such as Title II, we seek comment on whether and, if so, how we should prohibit all, or some, pay-for-priority arrangements, consistent with our authority, to protect and promote Internet openness.

4. Potential Safe Harbors

139. Similar to the approach of identifying practices

ex ante

that would not satisfy the commercially reasonable legal standard, the Commission may be able to identify specific services that would be treated separately from the application of the commercially reasonable legal standard. We seek comment on this approach and how the services below should be considered under such an approach.

140.

Application to Mobile Broadband.

The Commission chose not to apply its no unreasonable discrimination rule to mobile broadband providers in 2010 based on considerations including the rapidly evolving nature of mobile technologies, the increased amount of consumer choice in mobile broadband services, and operational constraints that put greater pressure on the concept of reasonable network management for mobile broadband services. We have tentatively concluded that we will continue that approach in the proposed rules. Alternatively, should the Commission account for different characteristics of mobile service as a factor in its application of the commercially reasonable standard, subject to mobile providers' reasonable network management? How would

maintaining our previous approach for mobile broadband affect end users across different demographic groups, including end users who rely solely on mobile broadband for Internet access?

141.

Non

-

exclusive, non-affiliated agreements.

AT&T has suggested that the Commission exclude from its review of particular practices any agreement between a broadband provider and an edge provider if the agreement is not exclusive and if the edge provider is not an affiliate of the broadband provider. AT&T explains that subjecting broadband providers to case-by-case scrutiny in such cases “would unnecessarily impede efficient and pro-consumer arms-length commercial dealings.” We seek comment on whether this approach should be adopted to limit the scope of the commercially reasonable standard and whether it could be made consistent with the protections afforded by the rule.

F. Legal Authority

142. In this NPRM, we propose to adopt rules to protect and promote the open Internet. For the reasons set forth below, we believe we have ample authority to do so. We propose that the Commission exercise its authority under Section 706, consistent with the D.C. Circuit's opinion in

Verizon

v.

FCC,

to adopt our proposed rules. We also seek comment on the nature and the extent of the Commission's authority to adopt open Internet rules relying on Title II, and other possible sources of authority, including Title III. Additionally, we seek comment on the Commission's authority under any of the legal theories discussed below to address any transition or implementation issues associated with any open Internet rules adopted in this proceeding, such as the effect on existing agreements.

1. Section 706

143. We seek comment on our authority under Section 706. 47 U.S.C. 1301

et seq.

We interpret Sections 706(a) and (b) as independent and overlapping grants of authority that give the Commission the flexibility to encourage deployment of broadband Internet access service through a variety of regulatory methods, including removal of barriers to infrastructure investment and promoting competition in the telecommunications market, and, in the case of Section 706(b), giving the Commission the authority to act swiftly when it makes a negative finding of adequate deployment. The rules we propose today would be authorized by Sections 706(a) and (b) because they would “encourage the deployment” of advanced telecommunications capability by promoting competition in the telecommunications market and removing barriers to infrastructure investment. We also seek comment on the relevant differences between Sections 706(a) and (b) and how, if at all, those differences should impact our exercise of authority here. There are significant differences between the authorities granted in each provision. For example, while both Section 706(a) and (b) permit the Commission to enact measures that promote competition in the telecommunications market, Section 706(b) permits the Commission to act by promoting competition in the “telecommunications market” while Section 706(a) limits the Commission to promoting competition in the “local telecommunications market.” Also, while Section 706(a) gives the Commission general authority to encourage the deployment of broadband regardless of findings under Section 706(b), Section 706(b) gives the Commission authority to take “immediate action.”

144. To the extent that we rely on our authority under Section 706(b), we seek comment on how we should treat the existence of and the findings in the Commission's Broadband Progress Reports for the purposes of this proceeding. Could and should the Commission incorporate findings that satisfy Section 706(b) in this proceeding? Finally, we seek comment on the extent to which the disparity between metropolitan areas and rural deployment of broadband or within metropolitan areas should impact our conclusions as to whether advanced telecommunications capability is being reasonably and timely deployed.

145. We also seek comment on how to construe the specific terms and definitions in Section 706. For example, “advanced telecommunications capability” is defined “without regard to any transmission media or technology, as high-speed, switched, broadband telecommunications capability that enables users to originate and receive high-quality voice, data, graphics, and video telecommunications using any technology.” It is clear that broadband Internet access service is such “advanced telecommunications capability,” but we also seek comment on what other broadband-enabled services may fall within the definition of “advanced telecommunications capability.” Should the Commission interpret the term “advanced telecommunications capability” to require that certain practices accompany a broadband provider's deployment to ensure that end users receive “high-speed, switched, broadband telecommunications capability that enables users to originate and receive high-quality voice, data, graphics, and video telecommunications?” In addition, we note that Congress did not define “deployment.” We believe Congress intended this term to be construed broadly, and thus, consistent with precedent, we have interpreted it to include the extension of networks as well as the extension of the capabilities and capacities of those networks.

146. In Section 230(b) of the Communications Act, Congress also set forth statutory “polic[ies] of the United States”: to “promote the continued development of the Internet,” to promote “technologies which maximize user control over what information is received” over the Internet, and to “preserve the vibrant and competitive free market

that presently exists for the Internet,

unfettered by Federal or State regulation.” We continue to believe the Commission's interpretation of Section 706 is bolstered by these congressional policies. We seek comment on how the Commission should read Section 230(b) in exercising its Section 706 authority.

147. We also seek comment generally on how the court's decision in

Verizon

v.

FCC

should inform our exercise of legal authority. The D.C. Circuit upheld the Commission's interpretation of its authority under Section 706, concluding that the factual predicate that the Commission had laid justifying its regulations was reasonable and that such a factual predicate was reasonably linked to the Commission's exercise of authority. However, because the court determined that the Commission's no-blocking and anti-discrimination rules impermissibly regulated broadband providers as common carriers, the court vacated those rules, and remanded for further proceedings consistent with the opinion. We seek comment generally on how the court's

Verizon

decision should impact our exercise of authority here. Are there principles raised in Judge Silberman's separate opinion concurring in part and dissenting in part that are relevant to our exercise of authority as to the new rules proposed, or upon which we otherwise seek comment, here?

2. Title II

148. We seek comment on whether the Commission should rely on its authority under Title II of the Communications Act, including both (1) whether we should revisit the Commission's classification of broadband Internet access service as an information service and (2) whether we should separately identify and classify

as a telecommunications service a service that “broadband providers . . . furnish to edge providers.” For either of these possibilities, we seek comment on whether and how the Commission should exercise its authority under Section 10 (or Section 332(c)(1) for mobile services) to forbear from specific obligations under the Act and Commission rules that would flow from the classification of a service as telecommunications service.

149.

Title II—Revisiting the Classification of Broadband Internet Access Service.

In a series of decisions beginning in 2002, the Commission has classified broadband Internet access service offered over cable modem, DSL and other wireline facilities, wireless facilities, and power lines as an information service, which is not subject to Title II and cannot be regulated as common carrier service. In 2010, following the D.C. Circuit's

Comcast

decision, the Commission issued a Notice of Inquiry (

2010 NOI

)

that, among other things, asked whether the Commission should revisit these decisions and classify a telecommunications component service of wired broadband Internet access service as a “telecommunications service.” Specifically, the Commission sought comment on whether to classify as a telecommunications service “Internet connectivity,” which it defined as “the functions that `enable [end users] to transmit data communications to and from the rest of the Internet.'” The docket opened by the 2010 NOI remains open. To ensure that it remains current, we hereby direct the Wireline Competition Bureau to issue a public notice to refresh the record in that proceeding including the inquiries contained herein. The Commission also asked whether it should similarly alter its approach to wireless broadband Internet access service, noting that Section 332 requires that wireless services that meet the definition of “commercial mobile service” be regulated as common carriers under Title II. In response, the Commission received substantial comments on these issues. We now seek further and updated comment on whether the Commission should revisit its prior classification decisions and apply Title II to broadband Internet access service (or components thereof). How would such a reclassification approach serve our goal to protect and promote Internet openness? What would be the legal bases and theories for particular open Internet rules adopted pursuant to such an approach? Would reclassification and applying Title II for the purpose of protecting and promoting Internet openness impact the Commission's overall policy goals and, if so, how?

150. What factors should the Commission keep in mind as it considers whether to revisit its prior decisions? Have there been changes to the broadband marketplace that should lead us to reconsider our prior classification decisions? To what extent is any telecommunications component of that service integrated with applications and other offerings, such that they are “inextricably intertwined” with the underlying connectivity service? Is broadband Internet access service (or any telecommunications component thereof) held out “for a fee directly to the public, or to such classes of users as to be effectively available directly to the public?” If not, should the Commission compel the offering of such functionality on a common carrier basis even if not offered as such? For mobile broadband Internet access service, does that service fit within the definition of “commercial mobile service”? We also note that on May 14, 2014, Representative Henry Waxman, Ranking Member of the Committee on Energy and Commerce of the U.S. House of Representatives, sent a letter to Chairman Wheeler proposing an approach to protecting the open Internet whereby the Commission would proceed under Section 706 but use Title II as a “backstop authority.” We seek comment on the viability of that approach.

151.

Title II—Classification of the Broadband Providers' Service to Edge Providers.

Separate from the reclassification of “broadband Internet access service,” we seek comment on how the Commission should consider broadband providers' service to edge providers and whether that service (or some portion of it) is subject to Title II regulation. As mentioned above, in

Verizon,

the D.C. Circuit stated that “broadband providers furnish a service to edge providers, thus undoubtedly functioning as edge providers' `carriers.'” We understand such service to include the flow of Internet traffic on the broadband providers' own network, and not how it gets to the broadband providers' networks. The Commission in the

Open Internet Order

understood the 2010 rules to regulate “broadband Internet access service,” which the Commission classified as an information service. That service, however, is by definition a “mass-market retail service” providing the capability to send and receive data from “all Internet end points.” Does the “service” contemplated by the court between broadband providers and edge providers fit that definition? We seek comment on whether and, if so how, the Commission should separately identify and classify a broadband service that is furnished by broadband providers' to edge providers in order to protect and promote Internet openness.

152. Some have made proposals suggesting that the Commission could apply Title II to such services to achieve our open Internet objectives. For example, on May 5, 2014, Mozilla filed a petition requesting that the Commission (1) recognize remote delivery services in terminating access networks; (2) classify these services as “telecommunications services” under Title II of the Act; and (3) forbear from any “inapplicable or undesirable provisions of Title II” for such services. Mozilla states that, unlike the end-user facing broadband services the Commission has classified as information services, the Commission has not classified the service that broadband Internet providers to remote endpoints, particularly to entities not in privity with the broadband provider. These services, Mozilla argues, can and should be classified as telecommunications services, subject to whatever Title II regulations the Commission deems appropriate. Similarly, academics from Columbia University have submitted an alternate proposal to classify Internet-facing services that a broadband provider offers. This theory would split broadband Internet access service into two components: first, the subscriber's “request [for] data from a third-party provider; and second, the content provider's response to the subscriber.” The proposal would classify the latter “sender-side” traffic, sent in response to a broadband provider's customer's request as a telecommunications service, subject to Title II. According to the proposal, this is a stand-alone offer of telecommunications—transmission between points specified by the end-user. We seek comment on these proposals and other suggestions for how the Commission could identify and classify such services and apply Title II to achieve our goals of protecting and promoting Internet openness.

153.

Title II—Forbearance.

If the Commission were to reclassify broadband Internet access service as described above or classify a separate broadband service provided to edge providers as a “telecommunications service,” such a service would then be subject to all of the requirements of the Act and Commission rules that would flow from the classification of a service as a telecommunications service or common carrier service. Should the

Commission take such an approach, we seek comment on the extent to which forbearance from certain provisions of the Act or our rules would be justified in order to strike the right balance between minimizing the regulatory burden on providers and ensuring that the public interest is served. For mobile broadband services, we seek comment on whether and how the Commission should apply Section 332(c)(1) in addition to Section 10 forbearance.

154. In the

2010 NOI,

the Commission contemplated that, if it were to classify the Internet connectivity component of broadband Internet access service, it would forbear from applying all but a handful of core statutory provisions—Sections 201, 202, 208, and 254—to the service. In addition, the Commission identified Sections 222 and 255 as provisions that could be excluded from forbearance, noting that they have “attracted longstanding and broad support in the broadband context.” We received considerable comment in that proceeding and seek further and updated comment. Commenters should list and explain which provisions should be exempt from forbearance and which should receive it in order to protect and promote Internet openness. Commenters should also detail which services should receive forbearance, list the provisions from which they believe the Commission should forbear, and provide justification for the forbearance. Commenters should also define the relevant geographic and product markets in which the services or providers should receive forbearance.

155. For mobile broadband services, we also seek comment on the extent to which forbearance should apply, if the Commission were to classify mobile broadband Internet access service as a CMRS service subject to Title II. The

2010 NOI

also asked whether the Commission could and should apply Section 332(c)(1) as well as Section 10 in its forbearance analysis for mobile services. We received considerable comment in that proceeding and seek further and updated comment here.

3. Other Sources of Authority

156.

Title III.

We further seek comment on the Commission's authority to adopt open Internet rules for mobile broadband services under Title III of the Communications Act. The Supreme Court has found that Title III endows the Commission with “expansive powers” and a “comprehensive mandate to `encourage the larger and more effective use of radio in the public interest.'” Section 303 of the Act, in particular, authorizes the Commission to exercise its authority as “the public interest, convenience, and necessity requires” to “[p]rescribe the nature of the service to be rendered by each class of licensed stations and each station within any class,” and to establish obligations, not inconsistent with law, as may be necessary to carry out the provisions of the Act. It further directs the Commission to “generally encourage the larger and more effective use of radio in the public interest.” Likewise, Section 316 of the Act authorizes the Commission to adopt “new conditions on existing licensees” when taking such action will “promote the public interest, convenience, and necessity.” The Commission may exercise this authority on a license-by-license basis or through a rulemaking, even if the affected licenses were awarded at auction.

157. We find that these provisions provide authority for the Commission to adopt open Internet rules for mobile broadband service providers. Particularly, we find that it is within our authority to “prescribe the nature of the service to be rendered by each class of licensed stations and each stat

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