FCC says net neutrality plan is on a 'firm legal foundation'

Lawsuits are widely expected that would attack the sweeping net neutrality reforms proposed Wednesday by Federal Communications Commission (FCC) Chairman Tom Wheeler.

A major concern of many wireless carriers and other Internet providers is that Wheeler's proposal would create a disincentive for future investment in services and infrastructure. Internet providers believe they would have to pass their proposals through a time-consuming and costly FCC review similar to a standard utility, effectively creating a disincentive.

The five-member commission is expected to vote on Wheeler's proposal on Feb. 26.

The FCC in a fact sheet posted today -- and via comments by senior commission officials during an afternoon briefing -- strongly defended Wheeler's proposed rules as resting on a "firm legal foundation built to withstand future challenges."

Not all Internet providers believe that reclassifying mobile and wired broadband as a common carrier under Title II of the Telecommunications Act of 1996 would lessen the incentive to invest, FCC officials argued. They cited Google, which operates Google Fiber for broadband Internet service, and Sprint, with about 50 million wireless customers; both filed comments with the agency saying they didn't see Title II as creating a drag on investments in networks.

In all, the FCC received about 4 million comments on its planned net neutrality reforms, the largest public outpouring it has ever received.

While FCC officials said they wouldn't be surprised to see the proposal taken to court, they also called it a straightforward approach that's less vulnerable to legal attack. What ISPs offer consumers is a service allowing them to use the Internet to access information around the globe, one in which packets of data are transmitted for a fee like a conventional telecommunications service that is already subject to Title II regulation, they said.

Wheeler, in a commentary posted on Wired, said that mobile voice providers have already been regulated under Title II provisions and have grown and have invested heavily in their businesses. "Fewer provisions will apply to ISPs than were applied to wireless carriers," the FCC said in its fact sheet.

While the mainstay of Wheeler's proposal would be to prevent blocking, throttling and paid prioritization of Internet content, the FCC noted that Internet providers will still be able to engage in "reasonable network management," but not network management practices for commercial purposes.

"For example, a provider can't cite reasonable network management to justify reneging on its promise to supply a customer with 'unlimited' data," the fact sheet states.

FCC officials also noted that the proposal applies to "last mile" Internet services that consumers typically see in their homes. The proposal would not apply future regulations to the Internet backbone and other major parts of the Internet, as some carriers have feared.

However, one area of the proposal that is sure to foster discussion is how the FCC would address so-called "interconnection" deals between companies like Netflix and broadband providers. In the past, Netflix has complained that some broadband providers selectively slowed down video traffic at points where Netflix connected to the Internet.

Senior FCC officials said companies like Netflix would be allowed to bring complaints and questions to the agency about the treatment they are getting from broadband providers. Few details were provided about how that process would work.

The FCC also noted that the proposal does not impose new tariffs or requirements on Internet providers to approve rates. Broadband providers would not have to contribute to the Universal Service Fund and the proposal does not "impose, suggest or authorize" any new taxes or fees, according to the fact sheet.

FCC officials said that in writing the proposal they didn't use all of the provisions in Title II. They called Wheeler's proposal a tailored approach that uses recommendations suggested in a U.S. appeals court decision from early 2014 that came out of a lawsuit brought against the FCC by Verizon Wireless.

While the exact wording of the Wheeler proposal will be distributed to the other four members of the FCC on Thursday, it will not be made public until the time of the vote on Feb. 26, an FCC official said. That has been the practice in the past and will continue, even though various groups have urged the agency to make public the draft of Wheeler's proposal well before the vote.