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FCC will have to drop a bombshell to solve net-neutrality conundrum

Both sides indicate a compromise won’t cut it

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Analysis The Federal Communications Commission chairman's decision to draft new rules ensuring net neutrality principles are applied to internet traffic hasn't impressed many, and it's becoming clear that his agency will have to make an all-or-nothing decision on the issue.

The January appeal court decision in Verizon v FCC gutted the watchdog's existing provision, set up in 2010, that internet traffic shouldn't be blocked or subject to differential pricing for speed. Since then the industry has been in somewhat of a limbo waiting to see what happens next.

Today's announcement indicates the FCC isn’t going to bother appealing Verizon's verdict and will work on changing the rules instead. Meanwhile Verizon said it was sticking to its guns on the issue and would continue to fight its corner.

"Verizon remains committed to an open internet that provides consumers with competitive choices and unblocked access to lawful websites and content when, where, and how they want," the company told El Reg in a statement. "We have always focused on providing our customers with the services and experience they want, and this focus has not changed."

As today's split statement from the FCC shows, Verizon has some supporters in the agency. Commissioner Mike O’Rielly (a former head of the FCC) said that he was "deeply troubled" by the move and accused the agency of "tilting at windmills." Fellow commissioner Ajit Pai expressed deep reservations.

Even those groups you might expect to support FCC chairman Tom Wheeler are deeply dubious about his plans to enforce internet neutrality standards by regulation alone. The Electronic Frontier Foundation's staff activist April Glaser told The Register that such attempts in the past had been fatally flawed.

Glaser pointed out that the court decision that partially annulled the FCC's 2010 "Open Internet" order came about because the agency was found to have exceeded its authority in regulating broadband, which is classified as an information service rather than a common carrier. Try the same approach again and "we'd be back to where we started four years ago," she said.

The crux of the problem, she said, was that the FCC's decision in 2002 and 2005 to classify internet provision as an information service. As such the FCC can't regulate the network on public interest grounds, which is allowed for common carriers like telephone provision.

"A lot of people are calling for reclassification," she said. "We have not made a statement as to whether or not we're going to call for reclassification. What we really want to see is a more competitive environment but frankly that would take an Act of Congress and in the current deadlock that might be a non-starter."

That's not a prospect welcomed by FCC Commissioner Ajit Pai, who warned against such a move. The internet was open and free before the FCC decided to set net neutrality rules and such schemes were "a solution in search of a problem."

"Today’s announcement reminds me of the movie Groundhog Day. In the wake of a court defeat, an FCC Chairman floats a plan for rules regulating Internet service providers’ network management practices instead of seeking guidance from Congress, all while the specter of Title II reclassification hovers ominously in the background," he said.

The ACLU, on the other hand, says reclassification of the internet as a common carrier is the only option likely to succeed. Its policy advisor Gabe Rottman told The Register that the reclassification would be "controversial," but that tinkering with the legal framework of information service regulation would be fraught with problems.

"We were pleased to see the FCC move so quickly after the court's decision but certainly they need to do reclassification in order to make sure that any regulation is bulletproof," he said.

Controversial is understating it somewhat. Internet providers are going to fight such a move tooth and nail, since the prospect of such a ruling would wipe billions off their potential future earnings.

If the FCC does decide to take the nuclear option of reclassification it looks likely to kick off a storm of protest from the industry and in the political sphere. The agency has the power to change the rules on this issue, but may not be willing to press the button. ®

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