skip to main content
Close Icon We use cookies to improve your website experience.  To learn about our use of cookies and how you can manage your cookie settings, please see our Cookie Policy.  By continuing to use the website, you consent to our use of cookies.
Global Search Configuration

Ovum view

Summary

The Federal Communications Commission has voted 3-2 to regulate broadband access as a common-carrier service under Title II of the Telecommunications Act. The decision follows a year of campaigning, both by consumer groups (in favor of greater regulatory oversight) and broadband providers such as Comcast, AT&T, and Verizon (against it), as well as President Barack Obama’s statement in November 2014 in favor of Title II regulation. It also includes mobile broadband for the first time, where previous Open-Internet rules have applied to only fixed broadband. Regulating under Title II is intended to stop ISPs offering so-called Internet fast lanes to services such as Netflix, to prioritize their traffic – a practice consumer advocates say would stifle innovation by enabling only well-established and richer companies to deliver content to customers quickly. Throttling and blocking Internet content will also be banned.

Industry will be looking to Congress to overturn the decision

While open-Internet advocates are celebrating this decision as a victory, the commission’s vote exposes the political split between the two sides of the argument. FCC chairman Tom Wheeler and his two fellow Democratic commissioners voted for Title II reclassification, while the two Republican commissioners voted against, having argued that Title II represents an unnecessary regulatory burden and applies regulation designed for the fixed voice network to broadband.

The first test of the new rules is likely to come from Congress, both houses of which are controlled by Republicans. Senate Commerce Committee chairman John Thune, a Republican from South Dakota, has said he intends to call the five commissioners before the committee to discuss the decision, and has not ruled out overturning the FCC’s decision via legislation. In the longer term, opponents of Title II have pointed out that a future shift in the FCC’s composition, as commissioners step down, could also lead to the rules being overturned.

Broadband providers, which had promised legal action when Wheeler’s proposals first came to light, have released slightly more conciliatory statements since the results were announced, though they still express disappointment at the use of Title II regulation and suggest a legislative solution. For example, NCTA head and former FCC chief Michael Powell has explicitly said, “We must now look to other branches of government for a more balanced resolution.”

Meanwhile, on its Public Policy blog, AT&T has said that the “partisan” decision can be undone by other partisan decisions, and that the threat of litigation remains high, meaning that there will still be uncertainty for broadband providers and consumers. AT&T added in a separate statement that it believes municipal broadband networks should be limited to locations where private networks are not available.

The way the debate has fallen along partisan lines is troubling, and will surely be the cause of further uncertainty, as the new rules are challenged in Congress and the courts. The question is whether the FCC could have avoided the reaction from Title II opponents by pushing for last-mile unbundling instead: Opening the incumbents to increased competition would make it easier for customers to change broadband providers, and would remove ISPs’ incentives to introduce paid prioritization for content providers, which should also satisfy proponents of more market-based solutions.

On the other hand, ISPs must be ruing Verizon’s 2014 court victory, in which the 2010 Open Internet rules were struck down, only to return stronger and more far-reaching than before.

Appendix

Further reading

“Net Neutrality: FCC head calls for Title II regulation for fixed and mobile broadband,” TE0001-000955 (February 2015)

“Net Neutrality: US president calls for Title II regulation,” TE0004-001001 (November 2014)

“Net Neutrality: Verizon wins as court overturns FCC rules,” TE0007-000817 (January 2014)

Author

Francesco Radicati, Senior Analyst, Digital Services

francesco.radicati@ovum.com

Recommended Articles

  • Internet of Things

    IoT Viewpoints 2018

    IoT Viewpoints explore the IoT opportunity in 2018 and beyond. Download our latest e-book to get our newest collection of thought leadership articles on the emerging IoT trends, technologies and opportunities.

    Topics IoT

  • Consumer & Entertainment Services

    US pay TV: Is it facing an existential threat?

    By Adam Thomas 28 Mar 2018

    With US pay TV having endured the worst year in its history, thoughts have inevitably turned to the future. The likelihood remains that the immediate future will remain highly uncomfortable for everyone except the scaled multinational digital platforms.

  • Enterprise Services

    5G: Another technology in search of enterprise use cases

    By Evan Kirchheimer 26 Apr 2018

    Service provider interest in justifying 5G investment through its potential to open new revenue streams from the enterprise segment is growing ever greater.

;

Have any questions? Speak to a Specialist

Europe, Middle East & Africa team - +44 (0) 207 017 7700


Asia-Pacific team - +61 (0)3 960 16700

US team - +1 646 957 8878

Email us at ClientServices@ovum.com

You can also contact your named/allocated Client Services Executive using their direct dial.
PR enquiries - Call us at +44 788 597 5160 or email us at pr@ovum.com

Contact marketing - 
marketingdepartment@ovum.com

Already an Ovum client? Login to the Knowledge Center now