skip to main content
Close Icon

In order to deliver a personalized, responsive service and to improve the site, we remember and store information about how you use it. This is done using simple text files called cookies which sit on your computer. By continuing to use this site and access its features, you are consenting to our use of cookies. To find out more about the way Informa uses cookies please go to our Cookie Policy page.

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

;

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

+44 (0) 207 551 9047 - Operational from 09.00 - 17.00 UK time

You can also contact your named/allocated Client Services Executive using their direct dial.
PR enquiries - Call us at +44 7770704398 or email us at pr@ovum.com

Contact marketing - 
marketingdepartment@ovum.com

Already an Ovum client? Login to the Knowledge Center now