Preserving the Open Internet, Broadband Industry Practices, 62638-62662 [E9-28062]

Agencies

• FEDERAL COMMUNICATIONS COMMISSION

[Federal Register Volume 74, Number 228 (Monday, November 30, 2009)]
[Proposed Rules]
[Pages 62638-62662]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-28062]



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Part II





Federal Communications Commission





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47 CFR Part 8



Preserving the Open Internet, Broadband Industry Practices; Proposed 
Rule

Federal Register / Vol. 74, No. 228 / Monday, November 30, 2009 / 
Proposed Rules

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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 8

[GN Docket No. 09-191; WC Docket No. 07-52; FCC 09-93]


Preserving the Open Internet, Broadband Industry Practices

AGENCY: Federal Communications Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: In this Notice of Proposed Rulemaking (NPRM), the Commission 
considers adopting rules to preserve the open Internet. In this NPRM, 
the Commission proposes draft language to codify the four principles 
the Commission articulated in the Internet Policy Statement; a fifth 
principle that would require a broadband Internet access service 
provider to treat lawful content, applications, and services in a 
nondiscriminatory manner; and a sixth principle that would require a 
broadband Internet access service provider to disclose such information 
concerning network management and other practices as is reasonably 
required for users and content, application, and service providers to 
enjoy the protections specified in this rulemaking. The Commission also 
proposes draft language to make clear that the principles would be 
subject to reasonable network management and would not supersede any 
obligation a broadband Internet access service provider may have--or 
limit its ability--to deliver emergency communications or to address 
the needs of law enforcement, public safety, or national or homeland 
security authorities, consistent with applicable law. The draft rules 
would not prohibit broadband Internet access service providers from 
taking reasonable action to prevent the transfer of unlawful content, 
such as the unlawful distribution of copyrighted works. Nor would the 
draft rules be intended to prevent a provider of broadband Internet 
access service from complying with other laws. The NPRM seeks comment 
on a category of ``managed'' or ``specialized'' services, how to define 
such services, and what principles or rules, if any, should apply to 
them. The NPRM affirms that the six principles the Commission proposes 
to codify apply to all platforms for broadband Internet access, and 
seeks comment on how, in what time frames or phases, and to what extent 
the principles should apply to non-wireline forms of Internet access, 
including, but not limited to, terrestrial mobile wireless, unlicensed 
wireless, licensed fixed wireless, and satellite. The NPRM also seeks 
comment on the enforcement procedures that the Commission should use to 
ensure compliance with the proposed principles.

DATES: Comments are due on or before January 14, 2010 and reply 
comments are due on or before March 5, 2010. 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 January 29, 2010.

ADDRESSES: You may submit comments, identified by GN Docket No. 09-191 
and WC Docket No. 07-52, by any of the following methods:
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments.
     Federal Communications Commission's Web site: https://www.fcc.gov/cgb/ecfs/. Follow the instructions for submitting comments.
     E-mail: ecfs@fcc.gov. and include the following words in 
the body of the message: ``get form.'' A sample form and directions 
will be sent in response. Include the docket number(s) in the subject 
line of the message.
     Blog Filers: In addition to the usual methods for filing 
electronic comments, the Commission is allowing comments, reply 
comments, and ex parte comments in this proceeding to be filed by 
posting comments on https://blog.openinternet.gov and on https://openinternet.ideascale.com.
     Mail: Secretary, Federal Communications Commission, 445 
12th Street, SW., Washington, DC 20554.
     Hand Delivery/Courier: 236 Massachusetts Avenue, NE., 
Suite 110, Washington, DC 20002.
     People with Disabilities: Contact the FCC to request 
reasonable accommodations (accessible format documents, sign language 
interpreters, CART, etc.) by e-mail: FCC504@fcc.gov or phone: 202-418-
0530 or TTY: 202-418-0432.

For detailed instructions for submitting comments and additional 
information on the rulemaking process, see the SUPPLEMENTARY 
INFORMATION section of this document. In addition to filing comments 
with the Secretary of the Commission, a copy of any comments on the 
Paperwork Reduction Act information collection requirements contained 
herein should be submitted to the Federal Communications Commission via 
e-mail to PRA@fcc.gov and to Nicholas A. Fraser, Office of Management 
and Budget, via e-mail to Nicholas_A._Fraser@omb.eop.gov or via fax 
at 202-395-5167.

FOR FURTHER INFORMATION CONTACT: Claude Aiken, Competition Policy 
Division, Wireline Competition Bureau, at 202-418-1580 or 
claude.aiken@fcc.gov, or John Spencer, Broadband Division, Wireless 
Telecommunications Bureau, at 202-418-2487 or john.spencer@fcc.gov. For 
additional information concerning the Paperwork Reduction Act 
information collection requirements contained in this document, send an 
e-mail to PRA@fcc.gov or contact Judith B. Herman at 202-418-0214, or 
via e-mail at Judith.Herman@fcc.gov.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Notice 
of Proposed Rulemaking (NPRM) in GN Docket No. 09-191, WC Docket No. 
07-52, FCC 09-93 adopted on October 22, 2009. The complete text of this 
document is available on the Commission's Internet site at www.fcc.gov 
and for public inspection Monday through Thursday from 8 a.m. to 4:30 
p.m. and Friday from 8 a.m. to 11:30 a.m. in the Commission's Consumer 
and Governmental Affairs Bureau Reference Information Center, Room CY-
A257, 445 12th Street, SW., Washington, DC 20554. The full text of the 
NPRM may also be purchased from the Commission's duplicating 
contractor, Best Copy and Printing, Inc., Portals II, 445 12th Street, 
SW., Washington, DC 20554, telephone 202-488-5300, facsimile 202-488-
5563, e-mail at fcc@bcpiweb.com, or via its Web site at https://www.bcpiweb.com.
    Pursuant to Sections 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 in the DATES section of this 
NPRM. Comments may be filed: (1) By using the Commission's Electronic 
Comment Filing System (ECFS), (2) by using the Federal Government's 
eRulemaking Portal, (3) by filing paper copies, or (4) by using the 
Commission's Ideascale and Openinternet.gov sites. 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: https://www.fcc.gov/cgb/ecfs/ 
or the Federal eRulemaking Portal: https://www.regulations.gov. Filers 
should follow the instructions provided on the Web site for submitting 
comments.
     ECFS filers must transmit one electronic copy of the 
comments for each docket referenced in the caption of this proceeding. 
In completing the

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transmittal screen, filers should include their full name, U.S. Postal 
Service mailing address, and the applicable docket or rulemaking 
number.
     Parties may also submit an electronic comment by Internet 
e-mail. To get filing instructions, filers should send an e-mail to 
ecfs@fcc.gov, and include the following words in the body of the 
message, ``get form.'' A sample form and directions will be sent in 
response.
     Paper Filers: Parties who choose to file by paper must 
file an original and four copies 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 (although we continue to experience delays in 
receiving U.S. Postal Service mail). All filings must be addressed to 
the Commission's Secretary, Office of the Secretary, Federal 
Communications Commission.
     The Commission's contractor will receive hand-delivered or 
messenger-delivered paper filings for the Commission's Secretary at 236 
Massachusetts Avenue, NE., Suite 110, Washington, DC 20002. The filing 
hours at this location are 8 a.m. to 7 p.m. All hand deliveries must be 
held together with rubber bands or fasteners. Any envelopes 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.
     Blog Filers: In addition to the usual methods for filing 
electronic comments, the Commission is allowing comments, reply 
comments, and ex parte comments in this proceeding to be filed by 
posting comments on https://blog.openinternet.gov and on https://openinternet.ideascale.com. Accordingly, persons wishing to examine the 
record in this proceeding should examine the record on ECFS, https://blog.openinternet.gov, and https://openinternet.ideascale.com. Although 
those posting comments on the blog may choose to provide identifying 
information or may comment anonymously, anonymous comments will not be 
part of the record in this proceeding and accordingly will not be 
relied on by the Commission in reaching its conclusions in this 
rulemaking. The Commission will not rely on anonymous postings in 
reaching conclusions in this matter because of the difficulty in 
verifying the accuracy of information in anonymous postings. Should 
posters provide identifying information, they should be aware that 
although such information will not be posted on the blog, it will be 
publicly available for inspection upon request.
    This document contains proposed information collection 
requirements. The Commission, as part of its continuing effort to 
reduce paperwork burdens, invites the general public and the Office of 
Management and Budget (OMB) to comment on the information collection 
requirements contained in this document, as required by the Paperwork 
Reduction Act of 1995, Public Law 104-13. Public and agency comments on 
the proposed information collection requirements are due January 29, 
2010.
    Comments on the proposed information collection requirements should 
address: (a) Whether the proposed collection of information is 
necessary for the proper performance of the functions of the 
Commission, including whether the information shall have practical 
utility; (b) the accuracy of the Commission's burden estimates; (c) 
ways to enhance the quality, utility, and clarity of the information 
collected; and (d) ways to minimize the burden of the collection of 
information on the respondents, including the use of automated 
collection techniques or other forms of information technology. In 
addition, pursuant to the Small Business Paperwork Relief Act of 2002, 
Public Law 107-198, see 44 U.S.C. 3506(c)(4), we seek specific comment 
on how we might further reduce the information collection burden for 
small business concerns with fewer than 25 employees.
    OMB Control Number: None.
    Title: Disclosure of Network Management Practices.
    Form Number: N/A.
    Type of Review: New Collection.
    Respondents: Business or other for-profit; not-for-profit 
institutions; and State, Local or Tribal governments.
    Number of Respondents and Responses: 1,674 respondents; 1,674 
responses.
    Estimated Time per Response: 327 hours.
    Frequency of Response: Third party disclosure; reporting on 
occasion.
    Obligation to Respond: Mandatory.
    Total Annual Burden: 546,840 hours.
    Total Annual Costs: $4,687,000.
    Privacy Act Impact Assessment: No impact.
    Nature and Extent of Confidentiality: The Commission does not 
expect to provide respondents with any assurance of confidentiality.
    Needs and Uses: The Federal Communications Commission proposes to 
require providers of broadband Internet access service to disclose such 
information concerning network management and other practices as is 
reasonably required for users and content, application, and service 
providers to enjoy the protections specified in its October 22, 2009 
Notice of Proposed Rulemaking (FCC 09-93).
    To request materials in accessible formats for people with 
disabilities (Braille, large print, electronic files, audio format) or 
to request reasonable accommodations for filing comments (accessible 
format documents, sign language interpreters, CART, etc.), send an e-
mail to fcc504@fcc.gov or call the Consumer & Governmental Affairs 
Bureau at 202-418-0530 (voice) or 202-418-0432 (TTY).

Synopsis of Notice of Proposed Rulemaking

    1. When the Telecommunications Act of 1996 was enacted, very few 
Americans had residential broadband Internet access service. Since the 
competition-based policies ushered in by the Telecommunications Act 
first took root through Commission implementation in the late 1990s, 
broadband Internet access service adoption has increased dramatically, 
with broadband in approximately thirty percent of American households 
in 2005 and sixty-three percent today. It is important to note that 
from 1996 to the adoption of the Commission's Internet Policy Statement 
in August of 2005, digital subscriber line (DSL) service offered by 
telecommunications carriers was regulated under Title II of the Act and 
experienced explosive growth. Since the Commission adopted the Internet 
Policy Statement over four years ago, our nation has seen even greater 
expansion of broadband Internet access service. In 2005, access to the 
Internet was split evenly between dial-up and broadband; now less than 
ten percent of Americans access the Internet with dial-up. Online 
retail spending increased 65 percent between 2005 and 2007. Today 
nearly a fifth of online adults access Internet video on a daily basis, 
compared with eight percent in 2006. Broadband Internet access has 
become a vital resource for, among other things, commerce, civic 
engagement, and communications and telecommuting options for people 
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disabilities, health care, and education. For purposes of this 
proceeding, we propose to define the Internet as the system of 
interconnected networks that use the Internet Protocol for 
communication with resources or endpoints (including computers, 
webservers, hosts, or other devices) that are reachable, directly or 
through a proxy, via a globally unique Internet address assigned by the 
Internet Assigned Numbers Authority. To be considered part of the 
``Internet'' for this proceeding, an Internet end point must be 
identified by a unique address assigned through the Internet Assigned 
Numbers Authority or its delegate registry, not an address created by a 
user for its internal purposes. We do not intend for this definition of 
the Internet to encompass private intranets generally inaccessible to 
users of the Internet. We seek comment on these proposals.
    2. The evolution in Internet usage, and associated developments in 
network technology, have respectively motivated and enabled network 
operators to differentiate price and service for end users and for 
providers of content, applications, and services. A significant debate 
has developed over how best to preserve the Internet's openness. We 
thus find it appropriate at this time to evaluate the need for 
oversight of broadband Internet access service providers' practices. 
Given the evolution of the Internet and the broadband marketplace, we 
believe that high-level rules specifying impermissible practices will 
best promote an Internet environment of widespread innovation and 
light-handed regulation.

A. The Need for Commission Action

    3. Despite our efforts to date, some conduct is occurring in the 
marketplace that warrants closer attention and could call for 
additional action by the Commission, including instances in which some 
Internet access service providers have been blocking or degrading 
Internet traffic, and doing so without disclosing those practices to 
users. We also believe it is important to provide greater clarity and 
certainty to Internet users; content, application, and service 
providers; and broadband Internet access service providers regarding 
the Commission's approach to safeguarding the open Internet. As 
discussed below, we seek comment on the reasons either for or against 
particular types of oversight by the Commission of broadband Internet 
access service providers' practices, including possible specific rules. 
In undertaking this examination, we seek to preserve the open, safe, 
and secure Internet and to promote and protect the legitimate business 
needs of broadband Internet access service providers and broader public 
interests such as innovation, investment, research and development, 
competition, consumer protection, speech, and democratic engagement. 
Thus, in the subsequent parts of this NPRM, we seek comment on how to 
tailor rules to achieve this balance.
1. Commission Goals
    4. The Communications Act, related statutes, and Commission 
precedent establish a number of interrelated goals that inform the 
Commission's approach to broadband Internet access service. For one, 
the Commission seeks to promote investment and innovation with respect 
to the Internet, as with other communications technologies. As the 
Commission has recognized, ``[t]he Internet has served as a critical 
platform for innovation for nearly two decades,'' and ``[h]istorically, 
`the innovation and explosive growth of the Internet [have been] 
directly linked to its particular architectural design.' ''
    5. Promoting competition for Internet access and Internet content, 
applications, and services is another key goal. In particular, Section 
230 of the Act states that ``[i]t is the policy of the United States * 
* * to preserve the vibrant and competitive free market that presently 
exists for the Internet and other interactive computer services.'' In 
adopting its Internet Policy Statement, the Commission recognized the 
importance of such competition not only ``among network providers,'' 
but also among ``application and service providers, and content 
providers.'' As the Commission has observed, ``[s]o far in the 
Internet's history,'' the basic standards underlying the operation of 
the Internet ``have created `the equivalent of perfect competition * * 
* among applications and content * * * with a minimum [of] interference 
by the network or platform owner.' ''
    6. The Act and Commission precedent likewise demonstrate the 
importance of protecting users' interests as a Commission goal. These 
interests are wide-ranging, including consumer protection in commercial 
contexts; the development of technological tools to empower users; and 
speech and democratic participation. As Congress has observed, ``[t]he 
rapidly developing array of Internet * * * services available to 
individual Americans represent an extraordinary advance in the 
availability of educational and informational resources to our 
citizens,'' and the Internet ``offer[s] a forum for a true diversity of 
political discourse, unique opportunities for cultural development, and 
myriad avenues for intellectual activity.''
    7. Other statutory objectives are relevant to our evaluation of 
broadband Internet access service providers' practices, including 
addressing the needs of law enforcement and public safety. Each of the 
goals described above informs our policy analyses, and we seek comment 
on how these and other relevant policy goals should affect our analysis 
of the Internet principles discussed below.
    8. As a general matter, we believe that our proposals should have 
broad application so that the protections that we propose are widely 
enjoyed. As such, we propose to define broadband Internet access 
service for the purpose of these rules as ``[a]ny communication service 
by wire or radio that provides broadband Internet access directly to 
the public, or to such classes of users as to be effectively available 
directly to the public.'' We do not intend that our proposals would 
apply to ``establishments that acquire broadband Internet access 
service from a facilities-based provider to enable their patrons or 
customers to access the Internet from their respective 
establishments.'' For example, we would not intend to include coffee 
shops, waiting rooms, or rest areas. Nor would we intend to include 
broadband Internet access service that is not intentionally offered for 
the benefit of others, such as service from personal Wi-Fi networks 
whose signal may be detectable outside the user's premises. We seek 
comment on this approach for defining the scope of entities covered by 
our proposals, including ways to make clear who is and is not subject 
to these rules.
2. Evolution of the Internet Marketplace and Technologies
    9. We also note that Internet technologies have changed markedly 
along with the evolution of the Internet marketplace. The Internet has 
traditionally relied on an end-to-end, open architecture, in which 
network operators use their ``best effort'' to deliver packets to their 
intended destinations without quality-of-service guarantees. This open 
architecture ``allowed all application developers to make their 
innovations available to all by placing a software program on a 
publicly available server,'' but the best-effort nature of early 
networks presented challenges for the deployment of applications 
requiring quality-of-service assurances.
    10. With the rapid growth of broadband applications and content, 
especially video, access providers may

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face capacity constraints. In many cases, either provisioning 
additional bandwidth or using sophisticated software techniques has 
been sufficient to support applications requiring reliable delivery or 
low latency, such as real-time voice and video. For example, Skype has 
more than 440 million registered users for its Internet-based real-time 
communications application, which runs over the best-effort Internet. 
As Internet infrastructure and the content, applications, and services 
delivered over the Internet have evolved, network equipment makers have 
also responded with new technologies, including more sophisticated 
routers that enable network operators to distinguish among different 
classes of traffic and offer different qualities of service to 
different traffic (service differentiation), which enables charging 
different prices for different traffic (price differentiation). For 
example, a broadband Internet access service provider can ensure that 
one class of traffic enjoys a greater share of capacity than another 
when there is contention for resources. A broadband Internet access 
service provider can also differentiate among different packet streams 
or classes of traffic by scheduling the transmission of certain packets 
waiting in a buffer ahead of others, determining by algorithm which 
packets in a buffer are dropped (i.e., discarded and not transmitted), 
blocking an entire packet stream by means of an admission control 
algorithm, transmitting data over more (or less) efficient routing, 
redirecting traffic to another site, or blocking traffic entirely. With 
``deep packet inspection,'' a broadband Internet access service 
provider can determine which packets to favor by examining ``in detail 
the content of [an] e-mail, or Web page, or downloaded file. It is 
possible to distinguish music files from text from pictures, or to 
search for key words within any text.'' A broadband Internet access 
service provider can also favor certain parties by providing access to 
information cached at the provider's facility, allowing consumers 
quicker access to Web sites using the caching services.
    11. Any of these techniques may be provided only to an Internet 
access service provider's own affiliates and partners. Or they may be 
turned into a service that Internet access service providers offer to 
content and application providers for a fee. Equipment manufacturers 
note that these new technologies allow Internet access service 
providers to maximize the revenue opportunities associated with their 
networks. For example, Sandvine, a technology vendor, claims to offer a 
``range of policy management options such as application-based and 
subscriber-based approaches, aggregate and per-subscriber shaping, 
prioritization, caching and content acceleration.'' Procera Networks 
advertises its PacketLogic technology as giving network providers the 
ability to ``monetize your network'' by monitoring user traffic on a 
real-time basis and using ``optimization that distinguishes between 
interactive and downloading traffic.'' And Cisco offers network 
providers the ability to ``identify[] services that might be riding an 
operator's network for free'' and ``extend quality of service 
guarantees to that third party for a share of the profits.''
    12. Four years ago, changes that were already taking place in the 
Internet marketplace and among network technologies led the Commission 
to adopt the Internet Policy Statement. Since then, the Internet 
marketplace and underlying technologies have continued to evolve, and 
we seek more detailed comment on the technological capabilities 
available today, as offered for sale and as actually deployed in 
providers' networks. We further seek comment on the effects of those 
technologies on the content, applications, and services being 
provided--or capable of being provided--over the Internet.
3. The Debate Regarding Oversight of Traffic Management Pricing and 
Practices
    13. The increasing capability of broadband Internet access service 
providers to offer differentiated services and prices for traffic 
flowing over their networks has spurred a debate about the public 
policy implications of using that capability. In particular, some 
parties have expressed concerns that, absent appropriate oversight, 
broadband Internet access service providers could make the Internet 
less useful for some users or applications by differentiating traffic 
based upon the user, the application provider, or the type of traffic. 
Other parties have suggested that ``the problems are all potential 
problems, not actual problems'' and that the ``fundamental inability to 
demonstrate any evidence of an actual market failure confirms what all 
the rhetoric in the world cannot obscure: `Net neutrality' is a 
solution in search of a problem.''
    14. In determining the Commission's proper role with respect to 
safeguarding the open Internet, we believe it is helpful to examine 
this debate and the arguments that have been made in favor of and 
against open Internet policies. The arguments in this area have largely 
revolved around four issues: (1) How best to promote investment and 
innovation; (2) the current and future adequacy of competition and 
market forces; (3) how best to promote speech and civic participation; 
and (4) the practical significance of network congestion to the other 
considerations. We summarize and seek evidence supporting or refuting a 
number of these key arguments.
a. Investment and Innovation
    15. The Commission has recognized that the historically open 
architecture of the Internet has facilitated entrepreneurs' entry into 
the market with new Internet services and promoted the Act's policies 
favoring ``a diversity of media voices'' and ``technological 
advancement.'' As discussed above, however, technologies now allow 
network operators to distinguish different classes of traffic, to offer 
different qualities of service, and to charge different prices to each 
class.
    16. In light of these developments, some parties have contended 
that safeguarding historic Internet traffic pricing and practices is 
needed to preserve the end-to-end architecture of the Internet, with 
intelligence and control at the edge of the network. These proponents 
of open Internet policies maintain that the end-to-end architecture is 
essential to give entrepreneurs confidence that they will be free to 
innovate on the Internet without first seeking permission from 
broadband Internet access service providers and, accordingly, is 
necessary to promote innovation and growth. Supporters argue that 
differentiation by Internet access service providers can be especially 
harmful to innovation by outsiders--individuals and entities 
unaffiliated with network owners--who have been responsible for some of 
the most important innovations in the history of the Internet. These 
outsiders, many of whom may have limited resources but can innovate on 
today's Internet with very low marginal costs, could choose not to 
innovate if faced with fees from Internet access service providers for 
equal access to end users. And the potential for such fees may deter 
outsiders from investing in long-term research and development that 
could benefit all of society.
    17. Some parties characterize the Internet as a ``general purpose 
technology,'' which ``does not create value through its existence 
alone'' but ``by enabling users to do the things they want or need to 
do.'' ``[T]he rate at which a general purpose technology

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affects economic growth depends on the rate of co-invention (i.e., the 
rate at which potential uses of the technology are identified and 
realized).'' In the case of the Internet, this means ``that identifying 
potential uses for the Internet and developing the corresponding 
applications is the prerequisite for realizing the enormous growth 
potential inherent in the Internet as a general-purpose technology. As 
a result, measures that reduce the amount of application-level 
innovation have the potential to significantly harm social welfare by 
significantly limiting economic growth.''
    18. Parties opposing further Commission action in this area raise 
several arguments in response. First, they contend that differentiation 
in pricing or quality of service may enable different types of 
innovation that might not be feasible with a network lacking such 
capabilities. Second, they assert that some traffic imposes greater 
burdens on the network than other traffic and that ``innovation could 
be even better for consumers if it could respond to price signals from 
platform providers,'' such as by ``tak[ing] into account potential 
congestion costs of bandwidth-intensive applications.'' Third, they 
often claim that charging content, application, and service providers 
may be necessary to recover the cost of the investment in their 
networks and to fund additional investment in research, development, 
and infrastructure. According to opponents, charging only end users 
instead would increase end-user prices, limit the number of users, and 
reduce revenue, discouraging network improvements.
    19. Opponents also cite economic theory that holds that benefits 
can arise from price and quality discrimination, at least in certain 
cases. For example, they argue that the ability of a provider to price 
discriminate not only will benefit the provider, but may also benefit 
the public as a whole (although not necessarily in all cases). Further, 
economists have recognized that the Internet is an example of a ``two-
sided market,'' in that broadband Internet access service providers 
offer service to both end-user customers and to content, application, 
and service providers simultaneously. Theoretical economic analyses 
suggest that price discrimination may be more beneficial in a two-sided 
market than in the standard one-sided market.
b. Competition and Market Forces
    20. Supporters of open Internet policies contend that market forces 
alone are unlikely to ensure that broadband Internet access service 
providers will discriminate in socially efficient ways and that, absent 
regulation, such discrimination is likely to change fundamentally the 
nature of the Internet, reduce competition, and hinder innovation and 
growth. Furthermore, some have noted that the justification for 
government oversight of key infrastructure has not always relied solely 
on lack of competition in the relevant market, and argue that the long-
standing doctrines of common carriage or bailment should inform 
policies for broadband Internet access service providers.
    21. Even where there is effective competition in the Internet 
access market, individual broadband Internet access service providers 
may charge inefficiently high prices to content, application, and 
service providers, even though it may be in the collective interest of 
all providers to charge a lower price or zero price in order to 
maximize innovation at the edge of the network and thereby increase the 
overall value of broadband Internet access. Investing in innovative 
Internet content, applications, and services is risky, and firms will 
not invest unless their expected revenues exceed their expected costs. 
If allowed to do so, broadband Internet access service providers may 
attempt to extract some of the profit earned by content, application, 
and service providers by charging them fees for providing access (or 
prioritized access) to the broadband Internet access service providers' 
subscribers. These fees will reduce the potential profit that a 
content, application, or service provider can expect to earn and hence 
reduce the provider's incentive to make future investments in the 
quantity or quality of its content, application, or service.
    22. If enough broadband Internet access service providers impose a 
fee, or if the fees are sufficiently high across a small number of 
broadband Internet access service providers with sufficient market 
share, then not only will content, application, and service providers' 
incentive to innovate be reduced, but the fees could drive some 
content, application, and service providers from the market. This would 
reduce the quantity and quality of Internet content, applications, and 
services, reducing the overall value of the Internet to end users and 
thereby reducing demand for broadband Internet access services. This 
dynamic raises a collective action problem: Although it might be in the 
collective interest of competing broadband Internet access service 
providers to refrain from charging access or prioritization fees to 
content, application, and service providers, it is in the interest of 
each individual access provider to charge a fee, and given multiple 
providers, it is unlikely that access providers could tacitly agree not 
to charge such fees. Furthermore, it is unlikely that competitive 
forces are sufficient to eliminate the incentive to charge a fee, 
particularly where the imposition of such a fee will not cause the 
access provider to lose many customers. Thus, allowing broadband 
Internet access service providers to impose access or prioritization 
fees may inefficiently reduce innovation and investment in content, 
applications, and services, generating a suboptimal economic outcome.
    23. Where effective competition is lacking (i.e., where broadband 
Internet access service providers have market power), it is more likely 
that price and quality discrimination will have socially adverse 
effects. Broadband Internet access service providers possessing market 
power may have an incentive to raise prices charged to content, 
application, and service providers and end users. Not only would that 
harm users overall, but it could reduce innovation at the edge of the 
network and cause some end users to decide not to subscribe to 
broadband Internet access service. Moreover, imposing a fee on content, 
application, and service providers could reduce total welfare more than 
imposing the same fee on the end users and no fee on the content, 
application, and service providers. In particular, such pricing may 
disproportionately affect ``socially produced'' content, i.e., content 
produced collaboratively by individuals without a direct financial 
incentive, such as Wikipedia.
    24. In addition, broadband Internet access service providers 
generally, and particularly broadband Internet access service providers 
with market power, may have the incentive and ability to reduce or fail 
to increase the transmission capacity available for standard best-
effort Internet access service, particularly relative to other services 
they offer, in order to increase the revenues obtained from content, 
application, and service providers or individual users who desire a 
higher quality of service. The result may be insufficient transmission 
capacity allocated to some content, application, or service providers 
and a misallocation of transmission capacity across quality-of-service 
classes.
    25. Where broadband Internet access service providers have market 
power and are vertically integrated or affiliated with content, 
application, or service

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providers, additional concerns may arise. By providing a user's 
broadband connection to the Internet, a broadband Internet access 
service provider serves as a gatekeeper to the content, applications, 
and services offered on the Internet. Broadband Internet access service 
providers have an incentive to use this gatekeeper role to make it more 
difficult or expensive for end users to access services competing with 
those offered by the network operator or its affiliates. For example, a 
broadband Internet access service provider that is also a pay 
television provider could charge providers or end users more to 
transmit or receive video programming over the Internet in order to 
protect the broadband Internet access service provider's own pay 
television service. Alternatively, such a broadband Internet access 
service provider could seek to protect its pay television service by 
degrading the performance of video programming delivered over the 
Internet by third parties. The result may be higher prices or worse 
service for some content and applications and inefficiently low 
investment in some content and application markets.
    26. This analysis is further complicated by control that the 
broadband Internet access service provider has over the delivery of 
traffic to its subscribers. In particular, there are typically multiple 
paths for routing packets over the Internet. For those packets to reach 
the end users that subscribe to a particular broadband Internet access 
service, however, they ultimately must be transported on that broadband 
Internet access service provider's network. Thus, even if there is 
competition among broadband Internet access service providers, once an 
end-user customer has chosen to subscribe to a particular broadband 
Internet access service provider, this may give that broadband Internet 
access service provider the ability, at least in theory, to favor or 
disfavor any traffic destined for that subscriber. And as discussed 
throughout this section, there may be various circumstances when the 
broadband Internet access service provider would have the incentive to 
do so.
    27. Opponents have responded that the markets for broadband 
Internet access services are sufficiently competitive to allay these 
concerns. They further contend that, even if a broadband Internet 
access service provider possessed market power, it generally would have 
an incentive to discriminate only in a socially efficient manner. 
Finally, opponents argue that, even if broadband Internet access 
service providers occasionally discriminate in a socially inefficient 
manner, open Internet policies would impose greater costs and 
inefficiency than the absence of policies.
c. Speech and Civic Participation
    28. Congress has recognized that the Internet ``offer[s] a forum 
for a true diversity of political discourse, unique opportunities for 
cultural development, and myriad avenues for intellectual activity.'' 
Numerous judicial opinions have noted the Internet's potential for 
facilitating speech. The bipartisan Knight Commission recently reported 
that the Internet has brought about ``new forms of collaboration 
between full-time journalists and the general citizenry,'' opening the 
age of networked journalism. It also observed that ``[p]olitical 
leaders and many government agencies are staking out ambitious agendas 
for openness,'' and ``[t]he potential for using technology to create a 
more transparent and connected democracy has never seemed brighter.'' 
At the same time, however, broadband Internet access service providers 
today could block, slow, or redirect access to Web sites espousing 
public policy positions that the broadband Internet access service 
provider considers contrary to its interests, or controversial content 
to which the service provider wants to avoid any connection. Broadband 
Internet access service providers also have the ability to delete or 
hinder e-mail based on inspection of its contents. Because broadband 
Internet access service providers are not government actors, the First 
Amendment does not directly govern their actions.
    29. Proponents therefore argue that the Commission should take 
steps to preserve the Internet ``as a general purpose technology that 
supports wide open speech.'' Others have argued that ``the openness of 
networks [is] essential to meeting community information needs,'' and 
that the Internet could be conceived of as a ``new marketplace of 
ideas''--a ``core common infrastructure'' that ``giv[es] users the 
capacity to participate in building our common informational and 
cultural environment and the freedom to construct their personal 
information environment that is the greatest promise of networked 
communications.''
    30. Some proponents of oversight have thus argued that the 
Commission should apply a standard similar to strict scrutiny to 
content-based discrimination, to ensure that any discrimination be 
carefully tailored to serve the public interest, not merely a private 
interest. (As discussed below, we do not adopt this standard in the 
draft rules we propose.) Some parties further argue that broadband 
Internet access service providers should not be left to balance among 
competing public interests themselves, but rather that the Commission 
(or other government entity) must be the one to do so. In support of 
such oversight, proponents note that the government has undertaken a 
role in promoting communications technologies as a channel for speech 
and democratic content in other contexts, such as the cable ``must 
carry'' rules.
    31. Opponents respond that such policies are unnecessary. In 
particular, they claim that a ``firestorm of controversy * * * would 
erupt if a major network owner embarked on a systematic campaign of 
censorship on its network,'' thus mitigating the need for formal 
policies.
d. Congestion
    32. The existence of congestion in the network is a major 
motivating factor in the open Internet debate, and is central to 
arguments that differential pricing or service quality is necessary. 
Moreover, because the effects of delays or dropping of packets arising 
from congestion are not the same for all applications, broadband 
Internet access service providers and content, application, and service 
providers may have incentives to seek agreements for the prioritization 
of traffic or other quality of service guarantees. Permitting these 
activities without appropriate oversight could lead to a number of 
harms, undermining the public interest goals of the Act discussed 
above.
    33. Although network operators may seek to alleviate congestion by 
increasing capacity, such actions would involve costs--in some cases 
large costs--and revenue opportunities might not justify the required 
investment. As a result, we must balance the need for incentives for 
infrastructure investment with the need to ensure that network 
operators do not adopt congestion management measures that could 
undermine the usefulness of the Internet to the public as a whole. We 
seek further comment on these issues below.
4. Next Steps
    34. We summarized above a number of the key arguments in the 
ongoing open Internet debate. We recognize, however, that this summary 
may be incomplete. Thus, we seek comment on what other considerations 
should inform our analysis. We also seek qualitative or quantitative 
evidence and analysis that illuminates any of the above arguments, 
including specific examples. To what extent are particular

[[Page 62644]]

arguments independent of competitive conclusions regarding particular 
markets for broadband Internet access services? Even in effectively 
competitive markets for broadband Internet access service, what impact 
do switching costs and consumer lock-in effects have on broadband 
Internet access service providers' ability to act in ways that limit 
innovation in content, applications, and services and/or reduce overall 
welfare? To the extent that certain arguments do depend upon the 
particular competitive state of a market, how should the Commission 
define and evaluate such markets? What specific evidence is there 
regarding the competitive state of those markets? We also seek comment 
on whether and to what extent application of the generally applicable 
antitrust laws is sufficient to address the concerns we identify here. 
We further seek comment on the effect of our decision to promulgate or 
not promulgate rules on the availability of antitrust law to address 
anticompetitive conduct in the broadband Internet access service 
market, particularly in light of Verizon Communications Inc. v. Law 
Offices of Curtis V. Trinko, LLP and Credit Suisse Securities (USA) LLC 
v. Billing. We note that policymakers in a number of other countries 
are considering similar issues, and we seek comment on the analyses of 
these issues that have been raised in those contexts, as well.
    35. We also seek comment on possible implications that the draft 
rules we propose here might have on efforts to close the digital divide 
and encourage robust broadband adoption and participation in the 
Internet community by minorities and other socially and economically 
disadvantaged groups. According to a recent study, broadband adoption 
varies significantly across demographic groups, and African Americans, 
Hispanics, and lower-income Americans, among others, trail the national 
average in home broadband adoption. This disparity among broadband 
adoption rates is significant and impacts efforts to promote 
employment, education, healthcare, and consumer welfare. Minorities and 
other socially and economically disadvantaged groups may also face 
unique or particularly high barriers to innovation, communication, and 
civic participation on the Internet, and may be susceptible to 
discrimination. This may make open Internet protections particularly 
important for these groups. We invite comment on these and related 
issues.

B. Our Authority To Prescribe Rules Implementing Federal Internet 
Policy

    36. Consistent with the Comcast Network Management Practices Order, 
we may exercise jurisdiction under the Act to regulate the network 
practices of facilities-based broadband Internet access service 
providers. We have ancillary jurisdiction over matters not directly 
addressed in the Act when the subject matter falls within the agency's 
general statutory grant of jurisdiction and the regulation is 
``reasonably ancillary to the effective performance of the Commission's 
various responsibilities.'' That test is met with respect to broadband 
Internet access service.
    37. As explained in the Comcast Network Management Practices Order, 
we believe that exercising ancillary authority over facilities-based 
Internet access will ``promote the objectives for which the Commission 
has been [specifically] assigned jurisdiction'' and ``further the 
achievement of * * * [legitimate] regulatory goals.'' The proposed 
rules we enunciate here will, we believe, advance the federal Internet 
policy set forth by Congress in section 230(b) as well as the broadband 
goals that section 706(a) of the Telecommunications Act of 1996 charges 
the Commission with achieving. Section 201(b), moreover, gives the 
Commission specific authority ``to prescribe such rules and regulations 
as may be necessary in the public interest to carry out the provisions 
of th[e] Act.''
    38. Voice and video services are increasingly delivered over the 
Internet, in actual or potential competition with voice and video 
offerings of companies that provide broadband Internet access. This 
growing interrelationship with voice and video services that the 
Commission has traditionally regulated pursuant to express statutory 
obligations and its general public interest mandate further supports 
the Commission's consideration of regulatory requirements for the 
provision of broadband Internet access service, and its ancillary 
jurisdiction to establish appropriate rules.
    39. With respect to Internet access via spectrum-based facilities, 
we have additional authority pursuant to Title III of the 
Communications Act. We have recognized previously that the spectrum 
allocation and licensing provisions of Title III and the Commission's 
rules continue to apply to wireless broadband Internet access services 
because these services use radio spectrum. We have relied upon Title 
III authority in the past to regulate services provided by wireless 
carriers.
    40. We invite comment on our view that we have jurisdiction over 
broadband Internet access service sufficient to adopt and enforce the 
proposed rules, or other rules that commenters propose.

C. Codifying the Existing Four Internet Principles

    41. We believe that the four Internet principles have performed 
effectively their role of explicating statutory federal Internet 
policy. At the time the Commission adopted the principles, it stated 
that they were not rules but that it would ``incorporate the above 
principles into its ongoing policymaking activities.'' Those ongoing 
activities included a broadband practices proceeding, two public field 
hearings, and an enforcement action. After four years of evaluating 
market developments, we now believe it is appropriate to codify the 
four principles. Codification will increase certainty regarding the 
Commission's approach to preserving the open Internet.
    42. We propose to codify the four principles at their current level 
of generality. Doing so will help establish clear requirements while 
giving us the flexibility to consider particular circumstances case by 
case. In that way, we will be able to generate over time a body of law 
that develops as technology and the marketplace evolve. As one 
commenter observed, ``given the extraordinarily rapid and wholly 
unpredictable evolution of services and applications, we see the need 
for policymaking principles centered on supporting innovation and 
protecting consumer interests in an agile, rather than prescriptive, 
way.''
    43. We also propose to codify the principles as obligations of 
broadband Internet access service providers, rather than as describing 
what ``consumers are entitled'' to do with their service, as the 
original Internet principles were phrased. We believe that codifying 
them as obligations of particular entities, rather than just as 
principles, would make clear precisely who must comply and in what way. 
Making these rules apply to particular entities will also provide 
certainty to all Internet participants as to what to expect and who 
bears responsibility for what types of actions.
    44. Finally, we affirm that these principles apply to all providers 
of Internet access service (other than via dial-up), regardless of the 
technology over which such service is delivered. We recognize that in 
other contexts, the term ``broadband'' may be used differently. We 
believe, however, that

[[Page 62645]]

defining broadband here to encompass all non-dial-up Internet access 
will ensure that our open Internet rules benefit as many users as 
possible and have broad application to protect the open Internet, 
however accessed. We seek comment on this approach to defining 
``broadband.'' We propose that these rules should not apply to dial-up 
Internet access service. Title II regulation applies to users' 
telephone connections to dial-up Internet access service providers, and 
the Commission's interpretation of those obligations appears to have 
resulted in a market for dial-up Internet access service providers that 
does not present the same concerns as the market for broadband Internet 
access. In addition, because of the lower speed of dial-up Internet 
access service, many of the Internet applications and services that may 
benefit from quality-of-service assurances and that raise the greatest 
concerns regarding discrimination are unavailable over dial-up Internet 
connections as a practical matter. We seek comment on our proposal. We 
note that our use of the term ``broadband Internet access service'' in 
the context of this NPRM does not prejudge how the Commission might 
define that term in other contexts.
    45. Specifically, we propose that all providers of broadband 
Internet access service must comply with the following four rules:
    1. Subject to reasonable network management, a provider of 
broadband Internet access service may not prevent any of its users from 
sending or receiving the lawful content of the user's choice over the 
Internet.
    2. Subject to reasonable network management, a provider of 
broadband Internet access service may not prevent any of its users from 
running the lawful applications or using the lawful services of the 
user's choice.
    3. Subject to reasonable network management, a provider of 
broadband Internet access service may not prevent any of its users from 
connecting to and using on its network the user's choice of lawful 
devices that do not harm the network.
    4. Subject to reasonable network management, a provider of 
broadband Internet access service may not deprive any of its users of 
the user's entitlement to competition among network providers, 
application providers, service providers, and content providers.
    46. We believe that applying these rules to all providers of 
broadband Internet access service would support the statutory and 
policy goals we articulated above. First, these rules would support our 
goals of protecting consumers and encouraging innovation and 
investment. Ensuring that users can send and receive content, run 
applications, and use services of their choice allows them to take 
advantage of the diverse results of past investment and innovation, 
which in turn encourages further innovation and investment, and 
research and development. Likewise, ensuring that users can connect the 
devices of their choice to the network would encourage investment and 
innovation in the device market, and permits customers to change 
Internet access service providers more easily, which in turn would 
encourage more innovation among providers to win their business.
    47. Second, these rules would support our goals of promoting 
competition. They would promote competition in the upstream markets for 
content, applications, and services by ensuring that users can take 
advantage of any offerings, not just those that are approved or 
selected by their Internet access service provider. These rules would 
also support our goals of promoting consumer protection, user 
empowerment, speech, and democratic participation.
    48. We now address each principle in turn. The first principle in 
the Internet Policy Statement, and the first rule we propose to codify 
here, ensures that users are in control of the content that they send 
and receive. Making sure that users can express themselves freely on 
the Internet and receive the content of their choice ensures that users 
are unconstrained by broadband Internet access service providers in 
their ability to participate in the marketplace of ideas. Indeed, to 
further this interest in encouraging freedom of expression, we propose 
that the first rule make explicit that users can both send the content 
of their choice and receive the content of their choice. While the 
Internet Policy Statement principle referred only to users' ``access'' 
to content, we believe that the ability of a user to produce or 
distribute content is just as important as the ability to receive it. 
Indeed, anyone who posts a comment on a blog is ``sending'' content.
    49. The second principle in the original Internet Policy Statement 
protects the ability of consumers to run applications and use services 
of their choice, subject to the needs of law enforcement. As explained 
below, we propose that all the principles be subject to the needs of 
law enforcement, as well as public safety, and national and homeland 
security, by proposing separate draft rules on these topics. As 
explained in more detail below, we intend to leave sufficient 
flexibility in all our rules to allow broadband Internet access service 
providers to address law enforcement, public safety, and national and 
homeland security needs. Furthermore, we have no intention of 
protecting unlawful activities in these rules. Therefore, for 
additional precision, we add the word ``lawful'' to the proposed second 
rule to make clear that nothing here requires broadband Internet access 
service providers to allow users to engage in unlawful activities. The 
addition of the word ``lawful'' also harmonizes the second proposed 
rule with the first and third.
    50. The third principle in the original Internet Policy Statement 
allows users to connect their choice of legal devices that do not harm 
the network. The proposed rule changes the word ``legal'' to ``lawful'' 
for harmony with the other proposed rules. We do not intend any 
difference in meaning by changing this particular word. In addition, 
the proposed rule would protect the ability of users to connect and use 
such devices. We add this clarification to avoid any overly narrow 
reading of the proposed rule, and as discussed below, seek comment on 
the application of this proposed rule to wireless networks.
    51. The fourth principle in the original Internet Policy Statement 
protects competition among network providers, application and service 
providers, and content providers. Here, we change the proposed wording 
of the last three types of providers--application, service, and 
content--to be consistent with other proposed rules. Again, no 
substantive difference is intended by that change.
    52. We propose not to adopt a specific definition of ``content, 
application, or service provider,'' because any user of the Internet 
can be such a provider. For example, anyone who creates a family Web 
site for sharing photographs could be reasonably classified as a 
``content provider.'' We believe that this broad interpretation of the 
phrase would reinforce the other principles and the overall goals of 
this rulemaking.
    53. As stated, we propose that all four principles would apply to 
all forms of broadband Internet access service, regardless over which 
technology platform they are provided. We explain below that all four 
principles would be subject to reasonable network management and the 
needs of law enforcement, public safety, and homeland and national 
security authorities. In addition, we seek comment on the implications 
of these principles for broadband Internet access over mobile wireless 
networks and how, and in what time frames or phases, and to what extent 
they can be fairly and appropriately implemented.

[[Page 62646]]

    54. At least one commenter in this proceeding has suggested that we 
should read the Internet Policy Statement as embodying obligations 
binding on content, applications, and service providers in addition to 
broadband Internet access service providers. Although the question of 
Internet openness at the Commission has traditionally focused on 
providers of broadband Internet access service, we seek comment on the 
pros and cons of phrasing one or more of the Internet openness 
principles as obligations of other entities, in addition to providers 
of broadband Internet access service.
    55. We also seek comment in general on our formulation of these 
proposed rules, including whether the fourth principle is appropriate 
for codification as a rule or whether the other rules we propose in 
this NPRM adequately achieve the fourth principle's purposes. We seek 
comment, including any applicable data and specific examples, on the 
likely costs and benefits of each of these proposed rules. We also seek 
comment on whether and how codifying these principles will promote free 
speech, civic participation, and democratic engagement. Will codifying 
these principles help preserve the Internet's status as ``a forum for a 
true diversity of political discourse'' and an open platform for 
publication of information?

D. Codifying a Principle of Nondiscrimination

    56. As discussed above, the ability of network operators to 
discriminate in price or service quality among different types of 
traffic or different providers or users may impose significant social 
costs, particularly if the discrimination is motivated by 
anticompetitive purposes. At the same time, we recognize that traffic 
on the Internet is increasing rapidly and that broadband Internet 
access service providers must be able to manage their networks and 
experiment with new technologies and business models in ways that 
benefit consumers. The key issue we face is distinguishing socially 
beneficial discrimination from socially harmful discrimination in a 
workable manner.
    57. Based on the record, we propose a general rule prohibiting a 
broadband Internet access service provider from discriminating against, 
or in favor of, any content, application, or service, subject to 
reasonable network management. More specifically we propose the 
following new rule:
    5. Subject to reasonable network management, a provider of 
broadband Internet access service must treat lawful content, 
applications, and services in a nondiscriminatory manner.
    58. We further propose that, as with the previous four rules, this 
rule should be subject to exceptions for the needs of law enforcement, 
public safety, national and homeland security authorities, as discussed 
at greater length below.
    59. We understand the term ``nondiscriminatory'' to mean that a 
broadband Internet access service provider may not charge a content, 
application, or service provider for enhanced or prioritized access to 
the subscribers of the broadband Internet access service provider. We 
propose that this rule would not prevent a broadband Internet access 
service provider from charging subscribers different prices for 
different services. We seek comment on each of these proposals. We also 
seek comment on whether the specific language of this draft rule best 
serves the public interest.
    60. In defining the scope of this proposed fifth rule, we propose 
to focus on that portion of the connectio