Here’s that FCC net neutrality compromise everyone demanded. And here’s the problem.

Federal Communications Commission (FCC) Chairman Tom Wheeler listens during an open meeting to receive public comment on proposed open Internet notice of proposed rulemaking and spectrum auctions May 15, 2014 at the FCC headquarters in Washington, DC. The FCC has voted in favor of a proposal to reform net neutrality and could allow Internet service providers to charge for faster and higher-quality service. (Photo by Alex Wong/Getty Images)

On Thursday, the FCC commissioners voted 3-2 to approve a framework for net neutrality rules that continue to favor the creation of an internet fast lane while exploring a line of inquiry into the idea of reclassifying broadband as a public utility. So, while the Federal Communications Commission has taken the protesters outside their offices to heart and adjusted the focus of its net neutrality rules a bit, the fate of the internet is still up in the air.

The notice sets off a discussion process that will culminate in new net neutrality rules, which chairman Tom Wheeler has said he hopes will be in place before the end of the year. Such rules are aimed at preventing ISPs from discriminating against traffic on their pipe — for example, preventing Comcast from slowing Gigaom traffic while stories from Comcast-owned NBC properties load with ease. However, the timing of actual rules will depend on what the agency decides to do after the four-month comment period on today’s proposed rules expires. So what are those rules? I’ll explain below.

Protesters outside the FCC ahead of the open meeting where the agency will start its net neutrality proceedings. Credit: Free Press

Protesters outside the FCC ahead of the open meeting where the agency will start its net neutrality proceedings. Credit: Free Press

Bringing in wireless networks to the net neutrality fold: In 2010, wireless and wireline networks were subject to different net neutrality rules after a compromise between Google and Verizon. The rules around discrimination on wireless networks were a bit more lenient, given the challenges of delivering large amounts of content over limited spectrum resources. By including the possibility of bringing wireless further into these rules, we have the debate over wireless discrimination all over again. And this is truly a tough debate because the physics of wireless networks are different from wireline networks. But with AT&T and Verizon trying to push landline and DSL customers onto LTE networks for voice and broadband access in rural areas, this debate is essential in order to make sure that the customers who have no choice but LTE have the same internet options as someone with cable or fiber.

Enhance transparency rule: This is pretty simple, but the idea here is that when ISPs take actions to block content or slow content or engage in deals with companies under any sort of prioritization scheme, customers will know about it, so they can “weigh their options.” While it’s nice to know that AT&T might have faster Netflix because the two companies have signed a deal to put Netflix traffic in a fast lane, it doesn’t help me if my only other alternative is Time Warner Cable that has put Gigaom’s servers in a fast lane, so I can send my video files back to my corporate office. Consumers will be left with bad choices or no choices, depending on their needs and location.

No blocking: This gets into the concept of the internet slow lane. As part of no blocking, the agency recognizes that there are plenty of things an ISP can do to make content unusable, such as slowing it to the point where video files become unwatchable or packets in a download are lost. This rule proposes minimum standards that remain to be seen (I’ll update when I see them) and will be a source of much drama in the weeks and months to come, because activists worry that it’s the weak legal link that ISPs can use to fight the new net neutrality rules.

No paid prioritization: The rules also try to say that priority service offered exclusively by a broadband provider to an affiliate should be considered illegal until proven otherwise. However, the agency acknowledges that this is a “rebuttable presumption,” which it defines as “a presumption that is taken to be true unless someone comes forward to contest it and proves otherwise” — like a court case. That would then allow for paid prioritization. Yes, that is a house the FCC is building on sand.

Dispute resolution: Who wants an internet ombudsman? Because that’s what the FCC is proposing as part of a series of rules that will allow the agency to take formal and informal complaints about ISP misbehavior. The agency also gives itself room to investigate ISP actions on its own. This is terrible, because it waits for ISPs to do harm as opposed to preventing it in the first place. I don’t see venture capitalists giving a lot of startups money to get pre-emptive investigations from the FCC before launching a service that may one day compete with a cable company or telco.

RIP net neutrality

The heart of the matter: The FCC is proposing that it should use the authority that it has under Section 706 of the 1996 Telecommunications Act to regulate net neutrality, which unfortunately leaves the rules open to the possibility of paid prioritization. While Chairman Wheeler said that these rules don’t allow paid prioritization and is vehemently against allowing any bifurcation of the internet, it’s also something that the agency can’t enforce if the ISPs offer a creative legal challenge to its no-blocking rules or the wording of the eventual net neutrality rules.

“The potential that there would be some kind of a fast lane has many concerned,” Wheeler said. “I don’t like the idea and I will work to see that does not happen. We specifically ask whether we can and how to prevent an internet fast lane.”

In short, using Section 706 will offer a substantial loophole for the possibility of paid prioritization. The commission is valiantly trying to fill it in with other rules, such as no-blocking and arguments about the potential consumer harm and the FCC’s mandate to protect consumers. Will that be enough? Only time and court cases will tell.

It’s in this same section that the FCC also devotes more space to the option of reclassifying broadband under Title II, which tech companies and Gigaom are in favor of. Title II would end up regulating broadband as a class of service more akin to telephone lines, where ISPs have certain obligations to the consumers and companies that ride on the network. The FCC seems to be using Title II to threaten ISPs to behave under these new net neutrality rules based on Section 706, but it’s also a response to protesters.

 Federal Communications Commission (FCC) Chairman Tom Wheeler speaks during an open meeting to receive public comment on proposed open Internet notice of proposed rulemaking and spectrum auctions May 15, 2014 at the FCC headquarters in Washington, DC. The FCC has voted in favor of a proposal to reform net neutrality and could allow Internet service providers to charge for faster and higher-quality service. (Photo by Alex Wong/Getty Images)

Federal Communications Commission (FCC) Chairman Tom Wheeler speaks during an open meeting to receive public comment on proposed open Internet notice of proposed rulemaking and spectrum auctions May 15, 2014 at the FCC headquarters in Washington, DC. The FCC has voted in favor of a proposal to reform net neutrality and could allow Internet service providers to charge for faster and higher-quality service. (Photo by Alex Wong/Getty Images)

What to do under Title II? If the agency elects to use Title II authority to regulate network neutrality, it would have to adjust or eliminate some of the requirements that Title II puts on ISPs that are harmful or irrelevant to how their businesses operate. Title II is from an era of landline and copper networks, so requirements associated with elements like forcing ISPs to open their networks would cause them to go all-out nuclear on the agency. The FCC would have to tweak those rules. It might do so on a case-by-case basis or might investigate whether applying Title III regulations to wireless carriers would make more sense.

In short, the rules are an effort to continue on the legal path the FCC believes is the best and fastest way to get net neutrality back on the books. But they don’t offer the ironclad protection that the internet and public were hoping for. While that ironclad option is still on the table, the FCC doesn’t think it’s prudent to go forth with Title II. The lack of a clear signal from the White House means the agency is likely to stick to its guns on using Section 706, unless public sentiment rallies so far in favor of Title II that Congress or the president push for a change in tactics.

If that happens, expect an epic battle behind the scenes as ISPs and web giants fight to carve out Title II to meet everyone’s needs.

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