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CHAPTER II - The Tension Between Markets and Government

Americans are becoming more aware of Internet governance issues than ever before. The biggest regulatory question facing the FCC and the future of the Internet—the issue of net neutrality and how to protect it—was not decided by the time of the conference, but the FCC has since issued its Open Internet order. The principle generally provides that no content should be prioritized above others, regardless of a content provider’s ability to pay more for the transmission. To Rosenworcel, it means “a user can go where he or she wants and do what he or she wants on the Internet unimpeded by the interference of his or her broadband provider.”

A key concern by net neutrality advocates is whether the playing field will allow for new companies to enter and compete against incumbents. Building a business costs money, and if the next YouTube or Snapchat feels the pressure of growing bandwidth bills is too high, startups could face insurmountable obstacles to getting launched.

In January 2014, the rules the FCC had been using since 2010 to support openness and enforce net neutrality were struck down by a U.S. Appellate Court after a years-long battle instigated by telecommunications companies. The Commission’s task in 2014 was to figure out how new rules and enforcement can fit into old laws—telecommunications laws written in 1934 and 1996, both of which are basically several pre-Internet generations ago.

“We’re seeing a level of public interest and engagement that is different from our prior discussions of this issue,” Commissioner Rosenworcel said. “That reflects just how powerful the Internet is. People are aware of what it really means to have networks that go far and go fast. These things are no longer abstract—they’re personal. For a democracy, that’s actually quite exciting. It’s going to make our job hard, but it’s the kind of hard we wish to have.”

The Regulation Question in Practice: U.S. Net Neutrality Debate

How to regulate is another tough question. The debate over the open Internet is now intertwined with a specific policy option—whether to reclassify broadband Internet to fall under Title II of the Telecommunications Act. In January 2015, when the D.C. Circuit Court overturned the FCC’s previous rules on net neutrality, it did so on the grounds that the agency did not justify its legal jurisdiction over ISPs under Section 706 of the Communications Act, nor under Title II of the statute since Internet providers were deemed not to be common carriers by an earlier FCC. Advocacy groups such as Free Press and the Electronic Frontier Foundation argued that the FCC should simply “fix the problem” and reclassify the industry so ISPs are regulated like public utilities. President Barack Obama, in a highly-publicized move in early November 2014, came out in support of the same reclassification favored by those advocates.

Big ISPs—Comcast, Verizon and Time Warner—and their trade associations and lobbyists argued that the Title II option will lead to suffocating regulation that would give them less incentive to invest millions in developing new technologies and maintaining or improving the current network connecting Americans to the Internet. They wanted the FCC to rewrite net neutrality rules relying on section 706 of the Telecommunications Act, as they say this is “lighter” regulation. Some advocacy groups, including a number of minority groups, agreed with this approach, saying that the D.C. Circuit’s decision does allow for using Section 706 as a jurisdictional basis if the FCC does it right, and that Title II could have too much baggage for modern Internet regulation.

As she left the meeting, Commissioner Rosenworcel charged the group with an assignment: recommend principles that FCC Commissioners could use in deciding these tensions and issues.

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