Title II Bill May Not Guarantee Net Neutrality, Raises Other Concerns | American Institute of Enterprise
By Daniel Lyons
When the Federal Communications Commission (FCC) repealed Obama-era net neutrality rules, activists responded by posting judgment Day predictions of the the disappearance of the internet. Four years later, it is safe to say that their alarmism was greatly exaggerated. In our current regulatory framework, networks have thrived as America weathered an unprecedented pandemic that moved much of our collective way of life online.
Undeterred by this evidence and frustrated by the Senate’s inability to give Democrats an agency majority in confirming that FCC nominee Gigi Sohn, Sen. Ed Markey (D-MA) reportedly intends to impose net neutrality by law. Although the proposed bill has not been made public, sources suggest it would reclassify high-speed Internet access as a Title II telecommunications service, like the old telephone monopoly. Markey’s office explained that this would allow the FCC to treat broadband as “an essential public service” by “restoring net neutrality rules.”
But the reclassification of Title II, on its own, would not impose net neutrality on broadband providers. Indeed, contrary to the claims of many net neutrality proponents, the Obama-era rules did not simply subject broadband networks to the same rules that Title II traditionally imposed on telephone companies. When it came to paid prioritization — the banning of “fast lanes” at the heart of the net neutrality movement — the Obama-era rules were After restrictive than the obligations that Title II imposed on the former Bell Telephone monopoly.
Unreasonable discrimination and paid prioritization
The core of Title II is Section 202, which prohibits “unreasonable discrimination”. To win, a complainant must demonstrate that he received a service that was “similar” to a service provided to another customer and that the two customers were treated differently in providing that service. If the complaint meets these requirements, the onus is on the telecommunications provider to prove that the difference in service was reasonable.
Although Article 202 covers a wide range of conduct, there is one key limitation: it only prohibits differential treatment of “like” services. As the DC Circuit noted in 1993,
By its nature, Section 202(a) is not concerned with price differentials between qualitatively different services or sets of services. In other words, with respect to “unreasonable discrimination”, an apple does not have to be sold at the same price as an orange.
For example, AT&T offered “private line” service as an alternative to traditional public telephone service. Private line service allowed a customer to lease some telephone network capacity for private use, keeping a dedicated channel open between two telephones to minimize the risk of delay or interruption if the public telephone network became congested. . Private line service and traditional service were different: while both allowed voice communication, one carried a risk of congestion and the other did not. From the perspective of Section 202, it was apples and oranges; AT&T could sell both products.
Pay tiering is to broadband what private line service was to AT&T: a premium communication service without the risk of congestion that best accompanies traditional delivery. Prioritization offers a minimum quality of service guarantee, which could be useful for companies that offer congestion-sensitive content and applications. Since this service is not functionally equivalent to best effort delivery, Section 202 would not prohibit a broadband provider from offering both side-by-side. Simply put, Title II alone does not prohibit carriers from offering priority shipping to customers interested in purchasing it.
Of course, the FCC could interpret “unreasonable discrimination” more strictly for broadband providers than for the phone industry. This is essentially what happened with the net neutrality rules of 2015. But the reclassification legislation alone would not prohibit paid prioritization: the FCC should adopt a rule, the same FCC that is currently prevented from upgrading broadband due to Sohn’s stalled nomination.
Although the Title II classification does not restore net neutrality, it does raise other concerns. Specifically, Section 201 requires carriers to provide services at “just and reasonable” rates, which creates the specter of rate regulation. The Obama-era rules specifically waived rate regulation. But since then, the rhetoric about broadband affordability has intensified, despite residential broadband prices falling over the past decade. Whether Markey likes it or not, reclassification may be the camel’s nose under the tent that leads to broadband price regulation.
I have long argued that the legislative compromise offers the best hope for a lasting solution to the net neutrality debate. But it’s not that. Markey’s reclassification proposal simply invites further agency disputes over how Title II should apply to broadband providers, while raising fears of more comprehensive rate regulation in the future. A more stable compromise would impose bans on blocking, throttling and unreasonable prioritization in exchange for a guarantee that broadband providers are not Title II Telecommunications Providers. As this bill moves through Congress, I hope lawmakers move closer to that long-term balance.