Net Neutrality, Part 1

Note: This was originally published at the Overture Networks "Overtones" blog site at http://www.overturenetworks.com/connect-with-overture/overtones-blog/net-neutrality-part-1/. That site is no longer available.

“Net Neutrality” refers to the FCC ruling on the fair or non-discriminatory treatment of services and applications.  While the basics of Net Neutrality are simple, the ramifications are broad and complex. This blog is the first of a three part series. 

• Part 1 describes the basic principles and applicability to residential versus business services.
• Part 2 covers fixed versus mobile, the impact of competition, and the validity of the order.  It also provides pointers to additional resources.
• Part 3 explores how the rules impact service providers, and how they could evolve.

Note that parts 1 and 2 will delve heavily into the order itself.  I am doing this because I have found that with legal documents it is best to start with first principles.  Of course, that is a good practice in many other parts of life. 

In this case, the first principles are the FCC order itself.  If you want to explore further, Part 2 provides a list of opinion pieces, and part 3 reflects some conversations with service providers. 

On to first principles!

What is Net Neutrality?

The concept of Net Neutrality has changed over time (see here for a history) and varies per geographic region.  The interpretation in the US today originates in the FCC’s Open Internet Report and Order, which was issued in December 2010.  The Open Internet Report and Order is quite detailed and lengthy, with 194 pages and 855 footnotes.   Fortunately, the meat of the Open Internet Report and Order is in the brief and formal “Rules”.  These are defined in Appendix A on page 88, which adds Part 8 of Title 47 to the Code of Federal Regulations.  They are also summarized online at http://www.fcc.gov/guides/open-Internet.  Here is the meat of Appendix A:

§ 8.3      Transparency.
A person engaged in the provision of broadband Internet access service shall publicly disclose accurate information regarding the network management practices, performance, and commercial terms of its broadband Internet access services sufficient for consumers to make informed choices regarding use of such services and for content, application, service, and device providers to develop, market, and maintain Internet offerings.

§ 8.5      No Blocking.
A person engaged in the provision of fixed broadband Internet access service, insofar as such person is so engaged, shall not block lawful content, applications, services, or non-harmful devices, subject to reasonable network management.

A person engaged in the provision of mobile broadband Internet access service, insofar as such person is so engaged, shall not block consumers from accessing lawful websites, subject to reasonable network management; nor shall such person block applications that compete with the provider’s voice or video telephony services, subject to reasonable network management.

§ 8.7      No Unreasonable Discrimination.
A person engaged in the provision of fixed broadband Internet access service, insofar as such person is so engaged, shall not unreasonably discriminate in transmitting lawful network traffic over a consumer’s broadband Internet access service. Reasonable network management shall not constitute unreasonable discrimination.

…

§ 8.11    Definitions.
(a) Broadband Internet access service. A mass-market retail service by wire or radio that provides the capability to transmit data to and receive data from all or substantially all Internet endpoints, including any capabilities that are incidental to and enable the operation of the communications service, but excluding dial-up Internet access service. This term also encompasses any service that the Commission finds to be providing a functional equivalent of the service described in the previous sentence, or that is used to evade the protections set forth in this Part.

(b) Fixed broadband Internet access service. A broadband Internet access service that serves end users primarily at fixed endpoints using stationary equipment. Fixed broadband Internet access service includes fixed wireless services (including fixed unlicensed wireless services), and fixed satellite services.

(c) Mobile broadband Internet access service. A broadband Internet access service that serves end users primarily using mobile stations.


(d) Reasonable network management. A network management practice is reasonable if it is appropriate and tailored to achieving a legitimate network management purpose, taking into account the particular network architecture and technology of the broadband Internet access service.

Sounds straightforward, right?  Maybe.  These apparently simple rules are involved in a multi-party struggle between service providers, content and Over The Top (OTT) providers (such as Google and Netflix), the FCC, the courts and Congress.  The following sections will delve into the FCC’s order to see what it means.

Residential Only?

It is commonly understood that the current Net Neutrality rules apply only to consumer or residential services, and not to business or private services.  Is this understanding is correct?  Sections 45 and 46 on page 28 state:

45. “Mass market” means a service marketed and sold on a standardized basis to residential customers, small businesses, and other end-user customers such as schools and libraries.  … The term does not include enterprise service offerings, which are typically offered to larger organizations through customized or individually negotiated arrangements.

…

46. “Broadband Internet access service” encompasses services that “provide the capability to transmit data to and receive data from all or substantially all Internet endpoints.”

Section 45 seems to exempt enterprise service offerings if they are customized or negotiated.  Section 46 implies exemption for private services such as VPNs because they don’t provide access to “substantially all Internet endpoints.”  So, it would be accurate to say that typical enterprise or private networking services are not subject to the rules, but a standard internet offering to a commercial enterprise would be.  This is clarified in Section 54 and Footnote 172 on page 133, which state that “end user” and “consumer” also includes businesses:

54. The Open Internet NPRM sought comment on what end users and edge providers need to know about broadband service, how this information should be disclosed, when disclosure should occur, and where information should be available.¹⁷¹ The resulting record supports adoption of the following rule:

A person engaged in the provision of broadband Internet access service shall publicly disclose accurate information regarding the network management practices, performance, and commercial terms of its broadband Internet access services sufficient for consumers to make informed choices regarding use of such services and for content, application, service, and device providers to develop, market, and maintain Internet offerings. ¹⁷²

…

¹⁷² For purposes of these rules, “consumer” includes any subscriber to the broadband provider’s broadband Internet access service, and “person” includes any “individual, group of individuals, corporation, partnership, association, unit of government or legal entity, however organized,” cf. 47 C.F.R. § 54.8(a)(6).

So, the key is the type of service, not the type of customer.

Come back next week for Part 2, which covers fixed versus mobile and the impact of competition, along with pointers to additional resources.