[Federal Register Volume 89, Number 100 (Wednesday, May 22, 2024)]
[Rules and Regulations]
[Pages 45404-45556]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-10674]
[[Page 45403]]
Vol. 89
Wednesday,
No. 100
May 22, 2024
Part V
Federal Communications Commission
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47 CFR Parts 8 and 20
Safeguarding and Securing the Open Internet; Restoring Internet
Freedom; Final Rule
Federal Register / Vol. 89 , No. 100 / Wednesday, May 22, 2024 /
Rules and Regulations
[[Page 45404]]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Parts 8 and 20
[WC Docket Nos. 23-320, 17-108; FCC 24-52, FR ID 219926]
Safeguarding and Securing the Open Internet; Restoring Internet
Freedom
AGENCY: Federal Communications Commission.
ACTION: Final rule.
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SUMMARY: In this document, the Federal Communications Commission
(Commission or FCC) adopts a Declaratory Ruling, Report and Order,
Order, and Order on Reconsideration that reestablishes the Commission's
authority over broadband internet access service (BIAS). The
Declaratory Ruling classifies broadband internet access service as a
telecommunications service under Title II of the Communications Act,
providing the Commission with additional authority to safeguard
national security, advance public safety, protect consumers, and
facilitate broadband deployment. The Order establishes broad, tailored
forbearance of the Commission's application of Title II to broadband
providers while maintaining Title II provisions the Commission needs to
fulfill its obligations and objectives. The Report and Order reinstates
straightforward, clear rules that prohibit blocking, throttling, or
engaging in paid or affiliated prioritization arrangements, adopts
certain enhancements to the transparency rule, and reinstates a general
conduct standard that prohibits unreasonable interference or
unreasonable disadvantage to consumers or edge providers. The Order on
Reconsideration partially grants and otherwise dismisses as moot four
petitions for reconsideration filed in response to the 2020 Restoring
Internet Freedom Remand Order.
DATES: Effective July 22, 2024, except for amendatory instruction 7
(revisions to 47 CFR 8.2(a) and (b)), which is delayed indefinitely.
The FCC will publish a document in the Federal Register announcing the
effective date.
As of September 19, 2024, China Mobile International (USA) Inc.,
China Telecom (Americas) Corporation, China Unicom (Americas)
Operations Limited, Pacific Networks Corp., and ComNet (USA) LLC, and
their affiliates and subsidiaries as defined pursuant to 47 CFR
2.903(c), shall discontinue any and all provision of broadband internet
access service.
ADDRESSES: Federal Communications Commission, 45 L Street SW,
Washington, DC 20554. In addition to filing comments with the Office of
the Secretary, a copy of any comments on the Paperwork Reduction Act
information collection requirements contained herein should be
submitted to Nicole Ongele, Federal Communications Commission, 45 L
Street SW, Washington, DC 20554, or send an email to [email protected].
FOR FURTHER INFORMATION CONTACT: For further information, contact Chris
Laughlin, Wireline Competition Bureau at 202-418-2193. For additional
information concerning the Paperwork Reduction Act information
collection requirements contained in this document, send an email to
[email protected] or contact Nicole Ongele, [email protected].
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's
Declaratory Ruling, Order, Report and Order, and Order on
Reconsideration in WC Docket Nos. 23-320 and 17-108, FCC 24-52, adopted
on April 25, 2024, and released on May 7, 2024. The full text of the
document is available on the Commission's website at https://docs.fcc.gov/public/attachments/FCC-24-52A1.pdf. To request materials
in accessible formats for people with disabilities (e.g., braille,
large print, electronic files, audio format, etc.), send an email to
[email protected] or call the Consumer & Governmental Affairs Bureau at
(202) 418-0530 (voice).
Paperwork Reduction Act of 1995 Analysis
This document contains new or modified information collection
requirements. The Commission, as part of its continuing effort to
reduce paperwork burdens, will invite the general public to comment on
the information collection requirements contained in the Report and
Order as required by the Paperwork Reduction Act of 1995, Public Law
104-13. In addition, the Commission notes that pursuant to the Small
Business Paperwork Relief Act of 2002, Public Law 107-198, see 44
U.S.C. 3506(c)(4), we previously sought specific comment on how the
Commission might further reduce the information collection burden for
small business concerns with fewer than 25 employees.
In the Report and Order, we adopt the transparency rule originally
adopted in 2010 and reaffirmed in 2015, which caters to a broader
relevant audience of interested parties than the audience identified in
the Restoring Internet Freedom (RIF) Order (83 FR 7852 (Feb. 22,
2018)). We reinstate enhancements to the transparency rule disclosures
pertaining to network practices and performance characteristics.
Specifically, with regard to network practices, we reaffirm that the
transparency rule requires that BIAS providers disclose any practices
applied to traffic associated with a particular user or user group
(including any application-agnostic degradation of service to a
particular end user), and requires that disclosures of user-based or
application-based practices must include the purpose of the practice;
which users or data plans may be affected; the triggers that activate
the use of the practice; the types of traffic that are subject to the
practice; and the practice's likely effects on end users' experiences.
In addition, we require BIAS providers to disclose any zero-rating
practices.
We reinstate the enhanced performance characteristics disclosures
eliminated in 2017 to require BIAS providers to disclose packet loss
and to require that performance characteristics be reported with
greater geographic granularity and be measured in terms of average
performance over a reasonable period of time and during times of peak
usage. We also require BIAS providers to directly notify end users if
their individual use of a network will trigger a network practice,
based on their demand prior to a period of congestion, that is likely
to have a significant impact on the end user's use of the service. We
temporarily exempt (with the potential to become permanent) BIAS
providers that have 100,000 or fewer BIAS subscribers as per their most
recent FCC Form 477, aggregated over all affiliates of the provider,
from the requirements to disclose packet loss and report their
performance characteristics with greater geographic granularity and in
terms of average performance over a reasonable period of time and
during times of peak usage, as well as from the direct notification
requirement to provide them additional time to develop appropriate
systems. We delegate to the Consumer and Governmental Affairs Bureau
(CGB) the authority to determine whether to maintain the exemption, and
if so, the appropriate bounds of the exemption. We require providers to
disclose all information required by the transparency rule on a
publicly available, easily accessible website and that all transparency
disclosures made pursuant to the transparency rule also be made
available in machine-readable format.
In addition, to provide upfront clarity, guidance, and
predictability, we adopt an updated process for providers seeking an
advisory opinion from Commission staff regarding the open
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internet rules, through which any BIAS provider may request an advisory
opinion regarding the permissibility of its proposed policies and
practices affecting access to BIAS.
Congressional Review Act
The Commission has determined, and the Administrator of the Office
of Information and Regulatory Affairs, Office of Management and Budget,
concurs, that this rule is major under the Congressional Review Act, 5
U.S.C. 804(2). The Commission will send a copy of the Declaratory
Ruling, Order, Report and Order, and Order on Reconsideration to
Congress and the Government Accountability Office pursuant to 5 U.S.C.
801(a)(1)(A).
Synopsis
I. Declaratory Ruling: Classification of Broadband Internet Access
Services
1. We reinstate the telecommunications service classification of
BIAS under Title II of the Act. Reclassification will enhance the
Commission's ability to ensure internet openness, defend national
security, promote cybersecurity, safeguard public safety, monitor
network resiliency and reliability, protect consumer privacy and data
security, support consumer access to BIAS, and improve disability
access. We find that classification of BIAS as a telecommunications
service represents the best reading of the text of the Act in light of
how the service is offered and perceived today, as well as the factual
and technical realities of how BIAS functions. Classifying BIAS as a
telecommunications service also accords with Commission and court
precedent and is fully and sufficiently justified under the
Commission's longstanding authority and responsibility to classify
services subject to the Commission's jurisdiction, as necessary. We
also ensure that consumers receive the same protections when using
fixed and mobile BIAS by reclassifying mobile BIAS as a commercial
mobile service.
A. Reclassification Enhances the Commission's Ability To Fulfill Key
Public Interest Obligations and Objectives
2. As the record overwhelmingly demonstrates, BIAS connections are
absolutely essential to modern day life, facilitating employment,
education, healthcare, commerce, community-building, communication, and
free expression. The ``forced digitization'' of the COVID-19 pandemic
served to underscore the importance of BIAS connections in society as
essential activities moved online, and the increased importance of BIAS
connections has only persisted in the wake of the pandemic. It has
therefore never been more important that the Commission have both the
necessary authority to oversee this essential service to protect
consumers, strengthen national security, and support public safety, and
the full complement of tools to facilitate access to BIAS.
3. While our conclusion that classifying BIAS as a
telecommunications service represents the best reading of the Act is
itself sufficient grounds for our decision, we separately conclude that
important policy considerations also support this determination. In
particular, our reclassification decision will ensure the Commission
can fulfill statutory obligations and policy objectives to ensure
internet openness, defend national security, promote cybersecurity,
safeguard public safety, monitor network resiliency and reliability,
protect consumer privacy and data security, support consumer access to
BIAS, and improve disability access. As such, these policy obligations
and objectives, each independently and collectively, support the
reclassification of BIAS as a telecommunications service. We therefore
reject arguments that we should address other issues instead of
reclassifying BIAS, particularly since reclassification will enhance
the Commission's ability to address many of the issues commenters
raise.
1. Ensuring Internet Openness
4. We find that reclassification of BIAS as a telecommunications
service enables the Commission to more effectively safeguard the open
internet. In addition to protecting free expression, an open internet
encourages competition and innovation, and is critical to public
safety. As we explain below, we find that a safe, secure, and open
internet is too important to consumers and innovators to leave without
the protection of Federal regulatory oversight.
5. Upon this document's reclassification of BIAS as a Title II
telecommunications service, we rely on our authority in sections 201
and 202 of the Act, along with the related enforcement authorities of
sections 206, 207, 208, 209, 216, and 217, for the open internet rules
we adopt in the Declaratory Ruling, Order, Report and Order, and Order
(Order) to address practices that are unjust, unreasonable, or
unreasonably discriminatory. Specifically, we reinstate rules that
prohibit BIAS providers from blocking or throttling the information
transmitted over their networks or engaging in paid or affiliated
prioritization arrangements, and reinstate a general conduct standard
that prohibits practices that cause unreasonable interference or
unreasonable disadvantage to consumers or edge providers. As discussed
more fully below, these rules, in concert with strong transparency
requirements, establish clear standards for BIAS providers to maintain
internet openness and give the Commission a solid basis on which to
take enforcement actions against conduct that prevents consumers from
fully accessing all of the critical services available through the
internet. The reclassification also enables the Commission to establish
a nationwide framework of open internet rules for BIAS providers and
thereby exercise our authority to preempt any state or local measures
that interfere or are incompatible with the Federal regulatory
framework we establish in the Order, while at the same time ensuring
that all consumers are protected from conduct harmful to internet
openness.
2. Defending National Security and Law Enforcement
6. The reclassification of BIAS enhances the Commission's ability
to protect the Nation's communications networks from entities that pose
threats to national security and law enforcement. The RIF Order's
classification of BIAS as an information service under Title I raised
concerns about the Commission's authority to take certain regulatory
actions to address risks to BIAS providers and vulnerabilities in
broadband networks. As the National Telecommunications and Information
Administration (NTIA) highlights, ``the Commission has encountered
challenges that have hampered its ability to fully protect the public
from serious national security threats.'' For example, NTIA describes
cases where the Commission identified such threats and revoked the
authority of certain foreign-owned adversarial service providers to
provide Title II telecommunications services (including ``traditional
telephony'') in the United States pursuant to its section 214
authority, but was not able to stop them from providing BIAS or other
internet-based services that were then classified as Title I services.
Classifying BIAS under Title II alleviates those concerns, restoring a
broader range of regulatory tools and enhancing the Commission's
jurisdiction to cover broadband services, providers, and networks. We
also find that reclassification will enable the
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Commission to make more significant national security contributions as
we continue our longstanding coordination with our Federal partners.
7. We find that reclassification will significantly bolster the
Commission's ability to carry out its statutory responsibilities to
safeguard national security and law enforcement. Congress created the
Commission, among other reasons, ``for the purpose of the national
defense.'' The Commission's national security responsibilities are well
established. Presidential Policy Directive 21 (PPD-21) describes the
Commission's roles as including ``identifying communications sector
vulnerabilities and working with industry and other stakeholders to
address those vulnerabilities . . . [and] to increase the security and
resilience of critical infrastructure within the communications
sector.'' The President's recent National Security Memorandum, NSM-22,
recognized the Commission's role in securing critical infrastructure:
``The Federal Communications Commission will, to the extent permitted
by law and in coordination with DHS and other Federal departments and
agencies: (1) identify and prioritize communications infrastructure by
collecting information regarding communications networks; (2) assess
communications sector risks and work to mitigate those risks by
requiring, as appropriate, regulated entities to take specific actions
to protect communications networks and infrastructure; and (3)
collaborate with communications sector industry members, foreign
governments, international organizations, and other stakeholders to
identify best practices and impose corresponding regulations.''
8. There can be no question about the importance to our national
security of maintaining the integrity of our critical infrastructure,
including communications networks. As PPD-21 explains:
The Nation's critical infrastructure provides the essential
services that underpin American society. Proactive and coordinated
efforts are necessary to strengthen and maintain secure,
functioning, and resilient critical infrastructure--including
assets, networks, and systems--that are vital to public confidence
and the Nation's safety, prosperity, and well-being . . . . The
Federal Government also has a responsibility to strengthen the
security and resilience of its own critical infrastructure, for the
continuity of national essential functions, and to organize itself
to partner effectively with and add value to the security and
resilience efforts of critical infrastructure owners and operators .
. . . It is the policy of the United States to strengthen the
security and resilience of its critical infrastructure against both
physical and cyber threats.
Developments in recent years have only highlighted national
security concerns arising in connection with the U.S. communications
sector. These security threats also impact BIAS providers and broadband
networks. PPD-21 recognizes that ``communications systems [are]
uniquely critical due to the enabling functions they provide across all
critical infrastructure sectors,'' which highlights the importance of
protecting communications infrastructure--including broadband networks.
Disruptions of communications can easily have significant cascading
effects on other critical infrastructure sectors that rely on
communications. The PPD-21 states, ``U.S. efforts shall address the
security and resilience of critical infrastructure in an integrated,
holistic manner to reflect this infrastructure's interconnectedness and
interdependency. This directive also identifies energy and
communications systems as uniquely critical due to the enabling
functions they provide across all critical infrastructure sectors.'' We
find that reclassification of BIAS under Title II will enable the
Commission to more fully utilize its regulatory authority and rely on
its subject matter expertise and operational capabilities to address
these concerns and strengthen the security posture of the United
States. As NTIA explains, the ``lightning-fast evolutions of our
communications technologies and our growing dependence on these
offerings necessitate a whole-of-government approach to security that
engages all available federal government resources.''
9. The Commission has on multiple occasions carried out its
responsibilities to protect the Nation's communications networks from
threats to national security and law enforcement by taking regulatory
actions under Title II regarding the provision of traditional
telecommunications services, including voice. For example, the
Commission denied an application for international section 214
authority and revoked the section 214 authority of, certain entities
that are majority-owned and controlled by the Chinese government, based
on recommendations and comments from interested Executive Branch
agencies regarding evolving national security and law enforcement
concerns. In the China Mobile USA Order, China Telecom Americas Order
on Revocation and Termination, China Unicom Americas Order on
Revocation, and Pacific Networks and ComNet Order on Revocation and
Termination, the Commission found that these entities are subject to
exploitation, influence, and control by the Chinese government, and
that mitigation would not address the national security and law
enforcement concerns. In the China Telecom Americas Order on Revocation
and Termination, China Unicom Americas Order on Revocation, and Pacific
Networks and ComNet Order on Revocation and Termination, the Commission
also found that the significant national security and law enforcement
risks associated with those entities' retention of their section 214
authority ``pose a clear and imminent threat to the security of the
United States.'' More recently, the Commission adopted the Evolving
Risks Notice of Proposed Rulemaking (NPRM) (88 FR 50486 (Aug. 1,
2023)), which, among other things, proposed rules that would require
carriers to renew, every 10 years, their international section 214
authority. In the alternative, the Commission sought comment on
adopting rules that would require all international section 214
authorization holders to periodically update information enabling the
Commission to review the public interest and national security
implications of those authorizations based on that updated information.
As stated in the Evolving Risks NPRM, the overarching objective of that
proceeding is to adopt rule changes ``that will enable the Commission,
in close collaboration with relevant Executive Branch agencies, to
better protect telecommunications services and infrastructure in the
United States in light of evolving national security, law enforcement,
foreign policy, and trade policy risks.''
10. The reclassification of BIAS as a Title II service, and our
decision below to decline to forbear from the entry certification
requirements of section 214, will enable the Commission to exercise its
section 214 authority with respect to BIAS providers, and will enhance
the Commission's ability to protect the Nation's communications
networks from entities that pose threats to national security and law
enforcement. Section 214(a) of the Act prohibits any carrier from
constructing, acquiring, or operating any line, and from engaging in
transmission through any such line, without first obtaining a
certificate from the Commission ``that the present or future public
convenience and necessity require or will require the construction, or
operation, or construction and operation, of such . . . line . . . .''
The Supreme Court has determined that the Commission has
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considerable discretion in deciding how to make its section 214 public
interest findings. As we discuss elsewhere, while we grant blanket
section 214 authority for the provision of BIAS to all current and
future BIAS providers, with exceptions, this grant of blanket authority
is subject to the Commission's reserved power to revoke such authority,
consistent with established statutory directives and longstanding
Commission determinations with respect to section 214 authorizations.
The Commission has explained that it grants blanket section 214
authority, rather than forbearing from application or enforcement of
section 214 entirely, in order to remove barriers to entry without
relinquishing its ability to protect consumers and the public interest
by withdrawing such grants on an individual basis. And we find that the
Commission's determinations, based on thorough record development, in
the denial and revocation actions discussed below, in which the
Commission extensively evaluated national security and law enforcement
considerations associated with those entities, support our decision to
exclude from this blanket section 214 authority for the provision of
BIAS those same entities whose application for international section
214 authority was previously denied or whose domestic and international
section 214 authority was previously revoked by the Commission because
of national security and law enforcement concerns. As discussed below,
we find that excluding those entities and their current and future
affiliates and subsidiaries from blanket section 214 authority for the
provision of BIAS is warranted based on the Commission's determinations
in those proceedings that the present and future public interest,
convenience, and necessity would no longer be served by the retention
of those entities' section 214 authority, or that the public interest
would not be served by the grant of international section 214
authority. The Commission's actions in those proceedings were based on
recommendations and comments regarding evolving national security and
law enforcement concerns from Executive Branch agencies, including from
Members of, or Advisors to, the Committee for the Assessment of Foreign
Participation in the U.S. Telecommunications Sector (Committee) created
pursuant to Executive Order 13913. Our action in the Order will enable
the Commission to use its section 214 authority to address threats to
communications networks, working cooperatively with our Federal
partners and leveraging all investigative tools at our disposal.
11. Reclassification will also enhance the Commission's ability to
obtain information from BIAS providers that will enable the Commission
to assess national security risks, through reliance on section 214 of
the Act, along with sections 201, 202, 218, 219, and 220. The
Commission relies on sections 201 and 202 of the Act, and section 706
of the 1996 Act, for its authority to collect information.
Additionally, section 218 of the Act authorizes the Commission to seek
``full and complete information necessary to enable the Commission to
perform the duties and carry out the objects for which it was
created.'' Section 219 of the Act provides that ``[t]he Commission is
authorized to require annual reports from all carriers subject to this
chapter, and from persons directly or indirectly controlling or
controlled by, or under direct or indirect common control with, any
such carrier, to prescribe the manner in which such reports shall be
made, and to require from such persons specific answers to all
questions upon which the Commission may need information.'' Section
220(c) of the Act provides that ``[t]he Commission shall at all times
have access to and the right of inspection and examination of all
accounts, records, and memoranda, including all documents, papers, and
correspondence now or hereafter existing, and kept or required to be
kept by such carriers, and the provisions of this section.'' As one
example, in the Evolving Risks Order (88 FR 85514 (Dec. 8, 2023)), the
Commission adopted a one-time collection of foreign ownership
information from international section 214 authorization holders,
pursuant to sections 218 and 219 of the Act, among other statutory
provisions. Reclassification grants the Commission additional authority
to develop information collection requirements pursuant to applicable
provisions under Title II with regard to BIAS providers.
12. We anticipate as well that Title II authority, such as that
provided in section 201 of the Act, will be important in addressing
national security and law enforcement concerns involving internet
Points of Presence (PoPs), which are usually located within data
centers, as those relate to the provision of BIAS. Today, internet
service providers (ISPs) provide BIAS through PoPs. There are serious
national security and law enforcement risks associated with PoPs that
are owned or operated by entities that present threats to national
security and law enforcement interests and potential harms related to
the services provided by such entities. For instance, in the China
Telecom Americas Order on Revocation and Termination, the Commission
addressed concerns that China Telecom (Americas) Corporation's (CTA)
PoPs in the United States ``are highly relevant to the national
security and law enforcement risks associated with CTA'' and that
``CTA's PoPs in the United States provide CTA with the capability to
misroute traffic and, in so doing, access and/or manipulate that
traffic.'' The Commission also stated that ``CTA, like any similarly
situated provider, can have both physical and remote access to its
customers' equipment needed to provide such services,'' and ``[t]his
physical access to customers' equipment would allow CTA to monitor and
record sensitive information.'' The Commission concluded that CTA's
provision of services pursuant to its section 214 authority, ``whether
offered individually or as part of a suite of services--combined with
CTA's physical presence in the United States, CTA's ultimate ownership
and control by the Chinese government, and CTA's relationship with its
indirect parent [China Telecommunications Corporation], which itself
maintains a physical presence in the United States--present
unacceptable national security and law enforcement risks to the United
States,'' and it reached similar conclusions in the other proceedings.
In the China Telecom Americas Order on Revocation and Termination, the
Commission stated that ``[i]n cases where [China Telecom Americas'
(CTA's)] PoPs reside in IX points, CTA can potentially access and/or
manipulate data where it is on the preferred path for U.S. customer
traffic, through its services provided pursuant to section 214
authority and those services not authorized under section 214
authority.'' The Commission also noted that ``[t]he Executive Branch
agencies refer to public reports that CTA's network misrouted large
amounts of information and communications traffic over long periods,
often several months, sometimes involving U.S. government traffic.''
Notably, CTA's website indicates that the company operates 23 PoPs in
the United States and offers a number of services that may be available
in the United States, including colocation, broadband, internet access,
IP transit, and data center services. We conclude that the same
national security and law enforcement concerns identified in that
revocation proceeding are at least as likely to be present in the
context of BIAS offerings when used to route or exchange BIAS traffic.
In the China
[[Page 45408]]
Telecom Americas Order on Revocation and Termination, the Commission
concluded that CTA's provision of services pursuant to its section 214
authority, ``whether offered individually or as part of a suite of
services--combined with CTA's physical presence in the United States,
CTA's ultimate ownership and control by the Chinese government, and
CTA's relationship with its indirect parent [China Telecommunications
Corporation], which itself maintains a physical presence in the United
States--present unacceptable national security and law enforcement
risks to the United States.'' We expect that reclassification of BIAS
under Title II will enable the Commission to exercise authority when
necessary to prohibit a BIAS provider from exchanging internet traffic
with third parties that present threats to U.S. national security and
law enforcement, such as CTA.
13. This document's reclassification decision also will provide the
Commission with broader authority under Title II to safeguard BIAS
providers, networks, and infrastructure from equipment and services
that pose national security threats. The Commission has undertaken
significant efforts to improve supply chain security pursuant to its
universal service authority in section 254 of the Act, its authority to
regulate equipment in sections 302 and 303 of the Act, and new mandates
established by Congress through the Secure and Trusted Communications
Networks Act of 2019, as amended, and the Secure Equipment Act of 2021.
In particular, the Commission has taken action to: prohibit the use of
universal service fund (USF) support to purchase or obtain any
equipment or services produced or provided by companies posing a
national security threat; prohibit the use of Federal subsidies
administered by the Commission and used for capital expenditures to
provide advanced communications service to purchase, rent, lease, or
otherwise obtain such equipment or services; create and maintain a list
of communications equipment and services that pose an unacceptable risk
to the national security (``covered equipment and services'');
administer the Secure and Trusted Communications Networks Reimbursement
Program (Reimbursement Program) to reimburse the costs providers incur
to remove, replace, and dispose of covered Huawei and ZTE equipment and
services from their networks; and prohibit the authorization of
equipment that poses a threat and the marketing and importation of such
equipment in the United States. Reclassification furthers these efforts
by enhancing the Commission's ability to address issues raised by the
use in our networks of equipment and services that pose a threat to
national security and law enforcement. Notably, the Commission stated
that the definition of ``provider of advanced communication services''
for purposes of the Reimbursement Program did not limit program
eligibility to providers who offer service to end users, and included
intermediate providers that carry traffic for other carriers only and
do not originate or terminate traffic.
14. We are unpersuaded by commenters who argue that Title II
classification is unjustified for national security purposes because
they question this policy rationale, argue that market forces are
sufficient to address national security risks, or contend that
potential national security regulations under Title II would be costly
or burdensome for BIAS providers. The Commission's national security
concerns are not new. As evidenced by the discussion above, the
Commission has engaged in numerous and ongoing actions to address these
risks. The Nation's communications networks are critical
infrastructure, and therefore too important to leave entirely to market
forces that may sometimes, but not always, align with necessary
national security measures. Arguments regarding costs and burdens are
unpersuasive given that, at this point, they represent only speculation
about hypothetical costs and burdens. To the extent there are costs and
burdens associated with any ultimate action the Commission may
undertake, we anticipate that the benefits to national security will
outweigh those costs.
15. We also disagree with those commenters that reject the national
security justification for reclassification on the grounds that there
are no gaps that need to be filled or problems that need to be solved
by the Commission, that argue that the Commission has a marginal role
in protecting national security, or that contend Commission action
would undermine the existing whole-of-government national security
approach. These commenters fail to recognize, as noted above, that
Congress made clear, when creating the Commission, that one of its
enumerated purposes was to further the ``national defense.''
Additionally, these commenters ignore the Commission's significant
contributions to the whole-of-government approach to national security.
In addition to the regulatory actions discussed above, the Commission
is actively engaged in several Federal interagency working groups and
policy committees that address a diverse range of national security
topics, including cybersecurity, critical infrastructure resilience,
emergency preparedness and response, supply chain risk management, and
space systems cybersecurity. Commission staff receive classified
briefings from the Intelligence Community on threats to the
communications sector, exchange relevant information with Federal
partners, and coordinate with law enforcement agencies to support
various national security initiatives. The Commission also supports
National Special Security Events (NSSE) and Security Event Assessment
Rating (SEAR) 1 events and conducts investigations to determine if
communications are being transmitted lawfully, if spectrum is being
used appropriately, or if radio-frequency devices are authorized for
operation. As a result of the Commission's collaborative efforts, we
have learned that there are segments of the communications sector that
are not subject to sufficient Federal regulatory oversight, including
BIAS, due to the RIF Order's misclassification of the service in 2017.
This lack of sufficient oversight allows security vulnerabilities to go
undiscovered--and unaddressed--which can produce negative consequences
for the communications sector, as well as other critical infrastructure
sectors. As articulated above, reclassification directly supports the
Commission's role in cross-government efforts and helps fill gaps in
oversight by enabling the Commission to take regulatory actions to
address national security risks.
16. We are also unpersuaded by arguments that reclassification is
unjustified because we can address certain harms without such change.
Some commenters argue that it would be sufficient to prevent carriers
already subject to Title II from interconnecting with any entities that
pose national security risks, whether or not those entities are
themselves subject to Title II. We find that merely taking this action
would fall far short of what is necessary to address our national
security concerns, especially given the vastly diminished role of Title
II voice and other traditional telecommunications services in today's
communications marketplace. A prohibition on only regulated carriers--
meaning those currently subject to Title II--from interconnecting with
entities that pose a national security threat would not reach
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providers of BIAS without reclassification. We find that it is instead
necessary to directly address the national security risks associated
with the provision of BIAS with the enhanced authorities available
under Title II. The reclassification of BIAS is an important step
toward closing the national security loopholes that exist within the
communications sector, especially in broadband networks.
17. Finally, we reject arguments of commenters that oppose
reclassification as unnecessary because the Commission's existing
authority is sufficient to address national security concerns for which
Congress has authorized the Commission to act; because the Commission
does not have statutory authority to address national security concerns
involving BIAS, broadband transmission services, or certain network
infrastructure; or because Title II does not provide the Commission
with authority to address national security. The Commission relies on
multiple statutory provisions when taking action to protect national
security, but Title II of the Communications Act includes some of the
most important authorities and vests the Commission with a broad grant
of rulemaking authority to ``prescribe such rules and regulations as
may be necessary in the public interest to carry out the provisions of
this chapter.'' Indeed, we have articulated several sources of
authority above. As we do not adopt any new national-security-focused
rules in the Order, we need not articulate with specificity each Title
II provision that would provide a source of authority for potential
action that the Commission may take in the future. Similarly, we are
not persuaded that using Title II authority for national security
purposes would violate Article II of the Constitution. As the U.S.
Court of Appeals for the Fifth Circuit recently held, the Commission's
exercise of authority to address national security threats to
communications networks does not violate the separation of powers or
infringe upon the President's constitutional authority to conduct
foreign affairs.
3. Promoting Cybersecurity
18. As with national security, the Commission has an important role
in addressing cybersecurity in communications networks that is inherent
in its establishment ``for the purpose of the national defense.'' The
National Cybersecurity Strategy highlights the importance of protecting
critical infrastructure as more of our ``essential systems'' move
online. The expanding cyber threat landscape is ``making cyberattacks
inherently more destructive and impactful to our daily lives.'' This
trend is especially problematic because ``malicious cyber activity has
evolved from nuisance defacement, to espionage and intellectual
property theft, to damaging attacks against critical infrastructure, to
ransomware attacks and cyber-enabled influence campaigns.'' Further,
``offensive hacking tools and services, including foreign commercial
spyware, are now widely accessible . . . [to] organized criminal
syndicates.'' In addition, ``China, Russia, Iran, North Korea, and
other autocratic states . . . are aggressively using advanced cyber
capabilities'' to pursue economic and military objectives. These
malicious cyber activities threaten ``the national security, public
safety, and economic prosperity of the United States and its allies and
partners.''
19. The communications sector is squarely in the crosshairs of
malicious cyber actors, who have targeted communications providers with
ransomware attacks and have exploited vulnerabilities in communications
networks to carry out cyberattacks against other critical
infrastructure. For example, the 2023 Annual Threat Assessment of the
U.S. Intelligence Community highlights the cyber threats to U.S.
communications networks and states that ``China's cyber espionage
operations have included compromising telecommunications firms.'' More
recently, Federal Bureau of Investigation (FBI) Director Christopher
Wray highlighted ``China's increasing buildout of offensive weapons
within our critical infrastructure,'' which has enabled ``persistent
PRC access'' to U.S. ``critical telecommunications, energy, water, and
other infrastructure.''
20. The Commission actively supports the U.S. Government's efforts
to protect critical infrastructure by participating in cybersecurity
planning, coordination, and response activities. However, the
classification of BIAS as a Title I information service has limited the
regulatory actions that the Commission could take to address cyber
incidents impacting some aspects of the communications sector, as well
as other critical infrastructure sectors. This is not a hypothetical
concern. As NTIA states on behalf of the Executive Branch,
``[r]eclassifying BIAS is necessary to ensure that the Commission has
the authority it needs to advance national security objectives.'' In
recent years, Federal agencies have requested the Commission's
assistance with mitigating specific risks and vulnerabilities in
broadband networks that foreign adversaries could exploit to carry out
cyberattacks against the United States. The lack of Title II authority
over BIAS has essentially precluded the Commission from taking
regulatory action to directly address these concerns. We note, by way
of example, recent reports of efforts of China-based hackers to target
Philippines government officials by carrying out cyberattacks over
broadband networks in that country. We find that reclassifying BIAS as
a Title II service will help to fill this gap by enhancing the
Commission's ability to protect U.S. communications networks and
infrastructure from cyberattacks and to ensure that communications
devices and equipment do not pose security risks to other critical
infrastructure sectors.
21. The reclassification of BIAS significantly bolsters the
Commission's existing authority to take regulatory actions to address
cybersecurity risks and vulnerabilities in broadband networks. We agree
with NTIA that reclassification will enable the Commission to better
``protect our networks from malicious actors . . . [by] leverag[ing]
the appropriate tools at its disposal, including the relevant Title II
provisions.'' We agree with commenters that reclassification ``provides
multiple new authorities for the Commission to engage on
cybersecurity'' and take regulatory actions to ``study cybersecurity
needs and impose minimum standards on BIAS providers.'' For example,
the Commission could build on existing efforts to require BIAS
providers to implement cybersecurity plans and risk management plans to
protect their networks from malicious cyber activity. This enhanced
authority over BIAS could also allow the Commission to obtain greater
situational awareness by working in coordination on cyber incident
reporting with the Cybersecurity & Infrastructure Security Agency
(CISA) as it implements the Cyber Incident Reporting for Critical
Infrastructure Act of 2022 (CIRCIA). It also provides the Commission
with additional regulatory tools to ensure network and service
reliability and better support effective 911 and emergency preparedness
and response efforts.
22. Reclassification also places the Commission in a stronger
position to address vulnerabilities threatening the security and
integrity of the Border Gateway Protocol (BGP), which impacts ``the
transmission of data from email, e-commerce, and bank transactions to
interconnected Voice-over-Internet Protocol (VoIP) and 9-1-1 calls.''
For example, the Commission could
[[Page 45410]]
consider requiring service providers to deploy solutions to address BGP
vulnerabilities, such as BGP hijacks. The agency could also consider
establishing cybersecurity requirements for BGP, including ``security
features to ensure trust in the information that it is used to
exchange,'' which could prevent bad actors from ``deliberately
falsify[ing] BGP reachability information to redirect traffic to itself
or through a specific third-party network, and prevent that traffic
from reaching its intended recipient.'' We note, however, that this
filing does not oppose the reclassification of BIAS under Title II, the
issue being addressed in the Order. Similarly, the Commission could
more effectively address security threats related to the Domain Name
System (DNS), which enables domain names to resolve to the correct IP
addresses, and other naming protocols when used by BIAS providers to
facilitate the operation of BIAS.
23. Some commenters argue that reclassification is unnecessary
because the Commission's existing authority is sufficient to address
cybersecurity risks in areas where Congress has authorized the
Commission to act. Other commenters argue that the classification of
BIAS is irrelevant because the Commission does not have statutory
authority to address cybersecurity matters. But it is well established
that the Commission may--indeed must--take security and public safety
considerations into account in its public interest determinations under
Title II. We disagree with these commenters because the classification
of BIAS under Title I created a loophole that largely precluded the
Commission from taking regulatory actions to address cyber risks to
BIAS providers and vulnerabilities in broadband networks. For example,
under the Title I classification, the Commission has limited authority
to require providers of non-Title II services (e.g., BIAS providers) to
adopt cybersecurity standards or performance goals, report information
about cyber incidents, or take defensive measures to protect
communications networks and critical infrastructure. The
reclassification of BIAS under Title II allows the Commission to use a
broader range of regulatory tools by reestablishing the Commission's
legal jurisdiction over broadband services, providers, and networks.
This change is necessary to ensure the Commission can effectively
address the cyber threats to the communications sector.
24. We also disagree with those commenters that argue that the
Commission should not take action because it lacks the expertise and
resources to implement a Title II regulatory regime in the area of
cybersecurity and because other agencies are better equipped to address
cybersecurity risks and vulnerabilities. For example, Verizon points
out that CISA is ``the federal leader for cyber and physical
infrastructure security'' and claims that the Commission plays ``only a
supporting role.'' NCTA--The Internet & Television Association (NCTA)
agrees, based on the fact that CISA ``issue[s] administrative subpoenas
to critical infrastructure entities, which includes broadband
providers, to obtain information necessary to identify and notify
entities of vulnerabilities in their system.'' We recognize and
appreciate CISA's leadership in protecting critical infrastructure--
including communications networks--from malicious cyber activity. The
Commission works closely with CISA and other Federal agencies in a
collaborative manner to address risks and vulnerabilities impacting the
communications sector. Chairwoman Rosenworcel currently serves as Chair
of the Cybersecurity Forum for Independent and Executive Branch
Regulators, ``a federal interagency group that shares information and
expertise to enhance the cybersecurity of America's critical
infrastructure.'' Further, the Commission is the regulatory agency for
communications and, as such, has access to regulatory authorities and
investigative tools that Congress has not granted to other agencies.
For example, the Commission recently adopted a cybersecurity labeling
program for Internet of Things (IoT) devices and products, and proposed
a pilot program to help schools and libraries improve their
cybersecurity efforts through the USF. In addition, the Commission
regularly investigates cyber intrusions and hacks related to the breach
of regulatorily protected consumer data in the possession of common
carriers, cable providers, and satellite providers. For example, cyber
breaches may involve unauthorized access to personally identifiable
information (PII) or customer proprietary network information (CPNI).
Likewise, our data protection investigations frequently involve
investigating and assessing whether the regulated entities had
reasonable cybersecurity protections in place to protect the networks
on which sensitive data are housed. The reclassification of BIAS will
enable the Commission to more effectively fulfill its responsibilities,
including those identified in PPD-21, within the existing frameworks
that support the whole-of-government approach to cybersecurity.
25. Even though the Commission, under Title II, may not be able to
address all significant cyber vulnerabilities, we find that the
availability of that authority meaningfully enhances our ability to
address significant cybersecurity threats. Given the interconnected
nature of communications networks, any efforts to reduce the number of
vulnerabilities and threat vectors that can be targeted by malicious
cyber actors could provide substantial benefits to the larger
communications sector. A recent cyberattack by Russian hackers against
Kyivstar, Ukraine's largest telecommunications provider, ``knocked out
services'' for 24 million users and ``completely destroyed the core''
of the company's network. This incident demonstrates how cyberattacks
targeting communications service providers--including BIAS providers--
can have disastrous impacts by damaging network infrastructure and
causing widespread service outages. The Electronic Privacy Information
Center (EPIC) asserts that ``immediate regulatory action must be taken
to compel ISPs to shore up their cybersecurity practices to better
protect consumers,'' and argues that Title II reclassification of BIAS
would empower the Commission to take further action. We agree with EPIC
and conclude that reclassification enhances the Commission's ability to
require BIAS providers to implement cybersecurity practices and take
other actions to protect the confidentiality and integrity of
information on the traffic that [each provider] stores or transmits.
26. Similar to certain arguments made opposing reclassification for
national security purposes, commenters opposing reclassification for
cybersecurity purposes argue that: the Commission has adequate
authority to address cybersecurity issues under Title I;
reclassification will be costly, burdensome, and too rigid for a
dynamic threat landscape; and industry already addresses cybersecurity
risks without regulatory mandates. We find that the Commission has an
essential role in promoting measures that ``currently seem to best
protect consumers from breaches and other cyber incidents.'' As
described above, and consistent with our conclusions on national
security matters generally, reclassification will provide additional
authority to act when necessary and in coordination with our Federal
partners to address cybersecurity in the communications sector.
Although the adoption of specific cybersecurity
[[Page 45411]]
requirements is beyond the scope of this proceeding, we intend for any
future proposed action to provide regulatory flexibility, ``leverage
existing cybersecurity frameworks,'' encourage ``public-private
collaboration,'' and be designed to minimize the ``cost of
implementation.''
4. Safeguarding Public Safety
27. Reclassifying BIAS as a telecommunications service enables the
Commission to advance several public safety initiatives. Congress
created the Commission, among other reasons, ``for the purpose of
promoting safety of life and property through the use of wire and radio
communication,'' and as the Commission recognized in the RIF Remand
Order (86 FR 994 (Jan. 7, 2021)), ``[a]dvancing public safety is one of
our fundamental obligations.'' The Mozilla court explained that when
```Congress has given an agency the responsibility to regulate a market
such as the telecommunications industry that it has repeatedly deemed
important to protecting public safety,' then the agency's decisions
`must take into account its duty to protect the public.' '' The
Commission's responsibility to address public safety is becoming
increasingly important as the severity and frequency of natural
disasters continue to rise. Reclassification enhances the Commission's
jurisdiction over BIAS providers, which, in combination with our other
statutory authority, will allow us to ensure BIAS meets the needs of
public safety entities and individuals when they use those services for
public safety purposes.
28. Reclassification will empower the Commission to more
effectively support public safety officials' use of BIAS for public
safety purposes. Public safety officials' reliance on broadband service
has become integral to their essential functions and services, even
aside from their use of enterprise-level broadband services, including
how they communicate with each other and how they convey information to
and receive information from the public. Public safety entities and
first responders often rely on retail broadband services to communicate
during emergency situations. Increasingly, public safety entities rely
on BIAS to access various databases, share data with emergency
responders, and stream video into 911 and emergency operations centers.
Public safety officials also rely on BIAS outside the emergency
context, including relying on individuals' residential security systems
that use BIAS and programs that are alternatives to incarceration,
which require individuals to check in with supervising officers
remotely, wear electronic location monitoring devices, or use
continuous alcohol monitoring devices. In addition, public safety
officials use services accessible over the top (OTT) of broadband
connections, such as social media, to communicate important and timely
information to the public and to gain valuable information from the
public and build on-the-ground situational awareness. For example,
during the recent 911 outage that impacted several western states,
public safety officials used social media ``to inform the public of the
issue and to provide alternate means of contacting emergency
services.'' Santa Clara describes the essential role BIAS also plays in
public safety officials' ability to carry out their daily, non-
emergency functions, including its importance in the functioning of its
emergency communications and operations protocols. Santa Clara also
describes the importance of redundancies in its emergency
communications and operations systems, and that many of these systems
rely on BIAS, outside of its enterprise systems. Public safety entities
benefit as well when they rely on enterprise services, which often flow
over the same facilities as mass-market retail services. For example,
Emergency Services Internet (ESInet) is a managed UP network that is
used for emergency services communications and which may be constructed
from a mix of dedicated and shared facilities. ESInets can be realized
in several ways with one example using the Multi-Protocol Label
Switching (MPLS) standard used by many BIAS and transit providers'
networks for traffic engineering and sharing facilities with other
traffic. Reclassification gives the Commission additional jurisdiction
to advance the existing uses of BIAS to support public safety
operations and communications by, for example, taking regulatory
actions to improve the effectiveness of emergency alerting and 911
communications. Given how crucial BIAS is to the protection of public
safety and that reclassification provides the Commission with the
ability to ensure that BIAS is reliable and secure during emergencies,
we disagree with those commenters who argue that reclassification will
not enhance public safety communications on the basis that public
safety entities heavily rely on enterprise-level dedicated networks
that fall outside of the scope of reclassification.
29. BIAS also plays an increasingly important role in allowing the
public to communicate with first responders during emergency
situations. In the RIF Remand Order, the Commission noted that retail
broadband services are used to translate communications with 911
callers and patients in the field and to deliver critical information
about 911 callers that is not delivered through the traditional 911
network. The Commission has undertaken various efforts in recent years
to improve how the public reaches and shares information with emergency
service providers. Title II classification of BIAS supports these
current and future efforts. For example, reclassification enhances the
Commission's jurisdiction to improve the flow of voice communications,
photos, videos, text messages, real-time text (RTT), and other types of
communications from the public to emergency service providers through
Next Generation 911 or Wi-Fi calling.
30. The public relies on BIAS to easily access public safety
resources and information. Commenters who support reclassification and
petitioners for reconsideration of the RIF Remand Order note that
social media is increasingly used as an important resource by the
public to access information about emergencies and other public safety
incidents. We therefore disagree with commenters who argue that there
is no evidence that the Commission's lack of regulatory authority over
BIAS poses public safety risks. Similar to the arguments made by
commenters who argue that reclassification will not affect
communications networks used by public safety officials, this argument
ignores that both public safety officials and the public increasingly
rely on BIAS. Indeed, BIAS has become for many individuals the primary
way to access critical public safety services, without which there
would be no other mode of communication. Reclassification enables the
Commission to ensure that communications are secure and reliable in
times of emergency. We agree with the Communications Workers of America
(CWA) that ``[w]hile many providers have made strides in improving
service quality and reducing outages, voluntary commitments are clearly
not enough.'' Furthermore, the fact that many states have implemented
their own laws to ensure public safety communications are safeguarded
demonstrates the gap that has existed since the repeal of Title II
classification of BIAS. We observe that the public also relies on BIAS
for public safety communications that occur outside of emergencies,
including for telemedicine; residential safety and security systems;
and in-home
[[Page 45412]]
monitoring of individuals who are elderly, disabled, or otherwise able
to benefit from such services.
31. BIAS is essential when used by individuals with disabilities to
communicate with public safety services, and the Commission has taken
several steps to improve access to IP-enabled 911 communications for
people with disabilities. For example, the Department of Health and
Human Services recently announced that the 988 Suicide & Crisis
Lifeline will provide direct video calling ASL services for people who
are deaf and hard of hearing, as part of ongoing efforts to expand
accessibility to behavioral health care for underserved communities.
This will allow an ASL user in crisis to communicate directly with a
counselor in ASL. Reclassification enhances our existing authority to
ensure these communications are not interrupted or degraded by, for
example, giving the Commission the jurisdiction necessary to ``develop
minimum standards of service and enforcement mechanisms that affect
people with disabilities.'' Likewise, reclassification ``provide[s] the
FCC with the tools needed, for example, to promote broadband in rural
areas lacking sufficient access to BIAS where there is no substitute
for copper wires which carry 911, closed captioning, and TTY
services.''
32. Reclassification will enhance the Commission's ability to
better protect public safety communications. For example, Title II
positions the Commission to more fully examine and investigate
incidents involving BIAS providers that are alleged to have violated
the Commission's rules, including those against throttling or blocking.
In addition to holding any particular violative action to account,
enforcement proceedings would also enable the Commission to prevent or
mitigate future threats to BIAS by using data and information gathered
as a result of those proceedings. Reclassification will also enable the
Commission to make the Nation's alerting and warning capabilities more
effective and resilient by, for example, adopting rules requiring BIAS
providers to transmit emergency alerts to their subscribers. Further,
given the expanding ways in which individuals and public safety
officials rely on BIAS to keep themselves and their homes safe, Title
II will enable the Commission to ensure that BIAS providers protect and
securely transmit the sensitive information to which they are privy
pursuant to section 222, which requires service providers to protect
customer information. Thus, reclassification enables the Commission to
take a wider range of regulatory actions to ensure the public can
reliably and securely access life-saving public safety resources and
information using BIAS.
33. We find that the ability of the Commission to adopt ex ante
regulations will provide better public safety protections than the ex
post enforcement framework established by the RIF Order. We agree with
Santa Clara and INCOMPAS, which, in their Petitions for Reconsideration
of the RIF Remand Order, criticize the RIF Remand Order's analysis of
the record at that time in light of these observations, including the
RIF Remand Order's minimization of the opportunity for harm to public
safety in the absence of reclassification and the open internet conduct
rules as well as its acceptance of industry's voluntary commitments to
abide by the principles underlying the open internet rules.
Reclassification and the conduct rules enable the Commission ``to deal
with public safety issues before a public safety situation arises--not
afterwards, as the RIF Remand Order suggests,'' and do not force the
Commission to rely on voluntary industry commitments to protect public
safety.
34. Some commenters assert that reclassification will stymie
innovation and reduce incentives for investment, which in turn, does
not serve public safety goals. Both INCOMPAS and Santa Clara petitioned
for reconsideration of the RIF Remand Order in large part on this very
notion, pointing out that the asserted benefits of increased investment
and innovation under Title I was unsupported by the record and that
there was evidence to the contrary. We agree with Public Knowledge in
that ``[n]owhere has the Commission ever found that the nebulous and
unsubstantiated benefits of deregulation outweigh the specific benefits
of ensuring that public safety responders can communicate reliably with
each other and with the public in times of crisis.'' Linking increases
or decreases in investment and innovation with reclassification is not
supported by the available evidence, as we discuss in more detail
below.
5. Monitoring Network Resiliency and Reliability
35. The Commission also plays a critical role in monitoring the
resiliency and reliability of the Nation's communications networks and
helping to ensure that these networks are in fact resilient and
reliable. PPD-21 defines ``resilience'' as ``the ability to prepare for
and adapt to changing conditions and withstand and recover rapidly from
disruptions . . . [it] includes the ability to withstand and recover
from deliberate attacks, accidents, or naturally occurring threats or
incidents.'' The Nation's networks are critical lifelines for those in
need during disasters and other emergency situations. Recent events,
including hurricanes, wildfires, tornadoes, earthquakes, and severe
winter storms, demonstrate how communications infrastructure remains
susceptible to disruption. As broadband services become more
widespread, consumers increasingly rely on these connections. As of
February 2021, Pew Research estimates that 77% of adults in the United
States have high-speed broadband service at home. Smartphone ownership
among adults in the US is now estimated to be at 85%. The Commission
has taken actions consistent with its existing authority to improve the
reliability and resiliency of the Nation's communications networks so
that the public can communicate, especially during emergencies.
However, those efforts have had to largely focus on the networks'
provision of voice telephony under Title II. This document's action to
reclassify BIAS under Title II will enable the Commission to build upon
these efforts by taking more effective regulatory actions to protect
the resiliency and reliability of our broadband networks and
infrastructure.
36. In particular, the Commission plays a vital role in ensuring
that the Nation's communications networks are resilient and reliable.
For example, the Commission ``monitors and analyzes communications
network outages[,] . . . [takes actions] to help prevent and mitigate
outages, and where necessary, assist[s] response and recovery
activities.'' During emergencies, the Commission ``collects information
on the operational status of communications infrastructure to support
government disaster assistance efforts and to monitor restoration and
recovery.'' One of the principal benefits of reclassification is to
enable all public safety officials to better assess the operational
status of broadband networks for dissemination of emergency information
and/or to better assess where support is needed. Under the Commission's
Network Outage Reporting System (NORS), qualifying service providers
are required to report to the Commission network outages that satisfy
certain criteria.
37. As Free Press points out, ``because NORS is limited to voice
service outages, `the Commission has historically lacked reliable
outage information for today's modern,
[[Page 45413]]
essential broadband networks.' '' Reclassification also enhances the
agency's ability to gain better visibility over the performance of
broadband networks and also to completely and accurately determine the
scope and causes of outages to these networks. Closing this reporting
gap for outages could afford the Commission and public safety officials
with more consistent and reliable data to better track changes in
network reliability, identify trends, pinpoint possible improvements
and best practices, and disseminate actionable information. New outage
reporting requirements for BIAS providers could also provide the
Commission with better situational awareness for major internet outages
affecting first responders, 911 services, and impacted populations that
are not currently captured by NORS data. Finally, reclassification
supports the Commission's authority to expand the scope of NORS by
requiring BIAS providers, like Title II-regulated voice service
providers, to submit outage reports in response to service incidents
that cause outages or the degradation of communications services, such
as cybersecurity breaches, wire cuts, infrastructure damages from
natural disaster, and operator errors or misconfigurations.
38. The Commission also ``oversees and monitors industry efforts to
strengthen network resiliency,'' including through the recently adopted
Mandatory Disaster Response Initiative. Moreover, the Commission
adopted new rules, ``to require enumerated service providers (cable
communications, wireline, wireless, and interconnected Voice over
Internet Protocol (VoIP) providers) . . . to report on their
infrastructure status during emergencies and crises in the Disaster
Information Reporting System (DIRS) when activated and to submit a
final report to the Commission within 24 hours of DIRS deactivation.''
Reclassification bolsters the Commission's authority to require BIAS
providers to participate in DIRS. In addition, the Commission endeavors
to ``identify and reduce risks to the reliability of the nation's
communications network[s],'' including by working with the
Communications Security Reliability and Interoperability Council
(CSRIC).
39. Reclassifying BIAS as a telecommunications service will
significantly enhance the Commission's ability to protect critical
infrastructure by taking actions to address threats and vulnerabilities
to communications networks. Public Knowledge agrees that ``[w]ithout
Title II authority, the Commission cannot impose regulations to meet
the need for resilience and reliability as more and more critical
traffic passes through IP networks.'' This change in policy will enable
the Commission to set goals and objectives that foster resilience and
to implement risk management directives on a wider basis in order to
make our broadband networks more resilient and reliable, and thus more
secure. We also disagree with those commenters who argue against
reclassification by contending that outage reporting targeted to BIAS
networks will not serve the public interest or that there are
alternative sources of authority for outage reporting. The Commission
is considering in a separate proceeding the extent to which outage
reporting requirements should be placed on BIAS providers and we
anticipate that having Title II as an additional source of authority
will support that evaluation.
40. We also are not persuaded by other arguments that certain
parties raise regarding network resilience and reliability that are
consistent with their comments regarding national security. Some
commenters argue reclassification is not necessary to ensure the
resiliency and reliability of the Nation's communications networks,
that market-driven incentives motivate broadband providers to make
significant investments to increase the resiliency and reliability of
their networks, or that the Commission has only a limited role to play
on resilience and reliability issues. We agree with AARP and Next
Century Cities, however, that reclassification is necessary to provide
the Commission with sufficient authority to address network resiliency
for critical infrastructure, which is too important for the Commission
to be forced to rely upon mere voluntary measures and alleged market-
driven incentives. As described above, and consistent with our
conclusions on national security matters generally, we find that the
Commission has an essential role on resilience and reliability issues,
working in coordination with its Federal partners. Reclassification
will allow for the direct network monitoring of the Nation's broadband
internet networks and provide a robust regulatory platform so that all
BIAS providers maintain the highest levels of business continuity when
incidents occur. We find that reclassification will support the
Commission's efforts to protect the public by ensuring that more
reliable and resilient networks are in use, including by developing
voluntary frameworks and policies when practical, and compelling
enforceable compliance when needed.
41. Commenters opposing reclassification also argue that under
Title I classification, broadband networks have provided robust
internet service despite unprecedented levels of demand during the
COVID-19 pandemic. We find these arguments unpersuasive. As more
critical functions rely on BIAS, it is imperative for the Commission to
have authority to address resiliency issues involving broadband
networks to the same degree that it has for traditional voice networks.
Further, we disagree with those commenters that contend that these
types of reporting, monitoring, and regulatory requirements would
likely impose significant new costs on BIAS providers and potentially
stifle investment and broadband deployment.
42. In conclusion, the reclassification of BIAS will secure the
Commission's authority to, as necessary, implement requirements for
network upgrades and changes, adopt rules relating to recovery from
network outages, and improve our incident investigation and enforcement
authority to mitigate network threats and vulnerabilities.
Reclassification also enables the Commission to create more stability
and predictability on how providers should address disasters and
emergency situations. Moreover, reclassifying broadband as a
telecommunications service allows the Commission to address
identified--and evolving--threats and vulnerabilities in the BIAS
industry, as some BIAS providers may not have sufficient incentives to
protect the traffic traversing their networks without such regulation.
Thus, reclassification would allow the Commission, for example, to
require BIAS providers to identify and reduce harmful activities
occurring across their infrastructure. These measures will be taken in
support of a whole-of-government approach by taking regulatory actions
to enhance network reliability and resiliency in order to better
protect all of our Nation's networks.
6. Protecting Consumers' Privacy and Data Security
43. We find that classifying BIAS as a telecommunications service
will support the Commission's efforts to protect consumers' privacy and
data security. Section 222 of the Act governs telecommunications
carriers' use, disclosure, and provision of access to information
obtained from their customers, other telecommunication carriers, and
equipment manufacturers. It imposes a general duty on every
telecommunications carrier to protect
[[Page 45414]]
the confidentiality of proprietary information of its customers, other
telecommunication carriers, and equipment manufacturers, and imposes
heightened restrictions on carriers' use, disclosure, or provision of
access to customers' customer proprietary network information (CPNI)--
including customer location information--without consent. CPNI is
defined as ``(A) information that relates to the quantity, technical
configuration, type, destination, location, and amount of use of a
telecommunications service subscribed to by any customer of a
telecommunications carrier, and that is made available to the carrier
by the customer solely by virtue of the carrier-customer relationship;
and (B) information contained in the bills pertaining to telephone
exchange service or telephone toll service received by a customer of a
carrier.''
44. Returning BIAS to its telecommunications service classification
will bring BIAS providers back under the section 222 privacy and data
security framework, restoring those protections for consumers and
yielding substantial public interest benefits. In her separate remarks
on the 2021 Federal Trade Commission (FTC) Staff Report, Chair Lina
Khan noted that the FCC ``has the clearest legal authority and
expertise to fully oversee internet service providers,'' a view
supported by a number of commenters, who assert that the Commission's
specific expertise to regulate privacy matters is needed. We observe
that the Commission's privacy authority under Title II is not limited
to CPNI. Section 222(a) also imposes obligations, which we enforce, on
carriers' practices with regard to protection of non-CPNI customer
proprietary information and personally identifiable information (PII),
and section 201(b)'s prohibition on practices that are unjust or
unreasonable also provides authority over privacy practices. We also
find that because section 222 places an obligation on
telecommunications carriers to protect the confidentiality of the
proprietary information of and relating to other telecommunication
carriers (including resellers) and equipment manufacturers, our
classification of BIAS as a telecommunications service will protect
information concerning entities that interact with BIAS providers.
7. Supporting Access to Broadband Internet Access Service
45. Reclassifying BIAS as a telecommunications service under Title
II will support the Commission's multifaceted efforts to support access
to BIAS in three ways. First, such authority will improve the
Commission's ability to foster investment in and deployment of wireline
and wireless infrastructure and to promote competition for, and access
to, BIAS for consumers by restoring to BIAS-only providers statutory
protections for pole attachments that providers of cable and
telecommunications services receive. Second, reclassification
facilitates our ability to ensure access to BIAS by enabling the
Commission to regulate BIAS-only providers that serve multi-tenant
environments to ensure they do not engage in unfair, unreasonable, and
anticompetitive practices, such as exclusivity contracts. Finally,
authority under Title II will put the Commission on the firmest legal
ground to promote the universal service goals of the Act.
46. Wireline and Wireless Infrastructure. We find that
reclassifying BIAS as a telecommunications service under Title II will
support the Commission's mission to foster investment in and deployment
of wireline and wireless infrastructure and to promote competition and
access to BIAS for consumers. Specifically, we find that the
application of sections 224, 253, and 332 of the Act to BIAS-only
providers will provide equitable rights to those providers and the
tools to enable the Commission to reach its goals, thereby promoting
greater deployment, competition, and availability of both wireline and
wireless BIAS. Furthermore, we find that the RIF Remand Order failed to
adequately address the Mozilla court's concerns regarding the effects
of reclassification on BIAS-only providers.
47. Reclassification of BIAS as a Title II service will ensure that
BIAS-only providers receive the same statutory protections for pole
attachments guaranteed by section 224 of the Act that providers of
cable and telecommunications services receive. Section 224 defines pole
attachments as ``any attachment by a cable television system or
provider of telecommunications service to a pole, duct, conduit, or
right-of-way owned or controlled by a utility.'' It authorizes the
Commission to prescribe rules to ensure that the rates, terms, and
conditions of pole attachments are just and reasonable; requires
utilities to provide nondiscriminatory access to their poles, ducts,
conduits, and rights-of-way to telecommunications carriers and cable
television systems (collectively, attachers); provides procedures for
resolving pole attachment complaints; governs pole attachment rates for
attachers; and allocates make-ready costs among attachers and
utilities. The Act defines a utility as a ``local exchange carrier or
an electric, gas, water, steam, or other public utility, . . . who owns
or controls poles, ducts, conduits, or rights-of-way used, in whole or
in part, for any wire communications.'' However, for purposes of pole
attachments, a utility does not include any railroad, any cooperatively
organized entity, or any entity owned by a Federal or State government.
Section 224 excludes incumbent local exchange carriers (ILECs) from the
meaning of the term ``telecommunications carrier,'' therefore these
entities do not have a mandatory access right under section 224(f)(1).
The Commission has held that when ILECs obtain access to poles, section
224 governs the rates, terms, and conditions of those attachments. The
Act allows utilities that provide electric service to deny access to
their poles, ducts, conduits, or rights-of-way because of
``insufficient capacity and for reasons of safety, reliability and
generally applicable engineering purposes.'' As the Commission noted in
2015, it ``has recognized repeatedly the importance of pole attachments
to the deployment of communications networks'' and therefore has
undertaken a series of reforms to improve access to poles under section
224. The National League of Cities urges us to revisit and overturn our
2018 Wireless Infrastructure Order (83 FR 51867 (Oct. 15, 2018)) and,
until that time, forbear from application of sections 253 and 332(c) to
reclassified BIAS. We agree with the Wireless Infrastructure
Association that the former request is outside the scope of this
proceeding. We decline to forbear from applying section 253 and 332(c)
to BIAS for the reasons we discuss in section IV.B.9. To that end, the
Commission continues to pursue solutions to improve pole access
including, most recently in December 2023, by adopting new rules that,
among other things, speed up the pole attachment dispute resolution
process by establishing a new intra-agency rapid response team, set
forth specific criteria for the response team to use when considering a
complaint, and increase transparency for new broadband buildouts by
requiring disclosure of pole inspection reports during the make-ready
process. Under a Title I classification scheme, BIAS-only providers are
not entitled to any of the current or future benefits the Commission
may enact to facilitate access to broadband infrastructure.
48. Section 253 of the Act provides further protections to
telecommunications companies that,
[[Page 45415]]
through Title II reclassification, will apply to BIAS-only providers.
Specifically, section 253 seeks to further facilitate deployment of
communications services by enabling the Commission (or a court) to
intervene when a State or local regulation or legal requirement ``may
prohibit or have the effect of prohibiting the ability of any entity to
provide any interstate or intrastate telecommunications service.''
Without reclassification, however, BIAS-only providers may not seek the
Commission's intervention under section 253 when State or local
regulations interfere with their network deployment. Moreover, State
and local laws that are exclusively focused on, or exclusively
implicate, the provision of BIAS, do not currently fall within the
ambit of section 253 and thus cannot be the subject of Commission
intervention when prohibiting or having the effect of prohibiting the
provision of BIAS exclusively.
49. In the wireless context, section 332 of the Act protects
regulated entities from State and local regulations that ``unreasonably
discriminate among providers or functionally equivalent services'' or
that ``prohibit or have the effect of prohibiting the provision of
personal wireless service.'' However, because mobile broadband is not
currently classified as a ``commercial mobile service,'' mobile BIAS-
only providers who do not offer additional regulated services are not
covered by section 332. As INCOMPAS notes, it has ``members who are
solely focused on providing broadband services,'' and ``[t]he current
classification of BIAS and mobile broadband as Title I services makes
it difficult for these providers to argue that they are building the
kinds of facilities capable of commingled operation that are covered by
Sections 332 and 253.'' As with sections 224 and 253, without
reclassification, mobile BIAS-only providers would be disadvantaged
compared to their competitors.
50. We find that reclassifying BIAS as a Title II service levels
the playing field by ensuring that BIAS-only providers enjoy the same
regulatory protections--those guaranteed by sections 224, 253, and
332--as their competitors who offered services already classified as
telecommunications services in addition to BIAS prior to our
classification decision in the Order. As the Commission found in 2015,
``[a]ccess to poles and other infrastructure is crucial to the
efficient deployment of communications networks including, and perhaps
especially, new entrants.'' INCOMPAS notes that BIAS providers face
``significant barriers to deploy broadband network infrastructure--
among them access to poles, ducts, and conduit.'' The California Public
Utilities Commission (CPUC) explains further that ``[a]ccess to poles,
conduits, and rights-of-way may affect cost, feasibility, and timing of
constructing and offering broadband services.'' Sections 224, 253, and
332 however, seek to remove these barriers by guaranteeing providers
access to utility poles at just and reasonable rates and by ensuring
that State and local laws do not prohibit deployment. Even WISPA--the
Association for Broadband Without Boundaries (WISPA), which otherwise
opposes our reclassification decision, highlights the benefits of
extending section 224 rights to BIAS-only providers.
51. NCTA argues that restoring section 224 rights will only provide
``illusory'' benefits to BIAS-only providers. We disagree. Under Title
II, BIAS-only providers will be guaranteed access to utility poles at
just and reasonable rates. BIAS-only providers, therefore, will no
longer be forced to negotiate for the right of pole access directly
with each set of pole owners, which will not only ensure they pay the
same rates as their competitors but will also ensure that deployment of
their networks is not unnecessarily bogged down by the negotiation
process. While such benefits may seem ``illusory'' to the competitors
who already enjoy such privileges, we find that eliminating one of the
``significant barriers to deploy[ment] [of] broadband network
infrastructure,'' is in fact a very real benefit for BIAS-only
providers. Indeed, NCTA, who claims that the benefits of pole
attachment rights will prove to be illusory, has consistently taken
issue with the costs of pole attachments, even under the existing
regime, and has regularly supported and championed the Commission's
efforts to reduce the costs and burdens of obtaining pole access.
52. We find that in addition to guaranteed pole attachment rates
and more efficient deployment, Title II reclassification will also
ensure that BIAS-only providers are protected by section 253, which
provides that ``no [s]tate or local statute or regulation, or other
[s]tate or local legal requirement, may prohibit or have the effect of
prohibiting the ability of any entity to provide any interstate or
intrastate telecommunications service.'' Likewise, mobile BIAS-only
providers will receive protection under section 332 which requires
State and local governments to act on ``any request for authorization
to place, construct, or modify personal wireless service facilities
within a reasonable period of time after the request is duly filed with
such government or instrumentality, taking into account the nature and
scope of such request.'' As INCOMPAS notes, ``a reclassification of
BIAS . . . opens an avenue for additional protections for BIAS-only
providers who may need Commission intervention to address state/local
policies that restrict competitive deployment through its oversight for
ensuring competitors can access new geographic markets.'' Under Title
I, BIAS-only providers cannot seek assistance from the Commission if
State or local governments interfere with the deployment of BIAS-only
networks--once again, leaving them worse off than their regulated
competitors. For example, under a Title I regulatory regime, if State
or local permitting processes effectively prohibit the deployment of
BIAS networks, BIAS-only providers cannot raise the issue with the
Commission. In areas where both BIAS-only and providers of comingled
services operate, providers of comingled services may seek a resolution
with the Commission that would resolve the issue for BIAS-only
competitors as well, but BIAS-only providers would be reliant upon
their competitors to bring the action to the Commission in the first
place. But if a State or local legal requirement solely affects BIAS,
even providers that currently offer commingled services lack the
ability under section 253 to challenge it given that section 253 only
applies to those State and local legal requirements that affect the
provisioning of ``telecommunications service.'' Moreover, in any area
where BIAS-only providers are the sole provider of service (or are
seeking to be a provider of service), they would be left without
recourse. We agree with INCOMPAS, which notes that ``reclassification
so that BIAS-only providers receive the same Title II protections as
incumbent telecommunications providers is in the public interest as it
will best ensure that the Communications Act's goal of the Commission
enabling and promoting competition can be fulfilled and that consumers
will benefit from additional choice in the marketplace.'' Therefore, we
find that restoring section 253 rights of BIAS-only providers is not
only equitable, but will help ensure that BIAS-only providers are
adequately protected by the Commission's authority to address State and
local policies that restrict deployment.
53. In the RIF Remand Order, the Commission attempted to downplay
its decision to strip section 224 rights from
[[Page 45416]]
BIAS-only providers by claiming that ``ISPs may gain the status of
telecommunications providers, and thus become eligible for section 224
pole attachment rights.'' Specifically, the Commission suggested that
BIAS-only providers could either alter their business plans to offer
other services that would then qualify them as telecommunications
carriers or enter into partnerships with existing telecommunications
carriers to attain section 224 rights. While it may be true that BIAS-
only providers could alter the business plans or partner with other
regulated entities to ensure they receive equitable pole access, our
regulations should not be designed to stifle innovative offerings
distinct from those currently offered in the marketplace. Furthermore,
each year more and more Americans are opting to forgo these additional
non-BIAS telecommunications services and instead are choosing to have
only a fixed BIAS connection in their homes along with a mobile
connection. INCOMPAS notes that because customers are opting to use
over-the-top video or VoIP services, many of its fixed BIAS members
were losing money on video and voice services and ``have ceased
offering voice and/or video options to their residential customers
given that those customers can choose third-party over-the-top video or
VoIP options for these services.'' Thus, requiring BIAS-only providers
to pursue declining lines of business just to receive the same legal
protections as their competitors makes little sense. And in following
the RIF Remand Order's suggestion that BIAS-only providers could enter
into partnerships with telecommunications carriers to gain pole access,
BIAS-only providers would just swap one barrier to entry (negotiating
directly with pole owners for access) for another (negotiating with a
telecommunications carrier). As a result, the supposed solution the RIF
Order offered up is in fact no solution at all and instead leaves BIAS-
only providers with a different ``competitive bottleneck.'' Moreover,
the RIF Remand Order failed to cite to even one instance of such a
partnership or provide any evidence that such a partnership would even
be economically or practically feasible, only mentioning the
possibility that BIAS-only providers might be able to pursue one. Even
assuming the possibility of such a partnership, unlike with section
224, which ensures pole owners provide access at just and reasonable
rates, there are no legal safeguards to ensure that potential partners
agree to reasonable terms with BIAS-only providers.
54. In addition, we find that the RIF Remand Order erred in
concluding that the ability of states under section 224(c) to establish
their own pole attachment rules in place of the Federal rules (often
referred to as reverse-preemption) minimizes the impact of the loss of
section 224 rights on BIAS-only providers. First, the majority of
jurisdictions have not chosen to reverse-preempt the Commission and
instead have opted to continue to allow the Commission to regulate pole
attachments under section 224. Second, we disagree with the conclusion
in the RIF Remand Order, as well as those commenters who agree with the
conclusion, that ``Title I classification does not impact the 22 states
and the District of Columbia that have chosen to reverse-preempt our
rules.'' An additional state, Florida, has subsequently reverse
preempted the Commission's jurisdiction since the issuance of the RIF
Remand Order. As INCOMPAS notes, some of the jurisdictions that have
reverse-preempted the Commission have simply mirrored the Commission's
rules so that any changes implemented by the Commission are also
directly implemented by the state. For example, Pennsylvania has
reverse-preempted the Commission but chosen to adopt the ``rates, terms
and conditions of access to and use of utility poles, ducts, conduits
and rights-of-way to the full extent provided for in 47 U.S.C. 224 and
47 CFR chapter I, subchapter A, part 1, subpart J (relating to pole
attachment complaint procedures), inclusive of future changes as those
regulations may be amended.'' Therefore, because the Pennsylvania code
reflects the ``rates, terms, and conditions of access to'' poles
adopted by the Commission, reclassifying BIAS as a Title II service
will provide pole access to BIAS-only providers in Pennsylvania even
though Pennsylvania regulates its own poles. The same is true in West
Virginia, another State that has reverse-preempted the Commission,
where the West Virginia Public Service Commission, at the direction of
the State legislature, adopted the FCC's pole attachment regulations in
their entirety, including subsequent modifications, superseded existing
pole attachment regulations that conflicted with Federal regulations,
and otherwise rejected stakeholder requests to alter the Commission's
regulations. Similarly, at least two other jurisdictions, the District
of Columbia and Ohio, have reverse-preempted the Commission but
continue to point to the Commission's regulations for reference. Three
other states seemingly have only partially preempted the Commission's
rules by opting to regulate only the attachments of other public
utilities or cable television providers. In those states, the
Commission's rules will continue to govern the attachments of
telecommunications carriers. Thus, the Commission's pole attachment
rules will continue to play a vital role in several jurisdictions that
have elected to reverse-preempt, or partially reverse-preempt, the
Commission.
55. The RIF Remand Order further posits that ``if a state prefers
to adopt a different regulatory approach, that state has the
opportunity to exercise its authority to expand the reach of government
oversight of pole attachments.'' But, as the CPUC, the Public Utility
Commission for a State which has reverse preempted the Commission,
argues, it is not entirely clear states can grant BIAS-only providers
pole access pursuant to their section 224 reverse-preemption authority
if the Commission itself has specifically chosen to exclude BIAS-only
providers from the purview of Title II, the very source of authority
from which section 224 authority emanates. Thus, under Title I
classification, the right of BIAS-only providers to access poles in
those states that have chosen to self-regulate is subject to
uncertainty; and in the majority of jurisdictions, which are governed
by the Commission's rules, such providers have no right to pole access
at all.
56. Furthermore, as the CPUC and other commenters note, the lack of
clear legal authority to regulate BIAS-only providers presents public
safety issues as states may not be able to enforce safety regulations
on BIAS-only providers that do manage to attach to poles. The CPUC
states, however, that ``reclassifying BIAS as a telecommunications
service would eliminate this potential argument and the commensurate
delay in responding to safety violations.'' We agree and find that, in
addition to the economic benefits of affording section 224 rights to
BIAS-only providers, reclassification will also ensure that the
Commission and State utility commissions have the requisite legal
authority to protect public safety concerns associated with the
deployment of broadband-only infrastructure.
57. We also find to be without merit the arguments of commenters
who echo the Commission's contention in the RIF Remand Order that the
loss of section 224 rights is not a serious issue because the majority
of BIAS providers offer
[[Page 45417]]
comingled services. To be clear, we do not dispute the fact that the
majority of BIAS providers offer at least one Title II-regulated
service in addition to BIAS, as some commenters contend. We believe,
however, that the small number of BIAS-only providers is not due just
to the popularity of other regulated services, but also because BIAS-
only providers, many of which are smaller competitive companies, do not
enjoy the competitive advantages of larger enterprises like many of
their competitors. As a result, competitive bottlenecks and obstacles
to deployment, such as access to poles at just and reasonable rates,
present significant challenges to BIAS-only providers that may make
breaking into markets with large entrenched incumbents next to
impossible. As the CPUC notes, ``[a]ll forms of telecommunications,
including broadband, require access to rights-of-way generally, and
specifically to poles and conduits, which are controlled by incumbent
local exchange carriers and other entities. Access to poles, conduits,
and rights-of-way may affect cost, feasibility, and timing of
constructing and offering broadband services.'' Furthermore, we believe
that the RIF Remand Order completely overlooked the future competitive
realities for BIAS-only providers and the resulting harms that its
decision will yield. As we discussed above, consumers are becoming more
reliant on BIAS and are continually foregoing the purchase of services
offered alongside BIAS (i.e., cable and voice). As a result, there is
no reason to doubt that more and more providers will begin offering
only BIAS and without reclassification would have no rights pursuant to
section 224. Therefore, we find that restoring the section 224 rights
and easing the burdens of pole access is likely to ensure that the
number of BIAS-only providers does not artificially shrink due to
inequitable treatment under the law.
58. Furthermore, we find that equitable regulatory treatment of
BIAS-only providers, particularly with regard to regulations designed
to speed network deployment, will also increase competition, ultimately
benefitting consumers and assisting the Commission's goal of achieving
universal service. We agree with INCOMPAS which states that
``[a]dditional competition is key to tackling our nation's internet
challenges'' and that the Commission must ensure that its policies do
not further entrench large telecommunications carriers, reducing the
viability of smaller, innovative alternative providers and also
reducing the service options available to consumers. USTelecom states
that ``[t]he NPRM cites no evidence that there are broadband-only
providers that could not receive those benefits today or that the
availability of the Broadband Equity, Access, and Deployment funding is
leading to the creation of such providers,'' but INCOMPAS specifically
notes that it ``expect[s] that many entities that will be competing for
BEAD dollars will be BIAS-only'' and states that those entities
``cannot exercise any rights afforded by Title II to speed their
deployment.'' USTelecom further contends that ``there is no record
evidence that Title I classification is preventing [BIAS-only
providers] from obtaining just and reasonable pole attachment rates.''
Even accepting USTelecom's statement as true, it still misses the mark.
Even if BIAS-only providers are somehow able to negotiate directly with
pole owners to ultimately achieve rates that are just and reasonable,
BIAS-only providers must still suffer the costs of securing pole access
through private negotiations, and without any leverage, with each set
of pole owners, unlike their regulated peers who have guaranteed access
rights under section 224. Clearly then, by failing to provide equal
access to the Act's legal protections on a nondiscriminatory basis, the
Title I regime favors large incumbents at the expense of BIAS-only
providers. Because we opt to restore the Title II classification of
BIAS, we find it unnecessary to address commenters who suggest the
Commission can provide similar rights to BIAS-only providers through
other sections of the Communications Act.
59. Multiple Tenant Environments (MTEs). In the 2023 Open Internet
NPRM (88 FR 76048 (Nov. 3, 2023)), we sought comment on how
reclassification of BIAS might impact the Commission's authority to
regulate service providers in MTEs. Specifically, we asked how
reclassification might provide the Commission additional authority to
foster competition and promote consumer choice for those living and
working in MTEs. We conclude now that reclassification of BIAS as a
telecommunications service facilitates these goals by enabling the
Commission to regulate broadband-only providers that serve MTEs and
thereby to end unfair, unreasonable, and anticompetitive practices
facing MTE residents. That is, reclassification would give the
Commission authority to require BIAS-only providers to abide by the
same kinds of rules--including those that prohibit exclusivity
contracts that bar competition outright in MTEs--that other
telecommunications and cable providers must currently follow. Such
rules in turn would secure the same protections for all residents of
MTEs, regardless of the kind of service offered by providers in their
building; reduce regulatory asymmetry between broadband-only providers
and other kinds of providers; and potentially improve competition in
the MTE marketplace.
60. More than 100 million people in the United States live or work
in MTEs, including a disproportionate number of lower-income residents
and members of marginalized communities. The Commission's rules, which
regulate the kinds of agreements service providers may enter into with
MTE owners, currently extend to telecommunications carriers as well as
cable operators and multichannel video programming distributors
(MVPDs). Developed pursuant to congressional direction to protect
consumer choice in emerging communications technologies for residents
of MTEs, these rules include, for example, a prohibition on exclusivity
contracts that grant the provider the sole right to access and offer
service in an MTE.
61. However, these rules do not govern broadband-only providers
today. Although many BIAS providers offer telecommunications, video
programming, and other commingled services that subject them to the
Commission's MTE rules, a provider offering only BIAS exists outside
the scope of its rules. This means that while the Commission can, for
example, impose rules on an entity offering both broadband and
traditional phone service in an MTE, there is uncertainty about whether
and when it could regulate a provider offering only the former. Even if
such a provider entered into an agreement with an MTE owner barring
competitors from the building outright--a type of agreement that the
Commission has long declared anathema to the public interest--the
Commission's rules would not apply and the Commission is not currently
aware of other authority it could rely on to prevent such an agreement.
62. We thus find that reclassification of BIAS as a Title II
service, which would provide us authority to regulate broadband-only
providers, enables the Commission to address these potential regulatory
gaps and ensure that all MTE tenants may benefit from the pro-consumer
MTE rules the Commission has adopted and may adopt in the future as
part of its current open proceeding.
[[Page 45418]]
We therefore agree with Public Knowledge that reclassification would
have many benefits for MTE residents including, among others, greater
competition and innovation in MTEs, lower costs for consumers, and
improved customer service. Reclassification would also create the
potential for parity between BIAS-only and other providers serving
MTEs, as well as protections for BIAS-only providers unable to compete
against those employing anticompetitive practices.
63. We disagree with CTIA--The Wireless Association's (CTIA)
contention, citing the Commission's 2022 MTE Report and Order and
Declaratory Ruling (87 FR 51267 (Aug. 22, 2022)), that reclassification
and regulation of the ``few'' BIAS-only providers in MTEs would
``disregard[ ] the Commission's `incremental approach' in this area,''
and that the Commission offers ``no significant evidence as to why the
Commission should change course now.'' The 2022 MTE Report and Order
and Declaratory Ruling adopted new rules and targeted additional
practices that reduce consumer choice in MTEs. We note that in that
proceeding's record, some commenters urged the Commission to ``subject
broadband-only providers to our rules governing MTE access, citing . .
. potential harms that could result from regulatory asymmetry if [it]
did not.'' The Commission declined to extend its rules to broadband-
only providers at the time, citing its historically incremental
approach to MTE regulation but noting explicitly that it would
``continue to monitor competition in MTEs to determine whether we
should alter the scope of [the] rules.'' However, nothing in the 2022
MTE Report and Order and Declaratory Ruling belies commenters' claims
about the harms arising out of the regulatory asymmetry, which we find
remain valid today. Meanwhile, commenters in opposition to
reclassification fail to raise arguments that justify failing to extend
the benefits of the Commission's rules to MTE residents where a
broadband-only provider offers service to a building.
64. We are also unpersuaded by CTIA's claims that broadband-only
providers are so few in number that it justifies the Commission not
taking any additional action to curb anticompetitive, unfair, and
unreasonable practices by broadband-only providers in MTEs. Even
assuming that CTIA is correct, or that the majority of service
providers offer commingled services, it is unclear whether this will
remain true in the future. And while some commenters claim that the
Commission failed to identify widespread abuses by BIAS-only providers
in the 2023 Open Internet NPRM, others, such as AARP, highlight that
such abuses may indeed be ongoing, pointing to an alleged instance of a
broadband-only provider exploiting its status to enter into an
exclusivity contract. We therefore find that these abuses are not
merely speculative or theoretical, and provide additional support for
the Commission's decision to reclassify BIAS as a Title II service.
65. Some commenters contend that the Commission need not reclassify
BIAS to protect tenants and can instead rely on its ancillary or other
existing authority to address broadband-only providers. Such authority,
however, does not provide the same firm legal footing as Title II and
thus is less likely to offer enduring protections for residents of
MTEs. WISPA, in its comments, expresses concern that reclassification
of BIAS would result in rule protections for over-the-air reception
devices (OTARDs) no longer being available to fixed wireless broadband-
only providers and contends that this will discourage deployment of
broadband in multi-tenant environments, neighborhoods lacking access to
nearby towers, and similar environments. We acknowledge WISPA's
concerns, and we will examine whether to revise Sec. 1.4000(a)(5) in
another proceeding. While classification of BIAS may affect the scope
of services that are covered under the Commission's rules regarding
over-the-air reception devices, classification of BIAS as
telecommunications service may also qualify fixed wireless broadband
services for the protections available under sections 332(c)(7) and
253. Although sections 253 and 332(c)(7) do not apply to restrictions
by private landlords they do provide for Federal preemption of State
and local zoning restrictions that ``prohibit or have the effect of
prohibiting'' ``the ability of any entity to provide any interstate or
intrastate telecommunications service'' and ``the provision of personal
wireless services.''
66. Finally, we disagree with WISPA that any purported benefits of
applying our MTE rules would be outweighed by a slowdown in broadband
investment in MTEs precipitated by the need for BIAS-only providers to
``assess the impact [reclassification more broadly would have] on their
business plans.'' We find that to the extent our reclassification of
BIAS as a Title II service would cause a BIAS-only provider to re-think
an exclusive contract to serve an MTE or an otherwise anticompetitive
arrangement in an MTE, that would be an additional benefit to
consumers, not a drawback. Moreover, our ability to regulate BIAS-only
providers in MTEs is but one reason moving us to reclassify BIAS as a
Title II service. Thus, the benefits outlined elsewhere in addition to
those detailed here must be considered in the aggregate.
67. Universal Service. Reclassifying BIAS as a telecommunications
service will also promote the universal service goals of section 254 by
enabling more efficient deployment of broadband networks and greater
access to affordable broadband service. In the 2023 Open Internet NPRM,
we asked how reclassification might better enable the Commission to
steward our universal service programs in a way that is responsive to
the communications needs of the modern economy. We specifically sought
comment on how reclassification might strengthen the Commission's
statutory authority to provide BIAS through the USF, eventually allow
broadband-only providers to once again participate in the Lifeline
program, and protect public investment in BIAS access and
affordability. Reclassification enhances the Commission's ability and
flexibility to address affordability and availability issues across the
country, both immediately and in the future. So as to not unnecessarily
disrupt the current marketplace without ample consideration, the
Commission does not designate BIAS as a supported service or extend
eligible telecommunications carrier (ETC) eligibility to BIAS-only
providers at this time. Such action would best be considered in a
future proceeding.
68. Universal Service is the principle that all Americans should
have access to telecommunications services and advanced communications
services at just, reasonable, and affordable rates in all regions of
the Nation. The Commission administers four programs in furtherance of
these principles using contributions from telecommunications carriers
to the USF: the High Cost program, which helps eligible carriers
recover some of the cost of providing access to modern communications
networks to consumers in rural, insular, and high-cost areas; the
Lifeline program, which provides discounted voice service and BIAS
through eligible carriers to qualifying low-income subscribers; the E-
Rate program, which provides discounts to eligible schools, school
districts, and libraries to purchase affordable BIAS; and the Rural
Health Care program, which provides funding to eligible health care
providers to purchase telecommunications and
[[Page 45419]]
broadband services necessary for the provision of health care. All four
USF programs fund BIAS or infrastructure and are able to rely on
statutory authority to do so regardless of BIAS's classification.
Classifying BIAS as a telecommunications service, however, will put the
Commission on the firmest legal ground to promote the universal service
goals of section 254 by enabling the Commission and states to designate
BIAS-only providers as ETCs.
69. The Commission has concluded that section 254(e) of the Act
allows for the use of universal service funds to benefit both the
facilities used to provide supported telecommunications service, and
the supported telecommunications services themselves, which permits the
Commission to provide High Cost and Lifeline program support for non-
telecommunications services offered over networks that also provide
telecommunications services. The Commission currently conditions
receipt of support on the provision of broadband service in funded
networks in 11 of the 15 High Cost program funds, and also supports
broadband through the Lifeline program.
70. The Commission has distinct authority to provide support for
BIAS and connections through the E-Rate and Rural Health Care programs.
Section 254(c)(3) specifies that ``the Commission may designate
additional services for such support mechanisms for schools, libraries,
and health care providers for the purposes of subsection (h).''
Subsection (h) reads, in part: ``[t]he Commission shall establish
competitively neutral rules--to enhance, to the extent technically
feasible and economically reasonable, access to advanced
telecommunications and information services for all public and
nonprofit elementary and secondary school classrooms, health care
providers, and libraries.'' The Commission has acted pursuant to
section 254(c)(3) to designate BIAS as eligible for support under both
the E-Rate and Rural Health Care programs. The Commission concluded at
the inception of the E-Rate program that it has the authority to
support BIAS access and connections ``provided by both
telecommunications carriers and non-telecommunications carriers''
through the E-Rate program because ``such services enhance access to
advanced telecommunications and information services for public and
non-profit elementary and secondary school classrooms and libraries.''
The Commission also determined that it could fund BIAS support through
the Rural Health Care program under section 254(h).
71. However, section 214(e) limits providers receiving USF support
to common carriers providing telecommunications services and designated
as ETCs after undergoing Commission or State commission approval
processes. Currently, only carriers that offer qualifying voice
telephony services can be designated as ETCs and receive support from
the two USF programs that provide funds directly to carriers, the High
Cost and Lifeline programs. Reclassification will allow BIAS-only
providers to act as common carriers providing telecommunications
service and enable them to be designated as ETCs. Indeed, after the
2015 Open Internet Order (80 FR 19738 (Apr. 13, 2015)), the Wireline
Competition Bureau designated ten such providers as ``Lifeline
Broadband Providers'' (LBPs), and some of those providers began
providing service that was subsidized by Lifeline support. But in 2017,
the Bureau rescinded those designations, and since the RIF Order and
the RIF Remand Order, standalone broadband providers have remained
unable to receive critical Lifeline universal service support.
72. Allowing BIAS-only providers to participate in the High Cost
and Lifeline programs would enhance both programs. Both programs are
already oriented overwhelmingly toward BIAS over other service types.
As discussed above, providers in most High Cost program funds are
required to build BIAS-capable networks. Moreover, as of September 2023
approximately 96% of Lifeline customers subscribe to a plan that
includes broadband service. Several commenters echo many of the
anticipated benefits of allowing carriers that do not provide voice
services to participate in the High Cost and Lifeline programs
discussed in the 2023 Open Internet NPRM, including increased
competition, program participation, consumer choice, rural coverage,
and affordability. The Commission also has recognized that
``encourag[ing] market entry and increased competition among Lifeline
providers, which will result in better services for eligible consumers
to choose from and more efficient usage of universal service funds.''
One commenter stresses that allowing BIAS-only providers to become ETCs
will particularly benefit consumers in areas where there are currently
few or no ETCs that provide BIAS. The need to allow BIAS-only providers
to become ETCs is more important and will provide more utility than it
did when BIAS was last classified under Title II, as the 2015
classification allowed Lifeline subscribers to apply the benefit to a
``new generation of ISPs that [did] not use their facilities to offer
voice services,'' and now there are even more ways to provide BIAS via
innovative, affordable, and user-friendly technologies.
73. Thus, we adopt the 2023 Open Internet NPRM's tentative
conclusion ``that classifying BIAS as a telecommunications service will
strengthen our policy initiatives to support the availability and
affordability of BIAS through USF programs.'' The majority of
commenters support this conclusion. Commenters state that, through the
USF, the Federal government has made significant investments in
networks to ensure BIAS is available to all consumers and in service
subsidies to ensure BIAS is affordable for all consumers, and
reclassification ``will enable the Commission to protect these
investments on an ongoing basis by ensuring that these connections
benefit users.'' Commenters further stated that ``[t]he Commission
needs clear authority over broadband-only services to implement and
maintain an effective and efficient Lifeline policy.''
74. A minority of commenters disagree with the 2023 Open Internet
NPRM's tentative conclusion that we adopt in the Order. Several
commenters argue that USF considerations are relatively unimportant
because direct appropriations programs such as the Commission's
Affordable Connectivity Program (ACP) and NTIA's Broadband Equity,
Access, and Deployment (BEAD) Program are viable alternatives to
achieving USF goals. Some commenters further argue that
reclassification will deter private sector participation in the BEAD
program. We find these claims to be speculative and give them no
weight. Given that there is no definitive evidence that
reclassification adversely affects privately funded BIAS investment, if
it has any effect at all, see infra section III.H, we find the claim
that reclassification would adversely affect BIAS investment that is
substantially publicly funded to not be credible. Furthermore, we find
as a general matter that new obligations on BIAS providers are unlikely
to be more onerous under Title II than is the case currently, and
therefore find it unlikely that BIAS providers' decisions to
participate in publicly funded programs would be meaningfully impacted
as a result of reclassification. At least one commenter stressed the
importance of funding the ACP or making the ACP part of the USF.
Another party stressed both the need to renew ACP funding and the risks
of making ACP part of the
[[Page 45420]]
USF. These issues are the remit of Congress and the Commission is
unable to accomplish either through this or any proceeding. We
therefore decline to address them here. We do not believe that the
strength of other programs dependent on different funding sources
should prevent the Commission from strengthening the USF. Closing the
digital divide is a large undertaking that benefits from multiple
programs, and we note that some of these alternative programs are
winding down given their lack of funding. Moreover, the Commission is
statutorily required to preserve and advance the USF. One commenter
contends that the benefits of reclassification to the Commission's
universal service goals may not be realized because BIAS-only providers
will be unwilling to assume increased oversight by State or Federal
regulators to obtain ETC designation. This claim is not only
speculative, it ignores the new opportunities that Title II offers to
these providers to expand their networks and subscriber base through
potential eligibility to participate in the High Cost and Lifeline
programs. Moreover, as discussed above, the record shows significant
consumer interest in allowing BIAS-only providers to become ETCs. We
also make clear that reclassification only provides an opportunity to
BIAS-only providers to become ETCs; it does not mandate it. Neglecting
it because of the existence of other programs defies this mandate. One
commenter argues that the Commission should focus on ``ensuring that
funding issued through the Universal Service Funds or the Affordable
Connectivity Program are not wasted or subject to fraud or abuse''
instead of reclassification. The Commission currently has strong
program integrity protections for the USF programs and continues to
update them as needed. USF program integrity, however, is only
tangentially related to BIAS reclassification and does not have a
significant impact on our actions taken in the Order. We also decline
to address commenters arguing for reforms to the portions of the USF
that states regulate because they are similarly unrelated to the
proceeding.
75. We reject some commenters' assertions that as to universal
service, reclassification is a solution in search of a problem because
USF programs are functioning properly, the Commission currently has a
strong legal basis to support BIAS through USF programs, and
reclassification would not further, and would possibly hinder,
affordability and availability goals. While we agree that the USF
programs are currently well positioned to further BIAS availability and
affordability, we disagree that reclassification cannot better position
the statutory basis for the Commission's universal service efforts. As
noted above, with reclassification, we remove any doubt about the
ability of the Commission to support BIAS-only providers with our
universal service programs. While the Commission is not taking steps in
the Order to allow BIAS-only providers to receive High Cost or Lifeline
program support, the ever-changing nature of communications offerings
may necessitate such future action to ensure that limited Commission
resources are going towards services consumers need. Our action in the
Order bolsters our existing legal framework and gives the Commission
flexibility to establish BIAS as a supported telecommunications
service.
76. We also adopt the 2023 Open Internet NPRM's tentative
conclusion that classifying BIAS as a telecommunications service would
protect public investments in BIAS access and affordability.
Establishing firmer legal authority to fund BIAS through the High Cost
and Lifeline programs ensures that public funds can continue to flow
into network buildouts and discounted service. Commenters agree that
reducing barriers to USF participation, including by potentially
allowing BIAS-only carriers to participate in the High Cost and
Lifeline programs in the future, will protect public investment by
increasing the number of entities eligible to receive it, including
small providers previously ineligible to become ETCs and providers in
rural areas where there had been no or few ETCs prior. We are
unpersuaded by one commenter's argument that ``the NPRM's tentative
conclusion that reclassification `protects public investments in
[broadband] access and affordability' ignores the fact that, in the
bipartisan [Infrastructure Investment and Jobs Act of 2021 (IIJA)],
Congress appropriated tens of billions of dollars for broadband
deployment, adoption, and affordability without subjecting broadband to
any Title II requirements.'' Congress's choice to support discrete
public investment through special appropriations does not affect
whether reclassification furthers the Commission's ability to protect
ongoing public investment distinct from or in concert with
appropriations.
77. While we agree with the potential for expanded access to our
universal service programs, we do not, however, designate BIAS as a
supported service at this time. Section 254(c)(1)'s requirement that
the Commission ``shall establish periodically'' which
telecommunications services meet the USF supported service standard
does not require the Commission to designate universal services at any
specific interval or time, much less the moment a service is classified
as a telecommunications service. The record created in this proceeding
is insufficient to properly and effectively address all of the concerns
raised by designating BIAS a supported service. Rather than adjust our
USF rules on a piecemeal basis, retaining existing supported universal
services and, by extension, ETC eligibility standards, provides us the
flexibility for holistically examining reclassification's effects on
the USF at a later time. For this reason, we decline at this time to
revise our definition of supported services.
8. Improving Access for People With Disabilities
78. We find that reclassification of BIAS under Title II will
enhance the Commission's authority to ensure that people with
disabilities can communicate using BIAS. Specifically, we agree with
commenters that reclassification will enable the Commission to utilize
its authority under sections 225, 255, 251(a)(2), and the newly adopted
open internet rules to ensure that BIAS is accessible for people with
disabilities.
79. People with disabilities who have access to BIAS rely on
internet-based forms of communications for more effective and efficient
direct and relayed communications. Reclassification of BIAS under Title
II and prohibiting BIAS providers from blocking or throttling
information transmitted over their BIAS networks, engaging in paid or
affiliated prioritization arrangements, and engaging in practices that
cause unreasonable interference or disadvantage to consumers will allow
the Commission to better safeguard access to internet-based
telecommunications relay services (TRS). Reclassification will also
allow the Commission to ensure that BIAS and equipment used for BIAS
are accessible to and usable by people with disabilities and precludes
the installation of ``network features, functions, or capabilities that
do not comply with the guidelines and standards established pursuant to
section 255 . . . .'' These provisions work in concert with sections
716 and 718 of the Act, giving the Commission authority to increase and
to maintain access for people with disabilities to modern
communications. Section 716 of the Act requires that advanced
communications services be accessible to and usable by people with
[[Page 45421]]
disabilities. Advanced communications services are: ``(A)
interconnected VoIP service; (B) non-interconnected VoIP service; (C)
electronic messaging service; (D) interoperable video conferencing
service; and (E) any audio or video communications service used by
inmates for the purpose of communicating with individuals outside the
correctional institution where the inmate is held, regardless of
technology used.'' Section 718 of the Act requires that internet
browsers installed on mobile phones be accessible to people who are
blind or visually impaired to ensure the accessibility of mobile
services.
80. For example, persons who are deaf, hard of hearing, or have
speech disabilities use BIAS to connect to internet-based video
applications to communicate directly with other persons who use sign
language (point-to-point) and other individuals who do not use the same
form of communication. These applications include Video Relay Service
(VRS), which involves multi-party synchronous high-definition video and
audio streaming requiring users to have a high-speed broadband
connection with sufficient data and bandwidth. Under section 225, the
Commission may make a telecommunications relay service like VRS
available to people with disabilities, but to use VRS, those
individuals must still subscribe to BIAS or mobile BIAS. Section 225
enables us to ensure that individuals with hearing and speech
disabilities can use BIAS-based services to communicate in a ``manner
that is functionally equivalent'' to the ability of a person who does
not have a hearing or speech disability. As the Commission recognized
in the 2015 Open Internet Order, BIAS providers may impede the ability
of the Commission to ensure BIAS-based forms of TRS are functionally
equivalent if they adopt network management practices that have the
effect of degrading the connections carrying video communications of
persons with hearing and speech disabilities. For instance, bandwidth
limits, data caps, or requirements to pay additional fees to obtain
sufficient capacity can have a disproportionate negative impact on
those people with disabilities who use VRS. These video-based services
are used by people whose first language is sign language and are the
only means of direct communications or a communications service that is
functionally equivalent to voice communications services used by
persons without hearing or speech disabilities.
81. We reject the argument by some commenters that reclassification
of BIAS under Title II will not enhance the Commission's authority to
ensure the accessibility of BIAS or will not improve accessibility of
BIAS for people with disabilities, given the existence of the Twenty-
First Century Communications and Video Accessibility Act (CVAA). For
example, USTelecom and CTIA argue that reclassification is ``not
necessary'' or would have ``no impact on accessibility'' because
Congress has already given the Commission the requisite authority to
ensure the accessibility of BIAS in sections 716 and 718, which do not
rely on the classification of BIAS. Reclassification will apply
statutory provisions to BIAS that will enhance our ability to improve
the accessibility of BIAS and internet-based communication services for
people with disabilities. Specifically, as discussed below, we do not
forbear from the application of sections 225, 251(a), and 255 or their
implementing regulations. We disagree with USTelecom that these
benefits are negligible. While the CVAA permits the Commission to adopt
certain regulations concerning ``advanced communications services,''
BIAS itself is not an advanced communications service, as specifically
defined in the CVAA. For example, the CVAA directs the Commission to
enact regulations to prescribe, among other things, that networks used
to provide advanced communications services ``may not impair or impede
the accessibility of information content when accessibility has been
incorporated into that content for transmission through . . . networks
used to provide [advanced communications services].'' Under section
716, 47 U.S.C. 617, a manufacturer of equipment used for advanced
communications services must ensure that such equipment is accessible
to and usable by individuals with disabilities, if achievable; and
similarly providers of advanced communications services must ensure
that those services are accessible to and usable by individuals with
disabilities, if achievable. Accordingly, reclassifying BIAS allows us
to regulate that service under Title II in ways that complements our
authority over advanced communications services under the CVAA. For
example, under Title II, providers of BIAS and manufacturers of BIAS
equipment and BIAS customer premises equipment must ensure that such
equipment and services are accessible to and usable by individuals with
disabilities, if readily achievable. In addition, section 251(a)(2)
prohibits providers of telecommunications services from installing
network features, functions, or capabilities that impede accessibility.
B. Broadband Internet Access Service Is Best Classified as a
Telecommunications Service
82. We conclude that BIAS is best classified as a
telecommunications service based on the ordinary meaning of the
statutory definitions for ``telecommunications service'' and
``information service'' established in the 1996 Act. This conclusion
reflects the best reading of the statutory terms applying basic
principles of textual analysis to the text, structure, and context of
the Act in light of (1) how consumers understand BIAS and (2) the
factual particulars of how the technology that enables the delivery of
BIAS functions. We recognize that when interpreting a statute, our
``analysis begins with the text'' of the statute ``and we look to both
`the language itself [and] the specific context in which that language
is used.' '' As explained below, the Commission also has well-
established and longstanding authority and responsibility, provided by
Congress, to classify services subject to the Commission's
jurisdiction, as necessary, using the Act's definitional criteria,
including the statutory provisions enacted as part of the 1996 Act. And
though not necessary to our conclusion that treating BIAS as a
telecommunications service is the best reading of the Act based on the
statutory text, structure, and context, our decision here is further
supported by the principles set forth by the Supreme Court in Chevron,
U.S.A., Inc. v. Natural Resources Defense Council, Inc. (Chevron). Our
analysis is also appropriately afforded deference under Skidmore v.
Swift & Co. Commenters in the record take various positions about
possible judicial deference regimes that might (or might not) apply to
our classification decision. We need not linger over those disputes
given that we find our classification of BIAS reflects the best reading
of the Act irrespective of such considerations. We also conclude that
BIAS is not best classified as an information service.
83. Our application of the statutory definitions to BIAS is driven
by how typical users understand the BIAS offering. For an offering to
meet the ``telecommunications service'' definition, the
telecommunications component of the offering, from the perspective of
the end user, must have
[[Page 45422]]
a sufficiently separate identity from the other components to
constitute a separate offering of service. As the Supreme Court
explained in Brand X, ``[i]t is common usage to describe what a company
`offers' to a consumer as what the consumer perceives to be the
integrated finished product, even to the exclusion of discrete
components that compose the product.'' The D.C. Circuit affirmed that
consumer perception is important to determining the proper
classification of a service in USTA. Furthermore, the Commission has
consistently analyzed consumers' understanding of the offering in its
decisions classifying broadband services. The 2015 Open Internet Order
and RIF Order both analyzed their classification decisions based on
consumers' understanding of the offering. That we should understand the
Act's definitional terms based on the consumer perception of the
offering is also supported by the references to the ``user'' in the
definition of ``telecommunications.'' The record also provides support
for relying on consumer perception to conduct our classification
analysis, and in light of the record and the well-established basis for
relying on consumer perception and BIAS provider marketing, we disagree
with commenters who argue that this consideration is unsuitable to our
classification analysis.
84. Our classification decision also is guided by an evaluation of
the statutory definitions based on the factual particulars of how the
technology that enables the delivery of BIAS functions. In Brand X, the
Supreme Court noted that the question of what service is being offered
depends on ``the factual particulars of how internet technology works
and [how the service] is provided.'' Past Commission classification
decisions also indicate that evaluation of the underlying technology is
an important factor. Consistent with the 2015 Open Internet Order, we
also find that the functionality of the offering is also informed by
how BIAS providers market the offering, including whether the offering
is focused on the transmission capabilities of the service or any
information service component or capabilities that may be provided with
the transmission component. We therefore disagree with commenters who
argue that this consideration should not apply to our classification
analysis.
1. BIAS Is an Offering of Telecommunications for a Fee Directly to the
Public
85. We conclude that BIAS is best classified as a
``telecommunications service'' under the Act because it is an
``offering of telecommunications for a fee directly to the public.''
The RIF Order did not dispute that BIAS providers offer BIAS directly
to the public for a fee. In support of this conclusion, we find that
BIAS provides ``telecommunications,'' as defined in the Act, because it
provides ``transmission, between or among points specified by the user,
of information of the user's choosing, without change in the form or
content of the information as sent and received.''
86. As the Commission has previously observed, the critical
distinction between a telecommunications service and an information
service turns on what the provider is ``offering.'' The record in this
proceeding leads us to the conclusion that BIAS is perceived by
consumers and functions as a transmission conduit that does not alter
the information it transmits. The record also demonstrates that
consumers perceive--and BIAS providers market--BIAS as a standalone
offering of such telecommunications, which is separate and distinct
from the applications, content, and services to which BIAS provides
access, and which are generally information services offered by third
parties. While we ground our conclusion that consumers perceive--and
BIAS providers market--BIAS as a telecommunications service on the
record before us in this proceeding, we also find that the conclusions
reached by the 2015 Open Internet Order about consumer perception and
BIAS provider marketing were not only accurate regarding the BIAS
offered at the time, but remain accurate concerning BIAS today.
Additionally, no party in the record disputes that BIAS providers
routinely market BIAS widely and directly to the public for a fee, and
therefore that BIAS is not a private carriage service.
a. BIAS Provides Telecommunications
87. The record evinces significant support for the general
proposition that BIAS provides ``telecommunications''; that is, BIAS
provides ``transmission, between or among points specified by the user,
of information of the user's choosing, without change in the form or
content of the information as sent and received.''
88. BIAS Transmits Information of the User's Choosing. BIAS
transmits information of a user's choosing both functionally and from a
user's perspective, providing two independent, alternative grounds for
this conclusion. Functionally, as a packet-switched transmission
service using Internet Protocol (IP), BIAS transmits information of a
user's choosing because a user decides what information to place in
each IP packet that is transmitted when the user decides what
information to send and receive. A user chooses to send or receive
particular information when the user visits a particular website, uses
a particular application, or operates a particular online device or
service. We are therefore unpersuaded by USTelecom's argument that BIAS
does not provide telecommunications because users often receive
information that is not of their choosing, such as display advertising
on a web page. That the user may not know exactly what information the
user will receive does not mean that the information was not ``of the
user's choosing.'' Just as traditional voice service provides
telecommunications even though a user making a telephone call does not
necessarily know who will answer or what information will be conveyed
in the call, BIAS provides telecommunications even when a user does not
necessarily know exactly what information will be received in response
to the user's selections. We are likewise unconvinced by NCTA's
argument that BIAS does not transmit information of the user's choosing
because, ``unlike traditional, circuit-switched voice services, in
which the user chooses and sends the information--i.e., his or her
voice--to a particular called party, broadband involves continual
interaction between computers and the transmission network, as well as
among computers themselves.'' To the extent BIAS is continually sending
and receiving information, it is doing so because users are choosing to
interact with websites, applications, or online devices or services,
and they are therefore directing the sending and receiving of such
information.
89. BIAS Transmits Information Between or Among Points Specified by
the User. The consumer perspective and technological functionality
confirm that BIAS transmits information between or among points
specified by the user, providing two independent, alternative grounds
for this conclusion as well. A typical consumer understands the phrase
``points specified by the user'' to mean the person, business, or
service provider with which the user intends to share information.
Therefore, when a consumer chooses to use a particular
[[Page 45423]]
website, application, or online device or service, the user perceives
that the user is specifying the points for the transmission of the
information that the user is sending or receiving. The ordinary meaning
of the terms ``specify'' and ``point,'' taken together, demonstrates
that users understand that when they ``specify'' the ``point,'' of
their choosing, they are specifying the website, application, online
device, or service with which they wish to communicate, regardless of
its physical or virtual location. We conclude that when BIAS users
expressly or explicitly identify to BIAS providers the particular
website, application, or online device or service they wish to access,
they would understand themselves to be specifying the points between or
among which the relevant information will be transmitted. Even assuming
arguendo that ``points specified by the user'' should be interpreted
more narrowly, the applications users are controlling to access
information may actually know the specific destination before the
transmission occurs, which provides an independent alternative basis
for our conclusion. This is true, contrary to some commenters' claims,
even if a user does not know the specific geographic location of that
person, business, or service provider or the precise physical or
virtual location or address where the requested content is stored.
Functionally, a user is also specifying the IP address of their desired
point even when the user enters a fully qualified domain name, such as
www.example.com, because the domain is resolved by the DNS to the
appropriate IP address. Additionally, the fact that users may specify a
point associated with more than one virtual location or address (e.g.,
due to load balancing) ``does not transform that service to something
other than telecommunications.'' Indeed, the Commission has ``never
understood the definition of `telecommunications' to require that users
specify--or even know--information about the routing or handling of
their transmissions along the path to the end point, nor do we do so
now.'' This understanding of the ``points specified by the user''
phrase is consistent with the 2015 Open Internet Order, which noted
that users ``would be quite upset if their internet communications did
not make it to their intended recipients or the website addresses they
entered into their browser would take them to unexpected web pages.''
Thus, ``there is no question that users specify the end points of their
internet communications.''
90. That users specify the points for the transmission of their
information when using BIAS is consistent with the functionality of
other forms of telecommunications. For example, in the context of
mobile voice service, when a user dials a number, the call is routed to
a cell tower near the called party--likely the one that would provide
the best user experience--just as how a BIAS user's query to a video
streaming service is often directed toward the server nearest to the
user. In neither case does the user know the precise geographic
location of the ``point'' specified. With toll-free 800 service, a call
dialed to a single telephone number may route to multiple locations
that are unknown to the user. Similarly, with call bridging services,
when a user dials a telephone number, the call is routed often to
multiple points, all with geographic locations that are unknown to the
user. Additionally, when the Commission first had the opportunity to
classify a broadband service--namely, digital subscriber line (xDSL)-
based advanced service--in the Advanced Services Order (63 FR 45140
(Aug. 24, 1998)), it concluded that the end user chooses the
destination of the IP packets sent beyond the central office where the
tariffed service of Bell Operating Companies (BOCs) ended, relying on
the function of such voice services. The Commission did not understand
any of these services to fall outside the meaning of telecommunications
simply because the user did not know the precise location of the
points.
91. The statutory context reinforces this understanding. The 1996
Act, which enacted the ``telecommunications'' definition, also included
section 706, which directs the Commission to ``encourage the deployment
. . . of advanced telecommunications capability,'' and to conduct
marketplace reviews in that regard. Section 706 defines the specific
sorts of ``telecommunications capability'' at issue as ``enabl[ing]
users to originate and receive high-quality voice, data, graphics, and
video telecommunications using any technology''--but does not
separately define ``telecommunications capability'' or
``telecommunications.'' Consequently, pursuant to section 3(b) of the
1996 Act, the definition from section 3 of the Communications Act--
i.e., the ``telecommunications'' definition we are applying here--
applies to the use of ``telecommunications'' in section 706 of the 1996
Act. It is improbable that users could be expected to have more
knowledge of the specific geographic or virtual locations between or
among which ``high-quality voice, data, graphics, and video'' are
transmitted than they do in the case of BIAS transmissions. Similarly,
that Congress considered the information a user receives in the form of
``high-quality voice, data, graphics, and video'' to fall within
``advanced telecommunications capability'' accords with the
understanding that users likewise have chosen the information they
receive when accessing the internet using BIAS, even if they have not
anticipated and specified its minutest details.
92. BIAS Transmits Information Without Change in the Form or
Content as Sent and Received. BIAS transmits information ``without a
change in its form or content as sent and received'' from a user
perspective. The record demonstrates that users expect that their
information will be sent and received without change and does not show
that these user expectations are not being met. There is even record
evidence that consumers have rejected past attempts by BIAS providers
to change the form or content of their information. When a user
``chooses'' to stream a music video, for example, the user expects to
hear the song and see the choreography without it being changed by
their BIAS provider. The record does not show that the user perceives
any processing or intelligence that is employed to deliver the video,
let alone understands that processing or intelligence to cause a change
in the form or content of that information.
93. BIAS also does not change the form or content of the
information it transmits from a technical perspective. As we explain
above, BIAS transmits the information of users' choosing because users
decide what information should be placed in the packets that are
transmitted. There is no change in the form or content of that
information because the packet payload is not altered in transit.
Although BIAS may use a variety of protocols to deliver information
from one point to another, the fundamental premise of the internet is
to enable the transmission of information without change in the form or
content across interconnected networks, and any such changes would
undermine that very functionality.
94. It is therefore not the case, as some commenters at the time of
the RIF Order contended and some commenters here repeat, that the
processing or intelligence that is combined with the transmission
component, and that may act upon a user's information for routing
purposes, changes the form or content of that information. NCTA argues,
for example, that while packet content may
[[Page 45424]]
not change, the packet switching architecture itself--``the breaking
apart, routing, and reconfiguration of these packets''--``involves a
`change in the form or content' of the information requested or sent by
the user.'' Making a similar argument, CTIA uses streaming a video as
an example, claiming that the ``significant information-processing,
from transforming keystrokes and clicks into machine readable
languages, to dividing information into packets, to intelligently
routing those packets to a server close to the user, to retrieving and
processing the video data for transmission,'' is what makes BIAS an
information service. CTIA also suggests that the form of information
transmitted by BIAS is changed because the ``coded information actually
being transmitted looks quite different from anything the user would
recognize.'' But the salient question under the statute is whether
there is a change in form or content of the information ``as sent and
received.'' The statutory focus thus is on either end of the
transmission, irrespective of any processing that occurs in between.
With data communications, while the information may be fragmented into
packets and unintelligible to users while in transit, ``such
fragmentation does not change the form or content, as the pieces are
reassembled before the packet is handed over to the application at the
destination,'' and thus the information is delivered to or from the
desired endpoint as it was sent and therefore without a change in
``form or content'' within the meaning of the statute. The Commission
has found in other contexts that protocol ``processing'' involved in
broadband transmission causes no net change in the form or content of
the information being transmitted. CTIA erroneously argues that the
Non-Accounting Safeguards Order (62 FR 2991 (Jan. 21, 1997)) held that
all protocol processing is an information service while ignoring the
Commission's finding that non-net protocol processing falls under the
telecommunications systems management exception.
95. NCTA's and CTIA's arguments also fail to acknowledge that BIAS
is not unique or distinguished from processing and intelligent routing
used by traditional telecommunications services. Mobile voice telephone
service for example, relies on similar processing to support essential
functions including mobile call routing, mobile paging, and handover
between cellular towers. For circuit-switched calls on these networks,
when a mobile user moves from one serving base station area to another
serving base station area, the call is handed over from the current
serving base station to the new serving base station with the help of
the base station controller and the mobile switching center. Similarly,
modern voice telephony (both fixed and mobile) can convert circuit-
switched voice transmissions into IP packets, route those packets using
the same processing as a BIAS provider does, and convert those packets
back to a circuit-switched format to deliver the call. Similar
conversions historically have been present in other packet-switched
transmission services as well. Contrary to NCTA's and CTIA's view, none
of these services are or can be understood to fall outside the meaning
of telecommunications on the theory that there is a change in the form
or content of the information as sent or received. CTIA tries to
distinguish voice and data services, arguing that ``the internet and
PSTN are two fundamentally different networks'' because the internet
uses packet switching to route data while the PSTN uses SS7 signaling
to route calls, which it says explains why they ``are completely
incompatible with each other and cannot directly interoperate.'' But
CTIA does not explain why these distinct protocols and their
incompatibility are independently relevant to classification
determinations, and its argument merely underscores that both BIAS and
voice networks involve inherent processing and signaling to ensure that
information is efficiently and correctly routed. Indeed, given the
prevalence of such technologies used in transmission, reaching a
contrary conclusion effectively would suggest that no transmission
services could ever be telecommunications, which could not have been
what Congress intended. The only services that reclassification
opponents argue include a net protocol conversion are certain forms of
VoIP. But even assuming arguendo the merits of the commenters'
technological description, they do not demonstrate that users of VoIP
consider the conversion to effectuate material changes, let alone that
they should inform our understanding of how BIAS users perceive that
service, as relevant to the ``telecommunications'' definition.
96. Our understanding of the ``telecommunications'' definition in
this regard also is supported by the scope of services encompassed by
the meaning of ``advanced telecommunications capability'' in section
706 of the 1996 Act. The purported changes in form or content that some
commenters associate with BIAS are no less likely to be associated with
the accessing of ``high-quality voice, data, graphics, and video'' that
Congress included within the scope of ``advanced telecommunications
capability'' under section 706. This elicits harmonization within the
1996 Act between the ``telecommunications'' definition and section 706,
supporting our application of the ``telecommunications'' definition to
BIAS here. Elsewhere, the Order interprets section 706 of the 1996 Act
as a grant of regulatory authority. We make clear, however, that our
consideration of section 706 in our analysis here does not depend on
whether section 706 is understood as a grant of regulatory authority.
Separately, we recognize that the RIF Order concluded that BIAS is made
available ``via telecommunications'' by reference to an amorphous set
of inputs that BIAS providers use when offering service. But even
accepting that, it raises more questions than answers as far as section
706 is concerned. For instance, it fails to address whether a BIAS
provider's own use of telecommunications as an input into BIAS would be
enough to bring it within the scope of section 706, and if so, whether
the entirety of the service would fall within the scope or just those
aspects--ill-defined by the RIF Order--that rely on telecommunications
inputs. The RIF Order also fails to explain how those amorphous details
about the underlying inputs used in BIAS could be a meaningful factor
in understanding the ``telecommunications'' definition from a user
perspective. Even if those questions had answers, we find our approach
best harmonizes the ``telecommunications'' definition and the meaning
of ``advanced telecommunications capability'' in section 706.
97. The user perspective and functionality of BIAS is also
consistent with the ordinary meaning of the words ``form'' and
``content,'' as they were understood at the time of the 1996 Act's
adoption. The word ``form'' was understood as ``a shape; an arrangement
of parts,'' ``the outward aspect (esp. apart from colour) or shape of a
body,'' or ``the mode in which a thing exists or manifests itself (took
the form of a book)''; ``the shape or appearance of something'' or
``the particular mode in which a thing or person appears: wood in the
form of paper''; and ``the shape and structure of something as
distinguished from its material.'' In support of its view, CTIA cites a
recent Second Circuit case purporting to define ``form'' as ``pattern
or schema,'' which we do not find to differ fundamentally from the
definitions we provide from the time of the 1996 Act's passage. Thus,
in the context of BIAS, the
[[Page 45425]]
question is whether the shape or appearance of the information being
transmitted is changed. This might occur, for example, if BIAS
manipulated the appearance of a website that a user is accessing or the
presentation of the information that appears in an application--but it
does not. When a user visits a website or uses an application, the
information is presented in exactly the form intended by the content
provider, and not a form determined by the BIAS provider. USTelecom
also argues that content filtering and video optimization means that
information transmission virtually never occurs ``without change in the
form or content.'' Insofar as this involves ``content filtering,'' the
filtered-out information is not information we consider the user to
have chosen to receive in the first place. Similarly in the case of
measures that guard against the distribution of malware, whether or not
consumers must affirmatively opt-in to such services, the record
provides no reason to believe that malware is information that BIAS
users have chosen to receive. Additionally, USTelecom cites video
optimization--e.g., to ``reduce the demand of high-resolution video on
mobile devices with small screens, mobile operators optimize the
content so as to consume less bandwidth.'' But such functionality
likely falls within the telecommunications systems management exception
to the information service definition, and in any event, USTelecom does
not suggest that video optimization causes the desired video not to
play, changes the content of the video as originally sent, or causes
the content not to present to the user as a video. The relevant
statutory question is whether a BIAS user would see video optimization
as sufficient to constitute a change in the form or content of the
information chosen by the user, and the record here does not make that
case. As such, BIAS transmits the form of the information to and from
an end user as it is sent. The same holds true for the ``content'' of
the information, a term which was understood at the time of the 1996
Act's adoption as ``the substance or material dealt with (in a speech,
work of art, etc.) as distinct from its form or style''); ``the meaning
or substance of a piece of writing, often as distinguished from its
style or form''); ``substance, gist'' or ``meaning, significance.''
BIAS providers do not change the substance of a news article on a
website, a social media post, the lyrics or melody of a streaming song,
or the images that appear in a photograph or video, and thus BIAS
providers do not change the content under the ordinary meaning of that
term. ACA Connects argues that BIAS includes certain capabilities,
namely retrieval and storage, that can fit within the information
service definition even though they do not require net protocol
conversion. But ACA Connects does not explain if the capabilities to
which it is referring are actually offered by BIAS providers (as
opposed to edge providers) or are different from those we already
address in the Order. ACA Connects also does not appear to grapple with
whether such capabilities--if indeed there are any we have not already
addressed--would fall under the telecommunications systems management
exception or are otherwise separable. In any event, that some
information-processing capabilities do not necessarily change the form
or content of information only further demonstrates that when
information-processing capabilities facilitate the use of BIAS, they do
not inherently cause BIAS to change the form or content of the
information it transmits.
b. BIAS Is a Telecommunications Service
98. BIAS is a ``telecommunications service'' because consumers
perceive it--and BIAS providers market it--as a standalone ``offering''
of telecommunications that is separate and distinct from the
applications, content, and services to which BIAS provides access, and
which are generally information services offered by third parties. BIAS
providers also market BIAS directly to the public for a fee, and it
therefore is not a private carriage service.
99. Consumers Perceive BIAS as a Standalone Offering of
Telecommunications. As evidenced in the record, there is wide
agreement, among both supporters and even some opponents of
reclassification, that consumers today perceive BIAS to be a
telecommunications service that is primarily a transmission conduit
used as a means to send and receive information to and from third-party
services. The D.C. Circuit recognized this in 2016, when it stated that
``[e]ven the most limited examination of contemporary broadband usage
reveals that consumers rely on the service primarily to access third-
party content.'' Since that time, this consumer perception of BIAS as a
gateway to third-party services has only become more pronounced. The
dramatic increase in consumers' reliance on BIAS to participate in
vital aspects of daily life during the COVID-19 pandemic set in stark
relief the central--and critical--importance of using BIAS to access
third-party services. And, as Home Telephone notes, while a consumer
``may decide to use edge services provided by the ISP, . . . the
consumer certainly is not expecting the ISP to dictate the edge
services available to them when subscribing to BIAS.'' It is thus
clearer now, more than ever before, that consumers view BIAS as a
neutral conduit (or, in the words of one commenter, a ``dumb pipe'')
through which they may transmit information of their choosing, between
or among points they specify, ``without change in the form or content
of the information as sent and received,'' and ``not as an end in
itself.'' It is also clear from the record that the third-party
services themselves rely on the neutral-conduit property of BIAS to
reach their customers. Netflix emphasizes that ``[their] members . . .
depend on an open internet that ensures that they can access our
content and the content of many other companies through their ISP's
networks without interruption.''
100. BIAS Providers Market BIAS as a Standalone Offering of
Telecommunications. We also find that BIAS providers market BIAS as a
telecommunications service that is essential for accessing third-party
services, and this marketing has become more pronounced during and
since the COVID-19 pandemic. In the 2015 Open Internet Order, the
Commission concluded that BIAS providers market their BIAS ``primarily
as a conduit for the transmission of data across the internet,'' with
fixed providers distinguishing service offerings on the basis of
transmission speeds, while mobile providers advertise speed,
reliability, and coverage of their networks. Although the RIF Order
contended that ``ISPs generally market and provide information
processing capabilities and transmission capabilities together as a
single service,'' it did not provide examples. BIAS providers'
marketing today appears even more focused than in 2015 on the
capability of BIAS to transmit information of users' choosing between
internet endpoints, rather than any capability to generate, acquire,
store, transform, process, retrieve, utilize, or make available that
information. Such marketing emphasizes faster speeds aimed at
connecting multiple devices, unlimited data for mobile service, and
reliable and secure coverage. INCOMPAS notes that ``some mobile BIAS
providers offering 5G services are now marketing their network capacity
to serve the fixed BIAS marketplace.'' Public Knowledge notes that
``[a] brief
[[Page 45426]]
survey of television and online advertising for both mobile and fixed
broadband shows that ISPs compete with each other on the basis of
speed, price, ease of use, reliability and availability.'' In those
cases where BIAS providers mention edge provider services, they often
advertise them as separate offerings that can be bundled with or added
on to their broadband internet access services, such as discounted
subscriptions to unaffiliated video and music streaming services or
access to mobile security apps.
101. BIAS Providers Market BIAS Directly to the Public for a Fee.
The concept of the ``offering'' within the telecommunications service
definition is based on the principles of common carriage. If the
offering meets the statutory definition of ``telecommunications
service,'' then the Act makes clear that a provider ``shall be treated
as a common carrier'' under the Act ``to the extent that it is engaged
in providing'' such a service. The Commission also has interpreted the
language of the ``telecommunications service'' definition in such a way
that meeting that definition also necessarily means the service meets
the definition of a common carrier service. We note that a service can
be a telecommunications service even where the service is not held out
to all end users equally.
102. The record does not dispute that BIAS providers market BIAS
directly to the public for a fee. This factual reality aligns with our
definition of BIAS as a mass-market retail service as such services are
necessarily offered to the public for a fee. Because BIAS providers do
in fact offer BIAS as a mass-market retail service, we conclude, as the
Commission did previously, that BIAS is not a private carriage
offering. Because the RIF Order concluded that BIAS was an information
service, it did not need to reach the question of whether any aspect of
the BIAS transmission offering was common or private carriage. We note
that no party argues that BIAS is offered on a private carriage basis.
While ADTRAN argues that the Commission permits ``a carrier to choose
how to structure its offerings and decide whether to operate as a
common carrier or a private carrier,'' it does not argue that any
particular BIAS offering is structured as a private carriage service.
103. Additionally, since we conclude below that BIAS includes the
exchange of traffic by an edge provider or an intermediary with the
BIAS provider's network (i.e., peering, traffic exchange or
interconnection), we again conclude that the implied promise to make
arrangements for such exchange does not make the traffic exchange
itself a separate offering from BIAS--private carriage, or otherwise.
Even if a traffic exchange arrangement involves some individualized
negotiation, that does not change the underlying fact that a BIAS
provider holds the end-to-end service out directly to the public. We
again conclude that some types of individualized negotiations are
analogous to other telecommunications carriers whose customer service
representatives may offer variable terms and conditions to customers in
circumstances where the customer threatens to switch service providers.
Therefore the end-to-end service remains a telecommunications service.
2. BIAS Is Not an Information Service
104. We find that BIAS, as offered today, is not an information
service under the best reading of the Act because it is not itself
``the offering of a capability for generating, acquiring, storing,
transforming, processing, retrieving, utilizing, or making available
information via telecommunications.'' Rather, BIAS functions as a
conduit that provides end users the ability to access and use
information services that provide those capabilities. DNS, caching, and
other information-processing capabilities, when used with BIAS, either
fall within the telecommunications systems management exception to the
definition of ``information service,'' or are separable information
services not inextricably intertwined with BIAS, or both, and therefore
do not convert BIAS into an information service. Additionally, BIAS is
not perceived by consumers or marketed by BIAS providers as an
information service.
a. BIAS Does Not Offer the Capability To Process Information in the
Ways Provided in the Act
105. Information services are applications whose information
payload is transmitted via telecommunications. These applications
provide end users with the capability to process the information they
send or receive via telecommunications in the ways Congress specified
in the information service definition, including the capability to:
``generate'' and ``make available'' information to others through email
and blogs; ``acquire'' and ``retrieve'' information from sources such
as websites, online streaming services, and file sharing tools;
``store'' information in the cloud; ``transform'' and ``process''
information through image and document manipulation tools, online
gaming, cloud computing, and machine learning capabilities; ``utilize''
information by interacting with stored data; and publish information on
social media sites. We use the term ``process'' to reference all the
terms described in the information service definition: generating,
acquiring, storing, transforming, processing, retrieving, utilizing, or
making available. In all these respects, information services are the
platforms that edge providers offer today. Furthermore, all these
information services are completely distinct from the conduit--i.e.,
the telecommunications--via which the payload for these services is
sent and received. Although BIAS providers may separately offer some of
these services to their subscribers, the information services most
often accessed by users are provided by third parties. Below we discuss
how certain such services can be used for the management, control, and
operation of a telecommunications system or management of a
telecommunications service, and how in those instances, those services
fall into the telecommunications systems management exception to the
information service definition.
106. ACA Connects argues that since ``information services by
definition are offered `via telecommunications,' . . . just because a
service has a material transmission component does not necessarily mean
it is a telecommunications service.'' We acknowledge in our discussion
of precedent that information services are offered ``via
telecommunications'' and that the existence of a material transmission
component does not necessarily render a service a telecommunications
service, but the classification of a service depends on the how
consumers understand it and the factual particulars of how the
technology functions. As we explain at length, BIAS is best classified
as a telecommunications service because consumers perceive it as such
and because the transmission component has a distinct identity from any
information-processing capabilities. By contrast, ACA Connects
diminishes, if not ignores, the core nature of the transmission
component to BIAS. Moreover, ACA Connects' entire claim that BIAS is an
information service offering ``via telecommunications'' rests entirely
on its assertion that BIAS is an offering of DNS, caching, and third-
party information service offerings. But the service BIAS providers
offer that we are classifying is BIAS, and as we explain herein, BIAS
is not those other services.
[[Page 45427]]
107. The RIF Order and its proponents who commented in this
proceeding engage in analytical gymnastics in an attempt to fit BIAS
into the definition of ``information service.'' We are unconvinced.
They first claim that BIAS itself offers subscribers the ability to
process information in the ways prescribed by Congress's information
service definition. This claim simply rehashes old arguments about the
integration of DNS, caching, or other information-processing
capabilities into BIAS offerings, which we address below. For its own
part, the RIF Order arbitrarily found that the term ``capability'' is
``broad and expansive'' and then used that understanding to reach the
conclusion that the information service definition encompasses BIAS.
But the RIF Order's focus was misplaced. The question is not how broad
the meaning of ``capability'' is, but what the service itself has the
capability to do. As even the RIF Order makes clear, BIAS does not
itself have the capability to process information in the ways the
statute prescribes, it only ``has the capacity or potential ability to
be used to engage in the activities within the information service
definition.'' The RIF Order tries to prop up its flawed analysis by
claiming that the ``fundamental purposes'' of BIAS are ``for its use
in'' processing information in the ways described in the information
service definition and that BIAS was ``designed and intended'' to
perform those functions. But this claim amounts to nothing more than
statutory eisegesis: reading words into the definition of ``information
service'' that are not there to reach the RIF Order's predetermined
outcome. Having the ``fundamental purpose'' or being ``designed and
intended'' to do something does not mean a service actually has the
capability to do that thing. In any event, the fundamental purpose of
BIAS is to serve as a conduit through which users can access and use
the applications we describe above that are themselves information
services. Put differently, a consumer with a BIAS connection could not
generate, acquire, store, transform, process, retrieve, utilize, or
make available information using that connection if those applications
did not exist. We thus disagree with ACA Connects' conflation of the
service offered by edge providers and the service offered by BIAS
providers.
108. The RIF Order's expansive reading of ``capability'' also
logically sweeps into the information service definition a category of
services that is objectively different and obliterates the statutory
distinction between telecommunications services and information
services. For instance, under the RIF Order's conception of information
services, the broadband internet access services provided by BIAS
providers like Comcast, Verizon, and AT&T are classified as the same
type of services provided by edge providers like Netflix, DuckDuckGo,
and Wikipedia. But that defies reality. Furthermore, if the RIF Order's
framework was followed through to its logical conclusion, even the most
obvious of telecommunications services, traditional switched telephone
service, would be classified as an information service, as it provides
customers with the ability to make information available to others
(e.g., public service announcements), retrieve information from others
(e.g., through a simple phone call with another person), and utilize
stored information from others (e.g., by interacting with a call menu
or accessing voice mailbox services). The RIF Order tries to get around
this problem by comparing the ``design,'' ``functionality,''
``nature,'' and ``purpose'' of traditional telephony and BIAS, and then
concluding that because they are different, BIAS cannot be a
telecommunications service. But Congress did not design the Act's
definitional terms to preclude the Commission from ever classifying new
offerings that differ from traditional telephony as telecommunications
services. If Congress had intended to foreclose that option, it could
have easily done so. Rather the Act simply provides the Commission with
statutory definitions for ``telecommunications service'' and
``information service'' with which the Commission can make
classification determinations on an ongoing basis. As discussed above,
the better reading of these definitions makes clear that BIAS is a
telecommunications service as defined by the 1996 Act.
109. We are also unpersuaded by the RIF Order's contention, and
that of some commenters in this proceeding, that BIAS is an information
service by virtue of its provision of access to third-party information
services. For instance, NCTA points to the U.S. Supreme Court's
statement that, ``[w]hen an end user accesses a third-party's website,
. . . he is equally using the information service provided by the cable
company that offers him internet access as when he accesses the
company's own website . . .'' However, the Court's statement stemmed
from its affirmation of the reasonableness of the Commission's
``understanding of the nature of cable modem service,'' as offered at
the time, an understanding which we do not find applicable to BIAS as
offered today. This argument conflates the critical distinction between
the information services that are typically offered by third parties
and are not part of the BIAS offering itself with the
telecommunications services that BIAS providers offer to their
customers. In doing so, the RIF Order and its supporters largely
eliminate the category of ``telecommunications services'' established
in the Act, which Congress could not have intended. Congress would not
have devised a scheme where the definition of ``information service''
would largely moot the ``telecommunications service'' definition or
confine it only to telephone service, particularly when Congress was
aware that non-telephone transmission services had been offered for
years under the Computer Inquiries as basic services. Specifically,
under the RIF Order's framework, all telecommunications offerings used
to access third-party information services that themselves have the
``capability'' to ``store'' or ``transform'' information would
logically be transformed into information services. Such a conclusion
would be inconsistent with Commission precedent. But the Commission has
never, until the RIF Order, imputed the capabilities of such third-
party information services to the telecommunications services that
provide access to them. The RIF Order implicitly acknowledges the
absurdity of this argument in finding the need to clarify that
information services accessed via traditional telephone service do not
convert that telephone service into an information service.
b. DNS and Caching, When Used With BIAS, Fall Within the
Telecommunications Systems Management Exception
110. We find that information-processing capabilities, such as DNS,
caching, and others, when used with BIAS, fall within the
telecommunications systems management exception to the definition of
``information service.'' The Act excludes from the definition of
information service the use of information-processing capabilities
``for the management, control, or operation of a telecommunications
system or the management of a telecommunications service.'' We refer to
this as the ``telecommunications systems management exception.'' BIAS
providers sometimes use information-processing capabilities, such as
DNS and caching, to manage, control, and operate the telecommunications
system
[[Page 45428]]
they operate and the telecommunications service they offer. Thus, when
BIAS providers use DNS, caching, and other information-processing
capabilities in that way, those services fall within the
telecommunications systems management exception and therefore do not
serve to convert the entire BIAS offering into an information service.
ACA Connects suggests that we ``disregard or downplay information
processing capabilities'' used by BIAS providers even though we provide
a fulsome analysis herein of the role those capabilities play in the
provisioning of BIAS. At the same time, in its filings, ACA Connects
disregards or downplays the existence of the telecommunications systems
management exception and how it applies to those capabilities.
111. We disagree with those commenters who argue that we should
treat the transmission component of BIAS differently than the complete
BIAS offering that often uses information-processing capabilities, like
DNS and caching, to facilitate competition and achieve policy goals.
For instance, ADTRAN advocates that we give BIAS providers a choice
between complying with Title II requirements from which we do not
forbear and our open internet rules for their BIAS offerings, or
alternatively offering the transmission component of BIAS as a separate
service subject to Title II regulation. And Mitchell Lazarus advocates
that the Commission institute a Title II regime for the transport
component of BIAS and forbear from all Title II regulation except a
requirement that facilities-based ISPs open their facilities to
competing ISPs. Both these proposals share the same fault in that they
fail to recognize that the entire BIAS offering is best classified as a
telecommunications service, as we explain in the Order. Because we
already have identified a legally sound approach to address the issues
taken up in the Order we are not persuaded that we should instead take
these approaches, which these commenters recognize would likely
necessitate that we defer action and issue a further notice of proposed
rulemaking to address the practical details of these alternative
approaches. And at least to the second proposal, it would likely compel
all BIAS providers to separately offer the transmission component of
BIAS as a telecommunications service, but the Commission, in 2017,
expressed doubt about its ``statutory authority to compel common
carriage offerings . . . if the provider has not voluntarily'' offered
such a service itself.
112. We find that DNS, caching, and other services the BIAS
providers use with their BIAS offering comfortably fit within the
telecommunications systems management exception, either because they
are used to manage a telecommunications service; used to manage,
control, or operate a telecommunications system; or both. Even if
specific capabilities might seem most naturally to fit in one category
or another, so long as they ultimately fit within the
telecommunications systems management exception as a whole--which we
find to be the case for all the capabilities at issue here--we need not
precisely identify the specific category. We reach this conclusion by
evaluating these services under the exception based on the text,
structure, and context of the Act in light of the functionality of the
service, how the service is offered, and how consumers perceive the
service. We also take into consideration the harmonization of the 1996
Act's definitional framework with the pre-1996 Act classification
framework, as we discuss in greater detail below.
113. The text, structure, and context of the Act reveal that the
telecommunications systems management exception operates in the
aggregate to exempt from the ``information service'' definition those
capabilities that facilitate the operation of the telecommunications
system and the telecommunications service offered or provided on such
system. While ``telecommunications service'' is a statutorily defined
term, ``telecommunications system'' is not. Based on a number of uses
of ``system'' in the Act, as well as the ordinary meaning of
``system,'' we find that ``telecommunications system'' is best
understood as the facilities, equipment, and devices that a provider
uses in a network to offer or provide telecommunications services.
Definitions from specialized sources provide similar definitions. Thus,
management of a telecommunications service necessarily is closely
interrelated with the management, control, and operation of the
underlying network, equipment, and facilities used to offer or provide
that service. While ``manage,'' ``control,'' and ``operate'' each have
independent meanings, their ordinary meanings substantially overlap. We
find that these terms are therefore best viewed as sweeping into the
exception any uses of information-processing capabilities with the
telecommunications service or telecommunications system that satisfy
that aggregate understanding, regardless of whether one might think
they are better categorized within one of those terms or another. Read
together, we find that these terms are meant to encompass the full
scope of how a provider may use information-processing capabilities to
manage a telecommunications service or manage, control, or operate a
telecommunications system. Consequently, we ultimately need not resolve
the precise contours of the individual terms in order to determine the
proper classification of BIAS, and we elect not to do so at this time
because such decisions could have broader implications for other
classification decisions outside the context of this proceeding.
114. When evaluating information-processing capabilities under the
telecommunications systems management exception, it is immaterial that
a service may benefit consumers as well as providers. As the D.C.
Circuit affirmed in USTA, the relevant question for determining whether
a service falls within the exception is whether ``a carrier uses a
service that would ordinarily be an information service--such as DNS or
caching--to manage a telecommunications service'' or to manage,
control, or operate a telecommunications system. Inevitably, a
capability used to manage a telecommunications service or manage,
control, or operate a telecommunications system will provide benefits
to the provider, but the provider may also choose to use such
capabilities to benefit consumers. Indeed, a service that facilitates
the use of the system and service may provide better resource
management for the provider and a better experience for the consumer.
The relative benefit to providers and to consumers falls on a spectrum,
rather than being a bright line distinction. It is therefore not the
case, as the RIF Order claimed and some commenters reassert, that the
primary or exclusive benefit of a service that falls within the
telecommunications systems management exception must be directed to the
providers' operations.
115. DNS Falls Within the Telecommunications Systems Management
Exception. We conclude that DNS, when used with BIAS, falls within the
telecommunications systems management exception to the definition of
``information service.'' As explained in the 2015 Open Internet Order,
DNS, when offered on a standalone basis by third parties, is likely an
information service. DNS ``is most commonly used to translate domain
names, such as `nytimes.com,' into numerical IP addresses that are used
by network equipment to locate the desired
[[Page 45429]]
content.'' We note, as we did in 2015, that although a BIAS provider's
DNS server may offer other functionalities, BIAS does not depend on
such functionalities and therefore they are separable from BIAS. By
analogy, just as a telephone book or 411 directory assistance service
enables customers of telephone service to ascertain the telephone
number of a desired call recipient, DNS enables customers of BIAS to
ascertain the IP address of a desired internet endpoint. DNS may still
be considered analogous to an adjunct-to-basic service that would not
impact the classification of the transmission service under Commission
precedent, given that it facilitates use of BIAS and does not alter the
fundamental character of BIAS. DNS uses computer processing to convert
the domain name that the end user enters into an IP address number
capable of routing the communication to the intended recipient. In
addition to providing benefits to consumers, a BIAS provider's DNS
service benefits the provider, as it ``may significantly reduce the
volume of DNS queries passing through its network'' and can be employed
by BIAS providers for ``load balancing'' and enabling efficient use of
limited network resources during periods of high traffic or congestion.
We thus agree with the 2015 Open Internet Order's conclusion that DNS
``allows more efficient use of the telecommunications network by
facilitating accurate and efficient routing from the end user to the
receiving party.''
116. USTelecom argues that because DNS is ``undeniably [an]
information service[ ] when offered by third parties,'' we cannot also
conclude that same service is used for telecommunications management by
BIAS providers. It contends that Brand X's holding--that the statutory
definitions do not distinguish between facilities-based and non-
facilities-based carriers but on the capabilities the provider offers
via the service--forecloses that conclusion. We disagree. As the
statute's text makes clear, the telecommunications systems management
exception explicitly provides that information-processing capabilities
are not information services when they are used for the purposes of
managing a telecommunications service or managing, controlling, or
operating a telecommunications network. Thus, the purpose for which a
capability is used is key to evaluating the capability under the
exception. We note that USTelecom attempts to relitigate an argument
that was settled by the D.C. Circuit in USTA. We are not persuaded to
depart from the court's understanding as reflected in USTA. In the case
of DNS, ``[i]t is important to distinguish between a DNS server
operated by a broadband provider and a DNS server operated by an
unaffiliated entity, as they have different reasons for operating a DNS
server.'' While DNS offered by a third party likely does not fall
within the exception because the third party is not ``us[ing] . . .
such capability for the management, control, or operation of a
telecommunications system or the management of a telecommunications
service,'' the fact that BIAS providers use DNS to manage BIAS or
manage, control, or operate their BIAS networks causes it to fall
within the exception.
117. Caching Falls Within the Telecommunications Systems Management
Exception. We conclude that caching, when used with BIAS, falls within
the telecommunications systems management exception to the definition
of ``information service.'' Caching ``is the storing of copies of
content at locations in a network closer to subscribers than the
original source of the content.'' BIAS providers use caching ``to
facilitate the transmission of information so that users can access
other services, in this case by enabling the user to obtain `more rapid
retrieval of information' through the network,'' and thereby offer
faster BIAS to consumers. A BIAS provider also uses caching for a
number of internal benefits, including ``to decrease its own
bandwidth'' and for ``capacity management,'' so that the strain of
subscribers' traffic on certain network segments or equipment is
reduced, and to ``reduce its own transit costs, because cached
information need[ ] not be retrieved across a tier-1 backbone
network.'' Indeed, Verizon currently describes its caching of video
content as ``network management.'' We are therefore unpersuaded by
assertions that caching is used primarily or exclusively to benefit end
users, and for the reasons provided above, disagree that any benefits
to users disqualify caching from the telecommunications systems
management exception. Richard Bennett similarly argues that caching
falls outside the exception because it ``does not affect the
transmission rate of bits on the network medium.'' But Richard Bennett
does not point to any statutory language or Commission precedent that
requires a service to ``affect the transmission rate of bits'' in order
to fall within the exception. For these reasons, we conclude that
caching, when offered by a BIAS provider, falls within the
telecommunications systems management exception to the definition of
information service.
118. Caching used by BIAS providers is distinct from content
delivery network (CDN) caching. CDNs are a ``system of computers
networked together across the internet that cooperate transparently to
deliver content to end users, in order to improve performance,
scalability, and cost efficiency.'' These servers, typically owned and
managed by third-party CDN providers and not BIAS providers, cache edge
provider content close to BIAS subscribers to improve subscribers' load
times. As explained in the 2015 Open Internet Order, CDNs, when offered
on a standalone basis, such as by third parties, likely provision an
information service. As discussed below, we exclude third-party CDNs
from the scope of BIAS. One commenter references an amicus brief to
argue that caching ``is not a network management function'' because
``caching is often done not by BIAS providers, but by third parties.''
This only serves to demonstrate how dispensable caching is to the
provisioning of BIAS and highlights how a service can fall within the
telecommunications systems management exception when used by a provider
to provision a telecommunications service and not fall within the
exception when it is used for another purpose.
c. Information-Processing Capabilities Are Not Inextricably Intertwined
With BIAS
119. Even if, arguendo, DNS, caching, and other information-
processing capabilities did not fall within the telecommunications
systems management exception to the definition of ``information
service,'' BIAS providers offer these capabilities as separate
components that are not inextricably intertwined with BIAS, and
therefore they do not convert BIAS into an information service.
120. Whether an information service is inextricably intertwined
with a telecommunications service turns principally on whether users
view the offering as a bundle of a telecommunications service and one
or more information services or instead as a single integrated offering
that is an information service. Users' perception of the offering can
be supported by a functional evaluation focused on whether the
information service components are separable from the
telecommunications service components. Thus, the mere act of bundling
an information service with a telecommunications service, does not, on
its own, automatically cause the services to become inseparable or
inextricably intertwined. In this case,
[[Page 45430]]
the evidence of consumer perception and the separability of the
functions at issue both point to one conclusion--BIAS is not an
integrated information service. To the extent that prior Commission
decisions suggested that an ``inextricably intertwined'' analysis was
an independent prerequisite to a telecommunications service
classification, we are now changing course in light of our evaluation
of the statute.
121. We base our conclusion first and foremost on an examination of
the consumer perception of the BIAS offering, which shows that
consumers do not perceive the offering as an information service. We
also examine the role that DNS, caching, and other information-
processing capabilities functionally play in provisioning BIAS today
and find that they are separable. We reiterate the factual reality that
the core element of BIAS, as offered by BIAS providers today, is the
transmission component. Our definition of BIAS, remaining unchanged
since 2010, makes clear that the ``data transport service,'' or
``telecommunications component,'' and BIAS are indeed one in the same.
Without the transmission component, BIAS, as offered today, would be no
service at all. As we elaborate below, the same cannot be said for DNS,
caching, and other information-processing capabilities, and thus they
cannot reasonably be viewed to convert the core, indispensable
transmission component of BIAS into an information service. We thus
disagree with commenters who argue that the RIF Order's approach to
understanding inextricably intertwined services ``best implements the
Commission's long-standing view that Congress intended the definitions
of `telecommunications service' and `information service' to be
mutually exclusive.'' That reasoning is tautological, relying on the
assumption that BIAS is an information service on the basis that it
combines information-processing capabilities and a transmission
component, and ignores our showing here that the information-processing
capabilities fall within the telecommunications systems management
exception, are separable information services, or both. We also discuss
below that the availability of those services from third parties, and
the use of those third-party services by consumers, demonstrate that
BIAS providers' DNS and caching components are neither integral nor
indispensable to their provisioning of BIAS. Given consumer perception
and these functional realities, DNS, caching, and other information-
processing capabilities cannot be inextricably intertwined with BIAS
and therefore they do not convert BIAS into an integrated information
service.
122. The RIF Order tried to fortify its information service
classification by asserting that DNS, caching, and other information-
processing capabilities are inextricably intertwined with the
transmission component of BIAS, thereby transforming BIAS into a
single, functionally integrated information service--and some
commenters in this proceeding endorse that proposition. But the RIF
Order treated its ``inextricably intertwined'' analysis as entirely
separate and distinct from the question of how users perceive the
relevant ``offer'' without identifying any statutory basis for doing
so. Even relying on this narrow analysis, the RIF Order reached the
wrong conclusion. Although the RIF Order recognized that ``the internet
marketplace has continued to develop in the years since the earliest
classification decisions,'' it failed to give ``serious technological
reconsideration and engagement'' to those new factual developments.
Instead, the RIF Order found that DNS and caching, specifically, were
``indispensable functionalit[ies] of broadband internet access
service'' at the time the RIF Order was adopted. At the same time, the
RIF Order tried to downplay the primacy of the transmission component
in the BIAS offering. But ``the Commission's exclusive reliance on DNS
and caching blinkered itself off from modern broadband reality, and
untethered the service `offer[ed]' from both the real-world marketplace
and the most ordinary of linguistic conventions.'' As Judge Millett
wrote in her concurrence to the D.C. Circuit's decision in Mozilla,
``the roles of DNS and caching themselves have changed dramatically
since Brand X was decided. And they have done so in ways that strongly
favor classifying broadband as a telecommunications service, as Justice
Scalia had originally advocated.''
123. Consumers Do Not Perceive BIAS as an Information Service.
Contrary to record assertions, consumers do not perceive BIAS as an
information service. As an initial matter, the record does not show
that consumers perceive information-processing capabilities, such as
DNS and caching, let alone understand those capabilities as information
services and thereby view the entire BIAS offering as an information
service based on those capabilities. Of the consumers that do perceive
these information-processing capabilities, they are likely the
consumers that would configure their system to obtain these
information-processing capabilities from third parties and therefore
view them as a separate offering. In its reply, CTIA claims, without
evidence, that ``[c]onsumers also know that BIAS offer[s] these
[information service] capabilities--that is why they purchase BIAS--and
that BIAS relies on advanced under-the-hood technologies, regardless of
whether they understand the precise mechanics of those technologies,
such as advanced DNS, caching, protocol translation, dynamic network
management, and other evolving services.'' But CTIA undercuts this
claim about consumer perception in a later filing where it and
USTelecom assert that nearly all consumers ``do not even know what DNS
does.'' Moreover, unlike the situation with ISPs of 30 years ago,
today's BIAS consumers do not purchase BIAS to receive an all-in-one
suite of information services offered by their provider, or to gain
access to a ``walled garden'' of internet endpoints cached by their
provider. Instead, as already explained, consumers' desired information
services are generally the applications, content, or services offered
by third-party edge providers across the global internet that provide
end users with the capability to process the information they send or
receive via the BIAS provider's telecommunications. Consumers view
these information services as completely distinct and separable from
the transmission conduits offered by BIAS providers today. Consumers
understand that when they access Netflix or an Apple iCloud storage
account, the BIAS provider is ``offering'' the ``capability'' to access
these third-party services, and not that these information services are
being offered by the BIAS provider itself. While consumers may ``highly
value'' the ability to access third-party services using their BIAS
connections, that does not support a conclusion that BIAS is an
information service. The RIF Order's primary argument that consumers
perceive BIAS as an information service rests on its misunderstanding
that DNS and caching convert BIAS into an information service rather
than fall into the telecommunications systems management exception, as
we establish above. Additionally, consumers' relationship with their
BIAS providers is distinct from their relationships with edge
providers. Most consumers have relationships with one or two BIAS
providers--e.g., one for fixed residential service and one for mobile
service--to gain access to the internet. Conversely, consumers may have
relationships with dozens or even hundreds of edge
[[Page 45431]]
providers to utilize the wide range of services that ride over the top
of their BIAS connections.
124. Accordingly, we are unconvinced by USTelecom's assertion that
its consumer surveys show we are wrong to conclude that consumers
perceive BIAS as a telecommunications service and not an information
service. USTelecom relies on two consumer surveys to support its
assertion. The first survey purports to show that 92% of consumers
perceive broadband as providing information service capabilities, while
only 8% of respondents said their broadband service offers only the
capability to transmit information between or among points of their
choosing. The second survey purports to remedy the faults of the first,
but it not only fails to do so, it serves to further undermine the
first survey. The first survey suffers from two primary faults. To
start, the results are misleading because the survey was weighted by
providing four ``information service'' options to one
``telecommunications service'' option and the respondents' information
service selections were aggregated. USTelecom argues that ``a question
structure that offers multiple information service capability options,
while directing respondents to select all that apply, does not bias the
results.'' But when there are only two categories to begin with,
providing one option for one category and four options for the other
objectively biases the results. That fact is very clearly proven by the
results of the second survey, which provided one option for the
information service category and had a wildly different result.
Specifically, while in the first survey, ``59% of respondents selected
at least one information service option without also selecting the
telecommunications service option,'' in the second survey, only 10.8%
of respondents selected the information service option without also
selecting the telecommunications service option. Returning to the first
survey, the second fault is that the terminology it used misrepresented
the statutory language by suggesting that BIAS itself has the
capability to perform the functions listed in the statute, and also
used plain English language for the so-called ``information service''
options while using more technical language for the
``telecommunications service'' option. USTelecom claims ``[t]hat is not
a valid criticism of the survey. . . .'' But to suggest that the
reliability of the survey does not depend on the formulation of the
questions is not only fallacious, it is proven wrong by the second
survey. While both surveys profess to measure consumer perception of
broadband, their different question formulations result in markedly
different results. Both surveys share the same additional fault in that
they fail to treat the telecommunications service and information
service categories as mutually exclusive, as we must. Thus, far from
clarifying consumers' perception about BIAS, the results from the two
surveys, and their shortcomings, only demonstrate that they cannot be
viewed as reliable sources of consumer perception of BIAS. However, it
is worth noting, given the importance of evaluating consumer perception
of the offering, as established by the Supreme Court in Brand X and
consistently affirmed by Commission and court precedent, that
USTelecom's surveys do not show that consumers perceive BIAS as an
information service, as opponents of reclassification would have us
conclude. Indeed the second survey, which used more reliable question
and answer formulations than the first, shows that more consumers
perceive BIAS as providing the capabilities of a telecommunications
service than providing the capabilities of an information service.
125. Consumer perception is also backed by BIAS providers'
marketing practices, which also do not show, as some commenters claim,
that BIAS is best understood as an information service. Contrary to
NCTA's contention, BIAS providers' marketing practices do not support a
conclusion that they compete on the basis of their offering of ``online
storage, spam filters, [or] security protections,'' for example. While
consumers may be ``aware of and value'' the features offered by their
BIAS providers, and some of these features also may be mentioned in
BIAS providers' advertising, that does not undercut the significant
evidence that BIAS providers predominantly market BIAS as a
transmission service. We also agree with Public Knowledge that ``BIAS
provider[s'] various attempts to enter adjacent markets or bundle
services with broadband do not change the nature of the service they
offer, no[r] do they change `what the consumer perceives to be the
integrated finished product.' '' ACA Connects argues that the
``marketing of broadband service has not undergone substantial change
since the inception of the service,'' and that such marketing ``has
always emphasized both the always-on capabilities that broadband
service affords subscribers, including the ability to retrieve, store,
and utilize the panoply of available internet content and applications,
and the fast speeds at which they are able to stream, download, and
upload internet content.'' However, ACA Connects deflects from its
failure to provide evidence to support such sweeping claims by adding
that, ``[t]o the extent that our Members' marketing may place a greater
emphasis on speed, this is a response to increased consumer familiarity
with the capabilities offered by broadband service.'' We are not
convinced. We find that a more reasonable conclusion drawn from BIAS
providers' marketing practices is that consumers select a BIAS provider
based on the quality of its transmission service offering, and thus
BIAS providers compete on this basis.
126. We note that at least one of ACA Connects' members, Sjoberg's
Cable TV, does not appear to emphasize or even mention any of the
information-service capabilities in its advertisement for BIAS. Indeed,
ACA Connects' own members state that their ``current marketing focuses
on differentiating ourselves from our competitors by touting the speeds
and process of our service packages'' and ``[t]he marketing of our
broadband services puts primary emphasis on the speeds we offer,
network reliability, and performance.'' ACA Connects attempts to
preserve its argument by asserting that ``it is unremarkable that
broadband providers emphasize . . . speeds and reliability . . . while
ignoring basic information-processing capabilities'' because that
advertising choice does not undermine its assertion that the
information-processing capabilities are integrated into the offering.
But the question here is what consumers perceive to be the offering,
and in part due to the focus of BIAS providers' advertising on factors
critical to transmission of information, consumers perceive the
offering as a telecommunications service. Whether information-
processing capabilities are integrated is a question of functionality
that we discuss below.
127. DNS Is Not Inextricably Intertwined with BIAS. In reviewing
the factual particulars of how DNS is functionally provided today, we
find that it is a separable service that is not inextricably
intertwined with BIAS and therefore does not convert BIAS into an
information service. Indeed, as Free Press notes, ``many ISPs have
moved away from making these same tired and demonstrably false
arguments that DNS service and caching transform a telecommunications
service into an information service.'' As we noted in the 2015 Open
Internet Order, now that we conclude that DNS falls within the
telecommunications systems management exception, ``prior factual
[[Page 45432]]
findings that DNS was inextricably intertwined with the transmission
feature of cable modem service do not provide support for the
conclusion that cable modem service is an integrated information
service.'' Claims that the internet ``would not work'' without DNS,
that DNS ``is a must for broadband to function properly,'' or that
there ``is no internet service without DNS,'' are simply not borne out
by the architecture of BIAS. The record reveals that DNS is not
necessary to IP packet transfer, which is the core function of the
service. As Professor Jon Peha explains, DNS is an ``application that
run[s] on top of IP packet transfer'' and that, ``[f]rom the beginning,
the DNS . . . was designed to be separate from the systems that provide
IP Packet Transfer Service.''
128. Even if DNS were necessary to the functionality of BIAS, the
DNS offerings of BIAS providers are not themselves essential to BIAS,
and therefore cannot be inextricably intertwined with their BIAS. As
Professor Scott Jordan explains, because a BIAS provider's DNS server
rarely serves as the authoritative resource for an IP address, their
DNS server plays only a limited role in DNS--and that role is
replaceable. Commenters explain that third-party-provided DNS is now
widely available and used by consumers. Consumers often use third-party
DNS services because their web browsers, apps, and IoT devices are
configured to use those third-party DNS services. Other consumers may
choose to use such third-party DNS services, which they can do with a
simple configuration change. Notably, Verizon provides instructions on
its website for how to change the default DNS settings or perform
manual DNS lookups. The record presents evidence that third-party DNS
services may now make up a significant portion of all DNS services
today. Indeed, commenters who otherwise argue that DNS is essential to
the functionality of BIAS carefully avoid saying that DNS supplied by
BIAS providers is essential to BIAS's functionality. CTIA complains
that ``[t]he IBM study makes no effort to distinguish IoT
manufacturers' choices from consumers' choices'' and ``therefore does
not meaningfully address what consumers perceive as the finished
service that BIAS providers offer them.'' But the question about
consumer perception of the ``offer'' is separate from the question of
whether BIAS providers' DNS is essential to BIAS, and we have already
shown that consumers perceive the BIAS offering as a telecommunications
service and not an information service. And contrary to CTIA and
USTelecom's assertion, if BIAS providers were to stop offering DNS,
their DNS functionality would be quickly replaced by alternatives
without consumers needing to take any action.
129. We are unmoved by CTIA and USTelecom's arguments that the
availability of third-party DNS and its use by consumers does not mean
that BIAS providers' DNS is not functionally integrated with their
BIAS. They first argue that consumers' use of third-party DNS is not
determinative because ``the statutory touchstone when classifying
services is the capability `offer[ed].' '' But consumers' use of third-
party services speaks to whether the capabilities offered by BIAS
providers are functionally integrated, and the separate question of
what is being offered by BIAS providers is about what consumers
understand is the integrated finished product, not what discrete
capabilities a BIAS provider claims itself to be offering.
130. USTelecom claims we assert that evidence of consumer
perception shows that consumers perceive DNS as separable from BIAS,
which it says contradicts USTelecom's survey about consumer perception
of DNS, but we do no such thing. Rather, we explicitly state here and
above that consumer perception is evaluated on how consumers perceive
the entire offering, not how consumers perceive the individual
components, and we show in the Order that consumers perceive the
offering of BIAS as a telecommunications service and not an information
service. Conversely, the question of whether individual components are
separable is a question of functionality, and we show here that DNS is
functionally separable. As such, USTelecom's assertions about consumer
perception of DNS based on its survey are irrelevant. But even if
consumer perception of DNS were relevant, USTelecom's survey does not
show that consumers perceive BIAS providers' DNS as integrated with
BIAS, as USTelecom claims. The survey says that only 17% of respondents
could even identify the functionality of DNS, and only 4.8% of those
respondents said they use their BIAS providers' DNS, while 83.5% of
respondents did not know which DNS they use. The survey then claims
those results ``suggest that 92% of the respondents--those who
affirmatively said they are using their ISP provider's DNS as well as
those who do not know what DNS does and those who know what it does but
are not sure which DNS they use--are using their ISP provider's DNS.''
This conclusion is based entirely on an assumption that all BIAS
providers have a proprietary DNS system and preset that as the default
DNS system for their BIAS, which USTelecom has not demonstrated, rather
than use a third-party DNS system. In any event, consumers' use of
their BIAS provider's DNS is not the same thing as consumers'
perception as to whether their BIAS provider's DNS is functionally
integrated with their BIAS. Moreover, because the survey does not say
anything about whether consumers only use a BIAS provider's DNS, and
given that browsers, apps, and devices can be preset to use third-party
DNS systems, the survey results could be potentially interpreted to
support the proposition that consumers use third-party DNS in addition
to or instead of their BIAS provider's DNS. So to the extent that
consumers' default use of DNS speaks to their perception of DNS, a
question that we find is not dispositive to the underlying
classification, the better conclusion is that consumers perceive DNS as
relevant to their use of BIAS generally, not as integrated with a BIAS
provider's BIAS offering specifically.
131. CTIA and USTelecom also argue ``that almost all BIAS users
rely on the DNS provided by their BIAS provider.'' A BIAS provider's
choice to offer a separable feature that is bundled with BIAS, and a
consumer's use of that feature, do not on their own make that feature
essential to, or functionally integrated with, BIAS. USTelecom tries to
sustain the argument, asserting that just as ``[a]ftermarket vendors
commonly offer consumers the ability to change out integrated features
in the products they buy,'' the ``ability of end users to select
different DNS servers [does not] mean that ISPs do not integrate DNS
into the broadband service they offer.'' USTelecom compares DNS to
``the radio and speakers or even the engines in cars; the hard drives,
RAM, and graphics cards in desktop computers; the hand brakes, seat,
and pedals on bicycles; and so on.'' Even if, arguendo, DNS were
functionally integrated with BIAS, that does not mean that DNS converts
BIAS into an information service--either functionally or from a
consumer perspective--any more than an engine converts a car into
merely a device that changes gasoline into energy, a hard drive
converts a computer into a data storage device, or hand brakes convert
a bicycle into a mere stopping mechanism. As the Supreme Court held in
Brand X, the entire question of whether DNS as provided with BIAS is
functionally integrated or functionally separate turns on the ``factual
[[Page 45433]]
particulars of how internet technology works and how it is provided.''
And as we have already shown, DNS is a separable, application-layer
service that does not technologically alter the ability of consumers to
use BIAS as a transmission conduit to reach all or substantially all
internet endpoints.
132. We also reject the related argument that BIAS provider DNS is
intertwined with BIAS because a customer using third-party DNS loses
the alleged unique benefits that arise from BIAS provider DNS, such as
efficient routing of traffic to cached information. As an initial
matter, there is conflicting evidence in the record on whether using
BIAS provider DNS has a material benefit to end users over third-party
DNS. An updated version of an article cited by CTIA states that
``[p]ublic DNS servers are often faster than those provided by ISPs due
to closer geographic locations, enabling quicker DNS resolutions''
while noting that ``an untrustworthy DNS server could slow performance
or pose security threats.'' It is also not evident that the EDNS Client
Subnet (ECS) extension, when enabled by BIAS providers, ensures better
performance over third-party DNS offerings that have also enabled the
extension. In any event, that ECS is an extension that can be enabled
(and disabled) shows that it is even more separable than DNS itself. In
any event, that ECS is an extension that can be enabled (and disabled)
shows that it is even more separable than DNS itself. Even if DNS does
have a material benefit to end users over third-party DNS, we find that
the mere existence of a potential consumer benefit resulting from BIAS
provider DNS does not compel the conclusion that DNS is inextricably
intertwined with BIAS. In any event, record evidence suggests it is
more likely that BIAS providers, rather than their customers, are the
true beneficiaries of their customers' use of in-house DNS given its
potential to reduce BIAS providers' own transit costs.
133. Caching Is Not Inextricably Intertwined With BIAS. In
reviewing the factual particulars of how caching is functionally
provided today, we find that it is a separable offering that is not
inextricably intertwined with BIAS and therefore does not convert BIAS
into an information service. In particular, we find that caching
offered by a BIAS provider is separable from BIAS because caching is
not necessary for BIAS to work--end users can and do access data that
is not cached at all. Indeed, the inherent nature of caching--to store
content that has been requested by the end users and is likely to be
requested again soon--means that users will request and be able to
receive information that has not yet been cached.
134. The record also demonstrates that BIAS provider caching is
separable because of the drastic reduction in its use and relevance and
the rise of third-party CDN caching since Brand X. As Mozilla explains
in its comments, ``caching and CDNs have been taken out of the hands of
ISPs and are largely operated by large content providers or independent
companies.'' Such third-party caching is now dominant because,
according to record evidence, caching offered by a BIAS provider does
not work with encrypted traffic--the overwhelming majority of traffic
today. CTIA and USTelecom attempt to minimize the effect of encryption
on BIAS provider caching, explaining that even when a website uses
HTTPS, a BIAS provider can still see the top level of the website and
asserting that they ``use that information to cache entire websites, so
they can resolve requests for pages associated with that website to the
cached content . . . .'' But this assertion is disputed in the record.
Moreover, CDNs are uniquely able to meet consumer expectations for
streaming video from third-party services. We therefore disagree with
NCTA that BIAS provider caching is ``as integrated into broadband
offerings today as they were when Brand X was decided.'' The RIF Order
incoherently reached a similar conclusion that BIAS provider caching
and DNS are ``inextricably intertwined'' with transmission even though
it acknowledged that ``some consumers'' use third-party caching and
excluded CDN caching from the definition of BIAS. Brand X was decided
at a time when encryption was limited and there was much lower demand
for streaming video (and therefore few, if any, CDNs). Opponents do not
directly dispute that BIAS provider caching is incompatible with
encryption, but try to downplay this by arguing that their DNS can
direct user requests to the appropriate caching server. But DNS is a
separate functionality from caching and the server to which they are
referring is not the BIAS providers' caching server but a third-party
CDN. In any event, even if BIAS provider caching were unaffected by the
increasing prevalence of encryption, no commenter disputes that CDN
caching is now dominant. Some commenters conflate transparent caching
offered by BIAS providers with CDN caching offered by third parties to
assert that caching is inextricably intertwined with BIAS, but we are
not fooled by this chicanery. These commenters provide no justification
for concluding that CDN caching, primarily sold to, and for the benefit
of, third-party content providers, and which is explicitly excluded
from the definition of BIAS, is also a functionally integrated
component of a BIAS provider's BIAS offering--and we do not find any
such justification either.
135. Other Information-Processing Capabilities Are Not Inextricably
Intertwined With BIAS. We are not convinced by commenters who argue
that BIAS is an information service because the routing and
transmission of IP packets involves information-processing
capabilities. CTIA, for example, argues that, because IP packet routing
``involves examination and processing of the packet at every router the
packet traverses,'' information processing is inextricably intertwined
with the transmission capability of BIAS itself. As an initial matter,
as discussed above, the user's data--forming part of a payload within
the IP packet--remains unchanged from the moment it reaches the BIAS
provider's network to the moment it arrives at the desired endpoint.
Thus, BIAS does not in fact offer subscribers the capability for
processing their data--such capabilities occur at the internet endpoint
selected by the subscriber. Other commenters raise old arguments that
the existence of IPv4-to-IPv6 protocol transition mechanisms within
BIAS is evidence of information processing that would convert BIAS into
an information service. In 2016, the Internet Corporation for Assigned
Names and Numbers (ICANN), a ``not-for-profit entity responsible for
the technical coordination of the internet's domain name system,''
announced that its Internet Assigned Numbers Authority (IANA) allocated
``the last remaining IPv4 . . . internet addresses from a central
pool'' and that ``future expansion of the internet is now dependent on
the successful deployment of the next generation of internet protocol,
called IPv6.'' We find that these mechanisms are designed to ensure the
effective and efficient transmission of BIAS traffic and thus fit
comfortably in the telecommunications systems management exception.
Given the difference in packet header formats between IPv4 packets and
IPv6 packets, transition mechanisms permit the interoperability between
IPv4-compliant and IPv6-compliant networks, servers, and routers.
136. We also disagree with commenters who argue that BIAS is a
functionally integrated information service because it may be offered
in
[[Page 45434]]
conjunction with information services such as electronic mail, security
software, smartphone applications, parental controls or spam and
content filtering software, distributed denial-of-service (DDoS)
mitigation, botnet notification, and firewalls. Commenters have not
demonstrated, beyond making conclusory statements, that these bundled
information services are not used for telecommunications systems
management or are inextricably intertwined with BIAS, rather than being
included in the product offering simply as the result of a marketing
decision not to offer them separately. As explained in the 2015 Open
Internet Order, spam filtering and DDoS mitigation fall within the
telecommunications systems management exception. As the Supreme Court
affirmed in Brand X, the mere packaging of separable information
services with a telecommunications service does not convert the
telecommunications service into an information service. The Interisle
Consulting Group (ICG) also notes that ``[b]undles and offers do not
define a service. Vertical integration of a retail product to include
additional non-telecommunications services does not change the nature
of the underlying services.'' Many of these services, such as
smartphone applications, electronic mail, and content filtering
software, are indeed ``offered at the application layer'' of the IP
stack, and thus are separable from the lower network layers that
facilitate transmission and routing of packets. No commenter has argued
that any of these services are necessary for IP packet transfer to
function. Thus, as explained in the 2015 Open Internet Order, BIAS ``is
only trivially affected, if at all'' by these services'
functionalities. Even the RIF Order stated that it did ``not find the
offering of these information processing capabilities determinative of
the classification of broadband Internet access service.'' For these
reasons, we find that commenters have not provided new evidence of
functionalities that would cause BIAS to be properly classified as a
functionally integrated information service.
C. Classifying BIAS as a Telecommunications Service Accords With
Commission and Court Precedent
137. The Commission has engaged in classification decisions of
various services that operate at the nexus of telecommunications and
computer-based data processing for almost half a century. As has been
the case in previous proceedings when the Commission has classified
broadband services, the record reveals a debate regarding the relevance
and precedential value of these Commission decisions and related court
rulings. As a general matter, we assign limited value to many of these
past Commission decisions and find that our classification of BIAS as a
telecommunications service is fully and independently supported by an
evaluation of the statutory text of the 1996 Act. Nevertheless, when
viewed as a whole and in the proper context, we find that, on balance,
Commission and court precedent also support our classification of BIAS
as a telecommunications service and that arguments from opponents of
reclassification that attempt to use such precedent to undercut our
statutory interpretation are unavailing.
138. Our consideration of past precedent takes two forms. In the
case of pre-1996 Act precedent, we consider whether and how such
precedent might have informed Congress's understanding of the
definitional language it used in the 1996 Act, and how that, in turn,
might support particular interpretations that otherwise flow from the
statutory language and statutory context. Given the role of the
Commission's Computer Inquiries precedent in the Commission's
regulatory scheme, we are persuaded to give that precedent appropriate
(if modest) weight and conclude that it reinforces our classification
of BIAS as a telecommunications service under the best reading of the
Act. We are more circumspect with respect to precedent related to the
1984 Modification of Final Judgment (MFJ)--the consent decree which
mandated the breakup of the Bell System--as the 1996 Act expressly
abrogated the MFJ's requirements. Although we do not affirmatively rely
on any of that precedent, we also consider the RIF Order to have
mischaracterized that precedent to reach an information service
classification of BIAS.
139. In the case of post-1996 Act precedent concerning
classification of services that relate to internet connectivity, we
evaluate whether each decision supports, is distinguishable from, or is
in tension with our decision, and explain any change in course. As
discussed below, we find certain precedent addressing DSL service,
while not precisely analogous with the circumstances here, helps
reinforce our classification decision. More directly relevant and
supportive are important court decisions addressing the classification
of cable modem service. Other broadband service classification
decisions prior to the 2015 Open Internet Order we find distinguishable
on the basis of their factual predicates and/or the sufficiency or
persuasiveness of the Commission's assessment of those facts. We
further conclude that the classification of BIAS as a
telecommunications service in the 2015 Open Internet Order, ultimately
affirmed by the D.C. Circuit in USTA, reinforces our conclusion that
BIAS is a telecommunications service under the best reading of the Act.
Likewise, the D.C. Circuit's numerous, substantial concerns about the
RIF Order's decision being ``unhinged from the realities of modern
broadband service,'' also militate in favor of our classification of
BIAS as a telecommunications service.
1. Relevant Pre-1996 Act Precedent
140. Pre-1996 Act precedent helps to inform our understanding of
the definitions used in the 1996 Act and reinforces our decision to
classify BIAS as a telecommunications service. We agree as a general
matter with the significant number of commenters that submit that the
pre-1996 Act Computer Inquiries and MFJ service definitions informed
Congress's adoption of the definitional terms ``telecommunications
service,'' along with ``telecommunications,'' and ``information
service,'' inclusive of the telecommunications systems management
exception. However, we find that the RIF Order's heavy reliance on
isolated MFJ precedent to understand the meaning of those terms in
search of its predetermined information service classification was
problematic. Contrary to the RIF Order's analysis, we find that
Congress, in giving those terms meaning, would not have relied upon
precedent that arose from a single isolated pre-1996 Act case, or
passages of such cases, without also considering the marketplace or
regulatory context present at the time of enactment of the 1996 Act.
Rather, as the Brand X Court surmised, it is likely that Congress would
have looked to ``settled . . . administrative . . . interpretation[s]''
of the analogous pre-1996 Act terms. Because much of the precedent that
the RIF Order relied upon does not fall into the category of settled
administrative interpretation, particularly the MFJ precedent, we
conclude that it is not relevant to the classification of BIAS.
141. The FCC's Computer Inquiries. Through a series of proceedings
collectively known as the Computer Inquiries, the Commission sought to
foster the development of the emerging data processing marketplace by
ensuring enhanced service providers' access to communications
facilities and services
[[Page 45435]]
necessary to the growth and success of that marketplace. To that end,
the Computer II Final Decision (45 FR 31319 (May 13, 1980)) in 1980
established ``a regulatory scheme that distinguishes a carrier's basic
transmission services from its enhanced services.'' The Commission
concluded that ``basic [services]'' were those that offered ``pure
transmission capability over a communications path that is virtually
transparent in terms of its interaction with customer supplied
information.'' By contrast, ``enhanced services,'' which the Commission
said had ``intertwined'' communications and data processing
technologies, were, for example, used to ``act on the content, code,
protocol, and other aspects of the subscriber's information,'' and
provide the subscriber ``additional, different, or restructured
information . . . through various processing applications performed on
the transmitted information, or other actions . . . taken by either the
vendor or the subscriber based on the content of the information
transmitted through editing, formatting, etc.'' Under the Computer II
regulatory approach, basic services offered on a common carrier basis
were subject to Title II while enhanced services were not. The
Commission used this approach to classify a wide range of services,
including, for example voicemail and frame relay transmission service.
142. Despite the Commission's hope that its basic-enhanced
dichotomy would be ``relatively clear-cut,'' it acknowledged certain
features of a service that ``might indeed fall within [the] literal
reading[ ]'' of the definition of an enhanced service, but that would
not change the classification of a basic service under its Computer
Inquiries regulations because the features ``are clearly `basic' in
purpose and use and [they] bring maximum benefits to the public through
their incorporation in the network.'' The Commission coined the term
``adjunct-to-basic'' to describe those kinds of features, which, when
included as part of a basic service, would be regulated the same way as
the basic service itself.
143. Under the Computer II adjunct-to-basic analytical framework,
the Commission permitted carriers to offer ``call forwarding, speed
calling, directory assistance, itemized billing, traffic management
studies, voice encryption, etc.'' as part of the basic service,
concluding that these ``ancillary services directly related to the
[provision of basic service] do not raise questions about the
fundamental . . . nature of a given service.'' Carriers were also
allowed to offer as basic services ``memory or storage within the
network'' that is used only to ``facilitate the transmission of the
information from the origination to its destination.'' Similarly, the
Commission found that computer processing features, including
``bandwidth compression techniques,'' ``packet switching,'' and ``error
control techniques'' that ``facilitate [the] economical, reliable
movement of information [did] not alter the nature of the basic
service.'' The Commission justified its inclusion of these features in
the basic service to encourage ``integrat[ion] of technological
advances conducive to the more efficient transmission of information
through the network.'' We note that the Computer III (51 FR 24350
(July, 3, 1986)) regime did not alter this approach. Continuing this
approach, in the 1985 NATA Centrex Order, the Commission concluded that
transmission of telephone numbers, even when ``transformed'' by the
network into a format that can be displayed to the call recipient on a
display, were considered adjunct-to-basic because the number display is
derived from the basic transmission service. Call forwarding was also
considered adjunct-to-basic because ``it does not materially change the
nature of a telephone call placed to that subscriber.'' In subsequently
applying these principles, the Commission concluded that the adjunct-
to-basic exception applies to optional features or functions that are
not necessary for the ``basic'' service to work but are merely helpful
to that function.
144. In other decisions under the adjunct-to-basic framework, the
Commission concluded that optional enhanced features of basic services
or the use of basic services to access third-party information did not
change the classification. Where enhanced features or functions are
accessed via a provider's basic service, but are not a part, or a
``capability,'' of the provider's own network or service (i.e., are a
third-party service), the service remained a basic service. Where a
consumer is offered optional enhanced service components that could be
combined with the basic service, but need not be, the underlying
service remained a basic service, regardless of whether the consumer
actually purchased the enhanced service components.
145. Given that data processing services relied on communications
facilities, the ability of facilities-based carriers to also offer
enhanced services over their networks created a risk that they would
have the incentive and ability to discriminate against their enhanced
service provider rivals. To protect against that risk, in Computer II,
the Commission specified that facilities-based carriers wishing to
directly provide enhanced services over their own facilities were
obligated to both offer the transmission component of their enhanced
offerings--including internet access service--on a common carrier basis
governed by Title II and acquire transmission capacity for their
enhanced offerings under the same tariffed transmission service
offering they made available to other enhanced service providers. Due
to these obligations, any internet access provider, including an
internet access provider affiliated with the facilities-based carrier
and an unaffiliated, non-facilities-based enhanced service provider,
was able to obtain common carrier transmission necessary to offer
internet access to end users on the same tariffed terms and conditions
under Title II. An end user could also obtain transmission on the same
basis to connect with the internet access provider of its choice.
146. By the time the 1996 Act was enacted, the Commission had been
using the Computer Inquiries framework and its subject-matter expertise
to classify data services as either ``basic'' or ``enhanced'' for
almost 16 years. Thus, Congress was well aware of the Commission's
well-established classification framework at the time it enacted the
1996 Act. There is a ``presumption that Congress is aware of `settled
judicial and administrative interpretation[s]' of terms when it enacts
a statute.'' ``[A] decision by Congress to overturn Computer II, and
subject [enhanced] services to regulatory constraints by creating an
expanded `telecommunications service' category incorporating enhanced
services, would have effected a major change in the regulatory
treatment of those services.'' Although the Commission stated that it
``would have implemented such a major change if Congress had required
it,'' it did not find ``an intent by Congress to do so.'' Rather, the
Commission found ``that Congress intended the 1996 Act to maintain the
Computer II framework.''
147. Given the myriad and complex array of Computer Inquiries
decisions, we do not attempt to detail here with specificity the ways
in which the Commission's Computer Inquiries precedent lends support to
the classification decision we reach in the Order. We instead take a
more measured approach, declining to give significant weight to
isolated statements or draw analogies to particular classification
outcomes dealing with services other than BIAS. It suffices to say that
the 2015 Open Internet Order did describe the basis for such support
when
[[Page 45436]]
classifying BIAS as a telecommunications service and that the D.C.
Circuit recognized the importance of the Computer Inquiries to the
``structure of the current regulatory scheme'' on its way to upholding
that classification decision. Thus, where Computer Inquiries precedents
are consistent with our determination that BIAS, as offered today, is
best classified as a telecommunications service, they lend some support
to that conclusion, and to the extent any such precedent is in tension
or conflict with that understanding, we do not view them as
undercutting that determination grounded in the best understanding of
the statutory text. We are therefore uncompelled by the RIF Order's
suggestion that only a ``drop'' of an information service (i.e., DNS or
caching) combined with the transmission component, is sufficient to
transform BIAS into an information service, regardless of consumer
perception or the functional realities of the offering. The RIF Order's
conclusion implicitly relies on isolated Computer Inquiries precedent
finding that when a non-facilities-based ISP, as understood at the
time, combines a telecommunications input purchased from a facilities-
based provider with its own enhanced service, the enhanced service
``contaminated'' the resold transmission service such that the combined
service sold to the end user is always an enhanced service. As an
initial matter, that theory never applied to facilities-based
providers, and some BIAS providers are facilities-based. Moreover, the
1996 Act's definition of a ``telecommunications service'' makes clear
that definition applies ``regardless of the facilities used.''
148. The MFJ Antitrust Consent Decree. Similar policy concerns to
those at issue in the Computer Inquiries were at play when, in 1982,
the Department of Justice (DOJ) reached a negotiated settlement with
AT&T and filed an MFJ with the D.C. Federal District Court to end a
decades-long antitrust case. As with the Computer Inquiries, a policy
objective of the MFJ regulatory regime was to guard against the risk of
carriers harming competitive providers of data processing services.
Among other things, the MFJ prohibited BOCs from providing
``interexchange telecommunications services or information services.''
149. As in the Computer Inquiries, the MFJ distinguished between
basic and enhanced services, but instead used the terms
``telecommunications services'' and ``information services,''
respectively. The MFJ defined a ``telecommunications service'' as ``the
offering for hire of telecommunications facilities, or of
telecommunications by means of such facilities.'' In turn,
``telecommunications'' was defined as ``the transmission, between or
among points specified by the user, of information of the user's
choosing, without change in the form or content of the information as
sent and received, by means of electromagnetic transmission medium,
including all instrumentalities, facilities, apparatus, and services
(including the collection, storage, forwarding, switching, and delivery
of such information) essential to such transmission.'' The court
defined ``information service'' for the purpose of the MFJ as ``the
offering of a capability for generating, acquiring, storing,
transforming, processing, retrieving, utilizing, or making available
information which may be conveyed via telecommunications.'' The MFJ
information service definition also included an exception analogous to
the ``adjunct-to-basic'' exception under the Computer Inquiries.
Specifically, ``information service'' did ``not include any use of any
such capability for the management, control, or operation of a
telecommunications system or the management of a telecommunications
service.'' Over time, the courts overseeing the MFJ developed a limited
body of precedent regarding what was an ``information service,'' but
did not squarely address the question of how internet access service
fit within the MFJ's definitional framework.
150. The RIF Order's invocation of MFJ precedent to support its
classification decision reflects significant flaws. To begin, its
reliance on that precedent was predicated in part on the 1996 Act's use
of the information service definition established in the MFJ, a fact
which we do not dispute when placed in the proper context, as described
below. But the historical context shows that Congress did not
necessarily intend for such reliance. Because the D.C. Circuit also was
not presented with the considerations we identify here for giving
little weight to MFJ precedent, its acceptance of certain of the RIF
Order's conclusions based on MFJ precedent in Mozilla does not undercut
our contrary conclusions here. Unlike with the Computer Inquiries,
which the Commission found Congress did not intend the 1996 Act's
definitional framework to supplant, the 1996 Act expressly abrogated
the MFJ's requirements, and replaced them with those enacted as part of
the 1996 Act. Indeed, the regulatory approach in the MFJ is
diametrically opposed to that in the 1996 Act. While the 1996 Act's
regulatory approach broadly tracks that of the Computer Inquiries, with
``telecommunications services'' subject to common carrier regulation
and ``information services'' not subject to common carrier regulation,
under the MFJ, an ``information service'' classification led to maximal
regulation--a complete ban on the provision of the service--for the
carriers subject to that regulatory regime. Thus, the relevance of MFJ
precedent is better viewed narrowly, rather than expansively, as done
in the RIF Order, given the origins of that precedent in a regulatory
framework Congress expressly chose to displace.
151. The RIF Order's reliance on MFJ precedent is also contrary to
our measured approach, and thereby suffers from the same faults it
claimed plagued the 2015 Open Internet Order's reliance on the Computer
Inquiries precedent--namely, viewing the precedent out of context and
making imperfect analogies without adequately accounting for
potentially distinguishing technical details and the regulatory
context. It exhibited this practice most prominently by ignoring the
MFJ framing of maximal regulation of information services. But it also
mischaracterized specific precedent it relied upon.
152. For instance, the RIF Order, and some commenters,
mischaracterized MFJ precedent ``analyzing `gateway' functionalities by
which BOCs would provide end users with access to third party
information services.'' While the RIF Order acknowledged ``that gateway
functionalities and broadband internet access service are not precisely
coextensive in scope,'' it nonetheless purported to ``find similarities
between functionalities such as address translation and storage and
retrieval to key functionalities provided by ISPs as part of broadband
internet access service,'' and claimed that ``the court found such
gateway and similar functionalities independently sufficient to warrant
an information service classification under the MFJ.'' CTIA quotes from
the 1987 MFJ Initial Gateway Decision to argue that gateway services
``rang[ed] from mere database access to such sophisticated services as
teleshopping, electronic banking, order entry, and electronic mail.''
But in the quoted passage the court is describing such services
generally, not specifically the offered BOC gateway service. This
characterization of the MFJ court's conclusions is misleading, at best.
Read in context, it is not evident the MFJ court concluded that the
address translation and storage and retrieval features of the gateway
service were
[[Page 45437]]
independently sufficient grounds for an information service
classification. In relying on the court's treatment of ``address
translation,'' the RIF Order cited a high-level statement from the
court ``that the transmission of information services at issue there
`involves a number of functions that by any fair reading of the term
`information services' would be included in that definition.'' But the
court never concluded that address translation was important to its
conclusion that the gateway service is an information service. It
merely listed address translation as one of the five functions that
were part of the ``infrastructure necessary for the transmission of
information service,'' and there is no basis for concluding that all
five of these functionalities were independently sufficient to justify
an information service classification. Indeed, when confronted with
arguments that ``the Regional Companies are entitled to provide
[address translation] even now under the decree as part of the
permissible `forwarding or routing' functions of `information
access,''' the court did not respond by asserting that it actually
constituted an information service, but instead by pointing out that
``the Court has concluded otherwise, particularly since section IV(F)
prohibits interexchange routing.'' Further, as to some of the other
listed service components, the MFJ court appears to strongly suggest
that it might not cause the gateway service to be classified as an
information service. In sum, the notion that the footnote relied on by
the RIF Order should be read to suggest that each function of the
gateways was independently sufficient to constitute an information
service seems highly doubtful and is at most ambiguous. Nor are we
persuaded to reach a contrary conclusion by a high-level assertion by
the court that a carrier's ``gateway proposal appears to be a variant''
of ``information services.'' Although the MFJ court analyzed storage
and retrieval as a distinct issue, the court's view of that
functionality encompassed that are more clearly viewed as information
services, ``such as voice messaging, voice storage and retrieval (VSR),
and electronic mail,'' and therefore are not coextensive with BIAS. We
also note that RIF Order did not address the D.C. Circuit's conclusion
that the gateway service included a separate offering of
telecommunications transmission, similar to the Commission's conclusion
in the Advanced Services Order that DSL included a separate offering of
transmission. For this reason, as well as the other concerns we raise
in relying on this case and the MFJ precedent in general, we conclude
that we need not adjudicate whether the MFJ permitted the generation of
information by BOCs instead of their transmission or whether that
distinction is relevant to the classification determination we make in
the Order.
153. We also conclude the RIF Order misinterpreted the single MFJ
case it relied upon in concluding that the telecommunications systems
management exception to the information service definition should
exclude functions directed at end users or customers. While Mozilla
accepted the RIF Order's analysis of the MFJ case as reasonable, it did
not conclude that it was the only or best reading. In classifying
Telecommunications Device for the Deaf (TDD) service as an information
service, the MFJ court concluded that that ``the very crux and
purpose'' of TDD service was the ``transformation of information'' and
``it is patently obvious that what is being sought does not involve the
internal management of Bell Atlantic.'' Although the MFJ court noted
that the telecommunications systems management exception ``was directed
at internal operations, not at services for customers or end users,''
the facts did not require the court to meaningfully grapple with the
full meaning of the exception.
154. In all events, the MFJ court's view of the telecommunications
systems management exception is not inconsistent with the view we
reiterate in the Order that a service can fall under the 1996 Act's
exception if it is used by the provider to manage, control, or operate
a telecommunications system, even if the service may also benefit end
users. Indeed, the court also explained that it had applied that
exception to ``allow[ ] the regional companies to provide directory
assistance to their own customers,'' which unambiguously provides
benefits for callers. Likewise, the Mozilla court recognized that an
evaluation of provider and customer benefit from a given function
involved ``a spectrum or continuum'' that ``requires a decider to
select a point where both ends are in play.'' Thus, to the extent that
these MFJ court precedents are relevant to our classification analysis,
they do not clearly show that the relevant functions must not be so
significantly focused on benefitting end users or customers (rather
than providers) to fall within the telecommunications systems
management exception.
2. Post-1996 Act Classification Decisions
155. As mentioned above, when Congress enacted the 1996 Act, it
codified statutory definitions that reflected the dichotomy of services
established by the Computer Inquiries and MFJ frameworks. Specifically,
the 1996 Act's definitions of ``telecommunications service'' and
``information service''--including the telecommunications systems
management exception to the definition of ``information service''--
largely track the definitions of those same terms in the MFJ. We note
that while Congress adopted the terminology of the MFJ's definition of
``information service,'' for the reasons we discussed above, we reject
the view that Congress thereby intended that the Commission would be
bound by MFJ precedent going forward. And the 1996 Act's regulatory
approach to that dichotomy of services broadly tracks that of the
Computer Inquiries' treatment of basic services, enhanced services, and
adjunct-to-basic services, with ``telecommunications services,''
inclusive of associated services that fall into the telecommunications
systems management exception, subject to common carrier regulation and
``information services'' not subject to common carrier regulation. As
noted, just two years after the 1996 Act's passage, the Commission
confirmed that Congress had incorporated the Commission's prior
classification scheme under the Computer Inquiries in adopting the 1996
Act. And the Supreme Court affirmed that understanding in Brand X,
stating that ``Congress passed the definitions in the Communications
Act against the background of [the Computer Inquiries] regulatory
history, and we may assume that the parallel terms `telecommunications
service' and `information service' substantially incorporated their
meaning, as the Commission has held.'' We disagree with NCTA that the
sole fact that Congress enacted the terms ``telecommunications
service'' and ``information service'' ``against the backdrop of [the]
Commission's own refusal to treat enhanced service offerings . . . as
`basic,' '' provides evidence of ``Congress's intent to classify
broadband as an information service.'' NCTA attempts to connect the
dots by claiming that the Commission classified ``the forerunners of
broadband'' as enhanced services, but it only cited to a single Bureau-
level order from the 1980s that classified a service wholly dissimilar
from modern BIAS as an enhanced service. And although
[[Page 45438]]
Commission precedent did treat ``internet access'' as it existed around
time of the 1996 Act as an enhanced service, as we make clear below,
the nature of BIAS is significantly different than the Commission's
understanding of internet access during that period of time.
156. In implementing the 1996 Act, the Commission harmonized its
earlier classification decisions with the 1996 Act's new terms for the
sake of providing regulatory certainty, and continued to draw on such
pre-1996 Act precedent for support in classifying services under the
1996 Act's categories. There was no need for the Commission to consider
reconciling the MFJ with the 1996 Act because section 601(a)(1) of the
1996 Act expressly replaced the MFJ's requirements with those enacted
as part of the 1996 Act. Over the course of almost three decades since
the passage of the 1996 Act, the Commission has considered the
regulatory classification of a variety of services that relate to
internet connectivity. In those decisions, the Commission has debated
the practical significance of the Computer Inquiries and later
classification decisions that preceded the decision under
consideration. But as was observed by Justice Scalia in his Brand X
dissent, the actual differences in Commission classification decisions
have comparatively little to do with interpretation of statutory
terms--like ``offer''--and instead turn principally on the best
understanding of particular facts, such as ``the identity of what is
offered.'' As we describe below, over the span of time since the 1996
Act's enactment, the underlying service that ISPs offer consumers, and
indeed, what even constitutes ``internet access,'' has shifted, and
with it, the meaning of what constitutes an internet service provider.
This shifting landscape challenged the Commission in conducting factual
analyses in connection with these classification decisions. As such,
the Commission reached different classification decisions based on
different factual characterizations of how the relevant ``offer'' would
be understood from a functional and end-user perspective. These factual
characterizations often were informed by--and in the case of the RIF
Order, were motivated by--policy objectives, and as such, the factual
characterizations varied in their reasonableness. For these reasons,
prior classification decisions, far from being a ``uniform regulatory
history,'' do not provide consistent, let alone persuasive, evidence
that modern-day BIAS is best classified as an information service under
the 1996 Act. Some commenters observe that Commission actions shortly
after the adoption of the Act can be particularly persuasive evidence
of Congressional intent. But that does not provide a justification for
attempting to apply early Commission decisions implementing the 1996
Act outside their logical context, or for overriding the direction
gleaned from the text and statutory context. We thus reject arguments
that neglect the material differences between present circumstances for
BIAS and decisions like the Stevens Report. In our decision in the
Order, we lay out the facts concerning how modern-day BIAS is offered
based on how it functions and is perceived, and follow those facts to
the most logical outcome under the best reading of the statutory text.
In doing so, as detailed above, we find that BIAS is best understood as
a telecommunications service under the Act's definitional framework.
157. Stevens Report. When the Commission first considered how best
to classify ``internet access service'' under the 1996 Act, that
service, being at a nascent stage of development, differed
substantially from the BIAS we classify in the Order in how it was
offered, and how consumers perceived the service. In 1997, for the
purpose of implementing the universal service provisions of the 1996
Act, Congress directed the Commission to review, inter alia, the
definitions of the term ``information service,''
``telecommunications,'' and ``telecommunications service,'' including
how those definitions apply ``to mixed or hybrid services and the
impact of such application on universal service definitions and support
. . . including with respect to internet access.'' In response, in
1998, the Commission adopted a Report to Congress commonly referred to
as the Stevens Report. We disagree with Consumer Action for a Strong
Economy's argument that the 1996 Act, in ``creat[ing] a new framework
for Title I `Information Services' as a modern alternative to
sclerotic, New Deal-era Title II rules[,]'' reflected a ``bipartisan
consensus for lightly regulating high-speed broadband.'' But even
assuming such a consensus had existed with respect not only to the
fundamentally different internet access service of the time, but also
to broadband at such a nascent stage of its development, the Stevens
Report makes clear that Congress preferred that the Commission decide
its classification. And indeed, as we discuss below, the very year the
Commission did so with respect to ``internet access service'' in the
Stevens Report, the Commission also classified broadband provided via
DSL as a telecommunications service subject to Title II. We also
disagree with LARIAT's contention that ``Title II itself--with
provisions explicitly mentioning differing charges dependent upon the
source, destination, time, and purpose of communications--was not
designed to regulate the internet, especially one that was `neutral.'
'' Beyond the fact that LARIAT provides only a vague description of the
provisions it claims are not well-suited to regulating BIAS--and does
not appear to consider how tailored forbearance could ameliorate such
concerns--we find that the Stevens Report makes clear that Congress did
not intend to foreclose application of Title II to new services.
158. At the time of the Stevens Report, internet access service
providers typically did not own facilities or provide last-mile
transmission themselves, instead providing their services over an
unaffiliated telecommunications carrier's public switched telephone
network (PSTN). ISPs primarily offered their customers a suite of
application-layer services such as World Wide Web, newsgroups, and
electronic mail using their own computer systems. Some ISPs did not yet
even provide their subscribers direct access to the wider internet,
instead solely offering portals to ``walled gardens'' of proprietary
content. In order to reach these application-layer services, an end
user typically first had to purchase a telecommunications service from
an unaffiliated carrier. The Stevens Report drew on the ``intertwined''
language of Computer II, and coined the term ``inextricably
intertwined'' to assert its belief that, because the ``core of the
internet and its associated services'' offered by providers were
information services, ``internet access service'' itself was an
information service, being dominated by such components.
159. The Stevens Report reserved judgment on whether entities that
provided internet access over their own network facilities were
offering a separate telecommunications service, and observed that ``the
question may not always be straightforward whether, on the one hand, an
entity is providing a single information service with communications
and computing components, or, on the other hand, is providing two
distinct services, one of which is a telecommunications service.''
Notably, at the time of the Stevens Report, BIAS was at ``an early
stage of deployment to residential customers''
[[Page 45439]]
and constituted a tiny fraction of all internet connections. As we
establish above, modern-day BIAS both functions and is perceived vastly
differently from the ``internet access service'' considered in the
Stevens Report, so we thus disagree with commenters who argue that the
Stevens Report's assessment of the service offered at the time has
precedential value to our decision making in the Order.
160. Advanced Services Order and Order on Remand. In the same year
that the Commission adopted the Stevens Report, the Commission first
classified an early form of BIAS--namely, digital subscriber line (DSL)
service provided over the wireline telephone network--as a
telecommunications service. The Advanced Services Order was subject to
a voluntary remand requested by the Commission. The Commission
explained in the 2015 Open Internet Order why the further history of
the Advanced Services Remand Order (65 FR 7744 (Feb. 16, 2000)) is not
relevant here. In the 1998 Advanced Services Order, the Commission
defined DSL-based advanced service as encompassing: (1) the
transmission of a customer's data traffic from the customer's modem to
the telephone company's central office; (2) the transmission between
the central office and an interconnection point across the telephone
company's packet switched network; and (3) interconnection arrangements
with other providers as necessary to fulfill the service. The
Commission distinguished this service--as we do in the Order with our
definition of BIAS--from what it considered to be ``internet access'':
the same bundle of application-level offerings (e.g., World Wide Web,
email, newsgroups, and portals) described in the Stevens Report. The
Commission therefore concluded that ``[a]n end-user may utilize a
telecommunications service together with an information service, as in
the case of internet access. In such a case, however, we treat the two
services separately: the first service is a telecommunications service
(e.g., the [ ]DSL-enabled transmission path), and the second service is
an information service, in this case internet access.'' In the 1999
Advanced Services Remand Order, the Commission affirmed its conclusion
that ``[ ]DSL-based advanced services constitute telecommunications
services as defined by section 3(46) of the Act.'' The definition of
telecommunications service is now in section 3(53) of the Act. DSL-
based broadband providers were thus subject, under these Orders, to
Title II in relevant part. In light of the factual circumstances
underlying the Commission's classification of DSL, we find the Advanced
Services Order informative as to the best classification of BIAS today.
Although the classification decision in the Advanced Services Order
arose in the context of the Computer II requirement that facilities-
based carriers offer the transmission underlying their enhanced service
offering on a common carrier basis, and therefore the DSL transmission
service was not a ``retail'' service within the meaning of the resale
obligation in section 251(c)(4) of the Act, that does not alter the
marketplace reality that this common carrier transmission service was
nevertheless available for purchase by retail end users as well as
wholesale customers, despite the RIF Order's suggestion to the
contrary. Retail end users could rely on that common carrier
transmission service to access the application-layer services offered
by the ISPs of the time, consistent with the explanation of
telecommunications services and information services that the
Commission laid out in the Stevens Report. The RIF Order's further
complaint that DSL common carrier transmission service ``[did not]
itself provide internet access[ ]'' does not demonstrate that the
purchase from two suppliers rather than a single supplier is inherently
material to the classification analysis.
161. We disagree with the U.S. Chamber of Commerce which argues
that the Advanced Services Order's classification of ``internet
access'' as an information service supports ``the textual reading . . .
that BIAS is best classified as a Title I `information service.''' As
we explain here, the ``internet access'' described in the Advanced
Services Order was fundamentally different from the BIAS we classify in
the Order, being a non-facilities-based suite of application-layer
information services to which users connected via their DSL-based
broadband provider. Today's BIAS, conversely, more closely resembles
the DSL-based broadband classified as providing telecommunications
service. We find that BIAS (as defined in the Order) provides a
transparent conduit to edge providers' information services. We also
disagree with NCTA's attempt to discount the relevance of the Advanced
Services Order's classification of DSL-based broadband service as a
telecommunications service by claiming that the Order only considered
the classification of ``wholesale DSL transmission[ ] which incumbent
telephone companies historically offered to ISPs such as AOL or
Earthlink as a telecommunications service unbundled from internet
access, [rather than] retail broadband service.'' This reading defies
the very language in the Advanced Services Order which clearly
considered the service to be offered both to end users and to ISPs.
162. Classification of Cable Modem Service. The regulatory
classification of cable modem service was unaddressed when the Ninth
Circuit had occasion to consider it in City of Portland. There, the
court found that cable modem service was a telecommunications service
to the extent that the cable operator ``provides its subscribers
internet transmission over its cable broadband facility.'' The court
found that cable modem service, ``like [the internet access service of]
other ISPs, . . . consists of two elements: a `pipeline' (cable
broadband instead of telephone lines), and the internet service
transmitted through that pipeline,'' but ``unlike [the internet access
service of] other ISPs, [the cable modem service provider] controls all
of the transmission facilities between its subscribers and the
internet.'' The Ninth Circuit also noted that the Communications Act
``includes cable broadband transmission as one of the
`telecommunications services' a cable operator may provide over its
cable system.'' Following City of Portland, two other courts had the
opportunity to consider the application of cable modem service, neither
of which we find undercut the weight the Ninth Circuit's conclusion
lends to our independent conclusion that today's offering of BIAS is
best classified as a telecommunications service.
163. Three months after the City of Portland decision, the
Commission issued the Cable Modem Notice of Inquiry (65 FR 60441 (Oct.
11, 2000)), which sought comment on whether cable modem service should
be classified as a telecommunications service under Title II or an
information service subject to Title I. That proceeding culminated with
the Cable Modem Declaratory Ruling (67 FR 18848 (Apr. 17, 2002)). Based
on a factual record that had been compiled at that time, the Commission
described cable modem service as ``typically includ[ing] many and
sometimes all of the functions made available through dial-up internet
access service, including content, email accounts, access to news
groups, the ability to create a personal web page, and the ability to
retrieve information from the internet.'' The Commission found that
cable modem service was ``an offering . . . which combines the
transmission of data with computer
[[Page 45440]]
processing, information provision, and computer interactivity, enabling
end users to run a variety of applications.'' The Commission further
concluded that, ``as it [was] currently offered,'' cable modem service
as a whole met the statutory definition of ``information service''
because its components were best viewed as a ``single, integrated
service that enables the subscriber to utilize internet access
service,'' with a telecommunications component that was ``not . . .
separable from the data-processing capabilities of the service.'' We
disagree with the U.S. Chamber of Commerce which argues that the Cable
Modem Declaratory Ruling's classification of cable modem service as an
information service supports ``the textual reading . . . that BIAS is
best classified as a Title I `information service.' '' As ACA Connects
explains, the Commission arrived at its conclusion after reviewing the
factual record of how providers offered, and consumers perceived, the
service at the time. However, we disagree with both commenters that,
somehow, this 22-year-old factual record has bearing on the
classification of modern-day BIAS. As we amply show above, the record
we received confirms that providers' offering of broadband service has
indeed changed dramatically, and so have consumers' perception of the
service. While the Cable Modem Declaratory Ruling did not mention the
``inextricably intertwined'' language from the Stevens Report or the
earlier ``intertwined'' language from Computer II, it followed their
classification approach in concluding that cable modem service, as
viewed by the end user, was dominated by the information service
aspects. The Brand X Court cited to the Stevens Report's use of
``inextricably intertwined'' to analogize to the Cable Modem
Declaratory Ruling classification analysis.
164. The Cable Modem Declaratory Ruling faced a legal challenge,
but was ultimately upheld by the U.S. Supreme Court in Brand X. Brand X
recognized that the Cable Modem Declaratory Ruling's Title I
classification was a ``reversal of agency policy'' and ``change [in]
course'' from the Commission's original classification of broadband in
the Advanced Services Order, but held that it was permissible under the
broad deference required by Chevron. Specifically, the Court held that
the word ``offering'' in the Act's definitions of ``telecommunications
service'' and ``information service'' is ambiguous, and that the
Commission's finding that cable modem service is a functionally
integrated information service was a permissible, though perhaps not
the best, interpretation of the Act. NCTA misleadingly states that the
Court's conclusion in Brand X ``confirmed that Congress never clearly
intended for broadband to be treated as a telecommunications service.''
By holding that the term ``offering'' in the 1996 Act is ambiguous, the
Court also confirmed that Congress never clearly intended for broadband
to be treated as an information service, and thus deferred to the
Commission's decision under Chevron. The Court explained that the Act's
definitions turn on what the cable modem service provider is understood
to be ``offering'' to consumers, which in turn depends on what
consumers reasonably perceive the offering to be. Based on the
administrative record before the Commission in 2002, the Court found
``reasonable'' ``the Commission's understanding of the nature of cable
modem service''--namely, that ``[w]hen an end user accesses a third
party's website,'' that user ``is equally using the information service
provided by the cable company that offers him internet access as when
he accesses the company's own website, its email service, or his
personal web page,'' citing as examples the roles of DNS and caching.
In the wake of Brand X, the Commission proceeded to adopt information
service classifications of internet access service offered via wireline
networks, power line networks, and wireless networks, though the
Commission continued to recognize that ISPs could offer broadband
transmission as a telecommunications service subject to Title II, and
many did.
165. The Cable Modem Declaratory Ruling, and the successive
decisions following it, are not determinative of the classification of
modern-day BIAS. The Cable Modem Declaratory Ruling was based on a
record developed in the early 2000s--when ISPs were still viewed as
playing a crucial role in the availability of websites, email,
newsgroup access, and the like. And the follow-on classification
decisions substantially relied on the record compiled in the Cable
Modem Declaratory Ruling proceeding. The factual circumstances, as
characterized by the Commission then, differ substantially from the
functional and marketplace realities of BIAS today, to say nothing of
the fact that none of these decisions considered the applicability of
the telecommunications systems management exception to the information
service definition. The Cable Modem Declaratory Ruling and the Wireline
Broadband Classification Order (70 FR 60222 (Oct. 17, 2005)) mentioned
the exception in quoting the statutory definition of ``information
service,'' but did not analyze its potential applicability, such as to
DNS.
166. While the Cable Modem Declaratory Ruling itself has limited
relevance to our classification of modern-day BIAS, the Supreme Court's
opinions on it lends some support to the telecommunications
classification we reach in the Order. In upholding the Cable Modem
Declaratory Ruling on reasonableness grounds, every Justice joined
opinions that, at best, showed that the Cable Modem Declaratory
Ruling's understanding of the factual circumstances was becoming
increasingly outdated even at the time. Justice Thomas, writing for the
majority, noted that ``our conclusion that it is reasonable to read the
Communications Act to classify cable modem service solely as an
`information service' leaves untouched Portland's holding that the
Commission's interpretation is not the best reading of the statute.''
Justice Breyer's concurrence cautioned that the Commission's
information service classification was ``perhaps just barely''
permissible. And in dissent, Justice Scalia, joined by Justices Souter
and Ginsburg, found that the Commission had adopted ``an implausible
reading of the statute'' and that ``the telecommunications component of
cable-modem service retains such ample independent identity'' that it
could only reasonably be classified as a separate telecommunications
service. As we demonstrate above, today's BIAS is now entirely divorced
from providers' information service offerings on which the Cable Modem
Declaratory Ruling rested its classification decision. If cable modem
service may have been best understood as a telecommunications service
then, modern BIAS most certainly is best understood as a
telecommunications service now.
167. 2015 Open Internet Order. In 2015, the Commission first
considered the classification of ``broadband internet access service,''
as defined by the 2010 Open Internet Order (76 FR 59192 (Sept. 23,
2011)), narrowly focused on the transmission component of the service
and any capabilities that are incidental to and enable the operation of
that service, and irrespective of the technology over which that
service is provided. In doing so, as we do here, the Commission
reviewed its prior classification decisions concerning dial-up internet
access service, DSL-based advanced service, cable modem service,
wireline broadband service, and wireless broadband service, and weighed
the relevance of such decisions
[[Page 45441]]
on a classification of BIAS based on the factual circumstances under
which it was then offered. The Commission concluded that fixed and
mobile ``broadband internet access service'' is a telecommunications
service, finding that ``broadband internet access service, as offered
by both fixed and mobile providers, is best seen, and is in fact most
commonly seen,'' as a ``separate `offering' '' of transmission capacity
that ``is today sufficiently independent of . . . information
services'' such as ``email and online storage.'' The Commission first
defined ``broadband internet access service'' in the 2010 Open Internet
Order. The 2015 Open Internet Order also concluded that the bundling of
certain services, such as DNS and caching, with broadband internet
access service, does not ``turn broadband internet access service into
a functionally integrated information service.''
168. In 2016, the D.C. Circuit upheld the 2015 Open Internet Order
in full in USTA. Requests for rehearing en banc were denied in 2017 in
USTA II, 855 F.3d 381. Of note, two judges concurring in the denial of
rehearing en banc reiterated Brand X's conclusion that a
telecommunications service classification was both reasonable and the
best reading of the Act. The court found that the Commission's
conclusion that consumer perception of BIAS as a separate offering of
telecommunications found ``extensive support in the record,''
``justify[ing] the Commission's decision to reclassify broadband as a
telecommunications service.'' It also affirmed the Commission's view
that DNS and caching fall under the telecommunications systems
management exception because they ``facilitate use of the network
without altering the fundamental character of the telecommunications
service.'' Similarly, the court found ``reasonable and supported by the
record'' the Commission's classification of mobile BIAS as a commercial
mobile service. It also concluded that the Commission fully justified
its change in course.
169. RIF Order. In 2017, the Commission reclassified the
technology-agnostic BIAS as an information service, reversing the
conclusion of the 2015 Open Internet Order. While maintaining the same
narrowly drawn definition of BIAS used since the 2010 Open Internet
Order, the Commission nevertheless considered BIAS (1) to provide
subscribers the capability ``to engage in all of the information
processes listed in the information service definition''; (2) to
involve ``information processing functions itself, such as DNS and
caching''; and (3) to be inextricably intertwined with other
information-processing capabilities offered by the BIAS provider or
third parties. In conducting its factual analysis, the RIF Order relied
on the Cable Modem Declaratory Ruling, along with Brand X, in addition
to the isolated MFJ precedent we previously addressed.
170. In addition to the RIF Order's misapplication of the statutory
definitions, which we discuss above, its application of Commission
precedent to arrive at its preordained information service
classification was flawed. By the time the RIF Order ventured to
reconsider the classification of BIAS, the factual characterizations in
the Cable Modem Declaratory Ruling, which Brand X showed were becoming
outdated even at the time, were positively antiquated. Nevertheless,
the RIF Order at times erroneously leaned on that proceeding's factual
record in its analysis of modern-day BIAS.
171. On review in Mozilla, the D.C. Circuit was skeptical of the
RIF Order's classification decision, and in particular its reliance on
Brand X and the underlying Cable Modem Declaratory Ruling. As Judge
Millett pointed out in her Mozilla concurrence, and as we likewise find
here: ``Today, the typical broadband offering bears little resemblance
to its Brand X version. The walled garden has been razed and its fields
sown with salt. The add-ons described in Brand X--`a cable company's
email service, its web page, and the ability it provides consumers to
create a personal web page,'--have dwindled as consumers routinely
deploy `their high-speed internet connections to take advantage of
competing services offered by third parties.' '' Although, the court
ultimately upheld the RIF Order, it did so not because the RIF Order
best represented the factual realities of the offering or most closely
accorded with precedent, but under the judicial principles concerning
deference and binding precedent. As Congress has granted the Commission
the authority and responsibility to classify services, we are not so
bound. Given the RIF Order's flawed analysis of the statutory terms and
misplaced reliance on aging conceptions of how internet access service
is offered today, we thus decline to give the RIF Order's
classification determination any precedential value, and instead find
that our classification of BIAS as a telecommunications service is not
only the best reading of the statute under the factual circumstances of
how BIAS is offered today but also best accords with Commission and
court precedent.
D. Scope of Reclassification
172. Our classification decision continues to rely on the same
definition of ``broadband internet access service'' the Commission has
used since the 2010 Open Internet Order, which encompasses mass market,
retail data transmission and capabilities that are incidental to and
enable its operation. We continue to exclude non-BIAS data services and
clarify the framework for identifying those services. To the extent
that the exchange of internet traffic by an edge provider or an
intermediary with the BIAS provider's network supports the capability
to reach all or substantially all internet endpoints and enables the
operation of the service, we find that BIAS includes such internet
traffic exchange. However, we clarify that service to edge providers is
not itself BIAS. We also continue to exclude premises operators and end
users who provide access to their BIAS connections when not offered on
a mass-market, retail basis.
1. Broadband Internet Access Service
173. We continue to define ``broadband internet access service'' as
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. We also
continue to include in this term any service that we find to provide a
functional equivalent of the service described in the definition, or
that is used to evade the protections set forth in part 8 of the
Commission's rules. The Commission has retained this definition since
it first defined broadband internet access service in the 2010 Open
Internet Order, and a broad range of commenters support us continuing
to do so. Our use of the term ``broadband'' in the Order includes, but
is not limited to, services meeting the threshold for ``advanced
telecommunications capability.'' We continue to exclude dial-up
internet access service from the definition of BIAS because of the
different market and regulatory landscape for that service. We also
make clear that the definition of BIAS does not include VoIP service
and we do not classify VoIP service in the Order. We do not, however,
find it appropriate to define BIAS as solely the ``commercial offering
of an IP packet transfer service'' because such a description would
expand the scope beyond the focus of this proceeding and our actions in
the Order.
[[Page 45442]]
Indeed, such a high-level--and therefore broad--definition could sweep
in services using IP packet transfer for reasons completely unrelated
to internet access.
174. As the Commission has previously determined, the term
``broadband internet access service'' includes services provided over
any technology platform, including, but not limited to, wire,
terrestrial wireless (including fixed and mobile wireless services
using licensed or unlicensed spectrum), and satellite. ``Fixed''
broadband internet access service refers to a broadband internet access
service that serves end users primarily at fixed endpoints using
stationary equipment, such as the modem that connects an end user's
home router, computer, or other internet access device to the internet,
and encompasses the delivery of fixed broadband service over any
medium, including various forms of wired broadband service (e.g.,
cable, DSL, fiber), fixed wireless access (FWA) broadband service
(including fixed services using unlicensed spectrum and cellular fixed
wireless access), and fixed satellite broadband service. Cellular fixed
wireless access refers to a specific subclass of FWA offered using 4G
or 5G mobile technologies and shares the mobile network. ``Mobile''
broadband internet access service refers to a broadband internet access
service that serves end users primarily using mobile stations, and
includes, among other things, services that use smartphones or mobile-
network-enabled tablets or devices as the primary endpoints for
connection to the internet, as well as mobile satellite broadband
service. We continue to encompass within the definition of broadband
internet access service all providers of any such service, regardless
of whether the BIAS provider leases or owns the facilities used to
provide the service.
175. We disagree with the Information Technology and Innovation
Foundation's (ITIF) argument that our definition of BIAS undermines the
applicability of the Open Internet rules we adopt by rendering the
rules ``essentially voluntary'' as long as an entity offers a service
that does not provide indiscriminate access to all or substantially all
internet endpoints and discloses its network management practices. This
argument conflates not providing BIAS at all with providing BIAS while
violating the rules. Notably, if ITIF's argument were true, it would
also be the case that the transparency rule maintained by the RIF Order
would also be voluntary, and yet ITIF did not raise this issue as a
concern in that proceeding. A BIAS provider cannot simply declare that
it is not providing BIAS; the determination is dependent on the nature
of the service the BIAS provider offers, as reasonably understood by
consumers. An ISP offering that is clearly identified and marketed to
consumers as providing edited or curated internet access--rather than
service that consumers reasonably understand and expect to provide
indiscriminate access to all or substantially all internet applications
and services of their choosing--would fall outside the scope of the
Order, but an ISP may not provide consumers what appears to be ordinary
mass-market broadband service and then engage in discriminatory
practices that deny customers the service they reasonably expect. An
ISP that currently provides BIAS but seeks to instead provide a service
that falls outside the definition of BIAS, particularly as a means to
avoid the service being subject to the Commission's rules, may find
that this exercise could have non-trivial commercial and regulatory
consequences. That decision also may carry other important
consequences. For example, an ISP that is not providing BIAS might not
qualify to participate in Federal and State programs to fund broadband
deployment and affordability, might not benefit from the Commission's
pole attachment rights under section 224 and rules concerning access to
MTEs, and might not be able to petition the Commission under section
253 to preempt State and local requirements that prohibit the provision
of the non-BIAS service.
176. Mass Market. We continue to find that a ``mass-market''
service is ``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 Commission has retained this
interpretation of ``mass market'' since the 2010 Open Internet Order,
and the record supports continuing to retain this definition. In order
to maintain consistency with this interpretation, we decline Ad Hoc
Telecom Users Committee's request to remove the word ``small'' from
``small business'' in considering what constitutes a ``mass market''
service. We note that in examining whether a service is ``mass
market,'' how a service generally is marketed and sold, rather than the
entity purchasing the service, is the key determination. In addition to
including broadband internet access service purchased with support from
the E-Rate, Lifeline, and Rural Health Care programs, as well as any
broadband internet access service offered using networks supported by
the High Cost program, ``mass market'' services include any broadband
internet access service purchased with support from the Affordable
Connectivity Program (or any successor program offering discounts to
eligible households for standardized broadband service offerings) or
the Connected Care Pilot Program. These programs statutorily support
BIAS regardless of its classification status. Consistent with the 2015
Open Internet Order and RIF Order, and with broad record support, we
continue to interpret mass market to exclude enterprise internet access
service offerings as well as other services, such as Business Data
Services (BDS), that do not provide access to all, or substantially
all, internet endpoints. The services we exclude from being considered
mass market exhibit distinct marketplace and technological
characteristics from those of BIAS. They are typically offered and sold
to large businesses through customized or individually negotiated
arrangements and thus depart significantly from BIAS offerings. We make
clear that enterprise services are excluded from the definition of BIAS
even when they are supported by the Commission's broadband access and
affordability programs. No commenter opposes this approach. Our
determination that enterprise services are not included within the
definition of BIAS should not be understood to mean that non-private-
carriage enterprise services cannot otherwise be subject to regulation
as telecommunications services. We believe it is likely that at least
some such services are indeed offered as telecommunications services
and note that would be consistent with previous Commission statements
that non-private-carriage enterprise services are telecommunications
services.
177. Retail. We retain the word ``retail'' in the definition of
BIAS and hold that BIAS includes retail service provided by both
facilities-based providers and resellers. In doing so, we maintain the
definition of BIAS that the Commission has consistently applied since
the definition originated in 2010. We therefore decline, at this time,
INCOMPAS's request to delete the word ``retail'' from the definition of
BIAS. The applicability of the Commission's reclassification and rules
to wholesale services was not directly raised in the 2023 Open Internet
NPRM and we find that it would be premature for the Commission to take
further action regarding wholesale services based on the current
record. For the same reasons, we decline Public Knowledge's request
that the Commission ``clarify''
[[Page 45443]]
that wholesale services are subject to Title II. Nevertheless, we agree
with commenters that broadband wholesalers should not engage in
anticompetitive practices or sell or operate their wholesale offerings
in a manner that prevents resellers from offering retail broadband
service that is in compliance with our BIAS rules. If wholesale
providers did engage in such harmful practices, the Commission would be
able to take action to address them pursuant to its Title II authority,
without including those wholesale providers within the scope of BIAS.
That wholesale services do not fall within the definition of BIAS does
not mean that they do not fall within the ambit of Title II in some
circumstances or otherwise may be subject to the Commission's oversight
under section 201(b), which provides the Commission authority to ensure
that all practices ``in connection with'' BIAS are ``just and
reasonable.'' We thus disagree with INCOMPAS's suggestion that a
specific classification of wholesale service as a telecommunications
service is a necessary prerequisite for protecting consumers and
resellers from the unjust or unreasonable actions of wholesale service
providers. Indeed, we agree with INCOMPAS that the Commission ``has the
authority under sections 201 and 202 to adjudicate disputes between
wholesalers and resellers of BIAS.''
178. We conclude that our approach should provide consumers with
necessary protections without unfairly burdening resellers with
violations resulting from the actions of their wholesale providers. Our
BIAS definition includes services from both facilities-based providers
and resellers, and therefore any BIAS rules we adopt apply to both
categories of service providers. As explained in the 2015 Open Internet
Order, while ``a reseller's obligation under the rules is independent
from the obligation of the facilities-based provider that supplies the
underlying service to the reseller, . . . the extent of compliance by
the underlying facilities-based provider will be a factor in assessing
compliance by the reseller.'' Thus, if a reseller has employed
reasonable measures to ensure it is able to comply with its obligations
under our rules, non-compliance by the reseller's underlying
facilities-based provider will not be imputed to the reseller. What
constitutes reasonable measures will depend on the factual
circumstances, including the details of the reseller's arrangement with
the wholesale provider and the reseller's diligence in seeking to
enforce the terms of that arrangement. We not only expect resellers to
take care that the service they choose to resell to retail customers
would not expose them to compliance issues under our rules, but we also
expect that facilities-based providers that choose to provide wholesale
service will not sell a service that does not allow resellers to comply
with our rules. In any event, we intend to monitor the wholesale
service marketplace and will take appropriate prescriptive or
enforcement action to protect consumers and resellers should the need
arise.
2. Non-BIAS Data Services
179. We continue to exclude non-BIAS data services (formerly
``specialized services'') from the scope of broadband internet access
service. As the Commission explained in the 2015 Open Internet Order,
non-BIAS data services are certain services offered by BIAS providers
that share capacity with broadband internet access service over BIAS
providers' last-mile facilities but are not broadband internet access
service or another type of internet access service, such as enterprise
services. Such services generally share the following characteristics:
(1) are only used to reach one or a limited number of internet
endpoints; (2) are not a generic platform, but rather a specific
``application level'' service; and (3) use some form of network
management to isolate the capacity used by these services from that
used by broadband internet access services. These characteristics are
non-exhaustive and do not comprise elements of a definition of non-BIAS
data services. We clarify this in light of confusion in the record that
the characteristics established in the 2015 Open Internet Order
constituted elements of a definition of non-BIAS data service. Thus,
services with these characteristics will not always be considered non-
BIAS data services. In 2015, the Commission identified examples of some
services that, at the time, likely fit within the category of non-BIAS
data services. The Commission identified some BIAS providers' existing
facilities-based VoIP and IP-video offerings, connectivity bundled with
e-readers, heart monitors, energy consumption sensors, limited-purpose
devices such as automobile telematics, and services that provide
schools with curriculum-approved applications and content as examples
of non-BIAS data services.
180. Innovation and Investment. We anticipate that maintaining an
exclusion of non-BIAS data services from the definition of BIAS will
foster innovation and investment in BIAS and non-BIAS data services. We
agree with Professor van Schewick that excluding non-BIAS data services
from the scope of BIAS ``allows applications to emerge that would not
be able to function on the Open Internet because they need special
treatment that the Open Internet cannot provide.'' We further expect
that our approach will guard against artificial marketplace distortions
by providing a level playing field for like data services under our
rules: those that fit the ``core'' definition of BIAS, represent its
functional equivalent, or are used in an attempt to evade our rules
governing BIAS will be treated the same under our rules, while data
services that fall outside the scope of BIAS--whether established or
new--will be treated comparably. Additionally, we anticipate that,
under our regulatory approach, BIAS providers will be motivated to
innovate and invest in the development and deployment of new
technologies that will help enable them to meet growing network
capacity demands for both BIAS and non-BIAS data services utilizing the
same network infrastructure, rather than responding to those growing
demands through blocking, throttling, paid prioritization, or other
conduct harmful to the broader public interest.
181. Evasion and Enforcement. Key to promoting these benefits is
ensuring that our exclusion of non-BIAS data services is not used as a
means to evade the rules we place on BIAS, including the open internet
rules we adopt in the Order. To do so, we will continue to closely
monitor the development and use of these services and will act to
prevent harm to the open internet, as necessary. We are especially
concerned about activities that may undermine national security or
public safety, hinder consumers' access to or use of BIAS, or impede
the ability of over-the-top services to compete with other data
services. If we determine that a particular service is providing the
functional equivalent of BIAS or is being used to evade the protections
set forth in our rules, we will take appropriate action. We will be
watchful of consumer retail offerings, and will evaluate if necessary
whether they actually require isolated capacity for a specific
functionality or level of quality of service that cannot be met over
the open internet, but we will presume that application-level
enterprise offerings do not evade our rules. For example, we are likely
to find that connectivity for video conferencing offered to consumers
would evade the protections we establish for BIAS if the video-
conferencing provider is paying the
[[Page 45444]]
BIAS provider for prioritized delivery. Conversely, we are likely to
find that connectivity for remote surgery is properly categorized as a
non-BIAS data service given its ``stringent requirements for
reliability'' and lack of latency that ``cannot be met over the Open
Internet.'' We also will closely monitor any services that have a
negative effect on the performance of BIAS or the capacity available
for BIAS over time. We decline to explicitly state that non-BIAS
service may not share capacity with BIAS, as Professor Peha requests,
as this may inhibit innovative uses of existing capacity that do not
otherwise harm the open internet. And we will take appropriate action
if a non-BIAS data service is undermining investment, innovation,
competition, or end-user benefits. To assist us in monitoring non-BIAS
data services, we continue to require BIAS providers to disclose: what
non-BIAS data services they offer to end users; whether and how any
non-BIAS data services may affect the last-mile capacity available for,
and the performance of, BIAS; and a description of whether the service
relies on particular network practices and whether similar
functionality is available to applications and services offered over
BIAS.
182. Alternative Approaches. We resist calls from some commenters
that we eschew this approach and instead adopt an abstract, expansive
definition of non-BIAS data services and/or a more detailed list of
such services, as doing so would not account for the evolving,
innovative nature of these services and the importance of ensuring BIAS
providers cannot evade our rules. Our approach aligns with the approach
taken towards non-BIAS data services in the 2015 Open Internet Order.
Adopting an abstract, expansive definition of non-BIAS data services
would encompass services functionally equivalent to BIAS and those used
to evade our rules for BIAS, contradicting our BIAS definition and
potentially undermining our ability to address services that cause open
internet, national security, public safety, or other harms we identify
in the Order. Similarly, providing an extensive list of non-BIAS data
services could harm consumers if BIAS providers develop methods to use
an identified service on the list to somehow circumvent our rules.
Moreover, a more detailed definition of non-BIAS data services would
require us to accurately predict the forms that ``functionally
equivalent'' services or services used to ``evade'' our rules could
take in the future. The record here does not persuade us that we could
reliably do so, nor would we be positioned to maintain and update such
a list in a timely manner as new services are developed. Additionally,
rather than promote innovation, as the European Telecom Operators'
Association suggests, developing an extensive and detailed list may
instead constrain innovation by disincentivizing BIAS providers from
offering or developing services that are not on the list.
183. Network Slicing. Consistent with the approach we lay out
above, we decline at this time to categorize network slicing or the
services delivered through network slicing as inherently either BIAS or
non-BIAS data services, or to opine on whether any particular use of
network slicing or the services delivered through network slicing would
be considered a reasonable network management practice under the open
internet rules we adopt below.
184. Network slicing is a technique that enables mobile network
operators (MNOs) to create multiple virtualized subnetworks (each known
as a ``slice'') using shared physical wireless network infrastructure
and common computing resources. Network slicing is often described as a
``logical'' segmentation of the network, which means that each slice
may correspond to a unique set of network management rules tailored for
specific technical requirements, but without any physical division or
dedication of network resources. MNOs can use network management rules
to configure each slice for customized use cases and quality-of-service
(QoS) targets. Network slicing is a key innovation of standalone 5G
networks, which are in varying stages of deployment for different
providers, and it cannot be deployed on non-standalone 5G networks
(i.e., 5G networks with a 4G LTE core network).
185. Proponents of network slicing ask us to clarify that network
slicing or certain services delivered using network slicing are ``non-
BIAS''--and thus not subject to Title II regulation--or are reasonable
network management practices under our open internet rules. They argue
that network slicing allows for the efficient management of finite
mobile network resources and eliminates the need for the deployment of
separate physical networks for different types of services. For
instance, network slicing proponents contend that it allows MNOs to
establish separate slices for mobile broadband and fixed wireless
traffic, while simultaneously offering customized slices for enterprise
private networks, video calls, and a variety of other uses. For
example, these supporters state that network slicing might be used for:
augmented reality (AR)/virtual reality (VR), automotive, agriculture,
energy, health, manufacturing, IoT, public safety, smart cities, and
other functions. They further assert that network slicing is more
resilient to cyberattacks because breaches can be contained in one
slice and prevented from affecting other parts of the network.
186. Other commenters raise concerns about the implications of
network slicing. They specifically express concern that network slicing
will be used to circumvent our prohibition on paid prioritization,
throttling, or unreasonable discrimination. Public Knowledge also
contends that allowing network slicing for specialized services will
negatively affect the quality and capacity of general internet access,
and New America's Open Technology Institute contends that exempting
applications, content, or services delivered over a slice of a mobile
network from the rules ``is likely to harm mobile market competition,''
particularly for ``independent MVNO [mobile virtual network operators]
competitors since they purchase wholesale bandwidth, cannot `slice'
their networks, and could also see their capacity and quality of
service crowded out over time as the more profitable edge providers are
pushed to pay for special delivery'' over the large mobile networks.
187. The record reflects that the potential use cases for network
slicing are still under development and that MNOs are in the early
stages of adopting the technique, with some moving more quickly than
others. For instance, T-Mobile states it has begun offering a network
slicing beta program that allows developers to begin building advanced
video calling functionality using its infrastructure. Other MNOs are
actively developing their own network slicing offerings, and equipment
manufacturers are also preparing to update their operating systems to
support network slicing applications. Given the nascent nature of
network slicing, we conclude that it is not appropriate at this time to
make a categorical determination regarding all network slicing and the
services delivered through the use of network slicing. We agree with
NCTA that we ``should not allow network slicing to be used to evade
[the] Open internet rules'' that we adopt. In the meantime, MNOs should
evaluate whether their particular uses of network slicing fall within
the definition of BIAS, and if so, ensure their uses of network slicing
are consistent with the conduct rules we adopt in the Order. MNOs may
also use the advisory opinion process we
[[Page 45445]]
establish below as a tool to seek Commission guidance on their use of
network slicing. And to the extent uses of network slicing fall outside
of BIAS, we will closely monitor those uses to evaluate if they are
providing the functional equivalent of BIAS, being used to evade our
open internet rules, or otherwise undermining investment, innovation,
competition, or end-user benefits in the internet ecosystem. We will
also monitor if network slicing affects the last-mile capacity
available for, and the performance of, BIAS. If necessary, we will take
action to address harmful uses of network slicing. We believe this
approach will allow for the continued development and implementation of
network slicing while at the same time ensuring that the use of network
slicing in connection with BIAS conforms to the classification and
rules adopted in the Order.
3. Internet Traffic Exchange
188. Consistent with the 2015 Open Internet Order, we find that
BIAS, as defined above, includes the exchange of internet traffic by an
edge provider or an intermediary with the BIAS provider's network
(i.e., internet peering, traffic exchange, or interconnection), to the
extent that the exchange supports the ``capability to transmit data to
and receive data from all or substantially all internet endpoints . . .
[and] enable the operation of the communications service.'' As the
Commission explained in 2015, ``[t]he representation to retail
customers that they will be able to reach `all or substantially all
internet endpoints' necessarily includes the promise to make the
interconnection arrangements necessary to allow that access'' and ``the
promise to transmit traffic to and from those internet end points back
to the user.'' We disagree with the Information Technology Industry
Council that ``interconnection, peering, traffic exchange, . . . and
similar arrangements should be excluded from the definition of BIAS.''
For a BIAS provider to offer to its subscribers the capability to reach
all or substantially all internet endpoints, it must make arrangements
with other network operators that have the capability (whether via its
own network or via another interconnected network) to reach those
endpoints. Indeed, this system of interconnection is the core concept
of the ``internet''--it is a network of networks. We also conclude that
the Commission's findings and rationale regarding internet traffic
exchange in the 2015 Open Internet Order--that service to edge
providers resulting from internet traffic exchange is derivative of
BIAS and constitutes the same traffic to the consumers--remain valid.
The Ad Hoc Broadband Carrier and Investor Coalition asks us to confirm
that edge service ``would be treated as part of BIAS only to the extent
they are offered as part of a `mass-market retail' internet access
service.'' Internet traffic arrangements are derivative of all services
that meet the definition of BIAS, which not only includes mass-market
retail services, but also services that provide the functional
equivalent of BIAS or that evade the protections set forth in part 8 of
the Commission's rules. We observe that the RIF Order does not appear
to dispute the Commission's previous conclusion that BIAS includes
internet traffic exchange, and instead determined that internet traffic
exchange arrangements were appropriately regulated as an information
service by virtue of its conclusion that BIAS is an information
service. Many commenters support our approach. Additional commenters,
by supporting our adoption of rules governing internet traffic exchange
arrangements, also support sub silentio the inclusion of internet
traffic exchange within the scope of BIAS.
189. We disagree with USTelecom's arguments that the D.C. Circuit
in USTA erred in concluding that the Commission has the authority to
include internet traffic exchange within the scope of BIAS. USTelecom
first asserts that sections 251(a), 251(c)(2), and 201(a) of the Act,
which concern interconnection, ``refute[ ] any notion that
classification of a retail service as a Title II common-carrier service
carries with it authority for the Commission to regulate on a common-
carrier basis the terms and conditions on which those retail providers
interconnect.'' USTelecom specifically asserts that were this not the
case, ``the specific limitations on the Commission's authority in
Sections 251(c)(2) and 201(a) would be rendered obsolete.'' But
USTelecom rests its conclusion on the mere existence of these
provisions and not any express statutory language prohibiting further
Commission authority over interconnection. USTelecom's understanding of
section 201(a) is undercut by the history of the Commission's treatment
of interconnection and traffic exchange-related matters as cognizable
under section 201(b). Nor does USTelecom grapple with the fact that
section 251 expressly preserves the Commission's prior authority under
section 201 in its entirety. Thus, we do not read section 201(a) and/or
section 251(c)(2) as limitations on other authority as relevant here--
notably including section 201(b). Our regulatory approach to the
traffic exchange element of BIAS also is far removed from the type of
case-by-case orders for physical interconnection between two carriers
that is the subject matter of the interconnection requirements of
section 201(a). We separately note that under section 251 ``the term
`interconnection' refers solely to the physical linking of two
networks, and not to the exchange of traffic between networks.''
190. Assuming, arguendo, that USTelecom were correct that the
Commission lacks authority to include internet traffic exchange within
the scope of BIAS, it goes on to claim that ``[i]n the absence of such
implicit authority,'' the Commission may only regulate internet traffic
exchange arrangements ``if the Commission classified such arrangements
as a telecommunications service,'' which it cannot do given that ``such
arrangements by definition involve information service providers on
both sides.'' Importantly, USTelecom conspicuously ignores the
statutory prescription of section 201(b) of the Act that all activities
performed ``in connection with'' a telecommunications service be just
and reasonable. For purposes of section 201(b), it does not matter
whether the practice, classification, or regulation itself involves a
separate telecommunications service if it is provided ``in connection''
with a telecommunications service. Accordingly, and as the USTA court
affirmed, we need not classify internet traffic exchange arrangements
as telecommunications services for the retail service that depends upon
such arrangements for its operation to be within the scope of our Title
II regulatory authority. We also disagree with USTelecom that all
internet traffic arrangements ``by definition involve information
service providers on both sides'' as that presumes that BIAS is an
information service, which as we conclude in the Order, it is not.
191. Lastly, we dispute USTelecom's characterization that the
inclusion of internet traffic exchange within the scope of BIAS is
flawed because we are compelling BIAS providers to offer internet
traffic exchange arrangements on a common carrier basis when they ``do
not satisfy the NARUC test for classifying a service as common carriage
rather than private carriage.'' In offering BIAS to its end-user
customers, a BIAS provider has voluntarily assumed an obligation to
arrange the transfer of that traffic on and off its network. BIAS
providers hold themselves out to carry the traffic desired by the BIAS
provider's end-user customers
[[Page 45446]]
regardless of source and regardless of whether an edge provider has a
specific arrangement with the BIAS provider. While broadband providers
may not need to enter into any specific agreement with any specific
traffic exchange partner, by choosing to offer BIAS, they have bound
themselves to enter into such agreements in general. In the absence of
such agreements, they would be unable to provide BIAS because users
would be unable to reach ``all or substantially all internet
endpoints.'' Thus, our treatment of internet traffic exchange is based
on the marketplace realities of how BIAS is offered today, not based on
any compulsion that BIAS providers enter any arrangements on a common
carriage basis. At the same time, nothing rules out those arrangements
being common carriage arrangements if, as a factual matter, that is, in
fact, how they are offered. Whether an offering is private or common
carriage does not depend upon what a provider may assert is the nature
of the offering, but rather on the factual particulars of how the
service is offered and to whom. Therefore, simply because a BIAS
provider's terms of service disclaims offering internet traffic
exchange on a common carrier basis does not make it so. Additionally,
as the Commission did in 2015, we apply a case-by-case approach to
exercising our section 201(b) authority over internet traffic exchange
underlying retail BIAS offerings, and we do not concede--and USTelecom
has not demonstrated--that such regulatory oversight will in practice
require BIAS providers to enter traffic exchange arrangements with edge
providers or intermediaries in a way that, per se, requires them to act
as common carriers.
4. Service Furnished to Edge Providers
192. We agree with ICG's contention that edge service--insofar as
the term ``edge service'' refers to ``the service that the Verizon
court identified as being furnished to the edge''--is not itself BIAS.
In its review of the 2010 Open Internet Order, the D.C. Circuit in
Verizon concluded that ``in addition to the retail service provided to
consumers, `broadband providers furnish a service to edge providers,'
'' and in the 2015 Open Internet Order, ``the Commission agree[d] that
a two-sided market exists and that the beneficiaries of the non-
consumer side either are or potentially could be all edge providers.''
The RIF Order reflected the same understanding of the marketplace.
Thus, we agree that any service BIAS providers provide to edge
providers is at least technically distinct from the ``retail'' and
``mass market'' service that we define BIAS to be. At the same time, we
reaffirm the understanding that ``the `service to edge providers' is
subsumed within the promise made to the retail customer of the BIAS
service.'' Whether the last-mile BIAS provider carries the traffic
directly from an edge provider's endpoint on the BIAS provider's own
network or from a data center or other interconnection point does not
change the fact that the BIAS provider is carrying that traffic, on
behalf of the edge provider, to the BIAS subscriber as part of the
subscriber's broadband internet access service. Just as BIAS can and
does include the exchange of internet traffic without requiring us to
classify the underlying service arrangements into which BIAS providers
enter to enable that exchange of traffic, so too can and does BIAS
include the transmission of edge provider traffic--as sought by BIAS
end users--without requiring us to classify the companion transmission
service provided to edge providers that was identified by the Verizon
court and accepted by subsequent Commission precedent. Specifically,
``the so-called `edge service' is secondary, and in support of, the
promise made to the end user'' to ``transport and deliver traffic to
and from all or substantially all internet endpoints,'' given that it
``necessarily includes the promise to transmit traffic to and from
those internet end points back to the user.''
193. We decline INCOMPAS's suggestion that we ``clearly state th[at
BIAS providers] serve their BIAS customers, [and] not edge providers,
in the provision of BIAS.'' As explained above, the Verizon court
identified this ``edge service'' as distinct from the retail service we
define as BIAS here, and the Commission ultimately endorsed the
understanding of it as a separate service in the 2015 Open Internet
Order and the RIF Order. Beyond claiming, without further explanation
or evidence, that BIAS providers do not serve edge providers, INCOMPAS
does not provide any justification for why we should change this
understanding of the marketplace. Even assuming arguendo that one
accepted INCOMPAS's assertion that while ``BIAS providers and edge
providers may share the BIAS customer--the end user who pays for the
BIAS-- . . . that does not make the edge provider a customer of the
BIAS provider,'' it would not persuade us to alter our understanding of
the marketplace. As the Verizon court observed, ``[i]t is true,
generally speaking, that the `customers' of broadband providers are end
users. But that hardly means that broadband providers could not also be
[a service provider] with respect to edge providers.'' INCOMPAS also
contends that ``edge service is not derivative of BIAS,'' but its
arguments in that regard fall short. Insofar as INCOMPAS argues that
the edge provider is not a customer of the BIAS provider, that disputes
an underlying premise--that there exists an edge service in the first
place--rather than explaining why such service, if it exists, should
not be understood as derivative of BIAS. And insofar as INCOMPAS argues
that the Commission ``should account for the fact that edge service may
be provided to some customers via connections that are not reliant on
BIAS,'' it misunderstands the nature of our finding. We do not conclude
that services provided by edge providers are inherently derivative of
BIAS or that they always are delivered via a BIAS connection. Rather,
the issue only arises in our analysis as it relates specifically to
traffic carried between edge providers and BIAS end users via a BIAS
connection. INCOMPAS's argument thus does not identify any flaw in our
conclusion as understood in the proper context. Nor does INCOMPAS
otherwise demonstrate how or why any of this impacts our classification
decision or decisions regarding open internet rules. Indeed, some of
INCOMPAS's concerns appear entirely misplaced. The Commission did ``not
reach the regulatory classification of the service that the Verizon
court identified as being furnished to the edge'' in the 2015 Open
Internet Order, nor do we do so here. Thus, INCOMPAS's concern about
the Verizon court's description of BIAS providers as edge providers'
``carriers'' is not implicated here.
5. Other Excluded Services
194. Consistent with the manner in which the Commission has
historically defined broadband internet access service, we exclude
premises operators and end users who provide access to their BIAS
connections but do not offer it on a mass-market, retail basis. Thus,
to the extent coffee shops, bookstores, airlines, private end-user
networks such as libraries and universities, and other businesses
acquire broadband internet access service from a BIAS provider to
enable patrons to access the internet from their respective
establishments, the provision of such service by the premise operator
would not itself be considered BIAS unless it were offered to patrons
as a retail mass-market service. Likewise, when a user employs, for
example, a wireless router or a Wi-Fi hotspot to create a personal Wi-
Fi network that is not intentionally offered
[[Page 45447]]
for the benefit of others, we find that he or she is not offering a
broadband internet access service under our definition, because the
user is not marketing and selling such service to residential
customers, small businesses, and other end-user customers. Our decision
to retain this approach received record support, and no opposition.
195. We also continue to view CDNs, virtual private network (VPN)
services, web hosting services, and data storage services as outside
the scope of broadband internet access service. In classifying BIAS as
a telecommunications service in the Order, we do not, and need not,
reach the question of whether and how these services are classified
under the Act. As evidenced in the record, these services are not
``mass market'' services and/or do not provide the capability to
transmit data to and receive data from all or substantially all
internet endpoints. Commenters are unified in supporting the continued
exclusion of such services from the definition of BIAS.
196. We decline at this time to make any further determinations
regarding whether other services fall within the scope of BIAS, given
the paucity of the record concerning such services. Regarding 5G IoT
services specifically, while Transatel acknowledges that any such
determination ``requires the assessment of individual 5G IoT services .
. . against the Commission[']s proposed definition of BIAS and mass
market,'' Transatel nevertheless urges us to ``exclud[e] all 5G IoT
services from the definition of BIAS and classify[ ] the[m] as either
non-BIAS data services or enterprise services on a use case by use case
basis.'' Transatel argues that doing so will ensure ``these valued
services will continue to be provided not only to end-users but also
enterprise customers without constraining innovation or investment.''
Although we anticipate that many 5G IoT services may qualify as non-
BIAS data services, enterprise services, or other edge services, we
decline to provide a blanket exclusion of these services. We first note
that Transatel does not provide any evidence to support its claim that
failing to provide this blanket exclusion would constrain innovation or
investment of 5G IoT services. Second, given the range of 5G IoT
services that Transatel itself identifies, we find that the public
interest would be best served by assessing these services on an
individualized basis as necessary.
197. We similarly also decline the suggestion of some commenters to
explicitly exclude all in-flight entertainment and connectivity (IFEC)
services from the scope of BIAS. The record suggests that not all IFEC
services are alike, with some airlines operating as BIAS providers
themselves, and other airlines, aircraft owners, or aircraft lessees
acquiring services from unaffiliated providers. Given this variety, a
general exclusion of IFEC services from the scope of BIAS may be
inappropriately broad. As discussed above, consistent with the 2015
Open Internet Order and the 2010 Open Internet Order, we continue to
exclude airlines from the scope of BIAS when they are functioning in
the role of premise operators. Additionally, by offering only vague
notions of ``promot[ing] investment,'' protecting ``flexibility,''
limiting the ``potential adverse consequences of regulatory
overreach,'' and avoiding amorphous concepts of ``harm,'' commenters
fail to convince us that a specific determination about IFEC service is
necessary. Gogo Business Aviation claims that considering IFEC services
within the scope of BIAS could somehow compromise aircraft safety
functions but fails to adequately explain why that would be the case or
why an aircraft's use of safety functionality would violate Commission
rules. Should evidence of specific harms arise which necessitates
additional regulatory clarity for IFEC service, we will analyze the
classification of such services on a case-by-case basis.
E. Mobile Broadband Internet Access Service Is Best Classified as a
Commercial Mobile Service
198. In addition to our decision to reinstate the classification of
BIAS as a telecommunications service, we adopt our proposal to
reinstate the classification of mobile BIAS as a commercial mobile
service. We further conclude that, even if mobile BIAS does not meet
the definition of ``commercial mobile service,'' it is the functional
equivalent of a commercial mobile service and, therefore, not a private
mobile service. As such, there is no obstacle to treating mobile BIAS
``as a common carrier . . . under [the Communications Act].''
199. Section 332(d)(1) of the Act defines ``commercial mobile
service'' as ``any mobile service . . . that is provided for profit and
makes interconnected service available (A) to the public or (B) to such
classes of eligible users as to be effectively available to a
substantial portion of the public, as specified by regulation by the
Commission.'' The commercial mobile service provisions of the Act are
implemented under Sec. 20.3 of the Commission's rules, which employs
the term ``commercial mobile service'' (CMRS). We find that mobile BIAS
meets the elements of this definition. Mobile BIAS is a ``mobile
service'' because subscribers access the service through their mobile
devices, and it is provided ``for profit'' because BIAS providers offer
it to subscribers with the intent of receiving compensation. The Second
CMRS Report and Order (59 FR 18493 (Apr. 19, 1994)) defined the
statutory phrase ``for profit'' to include: ``any mobile service that
is provided with the intent of receiving compensation or monetary
gain.'' Mobile BIAS is also widely available to the public, without
restriction on who may receive it. In the Second CMRS Report and Order,
the Commission determined that a service is available ``to the public''
if it is ``offered to the public without restriction in who may receive
it.'' We also find that mobile BIAS is an ``interconnected service.''
200. Definition of Public Switched Network. Under section 332(d)(2)
the term ``interconnected service'' means a ``service that is
interconnected with the public switched network (as such terms are
defined by regulation by the Commission).'' In the 2015 Open Internet
Order, the Commission reached the conclusion that mobile BIAS is an
interconnected service through the application of an updated definition
of ``public switched network'' that included networks that use public
IP addresses. In the RIF Order, the Commission reversed course,
reinstating the prior definition of ``public switched network'' and
concluding that mobile BIAS was not a commercial mobile service. The
Commission found the prior definition to be ``more consistent with the
ordinary meaning and commonly understood definition of the term and
with Commission precedent.''
201. In the 2023 Open Internet NPRM, we proposed reinstating the
definition of ``public switched network'' from the 2015 Open Internet
Order and indicated our belief that the Commission's decision in the
RIF Order failed ``to align with the technological reality and
widespread use of mobile BIAS.'' We indicated our view that the
proposed definition, which included IP addresses, ``embodies the
current technological landscape and the widespread use of mobile
broadband networks, and is therefore more consistent with the
Commission's recognition that the public switched network will grow and
change over time.'' We proposed that, based on this reinstated
definition, mobile BIAS would be an interconnected service and we
sought comment on our analysis and proposed approach.
[[Page 45448]]
202. Commenters express differing views of the Commission's
proposal. Professor Scott Jordan and New America's Open Technology
Institute express support for readopting the definition of the public
switched network from the 2015 Open Internet Order. New America's Open
Technology Institute notes that ``public switched network'' in section
332 ``is not limited to the legacy telephone network and should be
updated.'' In contrast, CTIA and Free State Foundation oppose
readopting the definition and instead express support for the reasoning
in the RIF Order, with CTIA arguing that ``public switched network''
``refers unambiguously to the telephone network.'' CTIA misstates the
legislative history here. The portion it cites is actually language
from a Conference Report explaining that the House bill, which was not
adopted, used the term ``public switched telephone network.'' That
report language was mistaken because the House bill (like the Senate
bill), as CTIA acknowledges, used the term ``public switched network''
(without ``telephone''). The Conference Report went on to explain that
the Senate amendment ``expressly recognizes the Commission's authority
to define the terms used in defining `commercial mobile service' '' and
that the Conference Report was adopting the Senate definitions with
minor changes. This is further evidence that the statutory language
means what it says, i.e., that the Commission has authority to define
these terms to reflect current technology and that it is not limited to
telephones. Wired Broadband et al. also oppose the proposed definition
and argue that evidence of the growth and widespread use of mobile
broadband services provides insufficient justification for readopting
the revised definition.
203. We adopt our proposal to reinstate the definition of ``public
switched network'' from the 2015 Open Internet Order, and we define it
to mean ``the network that includes any common carrier switched
network, whether by wire or radio, including local exchange carriers,
interexchange carriers, and mobile service providers, that use[s] the
North American Numbering Plan, or public IP addresses, in connection
with the provision of switched services.'' As the Commission determined
in the 2015 Open Internet Order, the definition we adopt recognizes
``that today's broadband internet access networks use their own unique
address identifier, IP addresses, to give users a universally
recognized format for sending and receiving messages across the country
and worldwide.'' CTIA and the Wired Broadband et al. highlight
technical distinctions between the telephone networks and IP-based
networks. CTIA, for example, states that ``[t]he telephone network uses
North American Numbering Plan numbers across a single network, while
the internet is a decentralized network of networks that relies on IP
addresses and uses a variety of protocols and architectures for
different purposes.'' These operational characteristics, however, do
not govern our determination of whether mobile BIAS should be
considered a commercial mobile service under the Commission's rules.
204. We find that the RIF Order's and opponents' assertions, that
the term ``public switched network'' may only be defined to mean the
traditional telephone network, fail to give sufficient weight to
Congress's express delegation of authority to the Commission to define
the term ``public switched network'' and to the Commission's own prior
recognition that the definition of ``public switched network'' should
evolve over time. Congress, in section 332(d)(2), defined the term
``interconnected service'' to mean a ``service that is interconnected
with the public switched network (as such terms are defined by
regulation by the Commission).'' The argument that the Commission may
not define ``public switched network'' to mean anything other than the
public switched telephone network runs counter to the statutory
language in section 332 because, if Congress had intended ``public
switched network'' to mean only the public switched telephone network,
it would have included the word ``telephone.'' Instead, Congress not
only used the broader term ``public switched network'' but also gave
the Commission express authority to define the term. Congress's
delegation of authority to the Commission would have been unnecessary
if Congress had intended the term to refer only to the public switched
telephone network based on a regulatory understanding asserted to exist
before 1993. Wired Broadband et al. suggest that Congress failed to use
the term ``public switched telephone network'' in the statute
``precisely because it was commonly understood that PSN and PSTN were
identical, the terms were used interchangeably.'' As a fundamental
matter, we disagree and find that this argument fails to give
sufficient weight to the text of the statute and to Congress's express
delegation of authority to the Commission to define the term ``public
switched network.'' But independently, even on its terms, their
argument fails. Under section 332(d)(1), CMRS must ``make[ ]
interconnected service available,'' and section 332(d)(2), in turn,
provides that ``interconnected service'' ``means service that is
interconnected with the public switched network.'' But even if ``public
switched network'' were understood as limited to the public switched
telephone network, we find that mobile BIAS is interconnected with the
public switched telephone network by virtue of VoIP applications.
205. Nothing in the text of the ``public switched network''
definition requires that the Commission's implementing definitional
regulations be limited to telephone service. Even at the time of the
enactment of section 332(d)(2), such terminology was understood as a
technological matter to be potentially more expansive than mere
telephone service. Exercising the Commission's authority to define
``public switched network'' by regulation to update the definition with
evolving technological and marketplace realities also better reflects
the broader statutory context. Section 1 of the Act explains that
Congress created the Commission ``to make available, so far as
possible, . . . a rapid, efficient, Nation-wide, and world-wide wire
and radio communication service with adequate facilities at reasonable
charges, for the purpose of the national defense, [and] for the purpose
of promoting safety of life and property through the use of wire and
radio communications.'' And section 706 of the 1996 Act directs the
Commission to ``encourage the deployment on a reasonable and timely
basis of advanced telecommunications capability to all Americans.''
Given the increasing importance of BIAS, these objectives can be
advanced more effectively if mobile BIAS is classified as a commercial
mobile service, strengthening our ability to adopt measures to promote
such infrastructure deployment through regulated access to pole
attachments and universal service support, the ability to deploy
infrastructure, and the Commission's enhanced ability to protect public
safety and national security through protections afforded by section
214. Although CMRS providers currently have forbearance from domestic
section 214 requirements, they remain subject to international section
214 requirements. And even as to domestic section 214 requirements, the
Commission could revisit forbearance from those requirements if
necessary to better enable the agency to address public safety and
national security
[[Page 45449]]
concerns. It also is clear from the legislative history that Congress
expected some services that were previously private land mobile
services to become common carrier services as a result of the enactment
of section 332. The D.C. Circuit affirmed this interpretation in the
USTA decision.
206. In exercising its authority and defining ``public switched
network'' in the Second CMRS Report and Order, the Commission
determined that the term ``should not be defined in a static way.'' The
Commission considered but rejected calls to define ``public switched
network'' as the public switched telephone network and found that a
broader definition was more consistent with the use of the term
``public switched network'' in section 332 rather ``than the more
technologically based term `public switched telephone network.' '' The
Commission recognized that the public switched network was
``continuously growing and changing because of new technology and
increasing demand.'' Consistent with these determinations, in the 2015
Open Internet Order, the Commission found that it was necessary to
update the definition of ``public switched network'' to reflect the
growth and changes to the network that occurred since the time the
Commission adopted its original definition.
207. In the Order, consistent with the Commission's original
determination that the definition of ``public switched network'' should
evolve over time, we update the definition to reflect significant
changes that have occurred in the technological landscape for mobile
services. Since the time the Commission defined ``public switched
network'' for purposes of section 332 in 1994, mobile broadband
technologies have developed and become ubiquitous. In 1994, the
Commission chose to define ``public switched network'' with reference
to telephone numbers ``because participation in the North American
Numbering Plan provides the participant with ubiquitous access to all
other participants in the Plan,'' concluding that ``this approach to
the public switched network is consistent with creating a system of
universal service where all people in the United States can use the
network to communicate with each other.'' This is the reality of the
internet, and IP addresses, today. Mobile broadband services are
available everywhere and millions of subscribers use them to
communicate. Evidence in the record shows, for example, that 85% of
Americans own smartphones. In 2022, 72.6% of adults lived in wireless-
only households with no landline. In addition, data show that Americans
are using their smartphones more than ever, with more than 73 trillion
megabytes of mobile data traffic exchanged in the United States in
2022, representing a 38% increase from the previous year. Continued
growth of mobile BIAS is expected, with one forecast predicting that
there will be 430 million 5G mobile subscriptions in North America by
2029. We find that it serves the public interest to adopt a definition
of ``public switched network'' that reflects today's technological
landscape for mobile communications technology and the widespread use
of mobile broadband services. We disagree with the RIF Order's finding
that the Commission's analysis from the 2015 Open Internet Order placed
undue emphasis on the wide availability of mobile BIAS in finding it to
be an interconnected service. We likewise disagree with comments
arguing that data showing the prevalence and use of mobile broadband
technologies are irrelevant to a determination about whether to adopt a
modernized definition of ``public switched network.'' We note that
while Wired Broadband et al. also argue that ``smartphone penetration
has barely changed (by less than 3% of the population) since 2018,''
they do not dispute the evolution in the growth and use of mobile
broadband services that has occurred since the time the Commission
adopted the 1994 definition of ``public switched network.'' That
evolution of mobile communications technology is the basis for the
action we take in the Order to adopt a modernized definition of the
term. To the contrary, we find that these data provide evidence of the
extent to which today's mobile broadband networks provide an essential
and universal means of communication among members of the public which
is essential to our determination that mobile BIAS is a commercial
rather than a private mobile service. Indeed, given the substantial
changes in technology and the telecommunications market since 1994, it
does not make sense to disregard mobile broadband networks in the
Commission's current definition of ``public switched network.'' This is
especially so because, in distinguishing between the ``commercial
mobile service'' and ``private mobile service'' definitions in the Act,
it is only logical to take into account the ubiquity of technology as
it stands today, and thereby interpret as commercial a service offered
to, and universally adopted by, the public.
208. We also disagree with the RIF Order and arguments in the
record that the definition we adopt is impermissible because it does
not refer to a ``single'' network. CTIA contends that there ``is no
single, overarching network that combines the telephone network and the
internet.'' This argument fails to recognize that the Commission's
definition of ``public switched network'' has always referred to a
composite of networks, covering ``any common carrier switched network,
whether by wire or radio, including local exchange carriers,
interexchange carriers, and mobile service providers.'' Our decision in
the Order to include networks that use public IP addresses as part of
the public switched network follows the same approach and treats mobile
voice and broadband networks as components of a single public switched
network. In their respective comments, Wired Broadband et al. and ICG
oppose defining ``public switched network'' to include networks that
use IP addresses, noting that the Commission lacks jurisdiction over
the internet. We clarify that the modernized definition of public
switched network we adopt in Sec. 20.3 of the Commission's rules in no
way asserts Commission jurisdiction over the internet at large or over
the assignment or management of IP addressing by the Internet Numbers
Registry System.
209. Mobile BIAS Is an Interconnected Service. We conclude that
mobile BIAS is an interconnected service because it is interconnected
with the ``public switched network,'' as we define it in the Order.
Mobile BIAS is also an interconnected service because it is a broadly
available mobile service that gives users the ability to send and
receive communications to and from all other users of the internet. We
find that the best reading of section 332 is reflected in the
Commission's determinations in the Second CMRS Report and Order that,
by using the phrase ``interconnected service,'' Congress intended that
mobile services should be classified as commercial services if they
make interconnected service broadly available through their use of the
``public switched network'' and that ``the purpose underlying the
congressional approach . . . is to ensure that a mobile service that
gives its customers the capability to communicate to or receive
communication from other users of the public switched network should be
treated as a common carriage offering.'' New America's Open Technology
Institute notes that Congress intended to differentiate between
services that were broadly available to the public and those that were
private special purpose services, such as taxi dispatch services.
[[Page 45450]]
CTIA argues that the statute does not limit private mobile services to
such types of services and that instead the only relevant question
under the statute in determining whether a service is a private mobile
service is whether or not the service is interconnected. Wired
Broadband et al. similarly argue that the statutory definition is the
only relevant consideration for determining what services are private
mobile services. Even though section 332(d)(3) does not limit private
mobile service to specific types of mobile services, it does provide
that private mobile services are those mobile services that are not
commercial mobile services or functionally equivalent. For the reasons
outlined above, we find that mobile BIAS is an interconnected
commercial mobile service and therefore by statute cannot be private
mobile service. Moreover, we find more persuasive the argument that
private mobile service is intended to refer to those services offered
only to a more limited group of users, such as taxi fleets. This
follows from both the ordinary meaning of the terms ``commercial'' and
``private'' and the state of the marketplace at the time of the 1996
Act. By contrast, mobile services classified as private are those
mobile services that do not make communications broadly available. The
Commission found in the 2015 Open Internet Order that ``mobile
broadband internet access service fits the [commercial mobile service]
classification as millions of subscribers use it to send and receive
communications on their mobile devices every day.'' Today, as the data
described above demonstrate, it is clear that this remains the case as
millions of Americans continue to communicate using mobile broadband
services.
210. We also find that mobile BIAS is an interconnected service for
the additional reason that it provides users with the capability to
communicate with other users of the internet and with people using
telephone numbers through VoIP applications. In the 2015 Open Internet
Order, the Commission found that ``users on mobile networks can
communicate with users on traditional copper based networks and IP
based networks, making more and more networks using different
technologies interconnected.'' The Commission further identified mobile
VoIP, as well as over-the-top mobile messaging, as ``among the
increasing number of ways in which users communicate indiscriminately
between [North American Numbering Plan (NANP)] and IP endpoints on the
public switched network.'' In the RIF Order, the Commission disagreed
and found that the ``definition of `interconnected service' focuses on
the characteristics of the offered mobile service itself.'' In the 2023
Open Internet NPRM, we sought comment on whether ``there have been any
material changes in technology, the marketplace, or other facts that
would warrant refinement or revision of the analysis regarding the
interconnected nature of mobile BIAS from the 2015 Open Internet
Order.''
211. We find that there is no evidence in the record showing
material changes in technology or the marketplace that would warrant a
revision to the Commission's 2015 analysis of the interconnected nature
of mobile BIAS. To the contrary, evidence shows that mobile BIAS users
continue to communicate using these tools and that today ``VoIP
applications are even more functionally integrated'' into mobile
broadband services than they were in 2015. Although some commenters
argue that it is the VoIP applications themselves, rather than mobile
BIAS, that should be viewed as providing interconnected service, we
find that such arguments fail to recognize the extent to which VoIP
applications have become ``functionally integrated'' into mobile
broadband services. CTIA also argues that, even with VoIP, mobile BIAS
should not be viewed as interconnected because IoT devices, such as
internet-connected lighting systems or internet-connected security
cameras, cannot make calls. We disagree and conclude that we may find
mobile BIAS to be an interconnected service even if there are some
other broadband services or devices that are not designed to provide
communications. Our findings in the Order apply in the context of BIAS,
and to the extent that other types of broadband services do not meet
the definition of BIAS, they are not within the scope of the Order.
Moreover, as the D.C. Circuit recognized in the USTA decision,
``[n]othing in the statute . . . compels the Commission to draw a
talismanic (and elusive) distinction between (i) mobile broadband alone
enabling a connection, and (ii) mobile broadband enabling a connection
through use of an adjunct application such as VoIP.'' In the Order, in
view of the evidence regarding the extent to which VoIP applications
continue to be integrated with mobile BIAS, we readopt the Commission's
analysis from the 2015 Open Internet Order and find that mobile BIAS
may be considered an interconnected service because it provides users
with the capability to communicate with other users of the internet and
with people using telephone numbers through VoIP applications. While
the D.C. Circuit in the Mozilla decision upheld the RIF Order's
findings regarding the distinction between mobile VoIP applications and
mobile BIAS itself, the Court nonetheless recognized that the
Commission has discretion to make such a determination.
212. In connection with this approach, in the 2023 Open Internet
NPRM we sought comment about whether we should also readopt the 2015
Open Internet Order's revised definition of ``interconnected service''
in Sec. 20.3 of the Commission's rules. We noted that, in the 2015
Open Internet Order, the Commission redefined ``interconnected
service'' to mean a service that gives subscribers the ability to
``communicate to or receive communications from other users of the
public switched network,'' removing the requirement that such service
provide the ability to communicate with all other users of the public
switched network. The RIF Order reverted to the prior definition,
concluding that ``the best reading of `interconnected service' is one
that enables communication between its users and all other users of the
public switched network.'' In the 2023 Open Internet NPRM, we sought
comment on whether it is necessary to return to the definition of
``interconnected service'' in the 2015 Open Internet Order to ensure
that all appropriate services are covered by the definition. Professor
Jordan expresses support for readopting the revised definition from the
2015 Open Internet Order and argues that the statute does not require
interconnected services to give subscribers the ability to communicate
to all other users of the public switched network and that such a
requirement is inconsistent with how mobile services actually operate.
213. We readopt the revised definition from the 2015 Open Internet
Order and define ``interconnected service'' to mean a service that
gives subscribers the ability to communicate to or receive
communications from other users of the public switched network. We
remove the requirement adopted by the Commission in the RIF Order that
such service provide the ability to communicate with all other users of
the public switched network. We conclude that mobile services that
provide the ability for users to communicate with others through the
public switched network should be considered ``interconnected'' even if
they are limited in certain ways and do not provide the ability to
communicate with all other users on the network. We find that revising
the definition in this way
[[Page 45451]]
will clarify the scope of services that may be viewed as interconnected
and is consistent with section 332's focus on differentiating between
mobile services that are available ``to the public'' or to ``a
substantial portion of the public'' and those that are not.
214. In addition, because we also have reclassified mobile BIAS as
a telecommunications service, we find that classifying it as a
commercial mobile service will avoid the inconsistency that would
result if the service were both a telecommunications service and a
private mobile service. The Commission explained this reasoning in the
2015 Open Internet Order, and we adopt our proposal from the 2023 Open
Internet NPRM to apply a consistent rationale here. Because we have
determined mobile BIAS to be a telecommunications service, we find that
designating it also as a commercial mobile service subject to Title II
is most consistent with Congressional intent to apply common carrier
treatment to telecommunications services. Consistent with the
Commission's analysis in 2015, we find that classifying mobile BIAS as
a commercial mobile service is necessary to avoid a statutory
contradiction that would result if the Commission were to conclude both
that mobile BIAS was a telecommunications service and also that it was
not a commercial mobile service. A statutory contradiction would result
from such a finding because, while the Act requires that providers of
telecommunications services be treated as common carriers, it prohibits
common carrier treatment of mobile services that do not either meet the
definition of commercial mobile service or serve as the functional
equivalent of commercial mobile service. We find that classifying
mobile BIAS as a commercial mobile service avoids this statutory
contradiction and is also most consistent with the Act's intent to
apply common carrier treatment to providers of telecommunications
services.
215. Functional Equivalence. In the alternative, even to the extent
that mobile BIAS were understood to fall outside the definition of
``commercial mobile service,'' we conclude that it is also the
functional equivalent of a commercial mobile service and, thus, not
private mobile service. In the 2015 Open Internet Order, the Commission
found that mobile BIAS was functionally equivalent to commercial mobile
service because, ``like commercial mobile service, it is a widely
available, for profit mobile service that offers mobile subscribers the
capability to send and receive communications on their mobile device to
and from the public.'' The RIF Order found that the 2015 Open Internet
Order's focus on the public's ``ubiquitous access'' to mobile BIAS
alone was ``insufficient'' to establish functional equivalency and that
the test established in the Second CMRS Report and Order provided a
more thorough consideration of factors of whether a service is closely
substitutable for a commercial mobile service.
216. In the 2023 Open Internet NPRM, we sought comment on both of
these analyses and on whether we should adopt ``any other or different
definition of `functional equivalent.' '' CTIA and Wired Broadband et
al. argue that the Commission cannot find that mobile BIAS is
functionally equivalent to commercial mobile service by assessing how
widely it is used but instead it must assess functional equivalence
based on the factors outlined in the Commission's rules, such as
whether the services are substitutable, whether a change in the price
of one service would prompt customers to change to the other, and
whether the service is advertised to the same targeted market. Under
these factors, they contend, mobile BIAS is not functionally equivalent
to commercial mobile service.
217. We disagree with these arguments and find that, to the extent
mobile BIAS falls outside the definition of commercial mobile service,
it is the functional equivalent of a commercial mobile service.
Consistent with our proposal in the 2023 Open Internet NPRM, and with
the analysis in the 2015 Open Internet Order, we find that mobile BIAS
is the functional equivalent of commercial mobile service because like
commercial mobile service, it is a widely available, for-profit mobile
service that offers mobile subscribers the capability to send and
receive communications on their mobile device to and from the public.
We disagree with CTIA's argument that this finding relies impermissibly
on an overly general description of mobile BIAS to show functional
equivalence. To the contrary, we find that the fact that mobile BIAS is
used to send and receive communications broadly among members of the
public is a critical factor in assessing its functional equivalence to
commercial mobile service. Although mobile BIAS uses IP addresses
rather than telephone numbers, consumers use both mobile voice service
and mobile BIAS to communicate with others on their mobile devices. The
fact that mobile BIAS may be used for some purposes that are different
than what mobile voice services are used for does not mean that the
services do not provide functional equivalence with respect to their
capability to send and receive communications.
218. As the RIF Order acknowledges, the Commission has express
delegated authority from Congress to make a policy determination on
whether a particular mobile service may be the functional equivalent of
a commercial mobile service. Specifically, section 332 of the Act
defines ``private mobile service'' as ``any mobile service . . . that
is not a commercial mobile service or the functional equivalent of a
commercial mobile service, as specified by regulation by the
Commission.'' While the factors outlined in Sec. 20.3 of the
Commission's rules may be used in making a determination about the
functional equivalence of a particular service, they do not prohibit
the Commission from designating a category of service to be the
functional equivalent of a commercial mobile service in a rulemaking
and they do not prevent us from considering other factors in making our
determination regarding the functional equivalence of mobile BIAS.
Paragraph (c) of the ``commercial mobile radio service'' definition
notes that ``[a] variety of factors may be evaluated'' to make a
determination regarding functional equivalence ``including'' the
enumerated factors. Based on this authority, the reasons outlined above
and in the 2015 Open Internet Order, and in light of the continued
widespread use and availability of mobile broadband services, we find
that mobile BIAS is the functional equivalent of commercial mobile
service, and is therefore not private mobile service.
219. Finally, in the 2023 Open Internet NPRM, we sought comment on
the potential impact of applying openness requirements to mobile
providers and on the ``policy consequences that commenters believe may
result from the proposed reclassification of mobile BIAS.'' Several
commenters stress the importance of applying the same open internet
rules to fixed and mobile BIAS. CTIA, Verizon, and AT&T, however,
oppose openness requirements for mobile providers contending that such
requirements are unnecessary and may discourage investment and
innovation in mobile broadband networks.
220. We find that returning mobile BIAS to its classification as a
commercial mobile service and reinstating openness requirements on
mobile BIAS providers will help protect mobile broadband consumers
while allowing mobile providers to continue to compete successfully and
develop
[[Page 45452]]
new products and services. We agree with commenters who note that
because consumers use both fixed and mobile BIAS regularly, it is
critical that we apply the same rules to both services. In addition, as
commenters point out, mobile broadband services are particularly
important to certain groups, such as low-income consumers, who may not
be able to afford to subscribe to both fixed and mobile broadband
service, and it is critical to ensure that these consumers are able to
benefit from a free and open internet. The Commission's previous
experience applying open access rules to upper 700 MHz C Block
licensees has shown that mobile operators subject to openness
requirements have continued to compete successfully in the marketplace,
and we expect mobile BIAS providers will continue to compete
successfully under the openness requirements we adopt in the Order.
ADTRAN contends that the C Block openness requirements drove down the
price of C Block spectrum at auction. ADTRAN Comments at 32. While any
number of factors may affect the price of any spectrum at auction, it
is clear that Upper 700 MHz C Block licensees, including Verizon,
invested heavily in deploying mobile broadband service over their C
Block spectrum.
F. Restoring the Telecommunications Service Classification of Broadband
Internet Access Service Is Lawful
221. Our classification of BIAS as a telecommunications service is
fully and sufficiently justified under the Commission's longstanding
authority and responsibility, provided by Congress, to classify
services subject to our jurisdiction, as necessary. This authority and
responsibility is not supplanted by the major-questions doctrine.
1. The Commission Has the Authority and Responsibility To Classify BIAS
222. The Commission's authority and responsibility to classify
services subject to our jurisdiction, as necessary, is borne out of
Congress's well-established and longstanding reliance on the Commission
to exercise this authority. Our decision to revisit the classification
of BIAS derives from ordinary administrative law principles and the
factual circumstances surrounding the RIF Order. And the classification
decision we reach is consistent with the broader context of the Act.
223. Congress Authorized and Expected the Commission to Classify
BIAS. No one disputes that internet access services are within the
Commission's subject-matter jurisdiction and historically have been
supervised by the Commission. Congress created the Commission ``[f]or
the purpose of regulating interstate and foreign commerce in
communication by wire and radio so as to make available, so far as
possible, to all people of the United States . . . a rapid, efficient,
Nation-wide, and world-wide wire and radio communication service with
adequate facilities at reasonable charges, for the purpose of the
national defense, [and] for the purpose of promoting safety of life and
property through the use of wire and radio communication.'' Section 2
of the Act grants the Commission jurisdiction over ``all interstate and
foreign communication by wire or radio.''
224. Since the original enactment of the Communications Act in
1934, Congress routinely has specified regulatory regimes that apply to
particular communications services or service providers that meet
statutorily defined categories, and Congress has relied on the
Commission to determine whether a particular service or provider falls
within the statutory definitions that trigger those regulatory
frameworks. For example, when the Act originally was enacted in 1934,
Congress adopted the statutory category of ``common carrier,'' and
specified the associated regulatory framework under Title II for such
providers, leaving it to the Commission to determine which specific
entities were common carriers based on the statutory criteria, drawing
on the historical backdrop of common carriage. For example, common
carriers are, among other things, subject by default to various rate
regulation, accounting, tariffing, market entry, and service
discontinuance requirements, implemented by the Commission. Likewise,
in 1934 Congress defined ``radio station[s]'' and ``broadcasting'' in
the Act, and specified the regulatory regimes that the Commission was
to apply when those definitions were met. For example, radio stations
and broadcasters are, among other things, subject by default to various
licensing and authorization requirements to ensure their operation
consistent with the public interest, implemented by the Commission.
Congress did so again, for instance, in the 1984 Cable Act for ``cable
operator[s]'' and ``cable service.'' For example, cable operators are,
among other things, subject by default to channel carriage requirements
and ownership restrictions implemented by the Commission. In 1993,
Congress did the same with respect to ``commercial mobile service'' and
``private mobile service.'' For example, commercial mobile service
providers are, among other things, subject by default to the
requirements governing common carriers under Title II of the
Communications Act, while private mobile service providers are not. It
did so again in 1994 in the Communications Assistance for Law
Enforcement Act (CALEA), for ``telecommunications carriers'' as defined
there. For example, entities that qualify as telecommunications
carriers for purposes of CALEA are, among other things, subject by
default to the requirement to file with the Commission and maintain up-
to-date System Security and Integrity plans designed to help preserve
the ability of law enforcement agencies to conduct electronic
surveillance while protecting the privacy of information outside the
scope of the investigation. When Congress enacted the definitional
frameworks and associated regulatory regimes to be applied by the
Commission in the 1996 Act, it continued its well-established,
longstanding approach reflected in those historical examples--an
approach that Congress has since continued to follow. Classification
decisions under each of those frameworks are consequential in their own
way, yet it is well established that Congress relies on the Commission
to make just such determinations.
225. Provisions enacted as part of the 1996 Act amply detail
Congress' expectation that the Commission would classify services and
providers under the ``telecommunications service'' and ``information
service'' statutory definitions. The Act is replete with examples of
provisions expressly to be implemented by the Commission that turn on
the Commission's interpretation and application of those statutory
definitions to classify particular services and service providers. As
relevant here, for example:
Section 10 of the Act directs the Commission to forbear
from applying provisions of the Act or Commission rules to
telecommunications carriers or telecommunications services if certain
statutory criteria are met.
Section 11 of the Act requires the Commission to
biennially review its rules ``that apply to the operations or
activities of any provider of telecommunications service'' and
determine if any such rules are no longer necessary in the public
interest based on certain marketplace developments.
Section 224 of the Act requires the Commission to ensure
just and reasonable rates, terms, and conditions for pole attachments,
among other
[[Page 45453]]
circumstances, when provided by a telecommunications carrier to a
provider of telecommunications service.
Sections 251 and 252 of the Act direct the Commission to
effectuate certain market-opening requirements for telecommunications
carriers, including setting rules to be applied by State commissions
when arbitrating interconnection agreements among carriers to implement
those statutory requirements.
Section 253 directs the Commission to preempt certain
State or local requirements that actually or effectively prohibit the
ability of any entity to provide any telecommunications service.
Section 254 of the Act requires the Commission to adopt
rules to preserve and advance universal service, defined principally in
terms of ``an evolving level of telecommunications services''
established by the Commission, and to fund universal service support by
contributions from ``[e]very telecommunications carrier that provides
interstate telecommunications services'' along with certain other
``provider[s] of interstate telecommunications,'' and to rely on
certain principles to inform its universal service rules, including
providing access to telecommunications and information services.
Section 272 of the Act gives the Commission the
responsibility to implement certain separate affiliate safeguards for
the former BOCs in connection with, among other things, the provision
of certain information services.
These illustrative examples, all enacted as part of the 1996 Act,
amply demonstrate the Commission's authority--and responsibility, as
necessary--to classify services under the definitional criteria
established by the 1996 Act.
226. Congress reaffirmed that it had granted the Commission this
authority when, less than two years after the 1996 Act's passage, it
directed the Commission to explain, in what came to be known as the
Stevens Report, how the new statutory terms apply ``with respect to
internet access'' for the purposes of universal service administration
and support. As Public Knowledge notes, ``[t]he Stevens Report
represents . . . a clear demonstration that Congress had committed the
question of classification of services to the FCC,'' and ``it is
undeniable that the Stevens Report reflects the FCC's interpretation--
supported by the initial report requirement from Congress--that
Congress assigned it the authority to classify services as either
information services or telecommunications services.'' Given the
Commission's longstanding, well-established authority and
responsibility to classify services, we disagree with commenters who
contend that the Commission does not have such authority or should
defer to Congress to determine the classification of BIAS.
227. Revisiting the Classification of BIAS Is Not Inherently
Suspect. We conclude that our decision to revisit the classification of
BIAS does not somehow render it inherently suspect. As a threshold
matter, it derives from ordinary administrative-law principles. The
U.S. Supreme Court has observed that there is ``no basis in the
Administrative Procedure Act [(APA)] or in our opinions for a
requirement that all agency change be subjected to more searching
review. . . . [I]t suffices that the new policy is permissible under
the statute, that there are good reasons for it, and that the agency
believes it to be better, which the conscious change of course
adequately indicates.'' Relevant precedent holds that we need only
``examine the relevant data and articulate a satisfactory explanation
for [our] action,'' a duty we fully satisfy here. The ``possibility of
drawing two inconsistent conclusions from the evidence does not prevent
an administrative agency's finding from being supported by substantial
evidence.'' Consistent with these principles, the Commission's reasoned
determination in the Order that classifying BIAS as a
telecommunications service is superior first and foremost as a matter
of textual interpretation--while also recognizing that public policy
supports the change in direction--is sufficient to justify our action
under ordinary administrative-law principles, even absent any new facts
or changes in circumstances.
228. But even assuming, arguendo, that an agency must go beyond
ordinary administrative-law principles and show new facts to justify
its action, our decision to revisit the classification of BIAS is
particularly warranted under the factual circumstances here. Our
classification of BIAS flows in significant part from concerns with the
RIF Order highlighted in Mozilla--to ``bring the law into harmony with
the realities of the modern broadband marketplace''--which is itself a
sufficient justification for our classification here. The U.S. Supreme
Court observed in Brand X that ``the agency . . . must consider varying
interpretations and the wisdom of its policy on a continuing basis.''
Separately and secondarily, our classification decision accounts for
certain statutory responsibilities and policy concerns--especially
safeguarding public safety and providing a uniform regulatory framework
for BIAS--where the RIF Order's approach was called into doubt by
Mozilla. The Commission's attempt to respond to the Mozilla remand has
remained subject to the petitions for reconsideration, which we resolve
in the Order, and a petition for judicial review held in abeyance
pending further Commission action. Given the Mozilla court's palpable
criticism of the RIF Order's regulatory approach to BIAS, and that the
merits of this approach were never brought to a final resolution, we
find it especially appropriate for the Commission to resolve these
lingering disputes now.
229. Reclassification Is Consistent with the Broader Context of the
Act. We also find that our classification of BIAS as a
telecommunications service accords with the goals and directives found
in the 1996 Act. To begin with, section 706, which while worded in
terms of encouraging the deployment of ``advanced telecommunications
capability,'' has long been understood to encompass the goal of
encouraging broadband internet access. That ``advanced
telecommunications capability'' is not identical to BIAS as defined for
purposes of the Order does not diminish the substantial extent to which
section 706 has been--and is--understood as encouraging BIAS
deployment. Congress specifically directed the Commission to encourage
the deployment of advanced telecommunications capability ``by
utilizing, in a manner consistent with the public interest,
convenience, and necessity, price cap regulation, regulatory
forbearance, measures that promote competition in the local
telecommunications market, or other regulating methods that remove
barriers to infrastructure investment.'' The list of specific
regulating methods--price cap regulation, regulatory forbearance,
measures that promote competition in the local telecommunications
market--all are authorities the Commission has long had, or that were
granted by the 1996 Act, with respect to telecommunications services.
230. The Mozilla court's critiques of the RIF Order highlight
specific areas where the objectives of section 706 of the 1996 Act--and
the operative provisions of the Communications Act itself--would be
more effectively carried out if BIAS is classified as a
telecommunications service. As we discuss above, reclassification will
further enable the Commission to promote broadband access by granting
[[Page 45454]]
to BIAS-only providers just and reasonable access and rates for pole
attachments under section 224, a key pro-competitive provision of the
Act that the Mozilla court chastised the RIF Order for failing to
properly grapple with when taking such rights from BIAS-only providers.
The D.C. Circuit in Mozilla also was concerned about the effect of the
RIF Order on the continued availability of funding for BIAS through
universal service support--a tool Congress provided in section 254 of
the 1996 Act to address barriers to infrastructure investment.
Expressing particular concern with respect to Lifeline support in light
of the arguments raised on review, the court highlighted that section
254(c)(1) ``declared that `[u]niversal service is an evolving level of
telecommunications services''' and sections 254(e) and 214(e)
``tethered Lifeline eligibility to common-carrier status.'' Our
classification recognizes that BIAS itself meets the criteria for
inclusion in ``universal service'' under section 254(c)(1) and
therefore provides a direct basis for support that is not contingent on
BIAS's relationship to the network facilities used to offer voice
service. Furthermore, reclassification would enable the Commission to
provide universal service support to BIAS providers that solely supply
BIAS.
231. By reclassifying BIAS as a telecommunications service, we also
help to effectuate the intent of section 706 of the 1996 Act by
empowering the Commission to focus section 253 on actions relating to
BIAS, an advanced telecommunications capability. In addition to the
market-opening amendments to pole access under section 224 of the Act,
the 1996 Act also sought to open markets to competition by granting
authority to the Commission in section 253 to preempt ``State or local
legal requirement[s that] may prohibit or have the effect of
prohibiting the ability of any entity to provide any interstate or
intrastate telecommunications service.'' If the Commission is to truly
realize section 706's command to encourage the deployment of advanced
telecommunications capability through ``measures that promote
competition in the local telecommunications market,'' it should not
have to resort to applying section 253 to a co-mingled
telecommunications service that may not even constitute ``advanced
telecommunications capability.''
232. Contrary to the RIF Order's suggestion, our classification of
BIAS as a telecommunications service is not undercut by section 230 of
the Act, which was enacted as part of the 1996 Act. Section 230(b)(2)
adopts the policy of ``preserv[ing] the vibrant and competitive free
market that presently exists for the internet and other interactive
computer services, unfettered by Federal or State regulation.'' Section
230 also finds that ``[t]he internet and other interactive computer
services have flourished, to the benefit of all Americans, with a
minimum of government regulation.'' As we discuss above, at the time
the 1996 Act was enacted, the transmission component of enhanced
services--namely, internet access--was subject to regulation under
Title II of the Act. Thus, the regulatory status quo that ``presently
exist[ed]'' and under which the internet and other interactive computer
services ``ha[d]'' flourished at the time of section 230's enactment as
part of the 1996 Act included Title II regulation of the transmission
services used to access the internet. We are not persuaded by
Commissioner Carr's suggestion that our rules are incompatible with
section 230(c)(2), which is entitled ``Civil Liability'' and provides
in relevant part that ``No provider or user of an interactive computer
service shall be held liable on account of any action voluntarily taken
in good faith to restrict access to or availability of material that
the provider or user considers to be obscene, lewd, lascivious, filthy,
excessively violent, harassing, or otherwise objectionable . . . .'' We
take no position here on when, if ever, a BIAS provider's actions to
discriminate against certain internet content, application, or services
could be characterized as good-faith action to address
``objectionable'' content within the meaning of section 230(c)(2).
Moreover, section 230(c)(2)'s title and text indicate, that provision
merely immunizes providers against civil liability, such as damages,
for their content-moderation decisions. It does not purport to
otherwise immunize BIAS providers from any regulatory obligations, and
if a BIAS provider violates our rules, the rules may be validly
enforced through other means--such as a writ of injunction under
section 401(b), or potentially criminal sanctions under section 501. In
addition, the Commission could issue a declaratory ruling identifying a
violation of the conduct rules by a given provider, 47 CFR 1.2, with
the potential to consider that determination in subsequent
adjudications not involving civil liability--such as evaluating the
public interest when granting or denying licenses or authorizations, or
crafting policies governing eligibility for universal service funding.
233. We also reject the contention of the RIF Order and certain
commenters that narrow-purpose statutory provisions like sections
230(f)(2) and 231 of the Act either settled the classification of BIAS
or are even relevant to our telecommunications service classification.
Section 230(f)(2) defines ``for purposes of this section'' an
``interactive computer service'' to ``mean[ ] any information service,
system, or access software provider that provides or enables computer
access by multiple users to a computer server, including specifically a
service or system that provides access to the internet.'' Likewise,
section 231(e)(4) provides that ``for purposes of'' section 231--which
was added a year after the enactment of the 1996 Act--`` `internet
access service' means a service that enables users to access content,
information, electronic mail, or other services offered over the
internet, . . . [and] does not include telecommunications services.''
In a similar vein, NCTA seeks to invoke language in section 231 of the
Act, stating that ``[n]othing in this section shall be construed to
treat interactive computer services as common carriers or
telecommunications carriers.'' But had Congress wanted those provisions
to settle the classification of internet access service, it easily
could have added those definitions--or others--to the definitions in
section 3 of the Communications Act, and thereby made them generally
applicable (as the 1996 Act did with respect to many other
definitions). Thus, we agree with the D.C. Circuit in USTA that it is
``unlikely that Congress would attempt to settle the regulatory status
of BIAS in such an oblique and indirect manner, especially given the
opportunity to do so when it adopted'' the 1996 Act. And as we discuss
above, that the internet access service prevalent at the time those
provisions were enacted bears so little resemblance to the BIAS we
classify in the Order reinforces our decision not to pull those
definitions out of their statutory context and apply them to a
fundamentally dissimilar service.
234. We also reject arguments that the IIJA counsels against
reclassification. USTelecom points out that through the IIJA ``Congress
established numerous programs to promote digital equity'' including
actions to foster ``deployment to unserved and underserved areas,'' to
``provide[ ] a discount for broadband service to eligible households,''
``to establish three grants with the goal of ensuring that all people
have the skills, technology, and capacity needed to participate in the
digital economy,'' and
[[Page 45455]]
to ``facilitat[e] equal access to broadband, including by preventing
and eliminating digital discrimination.'' USTelecom then asserts that
``Congress's decision to address equal access directly--in the way that
it chose--demonstrates that it did not intend for the Commission to
attempt to address the issue through Title II reclassification of
broadband.'' But such an argument proceeds from a mistaken assumption.
First and foremost, as discussed above, the Act clearly grants the
Commission authority and responsibility to classify services such as
BIAS--the status of which remained unsettled by the unresolved
challenges to the RIF Remand Order--where necessary to fulfill its
statutory duties. And we classify BIAS as a telecommunications service
because we conclude that represents the best reading of the Act.
Second, even to the extent that we evaluate policy considerations as
independently reinforcing our classification decision, we find
USTelecom's argument unpersuasive. We see nothing in the text of the
IIJA to indicate that the targeted efforts to address BIAS-related
policy concerns taken up in the IIJA were intended to comprehensively
address BIAS policy in any or all of the targeted policy areas to the
exclusion of other existing statutory authorities. Indeed, at the time
the IIJA was enacted in 2021, there were pending petitions for
reconsideration and a pending petition for judicial review of the RIF
Remand Order, and thus we cannot assume Congress would have reached a
conclusion about what the ultimate classification of BIAS would be at
the time of the IIJA's enactment.
235. We conclude that a finding of market power is not a
prerequisite to classifying a service as a telecommunications--and thus
common carrier--service and are unpersuaded by arguments to the
contrary. The Act is abundantly clear that common carrier regulation
applies--at least absent forbearance--even in the case of services
subject to competition. The 1996 Act is replete with examples of
provisions making clear that Congress desired telecommunications
carriers--which are treated as common carriers in their provision of
telecommunications services--to be subject to competition. Indeed, one
of the main goals of the 1996 Act was to foster competition amongst
common carriers. For example, among other things:
Section 10 of the Act directs the Commission to forbear
from applying provisions of the Act or Commission rules to
telecommunications carriers or telecommunications services if certain
statutory criteria are met and provides that the public interest
evaluations in section 10(a)(3) will be met if forbearance ``will
promote competitive market conditions, including . . . competition
among providers of telecommunications services.''
Section 11 of the Act requires the Commission to
biennially review its rules ``that apply to the operations or
activities of any provider of telecommunications service'' and
determine if any such rules are no longer necessary ``as the result of
meaningful economic competition between providers of such service.''
Section 251 of the Act provides for an array of
requirements specifically designed to facilitate local competition for
telecommunications services.
Section 254(k) of the Act prohibits telecommunications
carriers from ``us[ing] services that are not competitive to subsidize
services that are subject to competition.''
Section 271 of the Act predicated the BOCs' provision of
long distance services on anticipated competition in local markets for
telecommunications services, including through requirements designed to
foster that competition.
Even prior to the 1996 Act, it was apparent that common carrier
regulation under the Communications Act was not tied to market power or
similar considerations. For example, section 332(c)(1) provided that
commercial mobile service providers ``shall, insofar as such person is
so engaged, be treated as a common carrier,'' but authorized the
Commission to designate certain Title II provisions as inapplicable if
certain statutory criteria are met, including an analysis of whether
such relief ``will enhance competition among providers of commercial
mobile services.'' Likewise, the Supreme Court, in MCI, evaluated the
Commission's pre-1996 Act efforts to grant relief from Title II
requirements for common carriers that lacked market power, and
ultimately rejected such efforts as beyond the Commission's authority
under the Communications Act.
2. The Major-Questions Doctrine Poses No Obstacle to Recognizing BIAS
as a Telecommunications Service
236. We conclude that the major-questions doctrine--the notion that
in certain extraordinary cases, a court will not lightly find that
Congress has delegated authority to an agency--is no obstacle to our
classification of BIAS as a telecommunications service. We also reject
TechFreedom's assertion that our actions violate the non-delegation
doctrine. The Supreme Court has repeatedly held that ``a statutory
delegation is constitutional as long as Congress `lay[s] down by
legislative act an intelligible principle to which the person or body
authorized to [exercise the delegated authority] is directed to
conform.' '' In other words, a statutory delegation is constitutional
if Congress provides ``standards `sufficiently definite and precise to
enable Congress, the courts, and the public to ascertain' whether
Congress's guidance has been followed.'' The test is plainly satisfied
here. The Act contains specific definitions of ``information service''
and ``telecommunications service,'' which enable courts to assess
whether the Commission has properly classified BIAS under the Act.
Similarly, the statute provides that the Commission may engage in
regulatory forbearance only if it makes certain statutorily specified
determinations. Thus, consistent with the Constitution, the Act sets
forth intelligible principles to guide the Commission in exercising its
delegated authority.
237. To begin with, for several reasons, we do not think the major-
questions doctrine properly comes into play in this context at all. For
one, we are simply following the best reading of the Communications
Act, as demonstrated by the statute's plain text, structure, and
historical context; there is no call for deference to an interpretation
that is not the statute's most natural reading.
238. Moreover, as the D.C. Circuit has recognized, the Supreme
Court's Brand X decision establishes that the major-questions doctrine
does not restrict our authority to determine the proper classification
of BIAS. Brand X held that the Commission has the authority to
determine the proper statutory classification of BIAS. If the major-
questions doctrine were an obstacle to reclassification here, then it
also should have applied to the earlier reclassification in that case
from Title II to Title I. After all, a decision to adopt a Title I
classification would simply be the obverse of a decision to adopt a
Title II classification, with the same economic and political stakes
(but in the opposite direction). But, in reviewing the Cable Modem
Declaratory Ruling in Brand X, the Supreme Court recognized and upheld
the Commission's authority to determine the proper classification of
BIAS without identifying any concern over whether that classification
presents a major question. Indeed, the Court identified no major-
questions problem even though several parties expressly raised the
issue. We are unpersuaded by suggestions that a deregulatory Title I
classification would not be a major
[[Page 45456]]
question, yet a Title II classification would be. The Supreme Court has
construed its earlier decision in MCI as a ``major questions'' case.
And in MCI, the Court overturned a Commission order adopting a
deregulatory interpretation of the Act, holding that the Commission's
authority to ``modify'' certain tariff-filing requirements did not
permit elimination of the tariff-filing requirement for nondominant
carriers altogether. It is therefore apparent that the major-questions
doctrine applies equally to agency actions that are regulatory or
deregulatory. Thus, if the major-questions doctrine applies to an
interpretation that BIAS is a Title II telecommunications service, then
the doctrine equally would apply to an interpretation that BIAS is a
Title I information service. We therefore find that the major-questions
doctrine does not resolve this issue or place a thumb on the scale in
favor of one interpretation over the other.
239. We also do not think any inference can be drawn from
Congress's failure to clarify the regulatory status of BIAS one way or
the other. Commenters point out that several bills were introduced in
Congress to specify that broadband should be regulated under Title II,
but were not enacted. But other bills were introduced in Congress to
specify that broadband must be regulated under Title I, and those bills
also failed to pass. Numerous failed bills would have required that
broadband ``shall be considered to be an information service.'' Another
failed bill would have required that ``[t]he Commission may not impose
regulations on broadband internet access service or any component
thereof under title II.'' Three other failed bills proposed to overturn
and preclude reenactment of the 2015 Open Internet Order's Title II
classification and rules. And yet another bill proposed to classify
broadband under a new Title VIII. This record of unenacted legislation
on both sides reflects only indecision and inaction from Congress, not
that Congress discernibly refused or rejected any particular approach.
Failed legislation on both sides of this issue ``tell[s] us little if
anything about'' Congress's views on the proper classification of
broadband. The record of indecision and inaction from Congress on the
classification of broadband, against the backdrop of the Commission's
prior actions, readily distinguishes the situation here from that in
FDA v. Brown & Williamson Tobacco Corp. There, the Food and Drug
Administration (FDA) asserted jurisdiction to regulate tobacco products
after having ``disclaimed the authority to [do so] . . . for more than
eighty years,'' and ``Congress had repeatedly legislated against this
background.'' By contrast, in the period since Congress enacted the
1996 Act, the Commission's treatment of broadband service has wavered
between Title II and Title I and remained unsettled. In the years soon
after passage of the 1996 Act, the Commission classified DSL as
including an offer of telecommunications service subject to Title II.
In 2002, the Commission reversed course and classified cable broadband
as a single integrated offering of information service subject only to
Title I (although its legal status remained uncertain, with the Ninth
Circuit initially overturning that classification, until the Supreme
Court upheld it in 2005). From 2015 to 2018, the Commission regulated
broadband as a Title II telecommunications service. And then in 2018,
the Commission reverted to classifying broadband as a Title I
information service. And even during much of the Title I era, the
Commission repeatedly sought to enforce policies that closely resemble
the open internet rules we adopt in the Order. The Commission ``never
disclaimed any authority to regulate the internet or internet providers
altogether, nor is there any similar history of congressional reliance
on such a disclaimer.''
240. Even if the major-questions doctrine were to come into play,
we do not think it would ultimately apply to the actions we take here.
To determine whether the major-questions doctrine applies, courts weigh
several factors, including (1) ``the economic and political
significance'' of the agency action, (2) whether the agency is
``claim[ing] to discover in a long-extent statute an unheralded
power,'' (3) whether the action falls within the agency's ``comparative
expertise,'' and (4) whether Congress ``has consistently rejected''
similar efforts.
241. We do not think the rules we adopt in the Order have the
extraordinary economic and political effect required to implicate the
major-questions doctrine. To be sure, we believe the rules we adopt in
the Order will have substantial benefits for the American public. But
not every regulatory action that has substantial effects is so
momentous as to trigger the major-questions doctrine. BIAS providers
have previously been regulated under Title II--including several years
under the 2015 rules that were materially identical to those we adopt
in the Order--yet the record does not show that our past Title II rules
had any extraordinary negative impact on BIAS providers or the internet
economy, which continued to flourish while those rules were in effect.
Instead, commenters arguing that our actions in the Order cross the
major-questions threshold appear to exaggerate the potential effect of
the Order by focusing on the economic value of the internet economy as
a whole or the total amount of capital that has been spent to construct
the internet, rather than the effect of the specific actions we take
here, or by relying on provisions that we have forborne from applying,
or bare platitudes and ipse dixit. When considering economic effects,
the Supreme Court has focused on the actual magnitude of a challenged
action's effect on an industry, rather than just the size of the
underlying industry. To the extent parties have pointed to attempts to
isolate the effects of Title II or the 2015 rules, we agree with the
Mozilla court that ``the Title II Order's effect on investment [is]
subject to honest dispute'' and that the available studies are of only
``quite modest probative value'' and ``could only be reliably adduced
as evidence of the directionality of broadband investment, not `the
absolute size of the change' attributable to the Title II Order,'' for
the reasons we discuss below. The internet will continue to sustain its
enormous economic and social value under our actions in the Order, just
as it did under the 2015 Open Internet Order. And as with that Order,
our broad forbearance from any particularly onerous requirements under
Title II will significantly mitigate any economic impact on BIAS
providers. As Justice Scalia observed in his dissent in Brand X, ``the
Commission's statutory authority to forbear from imposing most Title II
regulations'' ensures that the economic effect of a Title II
classification is ``not a worry.''
242. But even if the economic and political significance of our
order met the first prong of the major-questions doctrine, the other
factors militate against applying it here. In every other respect, the
situation here is the antithesis of the Supreme Court's major-questions
cases.
243. To start, we are not ``claim[ing] to discover in a long-extant
statute an unheralded power.'' There is nothing novel about the
Commission's exercise of its classification power here. On the
contrary, the Commission regularly classified services under the basic-
enhanced Computer II framework even before Congress adopted the 1996
Act; Congress effectively codified that regulatory regime into the 1996
Act under the telecommunications service
[[Page 45457]]
and information service definitions; the Commission has continued to
regularly exercise that authority under the 1996 Act, including by
classifying DSL service as including a Title II telecommunications
service in 1998 and classifying all BIAS as a Title II
telecommunications service in 2015; and the Supreme Court expressly
upheld the Commission's authority to classify broadband service in
Brand X. That is not some ``newfound power,'' but instead a power that
the Commission has possessed and asserted all along. We also reject
claims that our order would ``effect[ ] a `fundamental revision of the
statute, changing it from [one sort of] scheme of . . . regulation'
into an entirely different kind.'' That may have been true in MCI,
which concerned a change from ``from a scheme of rate regulation in
long-distance common-carrier communications to a scheme of rate
regulation only where effective competition does not exist.'' But under
the forbearance authority that Congress added to the Communications Act
in response to that case, the Order specifically forbears from any
tariff-filing requirements or rate regulation, ensuring that our
classification decision will not alter those fundamental aspects of the
regulatory scheme. Our exercise of that authority in the Order thus
comes as no surprise. And given the important role that a service's
classification plays under numerous provisions of the Act, as well as
the persistent focus on that issue in numerous classification decisions
over the years, the classification power cannot be dismissed as some
mere `` `ancillary provision[ ]' of the Act . . . that was designed to
function as a gap filler and had rarely been used in the preceding
decades.''
244. On top of that, regulating communications services and
determining the proper regulatory classification of broadband falls
squarely within the Commission's wheelhouse. Regulating communications
networks ``is what [the Commission] does,'' consistent with our
statutory mandate to ``regulat[e] interstate and foreign commerce in
communications by wire and radio so as to make available . . . a rapid,
efficient, Nation-wide and world-wide wire and radio communication
service with adequate facilities at reasonable charges.'' No one should
be surprised to see the Commission classifying and regulating
communications services. Our action in the Order is thus nothing like
the Centers for Disease Control and Prevention seeking to regulate
evictions, the Occupational Safety and Health Administration seeking to
regulate non-occupational public health hazards, the Internal Revenue
Service addressing healthcare policy, or the Attorney General making
medical judgments. In contrast to those cases, the Order falls directly
within the agency's core statutory responsibility.
245. The regulatory issues we address in the Order also fall
squarely within the Commission's technical and policy expertise. The
issues here ``turn[ ] . . . on the factual particulars of how internet
technology works and how it is provided,'' and they ``involve a
`subject matter [that] is technical, complex, and dynamic,' '' which
the agency is well positioned ``to address'' through ``its expert
policy judgment.'' In light of that relevant expertise, it is entirely
appropriate and unsurprising that Congress would ``leave[ ] federal
telecommunications policy in this technical and complex area to be set
by the Commission.''
246. For the reasons explained above, we also do not believe that,
on the facts here, anything can be inferred from Congress's failure to
clarify the regulatory status of broadband one way or the other.
Against a pre-1996 Act backdrop in which the Commission regularly
classified emerging services as either basic services (now known as
telecommunications services) or enhanced services (now known as
information services), Congress essentially adopted that framework in
the 1996 Act. But Congress chose not to directly specify which
classification applies to broadband, which the Supreme Court understood
in Brand X as ``leav[ing] it to the Commission to resolve in the first
instance'' in the exercise of its expert technical and policy judgment.
In the years since Brand X, Congress has failed to adopt several bills
that would require broadband to be regulated under Title I and has also
failed to adopt several bills that would instead provide for broadband
to be regulated under Title II. Rather than casting any doubt on our
regulatory authority, we think this recent stalemate leaves in place
the prior understanding articulated in Brand X--i.e., that the
Communications Act ``leaves federal telecommunications policy in this
technical and complex area to be set by the Commission.''
247. The situation here again stands in stark contrast to Brown &
Williamson. In that case, the Court ``d[id] not rely on Congress'
failure to act'' as casting doubt on agency action, but instead on
affirmative action by Congress that appeared to chart an incompatible
course. There is no comparable record of incompatible action by
Congress here. Here, the only affirmative action Congress has taken on
broadband regulation in recent years was a 2017 resolution to
invalidate broadband privacy rules promulgated by the Commission under
section 222 of the Act. That resolution overturned only a specific set
of privacy rules while leaving in place the underlying Title II
classification and other rules that were then in effect, and so casts
no doubt on the actions we take in the Order. We disagree with
USTelecom's contention that Congress's authorization of the BEAD grant
program somehow bears on the classification of BIAS under the
Communications Act. USTelecom observes that, in authorizing that
program, section 60102(h)(5)(D) of the IIJA states that ``[n]othing in
this title''--meaning Title I of Division F of the IIJA--``may be
construed to authorize the Assistant Secretary [of Commerce] or the
National Telecommunications and Information Administration to regulate
the rates charged for broadband service.'' But a disclaimer that
Congress was not authorizing the Department of Commerce or its
subagency to regulate broadband rates as part of a subsidy program that
exists outside the Communications Act does not speak at all to how the
Commission may or should administer the Communications Act. And even if
the IIJA had adopted a broader prohibition on any rate regulation under
the Communications Act--something that the Order does not impose, and
indeed affirmatively forbears from--that would not speak to other forms
of common-carriage treatment or to the rules we adopt in the Order
prohibiting blocking, throttling, and paid prioritization. On its face,
the IIJA is entirely agnostic about how BIAS should be classified under
the Communications Act and whether the Commission should have the power
to impose the rules we adopt in the Order. If Congress wanted to
prohibit Title II regulation of broadband in the IIJA or to otherwise
restrict the Commission's authority, it surely could have done so, but
USTelecom errs in trying to read into the IIJA an unstated prohibition
that Congress nowhere adopted.
248. Finally, in the event that (despite all the considerations
above) the major-questions doctrine does apply here, we nonetheless
think our authority to classify and regulate broadband is sufficiently
clear under the Communications Act. We agree with the D.C. Circuit that
the Supreme Court already held as much in Brand X, in which ``the
Supreme Court expressly recognized that Congress . . . had
[[Page 45458]]
delegated to the Commission the power to regulate broadband service.''
Indeed, in a subsequent major-questions case, the Court expressly
pointed to Brand X as a case finding that the agency's ``authority is
clear'' based on ``the language of the statute itself.'' That
conclusion from the statute was clearly correct. The Communications Act
is full of provisions that depend on whether a service is classified as
a telecommunications service or an information service. The Commission
cannot administer those provisions without first deciding how a service
should be classified. To that end, section 4(i) of the Act expressly
empowers the Commission to ``perform any and all acts, make such rules
and regulations, and issue such orders . . . as may be necessary in the
execution of its functions.'' Likewise, section 201(b) empowers the
Commission to ``prescribe such rules and regulations as may be
necessary in the public interest to carry out the provisions of'' the
Act. And section 303(r) again empowers the Commission to ``[m]ake such
rules and regulations and prescribe such restrictions and conditions .
. . as may be necessary to carry out the provisions of'' the Act. The
grant of authority required under the major-questions doctrine ``may
come from specific words in the statute, but context can also do the
trick,'' including ``[s]urrounding circumstances, whether contained
within the statutory scheme or external to it.'' Here, as the Supreme
Court has opined in numerous Commission-related cases, ``[i]t suffices
. . . [that] Congress has unambiguously vested the FCC with general
authority to administer the Communications Act through rulemaking and
adjudication,'' and the Commission necessarily must be able to assess
the proper classification of BIAS ``in the exercise of that
authority.''
G. Preemption of State and Local Regulation of Broadband Service
249. Consistent with the Commission's approach in the 2015 Open
Internet Order, we will exercise our authority to preempt any State or
local measures that interfere or are incompatible with the Federal
regulatory framework we establish in the Order. And as in the 2015 Open
Internet Order, we will proceed incrementally by considering such
measures on a case-by-case basis as they arise ``in light of the fact
specific nature of particular preemption inquiries.'' We are not
persuaded to depart from our description of the basic preemption
framework here, particularly given our approach of generally deferring
specific preemption analyses to future case-by-case assessments where
the relevant issues can be fully vetted as warranted.
250. Commenters broadly agree that Title II gives the Commission
authority to preempt State or local requirements that interfere with
our exercise of Federal regulatory authority over interstate
communications. Under a doctrine known as the impossibility exception
to State jurisdiction, the Commission may, in the exercise of its
preeminent Federal regulatory authority over interstate communications,
preempt State law when (1) it is impossible or impracticable to
regulate the intrastate use of a communications service without
affecting interstate communications, and (2) State regulation would
interfere with the Commission's exercise of its authority to regulate
interstate communications. General principles of conflict preemption
also lead to the same conclusion. ``Under ordinary conflict pre-emption
principles[,] a state law that `stands as an obstacle to the
accomplishment and execution of the full purposes and objectives' of a
federal law is preempted.'' In Geier v. Am. Honda Motor Co., for
example, the Court ``found that [a] state law stood as an obstacle to
the accomplishment of a significant federal regulatory objective''
embodied in Department of Transportation regulations and was therefore
preempted.
251. The D.C. Circuit held in Mozilla that the Commission could not
invoke the impossibility exception to preempt State law after it
classified BIAS as an information service under Title I. But that was
because ``[c]lassifying broadband as an information service . . .
placed broadband outside of [the Commission's] Title II jurisdiction,''
and ``in any area where the Commission lacks the authority to regulate,
it equally lacks the power to preempt state law.'' Because the Order
restores and rests on the broad regulatory authority conferred on the
Commission by Title II, Mozilla does not cast any doubt on the
Commission's power, under the impossibility exception as well as
ordinary principles of conflict preemption, to preempt State law when
exercising--or when forbearing from--our affirmative regulatory
authority over broadband. We reiterate, as we have in the past, that
the reclassification decision made herein provides no justification for
a State or local franchising authority to require a party with a
franchise to operate a cable system under Title VI of the Act, to
obtain an additional or modified franchise in connection with the
provision of BIAS, or to pay any new franchise fees in connection with
the provision of such services.
252. We decline requests to categorically preempt all State or
local regulation affecting BIAS in the absence of any specific
determination that such regulation interferes with our exercise of
Federal regulatory authority. Because we think preemption decisions
will, at least in general, best be reached on a record specific to
whether and how a State or local regulation conflicts with our Federal
requirements, we also decline at this time to preempt specific State or
local regulations insofar as we lack a specific and robust record in
this proceeding. The Act establishes a dual Federal-State regulatory
system in which the Federal government and the states may exercise
concurrent regulatory authority over communications networks. While the
Commission has occasionally described the internet as
``jurisdictionally interstate'' or ``predominantly interstate,'' we
cannot find it to be exclusively interstate. BIAS providers operate in
and significantly affect local markets, and there are intrastate
aspects of BIAS providers' operations that could reasonably be handled
differently in different jurisdictions. For example, different laws
might apply to customer relationships and billing practices depending
on a customer's billing or service address. The Commission has
previously stated that ``whenever possible,'' preemption should be
applied ``narrow[ly]'' in order ``to accommodate differing state views
while preserving federal goals.'' And as the Commission recognized even
in the RIF Order, it would be inappropriate to ``disturb or displace
the states' traditional role in generally policing such matters as
fraud, taxation, and general commercial dealings.'' Where State or
local laws do unduly frustrate or interfere with interstate
communications, however, we have ample authority to address and preempt
those laws on a case-by-case basis as they arise. We will not hesitate
to exercise that authority.
253. California's Internet Consumer Protection and Network
Neutrality Act of 2018, also known as SB-822, appears largely to mirror
or parallel our Federal rules. Thus we see no reason at this time to
preempt it. The law's legislative history states that it was
specifically designed to ``codify portions of the [then]-rescinded
Federal Communications Commission rules'' by ``recast[ing] and
implement[ing] the `bright line rules' . . . established in the 2015
Open Internet Order.'' To that end, the California law makes it
``unlawful'' for any BIAS provider to engage in
[[Page 45459]]
``blocking,'' throttling (i.e., ``[i]mpairing or degrading'' internet
traffic), or ``paid prioritization.'' The law also prohibits BIAS
providers from ``unreasonably interfering'' with or ``unreasonably
disadvantaging'' internet content or services, similar to our general
conduct rule. And the law includes a disclosure requirement that
closely resembles our transparency rule.
254. On its face, the California law generally tracks the Federal
rules we restore in the Order, including the bright-line rules
prohibiting blocking, throttling, and paid-prioritization, as well as
the general conduct rule and transparency disclosures. A State law that
requires regulated parties to comply with the same requirements that
already apply under Federal law is by definition unlikely to interfere
with or frustrate those Federal rules.
255. Nor do we see any reason at this time to preempt California
from independently enforcing the requirements imposed by our rules or
by the state's parallel rules through appropriate State enforcement
mechanisms. On the contrary, we think State enforcement generally
supports our regulatory efforts by dedicating additional resources to
monitoring and enforcement, especially at the local level, and thereby
ensuring greater compliance with our requirements. However, should
California State enforcement authorities or State courts seek to
interpret or enforce these requirements in a manner inconsistent with
how we intend our rules to apply, we will consider whether
appropriately tailored preemption is needed at that time.
256. Some parties suggest that the California law might go further
than our Federal requirements with respect to interconnection or zero-
rating. Notably, most of these commenters express support for these
requirements and urge against preempting them. We are not persuaded on
the record currently before us that the California law is incompatible
with the Federal rules we adopt in the Order with respect to either
issue. As to the former, California prohibits BIAS providers from
requiring interconnection agreements ``that have the purpose or effect
of evading the other prohibitions'' by blocking, throttling, or
charging for traffic at the interconnection point. We have likewise
stated in the Order that BIAS providers may not engage in
interconnection practices that circumvent the prohibitions contained in
the open internet rules. As to the latter, California restricts zero-
rating when applied discriminatorily to only a subset of ``Internet
content, applications, services, or devices in a category'' or when
performed ``in exchange for consideration, monetary or otherwise, from
a third party.'' We have likewise explained in the Order that
sponsored-data programs--where a BIAS provider zero rates an edge
product in exchange for consideration (monetary or otherwise) from a
third party or where a BIAS provider favors an affiliate's edge
products--raise concerns under the general conduct standard. The
California Attorney General represents that these provisions of
California law ``are consistent with, and not in conflict with, the
Commission's proposal'' that we adopt in the Order, because the
Commission has ``included protections against interconnection
circumvention'' and stated that we ``may take action against zero-
rating practices under the general conduct provision on a case-by-case
basis.'' Nothing in the record gives us any reason to doubt that
representation. The California law has been in effect since early 2022,
yet there is no record evidence that these provisions have unduly
burdened or interfered with interstate communications service. And in
contrast to our treatment of rate regulation, from which we have
affirmatively forborne, we have not determined that regulation of zero-
rating and interconnection is detrimental, leaving room for states to
experiment and explore their own approaches within the bounds of our
overarching Federal framework.
257. We caution, however, that we stand ready to revisit these
determinations if evidence arises that State policies are creating
burdens on interstate communications that interfere or are incompatible
with the Federal regulatory framework we have established. Our
determination here simply reflects that no convincing evidence has been
presented to us in this proceeding.
258. A group of California Independent Small LECs ask us to preempt
several CPUC decisions regulating rates for intrastate telephone
service, insofar as those telephone service rates take into account a
company's broadband revenues or those of its affiliates. We find that
those decisions are outside the scope of this proceeding, which
concerns the regulatory framework that applies to BIAS, not rates for
or regulation of traditional telephone service. The California
Independent Small LECs or other parties are free to raise this issue in
an appropriate proceeding, but we express no views on it here.
259. Some commenters ask us to address more broadly the extent of
State authority to adopt broadband affordability programs. The comments
received in this proceeding do not contain a focused and robust record
or discussion concerning any particular State broadband affordability
program, so we decline to address any particular program here.
Nevertheless, we find that states have a critical role to play in
promoting broadband affordability and ensuring connectivity for low-
income consumers. The BEAD grant program established by the IIJA, for
example, requires State BEAD programs to ensure that ISPs offer a
``low-cost broadband service option'' for eligible subscribers. We also
clarify that the mere existence of a State affordability program is not
rate regulation.
H. Impact of Reclassification on Investment
260. Consistent with our tentative conclusion in the 2023 Open
Internet NPRM, and contrary to the conclusion reached in the RIF Order,
we find arguments that the reclassification of BIAS would lead to a
substantial adverse impact on BIAS investment to be unsubstantiated. In
the RIF Order, the Commission's primary policy justification for
reclassifying BIAS as a Title I information service was its conclusion
regarding the alleged harm to investment by Title II classification.
The RIF Order also advanced two additional policy rationales for
reclassifying BIAS under Title I: (1) a claim that there were no
demonstrated harms and that BIAS providers would be incentivized to
maintain internet openness; and (2) a claim that existing consumer
protection and competition laws were sufficient to protect an open
internet. As we discuss further below, we also disagree with the RIF
Order's analysis regarding these policy justifications. However, the
RIF Order failed to consider the evidence to the contrary, including
the 2015 Open Internet Order's evidence that investment in mobile voice
and DSL thrived during the period in which they were regulated as Title
II services. As the record in this proceeding clearly shows, the impact
of reclassification on BIAS investment is uncertain. This finding
comports with the literature on open internet regulations, the
available empirical evidence, and the literature on regulation more
broadly.
261. Commenters disagree as to whether reclassification of BIAS as
a Title II service will discourage investment in broadband
infrastructure or the internet generally. Several commenters contend
that the current classification of BIAS as a Title I information
service fosters investment,
[[Page 45460]]
claim that investment increased following the RIF Order, and raise the
concern that reclassification of BIAS under Title II will increase
regulatory burdens and uncertainty, leading to a reduction in
investment and innovation. AT&T argues that investment decisions depend
on long-run: (1) expected costs (including the costs of regulatory
compliance), (2) expected revenues, and (3) the degree of uncertainty
about costs and revenues; and it claims that Title II regulation would
worsen all three. WISPA contends that regulatory compliance costs will
disproportionately impact small service providers that lack the
resources to handle the new compliance obligations. Several commenters
claim that Title II classification, particularly the application of a
general conduct rule, would increase uncertainty and therefore chill
investment and innovation. Commenters also claim that application of
section 214 to BIAS would create a regulatory burden and reduce network
investment and innovation. Finally, many commenters claim that applying
public-utility style regulation to the internet would result in high
prices and chronic underinvestment.
262. Other commenters argue that Title II reclassification would
not reduce investment or innovation, and that there is no evidence that
the 2015 Open Internet Order reduced BIAS investment or that investment
increased following the 2017 RIF Order. Some of these commenters offer
evidence that in fact the opposite occurred: BIAS deployment and
investment increased following the 2015 Open Internet Order and
declined following the 2017 RIF Order. The California Independent Small
LECs argue that adopting Title II with strong forbearance, as we do
here, would increase investment incentives by reducing uncertainty due
to our rules preempting potentially different regulatory regimes within
each state.
263. We disagree with those commenters that argue our application
of Title II with broad forbearance would reduce investment incentives
or innovation. Regulation is but one of several factors that drive
investment and innovation in the telecommunications and digital-media
markets. Given the varying factors that underlie BIAS providers'
investment decisions, we are not persuaded by CTIA and NCTA's cursory
assertions that our classification decision would upset their
investment-backed reliance interests. Regulation interacts with demand
conditions, innovation opportunities created by technological advances,
and the competitive intensity of markets. Appropriate regulation is
often required to create market conditions that support infrastructure
investment, as regulation can enhance competition, mitigate transaction
costs between market players, and otherwise reduce market uncertainty,
thus boosting investment and innovation. We find that the approach we
take in the Order will foster a more competitive broadband marketplace,
increase overall regulatory certainty, and provide a more level playing
field for all market participants. We acknowledge that regulation
generally, and open internet regulations in particular, can affect
market participants differently. On balance, however, we conclude that
our approach is unlikely to reduce, and would likely promote, overall
investment and innovation in the internet ecosystem.
264. The RIF Order and at least one commenter argue that regulation
in general, and the prospect of future price regulation in particular,
which we clearly disclaim, will chill BIAS provider investment.
However, research on the relationship between regulation and investment
shows that the impact of regulation is more nuanced. For example, the
findings of empirical research on how Commission regulations concerning
the provision and pricing of network elements affected investment
reaches different conclusions with respect to incumbent firms and
competitors. To facilitate new entry into the local exchange market,
the Telecommunications Act of 1996 required an ILEC to, among other
things, offer new competitive carriers interconnection at any
technically feasible point in the ILEC's network, access to unbundled
network elements (UNEs) on a rate-regulated basis, and make retail
services available for resale at regulated wholesale rates. Researchers
have reached different conclusions regarding how the Commission's
implementation of this requirement has affected ILEC and CLEC
investment. Thus, a generic claim that regulation will chill investment
cannot be sustained. Furthermore, we emphasize that we do not consider
the effect of regulation solely on investment in broadband
infrastructure--whether positive or negative. Rather, we assess the
overall effect of regulation on consumer welfare, evaluating changes in
broadband investment along with effects on the prices and quality of
broadband access and edge services, and on edge provider investment and
innovation.
265. We find the comparison made by certain commenters between
Title II classification coupled with open internet rules and public-
utility regulation to be inapt for several reasons. First, unlike
utilities such as water, electricity, and gas, BIAS is a two-sided
platform with BIAS subscribers on one side of the market and edge
providers on the other. According to economist Mark Rysman, ``a two-
sided market is defined as one in which: (1) two sets of agents
interact through an intermediary or platform, and (2) the decisions of
each set of agents affects the outcomes of the other set of agents . .
. [because] there is some kind of interdependence or externality
between groups of agents that the intermediary serves.'' Rysman's
definition aptly describes the BIAS virtuous cycle between consumer
demand and edge provider innovation. Consumers value BIAS more as the
diversity and quality of valuable edge services increase, and edge
providers see value in investing and innovating as the breadth and
depth of consumer demand increases. We note that Rysman specifically
lists ``internet . . . markets'' under his examples. In contrast, in
water and traditional gas and electricity markets, the value to the
consumer of having access to the utility does not materially increase
with the number of suppliers through an interdependency, and even
modern energy markets only exhibit limited aspects of multisided
markets. Therefore, the type of regulation required and the effects of
those regulations will necessarily be different for BIAS than for such
utilities. Second, and most importantly, the rules we now adopt are
carefully tailored to avoid the potential issues that commenters claim
are problematic in the regulations of utilities. In particular, unlike
the range of utility-style regulations that were applied to monopoly
telephone service under Title II, including rate regulation, we forbear
from many of these provisions and do not adopt any rate regulation,
which is a hallmark of utility regulation. The Commission has long
recognized that regulating rates is not its preferred approach, and
therefore has spent decades promoting competition in the market rather
than relying on rate regulation. The approach we adopt in this
proceeding is consistent with this longstanding policy objective.
266. Economics literature shows that open internet provisions may
increase investment and innovation, and may have welfare-enhancing
effects. Contrary to BIAS provider claims that open internet provisions
would diminish their investment incentives, some economics literature
shows that allowing BIAS providers to sell prioritized access, for
instance, can
[[Page 45461]]
actually lower investment incentives. For example, Professors Jay Pil
Choi and Byung-Cheol Kim show under their assumptions that, if paid
prioritization is allowed, BIAS providers have an incentive to reduce
investment because expanding broadband capacity would lower the price
that they can charge for priority access. In addition, the authors find
that content provider investment incentives are also lower absent
neutrality regulation due to BIAS providers potentially expropriating
the benefits of content provider investment by charging for access to
their customers. Another paper by Professors Nicholas Economides and
Benjamin Hermalin finds that prohibiting BIAS providers from charging
for priority access unambiguously reduces BIAS provider investment in
their model. However, the study's finding on the overall effect of net
neutrality regulation on social welfare is still ambiguous because
social welfare is the sum of consumer welfare and producer surplus,
including any surplus that accrues to edge providers.
267. Given that economics literature supports a conclusion that the
effects of applying open internet provisions may not be harmful, and
can actually be beneficial to BIAS investment incentives, the RIF Order
and opponents of reclassification in this proceeding cite studies that
claim to show there was a decline in investment following the
reclassification of BIAS to Title II in the United States, or after
other countries implemented similar regulations. We find the evidence
presented to be unpersuasive for the following reasons.
268. First, as the RIF Order correctly recognized, network
infrastructure is a long-term irreversible investment that often
requires years of planning, preparation, and approvals before
construction can begin. The RIF Order then proceeds to suggest,
however, that there is a causal link between the adoption of the 2015
Open Internet Order and declines in broad measures of BIAS provider
investment that occurred in the same year that Order was adopted,
noting that this was the first year of decline since 2009. The RIF
Order goes on to review studies that compare BIAS provider investment
before and after adoption of the 2015 Open Internet Order and suggests
that the brief two-year reclassification of BIAS under Title II
resulted in a decline in BIAS provider investment of up to 5.6% between
2014 and 2016. Given the substantial planning, preparation and
permitting required to make most large-scale capital investments in
broadband networks, it is implausible that the 2015 Open Internet Order
would have resulted in such an immediate and substantial decline in
BIAS provider investment. Such a finding is also inconsistent with the
reaction of investors to Title II reclassification, the findings of
investment analysts, multiple statements made by company executives to
investors following Title II reclassification, and common sense. An
``event study'' analysis that examined the effect of the Title II
decision on ISP and edge provider stock prices found that the decision
had almost no impact, except for a very short-term decline in the stock
prices of a few cable ISPs. And Sprint's Chief Technology officer
stated that Sprint ``does not believe that a light touch application of
Title II, including appropriate forbearance, would harm the continued
investment in, and deployment of, mobile broadband services.'' In
short, a proper evaluation of the investment effects of Title II
reclassification, or open internet rules more generally, would require
a longer time period in order to properly evaluate any potential
effects on investment.
269. Second, as the RIF Order also correctly recognized, many of
the studies that it cites and evidence it presents did not account for
other factors that likely have a much larger impact on investment
decisions than the classification of BIAS. The RIF Order notes that
``[t]hese types of comparisons can only be regarded as suggestive,
since they fail to control for other factors that may affect investment
(such as technological change, the overall state of the economy, and
the fact that large capital investments often occur in discrete chunks
rather than being spaced evenly over time), and companies may take
several years to adjust their investment plans.'' These include the
broader economic conditions, capacity constraints, increasing demand
for broadband, technology changes (such as the transition from 3G to 4G
and then to 5G networks), and BIAS providers' general business
development decisions. Commenters in this proceeding point to the
recent increase above trend in aggregate broadband capital expenditures
as evidence that a ``light touch'' regulatory approach promotes
broadband investment. However, such claims do not adjust for
macroeconomic factors such as inflation, new technologies like 5G New
Radio (NR), and myriad other factors that likely explain most if not
all of the observed increases in investment since the RIF Order. We
also note that following the release of the RIF Order, major mobile
BIAS providers began investing in 5G NR technology, and this increase
in investment would have occurred even absent the adoption of the RIF
Order. In his dissent, Commissioner Carr points to a decline in
wireless investment in 2016 and 2017 as evidence that the 2015 Open
Internet Order caused wireless investment to decline. However, these
two years are the period when wireless carriers had mostly concluded
building their 4G networks. And the subsequent increase in wireless
investment was due to carriers beginning to deploy 5G in 2018. Thus,
after accounting for all relevant factors, the data Commissioner Carr
cites does not undercut our investment analysis.
270. Third, it is widely known in statistics that correlation does
not imply causation. In the broadest sense, correlation measures the
degree to which two random variables are associated with one another,
and tests of correlation measure the strength of such a relationship.
However, just because two variables--e.g., Title II reclassification
and changes in investment--are observed to occur together, does not
imply that one variable (reclassification) caused the other (observed
changes in investment). For example, ice cream sales and violent crime
rates tend to exhibit a strong positive association. However, it is not
the case that ice cream sales cause crime, or that higher crime causes
increased ice cream sales, but rather that a third variable,
temperature, affects both. Not adjusting for average daily temperature
could lead a researcher to draw an incorrect conclusion. To determine
whether Title II reclassification caused the change in investment, we
would need to determine what the level of investment would have been if
Title II reclassification had not been adopted.
271. The ``gold standard'' in empirical research for determining
what would have happened is the randomization of research subjects into
treatment and control groups, such as is commonly done in drug and
other medical trials. In a randomized clinical trial, the outcomes of
the control group that did not receive a treatment serve as the
counterfactual for measuring the effect of a treatment that is given to
the other group (the treatment group). However, in many real-world
scenarios, such as the evaluation of the effect of open internet
regulations, it is obviously not possible to randomize companies into
treatment and control groups to determine investment effects. For this
reason, there are a number of ``quasi-experimental'' empirical methods
that have been developed in statistics that attempt to use
observational data in a
[[Page 45462]]
manner that mimics a randomized experiment. Some of the statistical
techniques used to perform such an analysis are fixed effects,
instrumental variables (IV), differences-in-differences, and matching
estimators.
272. Only a few studies cited in the present record and in the RIF
Order record attempt to perform any type of rigorous analysis of the
effects on investment of open internet regulations or Title II
reclassification with forbearance. As for those, we find, as we discuss
below, that, in all cases, the results of these studies are
inconclusive due to methodological issues. As an initial matter, no
study in the record attempts to measure changes in edge provider
investment under Title II reclassification, so no study can make claims
about the effect of reclassification on the relevant investment
variable of interest from a policy perspective, which is total
investment in the internet ecosystem. Further, even if total investment
in the internet ecosystem were shown to be lower, that would not be
determinative of whether reclassification of BIAS under Title II with
forbearance is socially beneficial. To make this determination, changes
in social welfare, notably accounting for consumer benefits, would need
to be examined. There is no empirical study in the record that attempts
to measure such changes in social welfare, and as noted above, the
theoretical literature is ambiguous in terms of whether open internet
regulations would raise or lower social welfare.
273. One empirical study cited prominently in the record and in the
RIF Order uses a Differences-in-Differences (DiD) estimator on
aggregate investment data by industry from the Bureau of Economic
Analysis (BEA) to conclude that the 2010 announcement by Chairman
Genachowski that the Commission was considering reclassifying BIAS
under Title II raised uncertainty and reduced BIAS provider network
investment on average by about 20% from 2011 to 2016. We find several
other issues with this paper that lead us to give it no probative value
in this proceeding. ITIF criticizes our dismissal of this study, but it
does nothing to address the fundamental concerns with the study. ITIF
also fails to provide support for its contention that the Commission
should only reclassify BIAS as a Title II telecommunications service if
there is evidence doing so will enhance broadband investment. In any
event, we show below that the benefits of reclassification will
outweigh the costs.
274. The study conducts a DiD analysis by choosing five other
industries that the author claims will have comparable trends in
investment to the ``Broadcasting and Telecommunications'' industry that
serves as the treatment group for purposes of assessing the impact of
Title II reclassification on investment. The BEA industry
classifications that the author chose as comparable to
telecommunications are: wholesale trade; transportation and
warehousing; machinery manufacturing; computer and electronics
products; and plastics and rubber products. The BEA series
identification numbers for the industries used are ``i3n51301es00'' for
telecommunications, ``i3n42001es00'' for wholesale trade,
``i3n48001es00'' transportation and warehousing, ``i3n33301es00'' for
machinery manufacturing, ``i3n33401es00'' for computer and electronics
products, and ``i3n32601es00'' for plastics and rubber products. It is
not clear why this diverse set of industries with very different
technology and productivity shocks would be an appropriate control
group for telecommunications. Visual inspection comparing the pre-2010
(pre-treatment) investment trends of the control industries with the
trends in telecommunications and broadcasting investment confirm that
the controls are inappropriately chosen. Prior to the 2010 announcement
of potential Title II reclassification, there are sharp divergences in
the investment trends between the two groups, which implies that the
``parallel trends'' assumption of the DiD estimator may be violated and
that biased estimates will be produced as a result. This study is the
published version of a 2017 working paper that many commenters cite in
the record. Two other papers by the same author present similar
evidence, the latter of which, George Ford, Investment in the Virtuous
Circle, uses USTelecom investment data for its measure of
telecommunications investment and BEA data for its measure of
investment in other industries, which may be problematic given that the
two data sources may not be comparable. In addition, staff was unable
to replicate this paper due to the author's not describing the twenty
industries that were used in the control group. In fact, over 60% of
the growth in investment in the control group between the pre-treatment
and treatment periods is being driven in this study by the inclusion of
investment in the transportation and warehousing industry. Investment
in transportation and warehousing rose dramatically during the post-
2010 time period due to the boom in e-commerce that occurred. According
to Census Bureau data, e-commerce sales increased by over 120 percent
from Q4 2009 to Q4 2016. However, investment is forward-looking, and
this retail sales data does not capture expected future sales. As one
measure of forward-looking expectations for the e-commerce sales that
drove investment in this industry, the stock price of Amazon increased
by more than 400% over this same period. This trend makes this industry
a poor choice for predicting what the trend in telecommunications
investment would have been absent the announcement of the potential for
BIAS to be reclassified as a Title II service. A more appropriate
method to choose the control group industries to avoid these problems
is to choose a weighted combination of the potential controls where the
weights are chosen to minimize the pre-treatment differences between
the treatment group and the control group, but this procedure was not
followed.
275. The aggregate measure of investment used by the author as the
primary variable of interest is also too broad to provide meaningful
estimates, both in terms of the business entities and types of
investments included in the measure. There are currently 2,201 BIAS
providers in the United States that would be affected by Title II
reclassification, but the BEA collects investment data from nearly
125,000 business entities in the telecommunications, broadcasting,
motion picture, and video production industries when calculating their
``Broadcasting and Telecommunications'' investment data. Title II
reclassification would therefore be expected to have little direct
effect on most of the businesses reported in the author's measure of
broadband investment. Furthermore, investments captured within this
broad measure would include investments in buildings, trucks, office
equipment, software, and other investment categories that likely would
be unaffected by Title II reclassification. A proper analysis would
focus on discretionary investments by BIAS providers that would be
expected to actually be impacted by reclassification.
276. Finally, the BEA data used by the author has been
substantially revised since this study was published and the corrected
data undercut the conclusion that open internet regulations led to a
decline in telecommunications investment. The Census Bureau conducts an
Economic Census every five years that forms the basis of the investment
data published by the BEA
[[Page 45463]]
and used by the author in this study. In the intervening years, the BEA
estimates investment within each industry and then revises these
estimates when the actual investment data becomes available from the
newly conducted Economic Census. Whereas the author found that
telecommunications investment declined by 6.2% in real terms when
comparing the 2004-2009 period to the 2011-2016 period in his data, the
corrected data now available on the BEA website show that
telecommunications real investment in fact rose 10.2% between these two
periods. We replicated the author's regression analysis exactly based
on this previous data and found, as he did, that real investment in
telecommunications in the uncorrected data declined between the 2004-
2009 and 2011-2016 periods, which leads us to conclude that the change
in the conclusion based on the revised data is due entirely to changes
in the underlying data and not differences in model specification. The
revised data also substantially affect the results of the DiD
regression analysis performed by the author. When Commission staff re-
estimate his baseline regression model in Table 2 with the corrected
data, rather than finding a statistically significant 22% decline in
telecommunications investment as the author found, the corrected
regression finds only a 6.2% decline relative to expectations based on
the control group industries and this is not statistically significant.
If the inappropriate ``transport and warehousing'' control group is
then removed from the model, for all practical purposes the model
predicts no decline in telecommunications investment resulting from the
potential for Title II reclassification. While telecommunications
investment is still estimated to be -2.7% in the period following the
announcement of potential Title II reclassification, the p-value is
.71, which indicates that there is a 71% chance of obtaining a negative
effect at least this large even if the null hypothesis of no effect on
investment is true. In other words, this small negative effect is very
likely due to random noise rather than there being a true negative
effect of Title II regulation on investment. Therefore, if this paper
supports anything, it supports the position that Title II
reclassification had no effect on BIAS provider investment.
277. The study's author, Dr. George Ford, offers a critique of the
Commission's analysis and attempts to resuscitate his earlier
assertions regarding Title II investment impacts with new analysis--
neither his critique nor new analysis are persuasive. As an initial
matter, we note that Dr. Ford does not dispute that the underlying data
was revised by the BEA since his study was performed, or that
substituting the revised data into his previous model changes the
results to show a statistically insignificant difference in investment
following the announcement of Title II reclassification. Dr. Ford's
primary argument is that we did not replicate his study when reaching
our conclusions because we did not follow his ``entire research
process'' when updating his analysis with the new BEA data. We note
that Dr. Ford fails to cite a professionally accepted definition of
replication from a peer reviewed article on this topic, but rather
cites merely a website post for his definition. Dr. Ford implies that
we should have changed his underlying model, including the control
groups, as he proceeds to do in his new analysis. But his new analysis,
like his prior analysis, does not conduct a proper DiD regression
analysis with a replicable research process. As discussed below, Dr.
Ford did not use a rigorous and principled methodology for selecting
his control groups, and as such, there is no way that the Commission
could predict which control groups Dr. Ford would choose now that the
revised BEA data and original model no longer support his previous
conclusions. Dr. Ford also changed his criteria for choosing the
control groups, the level of aggregation at which control groups were
selected, and his standard error procedure. As Dr. Ford acknowledges,
the standard error procedure he now adopts for many of his new analyses
would be more likely to (incorrectly) conclude that there is a
statistically significant difference in investment when there is not.
His ``entire research process,'' therefore, could not have been
replicated. Even by his own--and not generally accepted--definition of
replication, Dr. Ford also chose not to replicate his original study in
the Ford Response, from which we conclude that he appears to be
retracting the original study, or at least, conceding that it no longer
supports the theory that Title II negatively impacts ISP investment.
278. Even if we had been able to replicate his entire research
process, the process he employs lacks rigor and is not in line with
recommended best practices from the empirical economics literature. Dr.
Ford appears to advocate basing the selection of DiD control groups
entirely on a comparison of the pre-treatment trends in the outcome
between the treatment and control groups. However, such a process is
known to be theoretically dubious and statistically problematic. Dr.
Ford is correct that one requirement for the DiD estimator to produce
valid estimates is that ``the selected control group for the industries
of interest plausibly satisfy the parallel paths (or common trends)
assumption, where the investment of the control group serves as a
reliable counterfactual for the treated group during the treatment
period.'' However, demonstrating this plausibility requires much more
than the ``visual inspection and some descriptive statistics''
methodology that he reports employing. Rigorous DiD analysis employs
the following three principles when choosing controls: (1) there should
be no reason to believe the untreated group would suddenly change
around the time of treatment; (2) the treated group and untreated
groups should be generally similar in many ways; and (3) the treated
group and untreated groups should have similar trajectories for the
dependent variable before treatment. In his analyses, Dr. Ford focuses
only on the last principle and does not consider the first two
principles. In fact, Dr. Ford explicitly argues against following
principles 1 and 2 in the Ford Response and criticizes the Draft Order
for raising this issue. Dr. Ford's other DiD analyses also do not
properly construct an appropriate control group which further leads us
to give no probative value to his findings. In a proper DiD research
design, observing parallel trends in outcomes prior to treatment should
be a consequence of choosing controls that are generally similar to the
treated group, not the tool by which the controls are chosen. We note
that the use of synthetic control methods does obviate the need to
follow the first two principles. For example, in a widely cited
synthetic control analysis of the economic effects of German
reunification, even among Organization for Economic Cooperation and
Development (OECD) countries, the authors excluded Luxemburg and
Iceland ``because of their small size and because of the peculiarities
of their economies.'' This illustrates that the authors followed
principle 2. In addition, they excluded Canada, Finland, Sweden, and
Ireland ``because these countries were affected by profound structural
shocks during the sample period.'' This demonstrates that the authors
also followed principle 1.
279. Just as Dr. Ford's choice of the Transportation and
Warehousing industry as a control in the previous analysis was in
violation of the first principle, Dr. Ford makes the same
[[Page 45464]]
mistake in his new synthetic DiD (sDiD) analysis where this same
control actually receives the largest weight. The Transportation and
Warehousing industry is industry code 48 and receives a weight of 18.7%
in his analysis. Dr. Ford also does not follow the second principle in
both his previous and current analyses because he never explains why or
how the treatment and control group industries are ``generally
similar'' and would be expected to have similar technology and
productivity shocks as the telecommunications industry. If Dr. Ford had
properly chosen the initial control groups, then the controls would be
valid in both the previous BEA data and revised BEA data. It is not
accepted practice to change control groups and research design in
response to changes in the underlying data. Finally, we note that both
graphical and statistical comparisons between Dr. Ford's original data
and the revised data confirm that the pre-treatment data for both the
treatment and control groups are nearly identical between the two
datasets. This is not surprising because the BEA conducts an Economic
Census every five years and the newly collected data in the 2017 Census
would generally have little impact on the investment data prior to 2012
when the last Economic Census was conducted. Only the post-2010
investment data for the telecommunications industry was significantly
revised by the BEA. The pre-treatment trends remain essentially
unchanged, suggesting that even by Dr. Ford's methodology, there is no
basis for switching the control groups he originally selected.
According to the control group selection methodology set forth in Dr.
Ford's previous paper, the old control groups remain valid because
``the pre-treatment growth rates are (statistically) the same between
the treated and control groups.'' Therefore, even by Dr. Ford's own
statements and line of reasoning, the Commission was correct to retain
the old control groups when replicating his study. We further note that
his only evidence that the control group industries are now
inappropriate is that a ``pseudo-treatment'' dummy from 2007-2010 is
now positive and statistically significant using his revised standard
errors. However, Dr. Ford includes 2010, the year the Commission first
sought comment on potential Title II classification, so this is an
improper test under this method as it used data from the treatment
period.
280. The only other paper in the record that uses rigorous
analytical methods and data to evaluate the effect of open internet
regulations on investment uses a panel data set for 32 OECD countries
covering the period from 2003 to 2019 and a fixed effects model to
examine the impact of open-internet-type regulations on the deployment
of new fiber connections. The paper finds that the adoption of open-
internet-type regulations in a country is associated with a 45%
decrease in fiber investments. However, we have serious concerns
regarding this paper that lead us to heavily discount its findings.
281. Our first concern is that it is not clear whether the results
of this study are even applicable to the present circumstances. The
policies adopted by various countries and the market dynamics within
them are wide ranging and quite different from the U.S. context. If the
types of regulations adopted were not similar to those adopted here
(for example, if a country adopted rate regulation), then these results
would not be a good proxy for how the regulations we adopt in the Order
would be expected to affect U.S. broadband investment.
282. A second concern is that, in the present U.S. context, the
size of the effect on broadband investment is implausibly large. The
authors admit that the large magnitude of the effect is likely driven
by the fact that, at the beginning of their sample, countries had
almost no fiber connections so the growth rate in fiber connections was
very high, while, at the end of their data sample, fiber coverage rates
exceeded 100% in many countries with correspondingly low fiber
connection growth rates. The crucial assumption the authors make to
claim that they are identifying causal effects of the change in
regulations is that decisions to implement or withdraw open-internet-
type regulations have been made exogenously, i.e., the timing of these
decisions is effectively random because these decisions are made for
ideological reasons and politicians make these decisions without
considering market outcome variables such as the number of fiber
connections in the country.
283. We find that this identifying assumption may be faulty and the
findings of this paper may be due to spurious correlations rather than
the authors having identified true causal effects of the impact of
open-internet-type regulation on investment. Contrary to the authors'
assertions, we find that it is likely that changes in which political
party controls a country is likely to have direct effects on investment
unrelated to the adoption of open-internet-type regulations. For
example, if more left-leaning parties in Europe tax investments at a
higher rate than their right-leaning counterparts, then the authors'
findings could be due to unaccounted-for changes in the tax system or
other national policy change that occurred at the same time as the
adoption or relaxation of open-internet-type rules. The authors'
instrumental variable estimates may be flawed for this same reason. The
authors use how ``left'' or ``right'' the current political party is as
an instrument. However, this measure likely has a direct effect on
broadband investment through multiple other channels, so it violates
the fundamental assumption of an instrumental variable that it must be
uncorrelated with the outcome of interest--broadband investment in this
case--conditional on the other variables in model. In this context,
instrumental variables estimation is often used when a treatment may
not have been assigned to subjects randomly. In this case, the
treatment is net neutrality regulations and OECD countries are the
subjects of the experiment. An appropriate instrument in this example
would be a third variable that is strongly correlated with the passage
of net neutrality regulations in a country but, conditional on all the
variables in the model, is not associated with the investment outcome
except through its effect on the probability of net neutrality
regulations being adopted. We find that whether the party in power is
more ``left'' or ``right'' on the political spectrum is likely to exert
a direct effect on ISP investment through many channels, and therefore
this crucial ``exclusion restriction'' assumption is violated and the
resulting estimates are biased.
284. There is a simple alternative explanation for why the authors
find such strong negative effects of open-internet-type regulation on
broadband investment. If countries do not adopt open-internet-type
regulations until BIAS becomes an essential service in the country, as
is the case in the United States, and the countries for which it is
essential have much higher fiber connection bases, then we would expect
exactly the results the authors find. The growth rates in fiber
connections in these mature broadband economies would be much lower
than the growth rates in fiber connections in countries that have a low
base number of such fiber connections due to a less mature broadband
market. If this is the case, these lower observed fiber growth rates in
countries with open-internet-type regulations would not be due to the
adoption of those regulations. Consistent with this view, the two
countries that were among the earliest
[[Page 45465]]
adopters of open-internet-type regulations in the authors' data sample,
South Korea and Japan, were also the countries that had by far the
greatest deployment of fiber connections at the time they adopted the
rules between 2010-2011. In 2010, 58% of broadband subscriptions in
Japan were provisioned by fiber-based technologies and 55% in South
Korea were fiber-based, which far exceeded the rates observed in the
next OECD country, the Slovak Republic at 29%, and many OECD countries
had almost no fiber-based connections at the time. In short, it would
not be possible for the growth rates in fiber access in these two early
adopting countries of open-internet-type regulations to keep pace with
the later adopting countries that had fiber access in the low single
digits at the time, and the model specification estimated by the
authors is not sufficiently rich to correct for these issues. The
authors include country fixed effects, year dummies, lags in investment
and time-varying covariates in their model, however, these controls are
not sufficient to address our concerns and satisfy the fundamental
identifying assumption of DiD models that ``the interventions are as
good as random, conditional on time and group fixed effects.'' We
conclude that it is not appropriate to compare fiber growth rates
across these countries using this model.
285. Finally, the authors admit that the results of all of their
models are inconsistent and biased because the lagged dependent
variable and the error term are correlated. For the only consistent and
unbiased model they estimate, the bias-corrected fixed effects
estimator, open-internet-type regulations are found to have a
statistically insignificant effect on BIAS provider investment.
286. As our detailed analysis demonstrates, the Commission's
conclusions in the RIF Order that BIAS provider investment is closely
tied to the classification of BIAS were not based on sound empirical
analysis, and no new studies submitted in the current record support
the conclusions of the RIF Order. Indeed, the record in both the Order
and the RIF Order proceeding on the likely effect of Title II
classification is ambiguous, offering conflicting viewpoints regarding
the potential investment effects. The theoretical literature, empirical
studies, and comments are all inconclusive. As such, we conclude that
any changes in BIAS provider investment following the adoption of each
Order were more likely the result of other factors unrelated to the
classification of BIAS.
287. The RIF Order also relied on a second study that used a
``natural experiment,'' but this study was not submitted into the
record of this proceeding. It found that DSL subscribership exhibited a
statistically significant upward shift relative to its baseline trend
after the Commission removed line-sharing rules on DSL in 2003 and
again in response to the reclassification of DSL as a Title I
information service in 2005. There appear to be several serious
problems with this study. First, it considers changes in DSL
subscribership, not changes in DSL investment, so it is not clear what
inferences can be drawn about the effect of the regulatory changes on
investment. Further, the authors attribute the increase in subscribers
solely to the regulatory changes, without accounting for other factors
that may have explained the increase. In particular, the authors ignore
the fact that very high-speed digital subscriber line (VDSL) and
asymmetric digital subscriber line (ADSL2) were developed and began to
be deployed in 2001 and 2002, respectively, and both of these
technologies significantly improved DSL speeds. It may be that these
technological innovations and lagging DSL market shares led to the
aggressive DSL price cuts that occurred starting in 2003 and this--not
a change in regulations--led to the observed strong DSL subscriber
gains relative to cable starting in 2003. Finally, we note that this
study is also methodologically flawed. The effects of the 2003 and 2005
regulatory changes that applied to DSL, if any, would also impact the
other broadband providers in the market due to such providers being
substitutes. Therefore, cable is not an appropriate comparison group
and the inclusion of the growth rate in cable modem subscriptions in
the estimation equation is endogenous (i.e., correlated with the error
term), which results in statistically biased and inconsistent
estimates.
II. Order: Forbearance for Broadband Internet Access Services
A. Forbearance Framework
288. Section 10 of the Act provides that the Commission shall
forbear from applying any regulation or provision of the Communications
Act to telecommunications carriers or telecommunications services if
the Commission determines that:
enforcement of such regulation or provision is not
necessary to ensure that the charges, practices, classifications, or
regulations by, for, or in connection with that telecommunications
carrier or telecommunications service are just and reasonable and are
not unjustly or unreasonably discriminatory;
provision is not necessary for the protection of
consumers; and
forbearance from applying such provision or regulation is
consistent with the public interest.
289. In making the determination under section 10(a)(3) that
forbearance is in the public interest, the Commission shall consider
whether forbearance from enforcing the provision or regulation will
promote competitive market conditions, including the extent to which
such forbearance will enhance competition among providers of
telecommunications services. If the Commission determines that such
forbearance will promote competition among providers of
telecommunications services, that determination may be the basis for a
Commission finding that forbearance is in the public interest. In
addition, ``[a] State commission may not continue to apply or enforce
any provision'' from which the Commission has granted forbearance under
section 10.
290. Our approach to forbearance here builds on the Commission's
approach in the 2015 Open Internet Order. In that Order, the Commission
broadly granted forbearance--to the full extent of its authority under
section 10 of the Act--with respect to provisions of the Act and
Commission rules that newly would have applied by virtue of the
classification of BIAS as a telecommunications service there, subject
only to exceptions in the case of certain expressly identified
statutory provisions and Commission rules. The Commission also
recognized that prior to the 2015 Open Internet Order some carriers
chose to offer internet transmission services as telecommunications
services subject to the full range of Title II requirements, and
clarified that those carriers could elect to operate under the 2015
Open Internet Order's forbearance framework instead of that legacy
framework.
291. It is unclear what effect the RIF Order had on the forbearance
granted in the 2015 Open Internet Order. It is possible to view the RIF
Order as implicitly vacating the forbearance granted in the 2015 Open
Internet Order, so that forbearance does not remain in effect when we
return to a Title II classification. Alternatively, the RIF Order's
silence on this issue can be read to leave the forbearance granted in
the 2015 Open Internet Order in place, so that it continues to apply
automatically to BIAS once reclassified as a telecommunications service
here, absent some action on our part to the
[[Page 45466]]
contrary. We conclude that the forbearance set forth in the Order is
justified under either understanding. Except as expressly modified in
the Order, the record in this proceeding and our own assessment each
support and provide no reason to question the forbearance granted in
the 2015 Open Internet Order, as we explain below, regardless of how
the RIF Order's effect on that prior forbearance is conceptualized. We
reject NCTA's arguments that ``ambiguity regarding the scope of
forbearance risks undermining its efficacy.'' In purporting to find
ambiguity in the 2015 Open Internet Order's approach to forbearance,
NCTA cites a paragraph providing a high-level summary of aspects of the
forbearance granted in that Order--which does not even appear in the
forbearance section. That does not persuade us that the scope of
forbearance as actually described in the forbearance section of the
2015 Open Internet Order--or the scope of forbearance as described in
our forbearance section here--is ambiguous in a way that undercuts the
efficacy of that regulatory relief. In further support of its claims of
ambiguity, NCTA contends that ``the NPRM itself does not specifically
propose to forbear from Section 251(c) . . . or even discuss the
Commission's intent with respect to unbundling and other similar
common-carrier requirements under Title II of the Act.'' But the 2023
Open Internet NPRM was clear that the Commission was proposing ``to use
the forbearance granted in the 2015 Open Internet Order as the starting
point for our consideration of the appropriate scope of forbearance,''
and the 2015 Open Internet Order was explicit in the forbearance it was
granting from (among other things) section 251(c) of the Act and common
carrier requirements such as those that would enable ex ante rate
regulation. Independently, as the Commission observed in this regard in
2015, ``the Commission cannot impose a penalty for conduct in the
absence of `fair notice of what is prohibited.' '' Consequently, we are
not persuaded that our approach to forbearance results in ambiguity
regarding the scope of relief that undercuts its efficacy.
292. In evaluating and applying the section 10(a) forbearance
criteria, we follow the same basic analytical approach used by the
Commission in the 2015 Open Internet Order and affirmed by the D.C.
Circuit in its USTA decision. As a threshold matter, we do not grant
forbearance beyond the scope of our authority under section 10 of the
Act. As the Commission explained in the 2015 Open Internet Order,
``[c]ertain provisions or regulations do not fall within the categories
of provisions of the Act or Commission regulations encompassed by that
language because they are not applied to telecommunications carriers or
telecommunications services, and we consequently do not forbear as to
those provisions or regulations.''
293. We also target our forbearance analysis to those provisions of
the Act or Commission rules that would not apply but for our
classification of BIAS as a telecommunications service and our
classification of mobile BIAS as a commercial mobile service. That
follows the Commission's approach in the 2015 Open Internet Order, and
also is how we contemplated targeting forbearance as proposed in the
2023 Open Internet NPRM in this proceeding. The record does not
persuade us to depart from that focus here, but BIAS providers remain
free to seek relief from other provisions or regulations through
appropriate filings with the Commission.
294. Section 706 of the 1996 Act once again informs our forbearance
analysis here, as well. That provision ``explicitly directs the FCC to
`utiliz[e]' forbearance to `encourage the deployment on a reasonable
and timely basis of advanced telecommunications capability to all
Americans.' '' Within the statutory framework that Congress
established, the Commission ``possesses significant, albeit not
unfettered, authority and discretion to settle on the best regulatory
or deregulatory approach to broadband.'' Thus, as in 2015, we seek to
strike the appropriate balance between retaining statutory protections
and our open internet rules to adequately protect the public, while
minimizing the burdens on BIAS providers and ensuring incentives for
broadband deployment consistent with the objectives of section 706 of
the 1996 Act.
295. One element of adopting a balanced regulatory approach is
giving BIAS providers reasonable regulatory predictability about the
obligations that will or will not be applied under that framework. We
thus reject broad-brush arguments that we should not forbear from
applying provisions that are by their own terms discretionary in some
manner. As a threshold matter, we see no indication in the text of
section 10 that provisions of the Act that give the Commission
discretion in their application to telecommunications carriers or
telecommunications are somehow categorically beyond the purview of
forbearance. Independently, insofar as forbearance incrementally
increases the clarity BIAS providers have about the regulatory
framework we are adopting here--given the need to grapple with the
section 10 criteria in addition to any discretion within a forborne-
from provision itself before it could be applied in the future--we find
it reasonable to account for the benefit provided by such greater
regulatory predictability in our application of the section 10
criteria.
296. At the same time, we also are not persuaded that our
forbearance decisions here provide insufficient clarity and regulatory
predictability about providers' regulatory obligations. Fundamentally,
these commenters' concerns are not truly directed at our approach to
forbearance but instead at the threshold classification decision. We
have determined that BIAS is a telecommunications service under the
best reading of the Act and its application to the record evidence
here. As a result, certain legal consequences under the Act flow from
that by default. The substantial forbearance we grant from rules and
provisions reaches the full extent of what we find warranted at this
time under the section 10 framework, which is the tool Congress
provided for the Commission to tailor those default regulatory
consequences. We therefore reject the suggestion that we improperly are
using forbearance to increase regulation. Our classification decision
simply ``bring[s] the law into harmony with the realities of the modern
broadband marketplace'' and against that backdrop our use of
forbearance plays its traditional role in granting relief from the
legal consequences that otherwise would flow by default from that
determination as warranted by the section 10 criteria. To the extent
that commenters are concerned that forbearance decisions could be
revisited, they do not demonstrate that it would be trivial for the
Commission to do so, particularly if reasonable reliance interests
could be demonstrated. Nor does the record reveal ways that the
Commission could provide even greater regulatory predictability to
providers beyond the approach adopted here while still honoring what we
find to be the best understanding of the Act in our classification of
BIAS.
297. We also follow the conceptual approach from the 2015 Open
Internet Order by considering the practical realities under an
``information service'' classification of BIAS to inform our section
10(a) analysis. As the Commission observed in 2015, although that
baseline is not itself dispositive of the appropriate regulatory
approach to BIAS, it is reasonable for the Commission to weigh concerns
about the burdens or regulatory uncertainty
[[Page 45467]]
that could arise from sudden changes in the actual or potential
regulatory requirements and obligations. Given agencies' discretion to
proceed incrementally, our forbearance analysis accounts for benefits
from adopting an incremental approach here. While we find that the
tailored regulatory framework we adopt in the Order strikes the right
balance, we note that the D.C. Circuit has recognized the Commission's
authority to revisit its decision should that prove not to be the case.
That said, although our conceptual approach in this regard tracks what
the Commission did in 2015, our application of that approach naturally
accounts for the additional experience and insight the Commission has
gained in the years since the RIF Order. In addition, there is a
petition for judicial review of the RIF Remand Order still pending and
the petitions for reconsideration of that Order were pending until our
action in the Order. Consequently, the insights we draw from the recent
past account for the likelihood that the unresolved status of the
regulatory approach adopted in the RIF Order could well have tempered
BIAS providers' conduct relative to what they otherwise might have
engaged in.
298. In addition, our analytical approach as to all the provisions
and regulations from which we forbear in the Order is consistent with
section 10(a) as interpreted by the Commission and courts. Consistent
with precedent, in interpreting the word ``necessary'' in section
10(a)(1) and (a)(2) we consider whether a current need exists for a
rule or statutory requirement. Under section 10(a)(1), we consider here
whether particular provisions and regulations are ``necessary'' to
ensure ``just and reasonable'' rates and practices with respect to
BIAS. In full, section 10(a)(1) directs the Commission to consider
whether enforcement ``is not necessary to ensure that the charges,
practices, classifications, or regulations by, for, or in connection
with that telecommunications carrier or telecommunications service are
just and reasonable and are not unjustly or unreasonably
discriminatory.'' As a shorthand, we refer to that as requiring an
analysis of whether rates and practices will be just and reasonable.
And under section 10(a)(2), we consider whether particular provision
and regulations are ``necessary for the protection of consumers.''
Consistent with our conclusion in the 2015 Open Internet Order, when
evaluating whether there is a current need for a rule or provision to
ensure just and reasonable rates and practices and to protect
consumers, we can account for policy trade-offs that can arise under
particular regulatory approaches. Thus, even when confronted with
arguments that applying a rule or provision could have some near-term
benefit, we nonetheless reasonably could conclude that application of
the rule or provision is not currently necessary within the meaning of
section 10(a)(1) or (a)(2) based on countervailing intermediate- or
longer-term consequences of applying the rule or provision. This
approach also is consistent with how the Commission has applied the
``just and reasonable'' criteria and otherwise evaluated consumers'
interests under other provisions of the Act.
299. Under section 10(a)(3), the Commission considers whether
forbearance is consistent with the public interest. This inquiry allows
us to account for additional factors beyond the sort of considerations
we evaluate under section 10(a)(1) and (a)(2), guided by the
Commission's statutory duties.
300. We agree with the 2015 Open Internet Order that persuasive
evidence of competition is not a necessary prerequisite to granting
forbearance under section 10 so long as the section 10 criteria
otherwise are met. As the 2015 Open Internet Order observed, although
competition can be a sufficient basis to grant forbearance, it is not
inherently necessary in order to find section 10 satisfied. To the
extent that commenters cite prior forbearance decisions relying on
competition as sufficient to justify forbearance, that precedent does
not persuade us that competition is inherently necessary to justify
forbearance. Nothing in the text of section 10 requires that
forbearance be premised on a finding of sufficient competition where
the Commission can conclude that the rules or provisions are not
``necessary'' under section 10(a)(1) and (a)(2) and that forbearance is
in the public interest under section 10(a)(3) on other grounds. A
statute that ``by its terms merely requires the Commission to
consider'' some factor does not mean that the Commission must ``give
any specific weight'' to the factor, and the Commission may
``ultimately conclude[ ] that it should not be given any weight.'' That
interpretation of section 10 is not altered where the rules or
provisions at issue involve measures to facilitate competition, despite
some claims to the contrary. To the extent that Congress wanted the
Commission to make additional findings beyond the general requirements
of section 10(a) in order to forbear from particular market-opening
provisions of the Act, it did so explicitly, precluding the Commission
from forbearing from the application of sections 251(c) or 271 of the
Act ``until it determines that those requirements have been fully
implemented.'' Given that we have found those provisions to be fully
implemented, we reject the view that we cannot simply apply the section
10(a) criteria according to their terms when evaluating forbearance
from market opening provisions of the Act and instead must make
different or more specific findings to justify forbearance. Even when
implementing such provisions, the Commission often has rejected a
single-minded focus on competition to the exclusion of other policies
such as network deployment consistent with the goals of section 706 of
the 1996 Act, and we see nothing in section 10 of the Act that would
require a single-minded focus on competition when considering
forbearance from such rules or provisions. In any case, the D.C.
Circuit in USTA has ``found reasonable the Commission's conclusion that
its section 10 analysis did not need to incorporate any statutory
requirement arising from section 251.'' Judge Williams, dissenting in
part in USTA, contended that Commission forbearance precedent had not,
to that point, involved the convergence of rules or provisions designed
to facilitate competition that were subject to a grant of forbearance
without heavy reliance on a competitive analysis. Whether or not
Commission precedent prior to the 2015 Open Internet Order involved the
precise convergence of factors identified by Judge Williams, we see
nothing in section 10 of the Act that would categorically preclude the
Commission from granting such forbearance.
301. We reject claims that an identified need for regulation in one
respect to address shortcomings in competition--such as with respect to
BIAS providers' gatekeeper role--implies a need for regulation in other
respects, as well. In other contexts the Commission has, for example,
regulated charges that certain carriers impose on other carriers
without finding it necessary to adopt ex ante regulation of those same
carriers' end-user charges. And the Commission has recognized such
distinctions between charges imposed on other providers and charges
imposed on end users in this context, as well. Separately and
independently, although the 2015 Open Internet Order did not find
pervasive evidence of competition or treat it as in itself sufficient
to justify forbearance, it would be a mistake to conclude that
competition plays no role at all in our analysis. As the Commission
concluded in 2015, ``there is some amount of
[[Page 45468]]
competition for broadband internet access service,'' even if ``it is
limited in key respects,'' and the Commission's overall regulatory
approach to BIAS, by striking the right balance between current
regulation and longer-term investment incentives, ``thus does advance
competition in important ways.'' This kind of recognition of potential
trade-offs associated with particular regulatory approaches is
consistent with our reading of the section 10(a) criteria, as discussed
above. In addition, we note that, during the last 15 years, when BIAS
was classified as Title I information service or subject to forbearance
under Title II, we have seen no significant increases in prices or
unreasonably discriminatory pricing that would seem to warrant the
imposition of rate regulation or tariffing requirements.
302. As in the 2015 approach, ``[b]ecause the Commission is not
responding to a petition under section 10(c), we conduct our
forbearance analysis under the general reasoned decision making
requirements of the Administrative Procedure Act, without the burden of
proof requirements that section 10(c) petitioners face.'' Consistent
with that approach, in our rulemaking decision here, we explain our
application of the statutory forbearance criteria and other relevant
statutory objectives such as section 706 of the 1996 Act in the level
of detail necessitated by the record and our own assessment of the
merits of forbearance from applying particular rules or provisions. We
conclude that satisfies our statutory obligations under section 10 of
the Act and the APA. We agree with Public Knowledge that we should not
grant forbearance ``cavalierly.'' But we disagree with Public Knowledge
insofar as it suggests that we approach the section 10 analysis with a
presumption against forbearance. We seek to faithfully apply the
section 10 forbearance criteria here without artificially placing a
thumb on the scale either for or against forbearance. That approach
best effectuates the Act as a whole, which not only reflects Congress's
default regulatory approach for telecommunications carriers and
telecommunications service but also directs that the Commission
``shall'' forbear where the section 10 criteria are met, as part and
parcel of that overall legal framework. We are unpersuaded by claims
that our application of the section 10 forbearance criteria in a manner
akin to that done in the 2015 Open Internet Order would violate the
nondelegation doctrine. Under Supreme Court precedent, a delegation is
constitutionally permissible if Congress has ``la[id] down by
legislative act an intelligible principle to which the person or body
authorized to [exercise the delegated authority] is directed to
conform.'' Section 10 readily satisfies that standard by directing the
Commission that it shall forbear where the rule or provision is not
necessary to ensure just and reasonable rates and practices; is not
necessary for the protection of consumers; and where forbearance is in
the public interest--including based on its competitive effects. These
are the types of assessments that Congress has entrusted to the
Commission since the original enactment of the Communications Act. The
Commission's authority to act in the public interest is not
``unlimited.'' ``[T]he words `public interest' in a regulatory
statute'' do not give an agency ``broad license to promote the general
public welfare,'' but rather ``take meaning from the purposes of the
regulatory legislation.'' Thus, for example, the Supreme Court has held
that the Communications Act's public interest standard, in context, is
sufficiently definite to overcome a nondelegation challenge. We
likewise conclude that the section 10(a) analysis is guided by
intelligible principles set down by Congress, and we therefore reject
the view that section 10 of the Act violates the nondelegation doctrine
either in general or as applied here.
303. Once again, where warranted we also evaluate forbearance
assuming arguendo that particular provisions of the Act or Commission
rules apply to BIAS, rather than ``first exhaustively determining
provision-by-provision and regulation-by-regulation whether and how
particular provisions and rules apply to this service.'' We agree with
the 2015 Open Internet Order's reasoning that ``to achieve the balance
of regulatory and deregulatory policies adopted here for BIAS, we need
not--and thus do not--first resolve potentially complex and/or disputed
interpretations and applications of the Act and Commission rules that
could create precedent with unanticipated consequences for other
services beyond the scope of this proceeding, and which would not alter
the ultimate regulatory outcome in this Order in any event.''
304. Given our approach in this regard, we conclude that simple
counts of provisions of the Act or Commission rules subject to
forbearance do not shed meaningful light on the extent to which our
regulatory approach to BIAS under the Order differs in practice from
the default obligations under Title II of the Act or otherwise for
purposes of arguments that a telecommunications service classification
of BIAS (and commercial mobile service classification of mobile BIAS)
are contrary to the Act's statutory scheme. As in the 2015 Open
Internet Order, forbearance is not used solely to grant relief from
default regulatory requirements affirmatively known and established to
be both applicable and burdensome. Rather, outside of certain key
requirements affirmatively determined to fall outside the scope of
justified forbearance, we grant forbearance broadly even as to
requirements that theoretically could newly apply by virtue of the
classification decision and, if they applied, would represent any
manner of departure from the preexisting status quo under an
information service classification. The Commission has taken this
approach not based on an affirmative determination that the default
regulatory requirements are somehow inherently incompatible with BIAS
but in the interest of being crystal clear about the targeted ways in
which the regulatory regime being applied here will depart from the
status quo under an information service classification. We thus find
that simply counting the number of provisions of the Act or Commission
rules subject to forbearance sheds no meaningful light on the magnitude
of any practical departure in our regulatory approach here from the
default requirements of the Act and our implementing rules.
305. Independently, the notion that even extensive forbearance
would illustrate the incompatibility of our approach with the statutory
scheme established by Congress fails to appreciate the full scope and
operation of the 1996 Act understood against its regulatory backdrop.
The Commission's section 10 forbearance authority was part and parcel
of the regulatory regime enacted for telecommunications carriers and
telecommunications services in the 1996 Act. The criteria specified in
section 10 for when the Commission shall forbear from applying the Act
or Commission rules to telecommunications carriers or
telecommunications services track nearly verbatim the standard Congress
established in 1993 in section 332(c)(1) of the Act for the Commission
to specify requirements of Title II that would be inapplicable to
commercial mobile service providers. And prior to the enactment of the
1996 Act, the Commission already had relied on that section 332(c)(1)
authority to grant commercial mobile service providers broad relief
from the requirements of Title II, including relief from, among other
things, the tariffing requirements
[[Page 45469]]
that the Supreme Court characterized as ``the heart of the common-
carrier section of the Communications Act'' under the pre-1996 Act
framework. There can be little doubt that when Congress enacted section
10 of the Act against that backdrop, it contemplated that services
meeting the definition of ``telecommunications services'' likewise
could--and would--be subject to broad forbearance where justified by
the statutory criteria. Such an outcome thus is entirely compatible
with the overall legal framework Congress enacted in the 1996 Act.
306. We disagree with arguments that our exercise of forbearance is
contrary to MCI v. AT&T and Biden v. Nebraska. In MCI, the Supreme
Court rejected the Commission's attempt to eliminate tariffing for
competitive common carriers, concluding that exempting carriers from
those obligations represented a ``fundamental revision of the statute''
that Congress was unlikely to have authorized through ``a subtle
device'' in the statutory language like the Commission's authority to
``modify'' tariffing requirements. And relying on MCI, the Court in
Biden v. Nebraska similarly concluded that ``statutory permission to
`modify' does not authorize `basic and fundamental changes in the
scheme' designed by Congress.'' By contrast, as the Commission has long
recognized, Congress enacted section 10 forbearance authority in
response to MCI--to grant the Commission the authority to make more
extensive changes that the MCI Court previously found lacking. That
fact--coupled with Congress's decision to model section 10 on section
332(c)(1) under which the Commission previously granted broad
forbearance in the past--amply demonstrates that section 10 forbearance
authority was intentionally designed by Congress to authorize more
expansive changes than what would flow from distinct statutory language
of the sort at issue in MCI and Biden v. Nebraska. And the
circumstances here also bear no meaningful similarity to the Court's
objection in Biden v. Nebraska that the Department of Education was
seeking to ``augment[ ] and expand[ ] existing [statutory] provisions
dramatically.'' In this case, after exercising the explicitly-granted
forbearance authority in accordance with the terms specified by
Congress, the remaining requirements that we apply flow directly from
the statutory regime Congress enacted as applied to BIAS consistent
with our classification decision here.
307. Finally, our forbearance with respect to BIAS does not
encompass internet transmission services that incumbent local exchange
carriers or other common carriers chose to offer as telecommunications
services subject to the full range of Title II requirements prior to
the 2015 Open Internet Order. The RIF Order observed that such services
``have never been subject to the [2015 Open Internet Order] forbearance
framework,'' and stated that ``carriers that choose to offer
transmission service on a common carriage basis are, as under the
Wireline Broadband Classification Order, subject to the full set of
Title II obligations, to the extent they applied before the'' 2015 Open
Internet Order. The 2015 Open Internet Order did, however, allow a
provider previously offering broadband transmission on a common carrier
basis ``to change to offer internet access services pursuant to the
construct adopted in'' that Order subject to filing with and review by
the Wireline Competition Bureau of the provider's proposal for the
steps it would take to convert to such an approach. In the 2023 Open
Internet NPRM we proposed to follow the same approach again here, and
no commenter opposes that proposal. As such, our forbearance with
respect to BIAS does not encompass such services.
B. Maintaining Targeted Authority To Protect Consumers, Promote
National Security, and Preserve the Broadband Ecosystem
308. We find that the standard for forbearance is not met with
respect to BIAS for the following limited provisions:
Sections 201, 202, and 208, along with the related
enforcement provisions of sections 206, 207, 209, 216, and 217, and the
associated complaint procedures; and the Commission's implementing
regulations (but, to be clear, the Commission forbears from all
ratemaking authority based on, or ratemaking regulations adopted under,
sections 201 and 202);
Section 214 entry certification requirements, pursuant to
which the Commission considers all aspects of the public interest
associated with section 214 authorizations, including national
security, law enforcement, and other concerns. We grant blanket section
214 authority for the provision of BIAS to all current and future BIAS
providers, with exceptions and subject to the Commission's reserved
power to revoke such authority and waive the Commission's implementing
rules in section 214(a)-(d) of the Act. Our grant of blanket section
214 authority includes authority for entry, acquisitions (including
transfers of control and assignments), and temporary or emergency
service and related requirements. We forbear from section 214 exit
certification requirements regarding the discontinuance, reduction, or
impairment of BIAS and the Commission's implementing section 214(a)-(d)
rules. In addition, since we classify mobile BIAS as a commercial
mobile service in the Order, the existing forbearance from all domestic
section 214 requirements for CMRS providers applies to mobile BIAS
providers. That forbearance is maintained and undisturbed by the Order;
Sections 218, 219, and 220(a)(1) and (c)-(e), which enable
the Commission to conduct inquiries and obtain information;
Section 222, which establishes core customer privacy
protections (while waiving application of our current implementing
rules to BIAS);
Section 224 and the Commission's implementing rules, which
grant certain benefits that foster network deployment by providing
telecommunications carriers with regulated access to poles, ducts,
conduits, and rights-of-way;
Sections 225, 255, and 251(a)(2), and the Commission's
implementing rules, which collectively advance access for persons with
disabilities, except that the Commission forbears from the requirement
that BIAS providers contribute to the Telecommunications Relay Service
(TRS) Fund at this time; and
Section 254, the interrelated requirements of section
214(e), and the Commission's implementing regulations to strengthen the
Commission's ability to support broadband, supporting the Commission's
ongoing efforts to support broadband deployment and adoption.
309. Our forbearance decision in this subsection focuses on
addressing consequences arising from the reclassification of BIAS in
the Order. Thus, we do not forbear with respect to requirements to the
extent that they already applied prior to the Order without regard to
the classification of BIAS. Similarly, consistent with the 2015 Open
Internet Order, to the extent that provisions or regulations apply to
an entity by virtue of other services it provides besides BIAS, the
forbearance in the Order does not extend to that context. Consistent
with the Commission's conclusions in the 2015 Open Internet Order, the
Order does not alter any additional or broader forbearance previously
granted that already might encompass BIAS in certain circumstances, for
example, insofar as BIAS, when provided by mobile providers, is a CMRS
service. As one example, the Commission has
[[Page 45470]]
granted some forbearance from section 310(d) for certain wireless
licensees that meet the definition of ``telecommunications carrier.''
But section 310(d) is not itself framed in terms of ``common carriers''
or ``telecommunications carriers'' or providers of ``CMRS'' or the
like, nor is it framed in terms of ``common carrier services,''
``telecommunications services,'' ``CMRS services'' or the like. To the
extent that such forbearance thus goes beyond the forbearance for
wireless providers granted in the Order, the Order does not narrow or
otherwise modify that pre-existing grant of forbearance.
1. Authority To Protect Consumers and Promote Competition (Sections 201
and 202)
310. The Commission has previously described sections 201 and 202
as lying ``at the heart of consumer protection under the Act,''
providing, along with their attendant enforcement sections, ``bedrock
consumer protection obligations.'' The Commission has never previously
completely forborne from these important statutory protections, and we
generally do not find forbearance warranted here. We find sections 201
and 202 of the Act, along with section 208 and certain fundamental
Title II enforcement authority, necessary to ensure just, reasonable,
and nondiscriminatory conduct by BIAS providers and necessary to
protect consumers under section 10(a)(1) and (a)(2). We also find that
forbearance from these provisions would not be in the public interest
under section 10(a)(3), and therefore do not grant forbearance from
those provisions and associated enforcement procedural rules with
respect to BIAS. However, particularly in light of the protections the
open internet rules provide and the ability to employ sections 201 and
202 in case-by-case adjudications, we are otherwise persuaded to
forbear from applying sections 201 and 202 of the Act to the extent
they would permit the adoption of ex ante rate regulation of BIAS in
the future, as discussed below. To be clear, this ex ante rate
regulation forbearance does not extend to inmate calling services and
therefore has no effect on our ability to address rates for inmate
calling services under section 276.
311. Section 201 enables the Commission to protect consumers
against unjust or unreasonable charges, practices, classifications, and
regulations in connection with BIAS. And section 202 prohibits
discrimination in the provision of communications services, thereby
advancing the Commission's goals of ending digital discrimination and
promoting universal service and digital equity. In order to forbear
from these statutory provisions, we would have to conclude, among other
things, that their enforcement is not necessary for consumer
protection, something the record provides no basis to do. Indeed, the
Commission has previously taken enforcement action against providers
under section 201 for violation of consumers' privacy rights. And
Congress itself recognized the importance of sections 201 and 202 when
it specifically excluded them (along with section 208) from earlier
CMRS-specific forbearance authority under section 332(c)(1)(A).
312. Additionally, sections 201 and 202 reinforce the Commission's
ability to preserve internet openness, and applying these provisions
benefits the public broadly by helping foster innovation and
competition at the edge, thereby promoting broadband infrastructure
investment nationwide. Thus, in this respect, our decision to apply the
provisions actually will promote competitive market conditions at the
edge. As explained below, the open internet rules adopted in the Order
reflect more specific protections against unjust or unreasonable
practices for or in connection with BIAS. These benefits--which can
extend beyond the specific dealings between a particular BIAS provider
and customer--persuade us that forbearance from sections 201 and 202
here is not in the public interest.
313. We also observe that section 201(b) enables the Commission to
regulate BIAS-only providers that serve MTEs and thereby end unfair,
unreasonable, and anticompetitive practices facing MTE residents,
furthering the Commission's goals to foster competition and promote
consumer choice for those living and working in MTEs. Obligating BIAS-
only providers to abide by the same kinds of rules--including those
that prohibit exclusivity contracts that bar competition outright in
MTEs--that other telecommunications and cable providers must currently
follow will secure the same protections for all residents of MTEs,
regardless of the kind of service offered by providers in their
building; reduce regulatory asymmetry between BIAS-only providers and
other kinds of providers; and potentially improve competition in the
MTE marketplace. Therefore, we do not forbear from Sec. 64.2500 of our
rules as to BIAS providers, which prohibits common carriers from
entering into certain types of agreements and requires disclosure of
others. BIAS-only providers should therefore ensure that all MTE-
related contracts entered into subsequent to the effective date of the
Order we adopt in the Order are in compliance with Sec. 64.2500. With
respect to pre-existing MTE-related contracts, we temporarily waive
Sec. 64.2500 with respect to these contracts for BIAS-only providers
for a period of 180 days to allow these providers to bring their pre-
existing contracts into compliance with Sec. 64.2500. The Commission
may waive its rules and requirements for ``good cause shown,'' which
may be found ``where particular facts would make strict compliance
inconsistent with the public interest.'' In making this determination,
the Commission may ``take into account considerations of hardship,
equity, or more effective implementation of overall policy,'' and if
``special circumstances warrant a deviation from the general rule and
such deviation will serve the public interest.'' We find good cause in
this instance to provide adequate notice and time to give BIAS-only
providers an opportunity to bring pre-existing contracts for MTEs into
compliance with our newly applicable MTE rules. We note that this 180-
day period is consistent with the time the Commission has previously
granted providers to bring their pre-existing contracts into compliance
with newly enacted MTE rules. We reject LARIAT's request that the
Commission exempt small providers from ``restrictions'' on ``bulk
billing of multi-tenant dwellings.'' LARIAT does not provide a specific
justification for exempting small BIAS providers from our MTE
requirements, but rather generalizes that these provisions (along with
others) ``could'' impose ``tremendous unnecessary burdens on our
company . . . and also harm consumers.'' We have provided all BIAS-only
providers a suitable period of time to come into compliance with these
provisions, and further, the Commission's MTE provisions are designed
to protect, not harm, consumers and LARIAT provides no evidence to the
contrary.
314. For the foregoing reasons we find that sections 201 and 202 of
the Act are necessary to ensure just, reasonable, and nondiscriminatory
conduct by BIAS providers and necessary to protect consumers under
sections 10(a)(1) and (a)(2). Moreover, retaining these provisions is
in the public interest because it provides the Commission direct
statutory authority to protect internet openness and promote fair
competition while allowing the Commission to adopt a tailored
[[Page 45471]]
approach and forbear from most other requirements. We find that our
sections 201 and 202 authority provides a more flexible framework
better suited to the broadband marketplace than many of the alternative
regulations--such as ex ante rate regulations and interconnection
requirements--from which we are forbearing but which otherwise would be
necessary. We thus reject the arguments of some commenters against the
application of these provisions insofar as they assume that such
additional regulatory requirements also will apply in the first
instance. Such considerations provide additional grounds for our
conclusion that section 10(a)(3) is not satisfied as to forbearance
from sections 201 and 202 of the Act with respect to BIAS.
315. We disagree with commenters urging the Commission to forbear
from sections 201 and 202 outright. WISPA disputes the value section
202 brings to the Commission's antidiscrimination efforts, highlighting
the broad enforcement powers Congress conferred upon the Commission and
the rules established in our digital discrimination proceeding. But
these sections enable the Commission to advance digital equity in other
ways not contemplated elsewhere, including providing authority for our
open internet rules.
316. We also disagree with ACA Connects and WISPA that the
Commission should forbear from applying sections 201 and 202 to small
BIAS providers. ACA Connects contends that reclassification would
impose burdensome costs and that smaller service providers lack the
resources, such as in-house legal staff, needed to navigate a Title II
world. They thus argue that the Commission should grant forbearance
from direct application of sections 201 and 202 and instead ``bring ad
hoc enforcement actions . . . for conduct that falls outside the scope
of the proposed conduct-based rules.'' Similarly, WISPA asserts that
there is ``ample evidence that application of these requirements to
smaller providers will do more harm than good.'' These arguments fail
to consider that sections 201 and 202 serve as a legal basis for
adoption of the open internet conduct rules. Further, in making these
arguments, commenters fail to acknowledge the legal framework applied
in the CMRS context, where sections 201 and 202 have applied for years.
This history should allay any ``concerns . . . about potential burdens,
or uncertainty, resulting from the application of sections 201 and
202,'' and we conclude that providers, both small and large, will find
ample guidance about the application of sections 201 and 202 via our
open internet rules.
2. Enforcement (Sections 206, 207, 208, 209, 216, and 217)
317. We also do not forbear from section 208's complaint proceeding
rules and other fundamental Title II enforcement provisions. In
particular, we do not forbear from applying section 208 of the Act and
the associated procedural rules, which provide a complaint process for
enforcement of applicable provisions of the Act or any Commission
rules. We also retain additional statutory provisions that we find
necessary to ensuring a meaningful enforcement process. In particular,
we do not forbear from sections 206, 207, and 209. Without these
provisions that permit ``redress through collection of damages,''
Section 208's complaint protections would be ``virtually meaningless.''
Allowing for the recovery of damages does not mean that an award of
damages necessarily would be appropriate in all, or even most, cases.
The Commission has discretion to deny an award of damages and grant
only prospective relief where a case raises novel issues on which the
Commission has not previously spoken, or where the measurement of
damages would be speculative. The Commission also has authority to
adopt rules and procedures that are narrowly tailored to address the
circumstances under which damages would be available in particular
types of cases. Section 208 and its associated procedural rules, as
well as sections 206 and 207, which serve as a necessary adjunct to the
complaint process, provide the public the means to ``file a complaint
with the Commission and seek redress.'' We similarly do not forbear
from sections 216 and 217, which ``were intended to ensure that a
common carrier could not evade complying with the Act by acting through
others over whom it has control or by selling its business.'' Thus, we
do not forbear from enforcing these key Title II enforcement provisions
with respect to BIAS.
318. In the event that a carrier violates its common carrier
duties, the section 208 complaint process would permit challenges to a
carrier's conduct, and many commenters advocate for section 208 to
apply. The Commission's procedural rules establish mechanisms to carry
out that enforcement function in a manner that is well-established and
clear for all parties involved. The Commission has never previously
forborne from section 208. Indeed, we find it instructive that in the
CMRS context Congress specifically precluded the Commission from using
section 332 to forbear from section 208. Commenters also observe the
important interrelationship between section 208 and sections 206, 207,
216, and 217, which the Commission itself has recognized in the past,
as discussed above. We note, however, that in complaint proceedings
filed pursuant to section 207, courts have historically been careful to
consider the Commission's views as a matter of primary jurisdiction on
the reasonableness of a practice under section 201(b). A Federal
district court may determine that the Commission is better to suited to
answer the particular question before the court in the first instance
and elect to invoke the primary jurisdiction doctrine. The primary
jurisdiction doctrine applies where a claim is originally cognizable in
the courts, and comes into play whenever enforcement of the claim
requires the resolution of issues which, under a regulatory scheme,
have been placed within the special competence of an administrative
body; in such a case the judicial process is suspended pending referral
of such issues to the administrative body for its views. In addition,
to forbear from sections 216 and 217 would create a loophole in our
ability to evenly enforce the Act, which would imperil our ability to
protect consumers and to protect against unjust or unreasonable
conduct, and would be contrary to the public interest. The prospect
that carriers may be forced to defend their practices before the
Commission supports the strong public interest in ensuring the
reasonableness and nondiscriminatory nature of those actions,
protecting consumers, and advancing our overall public interest
objectives. For the reasons discussed above, we thus reject the
assertions of some commenters that enforcement is unduly burdensome. In
particular, we are not persuaded that such concerns outweigh the
overarching interest advanced by the enforceability of sections 201 and
202. Nothing in the record demonstrates that our need for enforcement
differs among broadband providers based on their size, and we thus are
not persuaded that a different conclusion in our forbearance analysis
should be reached in the case of small broadband providers, for
example. While some commenters express fears of burdens arising from
the application of these provisions to BIAS, we find such arguments to
be speculative, particularly given the lack of evidence of such actions
where those provisions historically have applied (including in the CMRS
context). As a result, for all of the foregoing reasons, we conclude
[[Page 45472]]
that none of the section 10(a) criteria is met as to forbearance from
these fundamental Title II enforcement provisions and the associated
Commission procedural rules with respect to BIAS. As explained above,
sections 201 and 202 do not pose the existential threat that some
commenters claim they do. Moreover, individuals harmed by a provider's
unlawful practices must have some means of being made whole, and we
agree with the Lawyers' Committee that section 208 is ``essential'' for
pursuing claims of discrimination and other harms.
3. Requirement for a Certificate of Public Convenience and Necessity
(Section 214)
319. We do not forbear from the entry certification requirements of
section 214(a)-(d) of the Act with respect to the provision of BIAS.
Section 214(a) requires carriers to obtain a Commission certification
to construct, acquire, operate, or engage in transmission over lines of
communication. By reclassifying BIAS as a Title II telecommunications
service subject to section 214, the Commission can ensure that the
``present or future public convenience and necessity'' is served,
including its obligation to protect the Nation's telecommunications
networks and to protect the United States from entities that pose
threats to national security and law enforcement interests. To ensure
continued service for consumers and to provide regulatory certainty to
BIAS providers, however, we grant blanket section 214 authority for the
provision of BIAS to all current and future BIAS providers, with
exceptions and subject to the Commission's reserved power to revoke
such authority. Specifically, to protect national security and law
enforcement interests, we exclude the following entities and their
current and future affiliates and subsidiaries from this blanket
section 214 authority--China Mobile International (USA) Inc. (China
Mobile USA), China Telecom (Americas) Corporation (CTA), China Unicom
(Americas) Operations Limited (CUA), Pacific Networks Corp. (Pacific
Networks), and ComNet (USA) LLC (ComNet)--whose application for
international section 214 authority was previously denied or whose
domestic and international section 214 authority was previously revoked
by the Commission in view of national security and law enforcement
concerns. The Order does not modify China Mobile USA's blanket domestic
section 214 authority to provide other domestic interstate services and
to construct or operate any other domestic transmission line, which was
not addressed in the China Mobile USA Order. The Commission retains the
authority to revoke a carrier's blanket domestic section 214 authority
when warranted.
320. Section 214 entry certification, albeit blanket certification,
is consistent with our conclusion that reclassifying BIAS as a
telecommunications service will significantly bolster the Commission's
ability to carry out its statutory public interest responsibilities to
safeguard national security and law enforcement. The Supreme Court has
determined that the Commission has considerable discretion in deciding
how to make its section 214 public interest findings. Exercising this
section 214 authority achieves two core purposes--national security and
the promotion of safety of life and property--and is integral to the
Commission's public interest assessment of providers seeking to provide
essential BIAS to consumers. The 2023 Open Internet NPRM recognized
that reclassification of BIAS ``is necessary to unlock tools the
Commission needs to fulfill its objectives and responsibilities to
safeguard this vital service.''
321. The importance of section 214 of the Act with regard to the
Commission's national security efforts is evident in the Commission's
actions concerning entities that are majority-owned and controlled by
the Chinese government. Over the past several years, the Commission
denied an application for international section 214 authority and
revoked certain carriers' section 214 authority based on
recommendations and comments from interested Executive Branch agencies
regarding evolving national security and law enforcement concerns. In
one of those proceedings, the Executive Branch agencies and the
Commission confronted the implications of changed circumstances in the
national security environment on the evaluation of international
section 214 authority. In each of these revocation actions, the
Commission extensively evaluated national security and law enforcement
concerns raised by existing section 214 authorizations and determined,
based on thorough record development, that the present and future
public interest, convenience, and necessity was no longer served by
those carriers' retention of their section 214 authority. We disagree
with commenters that contend that an insignificant fraction of all BIAS
providers serving U.S. customers ``present the type of national
security risk that the Commission intends to address,'' or that ``there
is no indication that any of the carriers whose section 214
authorizations the Commission revoked in recent years provides BIAS.''
At the time the Commission took these actions, section 214 did not
apply to BIAS, potentially exposing the Nation's communications
networks to national security and law enforcement threats by entities
providing BIAS or seeking to provide BIAS. We believe the same national
security and law enforcement concerns identified in the Commission's
recent denial and revocation and/or termination proceedings equally
exist with respect to these and other entities providing BIAS or
seeking to provide BIAS. We agree with arguments in the record that
applying section 214 of the Act to the provision of BIAS may have
significant future national security, law enforcement, and other
benefits by enhancing the Commission's ability to act immediately in
response to future threats. By declining to forbear from the
application of the section 214 entry authorization requirement to BIAS,
we build upon these and other actions the Commission has taken to
strengthen and advance its ability to protect U.S. telecommunications
networks and critical infrastructure against national security threats.
For instance, in November 2019, the Commission prohibited the use of
public funds from the Commission's Universal Service Fund (USF) to
purchase, obtain, maintain, improve, modify, or otherwise support any
equipment or services produced or provided by companies posing a
national security threat to the integrity of communications networks or
the communications supply chain.
322. We find that BIAS is subject to section 214 on the basis of it
being both a domestic and an international telecommunications service.
The Commission has employed different rules for domestic and
international section 214 authorizations to date. Within the category
of international section 214 authorizations, it has adopted a
regulatory approach that turns, among other things, on the particular
destination country to be served. BIAS is defined as a ``service by
wire or radio that provides the capability to transmit data to and
receive data from all or substantially all internet endpoints,'' and
our interpretation of ``all internet endpoints'' includes, without
distinction, foreign as well as domestic endpoints. Thus, BIAS
necessarily involves ``foreign communication'' as well as ``interstate
communication'' (and at least some intrastate communication, as well).
Given the global nature of BIAS, we find it appropriate to treat BIAS
as a mixed
[[Page 45473]]
domestic and international service. We recognize that the Commission
stated in the 2015 Open Internet Order that ``[b]roadband internet
access service involves the exchange of traffic between a last-mile
broadband provider and connecting networks.'' But what could be termed
the ``physical'' location or scope of a service does not dictate its
jurisdictional status, which instead turns on the jurisdiction of the
communications being carried.
a. Blanket Section 214 Authority Is Granted for the Provision of BIAS,
With Exceptions and Subject to the Commission's Reserved Power To
Revoke Such Authority
323. While section 214 entry authorization is critical to protect
national security and law enforcement interests, we recognize that
entry certification entails costs. Commenters argue that the Commission
should forbear from section 214, citing potential costs, delays, and
administrative burdens on BIAS providers. They raise concerns about
lengthy and burdensome application processes, especially for small BIAS
providers, and consequences for investment and innovation. At least one
commenter claims that the networks of smaller BIAS providers ``are not
prone'' to evolving national security and other concerns, and the
Commission should not apply section 214 to smaller BIAS providers. To
address these concerns while protecting our telecommunications
networks, and supported by the record, we grant blanket section 214
authority for the provision of BIAS to any entity currently providing
or seeking to provide BIAS--except those specific identified entities
whose application for international section 214 authority was
previously denied or whose domestic and international section 214
authority was previously revoked and their current and future
affiliates and subsidiaries.
324. Such blanket section 214 authority is subject to the
Commission's reserved power to revoke, consistent with established
statutory directives and longstanding Commission determinations with
respect to section 214 authorizations. The Commission has explained
that it grants blanket section 214 authority, rather than forbearing
from application or enforcement of section 214 entirely, in order to
remove barriers to entry without relinquishing its ability to protect
consumers and the public interest by withdrawing such grants on an
individual basis. The Order does not alter the Commission's current
rules implementing section 214 as applied to all other services subject
to section 214 of the Act. We believe that blanket section 214
authority will allow BIAS providers to continue operating and providing
BIAS without the need for Commission-approved applications at this
time. While certain benefits arising from our decision not to forbear
may be difficult to quantify, such as the current and future protection
of national security, law enforcement, or other public interest
benefits, we nevertheless conclude that the expected benefits of
applying section 214 entry authority to the provision of BIAS through
the Order greatly exceed any potential costs to providers. The costs to
providers are, in any event, minimized by our grant of blanket
authority with no prescriptive entry requirements. Our decision to
condition grant of blanket section 214 authority for the provision of
BIAS on the Commission's reserved power to revoke such authority is
consistent with the established statutory directives and longstanding
Commission determinations with respect to section 214 authorizations.
In previously granting all telecommunications carriers blanket domestic
section 214 authority, the Commission found that the ``present and
future public convenience and necessity require the construction and
operation of all domestic new lines pursuant to blanket authority,''
subject to the Commission's ability to revoke a carrier's section 214
authority when warranted to protect the public interest. Indeed, when
the Commission opened the U.S. telecommunications market to foreign
participation in the late 1990s, it delineated a non-exhaustive list of
circumstances where it reserved the right to designate for revocation
an international section 214 authorization based on public interest
considerations and stated that it considers ``national security'' and
``foreign policy'' concerns when granting authorizations under section
214 of the Act.
325. Based on the key public interest considerations that inform
our action in the Order, we reserve the right to conduct ad hoc review
of whether a provider's retention of blanket section 214 authority for
the provision of BIAS presents national security, law enforcement,
public safety, or other risks that warrant revocation of such
authority. We disagree that this important safeguard associated with
blanket section 214 authority causes uncertainty for BIAS providers as
the Commission has clearly established that it continues to reassess on
an ad hoc basis whether a carrier's retention of section 214 authority
presents national security or other risks that warrant revocation of
its section 214 authority. The Executive Branch agencies also may
recommend that the Commission modify or revoke an existing
authorization if they at any time identify unacceptable risks to
national security or law enforcement interests of the United States. If
revocation or termination may be warranted, the Commission may
institute a revocation proceeding to ``provide the authorization holder
such notice and an opportunity to respond as is required by due process
and applicable law, and appropriate in light of the facts and
circumstances.''
b. China Mobile USA, CTA, CUA, Pacific Networks, ComNet, and Their
Current and Future Affiliates and Subsidiaries Are Excluded From
Blanket Section 214 Authority for BIAS
326. To further protect the Nation's telecommunications networks
from threats to national security and law enforcement, we exclude China
Mobile USA, CTA, CUA, Pacific Networks, ComNet, and their current and
future affiliates and subsidiaries from grant of blanket section 214
authority for the provision of BIAS. We find that excluding these
Chinese government-owned entities and their current and future
affiliates and subsidiaries from blanket section 214 authority is
warranted based on the Commission's prior determinations that the
present and future public interest, convenience, and necessity would no
longer be served by these Chinese government-owned entities' retention
of section 214 authority, or that the public interest would not be
served by the grant of international section 214 authority.
327. The Commission found that these entities are subject to
exploitation, influence, and control by the Chinese government, and
that mitigation would not address the national security and law
enforcement concerns. The Commission identified national security and
law enforcement concerns with respect to the entities' access to
internet PoPs (usually located within data centers) and other harms in
relation to the services provided by those entities pursuant to section
214 authorization. To deter evasion of our exclusion of these entities,
and consistent with the Commission's inclusion of these entities and
their affiliates and subsidiaries in the list of equipment and services
covered by section 2 of the Secure and Trusted Communications Networks
Act, we also exclude their current and future affiliates and
subsidiaries from our grant of blanket section 214 authority. Of
course, any entity affected by this
[[Page 45474]]
exclusion remains free to petition the Commission for section 214
authority under the statute and demonstrate how grant of the authority
would serve the public interest, convenience, and necessity.
c. Transition Period for China Mobile USA, CTA, CUA, Pacific Networks,
and ComNet
328. We direct China Mobile USA, CTA, CUA, Pacific Networks, and
ComNet and their affiliates and subsidiaries to discontinue any and all
provision of BIAS no later than sixty (60) days after the effective
date of the Order as established in the Federal Register. We require
these entities to provide notice of service discontinuance to all
affected customers within thirty (30) days after the effective date of
the Order as established in the Federal Register. The Order shall be
effective sixty (60) days after publication in the Federal Register.
Such notice shall be in writing to each affected customer. We further
require the entities to file a copy of the standard notice(s) sent to
their customers (without providing the Commission with any customers'
personally identifiable information (PII)) in the docket of this
proceeding through the Commission's Electronic Comment Filing System
(ECFS) within sixty (60) days after the effective date of the Order as
established in the Federal Register. If the entity does not provide
BIAS, the entity shall file a letter attesting to this information and
certified by a corporate officer in ECFS within sixty (60) days after
the effective date of the Order as established in the Federal Register.
We find this transition reasonable, as the Commission previously gave
CTA, CUA, Pacific Networks, and ComNet this same transition period to
discontinue all services previously provided under section 214
authority, and it should mitigate any difficulties BIAS customers may
face in finding other providers.
d. Waiver of Rules Implementing Section 214(a)-(d) of the Act
329. We recognize that application of the Commission's current
rules implementing section 214(a)-(d) of the Act, which historically
have addressed traditional telecommunications services, may raise
operational issues in the context of BIAS. For example, the current
rules contain requirements with respect to the regulatory
classification of U.S. international carriers as ``either dominant or
non-dominant for the provision of particular international
communications services on particular routes''; notification by, and
prior approval for, U.S. international carriers that are, or propose to
become, affiliated with a foreign carrier; conditions applicable to all
international section 214 authorizations; conditions applicable to
authorized facilities-based international carriers; and conditions
applicable to carriers authorized to resell the international services
of other authorized carriers. In addition, some commenters suggest that
the Commission should pursue a further rulemaking to consider
implementation of rules under section 214(a)-(d) that are tailored to
BIAS in view of our classification of BIAS herein. The Commission
expects to release a further notice of proposed rulemaking (FNPRM) at a
future time to examine whether any section 214 rules specifically
tailored to BIAS, including for small providers, are warranted. But in
light of the current record and the blanket authority we grant herein,
we find it appropriate to waive the current rules implementing section
214(a)-(d) of the Act with respect to BIAS to the extent they are
otherwise applicable. In light of the forbearance we grant for section
214 related exit authority, i.e., discontinuance requirements, it is
unnecessary to waive our discontinuance rules to the extent they would
be applicable to BIAS as a telecommunications service.
330. The Commission may waive its rules and requirements for ``good
cause shown.'' In the 2023 Open Internet NPRM, we sought comment on
issues related to implementation of section 214, including whether we
should adopt temporary forbearance, grant blanket section 214
authority, or act in some other manner. One commenter proposed issuing
a waiver of the rules if the Commission does not forbear from section
214. Good cause, in turn, may be found ``where particular facts would
make strict compliance inconsistent with the public interest.'' In
making this determination, the Commission may ``take into account
considerations of hardship, equity, or more effective implementation of
overall policy,'' and whether ``special circumstances warrant a
deviation from the general rule and such deviation will serve the
public interest.'' The current rules were established in the context of
traditional telecommunications services. Given our consideration of
hardship and equity that may arise by immediate application of those
rules to BIAS following our action in the Order, we find there is good
cause to waive those rules pending the adoption of BIAS-specific rules
at some future time to the extent the public interest dictates.
331. We find that the public interest is served by this waiver as
it will ensure that consumers can continue to receive the broadband
internet access services to which they presently subscribe and avoid
any disruption to, or uncertainty for, BIAS consumers and BIAS
providers. We reiterate that with respect to mobile BIAS, because we
conclude herein that mobile BIAS is a commercial mobile service, it is
subject to the forbearance granted for CMRS providers as a whole in
1994. We note that this forbearance from domestic section 214
requirements as applied to mobile BIAS providers will also apply to
mobile satellite service providers, to the extent they provide mobile
satellite broadband service, that are licensed as common carriers for
the provision of service that meets the statutory definition of CMRS
(e.g., mobile earth station licensees). Under our decision in the
Order, mobile BIAS, including mobile satellite broadband service, will
continue to be subject to international section 214 requirements for
their international operations, but as discussed, we are granting
blanket section 214 authority for the provision of BIAS set forth in
the Order. The Commission anticipates issuing an FNPRM to consider what
rules should apply going forward. As we observed in the 2023 Open
Internet NPRM, our Title III licensing authority with respect to
facilities-based mobile BIAS providers independently ``grant[s] us
important authority that can be used to advance national security and
public safety with respect to the services and equipment subject to
licensing.''
e. The Commission Will Forbear From the Section 214 Exit Certification
Requirement
332. We find the section 10 criteria met for forbearance from
applying the exit certification requirements in section 214(a)-(d) and
the Commission's implementing rules to the extent they would newly
apply through the classification of BIAS as a Title II
telecommunications service. As explained above, we focus our regulatory
oversight on the entry certification requirement for BIAS providers and
find it prudent to forbear from mandating an exit certification that
would require them to obtain approval from the Commission to
discontinue, reduce, or impair service to a community. Knowing that we
can ensure that the Commission can review existing and future BIAS
participants serving consumers through their blanket entry into the
market, we find that there is no current need to also require exit
certifications. Doing so would conflict with the overall tailored
regulatory approach we adopt and that is designed to promote
infrastructure investment and innovation. We are persuaded by
[[Page 45475]]
commenters that BIAS providers' freedom to make network investments is
optimized when they need not divert capital to outdated network
equipment and services while seeking discontinuance approval. We agree
that applying section 214 in a targeted and narrow manner to address
national security and law enforcement concerns allows us to monitor
market entrants that may then invest and innovate without being
``locked in'' to maintaining those investments as circumstances and
technology evolve. This is also consistent with the 2015 Open Internet
Order, which acknowledged that discontinuance obligations entail costs
and that it is important to incrementally apply regulations beyond the
status quo. Thus, applying the exit certification provision of section
214(a) of the Act is not ``necessary'' under section 10(a)(1) and
(a)(2). We thus disagree with those commenters that support not
forbearing from section 214 exit requirements because of alleged public
safety benefits with respect to discontinuance requirements. The
services for which they are primarily concerned are not BIAS and remain
subject to our sections 214 discontinuance rules.
333. For those same reasons, we also find that forbearance is in
the public interest under section 10(a)(3). Some commenters have raised
important issues regarding the ability of consumers and companies to
maintain awareness of potential service changes and disruptions,
including for alarm companies monitoring and public safety activities.
To the extent that Public Knowledge urges the Commission to avoid
forbearance and instead waive the section 214 exit certification
requirements, we note that while the Commission may waive its rules, it
may not generally waive a provision of a statute. Forbearance is the
mechanism for not applying statutory provisions when warranted.
Carriers remain subject to section 214 discontinuance requirements for
all telecommunications services other than BIAS, including for
telephone exchange and other services, and for services being
transitioned to IP-based technology, which appear to be the focus of
the Alarm Industry Communications Committee's (AICC) concerns at this
time. As services evolve, providers must ensure that customers remain
informed. As we stated in the 2015 Open Internet Order, our universal
service rules are designed to advance the deployment of broadband
networks, including in rural and high-cost areas. Providers receiving
funding to deploy networks are subject to public interest obligations
that protect consumers subscribing to BIAS, including in rural areas or
in areas that might have only one provider. In addition, the conduct
standards in our open internet rules are a necessary backstop to ensure
BIAS providers act reasonably and provide protections against reduction
or impairment of BIAS short of complete cessation of providing that
service. As the Commission determined in the 2015 Open Internet Order,
all of these protections are sufficient to protect consumers.
4. Information Collection and Reporting To Promote National Security,
Public Safety, and Improve Network Resiliency (Sections 218, 219, and
220(a)(1), (c)-(e))
334. We do not forbear from sections 218, 219, and 220(a)(1) and
(c)-(e) of the Act. The Commission was created in part ``[f]or the
purpose of obtaining maximum effectiveness from the use of radio and
wire communications in connection with safety of life and property.''
As we conclude in the Order, reclassification of BIAS is essential to
protecting national security and public safety. Sections 218, 219, and
220(a)(1) and (c)-(e) of the Act provide the Commission with the
ability to inquire into the management of providers, collect
information, and require reporting, among other things, in order to
carry out the Commission's duties. Sections 218, 219, and 220 provide
additional tools necessary to ensure that our Nation's networks are
reliable, secure, and protected from bad actors seeking to disrupt our
communications and access sensitive information. For example, sections
218 and 220(a)(1) and (c) will enhance the Commission's ability to
require BIAS providers to report outages through NORS and DIRS, which
promotes the Commission's ongoing efforts to improve network resiliency
and increase situation awareness during disasters. Further, sections
218, 219, and 220(a)(1) and (c)-(e) will provide the Commission with
the ability to obtain information from BIAS providers that is essential
to the Commission's performance of its duties and statutory
responsibilities. For example, in the Evolving Risks Order, the
Commission adopted a one-time collection of foreign ownership
information from international section 214 authorization holders,
noting that the information will assist the Commission in developing a
timely and effective process for prioritizing the review of
international section 214 authorizations that are most likely to raise
national security, law enforcement, foreign policy, and/or trade policy
concerns. Additionally, sections 220(a)(1) and (c) will enhance the
Commission's ability to require BIAS providers to establish
cybersecurity risk management plans and other best practices to
mitigate exploitation of BIAS networks. For these reasons, we find that
forbearance from sections 218, 219, and 220(a)(1) and (c)-(e) of the
Act would neither serve the public interest under section 10(a)(3) nor
satisfy the requirements of section 10(a)(2) as it pertains to the
protection of consumers. Although WISPA argues that section 220(a)(2)'s
recordkeeping requirements would be unduly burdensome for smaller
providers, WISPA itself acknowledges the Commission's ability to tailor
application thereof as necessary.
335. We agree with Free Press that we should exclude section 218
from forbearance because it could be an important source of
investigative authority, and that we should retain section 220(c) to
address national security. We are not persuaded by the Computer &
Communications Industry Association (CCIA) that we should forbear from
these sections because the Commission forbore from them in 2015.
Because of the changed circumstances since 2015, we find that the
national security and public safety benefits require that we exclude
these sections from forbearance. We also disagree with WISPA that
enforcement of sections 218 and 220 will be burdensome to small
providers. Arguments about the hypothetical costs and burdens to
providers are speculative if and until we take additional regulatory
action pursuant to those sections, at which time the Commission would
consider the impact on small providers. Furthermore, we find that the
benefits to national security, public safety, and network resiliency
likely weigh in favor of not forbearing from these sections.
5. Customer Privacy (Section 222)
336. As proposed, we do not forbear from section 222 of the Act,
which establishes core privacy protections for customers of
telecommunications services, as well as other entities that do business
with Title II providers. We do, however, waive the rules implementing
section 222 to the extent such rules are applicable to BIAS as a
telecommunications service by virtue of the Order. Section 222 governs
telecommunications carriers' protection, use, and disclosure of
information obtained from their customers or other carriers. The
requirements of section 222 themselves impose duties on carriers, and
the Commission has recognized its ability to directly enforce
[[Page 45476]]
the statutory requirements of section 222 even in the absence of rules
specifically addressing a given issue. We find that forbearance from
section 222 would neither serve the public interest under section
10(a)(3) nor satisfy the requirements of section 10(a)(2) as it
pertains to the protection of consumers. Our decision in the Order
conforms to the Commission's long history of protecting consumer
privacy, and the Commission's long-held understanding that
``[c]onsumers' privacy needs are no less important when consumers
communicate over and use broadband internet access than when they rely
on [telephone] services.'' We also find that because section 222 places
an obligation on telecommunications carriers to protect the
confidentiality of the proprietary information of, and relating to,
other telecommunications carriers (including resellers), equipment
manufacturers, and business customers, requiring BIAS providers to
comply with section 222 will protect information concerning entities
that interact with BIAS providers.
337. As discussed above, the record supports our finding that BIAS
providers serve as a necessary conduit for information passing between
their customers and internet sites or other users, and are thus
situated to collect vast swaths of sensitive information about their
customers, including personal information, financial information,
precise location information, and information regarding their online
activity. And this finding, in turn, supports our conclusion not to
forbear from section 222. A 2021 FTC Staff Report found that BIAS
providers collect and combine data across product lines, collect data
beyond what is necessary to provide the service (including the websites
that customers visit, the shows they watch, the apps they use, details
about their home energy use, their real-time and historical location,
and their internet search queries), use web data to target ads, group
consumers using sensitive characteristics, and share real-time location
data with third parties. Evidence suggests that consumers may not fully
comprehend--and therefore may not be able to meaningfully consent to--
BIAS providers' collection, processing, and disclosure of customer
information. Further, as the American Library Association explains,
``due to the lack of competition, even if consumers understand the
extent to which their ISP collects their personal data, they most
likely do not have the option to switch to an ISP that aligns with
their privacy and data security goals.'' As just one example that
illustrates the fact that providers do not compete on privacy--and the
importance of the Commission's domain-specific expertise in the area of
privacy enforcement--we note that all of the nationwide wireless
carriers are currently subject to Forfeiture Orders for their similar
failures to protect customer location information. We remain concerned
that, absent statutory and regulatory requirements to do so, BIAS
providers have minimal incentive to adopt adequate administrative,
technical, physical, and procedural safeguards to protect their
customers' data from improper or excessive uses by providers
themselves, or from further disclosure and misuse by third parties.
Additionally, WISPA's contention that protection of CPNI may be
particularly burdensome for small providers is not itself cause for
forbearance from section 222 outright. A customer's privacy needs do
not fluctuate with the size of a provider, and therefore section
10(a)'s forbearance criteria, which focus on whether a requirement is
necessary to ensure just and reasonable and nondiscriminatory
practices, do not justify the relief requested by WISPA.
338. We also disagree with CCIA's position that the Commission
must, at this time, apply section 222 to BIAS providers only with
respect to `` `information' that is a clear analog to the non-BIAS
telecommunications service information that the Commission is charged
with protecting.'' As an initial matter, we observe that the Commission
has never provided an exhaustive list of what constitutes CPNI. But
more importantly, as explained above, the Commission's privacy
authority under Title II is not limited to CPNI. Sections 222(a) and
201 also impose obligations, which we enforce, on carriers' practices
with regard to non-CPNI customer proprietary information and PII. We
see no reason to depart from that approach with respect to BIAS; on the
contrary, the types of sensitive information to which BIAS providers
have access by virtue of their provision of BIAS as a service
underscores the imperative of applying section 222 to BIAS providers
broadly--i.e., without limiting its application to only particular
information types. Similarly, we are unpersuaded by USTelecom's
suggestion that section 222 only applies to CPNI, as defined therein,
and does not provide authority beyond that as cause for forbearance.
339. We reject assertions that application of section 222 to BIAS
will lead to ``regulatory bifurcation'' of privacy on the internet, or
that it would be arbitrary and capricious for the Commission to impose
privacy requirements on BIAS providers while leaving larger edge,
content, or social media platforms, such as Google, Apple, and Meta,
subject to the FTC's section 5 authority. As an initial matter, we
think that the statutory framework makes clear that the Commission has
authority over the misuse of the ``underlying communications
infrastructure by consumer-facing service providers, whereas the FTC .
. . concerns itself with businesses offering their products and
services by means of that infrastructure.'' Further, we disagree that
BIAS providers' access to user data ``is not comprehensive.'' And, as
the Lawyers' Committee explains, ``even when communications content is
encrypted or uninspected, unshielded metadata can still reveal highly
sensitive information.''
340. In addition, assertions that ``[i]t is confusing for consumers
when privacy regimes differ based on who holds the information'' ignore
the fact that consumers are already subject to a dichotomy of privacy
regimes. Currently, a provider of mobile voice service is subject to
the section 222 privacy and data protection framework, while mobile
BIAS offered by the same provider, and used on the same device, is
currently not subject to the same framework under the RIF Order. We are
skeptical of claims, and find no actual evidence in the record, that
consumers view their use of over-the-top applications like Google Maps,
YouTube, or TikTok--applications that a consumer chooses to download
and to which they consent to provide their information--as more closely
comparable to BIAS than they view BIAS as comparable to other
communications services, like voice services, which are typically
provided by, and billed in conjunction with, their broadband services.
On the contrary, we find that declining to forbear from applying
section 222 to BIAS will support a consistent privacy and data security
framework for voice and data services, which consumers often subscribe
to from one provider in a bundle and perceive to be part of the same
service, particularly for mobile services.
341. Finally, we also disagree with commenters' assertions that
application of section 222 to BIAS is inconsistent with the
Congressional Review Act (CRA). As one independent basis for our
decision, this argument fails because it attempts to impute Congress's
2017 CRA resolution with respect to the Commission's 2016 Privacy Order
(81
[[Page 45477]]
FR 87274 (Jan. 3, 2017)) to the Commission's 2015 Open Internet Order.
Specifically, in the 2015 Open Internet Order, the Commission
classified BIAS as a telecommunications service and granted forbearance
from the Commission rules implementing section 222, but did not grant
forbearance from section 222 itself. Thus, the application of section
222 to BIAS was established by the 2015 Open Internet Order, and that
Order was not subject to a resolution of disapproval. While
Commissioner Carr's dissent suggests that enforcement under the statute
might fall short because ```calls' are the only telecommunications
services specifically mentioned in section 222,'' this argument
overlooks the fact that the relevant requirements under section 222--
specifically section 222(a) and 222(c)--and the definition of CPNI
found in section 222(h) do not refer to ``calls'' but instead to
``telecommunications'' services, thus allowing for Commission
enforcement under the Act. Indeed, we note that such enforcement was
specially contemplated by the Commission following the CRA resolution.
342. The argument about the 2017 CRA resolution of disapproval also
fails for additional, independent reasons. Subsequent to the 2015
reclassification of BIAS as a telecommunications service subject to
section 222, the Commission attempted to further address privacy
requirements for BIAS providers, adopting rules in the 2016 Privacy
Order that applied to BIAS providers in addition to other
telecommunications carriers and interconnected VoIP providers. In 2017,
however, Congress nullified those 2016 revisions to the Commission's
privacy rules under the CRA. Pursuant to the language of the Resolution
of Disapproval, the 2016 Privacy Order was rendered ``of no force or
effect.'' That resolution conformed to the procedure set out in the
CRA, which requires agencies to submit most rules to Congress before
they can take effect and provides a mechanism for Congress to
disapprove of such rules. Pursuant to the operation of the CRA, the
2016 Privacy Order ``may not be reissued in substantially the same
form, and a new rule that is substantially the same as such a rule may
not be issued, unless the reissued or new rule is specifically
authorized by a law enacted after the date of the joint resolution
disapproving the original rule.''
343. Commenters' CRA arguments are unavailing on their own terms,
however. As the Commission explained in the Data Breach Notification
Order (89 FR 9968 (Feb. 12, 2024)), ``the CRA is best interpreted as
prohibiting the Commission from reissuing the 2016 Privacy Order in
whole, or in substantially the same form, or from adopting another item
that is substantially the same as the 2016 Privacy Order.'' It does not
prohibit the application of Title II generally, or sections 222 or 201
specifically, to BIAS, nor does it prohibit the Commission from
considering the later adoption of regulations implementing those
obligations. We do not, through our reclassification of BIAS as a
telecommunications service, reinstate the 2016 Privacy Order or, for
that matter, any of the rules that it adopted. And even if one
considers the aggregate effect of Commission actions related to
privacy, we are not persuaded that they collectively adopt or
effectuate rules that are substantially the same as the 2016 Privacy
Order as a whole. This is particularly true because the 2016 Privacy
Order was focused in substantial part on privacy rules for BIAS
providers, and as discussed in the next paragraph, our application of
section 222 to BIAS providers here is not substantially the same as the
rules adopted for BIAS providers in the 2016 Privacy Order. If the
Commission later initiates a proceeding to consider privacy rules for
BIAS pursuant to Title II, it will be bound by the CRA not to issue a
rule that is substantially the same as the 2016 Privacy Order. We are
doubtful that future Commission actions that recapitulated some or even
all of the data elements that constituted customer proprietary network
information in the BIAS context under the 2016 Privacy Order would run
afoul of the CRA resolution, as suggested by Commissioner Carr's
dissent. And, in any event, based on the Commission's long experience
enforcing section 222 without having offered a comprehensive definition
of CPNI, we do not anticipate any difficulty in enforcing section 222
with respect to BIAS providers without first adopting a comprehensive
definition of BIAS CPNI that includes virtually all data and metadata
elements.
344. Indeed, even if, as some parties argue, the CRA prohibits the
Commission from adopting rules similar to some of the aspects of the
2016 Privacy Order, we believe that reinstating the applicability of
the statutory obligations and the Commission's ability to consider
other regulatory obligations still would not be contrary to the
Resolution of Disapproval, and serves the public interest. As explained
in the Data Breach Notification Order, the 2016 Privacy Order ``made a
number of changes to the Commission's privacy rules that, among other
things, required carriers to disclose their privacy practices, revised
the framework for customer choice regarding carriers' access, use, and
disclosure of the customers' information, and imposed data security
requirements in addition to data breach notification requirements.''
For example, the 2016 Privacy Order specified in detail the contents
that had to be included in privacy notices, including mandatory
disclosures related to other substantive requirements adopted in the
2016 Privacy Order, requirements for translation into languages other
than English, and detailed requirements for where and how the notice is
made available and updated. As another example, the 2016 Privacy Order
adopted detailed customer approval requirements, including when opt-out
approval was permitted; when and how approval must be solicited; and
detailed requirements for a mandatory mechanism to grant, deny, or
withdraw approval at any time. And as another example, the 2016 Privacy
Order restricted BIAS providers' conditioning service on waiver of
privacy rights, including limiting the incentives BIAS providers could
offer customers in exchange for authorization to use, disclose, and/or
permit access to the customer's personal information. Although the
basic principles underlying the requirements adopted in the 2016
Privacy Order obviously flow from the statutory requirements of section
222 themselves, section 222 alone (even when coupled with open internet
rules like the transparency rule) leaves BIAS providers with leeway in
the details of how they go about complying with those obligations to a
materially greater extent than the much more prescriptive 2016 rules.
345. In addition, the Commission Order effectuating the 2017
Resolution of Disapproval explicitly recognized that BIAS providers
would ``remain subject to Section 222'' itself. As such, we reject
assertions that the Commission may not have authorization to apply
section 222 to BIAS providers because Congress overturned the 2016
rules implementing section 222 with respect to BIAS. Thus, even at the
time of the 2017 Resolution of Disapproval, the Commission saw no
inconsistency between that resolution and the application of the
statutory requirements of section 222. As such, we reject arguments
that this document's classification is contrary to Congress's
disapproval to the 2016 Privacy Order in 2017.
[[Page 45478]]
346. We nevertheless find it appropriate to waive the rules
implementing section 222 to the extent such rules are applicable to
BIAS as a telecommunications service by virtue of the Order. The
Commission may waive its rules and requirements for ``good cause
shown.'' Good cause, in turn, may be found ``where particular facts
would make strict compliance inconsistent with the public interest.''
In making this determination, the Commission may ``take into account
considerations of hardship, equity, or more effective implementation of
overall policy,'' and if ``special circumstances warrant a deviation
from the general rule and such deviation will serve the public
interest.'' We observe that many of the Commission's current rules
implementing section 222 were adopted to address specific concerns in
the voice context, as the Commission recognized in 2015 when initially
reclassifying broadband as a Title II telecommunications service.
Additionally, there is nothing in the record to indicate that the
current rules implementing section 222 would be a good fit for BIAS to
the extent that they impose more specific requirements than section 222
itself. Thus, insofar as rules focused on addressing problems in the
voice service context are among the central underpinnings of our CPNI
rules, we find the public interest better served by waiving all of our
CPNI rules at this time, insofar as they would apply to BIAS, to give
us the opportunity to carefully evaluate appropriate rules for BIAS,
particularly given the need to consider the effect of the Resolution of
Disapproval. As the Commission explained in 2015, it is within the
agency's discretion to proceed incrementally, and we similarly find
that adopting an incremental approach here ``guards against any
unanticipated and undesired detrimental effects on broadband deployment
that could arise.'' We find that requiring BIAS providers to comply
with section 222, while at the same time waiving application of our
voice-specific rules, will allow providers the flexibility to adopt
security practices that are effective and appropriate in the BIAS
context, enhancing protections for customers without placing undue
costs on providers, including small providers. As discussed above, we
continue to apply section 222 of the Act itself, as well as section
201(b)'s prohibition on practices that are unjust or unreasonable,
which also provides authority over privacy practices.
6. Access to Poles, Ducts, Conduit, and Rights-of-Way (Section 224)
347. We do not forbear from section 224 and the Commission's
associated rules with respect to BIAS. Section 224 governs the
Commission's regulation of pole attachments. It authorizes the
Commission to prescribe rules to ensure that the rates, terms, and
conditions of pole attachments are just and reasonable; requires
utilities to provide nondiscriminatory access to their poles, ducts,
conduits, and rights-of-way to telecommunications carriers and cable
television systems (collectively, attachers); provides procedures for
resolving pole attachment complaints; governs pole attachment rates for
attachers; and allocates make-ready costs among attachers and
utilities. The Act defines a utility as a ``local exchange carrier or
an electric, gas, water, steam, or other public utility, . . . who owns
or controls poles, ducts, conduits, or rights-of-way used, in whole or
in part, for any wire communications.'' However, for purposes of pole
attachments, a utility does not include any railroad, cooperatively-
organized entity, or entity owned by a Federal or State government.
Section 224 excludes ILECs from the meaning of the term
``telecommunications carrier.'' Therefore, these entities do not have a
mandatory access right under section 224(f)(1). The Commission has held
that when ILECs obtain access to poles, section 224 governs the rates,
terms, and conditions of those attachments. The Act allows utilities
that provide electric service to deny access to their poles, ducts,
conduits, or rights-of-way because of ``insufficient capacity and for
reasons of safety, reliability and generally applicable engineering
purposes.'' The Commission has recognized repeatedly the importance of
pole attachments to the deployment of communications networks, and pole
attachments remain critical to the development of communications
networks. Indeed, section 224 is critical to certain carriers' ability
to comply with the deployment obligations associated with their receipt
of Federal funding.
348. As explained above, applying section 224 to BIAS will ensure
that BIAS-only providers receive the same statutory protections for
pole attachments guaranteed by section 224 of the Act that providers of
cable and telecommunications services receive, thereby promoting
greater deployment, competition, and availability of BIAS. Instead of
being forced to privately negotiate for pole access with each pole
owner, BIAS-only providers will be statutorily guaranteed a right of
nondiscriminatory access and will also be entitled by statute to the
same rates as their competitors. As we noted above, BIAS-only providers
face ``significant barriers to deploy broadband network
infrastructure--among them access to poles, ducts, and conduit.''
Section 224 seeks to remove these barriers by guaranteeing providers
access to utility poles at just and reasonable rates. We reiterate our
findings from above that restoring section 224 rights and easing the
burdens of pole access is likely to ensure that the number of BIAS-only
providers does not artificially shrink due to inequitable treatment
under the law, and that equitable regulatory treatment of BIAS-only
providers, particularly with regard to regulations designed to speed
network deployment, will also increase competition, ultimately
benefitting consumers and assisting the Commission's goal of achieving
universal service. Further, as discussed above, applying section 224 to
BIAS will ensure that the Commission and State utility commissions have
the requisite legal authority to protect public safety concerns
associated with the deployment of BIAS-only infrastructure.
349. Consistent with our findings in the 2015 Open Internet Order,
we thus conclude that applying these provisions will help ensure just
and reasonable rates for BIAS by continuing pole access and thereby
limiting the input costs that BIAS providers otherwise would need to
incur. Leveling the pole attachment playing field for new entrants that
offer solely BIAS also removes barriers to deployment and fosters
additional broadband competition. For similar reasons, we find that
applying these provisions will protect consumers and advance the public
interest, and therefore the requirements for forbearance under sections
10(a)(2) and (a)(3) are not met.
7. Universal Service
350. We find the statutory test is met for certain forbearance
under section 10(a) from applying portions of sections 254(d), (g), and
(k), as discussed below, but we otherwise will apply section 254,
section 214(e), and our implementing rules with respect to BIAS, as
supported by a number of commenters. section 254, the statutory
foundation of our universal service programs, requires the Commission
to promote universal service goals, including ``[a]ccess to advanced
telecommunications and information services . . . in all regions of the
Nation.'' Section 214(e) provides the framework for determining which
[[Page 45479]]
carriers are eligible to participate in universal service programs.
More specifically, an entity must be designated an eligible
telecommunications carrier (ETC) under section 214(e) in order to get
High Cost or Lifeline program support, but the same constraint does not
apply with respect to receipt of support under the E-Rate or Rural
Health Care programs. As discussed in greater detail above, the
Commission already exercises its authority to support broadband
services to schools, libraries, and health care providers and to
support deployment of broadband-capable networks in high-cost areas.
BIAS is a key focus of those universal service policies, and
classification in the Order simply provides another statutory
justification in support of these policies going forward. Even assuming
arguendo that section 706 of the 1996 Act may also enhance the
Commission's ability to achieve its universal service policies in
certain targeted ways, the likely limits of that authority mean that we
are not persuaded simply to rely on section 706 of the 1996 Act in lieu
of section 254. Under our broader section 10(a)(3) public interest
analysis, the historical focus of our universal service policies on
advancing end users' access to BIAS persuades us that strengthening the
foundation of our universal service activities is justified and will
have limited impact on BIAS providers. Because forbearance would not be
in the public interest under section 10(a)(3), we generally apply
sections 254 and 214(e), and our implementing rules, to BIAS.
351. However, we find it appropriate--as the Commission previously
found in 2015--to forbear from the first sentence of section 254(d) and
our associated rules insofar as they would immediately require new
universal service contributions to be assessed on broadband internet
access service to end users. In addition, pursuant to our forbearance
from section 254(d) to maintain the status quo for contributions based
on the provision of BIAS, and consistent with the 2015 Open Internet
Order, we maintain the status quo with respect to states' ability to
impose state-level contribution obligations on the provision of BIAS
for State universal service programs. The first sentence of section
254(d) states that ``[e]very telecommunications carrier that provides
interstate telecommunications services shall contribute, on an
equitable and nondiscriminatory basis, to the'' USF. In the 2015 Open
Internet Order, however, the Commission ``forb[ore] in part from the
first sentence of section 254(d) and our associated rules insofar as
they would immediately require new universal service contributions
associated with [BIAS].'' The Commission stated that, as with
forbearance from requiring new TRS contributions, forbearing from
requiring new universal service contributions to be assessed on BIAS
would permissibly `` `balance the future benefits' of encouraging
broadband deployment `against [the] short term impact' from''
forbearing from immediate new contribution assessments. The Commission
also pointed to other parallel proceedings, both before the Commission
and before other bodies, examining ``a wide range of issues regarding
how contributions should be assessed, including whether to continue to
assess contributions based on revenues or to adopt alternative
methodologies for determining contribution obligations.'' The
Commission thus determined to ``forbear[ ] from applying the first
sentence of section 254(d) and our implementing rules insofar as they
would immediately require new universal service contributions for
[BIAS] but not insofar as they authorize the Commission to require such
contributions in a rulemaking in the future.''
352. We agree with commenters who say that the Universal Service
Fund helps to protect consumers and to ensure that communications
services are available to all Americans on just and reasonable rates
and terms, and indeed for that reason we have found it important to
reclassify BIAS as a Title II telecommunications service to ensure that
we can continue to support the availability and affordability of BIAS
through USF programs. But the record does not show that assessing new
USF contribution requirements on BIAS is necessary for the Universal
Service Fund to fulfill those goals at this time. On the contrary, the
Universal Service Fund has been funding broadband access and
affordability for well over a decade without imposing contribution
requirements on BIAS providers. And the record does not show that
anything would substantially change in that regard without imposing
contribution requirements on BIAS. In fact, the Universal Service Fund
successfully operated under a materially identical set of contribution
and support schemes throughout the time that the 2015 Open Internet
Order was in effect. To be sure, several commenters contend that it
would be preferable to expand the contribution base to include BIAS, or
that doing so might become necessary in the future, but the record does
not convincingly show that imposing universal service contribution
requirements on BIAS is necessary at this time.
353. We conclude that forbearing from imposing new universal
service contribution requirements on BIAS at this time is in the public
interest. Others disagree with this proposal, primarily arguing that
not forbearing from section 254(d) and our implementing rules would
abandon a much-needed expansion of contributors, decrease the
contribution amount for each provider, increase the size of the USF,
complicate future USF reform, and/or be an unnecessary step toward
precluding BIAS providers from assessment. For one thing, we agree with
commenters who warn that suddenly and unnecessarily imposing new fees
on BIAS could pose ``major upheaval in what is actually a stable and
equitable contribution system.'' Rather than risk this upheaval, we
believe it to be in the public interest to proceed cautiously and
incrementally. The Commission thus recognized in 2015 that it is
appropriate to forbear from extending new contribution requirements to
BIAS pending ongoing deliberations, both before the Commission and
before other bodies, on future USF contribution reform. Contrary to the
assumption of some commenters, Commission efforts remain ongoing in
this area. In the Luj[aacute]n Letter, Chairwoman Rosenworcel stressed
that ``[t]here are a number of potential options for reforming the USF
contribution system, each with advantages and disadvantages, and,
critically, different cost burdens on consumers . . . . Nonetheless,
any reform efforts would benefit from further inquiry, such as a
rulemaking or data collection, to fully appreciate the potential
burdens on consumers and any other unforeseen, negative downstream
effects.'' She added that any such effort ``must result in a
sustainable funding model and also fully consider the current
telecommunications marketplace and the potential cost burdens on
consumers.'' Several commenters also suggested that the Commission
should seek and obtain statutory authority to assess edge providers,
while another stressed that assessing edge providers ``would undermine
the ultimate goal of universal connectivity by imposing new fees on the
very services that drive consumers to seek broadband connections in the
first place.'' Congress has also been actively deliberating on
legislative proposals to reform the USF
[[Page 45480]]
contribution and funding mechanisms. USF contribution reform is an
immensely complex and delicate undertaking with far-reaching
consequences, and we believe that any decisions on whether and how to
make BIAS providers contribute to the USF are best addressed
holistically in those ongoing discussions of USF contribution reform,
with a full record and robust input from all interested parties, rather
than in this proceeding.
354. Forbearance will also serve the important public interest
goals of broadband access and affordability. As always, we are mindful
of section 706's directive to ``encourage the deployment on a
reasonable and timely basis of advanced telecommunications capability
to all Americans . . . by utilizing . . . regulatory forbearance.''
That directive is echoed in the universal service principles set forth
in section 254(b) of the Act, which include ``access . . . in all
regions of the Nation'' at ``just, reasonable, and affordable rates.''
Here, estimates show that assessing contribution requirements on BIAS
could result in a material increase in consumer broadband bills,
potentially in the range of roughly $5 to $18 per month. ``The monthly
household payment would increase, even though the contribution factor
would decrease, because the contribution factor would be applied for
the first time to customer broadband bills (in addition to telephone
bills) which are generally higher than telephone bills.'' INCOMPAS
disputes these figures, citing materials that it has previously
submitted to the Commission, including materials fully considered in
the Future of USF Report. We decline to revisit those figures here
without a fully updated record and comprehensive input from a full
array of interested parties. Indeed, INCOMPAS itself acknowledges ``the
need to develop a fuller record on contribution reform.'' Our
forbearance preserves for now the longstanding status quo in this
complex and developing area. The impact of those additional fees is
likely to be highly regressive, with a disproportionate impact on low-
income consumers who may be particularly sensitive to price increases.
Although price-cap and rate-of-return carriers cannot pass through
universal service contributions to Lifeline customers, that does not
account for the many other BIAS providers or the low-income consumers
that might not be formally identified as ILEC Lifeline recipients.
Imposing new contribution requirements on BIAS could therefore be
detrimental to the goal of promoting broadband adoption and
affordability. For these reasons, as with our forbearance from TRS
contribution requirements, we deem it appropriate and in the public
interest to forbear from the imposition of new contribution
requirements on BIAS at this time.
355. We are not persuaded that allowing BIAS providers to continue
to forgo USF contributions would be contrary to section 254(d)'s
requirement that providers contribute ``on an equitable and
nondiscriminatory basis'' even if we were not forbearing from that
requirement. Forbearance essentially maintains the longstanding status
quo. Under the final sentence of section 254(d), the Commission has had
discretion to impose contribution requirements on BIAS providers even
under Title I, but no one has argued it is unlawful not to do so.
Arguments by commenters that forbearance from contribution requirements
would improperly permit BIAS providers to receive USF support without
having to contribute likewise neglect that operation of our current
contribution rules. Our rules generally permit carriers to recoup their
universal service contributions from their customers through surcharges
on customers' monthly bills, so most of the burden ultimately falls on
end users. Given estimates that extending the contribution requirements
to BIAS could considerably increase consumers' broadband bills and
would require residential consumers to bear a much greater share of the
burden relative to business users, forbearing from new contribution
requirements may be more equitable. And in any event, we do not think
it inequitable to forbear from imposing new and unnecessary costs on
BIAS when seeking to promote universal broadband availability, while
requiring contributions from more mature services that have already
achieved near-universal penetration. We are likewise unpersuaded by
claims that forbearance would give BIAS a competitive advantage over
non-BIAS services. It is not evident that BIAS and non-BIAS services
are generally competitive substitutes even if there is limited evidence
of substitution in some instances, or that USF fees have enough of a
price impact to give rise to significant or widespread substitution. In
any event, this issue would be better raised and addressed as part of a
broader holistic proceeding on USF contribution reform, based on a full
record and full input on all relevant issues, than in this proceeding.
356. We caution, as the Commission did in 2015, that our
determination to forbear at this time is based on the present record in
a complex and developing area. We do not disclaim our authority to
require new universal service contributions in a future rulemaking, and
our decision in the Order is not intended to prejudge or limit how the
Commission might take action in the future. Some commenters express
concern that ``it will be difficult, if not impossible, to `unforbear'
'' from the contributions-related forbearance that applies in this
context. We find that this concern is unfounded. It is appropriate for
the Commission to reverse a forbearance decision if ``[c]ontinued
forbearance from this regulation would be inconsistent with the
statutory forbearance criteria'' and the Commission has done so
previously. We are confident that, if any future USF contribution
reform renders continued forbearance from BIAS USF assessments
inconsistent with statutory forbearance criteria, the Commission could
and would reverse that grant of forbearance.
357. Some commenters contend that the Commission could refrain from
assessing BIAS providers for USF contributions without forbearing by
instead ``clarify[ing] that it will pause from immediately enforcing
the statute and that BIAS providers are not required to include those
revenues until the Commission moves to Order on that contribution
reform.'' However, we explain above why the forbearance standard is met
and why we find it in the public interest under that standard to rely
on the Commission's well-established statutory forbearance authority to
ensure that BIAS providers are not immediately assessed contributions.
We therefore decline WTA--Advocates for Rural Broadband's (WTA) request
to delete any discussion of section 254(d) forbearance until a
rulemaking is conducted. Moreover, the Commission's waiving the
application of Sec. 54.706 of its rules for BIAS providers as some
commenters propose as an alternative to forbearance would not alter the
Commission's underlying statutory obligation under section 254(d). We
therefore decline to adopt a different approach. Section 254(d) directs
the Commission to establish mechanisms--including contribution
requirements--to preserve and advance universal service. Some
commenters attempt to rely on various precedents to argue that section
254(d) is not ``self-effectuating.'' We find that the examples cited--
the initial implementation of section 254, the assessment of wireless
voice providers, the assessment of VoIP providers, and the brief period
of assessment of wireline BIAS providers--are inapposite and are not
[[Page 45481]]
germane as to whether the statute is self-effectuating. Indeed, these
examples are not analogous to the assessment of contributions for BIAS
providers because the wireless providers in questions were in fact
required to contribute to the USF immediately pending the development
of a Commission-specified allocation methodology; the VoIP providers
were assessed based on permissive, not mandatory, authority; and the
2005 wireline BIAS providers were subject to an existing contribution
methodology on a time-limited basis to maintain the status quo. Notably
in this case, the Commission already has established requirements that,
by their terms, would require contributions on BIAS revenues if they
immediately applied.
358. We also forbear from applying section 254(g) and (k) and our
associated rules. Section 254(g) requires ``that the rates charged by
providers of interexchange telecommunications services to subscribers
in rural and high-cost areas shall be no higher than the rates charged
by each such provider to its subscribers in urban areas.'' Section
254(k) prohibits the use of revenues from a non-competitive service to
subsidize a service that is subject to competition. As with the 2015
Open Internet Order, we are not persuaded that applying these
provisions is necessary for purposes of section 10(a)(1) and (a)(2),
particularly given the availability of the core BIAS requirements. By
``core BIAS requirements,'' we mean the provisions of the Act and
regulations expressly excluded from the scope of forbearance under the
Order, along with section 706 of the 1996 Act, and our Open Internet
rules. Likewise, under the tailored regulatory approach we find
warranted here, informed by our responsibilities under section 706, we
conclude that forbearance from enforcing section 254(g) and (k) is in
the public interest under section 10(a)(3). Forbearance from section
254(g) also is consistent with our commitment to forbear from all
provisions that would permit rate regulation of BIAS. We also note that
comments addressing section 254 appear focused on provisions regarding
universal service support for BIAS networks and universal service
contributions, addressed above, and not on the requirements of section
254(g) and (k) and our implementing rules. We thus forbear from
applying these provisions insofar as they would be newly triggered by
the classification of BIAS in the Order. Nothing in our forbearance
with respect to section 254(k) for BIAS is intended to encompass,
however, situations where ILECs or other common carriers voluntarily
choose to offer internet transmission services as telecommunications
services subject to the full scope of Title II requirements for such
services. As a result, such providers remain subject to the obligations
that arise under section 254(k) and the Commission's rules by virtue of
their elective provision of such services. For example, if a rate-of-
return incumbent LEC (or other provider) voluntarily offers internet
transmission outside the forbearance framework adopted in the Order, it
remains subject to the pre-existing Title II rights and obligations,
including those from which we forbear in the Order.
8. Access for Persons With Disabilities (Sections 225, 255, and
251(a)(2))
359. We do not forbear from those provisions of Title II that
ensure access to BIAS by individuals with disabilities. Consistent with
our conclusion above that BIAS is essential, we find that all
Americans, including those with disabilities, must be able to reap the
benefits of an open internet. Application of sections 225, 255, and
251(a)(2) is necessary to ensure access for these individuals, thereby
protecting consumers and furthering the public interest.
360. Section 225 mandates that telecommunications relay services be
made available on an interstate and intrastate basis to individuals who
are deaf, hard of hearing, deafblind, and who have speech disabilities
in a manner that is ``functionally equivalent to the ability of a
hearing individual who does not have a speech disability to communicate
using voice communication services by wire or radio.'' To achieve this,
the Commission has required all interstate service providers (other
than one-way paging services) to provide TRS. People who are deaf, hard
of hearing, deafblind, and who have speech disabilities increasingly
rely upon internet-based video communications, both to communicate
directly (point-to-point) with other persons who are deaf or hard of
hearing who use sign language and through video relay service with
individuals who do not use the same mode of communication that they do.
VRS is a form of TRS that allows people who are blind, hard of hearing,
deafblind, and who have speech disabilities who use sign language to
communicate with voice telephone users through a communications
assistant using video transmissions over the internet. In addition,
these populations rely on other forms of internet-based TRS, including
Internet Protocol Relay Service (IP Relay) and Internet Protocol
Captioned Telephone Service (IP CTS). IP Relay is a
``telecommunications relay service that permits an individual with a
hearing or a speech disability to communicate in text using an Internet
Protocol-enabled device via the internet, rather than using a text
telephone (TTY) and the public switched telephone network.'' IP CTS is
a ``telecommunications relay service that permits an individual who can
speak but who has difficulty hearing over the telephone to use a
telephone and an Internet Protocol-enabled device via the internet to
simultaneously listen to the other party and read captions of what the
other party is saying.'' In using these forms of video communications,
they rely on high definition two-party or multiple-party video
conferencing that necessitates a broadband connection. Indeed, the
Commission recognized the increased importance for persons with
disabilities to have access to video conferencing services that arose
during the COVID-19 pandemic and its aftermath.
361. Section 225 is forward-looking and requires the Commission to
adopt TRS regulations that encourage the use of existing technologies
and not discourage or impair the development of new technologies. As
technology advances, the obligations of section 225 carry forward to
ensure the Commission makes available to all individuals in the United
States a rapid, efficient, nationwide communications service. For
example, in 2007, the Commission extended the application of section
225 requirements to interconnected VoIP providers, relying at the time
on its ancillary authority to the Commission's to carry out the
purposes established under section 1 of the Act, make available to all
individuals in the United States a rapid, efficient nationwide
communication service, and increase the utility of the telephone
system. The Commission also relied on an express authority under
section 225(d)(3)(B) to issue regulations that ``shall generally
provide that costs caused by interstate relay services shall be covered
from all subscribers for every interstate service'' to require VoIP
providers to contribute to the TRS fund. Congress, in the CVAA,
subsequently codified the obligations of interconnected and non-
interconnected VoIP providers to contribute to the TRS fund. Limits
imposed on bandwidth use through network management practices that
might otherwise appear neutral, could have an adverse effect on
internet-based TRS users who use sign language to communicate by
degrading the
[[Page 45482]]
underlying service carrying their video communications. This result
could potentially deny these individuals access to a functionally
equivalent communications service. Additionally, if VRS and other
internet-based TRS users are limited in their ability to use BIAS or
are assessed extra costs for BIAS in order to access or use internet-
based TRS or point-to-point services, this could cause discrimination
against them because for many such individuals, TRS is the only form of
communication that affords service that is functionally equivalent to
what voice users have over the telephone. Moreover, limiting their
bandwidth capacity could compromise their ability to obtain access to
emergency services via VRS and other forms of internet-based TRS, which
is required by the Commission's rules implementing section 225.
362. As emphasized in the 2015 Open Internet Order, section 225 is
important not only as a basis for future rules adopting additional
protections but also to clarify internet-based TRS providers'
obligations under existing rules. To be compensated from the TRS fund,
providers' services must comply with section 225 and the Commission's
TRS rules and orders. A number of IP-based TRS services are delivered
through users' broadband internet access services. Forbearing from
applying section 225 and our TRS service requirements would risk
creating loopholes in the protections otherwise afforded to users of
internet-based TRS services, or even just uncertainty that might result
in degradation of these services. More specifically, if we were to
forbear from applying these provisions, we run the risk of allowing
actions taken by BIAS providers to come into conflict with the
overarching goal of section 225, i.e., ensuring that communication
services made available through TRS are functionally equivalent, that
is, mirror as closely as possible the voice communication services
available to the general public. Enforcement of this functional
equivalency mandate will protect against such degradation of service.
In sum, we find that the enforcement of section 225 is necessary for
the protection of consumers, and that forbearance would not be in the
public interest.
363. Notwithstanding the foregoing, we forbear at this time, for
reasons similar to those discussed above relating to our forbearance of
universal service contributions for BIAS providers, from the
application of TRS fund contribution obligations that otherwise would
newly apply to BIAS. We find that applying new TRS fund contribution
requirements at this time is not necessary to ensure just, reasonable,
and nondiscriminatory conduct by BIAS providers or for the protection
of consumers under section 10(a)(1) and (a)(2) and that forbearance is
in the public interest under section 10(a)(3). We limit our action only
to forbearing from applying section 225(d)(3)(B) and our implementing
rules insofar as they would immediately require new TRS fund
contributions from BIAS providers. We reserve the ability to conduct a
future rulemaking to require such contributions in the event future
developments necessitate such action. Before adopting any TRS-related
contributions requirements, the Commission would assess the need for
such funding, and the appropriate contribution level, given the
totality of concerns implicated in this context.
364. Consistent with the Commission's approach in 2015, nothing in
our forbearance from TRS fund contribution requirements for BIAS is
intended to encompass situations when ILECs or other common carriers
voluntarily choose to offer internet transmission services as
telecommunications services subject to the full scope of Title II
requirements for such services. As a result, such providers remain
subject to the TRS fund contribution obligations that arise under
section 225 and the Commission's rules by virtue of their elective
provision of such services until such time as the Commission further
addresses such contributions in the future.
365. Further, with respect to BIAS, we do not forbear from applying
sections 255 and 251(a)(2), and the associated rules, that require
telecommunications carriers and equipment manufacturers to make their
services and equipment accessible to individuals with disabilities,
unless not readily achievable, and preclude the installation of
``network features, functions, or capabilities that do not comply with
the guidelines and standards established pursuant to section 255.'' In
prior proceedings, the Commission has emphasized its commitment to
implementing the important policy goals of section 255 in the internet
access service context. Commenters have noted that broadband adoption,
while growing, still lags among certain groups, including individuals
with disabilities. Adoption of BIAS by persons with disabilities can
enable these individuals to achieve greater productivity, independence,
and integration into society in a variety of ways. These capabilities,
however, are not available to persons with disabilities if they face
barriers to BIAS usage, such as inaccessible hardware, software, or
services. We anticipate that increased adoption of services and
technologies accessible to individuals with disabilities will, in turn,
spur further availability of such capabilities, and of BIAS deployment
and usage more generally.
366. Our forbearance analysis regarding sections 255 and 251(a)(2),
and our implementing rules, is also informed by the incremental nature
of the requirements imposed. The CVAA addressed advanced communication
services (regardless of their regulatory classification) to ensure that
such products and services are accessible to persons with disabilities,
unless it is not achievable to do so. While the CVAA permits the
Commission to adopt regulations that networks used to provide advanced
communications services ``may not impair or impede the accessibility of
information content when accessibility has been incorporated into that
content for transmission,'' such provisions alone do not help the
Commission ensure that BIAS is accessible to people with disabilities.
367. As explained above, we find the provisions of the CVAA, while
significant, are not sufficient protections in the context of BIAS,
despite the claims of several commenters. Insofar as sections 255,
251(a)(2), and our implementing rules impose different requirements
that are reconcilable with the CVAA, we find it appropriate to apply
those additional protections in the context of BIAS for the reasons
described above. For example, providers of BIAS must ensure that
network services and equipment do not impair or impede accessibility
pursuant to the sections 255 and 251(a)(2) framework. Because this
section requires pass through of telecommunications in an accessible
format, and 47 CFR 14.20(c) requires pass through of advanced
communications services in an accessible format, the two sections work
in tandem with each other, and forbearance from sections 255 and
251(a)(2) would therefore result in a diminution of accessibility. In
particular, we find that these provisions and regulations are necessary
for the protection of consumers and forbearance would not be in the
public interest. We recognize that the Commission previously has held
that section 2(a) of the CVAA exempts entities, such as internet
service providers, from liability for violations of section 716 when
they are acting only to transmit covered services or to
[[Page 45483]]
provide an information location tool. Thus, service providers that
merely provide access to an electronic messaging service, such as a
broadband platform that provides an end user with access to a web-based
email service, are excluded from the accessibility requirements of
section 716. Our decision here is not at odds with Congress's approach
to such services under the CVAA, however, because we also have found
that ``relative to section 255, section 716 requires a higher standard
of achievement for covered entities.'' Thus, under our decision here,
BIAS will remain excluded from the ``higher standard of achievement''
required by the CVAA to the extent provided by that law, and instead
will be subject to the lower standard imposed under section 255 in
those cases where the CVAA does not apply.
9. Other Title II Provisions
368. We adopt our proposal to not grant forbearance to the extent
it was considered and rejected for particular statutory provisions in
the 2015 Open Internet Order. The record does not reflect that the
Commission's forbearance criteria or analyses must be updated with
regard to these obligations, and no commenter suggests we should
forbear from these provisions. Specifically, we do not forbear from
section 257 of the Act and provisions insofar as they only reserve
State or local authority, as these provisions impose certain
obligations on the Commission without creating enforceable obligations
that the Commission would apply to telecommunications carriers or
telecommunications services. Section 257 also may enhance public safety
by giving the Commission additional authority to address outage
reporting requirements. We also decline requests to forbear from
applying sections 253 and 332(c), which provide us authority to preempt
State and local requirements, which is consistent with the preemption
approach we articulate in the Order, and we therefore find it is in the
public interest to continue applying those provisions. Additionally,
for the reasons fully elaborated on in the 2015 Open Internet Order, we
decline to forbear from the CALEA requirements in section 229. To the
extent we do not forbear from these or any other provisions or
regulations, BIAS providers remain free to seek relief from such
provisions or regulations through appropriate filings with the
Commissions.
369. We also similarly do not forbear from applying Title II
provisions that could be viewed as a benefit to BIAS providers, such as
sections 223, 230(c), and 231. Section 230(c) was not covered by the
scope of forbearance in the 2015 Open Internet Order because ``its
application does not vary based on the classification of BIAS here.''
Since section 230(c)'s application has not changed since the Commission
adopted the 2015 Open Internet Order, the Commission again does not
forbear. Similarly, applying sections 223 and 231 (to the extent
enforced) and their associated limitations on liability, still do not
vary with BIAS's classification, and are not encompassed by the
forbearance in the Order. Many of the relevant provisions in these
sections stem from the Child Online Protection Act (COPA), which has
been enjoined as unconstitutional. A Federal court held that COPA is
unconstitutional and placed a permanent injunction against its
enforcement, and that decision was affirmed on appeal. We also find
that, to the extent that Title II provisions benefit BIAS providers and
newly apply by virtue of reclassification, applying those provisions
better serve the public interest because they promote broadband
deployment.
C. Broad Forbearance From Other Title II Provisions for Broadband
Internet Access Service
370. Beyond the specific statutory provisions and regulations
expressly excluded from forbearance as discussed above and in the
sections below, we apply broad forbearance, to the full extent
permitted by our authority under section 10 of the Act, from provisions
of Title II of the Act and implementing Commission rules that would
apply to BIAS by virtue of its classification as a Title II
telecommunications service. We are persuaded that this forbearance is
appropriate and in the public interest based on our predictive judgment
regarding the adequacy of other protections where needed, the role of
section 706 of the 1996 Act, and how we have tailored our forbearance
to account for updated conclusions in this proceeding regarding the
application of particular rules, requirements, and sources of authority
to BIAS. The record also provides support for the forbearance approach
we take here.
371. Consistent with our analysis in 2015, we conclude that our
analytical approach as to all the provisions and regulations from which
we forbear in the Order is consistent with section 10(a). We also
decline WISPA's request that we conduct a cost-benefit analysis of the
imposition of Title II regulations in the context of deciding which
regulations we should or should not forbear from. WISPA Comments at 60.
This is unnecessary, as we find that our forbearance is in the public
interest and is consistent with 10(a) analysis. Under section 10(a)(1),
we consider here whether particular provisions and regulations are
``necessary'' to ensure ``just and reasonable'' conduct by BIAS
providers. In interpreting that terminology, we conclude that we
reasonably can account for policy trade-offs that can arise under
particular regulatory approaches, as discussed above. While the
specific balancing at issue in EarthLink v. FCC may have involved
trade-offs regarding competition, we nonetheless believe the view
expressed in that decision accords with our conclusion here that we
permissibly can interpret and apply all the section 10(a) criteria to
also reflect the competing policy concerns here. As the D.C. Circuit
also has observed, within the statutory framework that Congress
established, the Commission ``possesses significant, albeit not
unfettered, authority and discretion to settle on the best regulatory
or deregulatory approach to broadband.'' For one, we find it reasonable
in the BIAS context for our interpretation and application of section
10(a)(1) to be informed by section 706 of the 1996 Act. Given the
characteristics specific to BIAS that we find on the record here--
including, among other things, protections from the newly adopted open
internet rules and the overlay of section 706--we limit our forbearance
from the relevant provisions and regulations to the context of BIAS.
Outside that context, they will continue to apply as they have
previously, unaffected by the Order. As discussed above, section 706 of
the 1996 Act ``explicitly directs the FCC to `utiliz[e]' forbearance to
`encourage the deployment on a reasonable and timely basis of advanced
telecommunications capability to all Americans,' '' and our recent
negative section 706(b) determination triggers a duty under section 706
for the Commission to ``take immediate action to accelerate
deployment.'' As discussed in greater detail below, a tailored
regulatory approach avoids disincentives for broadband deployment,
which we weigh in considering what outcomes are just and reasonable--
and whether the forborne-from provisions are necessary to ensure just
and reasonable conduct--under our section 10(a)(1) analyses in this
item. Furthermore, our forbearance in the Order, informed by past
experience and the record in this proceeding, reflects the recognition
that, beyond the specific provisions from which we decline to forbear
above and
[[Page 45484]]
the bright-line open internet rules we adopt below, particular conduct
by a BIAS provider can have mixed consequences, rendering a case-by-
case evaluation superior to bright-line rules. Consequently, based on
those considerations, we predict that, outside the authority we retain
and the rules we apply in the Order, just and reasonable conduct by
BIAS providers is better ensured under section 10(a)(1) by the case-by-
case regulatory approach we adopt--which enables us to account for the
countervailing policy implications of given conduct--rather than any of
the more bright-line requirements that would have flowed from the
provisions and regulations from which we forbear. As explained above,
we conclude that while competition can be a sufficient basis to grant
forbearance, it is not inherently necessary to find section 10
satisfied. These same considerations underlie our section 10(a)(2)
analyses as well, since advancing BIAS deployment and ensuring
appropriately nuanced evaluations of the consequences of BIAS provider
conduct better protects consumers. Likewise, these same policy
considerations are central to the conclusion that the forbearance
granted in the Order, against the backdrop of the protections that
remain, best advance the public interest under section 10(a)(3).
372. The Commission's practical experience with the classification
of BIAS informs our section 10(a) analysis for the remaining statutory
and regulatory obligations triggered by classifying BIAS as a Title II
telecommunications service. Although practical experience in and of
itself does not resolve the appropriate regulatory treatment of BIAS,
it suggests that our approach guards against undue burden that could
hinder BIAS deployment or otherwise be contrary to the public interest.
We are not persuaded by arguments to the contrary, nor that we should
not adopt the regulatory framework in the Order because it will impose
such high compliance costs on providers relative to the status quo from
the near-term past. The record reflects that providers were not
deterred from network investment after the Commission adopted a similar
regulatory approach in the 2015 Open Internet Order and that some
providers voluntarily continue to follow certain conduct rules. We note
in this regard that when exercising its section 10 forbearance
authority ``[g]uided by section 706,'' the Commission permissibly may
``decide[ ] to balance the future benefits'' of encouraging broadband
deployment ``against [the] short term impact'' from a grant of
forbearance. Under the section 10(a) analysis, we are particularly
persuaded to give greater weight to the likely benefits of proceeding
cautiously given the speculative or otherwise limited nature of the
arguments in the current record regarding the forbearance approach
adopted here, which we discuss in greater detail below. Although we
adopt firm forbearance from all direct rate regulation, with respect to
other provisions from which we forbear here, we note that it also is
within the Commission's discretion to proceed incrementally, and we
find that adopting an incremental approach here--by virtue of the
forbearance granted here--guards against any unanticipated and
undesired detrimental effects on broadband deployment that could arise.
While we find that the tailored regulatory framework we adopt in the
Order strikes the right balance, we note that the D.C. Circuit has
recognized the Commission's authority to revisit its decision should
that prove not to be the case.
1. Rate Regulation (Sections 201 and 202)
373. Although we conclude, as the Commission did in 2015, that the
section 10 criteria are not met with respect to forbearance from
section 201 and 202 in full, ``because we do not and cannot envision
adopting new ex ante rate regulation'' or ex post rate regulation of
BIAS beyond the scope of our open internet conduct rules in the future,
we forbear from applying sections 201 and 202 to BIAS to the extent
they would permit such regulation. Contrary to New America's Open
Technology Institute's claim, our sections 201 and 202 forbearance with
respect to rate regulation is consistent with the Commission's approach
in 2015. In forbearing from sections 201 and 202 in this manner, we
reiterate that states may have a role to play in promoting broadband
affordability. Given the protection of our open internet rules, we do
not find ex ante or ex post rate regulation necessary for purposes of
section 10(a)(1) and (a)(2), and we find it in the public interest to
forbear from applying sections 201 and 202 insofar as they would permit
the adoption of such rate regulations for BIAS in the future. We
therefore find to be unfounded claims that our refusal to forbear
entirely from sections 201 and 202 means that the Commission could
introduce rate regulation of BIAS despite our commitment not to do so.
2. Tariffing (Sections 203 and 204)
374. We find the section 10(a) criteria met and forbear from
applying section 203 of the Act insofar as it newly applies to BIAS
providers by virtue of our classification of BIAS. Section 203 requires
Title II common carriers to file a schedule of rates and charges for
interstate common carrier services. We forbear from tariffing
provisions because we predict that the other protections that remain in
place are adequate to guard against unjust and unreasonable, and
unjustly and unreasonably discriminatory, rates and practices in
accordance with section 10(a)(1) and to protect consumers under section
10(a)(2). We also conclude that those other protections reflect the
appropriate calibration of regulation of BIAS at this time, such that
forbearance is in the public interest under section 10(a)(3).
375. We find that section 203's requirements are not necessary to
ensure just and reasonable, and not unjustly or unreasonably
discriminatory, rates and practices under section 10(a)(1) nor to
protect consumers under 10(a)(2). Sections 201 and 202 of the Act, from
which we do not forbear, and our open internet rules are designed to
preserve and protect internet openness by prohibiting unjust and
unreasonable, and unjustly or unreasonably discriminatory, conduct by
BIAS providers for or in connection with BIAS, protecting the retail
mass market customers of BIAS. In calibrating that legal framework, we
considered, among other things, the operation of the marketplace in
conjunction with those protections. This regulatory scheme is
substantially similar to the one we used in the 2015 Open Internet
Order, since there is no evidence that approach did not adequately
protect the interests of consumers--including the interest in just,
reasonable, and nondiscriminatory conduct--that might otherwise be
threatened by the actions of BIAS providers. As such, we make the same
finding in the Order. In the event that BIAS providers violate sections
201 or 202 of the Act, the open internet rules, or any other BIAS
requirements, they remain subject to complaints and Commission
enforcement action.
376. That the Commission has never before imposed tariffing
requirements on BIAS as defined here also supports our section 10
analysis. This practical experience informs what issues may arise with
forbearance from tariffing requirements in this proceeding and
underlies our prediction that the remaining rules and requirements are
sufficient to fulfill the requirements under section 10. Additionally,
our
[[Page 45485]]
forbearance from section 203 is consistent with our broad forbearance
from all Title II provisions that could be used to impose ex ante or ex
post rate regulation on BIAS providers, and we therefore make clear
that we will not impose any such rate regulation nor any requirement of
advanced Commission approval of rates and practices as otherwise would
have been imposed under section 203 on BIAS providers.
377. We find that forbearance from tariffing requirements for BIAS
satisfies section 10(a)(1) and (a)(2) and is consistent with the public
interest under section 10(a)(3) in light of the objectives of section
706. As explained above, section 706 of the 1996 Act ``explicitly
directs the FCC to `utiliz[e]' forbearance to `encourage the deployment
on a reasonable and timely basis of advanced telecommunications
capability to all Americans.' '' The D.C. Circuit has further held that
the Commission ``possesses significant, albeit not unfettered,
authority and discretion to settle on the best regulatory or
deregulatory approach to broadband.'' We find that the scope of our
adopted forbearance strikes the right balance at this time between, on
the one hand, providing the regulatory protections clearly required by
the evidence and our analysis to, among other things, guard the
virtuous cycle of internet innovation and investment and, on the other
hand, avoiding additional regulations that do not appear required at
this time and that risk needlessly detracting from BIAS providers'
broadband investments. We clarify that although we forbear from
applying to BIAS section 203 and, as noted below, section 204,
forbearing from tariffing does not limit the Commission's existing
authority to study rates or competition.
378. We also conclude that the public interest supports forbearing
from tariffing requirements for BIAS under section 10(b)'s requirement
that we analyze the impact forbearance would have on competitive market
conditions. While we consider the section 10(b) criteria in our section
10(a)(3) public interest analysis, our public interest determination
rests on other grounds. In particular, under the entirety of our
section 10(a)(3) analysis, as discussed above, we conclude that the
public interest supports the forbearance adopted in the Order. These
same section 10(b) findings likewise apply in the case of our other
section 10(a)(3) public interest evaluations with respect to BIAS, and
should be understood as incorporated there. Nonetheless, we also
believe that our overall regulatory approach, viewed broadly, advances
competition in important ways. The record reflects that competition is
still limited, and does not provide a strong basis for concluding that
the forbearance granted in the Order is likely to directly affect the
competitiveness of the marketplace for BIAS. Our granted forbearance
continues to be part of an overall regulatory approach designed to
promote infrastructure investment in significant part by preserving and
promoting innovation and competition at the edge of the network, and we
similarly conclude that a grant of forbearance from section 203
indirectly promotes market competition by enabling us to strike the
right balance at this time in our overall regulatory approach.
379. We disagree with Public Knowledge that we should not forbear
from section 203 for BIAS because tariff filings ``provide consumers
with the transparency necessary to protect their interests.'' The
transparency rule and the broadband label requirements are designed to
provide consumers with disclosures of BIAS providers' commercial terms,
including rates, as well as a wide array of other information about
their services, and Public Knowledge fails to explain why these
requirements are insufficient to provide consumers with information
they need to protect their interest. We are thus not persuaded to
depart from our section 10(a) findings above regarding section 203.
380. We also forbear from applying section 204 of the Act insofar
as it newly applies to providers by virtue of our classification of
BIAS. Section 204 provides for Commission investigation of a carrier's
rates and practices newly filed with the Commission, and to order
refunds, if warranted. Since we forbear from section 203's tariffing
requirements, it is not clear what purpose section 204 would serve, and
we thus apply our overarching section 10(a) forbearance analysis above
to section 204. We decline Public Knowledge's suggestion that the
Commission retain section 204. We are not persuaded by Public
Knowledge's argument that ``[t]here appears to be no a priori reason to
assume that the Commission can adequately protect consumers by
disclaiming its authority to suspend unjust rates and practices
(Section 204).'' Public Knowledge fails to explain why our remaining
authority and regulations would be insufficient to protect consumers,
or how section 204 would effectuate that purpose once we have forborne
from applying section 203.
3. Enforcement-Related Provisions (Sections 205 and 212)
381. We forbear from applying certain enforcement-related
provisions of Title II to BIAS beyond the core Title II enforcement
authority discussed above, and find this forbearance warranted under
section 10(a). Section 205 provides for Commission investigation of
existing rates and practices and to prescribe rates and practices if it
determines that the carrier's rates or practices do not comply with the
Communications Act. The Commission has forborne from enforcing section
205 when it sought to adopt a tailored, limited regulatory environment
and, notwithstanding that forbearance, sections 201 and 202 and other
complaint processes continued to apply. The Commission previously
forbore from enforcing section 205 in the 2015 Open Internet Order,
finding that the core Title II enforcement authority, along with the
ability to pursue claims in court, as discussed below, provide adequate
enforcement options and the statutory forbearance test is met for
section 205. Since we are adopting a substantially similar regulatory
scheme as the 2015 Open Internet Order and there is no evidence that
those enforcement options were inadequate, we make the same finding in
the Order. Consistent with our analysis above, we predict that these
provisions are not necessary to ensure just, reasonable, and
nondiscriminatory conduct by providers of BIAS or to protect consumers
under section 10(a)(1) and (a)(2). In addition, as above, under the
tailored regulatory approach we find warranted here, informed by our
responsibilities under section 706, we conclude that forbearance is in
the public interest under section 10(a)(3). We thus reject claims that
we should not forbear from section 205 insofar as it is triggered by
our classification of BIAS. Public Knowledge requests that we not
forebear from enforcing sections 205, 209, 206, 216-217, and 212
because they provide consumers adequate remedies and the Commission the
ability to hold providers accountable. But by Public Knowledge's own
admission applying these provisions is unnecessary, as we ``arguably
have similar authority under the broad grant of Sections 201 and 202
and its general authority under Section 4(i)'' with regard to section
205 and other provisions it requests that we not forebear from
enforcement.
382. We also forbear from applying section 212 to the extent that
it newly applies by virtue of our classification of BIAS. Section 212
empowers the Commission to monitor interlocking
[[Page 45486]]
directorates, i.e., the involvement of directors or officers holding
such positions in more than one common carrier. The Commission has
granted forbearance from section 212 in the CMRS context on the grounds
that forbearance would reduce regulatory burdens without adversely
affecting rates in the CMRS market. In so doing, the Commission noted
that section 212 was originally placed in the Communications Act to
prevent interlocking officers from engaging in anticompetitive
practices, such as price fixing, but found protections of sections
201(b) and 221 and antitrust laws were sufficient to protect consumers
against the potential harms from interlocking directorates. (The
Commission noted that section 221 provided protections against
interlocking directorates, but section 221(a) was repealed in the
Telecommunications Act of 1996. This section gave the Commission the
power to review proposed consolidations and mergers of telephone
companies. While section 221(a) allowed the Commission to bolster its
analysis to forbear from section 212 in the Second CMRS Report and
Order, the protections against interlocking directorates provided by
section 201(b) and 15 U.S.C. 19 provide sufficient protection to
forbear from section 212 for BIAS.) Forbearance also reduced an
unnecessary regulatory cost imposed on carriers. The Commission later
extended this forbearance to dominant carriers and carriers not yet
found to be non-dominant, repealing part 62 of its rules and granting
forbearance from the provisions of section 212. Since we are adopting a
substantially similar regulatory scheme as the 2015 Open Internet Order
and there is no evidence that other protections are not adequate, we
make the same finding in the Order. We predict that other protections
will adequately ensure just, reasonable, and nondiscriminatory conduct
by BIAS providers and protect consumers here, and thus conclude that
the application of section 212 is not necessary for purposes of section
10(a)(1) or 10(a)(2). Moreover, as above, under the tailored regulatory
approach we find warranted here, informed by our responsibilities under
section 706, we conclude that forbearance is in the public interest
under section 10(a)(3). We thus reject Public Knowledge's claim that we
should not forbear from section 212 insofar as it is triggered by our
classification of BIAS.
4. Information Collection and Reporting (Sections 211, 213, 215, and
220(a)(2), (b), (f)-(j))
383. Outside the national security and public safety context, which
we discuss above, we forbear from applying information collection and
reporting provisions of the Act insofar as they would newly apply by
virtue of our classification of BIAS as a Title II telecommunications
service. These provisions principally are used by the Commission to
implement its traditional rate-making authority over common carriers.
Since we are not applying tariffing requirements to BIAS nor engaging
in ex ante or ex post rate regulation of BIAS, it is not clear what
purpose these provisions would serve. The Commission also has
undertaken the Broadband Data Collection and adopted broadband labeling
requirements since the 2015 Open Internet Order, both of which empower
consumers by providing them with greater transparency as to their
broadband service and further suggest these information collection
requirements are unnecessary. Given both our intention to tailor the
regulations applicable to BIAS and our responsibility under section 706
to encourage deployment, we conclude that forbearance of these
information collection and reporting provisions is in the public
interest under section 10(a)(3) and applying these sections is not
necessary within the meaning of section 10(a)(1) and (a)(2).
384. We disagree, in part, with Public Knowledge, which broadly
argues that we should not forbear from sections 211, 213, 215, and 220.
We also disagree with Public Knowledge that there is ``no reason to
forbear simply for the sake of forbearing when a waiver will minimize
any regulatory burden without depriving the Commission of useful tools
for the future.'' We again note that while the Commission may waive its
rules, it may not generally waive a provision of a statute. Forbearance
is the mechanism for not applying statutory provisions when warranted.
As discussed earlier, we retain sections 218 and 219, and certain
provisions of section 220, which Public Knowledge also asserts should
be excluded from forbearance, to ensure that the Commission has the
ability to collect information and require reporting if necessary,
including for national security and public safety purposes, and to
ensure network resiliency. We conclude that excluding sections 218 and
219, and the section 220 provisions from forbearance, as detailed
above, ensures that the Commission can collect information necessary to
carry out its duties with respect to the public interest. Public
Knowledge does not name any uncollected information that would enhance
our ``ability to make informed policy choices that promote the
Congressional goals of ubiquitous, affordable deployment.''
5. Interconnection and Market-Opening Provisions (Sections 251, 252,
and 256)
385. We find the section 10 criteria met for forbearance from
applying the interconnection and market-opening provisions in sections
251 (other than sections 251(a)(2)), 252, and 256 to the extent that
they would newly apply through the classification of BIAS as a Title II
service. As a result of the forbearance granted from section 251,
section 252 thus is inapplicable, insofar as it is simply a tool for
implementing the section 251 obligations. Although we do not forbear
from applying section 251(a)(2) with respect to BIAS, we note that the
Commission previously has held that the procedures of section 252 are
not applicable in matters simply involving section 251(a). To the
extent that the Commission nonetheless could be seen as newly applying
section 252 with respect to BIAS as a result of our classification
decision here, we find the section 10 criteria met for forbearance from
that provision for the same reasons discussed below with respect to
section 251. Given otherwise-existing authority that we retain under
our open internet rules and provisions of the Act from which we do not
forbear, we find that there is no current Federal need for those
provisions--and, indeed, that they would conflict with the regulatory
approach to BIAS that we find most appropriate. Thus, applying those
provisions of the Act is not ``necessary'' under section 10(a)(1) and
(a)(2). For those same reasons, we also find that forbearance is in the
public interest under section 10(a)(3). We note that the Commission has
determined that section 251(c) has been fully implemented throughout
the United States, and thus permissibly is within the scope of the
Commission's section 10 forbearance authority.
386. We begin by putting the key market-opening requirements of the
sections 251 and 252 framework in their broader legal and regulatory
context under current precedent (while saving discussion of the more
limited role of section 256 for our targeted analysis of
interconnection below). At a high level, section 251 provides a
graduated set of interconnection requirements and other obligations
designed to foster competition in telecommunications markets,
particularly local markets. The
[[Page 45487]]
nature and scope of these obligations vary depending on the type of
service provider involved.
Section 251(a) sets forth general duties applicable to all
telecommunications carriers, including the section 251(a)(1) duty ``to
interconnect directly or indirectly with the facilities and equipment
of other telecommunications carriers.''
Section 251(b) sets forth additional duties for local
exchange carriers pertaining to resale of services, number portability,
dialing parity, access to rights-of-way, and reciprocal compensation--
the duty to establish reciprocal compensation arrangements for the
transport and termination of telecommunications (i.e., arrangements for
exchange of traffic terminating on another carrier's network).
Section 251(c) sets forth the most detailed obligations,
which apply to ILECs, the group of local telephone companies that,
prior to the 1996 Act, generally had been subject to little or no
competition. These section 251(c) obligations include: the duty to
``negotiate in good faith in accordance with section 252 the particular
terms and conditions of agreements'' to fulfill the section 251(b) and
(c) requirements; additional direct, physical interconnection
obligations; requirements to unbundle network elements; the duty to
allow resale of telecommunications services at wholesale rates;
requirements to provide notice of network changes; and a requirement to
allow collocation of equipment.
387. In turn, section 252 directs State commissions to mediate and
arbitrate interconnection disputes involving an ILEC, as well as to
review interconnection agreements arrived at ``by negotiation and
arbitration.'' The Commission has declined to adopt rules advising the
State commissions on how to conduct mediations and arbitrations, and
has stated that the states are in a better position to develop
mediation and arbitration rules that support the objectives of the 1996
Act. ILECs are required to negotiate the implementation of section
251(b) and (c) requirements through interconnection agreements subject
to section 252, and the Commission has held that the section 252
process applies even when a request involves section 251(a) and (b)
alone, without any request under section 251(c). The Commission also
has concluded that section 252 provides a State forum for disputes
involving two carriers that are not ILECs regarding the implementation
of section 251(b) duties.
388. Although the Commission has authority to adopt rules governing
the implementation of section 251(b) and (c), precedent demonstrates
that State commissions acting under section 252 can resolve
interconnection disputes even as to issues where the Commission has not
adopted rules. Further, agreements between ILECs and other parties
under section 252 can be entered ``without regard to the standards set
forth in subsections (b) and (c) of section 251 of this title.'' And
while interconnection agreements are subject to approval, by default
that entails approval by a State commission--not the FCC. Further,
parties aggrieved by State commission actions under section 252 do not
raise those with the FCC--instead, they go in the first instance to
Federal district court.
389. Even stated at that high level of abstraction, it is clear
that the section 251/252 framework is significantly at odds with the
regulatory framework we find warranted for BIAS to implement the ``just
and reasonable'' requirements of sections 201 and 202; to protect
consumers; and to advance the public interest. Our bright-line conduct
rules implementing sections 201 and 202, Title III of the Act, and
section 706 of the 1996 Act, squarely address key issues regarding the
carriage of traffic, subject to reasonable network management. We
otherwise deliberately elect to take a case-by-case approach in
evaluating BIAS-related conduct, including traffic exchange agreements.
And although we do not categorically preempt all State or local
regulation affecting BIAS, we clearly express our intention to preempt
conflicting State and local regulations--including regulations more
onerous than the regulatory framework we adopt.
390. Trying to square our chosen regulatory approach to BIAS with
the section 251/252 framework is problematic, to say the least. As
described above, the section 251/252 framework presupposes heavy State
involvement in its implementation, providing for states to resolve
previously unaddressed legal and policy questions under the Federal
framework while also leaving states to impose State law requirements.
Sections 251 and 252 also render all such decisions subject to State
commission interpretation and enforcement in the first instance, with
any direct review coming not from the FCC but from Federal courts.
Given our conscious choice to leave significant issues to case-by-case
evaluation, if the section 251/252 framework applied we would risk
forgoing the ability to be the first one to pass on previously
unaddressed policy issues, instead yielding those decisions to State
commissions. Although we could seek to constrain states by adopting ex
ante rules in this regard specifically implementing section 251, that
would force us down a course we have expressly disavowed as unwarranted
under the general conduct rule and oversight of traffic exchange
agreements, where we find case-by-case review most appropriate. Even
then, section 251(d)(3) specifies that, in prescribing and enforcing
regulations to implement the requirements of the section, the
Commission shall not preclude the enforcement of any regulation, order,
or policy of a State commission that: (a) establishes access and
interconnection obligations of local exchange carriers; (b) is
consistent with the requirements of the section; and (c) does not
substantially prevent implementation of the requirements of the section
and the purposes of the part. What is more, tying our rules to the
section 251/252 framework opens the door for them to be disregarded
entirely through intercarrier agreements entered into ``without regard
to the standards set forth in subsections (b) and (c) of section 251.''
In sum, rather than a primarily Federal policy framework administered
in the first instance by the Commission--and our choice of the best mix
of bright-line rules and case-by-case review--applying the section 251/
252 framework risks forcing us into a choice between preserving case-
by-case review in many scenarios, but leaving unresolved policy
questions to be first addressed by states in many cases, or else
forgoing case-by-case review even where we think it is warranted in
favor of ex ante rules that might have the perverse consequence of
opening the door for providers to disregard them.
391. That backdrop is a key overlay to all of our forbearance
analyses in this regard. Insofar as applying the section 251/252
framework would undermine the regulatory approach we have identified as
the best way to ensure just and reasonable rates and practices under
sections 201 and 202 of the Act, and the best way to protect consumers,
that is highly relevant to our evaluation of whether there is a current
Federal need for the section 251/252 framework in the BIAS context
under the section 10(a)(1) and (a)(2) forbearance criteria. Those
considerations also carry significant weight in our public interest
evaluation under section 10(a)(3). Although Congress directed the
Commission, in section 706 of the 1996 Act, to encourage the deployment
of advanced telecommunications capability through, among other things,
``measures that promote competition in the local telecommunications
market''--
[[Page 45488]]
and we concede that the section 251/252 framework is one such example--
we nonetheless conclude that our approach correctly reflects the
overall legal framework Congress established in the 1996 Act. Congress
recognized that our preexisting section 201 authority could enable us,
in the case of interstate and international services, to do many of the
same things addressed for intrastate services as well under section
251, and thus expressly preserved that authority against any inference
of an implicit repeal or narrowing through its enactment of section
251. Likewise, the Commission previously has sought to balance the
advancement of competition policy with the duty to encourage advanced
services deployment pursuant to section 706, which we conclude is
advanced by our tailored regulatory approach here. Our overall analysis
of the record on investment incentives--including evidence and
arguments regarding more extensive or less extensive regulation than
the tailored approach adopted here--is discussed in greater detail
above.
a. Interconnection and Traffic Exchange
392. Arguments in the record that identify concrete scenarios where
sections 251(a)(1), 251(b)-(c), 252, and 256 could be relevant only
involve the related issues of interconnection and traffic exchange. We
clarify that for purposes of this section we use the term
``interconnection'' solely in the manner it is used and defined for
purposes of these provisions. Most significantly, WTA argues that the
section 251/252 framework could help resolve problems rural carriers
experience when dealing with ``large internet backbone and middle mile
transport providers'' due to ``disadvantages and discrepancies in
negotiation power and resources''--including ``refusals to upgrade the
capacity and quality of middle mile facilities, take-it-or-leave it
offers rather than bona fide negotiations of IP interconnection and
traffic exchange terms and conditions, and demands that broadband
traffic be accepted at and delivered to large carrier facilities in
distant cities at the WTA member's expense.'' Although those are
important concerns, we are not persuaded that applying the section 251/
252 framework--or section 256--would be an appropriate course of
action. As with our forbearance analysis more generally, we can proceed
by assuming that certain requirements apply and evaluate the section 10
criteria on that basis. And because we forbear from the relevant
requirements we need not, and do not, resolve whether BIAS could
constitute ``telephone exchange service'' or ``exchange access,'' nor
whether any particular non-BIAS provider seeking to interconnect and
exchange traffic with a BIAS provider is a carrier. To the extent that
WTA goes beyond BIAS and argues that the section 251/252 framework
should apply to ``any other IP broadband services'' or ``other IP
interconnection,'' it does not explain what it means in a way that
would undercut--or even demonstrate the relevance of--those other
scenarios to the forbearance at issue here. We thus do not depart from
the forbearance analysis above on the basis of such undeveloped
references.
393. Sections 251(a)(1) and 256. Section 251(a)(1) requires all
carriers to interconnect with other carriers directly or indirectly.
However, the identified concerns do not demonstrate a refusal to
interconnect (even indirectly). Rather, they reflect dissatisfaction
with the claimed inconvenience and expense. Thus, section 251(a)(1)
does not appear even potentially to be a solution to these concerns.
394. Likewise, section 256 does not appear any more relevant of a
solution, even in theory. Section 251(a)(2)--which we do not forbear
from applying, as explained above--prohibits carriers from
``install[ing] network features, functions, or capabilities that do not
comply with the guidelines and standards established'' pursuant to two
other provisions of the Act. The first of those provisions is section
255 of the Act, which is designed to make networks more usable by
individuals with disabilities--and which is the premise of our decision
not to forbear from applying section 251(a)(2). The second of those
provisions is section 256, which, without granting the Commission any
new authority, provides for the Commission to encourage coordinated
network planning and network interconnectivity, including through
participating in industry standards-setting. But again, the types of
industry standards or network planning contemplated by section 256 do
not appear to address the concerns raised by rural carriers about the
cost and inconvenience of interconnection.
395. Consequently, because these concretely identified concerns
about interconnection would not be addressed by sections 251(a)(1) and
256 in any case, we see no current Federal need to apply those
provisions of the Act insofar as they would be newly triggered by our
classification of BIAS. Indeed, the Commission retains authority under
sections 201 and 202, and the open internet rules, to address
interconnection issues should they arise, including through evaluating
whether BIAS providers' conduct is just and reasonable on a case-by-
case basis. These remaining legal protections that apply with respect
to BIAS providers will enable us to act if needed to ensure that a
provider does not unreasonably refuse to provide service or
interconnect. Thus, we do not find it ``necessary'' to apply section
251(a)(1) or section 256 to ensure just and reasonable rates and
practices under section 10(a)(1) or to protect consumers under section
10(a)(2). For those same reasons, we find forbearance in the public
interest under section 10(a)(3), consistent with our decision to
proceed incrementally and make clear the limited extent of our
departure from the preexisting regulatory status quo.
396. Sections 251(c)(2) and 252. We next turn to the
interconnection requirements of section 251(c)(2). That provision
requires ILECs to provide interconnection ``at any technically feasible
point within the carrier's network . . . on rates, terms, and
conditions that are just, reasonable, and nondiscriminatory.'' Because
it is a provision implemented under the combined section 251/252
framework, it squarely implicates the full array of concerns discussed
above about the conflict between that framework and the regulatory
approach to BIAS that we conclude is most appropriate.
397. WTA's arguments do not persuade us that forbearance is
unwarranted. For one, it does not appear that WTA's concerns about
rural carriers' need to carry traffic ``to large carrier facilities in
distant cities at the WTA member's expense'' meaningfully would be
remedied by the application of section 251(c)(2), which still requires
the carrier invoking section 251(c)(2) to get its traffic to a ``point
within the [ILEC's] network.'' Although WTA's concerns about ``refusals
to upgrade the capacity and quality of middle mile facilities'' and
``take-it-or-leave it offers rather than bona fide negotiations of IP
interconnection . . . terms and conditions'' theoretically could be
addressed under section 251(c)(2) where that provision applies, the
practical scope of that provision appears quite limited as relevant
here. Even assuming arguendo that the internet backbone providers and
middle mile providers of concern to WTA would be telecommunications
carriers (or else they would not be subject to the section 251/242
framework in the first place), the universe of ILECs providing such
service--the only providers actually subject to section 251(c)--is far
more limited. And even then, section 251(c) does not apply to many
rural carriers by
[[Page 45489]]
virtue of section 251(f). Section 251(f)(1) of the Act establishes a
default exemption from all of section 251(c) for a ``rural telephone
company'' absent a request from a carrier invoking section 251(c) and
an affirmative determination by a State commission ``that such request
is not unduly economically burdensome, is technically feasible, and is
consistent with section 254 of this title (other than subsections
(b)(7) and (c)(1)(D) thereof).'' Further, under section 251(f)(2),
``[a] local exchange carrier with fewer than 2 percent of the Nation's
subscriber lines installed in the aggregate nationwide may petition a
State commission for a suspension or modification of the application of
a requirement or requirements of subsection (b) or (c)'' of section
251.
398. But once we assume arguendo that the internet backbone
providers and middle mile providers of concern to WTA would be
telecommunications carriers, that scenario is one that the Commission
can address far more comprehensively through sections 201 and 202 on a
case-by-case basis. And it will be the FCC--rather than State
commissions--addressing previously unresolved policy issues and
generating a more uniform Federal regulatory framework for BIAS. We
otherwise have determined that an FCC-led case-by-case evaluation is
the best approach to internet traffic exchange arrangements consistent
with our obligation to ensure just and reasonable rates and practices
under sections 201 and 202 of the Act. Because we conclude that the
section 251(c)(2)/252 framework would interfere with that approach, and
because we find that our regulatory approach will enable us to more
comprehensively and consistently address any issues that arise in this
regard, while appropriately balancing BIAS providers' investment
incentives, we conclude that applying those provisions is not
``necessary'' under section 10(a)(1) and (a)(2), and that forbearance
is in the public interest under section 10(a)(3).
399. Sections 251(b)(5) and 252. The final concrete issue raised by
WTA--its concern about ``take-it-or-leave it offers rather than bona
fide negotiations of IP . . . traffic exchange terms and conditions''--
requires a clarification about terminology. When the Commission
referred to ``Internet traffic exchange arrangements'' in the 2015 Open
Internet Order and again here, it contemplated arrangements or
agreements potentially dealing with both the physical linking of
networks and the associated exchange of traffic. Section 251 reflects a
different approach. Subsections (a)(1) and (c)(2) address the linking
of networks, while subsection (b)(5) addresses compensation
arrangements for traffic exchange. Thus, when considering concerns
associated with traffic exchange under section 251, we must focus on
subsection (b)(5).
400. Section 251(b)(5) requires LECs ``to establish reciprocal
compensation arrangements for the transport and termination of
telecommunications.'' In the Commission's implementation of this
provision (in conjunction with other statutory provisions) outside the
BIAS context, it has established an extensive series of rules
addressing traffic exchange arrangements between local carriers and
other carriers, that generally has moved in the direction of ``bill-
and-keep'' arrangements rather than per-minute (or other) intercarrier
compensation payments. Under bill-and-keep arrangements, a carrier
generally looks to its end users--which are the entities and
individuals making the choice to subscribe to that network--rather than
looking to other carriers and their customers to pay for the costs of
its network. The changes to the preexisting intercarrier rate
regulations were paired with universal service support when appropriate
to account for lost revenues, and with a State role in defining the
specific point in the network where each carrier is responsible for its
own costs in delivering the network (called the ``network edge'').
401. Because section 251(b)(5)--like section 251(c)(2)--is a
provision implemented under the combined section 251/252 framework, it
squarely implicates the full array of concerns discussed above about
the conflict between that framework and the regulatory approach to BIAS
that we conclude is most appropriate. Against that backdrop, the record
on this issue likewise does not persuade us that forbearance is
unwarranted.
402. As a threshold matter, we are not persuaded to simply apply
our existing rules implementing section 251(b)(5) in the case of BIAS
traffic. Those rules reflect a carefully calibrated regulatory regime
designed to account for historical reliance interests as well as the
interests of universal service contributors being asked to bear costs
associated with revenue replacement mechanisms. They were not adopted
with the expectation that they would apply to BIAS traffic, and
abruptly doing so could seriously unsettle that careful balance.
403. Although there is debate in the record about whether and when
bill-and-keep could be appropriate in this context irrespective of
those intercarrier compensation rules, our past experience counsels for
a cautious approach. As noted above, before adopting a shift to bill-
and-keep for traffic historically subject to intercarrier compensation,
the Commission evaluated a comprehensive record on the merits of such
an approach, the associated reliance interests that could be affected,
and how to employ universal service support in response to any
legitimate reliance interests or need for revenues beyond what could be
recovered from end users. Absent a carefully calibrated regulatory
approach founded on such a record, an industry-wide shift to mandatory
bill-and-keep for BIAS traffic risks disruptive consequences for end-
user BIAS rates, overall industry recovery, and provider viability.
404. Thus, we find that either applying our existing intercarrier
compensation framework implementing section 251(b)(5) (along with
sections 201(b) and 254, among other provisions) or adopting bill-and-
keep here as the industry approach to traffic exchange arrangements for
BIAS traffic under section 251(b)(5) itself risks undermining just and
reasonable rates and practices and harming consumers. Thus, applying
such requirements naturally is not necessary to ensure just and
reasonable rates and practices under section 10(a)(1) or for the
protection of consumers under section 10(a)(2). And for those same
reasons, we find forbearance to be in the public interest under section
10(a)(3).
405. The remaining near-term issue is the choice between relying on
case-by-case assessments under the regulatory framework for BIAS we
already have identified as most appropriate, or instead on attempting
case-by-case assessments under the section 251(b)(5)/252 framework. As
discussed above, there are inherent incompatibilities between the
Federal case-by-case review we contemplate and any approach that relies
on the heavily state-commission-dependent section 251/252 framework.
Thus, we do not see it as realistically viable to maintain both
approaches simultaneously in disparate forums with the likelihood of
divergent policy decisions from different decisionmakers. And the
record does not reveal benefits from the section 251(b)(5)/252
framework that would offset the harms to what we have identified as the
best way to ensure just and reasonable rates and practices, to protect
consumers, and to advance the public interest.
406. As an alternative to case-by-case evaluation of traffic
exchange issues, we find the section 251(b)(5)/252 framework inferior.
For one, as
[[Page 45490]]
contemplated by our regulatory approach based principally on sections
201 and 202 of the Act, oversight of internet traffic exchange
arrangements can encompass both interconnection and traffic exchange
issues. But section 251(b)(5) is limited narrowly to traffic exchange,
and at best could be paired with the broadly applicable interconnection
requirement of section 251(a)(1) that imposes limited substantive
duties unlikely to address the concerns raised in the record and/or the
(theoretically) somewhat helpful substantive requirement of section
251(c)(2) that appears likely to apply to at most a very narrow subset
of the providers of concern. Further, the notion of a truly case-by-
case approach under section 251(b)(5) is at least somewhat illusory.
Given the wording of section 251(b)(5), an ``originating carrier is
barred from charging another carrier for delivery of traffic that falls
within the scope of section 251(b)(5).'' Thus, section 251(b)(5) itself
constrains the possible outcomes of traffic exchange arrangements as
compared to the greater flexibility we find in our approach grounded in
sections 201 and 202.
407. For all those reasons, we conclude that application of the
section 251(b)(5)/252 framework is not necessary under section 10(a)(1)
and (a)(2). For those same reasons, we also conclude that forbearance
is in the public interest under section 10(a)(3).
b. Generalized Arguments About Competition
408. We also do not depart from our forbearance analysis above--or
the forbearance from sections 251 (other than subsection (a)(2)), 252,
and 256 in the 2015 Open Internet Order--based on generalized arguments
about the need for, or benefits of, competition. To be clear, we
forbear from applying all of section 251 other than subsection (a)(2)
insofar as it would newly apply to BIAS or a BIAS provider by virtue of
our classification of BIAS as a telecommunications service. Public
Knowledge asserts that ``[a] wide variety of provisions that the
Commission proposes to forbear from enforcing are essential to
promoting competition,'' but does not identify specifically what
provisions it has in mind. Against the backdrop of the 2015 Open
Internet Order having identified sections 251, 252, and 256 as
involving interconnection and market-opening provisions, we consider
Public Knowledge's arguments in that context here. To the extent that
Public Knowledge had other provisions in mind, its high-level arguments
about competition divorced from any reference to specific provisions or
requirements does not persuade us to depart from the forbearance
approach adopted in the 2015 Open Internet Order. Competition is
important, and the regulatory framework for BIAS that we adopt here
will contribute to increased competition for BIAS itself as well as for
the broader internet marketplace. At the same time, it is not the
Commission's purpose to protect specific competitors--or even
competition merely for its own sake--but ultimately to seek the benefit
of end users. Thus, generalized arguments about competition do not
persuade us to depart from the forbearance analysis above, the
forbearance analysis in the 2015 Open Internet Order, or the
forbearance from sections 251 (other than subsection (a)(2)), 252, and
256 granted there.
6. Subscriber Changes (Section 258)
409. We forbear from applying section 258 insofar as it would newly
apply by virtue of our classification of BIAS as a Title II
telecommunications service. Section 258 and the Commission's
implementing rules provide important protections to voice service
customers against unauthorized carrier changes. As was the case when
the Commission adopted the 2015 Open Internet Order, the record does
not indicate whether or how unauthorized changes involving BIAS
providers could occur. Consequently, it remains unclear what purpose
applying this provision would serve, especially given the consumer
protections afforded by the core BIAS requirements. As under our
analyses of other Title II provisions from which we forbear, we
conclude that application of section 258 is not necessary for purposes
of section 10(a)(1) and (a)(2) and that forbearance is in the public
interest under section 10(a)(3). We disagree with Public Knowledge that
we should not forbear from section 258. While we do not disagree that
section 258 can provide consumers protections for voice services,
Public Knowledge fails to articulate how an unauthorized carrier change
could occur in the context of BIAS.
7. Other Title II Provisions
410. Beyond the provisions already addressed above, we also forbear
from applying additional Title II provisions that could give rise to
new requirements by virtue of our classification of BIAS to the extent
our section 10 authority allows. We find it notable that no commenter
raises significant concerns about forbearing from these requirements,
which reinforces our analysis below.
411. We conclude that the three-part statutory test under section
10(a) is met to forbear from applying certain provisions concerning
BOCs in sections 271-276 of the Act to the extent that they would
impose new requirements arising from classifying BIAS as a Title II
telecommunications service, as the Commission did in the 2015 Open
Internet Order. Sections 271, 272, 274, and 275 establish requirements
and safeguards regarding the provision of interLATA services,
electronic publishing, and alarm monitoring services by the BOCs and
their affiliates. The Commission has determined that section 271 has
been fully implemented throughout the United States. Therefore, the
prohibition in section 10(d) of the Act against forbearing from section
271 prior to such a determination is not applicable. Section 273
addresses the manufacturing, provision, and procurement of
telecommunications equipment and customer premises equipment (CPE) by
the BOCs and their affiliates, the establishment and implementation of
technical standards for telecommunications equipment and CPE, and joint
network planning and design, among other matters. Section 276 addresses
the provision of ``payphone service,'' and in particular establishes
nondiscrimination standards applicable to BOCs' provision of payphone
service.
412. We again conclude that the application of any newly triggered
provisions of sections 271 through 276 to BIAS is not necessary within
the meaning of section 10(a)(1) or (a)(2), and that forbearance from
these requirements is consistent with the public interest under section
10(a)(3), with one exception regarding section 276 that we discuss
below. Many of the provisions in these sections are not currently in
effect at all. Others impose continuing obligations that are, at most,
tangentially related to the provision of BIAS. Forbearance from any
application of these provisions with respect to BIAS insofar as they
are newly triggered by our classification of that service will not
meaningfully affect the charges, practices, classifications, or
regulations for or in connection with that service, consumer
protection, or the public interest. The Alarm Industry Communications
Committee (AICC) argues that we should not forbear from section 275
because it ``would actively strip the alarm industry of existing
protections.'' AICC asserts that refraining from forbearance of section
275 would be consistent with the 2015 Open Internet Order because
``that
[[Page 45491]]
Order held that forbearance from section 275 was only appropriate where
it would impose new requirements arising from the reclassification of
BIAS as a Title II service.'' We note that the 2015 Open Internet Order
specifically said that it forbears from section 275, inter alia, ``to
the extent that [it] would impose new requirements arising from the
classification of broadband internet access service in this Order.'' We
take the same approach in the Order, and therefore find that the Order
does not strip the alarm industry of any protections that may have
existed prior to our reclassification of BIAS. Consistent with our
general approach to forbearance here, which seeks to address new
requirements that could be triggered by our classification of BIAS, we
do not forbear with respect to provisions to the extent that they
already applied prior to the Order. For example, section 271(c)
establishes substantive standards that a BOC was required to meet to
obtain authorization to provide interLATA services in an in-region
state, which it must continue to meet to retain that authorization. In
addition, section 271(c)(2)(B)(iii), which requires that a BOC provide
nondiscriminatory access to poles, ducts, conduits, and rights-of-way
in accordance with the requirements of section 224 of the Act, does not
depend upon the classification of BOCs' BIAS. In combination with
section 271(d)(6), this provision provides the Commission with an
additional mechanism to enforce section 224 against the BOCs. We also
do not forbear from section 271(d)(6) to the extent that it provides
for enforcement of the provisions we do not forbear from here. In
addition, while the BOC-specific provisions of section 276
theoretically could be newly implicated insofar as the reclassification
of BIAS might result in some entities newly being treated as a BOC, the
bulk of section 276 appears independent of the classification of BIAS
and we thus do not forbear as to those provisions.
413. We generally forbear from applying sections 221 and 259 of the
Act, consistent with our forbearance throughout the Order. First, as
described elsewhere, we forbear from all ex ante and ex post rate
regulation, tariffing, and related recordkeeping and reporting
requirements insofar as they would arise from our classification of
BIAS. Second, we likewise forbear from unbundling and network access
requirements that would newly apply based on the classification
decision in the Order. We predict that other protections will be
adequate to ensure just, reasonable, and nondiscriminatory conduct by
providers of BIAS and to protect consumers for purposes of section
10(a)(1) and (a)(2). Further, informed by our responsibilities under
section 706, we adopt a regulatory approach that we find strikes the
appropriate public interest balance under section 10(a)(3). For these
reasons, we also forbear from section 221's property records
classification and valuation provisions, which would be used in the
sort of rate regulation that we do not find warranted for BIAS.
Likewise, just as we forbear from broader unbundling obligations, that
same analysis persuades us to forbear from applying section 259's
infrastructure-sharing and notification requirements.
414. We also again grant forbearance from other miscellaneous
provisions to the extent that they would newly apply as a result of our
classification insofar as they do not appear necessary or even relevant
for BIAS. Section 226 protects consumers making interstate operator
services calls from pay telephones and other public telephones from
unreasonably high rates and anti-competitive practices. Section
227(c)(3) imposes on carriers certain notification obligations related
to the Telephone Consumer Protection Act (TCPA), and section 227(e)
restricts the provision of inaccurate caller identification information
associated with any telecommunications service. Because we are
forbearing from these substantive requirements, we note that, as a
consequence, there will not be a private right of action granted under
section 227(c)(5) based on alleged violations of those forborne-from
requirements in the context of BIAS. We note that while the universe of
``calls'' covered by section 227(b)(1)(A)(iii) is prerecorded or
autodialed calls to ``a paging service, cellular telephone service,
specialized mobile radio service, or other radio common carrier
service, or any service for which the called party is charged for the
call'' even with the reclassification of mobile BIAS we do not
interpret there to be any new or expanded restrictions arising from
that provision because the relevant calls also would need to be
specifically to a ``telephone number'' assigned to the relevant service
As a result, there also would not be any private right of action under
section 227(b)(3) that is newly triggered by the decisions in the
Order. Section 228 regulates the offering of pay-per-call services and
requires carriers, inter alia, to maintain lists of information
providers to whom they assign a telephone number, to provide a short
description of the services the information providers offer, and to
provide a statement of the cost per minute or the total cost for each
service. Section 260 regulates LEC practices with respect to the
provision of telemessaging services. It remains unclear how these
provisions would be relevant to BIAS, and commenters do not explain how
or argue that they would. Since the core BIAS requirements would also
still be available to the Commission, we find that enforcing these
provisions, to the extent they would newly apply by virtue of our
classification of BIAS, is not necessary to ensure that the charges,
practices, classifications, or regulations by, for, or in connection
with BIAS providers are just and reasonable and are not unjustly or
unreasonably discriminatory under section 10(a)(1). Enforcement also is
not necessary for the protection of consumers under section 10(a)(2),
and forbearance from applying these provisions is consistent with the
public interest under section 10(a)(3), particularly given our
conclusion, informed by section 706, that it is appropriate to adopt a
tailored approach here.
415. We clarify that we will not forbear from applying section 276
to the extent it applies to incarcerated people's communications
services (IPCS) or the Commission's IPCS rules. Though the IPCS rules
themselves do not appear to vary depending on whether BIAS is an
``information service'' or ``telecommunications service,'' the
Commission previously made this clarification in the 2015 Open Internet
Order to respond to a concern that forbearance ``could be misconstrued
as a limitation on the Commission's authority with respect to any
advanced ICS services (such as video visitation) that may replace or
supplement traditional ICS telephone calls.'' Congress amended section
276 of the Act in January 2023 to expand the Commission's authority
over IPCS under that provision, but the ultimate scope and bounds of
that expanded authority is the subject of a pending rulemaking
proceeding. Consistent with our conclusion below that it would be
contrary to the public interest to forbear from applying section 276 to
the extent it applies to IPCS or the Commission's IPCS rules, given
open questions about the scope of the Commission's expanded authority
under section 276, we find it prudent at this time--and consistent with
the public interest--to retain our full section 201(b) authority
specifically in the context of IPCS, as well. Though no commenter
raises similar concerns in this proceeding, we make the same
clarification, consistent
[[Page 45492]]
with the Commission's ongoing efforts to grant relief from exorbitantly
high rates for calls between incarcerated people and their loved ones,
particularly in light of Congress recently recognizing the increased
role that advanced communications plays in these communications. This
also is consistent with the Commission not forbearing from section 225,
as the Commission has acted to improve communications access for
incarcerated people with disabilities. We therefore find that
forbearance would fail to meet the statutory test of section 10 of the
Act, in that the protections of section 276 remain necessary to protect
consumers and serve the public interest.
8. Truth-in-Billing Rules
416. We again forbear from applying our truth-in-billing rules
insofar as they are triggered by our classification of BIAS here. As
with our section 10 analysis above, we conclude that our truth-in-
billing rules are not needed for the purposes of section 10(a)(1) and
(2) and that forbearance is in the public interest under section
10(a)(3). No commenter discusses whether we should or should not
forbear from our truth-in-billing rules, and we have no reason to
believe that ``our core BIAS requirements, including the requirement of
just and reasonable conduct under section 201(b), will not provide
important protections in this context even without specific rules.''
9. Roaming-Related Provisions and Regulation
417. We adopt our proposal to grant the same conditional
forbearance from common carrier roaming regulations as in the 2015 Open
Internet Order and find that doing so meets the section 10(a) analysis.
As there is no record discussion regarding our forbearance from
applying the Commission's roaming rules, we have no reason to believe
that we should depart from the forbearance in the 2015 Open Internet
Order or that it would fail to meet the section 10(a) analysis. The
Commission has established two different regimes to govern the roaming
obligations of commercial mobile providers. One requires certain CMRS
providers, ``on reasonable request, to provide automatic roaming on
reasonable and not unreasonably discriminatory terms and conditions.''
The second requires providers of commercial mobile data services, as
defined and including mobile BIAS, to ``offer roaming arrangements to
other such providers on commercially reasonable terms and conditions,
subject to certain specified limits.'' As the Commission previously
determined in the 2015 Open Internet Order, it remains the case that
reclassifying mobile BIAS as CMRS potentially affects the roaming
obligations of mobile BIAS providers in two ways. First, absent any
action by the Commission to preserve data roaming obligations, the
determination that mobile BIAS is an interconnected service would
result in providers of mobile BIAS no longer being subject to the data
roaming rule, which applies only to non-interconnected services.
Second, the determination that mobile BIAS is CMRS potentially subjects
mobile BIAS providers to the terms of the CMRS roaming rules.
418. We again forbear from the application of the CMRS roaming
rule, Sec. 20.12(d) of the Commission's rules, to mobile BIAS,
conditioned on such providers continuing to be subject to the
obligations, process, and remedies under the data roaming rule codified
in Sec. 20.12(e). Retaining the roaming obligations for mobile BIAS
that applied prior to reclassification remains consistent with our
tailored approach, and we are again persuaded that the Commission rules
in Sec. 20.12(e) and our remaining core BIAS requirements render the
forborne-from rules unnecessary. We thus find that applying the
forborne-from rules is not necessary for purposes of section 10(a)(1)
and (a)(2) and that the conditional forbearance is in the public
interest under section 10(a)(3).
10. Terminal Equipment Rules
419. We also again forbear from applying certain terminal equipment
rules to the extent that they would newly apply by virtue of the
classification of BIAS. Similar to the rules adopted in the 2015 Open
Internet Order, the open internet rules we adopt in the Order will
prevent BIAS providers from restricting the use of non-harmful devices
subject to reasonable network management. The record does not discuss
whether we should forbear from our terminal equipment rules. We thus
find that applying the Commission's terminal equipment rules, insofar
as they would newly apply to BIAS providers by virtue of our
classification decision here, are necessary for purposes of section
10(a)(1) and (a)(2), particularly given the availability of the core
BIAS requirements, and in particular our bright-line rules. Likewise,
as above, under the tailored regulatory approach we find warranted
here, informed by our responsibilities under section 706, we conclude
that forbearance is in the public interest under section 10(a)(3).
D. Other Regulations and Non-Title II Provisions
1. Maintaining Authority Under Certain Title III Provisions
a. Wireless Licensing
420. We clarify that we do not forbear from applying--or waive--our
rules governing the wireless licensing process and authorities and
clarify that our adopted forbearance does not encompass Title III
licensing, except to the extent specifically noted below. Among other
benefits, we find that maintaining these provisions will support our
national security goals, as they will allow us to continue to review
wireless license applications under our normal processes, including to
determine whether they are in the public interest--which includes
consideration of national security. As we observed in the 2023 Open
Internet NPRM, our Title III licensing authority with respect to
facilities-based mobile BIAS providers independently ``grant[s] us
important authority that can be used to advance national security and
public safety with respect to the services and equipment subject to
licensing.'' In determining whether to grant an original application
for a license or permit or an application for renewal of a license
under Title III (47 U.S.C. 309(a)), approve the assignment or transfer
of control of a Title III license or permit (47 U.S.C. 310(d)), or
revoke a Title III license or permit (47 U.S.C. 312(a)(2)), the
Commission considers whether the applicant has the requisite
citizenship, character, and other necessary qualifications. The
Commission also must ``determine whether the public interest,
convenience, and necessity will be served'' by granting the application
or revoking the license or permit. Among the factors the Commission may
consider are national security, law enforcement, public safety, or
other risks. Therefore, given the Commission's public interest
obligations in licensing decisions, and based on the key public
interest considerations that inform our action in the Order, we retain
the right to review fully original applications and applications for
assignment or transfer of control of Title III licenses and permits,
and we reserve the right to conduct ad hoc review of whether a
licensee's retention of a Title III license presents national security,
law enforcement, public safety, or other risks that warrant revocation
of such authority. We discuss how our review under Title III
requirements intersects with our determinations regarding foreign
ownership requirements below. The record does not address whether we
[[Page 45493]]
should adopt the same forbearance for Title III wireless licensing as
the Commission did in the 2015 Open Internet Order, so we have no basis
for adopting different findings here. We do mean, however, to apply
current Title III wireless licensing requirements (i.e., ones that are
new or revised since the 2015 Open Internet Order). Adopting this
approach also has the added benefit of being consistent with the
Commission adopting largely the same broad forbearance as the 2015 Open
Internet Order. Consequently, as the Commission found in the 2015 Open
Internet Order, we find that forbearing from the Commission's flexible
use rules would be against the public interest under section 10(a)(3)
because it would lead to inaccurate license information. Accordingly,
we do not forbear from applying--or waive--the wireless licensing
requirements under Title III and the Commission's rules, except to the
extent specified below.
b. Foreign Ownership of Common Carrier Wireless Licensees (Section
310(a) and (b))
421. With limited exceptions, we do not forbear from section 310(a)
and (b) of the Act, which requires the Commission to review foreign
investment in radio station licenses and imposes specific limitations
on who may hold certain types of radio station licenses. As discussed
below, we find that forbearance from section 310(a) and (b), except to
the extent the Commission previously determined to forbear from section
310(b)(3) for wireless common carriers, would neither serve the public
interest under section 10(a)(3) nor satisfy the requirements of section
10(a)(2) as it pertains to the protection of consumers. As noted below,
the Commission previously determined that forbearance from the
application of section 310(b)(3) to wireless common carriers, which now
includes wireless BIAS providers, was in the public interest with
respect to a discrete type of foreign ownership. We anticipate a future
proceeding will, among other things, develop a fuller record on the
application of the Commission's rules implementing section 310(b)(3)
and (b)(4) in the context of BIAS.
422. By the Order, we find that foreign ownership in excess of the
statutory benchmarks in common carrier wireless licensees that are
providing only BIAS is in the public interest under section 310(b)(3)
when such foreign ownership is held in the licensee through a U.S.
entity that does not control the licensee, and under section 310(b)(4).
Common carrier wireless licensees that are providing other common
carrier services in addition to BIAS will still need a ruling for their
indirect foreign ownership above the statutory benchmarks, as the
waiver will only apply to BIAS and not other common carrier wireless
services. We also waive the associated requirements for such licensees
to request a declaratory ruling under Sec. Sec. 1.5000 through 1.5004
of the Commission's rules, until the adoption of any rules for BIAS.
423. Section 310(a) and (b) of the Act provide for Commission
review of foreign investment in radio station licenses and impose
specific restrictions on who may hold certain types of radio station
licenses. Section 310(a) prohibits foreign governments or their
representatives from holding any radio station license, and section
310(b)(1) and (b)(2) prohibits foreign individuals or their
representatives and corporations organized under the laws of a foreign
government from holding a broadcast, common carrier, or aeronautical en
route and aeronautical fixed (hereinafter, aeronautical) radio station
license. The prohibitions in section 310(a), (b)(1), and (b)(2) are
absolute, and the Commission has no discretion to waive them. The
Commission has stated that, for purposes of section 310(a), a ``
`representative' '' is a person or entity that acts `` `in behalf of'
'' or `` `in connection with' '' the foreign government. Section
310(b)(3) prohibits foreign individuals, governments, and corporations
from owning or voting more than 20% of the capital stock of a
broadcast, common carrier, or aeronautical radio station licensee.
Section 310(b)(3), unlike section 310(b)(4), does not give the
Commission the discretion to permit foreign ownership above the
statutory threshold. Section 310(b)(4) establishes 25% benchmarks for
investment by foreign individuals, governments, and corporations in a
U.S.-organized entity that directly or indirectly controls a U.S.
broadcast, common carrier, or aeronautical radio licensee. Foreign
individuals, governments, or entities may own, directly or indirectly,
more than 25% (and up to 100%) of the stock of a U.S.-organized entity
that holds a controlling interest in a broadcast, common carrier, or
aeronautical radio licensee, unless the Commission finds that the
public interest will be served by refusing to permit such foreign
ownership. In the 2012 Foreign Ownership First Report and Order (77 FR
50628 (Aug. 22, 2012)), the Commission determined to forbear from
applying the foreign ownership limits in section 310(b)(3) to the class
of common carrier licensees in which the foreign investment is held in
the licensee through a U.S.-organized entity that does not control the
licensee, to the extent the Commission determines such foreign
ownership is consistent with the public interest under the policies and
procedures that apply to the Commission's public interest review of
foreign ownership subject to section 310(b)(4) of the Act. The
Commission's forbearance authority does not extend to broadcast or
aeronautical radio station licensees covered by section 310(b)(3). The
forbearance approach that the Commission adopted in the 2012 Foreign
Ownership First Report and Order applies only to foreign ownership in
common carrier licensees held through intervening U.S.-organized
entities that do not control the licensee. The Commission codified this
forbearance approach in the 2013 Foreign Ownership Second Report and
Order, which adopted rules to treat foreign investment under section
310(b)(4) and the forbearance approach of section 310(b)(3)
consistently.
424. Forbearance Is Not in the Public Interest With Limited
Exceptions. We do not forbear from section 310(a) and (b) of the Act
except to (1) extend our existing section 310(b)(3) forbearance policy
to not require the filing of a petition for declaratory ruling or
similar request where and to the extent the Commission has already
found the foreign ownership at issue to be in the public interest and
(2) provide a reasonable period for other BIAS providers newly subject
to section 310(b)(3) to reduce their foreign ownership interests below
the statutory limit or restructure their holdings to include an
intervening, non-controlling U.S. interest holder. Our determination
that this limited forbearance is in the public interest rests on the
same reasoning as our determination below that waiver of the associated
rules is in the public interest. The Commission concluded in 2012 that
application of the statutory threshold is not necessary to ensure that
rates are just and reasonable and not unjustly or unreasonably
discriminatory, and we determine below that consumers will benefit from
our decision not to require BIAS-only providers to file petitions for
declaratory ruling under the circumstances described here. Except to
this limited extent, we find that forbearance from section 310(a) and
(b) would neither serve the public interest under section 10(a)(3) nor
satisfy the requirements of section 10(a)(2) as it pertains to the
protection of consumers. Congress created the Commission,
[[Page 45494]]
among other reasons, ``for the purpose of the national defense [and]
for the purpose of promoting safety of life and property through the
use of wire and radio communication.'' We find that our decision not to
forbear ensures the Commission can continue to advance the public
interest, and furthers two core purposes--national security and the
promotion of safety of life and property--for which Congress created
the Commission. In the 2023 Open Internet NPRM, we sought comment ``on
any other provisions of the Act or Commission rules that likewise
should be expressly excluded from the scope of forbearance based on
national security and/or public safety considerations, including, for
example, sections 305, 310, and 332 of the Act.'' In evaluating a
petition for a declaratory ruling seeking a determination that it is in
the public interest to exceed the statutory foreign ownership
benchmarks, the Commission's public interest analysis under section
310(b)(3) and (b)(4) considers, among other things, any national
security, law enforcement, foreign policy, and trade policy concerns
raised by the proposed foreign investment. The Commission has also
identified public safety and security of critical infrastructure as
relevant to the Commission's review of foreign investment under section
310(b)(4). We find that our decision not to forbear further from
section 310(a) and (b) is consistent with the Commission's statutory
responsibilities under section 10(a) and is warranted based on the key
public interest considerations that inform our action in the Order and
to enable the Commission to address national security, public safety,
and other public interest concerns with respect to BIAS.
425. Public Interest Finding and Waiver of Rules. Notwithstanding
the determination about public interest considerations supporting our
decisions regarding section 310(b)'s application to BIAS, we reserve
the right, as part of our review under Title III licensing provisions,
to override that determination with respect to specific applications.
Under the existing section 310(b)(3) forbearance policy, and under the
Commission's rules applicable to section 310(b)(4), wireless common
carriers must file a petition for declaratory ruling before they may
exceed the statutory foreign ownership thresholds. The Commission
applies the same rules to both types of petitions for declaratory
ruling. Sections 1.5000 through 1.5004 of the Commission's rules
implement section 310(b)(3)--with regard to the class of common carrier
radio station licensees subject to the forbearance approach adopted in
the 2012 Foreign Ownership First Report and Order that seek Commission
approval to exceed the 20% foreign ownership limit in section
310(b)(3)--and section 310(b)(4) of the Act. We recognize that
application of these rules may raise operational issues in the context
of BIAS. WISPA, for example, addresses the potential impact on common
carrier wireless licensees that would be subject to section 310(b)
pursuant to our reclassification of BIAS under Title II. The Commission
anticipates releasing a further notice of proposed rulemaking to
address this and other comments. By the Order, and pending the outcome
of a further notice of proposed rulemaking, we find that foreign
ownership interests that exceed the statutory benchmarks in common
carrier wireless licensees that are providing only BIAS are in the
public interest under section 310(b)(3)--when such foreign ownership is
held in the licensee through a U.S. entity that does not control the
licensee--and under section 310(b)(4). The waiver that we adopt in the
Order shall not apply to any common carrier wireless licensee providing
only BIAS that does not fall within this class, including foreign
ownership held directly in a common carrier wireless licensee under
section 310(b)(3). Foreign ownership held directly in common carrier
licensees under section 310(b)(3) is not subject to the forbearance
approach adopted in the 2012 Foreign Ownership First Report and Order
and shall not be covered in the waiver that we adopt in the Order. As
such, the 20% foreign ownership limit set forth in section 310(b)(3)
shall apply to such common carrier wireless licensee providing only
BIAS that does not fall within this class. For the same reasons
discussed below in support of our waiver of the rules, and in
furtherance of our decision to extend our existing section 310(b)(3)
forbearance policy for common carrier licensees to BIAS-only providers,
we temporarily find that foreign ownership in a common carrier wireless
licensee providing only BIAS is in the public interest where foreign
interests are held in a licensee through an intervening U.S. entity
that does not control the licensee, even though we are temporarily not
requiring the filing of a petition for declaratory ruling as to such
interests. For such licensees, we waive the requirements to request a
declaratory ruling under Sec. Sec. 1.5000 through 1.5004 of the
Commission's rules, pending adoption of any rules for BIAS. We
recognize that, for the period for which we waive Sec. Sec. 1.5000
through 1.5004 of the rules as specified herein, we will not be
receiving petitions for declaratory ruling seeking prior approval to
exceed the section 310(b)(3) and (b)(4) statutory benchmarks--as set
out in the existing rules--from common carrier wireless licensees that
are providing only BIAS, and it is our intent to address this matter in
a further notice of proposed rulemaking. This waiver of those rules as
it relates to the foreign ownership of common carrier wireless
licensees providing only BIAS will not apply to foreign ownership held
directly in such licensees under section 310(b)(3). We note that the
blanket section 214 authority that we grant to such common carrier
wireless licensees providing BIAS, pursuant to our reclassification of
BIAS in the Order, is subject to the Commission's power to revoke such
authority. The Commission also has the power to revoke a Title III
station license, including ``for willful or repeated violation of, or
willful or repeated failure to observe any provision of this chapter or
any rule or regulation of the Commission authorized by this chapter or
by a treaty ratified by the United States.''
426. We further find that temporary forbearance is warranted to
afford additional time after the Order's effective date for other BIAS
providers newly subject to Title II to restructure to the extent
necessary to bring any direct foreign ownership interest in the
licensee below the statutory limit or to include a non-controlling
intervening U.S. interest holder. WISPA asked the Commission to provide
time for these providers to come into compliance with section 310(b)(3)
and the terms of the forbearance policy applicable to BIAS providers
with foreign interests in the licensee held through a non-controlling
U.S. entity. We find that a compliance period of twelve months after
the effective date is reasonable based on the amount of time that it
could take to restructure corporate ownership or take other similar
steps to come into compliance given our experience with transactions of
a similar scale and type and strikes the right balance between
maximizing public interest benefits and minimizing potential public
interest harm. For that period of time, enforcement of the statutory
prohibition in section 310(b)(3) is not necessary to protect consumers
or ensure just and reasonable and nondiscriminatory rates and
practices. Forbearing from enforcement of the prohibition for that
period of time serves the public interest by allowing newly covered
BIAS providers to continue providing service
[[Page 45495]]
during the limited time necessary to protect existing investments in
such businesses without presenting undue risk of harm given the limited
duration of this temporary forbearance. Following that period of time,
forbearance will no longer serve the public interest except as the
Commission adopted in the 2012 Foreign Ownership First Report and Order
and as applied herein with respect to foreign interests held in the
licensee through a non-controlling U.S. interest holder.
427. The Commission may waive its rules and requirements for ``good
cause shown.'' Good cause, in turn, may be found ``where particular
facts would make strict compliance inconsistent with the public
interest.'' In making this determination, the Commission may ``take
into account considerations of hardship, equity, or more effective
implementation of overall policy,'' and if ``special circumstances
warrant a deviation from the general rule and such deviation will serve
the public interest.'' As discussed above, the current rules that
implement section 310(b)(3) and (b)(4) of the Act establish
requirements and conditions for obtaining the Commission's prior
approval of foreign ownership in common carrier wireless licensees,
among other licensees. Importantly, the current rules that we waive, as
set out in the Order, were established in the context of traditional
telecommunications services, and thus we find there is good cause to
waive those rules pending adoption of any rules for BIAS.
428. As such, we find that, for the period leading to adoption of
any rules for BIAS, foreign ownership in excess of the statutory
benchmarks in common carrier wireless licensees that are providing only
BIAS is in the public interest under section 310(b)(3) when such
foreign ownership is held in the licensee through a U.S.-organized
entity that does not control the licensee and under section 310(b)(4).
For such licensees, we waive the requirements to request a declaratory
ruling under Sec. Sec. 1.5000 through 1.5004 of the Commission's
rules, pending the adoption of any rules for BIAS. We find that our
decision to waive Sec. Sec. 1.5000 through 1.5004 of the Commission's
rules with respect to this class of licensees is in the public interest
given our consideration of hardship and equity that may be raised by
immediate application of those rules to such licensees following our
action in the Order. The reclassification of BIAS under Title II is a
special circumstance that requires careful consideration of rules
concerning BIAS and thus warrants deviation at this time from the
application of our current rules implementing section 310(b)(3) and
(b)(4), pending a further notice of proposed rulemaking. We find that
the public interest is served as our approach will ensure that
consumers can continue to receive the BIAS services to which they
subscribe. Additionally, by waiving the requirements to request a
declaratory ruling under Sec. Sec. 1.5000 through 1.5004 of the
Commission's rules, where it pertains to the foreign ownership of
common carrier wireless licensees that are providing only BIAS as set
out in the Order, we will avoid any disruption to or uncertainty for
BIAS consumers and BIAS providers. As we conclude in the present Order,
our action to reclassify BIAS under Title II will protect consumers and
ensure a safe, secure, and open internet. Accordingly, we find that
granting a waiver of the requirements to request a declaratory ruling
under Sec. Sec. 1.5000 through 1.5004 of the Commission's rules, where
it pertains to the foreign ownership of common carrier wireless
licensees that are providing only BIAS as set out in the Order, is
fully consistent with our responsibility to account for the effective
implementation of our overall obligations and objectives to address
national security, law enforcement, public safety, or other public
interest concerns while ensuring the uninterrupted provision of BIAS
for consumers pending a further notice of proposed rulemaking to
develop a fuller record. This waiver as set out in the Order will
remain in effect pending such further notice of proposed rulemaking and
the adoption of any rules for BIAS.
429. We find that it is in the public interest not to disturb the
section 310(b)(3) forbearance approach the Commission adopted in the
2012 Foreign Ownership First Report and Order and to temporarily apply
it to those common carrier wireless licensees providing only BIAS as
set out in the Order. We recognize that the forbearance analysis
adopted in the 2012 Foreign Ownership First Report and Order relied on
the filing of a declaratory ruling and prior approval of the
Commission. At this time, however, we find that there is good cause to
apply the section 310(b)(3) forbearance approach to those common
carrier wireless licensees providing only BIAS, where strict compliance
with the rules implementing section 310(b)(3)--in those instances where
the foreign ownership is held in the licensee through a U.S. entity
that does not control the licensee--would be inconsistent with the
public interest based on consideration of hardship and equity that may
be raised by immediate application of those rules until the Commission
releases a further notice of proposed rulemaking to develop a fuller
record on this matter. Pending such further notice of proposed
rulemaking, we note that the Commission stated in the 2012 Foreign
Ownership First Report and Order, with regard to the class of common
carrier licensees subject to the forbearance approach adopted in that
Order, ``that the public interest would be served by not applying the
foreign ownership limit of section 310(b)(3) to licensees subject to
section 310(b)(3) forbearance . . . for the same reasons that the
public interest is served when we allow, under section 310(b)(4),
greater than 25 percent foreign ownership in a U.S.-organized entity
that does control the licensee under otherwise identical
circumstances.'' The approach that we adopt in the Order would allow us
to treat foreign ownership in excess of the statutory benchmarks in
common carrier wireless licensees providing only BIAS consistently
under section 310(b)(4) and (b)(3), respectively, whether the foreign
ownership is held through a controlling U.S. parent of the common
carrier licensee or through an intervening U.S. entity that does not
control the licensee, by including such licensees here and waiving
Sec. Sec. 1.5000 through 1.5004 of the Commission's rules until
adoption of any rules.
2. Forbearance From Certain Provisions of Titles III, VI, and Other
Commission Rules
430. We forbear from applying other provisions of the Act insofar
as they would be triggered by classifying BIAS as a telecommunications
service, to the extent of our section 10 authority. In particular,
beyond the Title II provisions and certain implementing rules discussed
above, we grant forbearance, as the Commission did in the 2015 Open
Internet Order, from obligations related to BIAS providers' provision
of BIAS under certain provisions of Title III, Title VI, and associated
Commission rules. We conclude that the same analysis justifies
forbearance from these provisions, and the record does not dispute
that. We thus predict, as we did in the 2015 Open Internet Order, that
other provisions and rules will be adequate to ensure just, reasonable,
and nondiscriminatory conduct by BIAS providers and to protect
consumers for purposes of section 10(a)(1) and (a)(2). Further,
informed by our responsibilities under section 706, we find the
tailored regulatory approach we
[[Page 45496]]
adopt strikes the appropriate public interest balance under section
10(a)(3). Accordingly, we adopt the following forbearance:
First, we forbear from applying certain provisions of
Titles III and VI and Commission rules associated with those Titles or
the provisions of Title II from which we forbear that may apply by
their terms to providers classified in particular ways. The Commission
has forborne from provisions of Title II and from Commission rules in
many instances in the past. However, nothing in the language of section
10 categorically limits the scope of Commission forbearance only to the
provisions of Title II, and although it has been less common for the
Commission to forbear from provisions of Titles III and VI, it has done
so at times. For clarity, we note that by ``rules'' we mean both
codified and uncodified rules. In addition, by ``associated''
Commission rules, we mean rules implementing requirements or
substantive Commission jurisdiction under provisions in Title II, III,
and/or VI of the Act from which we forbear. As to this first category
of requirements, and except as to the core BIAS requirements, we
forbear from any such provisions and regulations to the full extent of
our authority under section 10, but only insofar as a BIAS provider
falls within those categories or provider classifications by virtue of
its provision of BIAS, but not insofar as those entities fall within
those categories of classifications by virtue of other services they
provide. The Order's classification of BIAS could trigger requirements
that apply by their terms to ``common carriers,'' ``telecommunications
carriers,'' ``providers'' of common carrier or telecommunications
services, or ``providers'' of CMRS or commercial mobile services.
Similarly, other provisions of the Act and Commission rules may impose
requirements on entities predicated on an entity's classification as a
``common carrier,'' ``telecommunications carrier,'' ``provider'' of
common carrier or telecommunications service, or ``provider'' of CMRS
or commercial mobile service without being framed in those terms.
Second, we forbear from applying certain provisions of
Titles III and VI and Commission rules associated with those Titles or
the provisions of Title II from which we forbear that may apply by
their terms to services classified in particular ways. The
classification of BIAS as a telecommunications service and, in the
mobile context, CMRS, under the Communications Act, thus could trigger
any requirements that apply by their terms to ``common carrier
services,'' ``telecommunications services,'' or ``CMRS'' or
``commercial mobile'' services. Similarly, other provisions of the Act
and Commission rules may impose requirements on services predicated on
a service's classification as a ``common carrier service,''
``telecommunications service,'' ``CMRS,'' or ``commercial mobile''
service without being framed in those terms. Regarding this second
category of requirements (to the extent not already covered by the
first category), and except as to the core BIAS requirements, we
forbear from any such provisions and regulations to the full extent of
our authority under section 10 specifically with respect to BIAS, but
do not forbear from these requirements as to any other services (if
any) that BIAS providers offer that are subject to these requirements.
Third, while commenters do not appear to have identified
such rules, there potentially could be other Commission rules for which
our underlying authority derives from provisions of the Act all of
which we forbear from under the first two categories of requirements
identified above, but which are not already subject to that identified
scope of forbearance. To the extent not already identified in the first
two categories of requirements above, and except as to the core BIAS
requirements, we forbear to the full extent of our authority under
section 10 from rules based entirely on our authority under provisions
from which we forbear under the first and second categories above (or
for which the forborne-from provisions provide essential authority)
insofar as the rules newly apply as a result of the classification of
BIAS.
Fourth, we include within the scope of our broad
forbearance for BIAS any preexisting rules with the primary focus of
implementing the requirements and substantive Commission jurisdiction
in sections 201 and/or 202, including forbearing from preexisting
pricing, accounting, billing, and recordkeeping rules. This forbearance
would not include rules implementing our substantive jurisdiction under
provisions of the Act from which we do not forbear that merely cite or
rely on sections 201 or 202 in some incidental way, such as by, for
example, relying on the rulemaking authority provided in section
201(b). Consistent with our discussions above, this category also does
not include our open internet rules or MTE rules. As with the rules
identified under the first and second categories above, we do not
forbear insofar as a provider is subject to these rules by virtue of
some other service it provides.
Fifth, the classification of BIAS as a telecommunications
service could trigger certain contributions to support mechanisms or
fee payment requirements under the Act and Commission rules, including
some beyond those encompassed by the categories above. Insofar as any
provisions or regulations not already covered above would immediately
require the payment of contributions or fees by virtue of the
classification of BIAS (rather than merely providing Commission
authority to assess such contributions or fees) they are included
within the scope of our forbearance. As under the first and second
categories above, we do not forbear insofar as a provider is subject to
these contribution or fee payments by virtue of some other service it
provides.
III. Report and Order: Open Internet Rules
431. The rules we adopt in the Order mark the return to the
Commission's longstanding basic framework governing BIAS provider
conduct to protect the open internet. We establish ``rules of the
road'' that are straightforward and clear, prohibiting specific
practices harmful to an open internet--blocking, throttling, and paid
prioritization--as well as a strong standard of conduct designed to
prevent deployment of new practices that would harm internet openness,
and certain enhancements to the transparency rule. Our rules are
designed to prevent BIAS providers from engaging in practices that are
harmful to consumers, competition, and public safety. As proposed in
the 2023 Open Internet NPRM, our approach reinstates the rules that the
Commission adopted in 2015. We find that the temporary deviation from
this framework, which the Commission adopted in the RIF Order, left
consumers exposed to behavior that can hinder their ability to access--
and the Commission without recourse to protect and promote--an open
internet. As we explained in the 2023 Open Internet NPRM, we find that
the rules we adopt in the Order are ``consistent with numerous other
steps the Commission has taken to ensure that this country has access
to affordable, competitive, secure, and reliable broadband.''
A. Need for Rules
432. We affirm our tentative conclusion from the 2023 Open Internet
NPRM that baseline internet conduct rules for BIAS providers are
necessary to enable the Commission to prevent and address conduct that
harms
[[Page 45497]]
consumers and competition. BIAS is an essential service that is
critical to so many aspects of everyday life, from healthcare and
education to work, commerce, and civic engagement. Because of its
importance, we conclude that rules are necessary to promote free
expression; encourage innovation, competition, and consumer demand; and
protect public safety. As the Commission found in both 2010 and 2015,
BIAS providers continue to have the incentive and ability to harm
internet openness. We find that the framework the Commission adopted in
the RIF Order provides insufficient protection from these dangers, and
that a safe, secure, and open internet is too important to consumers
and innovators to leave unprotected.
1. Promoting Free Expression and Encouraging Innovation, Competition,
and Consumer Demand
433. The internet serves as a cornerstone for free expression,
fostering a diverse and inclusive digital space where individuals can
share ideas, opinions, and information without undue influence or
interference. It promotes the exchange of diverse perspectives,
ultimately enriching society by exposing individuals to a wide range of
thoughts and experiences. As the Supreme Court noted in 1997, the
internet enables any person to ``become a town crier with a voice that
resonates farther than it could from any soapbox.'' In the 2023 Open
Internet NPRM, we sought comment on the need for conduct rules to
protect free expression, innovation, and investment. The record
confirms the Commission's long-held tenet that an open internet is
critical to facilitate the free flow of diverse speech and content, and
serves as a platform for speech and civic engagement. Several
commenters highlight that open internet rules would ensure that BIAS
providers cannot discriminate against content, thereby providing a
space for all voices, including those from diverse and minority
backgrounds. We agree with the Communications Workers of America that a
BIAS provider's ``ability to place restrictions on what speech is
permitted on its platform creates a chilling effect on civic
discourse.''
434. In addition to protecting free expression, an open internet
encourages competition and ensures that breakthrough innovations are
not limited. In the 2015 Open Internet Order, the Commission recognized
that ``innovations at the edges of the network enhance consumer demand,
leading to expanded investments in broadband infrastructure that, in
turn, spark new innovations at the edge.'' This self-reinforcing cycle,
which the Commission has referred to as a ``virtuous cycle'' and which
was a primary basis for the actions the Commission took in the 2010
Open Internet Order and the 2015 Open Internet Order, was accepted by
the Verizon court. The Verizon court found that ``the Commission's
determination that internet openness fosters the edge-provider
innovation that drives this `virtuous cycle' was . . . reasonable and
grounded in substantial evidence,'' and that ``the Commission has
adequately supported and explained its conclusion that, absent rules
such as those set forth in the Open Internet Order, broadband providers
represent a threat to internet openness and could act in ways that
would ultimately inhibit the speed and extent of future broadband
deployment.''
435. In the RIF Order, the Commission did not question the
existence of the virtuous cycle or the fact that, at least in theory,
BIAS providers might take actions that undermine the cycle. However,
the Commission pointed out that BIAS providers may also contribute to
the ``virtuous cycle,'' and, without presenting any evidence or
reasoned analysis, opined that the three potential sources of harm by
BIAS providers to the ``virtuous cycle'' ``have been overestimated, and
can be substantially eliminated or reduced by the more light-handed
approach [the RIF Order] implements.''
436. In the 2023 Open Internet NPRM, we sought comment on the
``virtuous cycle'' and whether ``it is necessary to secure the open
internet to preserve the virtuous cycle.'' Of the few parties that
comment on this issue, none question the validity of the ``virtuous
cycle'' or the fact that innovations at the edge of the network can
increase consumer demand, which can lead to expanded investments in
broadband infrastructure, which in turn stimulate further innovation at
the edge. Rather, those opposing the proposed bright-line rules instead
either argue that BIAS providers lack the incentive or ability to
engage in activities that would undermine the ``virtuous cycle'' or
that BIAS providers have not engaged in such activities, or they
suggest, irrelevantly, that other entities, including large edge
providers, transit providers, backbone providers, and CDNs can also
affect and undermine the consumer experience. We note that, to the
extent that other entities may have the incentive or ability to engage
in anticompetitive activities that undermine the virtuous cycle, such
activities are beyond the scope of this proceeding.
437. We agree with Netflix that ``where both affiliated and
independent content providers compete on a level playing field that
offers the same access to terminating access networks, these companies
are spurred to compete vigorously and to continue to improve their
offerings by investing in quality content and technology.'' The record
reflects wide agreement that the internet ecosystem has become more
diverse during the past decade with the entrance of new network
operators, new intermediaries such as CDNs and interexchange carriers,
and new edge providers. Small and emerging edge providers constitute
particularly dynamic drivers of innovation and are a critical part of
the diversity of the internet ecosystem. In March 2023, 1,054,052
business establishments in the United States (11.6% of all businesses)
were less than one year old and 2,436,791 (26.8% of all businesses)
were less than three years old. Although many of these companies may go
out of business, others innovate successfully and become a major
impetus to innovation and growth in the economy. Most of these
businesses depend on reliable, open internet connections to build and
scale their businesses. Research on internet-based innovation shows
that the innovative generativity of the internet is strongly related to
its open, transparent, and modular architecture. These technological
design choices greatly reduce the costs of innovation for edge
providers and hence stimulate more innovation experiments. They enable
coordination and the realization of synergies between the participants
in the internet ecosystem. These insights are congruent with recent
research in innovation economics. This work shows that particularly
important innovation drivers are (1) the contestability of a market
(that is, the intensity of competition in the market segment and the
competitive threats exerted by potential new entrants); (2) the
available technological and business innovation opportunities; and (3)
the appropriability of temporary risk premiums that reward taking the
innovation risk. In digital ecosystems, innovation is further
stimulated by synergies between market participants (e.g., between ISPs
and edge providers) but it is impeded by coordination costs between
market participants. The importance of synergies and complementarities
in interdependent innovation processes was examined rigorously. An
important insight from this research is that innovation is
[[Page 45498]]
stimulated in a reciprocal process, with edge provider innovation
stimulating infrastructure innovation. In turn, infrastructure
innovation enhances the innovation opportunities and activities of edge
providers. The negative effects of coordination costs, such as the
costs of adapting an application to different ISPs and the costs of
negotiating agreements. However, this generativity can be weakened, and
the innovation performance degraded, if individual market participants
have incentives that impede this complementary innovation process. The
more recent innovation research often uses the term ``complementary
innovation'' or ``interdependent innovation'' to refer to the
reciprocal synergies that exist in digital innovation systems. The
notion of a virtuous cycle of innovation and investment, used in the
2010 Open Internet Order and 2015 Open Internet Order, describes key
features of such complementary innovation processes. The more recent
research clarifies that several types of complementary innovation
coexist in the advanced internet that thrive under different
conditions. A vast set of innovation opportunities will thrive in a
best-effort internet offering that is transparent and provides
nondiscriminatory connectivity for edge providers and users. Emerging
technologies such as new forms of edge computing and open radio access
network (open RAN) will further expand these innovation opportunities.
In all these cases, the virtuous cycle of complementary innovation
creates synergies between innovation processes in networks,
applications, services, and devices. While we do not disagree with
commenters who argue that excessive regulation can stifle innovation by
creating barriers to entry and reduce competition, we do dispute that
the rules we adopt in the Order would constitute the type of regulation
that would stifle innovation. If anything, the surge in innovation over
the past 25 years underscores the success of innovators under an open
internet. We believe this success can be attributed, at least in part,
to the absence of any preemptive control by service providers or any
other entities over new applications, services, or content. We agree
with the Electronic Frontier Foundation, which asserts that an open
internet is also essential to help new businesses find investors. As
the Greenlining Institute explains, ``[w]ithout net neutrality rules,
the next Amazon or YouTube may never get off the ground and an ex post
regulatory intervention will be too little, too late.'' As discussed
below, we find that BIAS providers have the incentive and technical
ability to engage in activities that harm edge providers, which can
reduce investment and innovation at the edge, which in turn can harm
consumers and ultimately reduce incentives to invest in broadband
infrastructure. As the Commission explained in the 2010 Open Internet
Order, pervasive interference with the open internet would likely slow
or even break the virtuous cycle of innovation enabled by internet,
likely causing irreversible or very costly harms. If broadband provider
practices chill entry and innovation by edge providers and thereby
prevent development of the next revolutionary technology or business,
the missed opportunity may be significant, and it may be impossible to
restore the lost innovation, investment, and competition after the
fact. Additionally, because the internet is a general purpose
technology, erosion of internet openness threatens to harm innovation,
investment in the core and at the edge of the network, and competition
in many sectors. This can have a disproportionate effect on small,
entering, and non-commercial edge providers that drive much of the
innovation on the internet. Effective open internet rules can both
prevent or reduce the risk of these harms and help to ensure the public
has unfettered access to diverse sources of news, information, and
entertainment, as well as an array of technologies and devices that
enhance health, education, and the environment. Moreover, as the
Commission explained in the 2015 Open Internet Order, such ``behavior
[by BIAS providers to throttle or degrade edge content] has the
potential to cause a variety of other negative externalities that hurt
the open nature of the internet.'' The Commission went on to explain
that ``[b]roadband providers have incentives to engage in practices
that will provide them short term gains but will not adequately take
into account the effects on the virtuous cycle . . . . [and] that the
unaccounted-for harms to innovation are negative externalities [that]
are likely to be particularly large because of the rapid pace of
internet innovation, and wide-ranging because of the role of the
internet as a general purpose technology.''
438. Thus, the conduct that we seek to prevent can not only harm
edge providers, which will reduce their incentives to invest and
innovate, but can also harm consumers. This harmful conduct may even
reduce other BIAS providers' incentives to invest in broadband
infrastructure. Overall, the record before us corroborates the need for
a balanced approach to safeguard edge innovation while allowing
entrepreneurial experimentation to advance innovation. The Order
achieves this balance by establishing a framework of bright-line rules
for BIAS. These rules offer guardrails to safeguard important open
internet principles that will maintain edge-provider innovation and
protect the smallest and most vulnerable edge providers. At the same
time, the ability of BIAS providers to offer specialized and innovative
new services is preserved by allowing BIAS providers to use appropriate
network management, offer enterprise services, and offer non-BIAS data
services. We believe that, overall, the benefits of this balanced
approach, which secures an open internet while allowing flexibility for
edge and BIAS provider innovation, outweigh its costs. As such, we
conclude that the protections we adopt in the Order will help to
facilitate ``the development of diverse, content, applications, and
services,'' and enable ``a virtuous cycle of innovation.''
2. Protecting Public Safety
439. The conduct rules that we adopt in the Order are necessary to
prevent and mitigate harms to public safety that could result from
blocking, throttling, paid prioritization, and other actions that have
the potential to impair public safety communications. These conduct
rules may also support consumer use of telehealth service and remote
healthcare monitoring, such as through connected devices, by ensuring
consumers can continue to access these services without the threat of
blocking, throttling, or other degradation. The prohibited conduct
could make it more difficult for the public to receive emergency
services and critical information and could impair the ability of first
responders to communicate during emergency situations. As discussed
above, one of the Commission's fundamental obligations is to advance
public safety. The Mozilla court highlighted this obligation and
recognized its significance, emphasizing that ``whenever public safety
is involved, lives are at stake.'' The court went on to note that
``[a]ny blocking or throttling of [safety officials'] internet
communications during a public safety crisis could have dire,
irreversible results.'' Similarly, in the 2015 Open Internet Order, the
Commission recognized that paid prioritization and peering
disagreements can negatively affect public safety communications
traveling over the same networks.
[[Page 45499]]
440. Above, we discuss the wide range of public safety
communications and applications that rely on broadband networks and the
related national security concerns impacting broadband services,
providers, and critical infrastructure. The CPUC points out that first
responders use ``communications tools to respond to life-threatening
situations,'' such as by ``notify[ing] residents and businesses by
mobile phone, text message, email and social media with time-sensitive,
geographically specific emergency notifications.'' We agree with the
CPUC that the ability of first responders to ``communicate with the
public in a timely manner is, literally, a matter of life and death.''
441. We conclude that open internet conduct rules are necessary to
support public safety communications by preventing ``harmful practices
that could impede emergency response and critical information
sharing.'' The D.C. Circuit found that ``the harms from blocking and
throttling during a public safety emergency are irreparable . . .
[because] people could be injured or die.'' Santa Clara asserts that
``such practices could interfere with the communications about the
existence of a fire line or evacuation zone, the location of flooding,
or the location of criminal suspects or missing individuals, among many
other critical and time-sensitive communications.''
442. Several commenters emphasize the importance of the conduct
rules for public safety. For example, the AICC contends that the
proposed ``bright-line rules would serve a vital role in protecting
public safety'' by preventing ``interruptions in signal transmissions
between customers and the monitoring centers which serve them.'' New
America's Open Technology Institute agrees, stating that ``it is
imperative that the Commission . . . regulate BIAS . . . and take
enforcement action in the interest of public safety through Title II
classification and the creation of conduct standards.'' The CPUC also
agrees, arguing that ``strong, non-discriminatory rules are needed to
ensure that providers of emergency services or public safety agencies
are not impaired in providing comprehensive, timely information to the
public in a crisis.''
443. We also agree with commenters who assert that the conduct
rules will provide other public safety benefits beyond emergency
communications. As the CPUC points out, ``[t]he `Internet of Things' is
deeply intertwined with many facets of society, including critical
infrastructure such as the energy grid and water pipelines.'' The CPUC
contends that ``[a]llowing ISPs to engage in paid prioritization deals
with energy suppliers'' could have detrimental impacts on demand
response programs that are vital to ``California's battle against
catastrophic wildfires.'' The CPUC further explains that, ``[s]ince
demand response relies on fast, instantaneous communication to the
customer, non-discriminatory Open internet rules are vital to
dispatching demand response during times of extreme grid stress.'' The
CPUC concludes that ``it is critical to energy safety and reliability
that internet communications . . . not be subject to paid
prioritization delays, payment demands, or service degradation due to
priority accorded to other users who pay extra.''
444. We conclude that the conduct rules will benefit public safety
as proactive actions to protect life and property by preventing
potential harms from occurring, as opposed to the Commission solely
taking enforcement actions after the harms have already occurred. Santa
Clara recognizes the benefits of the conduct rules, which ``impose
requirements on ISPs ex ante, that is, before their blocking,
throttling, or unreasonable interference can hinder or prevent time-
sensitive, life-saving public safety communications from reaching their
destinations.'' In addition, Santa Clara reiterates that ``ex post
remedies cannot adequately protect against or compensate for the harms
that ISP interference can cause to public safety.'' Free Press agrees
because, ``[w]ithout agency authority for ex post enforcement (or
authority for ex ante rules) the Commission cannot do its job to
promote public safety.'' INCOMPAS also agrees with the need for ex ante
rules, on the basis that the Commission's ``fundamental obligation to
promote and protect public safety . . . includes ensuring that
emergency situations are prevented, mitigated, and/or handled
immediately.'' We agree that ``[t]he harm caused by blocking and
throttling [public safety] communications simply cannot be remedied
after the fact.'' We also agree that the conduct rules are needed to
enable the Commission to ``deal with public safety issues before a
public safety situations arises--not afterwards.'' Notably, the Mozilla
court expressed skepticism about the Commission's contention in the RIF
Order that post-activity enforcement is a suitable method to address
harmful conduct in the public safety context, finding that ``the harm
to the public cannot be undone'' by ex post enforcement. For these
reasons, we conclude that the conduct rules are necessary because ex
ante regulations would provide better public safety protections than an
ex post enforcement framework.
445. Some commenters also contend that the conduct rules would have
a limited impact on public safety because public safety entities
heavily rely on enterprise-level dedicated networks, which fall outside
of the scope of reclassification. As explained above, public safety
officials' reliance on BIAS has become integral to their essential
functions and services, aside from their reliance on enterprise-based
systems. We agree with INCOMPAS's analysis in its petition for
reconsideration that ``[t]he Commission should not ignore the effects
of reclassifying BIAS on public safety by conflating the idea that non-
BIAS services are also used to address public safety issues.''
446. We reject the argument of some commenters that the conduct
rules are unnecessary due to the lack of evidence of public safety
harms. Multiple commenters refute these arguments. For example, New
America's Open Technology Institute cites the Mendocino Complex Fire in
2018 as evidence that, ``in the absence of general conduct standards
and rules against blocking, throttling, or prioritization, ISP behavior
did directly impact public safety efforts.'' New America's Open
Technology Institute states that ``the full extent of these impacts . .
. is unknown'' but cites to other comments to explain that ``it is
difficult, if not impossible, for governments to identify harms caused
by violations of net neutrality principles.'' INCOMPAS notes that, with
regard to the Santa Clara County incident, ``there [was] no agency
authority to determine whether [the service provider] violated the
rules, and that in itself is dangerous for public safety.'' We agree
with INCOMPAS that the Commission needs the authority to address public
safety matters through ex ante rules before a public safety situation
arises.
447. Commenters reach differing conclusions regarding the
significance of the 2018 Mendocino Complex Fire. Commenters who support
reclassification point to the wildfire incident as an example
demonstrating the need for the open internet rules and for the
Commission to have greater authority to examine and investigate such
incidents, and ultimately, to prevent future harms from occurring.
Without such rules, these commenters warn, BIAS providers will engage
in conduct that could result in harm to public safety, and that
voluntary commitments are insufficient to ensure
[[Page 45500]]
public safety. Commenters who oppose reclassification contend that the
wildfire incident is irrelevant to, and an unpersuasive example used in
support of, reclassification and the open internet rules, because ``the
data plan at issue was marketed to government users, and therefore not
covered by the FCC's 2015 rules, nor by the definition of BIAS
contained in the NPRM'' and that Verizon's actions would not have
violated the 2015 Open Internet Order. In other words, they state that
the type of data use plan that Verizon offered and that the Santa Clara
fire department purchased did not violate the 2015 Open Internet Order.
Opponents also argue that the Santa Clara fire department did not
purchase a data plan that was appropriate for their needs. In our view,
the 2018 Mendocino Complex Wildfire incident demonstrates that given
the high stakes at issue--the loss of life and property--reliance on
the free market alone is insufficient in the area of public safety.
448. We also disagree with commenters that argue open internet
rules could deter providers from blocking or throttling access to
websites that pose a threat to public safety for fear of violating the
rules. We find that these concerns lack merit because the rules we
adopt in the Order only apply to lawful content and the use of non-
harmful devices. As was the case with the 2015 open internet rules,
transfers of unlawful content or unlawful transfers of content are not
covered by the no-throttling and no-blocking rules.
449. Public Safety Accessibility for People with Disabilities. We
find that the adoption of the open internet conduct rules will allow
the Commission to ensure that people with disabilities both have access
to essential information and can communicate with public safety
personnel during emergencies.
450. Many people with hearing- and speech-based disabilities rely
on data-intensive, latency-sensitive video applications, such as VRS
and other types of internet-based relay services, to communicate with
public safety personnel. In the 2023 Open Internet NPRM, we tentatively
concluded that such data-intensive, latency-sensitive applications
would be at a higher risk of being degraded by BIAS providers during
emergency situations. Throttling or paid prioritization of certain
services over others has the effect of degrading the network carrying
individuals with hearing and speech disabilities' essential video
communications, and discriminating against them by preventing them from
communicating in the same manner as individuals without disabilities.
We also tentatively concluded in the 2023 Open Internet NPRM that the
proposed conduct rules would prevent this degradation of such
communications. In their comments, both the CPUC and the Equity
Advocates support this finding and argued that the application of
``strong net neutrality protections'' to BIAS networks would benefit
people with disabilities. Applying the prohibitions on blocking,
throttling, and paid prioritization to BIAS will ensure that
individuals with hearing and speech disabilities who need to use data-
intensive video applications have access to reliable and accessible
means to communicate with emergency service operators. As a result of
the rules prohibiting throttling and blocking of lawful content, any
person who uses internet-based relay services to communicate with
emergency management agencies can be confident that they can do so
without experiencing a degraded network connection. Additionally, the
general conduct rule we adopt will ensure that BIAS providers do not
unreasonably interfere with, disadvantage, or discriminate against the
internet-based relay services that individuals with disabilities use
for emergency communications.
451. The conduct rules prohibiting throttling and blocking, and
governing the general conduct of BIAS providers will ensure that people
with disabilities have access to essential information during
emergencies. As Santa Clara raises in its comments, cities, localities,
states, and other entities operating during emergencies increasingly
rely on BIAS networks to send out essential information through social-
media, email, and other internet-supported channels. For some people
with disabilities, accessing information through these internet-
supported channels may be their preferred way of receiving accessible
information alerting them, for example, of a wildfire or a hurricane.
The same populations may use BIAS to communicate to friends and
families that they have evacuated or taken other safety precautions
during emergencies. We agree with commenters that it is essential for
members of the disability community to be able to receive information
and for emergency service organizations to be able to transmit public
safety information. In sum, the conduct rules that we adopt in the
Order will ensure that people with disabilities, especially those
individuals with hearing or visual disabilities, can access essential
public safety information.
3. BIAS Providers' Incentive and Ability To Harm Internet Openness
452. Based on the record in this proceeding, and consistent with
the findings of the Commission in both the 2010 Open Internet Order and
the 2015 Open Internet Order, we find that open internet rules are
needed because BIAS providers have the economic incentive and technical
ability to engage in practices that pose a threat to internet openness
and have engaged in such practices in the past.
453. As explained below, BIAS providers may have incentives to
block, throttle, or otherwise degrade service to specific edge
providers, classes of edge providers, or end users. They also have
incentives to increase revenues by charging edge providers in addition
to end users. And, if BIAS providers can charge for prioritized access,
BIAS providers will have incentives to degrade the quality of service
to non-prioritized traffic classes and users.
454. In the 2010 Open Internet Order, the Commission explained that
BIAS providers may face at least three types of incentives to reduce
the current openness of the internet. We find that this analysis
continues to be correct, even after accounting for developments in the
broadband ecosystem and advances in broadband technology over the last
decade.
455. First, a BIAS provider may have incentives to block, degrade,
or otherwise disadvantage services offered by specific edge providers
or classes of edge providers by controlling the transmission of network
traffic over the provider's broadband connection. These incentives are
particularly strong if a third party's services compete with the BIAS
provider's own revenue-generating offerings. For example, if a large,
vertically integrated BIAS provider offers video streaming and other
content services, such as cable television service, in competition with
content offered by edge providers, it would have an incentive to
discriminate against those edge providers. Unless safeguards are in
place, a vertically integrated BIAS provider may have incentives to
interfere with the transmission of such competing services. Similarly,
a vertically integrated BIAS provider may have an incentive to limit
the entry of new content or application providers that may compete with
its own offerings in the future. The record suggests that BIAS
providers have engaged in such behavior.
456. Such incentives also exist if a BIAS provider has contractual
arrangements with a third-party edge provider in which the third-party
pays
[[Page 45501]]
the ISP to terminate traffic. Commissioner Carr in his dissent suggests
that, because a small BIAS provider is unlikely to block access to
Netflix, this suggests that regulation is unnecessary. This argument
fails for a number of reasons, most importantly because, if a BIAS
provider, regardless of its size, provides a service that competes
directly with an edge provider's service (or is affiliated with a
provider of a competing service or has a contractual relationship with
such a competing provider), that BIAS provider will have an incentive
to block or degrade access to the competing provider's service in order
to increase its own profits. Whether a small BIAS provider in Louisiana
could provide a service comparable to Netflix's may or may not be
possible, but that does not mean there would not be other services and
edge providers for which a small provider might have a stronger
incentive to degrade access. In this case, the BIAS providers would
have an incentive to interfere with and degrade the quality of the
transmission provided to non-affiliated content providers. Some
commenters contend that, in both cases (of vertical integration of the
BIAS provider and contractual agreements with third-party content
providers), paid peering and interconnection agreements may be used to
raise rival content providers' costs through inefficiently high
payments and that such practices will negatively affect the internet
ecosystem.
457. Second, a BIAS provider may have an incentive to charge
specific edge providers or classes of edge providers for access or
prioritized access to the provider's end users. A BIAS provider could
have an incentive to charge inefficiently high fees to edge providers
because the BIAS provider is typically an edge-provider's only option
for reaching a particular end user. Thus, as the Commission noted in
the 2015 Open Internet Order, BIAS providers have the ability to act as
gatekeepers. The additional cost associated with these fees, in turn,
would reduce the incentives of edge providers to innovate. Harms from
such inefficiently high charges could be particularly impactful because
many edge innovations generate large benefits for the internet as a
whole (what economists call positive spillover effects). Reduced edge
innovation activity therefore may cause harms for the internet
ecosystem that extend beyond an individual edge provider.
458. Third, if a BIAS provider can profitably charge edge providers
for prioritized access to end users, it may have an incentive to
strategically degrade, or decline to maintain or increase, the quality
of service to non-prioritized uses and users in order to raise the
profits from selling priority access. And even though the quality of
broadband access generally has improved over time, as reflected in
higher download and upload speeds, a BIAS provider might withhold or
decline to expand capacity in order to ``squeeze'' and degrade
nonprioritized traffic, thus increasing network congestion.
459. We note, as the Commission did in both the 2015 Open Internet
Order and the 2010 Open Internet Order, that BIAS providers need not
possess monopoly power over end users in order to engage in conduct
that harms edge providers, consumers, and the open internet. We
recognize, however, that BIAS providers generally possess some degree
of market power. As discussed below this market power generally arises
from product differentiation and a limited choice among BIAS providers,
significant switching costs, and customer inertia, though the incentive
and ability to engage in such conduct is likely exacerbated by an
increase in market power. As the Commission explained in the 2010 and
2015 Open Internet Orders, a ``broadband provider's incentive to favor
affiliated content or the content of unaffiliated firms that pay for it
to do so, its incentive to block or degrade traffic or charge edge
providers for access to end users, and its incentive to squeeze non-
prioritized transmission will all be greater if end users are less able
to respond by switching to rival broadband providers.'' Similarly, in
the 2015 Open Internet Order, the Commission observed that ``a
broadband provider's incentive to favor affiliated content or the
content of unaffiliated firms that pay for it to do so, to block or
degrade traffic, to charge edge providers for access to end users, and
to disadvantage non-prioritized transmission all increase when end
users are less able to respond by switching to rival broadband
providers.''
460. In Verizon, the D.C. Circuit found that the Commission
``adequately supported and explained'' that, absent open internet
rules, ``broadband providers represent a threat to internet openness
and could act in ways that would ultimately inhibit the speed and
extent of future broadband deployment.'' And in the 2015 Open Internet
Order, the Commission generally adopted the analysis underlying the
Commission's 2010 Open Internet Order. Based on the record in this
proceeding, we continue to find the analysis contained in both the 2010
and 2015 Open Internet Orders persuasive.
461. Opponents of open internet regulation present several
arguments as to why BIAS providers will not have the incentive or
ability to engage in conduct that harms the open internet. As discussed
below, we find that none of these arguments are well-founded. First,
opponents argue that BIAS providers lack the incentive to block,
throttle, or otherwise disadvantage unaffiliated edge providers because
they face effective competition and because end users can switch to
other service providers. The Commission has acknowledged that the
gatekeeper role of BIAS providers could be ``mitigated if a consumer
could easily switch broadband providers.'' However, there are several
problems with the opponents' argument in practice. While the number of
BIAS providers is increasing and BIAS providers are expanding their
networks, many consumers still lack a choice of BIAS providers or,
where they do have a choice, they have a choice of only two providers
and/or the services offered by competing providers are often not close
substitutes. The 2024 Section 706 Report shows that as of year-end
2022, 37.4% of households lived in areas where only one provider
offered wireline or terrestrial fixed wireless broadband internet
access services at 100 Mbps download and 20 Mbps upload speeds (100/20
Mbps), the new benchmark for defining advanced telecommunications
capability, and the Commission's fixed speed benchmark for broadband,
while 36.6% of households lived in areas with two providers offering
100/20 Mbps service, and only 18.2% lived in areas where they had a
choice of three or more providers offering 100/20 Mbps service. 7.9% of
households did not have any terrestrial fixed broadband provider
offering 100/20 Mbps service. The figures in the text include fixed
wireless services at 100/20 Mbps. If fixed wireless is excluded, then
49.8% of households had a choice of only one provider offering 100/20
Mbps, 34.9% of households had a choice of two providers offering these
speeds, and only 5.1% of households had a choice of three or more
providers offering 100/20 Mbps. We reach no conclusion as to whether,
or how close, a substitute fixed wireless is for wireline fixed
broadband, though we note that subscription rates for fixed wireless
are only 4%, which may suggest that fixed wireless is not a close
substitute for fixed wireline service at 100/20 Mbps. NCTA takes issue
with the Commission's reliance on
[[Page 45502]]
these data, which represent the most recent Commission-analyzed
competition data, claiming that the June 2023 Broadband Data Collection
data demonstrate ``existing competition is already sufficient to
prevent open internet harms while it is driving increased investment
and deployment.'' As discussed above, we do not rest our findings about
BIAS providers' incentives and abilities to harm internet openness
solely or even primarily on the competitive state of the marketplace,
though to be sure, these incentives are influenced by a consumer's
ability to switch to a competitive provider. In any event, even if we
take NCTA's June 2023 data calculations at face value, we find that the
incremental increases in competition do not meaningfully change our
incentive and ability analysis. NCTA also submits that the Commission
should account for wireless and low Earth orbit satellite providers in
its competitive analysis. However, the Commission has consistently
found that fixed and mobile broadband services are not full
substitutes, and given the nascent availability of low Earth orbit
satellite services, we find it is premature to make a determination
regarding the potential substitutability of these services for fixed
terrestrial service. Furthermore, with respect to NCTA's claims
regarding the impact of future potential competition, we find that our
analysis is best conducted based on the current state of the
marketplace rather than speculation regarding future BIAS deployment.
At the Commission's long-term speed goal of 1,000 Mbps download and 500
Mbps upload, 34.4% of households lived in areas with one provider of
such service, 3.5% lived in areas with two providers, and only 0.2%
lived in areas offering a choice of three or more providers. To report
service availability at the long-term speed goal, the Commission uses
BDC data reporting 940GB download and 500 Mbps upload. In most
locations, end users also have access to satellite and mobile broadband
services. However, the Commission has found that fixed and mobile
broadband services are not full substitutes to each other and both
services are necessary to ensure that all Americans have access to
advanced telecommunications capability. Both have different service
capabilities and use cases, and because these services are complements,
and many consumers subscribe to both, which means that the incentives
to degrade one of these services would not fully affect consumers' use
of the other service. Further, the 2024 Section 706 Report observed
that satellite services have a relatively low subscription rate despite
their apparent widespread service availability, and satellite capacity
limits the number of subscribers that can be served without service
degradation.
462. Several commenters argue that the development of cellular FWA
as an alternative to more traditional fixed BIAS is an example that
broadband deployment, innovation, and competition are flourishing, and
that the Commission's proposed rules are unnecessary. Cellular FWA, the
subclass of FWA offered using 4G or 5G mobile technologies, is a
relatively new residential fixed wireless broadband internet access
service offered by nationwide providers AT&T, T-Mobile, and Verizon. As
USTelecom notes, ``[n]ew 5G fixed wireless offerings provide a
competitive alternative to . . . wireline offerings.'' INCOMPAS and
Free Press, conversely, suggest that claims of cellular FWA's
competitive effects on the fixed BIAS market may be exaggerated,
arguing that the fixed BIAS market is highly concentrated and requires
open internet regulation. While Free Press acknowledges fixed wireless
as a potential source of competition for home broadband, it argues in
favor of the need to reclassify broadband as Title II ``regardless of
how competitive the market is.'' While we acknowledge the availability
of cellular FWA as an alternative to wired home internet offerings, we
note that the development of this technology--and any resulting impact
on competition--is not sufficient by itself to outweigh our concerns
regarding BIAS providers' incentives.
463. A second response to the argument that BIAS providers lack the
incentive to engage in conduct that harms edge providers is that even
where consumers face a choice among BIAS providers that are close
substitutes, they likely face high switching costs. The record shows
broad support for the relevance of switching costs in reducing the
intensity of competition. Other commenters emphasize that competition
among BIAS providers has reduced switching costs and increased customer
choice options. While we recognize that these competitive forces may
exist to lower switching costs for some consumers in some areas, many
areas and groups remain for whom switching costs remain high. As the
Commission explained in the 2015 Open Internet Order, consumers may
face ``high upfront device installation fees; long-term contracts and
early termination fees; the activation fee when changing service
providers; and compatibility costs of owned equipment not working with
the new service.'' In addition, BIAS providers can use bundling
strategies to increase switching costs.
464. Third, even where a BIAS provider degrades the quality of an
edge provider's service to the extent that it is noticeable to the
consumer, the consumer may not be able to determine whether the poor
quality is due to the BIAS provider or to the edge provider. Consumers
often lack the information needed to understand how the practices of
their current BIAS provider may affect their user experience and are
confused by the complexity of multifaceted pricing plans and discount
offers. This uncertainty reduces consumers' willingness to switch,
solidifying the gatekeeper position of BIAS providers, and weakening
the checks provided by competing providers.
465. Another argument raised by opponents of open internet rules is
that BIAS providers will not have the incentive to degrade or
disadvantage edge providers to the extent that BIAS and edge services
are complements. We find that this argument does not always hold. For
example, if a BIAS provider is vertically integrated with a content
provider or has a contractual relationship with an edge provider that
competes directly against other edge providers, then the BIAS provider
may have an incentive to block or degrade access to unaffiliated edge
providers. Similarly, if a BIAS provider sees an edge provider as a
potential future competitor in an upstream market, it may have the
incentive to discriminate in providing access. Finally, each BIAS
provider only accounts for how its actions impact its own profits and
ignores the effect it has on other BIAS providers and the broader
internet ecosystem. As a result, each individual BIAS provider's
profit-maximizing decision, when aggregated across all BIAS providers,
can be harmful. For example, an individual BIAS provider may find
charging edge providers a small amount increases its profits. To the
extent that charge leads edge providers to degrade output, the BIAS
provider would only account for the impact on its own customers, but
not the impact on customers of other BIAS providers. While the BIAS
provider might use some of its revenue from the edge providers to
compensate its own customers and negate the harm, other users of the
edge providers' services would still be harmed by the charge. While the
harm caused when a single BIAS provider takes such action may be small,
all BIAS providers have an incentive to behave this way, substantially
harming edge provision.
[[Page 45503]]
466. Opponents of the proposed open internet rules further argue
that a supposed lack of examples of BIAS providers blocking or
throttling edge content proves that such rules are not needed. We find
this argument unpersuasive. As an initial matter, we note that open
internet rules and active enforcement of such rules have been in effect
nearly continuously in some form since 2010. Following the RIF Order,
various states began enacting their own open internet rules, and given
the national scope of many BIAS providers and services, such State
rules provided at least some constraint on the ability of BIAS
providers to engage in behavior that would harm internet openness.
Indeed, AT&T abandoned its sponsored data plan that zero-rated
affiliated DirecTV video as a direct result of the passage of the
California open internet regulations. AT&T stated that, ``[g]iven that
the internet does not recognize state borders, the new law not only
ends our ability to offer California customers such free data services
but also similarly impacts our customers in states beyond California.''
As we explained above, BIAS providers continue to have strong
incentives and the ability to favor some edge provider content and to
discriminate against other content, especially when a BIAS provider is
vertically integrated, or has contractual relationships, with edge
provider content that competes with unaffiliated content. Therefore,
the perceived lack of examples of BIAS providers engaging in practices
that harm internet openness is more likely evidence in favor of the
effectiveness of open internet regulation and enforcement rather than
evidence of a lack of incentives for BIAS providers to engage in such
activities.
467. However, there have been repeated cases of discriminatory
conduct that often required Commission action to resolve and would
likely be addressed by the rules we adopt in the Order. The record and
independent research document a list of incidences, such as blocking,
throttling, and other forms of conduct that harm edge providers. This
includes the blocking by Madison River Communications of VoIP service
provided by Vonage; the throttling and blocking of peer-to-peer (P2P)
traffic by cable providers; the blocking of video calling on the Apple
FaceTime app by AT&T; and, as discussed below, recent evidence that
major BIAS providers are currently engaged in throttling. BIAS provider
RCN settled a class action lawsuit related to its throttling of P2P
traffic on its network. RCN denied any wrongdoing, but it acknowledged
that in order to ease network congestion, it targeted specific P2P
applications. A 2008 study by the Max Planck Institute revealed
significant blocking of BitTorrent applications in the United States.
Comcast and Cox were both cited as examples of providers blocking
traffic. AT&T initially restricted use of Apple's FaceTime application
to times when the end user was connected to Wi-Fi and thus to another
BIAS provider. In addition, there have been many instances over the
past decade where BIAS providers changed the traffic that was requested
by their users, including by redirecting search requests to websites
chosen by the BIAS provider in exchange for payments; injecting
JavaScript code into traffic, raising security concerns; adding unique
tracking IDs to web requests, raising privacy concerns; and stripping
email encryption requests, raising security and privacy concerns.
468. The RIF Order asserted that there are only a few examples of
BIAS providers engaging in practices harmful to internet openness, and
that proponents of the 2015 Open Internet Order ``relied on purely
speculative threats.'' It argued that, in a holistic view, both BIAS
and edge providers ``are important drivers of the virtuous cycle'' of
investment and innovation, and that regulatory analysis must examine
this two-sided market interaction. The RIF Order then concludes that,
seen through a two-sided market lens, BIAS providers ``face material
competitive constraints.'' Furthermore, it contended that the
terminating monopoly problem forces BIAS providers to compete for
subscribers, thus creating downward price pressure for end users.
Moreover, it claimed that smaller BIAS providers cannot exercise market
power against large edge providers. Finally, the RIF Order argued that
positive externalities associated with the general-purpose technology
internet and their regulatory implications were not substantiated by
commenters who supported the 2015 Open Internet Order's approach and
thus considered their support of the application of Title II regulation
to all BIAS providers ``unreasonable and unreasoned.''
469. As our analysis in this section shows, these arguments are not
persuasive. Although it is correct that both BIAS and edge providers
provide impetus for innovation, the interests of BIAS providers and
edge providers often conflict with each other. BIAS providers have
incentives to disadvantage competing edge providers and edge providers
that might offer competing services in the future. And as discussed
above, even where end users have competitive choices, they generally
face significant switching costs and often lack the ability to identify
when their BIAS provider is degrading the quality of particular edge
services. Consequently, even from a two-sided-market perspective, the
interactions between each side of the market are not well aligned.
Finally, externalities deserve serious consideration as they imply that
the decentralized decisions of BIAS providers and edge providers can
have undesirable sectoral outcomes, even when BIAS providers have no
incentives to favor their own operations. For example, if a BIAS
provider imposes an access fee on an edge provider, it is only
considering the effect of such a charge on its own profits, and not the
potential reduced edge provider innovation and investment caused by the
new cost imposed on the edge provider. A BIAS provider's mere
exploitation of its existing market power will reduce edge provider
investment, a harm the BIAS provider will only account for to the
extent it reduces its own profits, ignoring the damage to the broader
internet ecosystem.
4. The RIF Order's Framework Is Insufficient To Safeguard and Secure
the Open Internet
470. We find that framework in the RIF Order does not adequately
protect consumers from the potential harms of BIAS provider misconduct.
As discussed above, BIAS providers have the incentive and technical
ability to engage in conduct that undermines the openness of the
internet. In 2018, when the Commission repealed the open internet
conduct rules, the Commission asserted that a modified transparency
rule, combined with the effects of competition, would prevent BIAS
provider conduct that might threaten the internet's openness.
Notwithstanding this conclusion, the Commission found that ``[i]n the
unlikely event that ISPs engage in conduct that harms internet
openness,'' preexisting antitrust and consumer protection laws will
protect consumers. In the RIF Order, the Commission further found that
even if the conduct rules adopted by the Commission in 2015 provided
``any additional marginal deterrence,'' those benefits were not worth
the costs. We believe that this framework is insufficient to safeguard
and secure the open internet.
471. While the D.C. Circuit found the RIF Order's framework to
represent a reasonable policy view, the court was skeptical of the
Commission's analysis. Even while upholding the Commission's reliance
on consumer protection and
[[Page 45504]]
antitrust law to protect the open internet in Mozilla, the court
observed that the RIF Order's ``discussion of antitrust and consumer
protection law is no model of agency decisionmaking.'' As the court
explained, although ``[t]he Commission theorized why antitrust and
consumer protection law is preferred to ex ante regulations [it] failed
to provide any meaningful analysis of whether these laws would, in
practice, prevent blocking and throttling.'' Consequently, although
``the Commission opine[d] that `[m]ost of the examples of net
neutrality violations discussed in the [2015 Open Internet Order] could
have been investigated as antitrust violations,' '' the RIF Order
``fail[ed] to explain what, if any, concrete remedies might address
these antitrust violations.'' The court found it ``concerning that the
Commission provide[d] such an anemic analysis of the safety valve that
it insists will limit anticompetitive behavior among broadband
providers.''
472. Consistent with the D.C. Circuit's skepticism of the RIF
Order's approach, we find that the consumer protection and antitrust
laws, even combined with transparency requirements, are insufficient to
protect against blocking, throttling, and other conduct that harms the
open internet. We believe that the approach we adopt in the Order,
based on the 2015 Open Internet Order, is consistent with a light-touch
regulatory framework to protect internet openness. Even while upholding
the RIF Order, the D.C. Circuit was ``troubled by the Commission's
failure to grapple with the fact that, for much of the past two
decades, broadband providers were subject to some degree of open
internet restrictions,'' and we aim to return to the Commission
understanding that existed from the 2005 Internet Policy Statement
through the repeal of the 2015 Open Internet Order in 2017.
473. As an initial matter, we find the RIF Order's reliance on
transparency as a deterrent for problematic practices to be
insufficient to protect consumers and edge providers from BIAS provider
misconduct. We affirm our tentative conclusion from the 2023 Open
Internet NPRM that there are types of conduct, such as blocking,
throttling, and traffic discrimination, that require ex ante
intervention to prevent their occurrence in the first instance. We
agree with those commenters that argue it is not enough for the
Commission to require that BIAS providers disclose their policies on
these network practices in the commercial terms of their service
offerings because it does not restrict BIAS providers from engaging in
harmful behavior. We conclude that a comprehensive set of conduct
rules, which includes a transparency element, is required to protect
consumers from harmful BIAS provider conduct, and that the open
internet rules we adopt in the Order, including bright-line rules, are
necessary to safeguard and secure the open internet. As discussed
above, we find that: (1) BIAS providers may have the incentive to
engage in conduct that harms edge providers and the open internet even
where they lack market power over end users; and (2) contrary to the
claims of some commenters, there have been several instances of conduct
that the Commission felt a need to address and correct, despite the
fact that there were open internet rules in place.
474. Furthermore, based on the record in this proceeding, we find
that the RIF Order's reliance on the DOJ and the FTC for enforcement of
the consumer protection and antitrust laws is unlikely to provide
sufficient deterrence to BIAS providers from engaging in conduct that
may harm consumers, edge providers, and the open internet. Both the DOJ
and the FTC have authority to enforce the Federal antitrust laws, and
particularly sections 1 and 2 of the Sherman Act. Section 1 of the
Sherman Act makes illegal ``[e]very contract, combination . . . , or
conspiracy in restraint of trade . . . among the several States,''
while section 2 prohibits monopolization, attempts to monopolize, or
combinations or conspiracies to monopolize ``any part of the trade or
commerce among the several States.'' In the 2010 and 2015 Open Internet
Orders, the Commission found that it was necessary to adopt certain
rules to protect the openness of the internet and that sole reliance on
enforcement of the antitrust laws by the DOJ and FTC was insufficient
to protect edge providers, consumers, and the open internet. In the RIF
Order, the Commission reconsidered and concluded that conduct that
harms the openness of the internet was unlikely, and that other legal
regimes--particularly antitrust law and section 5 of the Federal Trade
Commission Act (FTC Act)--were sufficient to protect consumers.
475. We disagree with commenters who argue that existing consumer
protection and antitrust laws provide adequate protection against the
harms the open internet rules we adopt in the Order seek to prevent. To
begin with, the FTC's section 5 authority does not apply to ``common
carriers subject to'' the Communications Act, so if BIAS providers are
properly classified as common carriers, section 5 does not apply at
all. With respect to antitrust oversight, it is not clear that all
conduct that could harm consumers and edge providers would constitute
an ``unfair method of competition'' under section 5 of the FTC Act or a
violation of section 1 or 2 of the Sherman Act. The FTC goes on to
explain that conduct that violates section 5 includes practices
``deemed to violate the antitrust laws,'' ``conduct deemed to be an
incipient violation of the antitrust laws,'' and ``conduct that
violates the spirit of the antitrust laws,'' but none of the examples
cited by the FTC clearly address the types of conduct the open internet
rules seek to prohibit. For example, if a vertically integrated BIAS
provider blocked or throttled the content of a particular edge provider
with which it competed in the content market, it is not clear whether
such conduct would constitute a violation of section 2 of the Sherman
Act. It is well settled that there are two elements to the offense of
unlawful monopolization under section 2 of the Sherman Act: ``(1) the
possession of monopoly power in the relevant market; and (2) the
willful acquisition or maintenance of that power as distinguished from
growth or development as a consequence of a superior product, business
acumen, or historic accident.'' As the Commission has repeatedly
explained, however, it is not necessary for a BIAS provider to have
``market power with respect to end users'' for it to be able to engage
in conduct that harms edge providers, the open internet, and consumers.
This conclusion was accepted and affirmed by the D.C. Circuit in
Verizon, where it stated:
Broadband providers' ability to impose restriction on edge
providers does not depend on their benefiting from the sort of
market concentration that would enable them to impose substantial
price increases on end users--which is all the Commission said in
declining to make a market power finding. . . . Rather, broadband
providers' ability to impose restriction on edge providers simply
depends on end users not being fully responsive to the imposition of
such restrictions.
Thus, section 2 of the Sherman Act will not provide adequate
protection, at least in cases where the BIAS provider lacks monopoly
power over its end user customers. In Mozilla, the D.C. Circuit
reiterated its concern about the insufficiency of the RIF Order's
reliance on antitrust law, explaining that the RIF Order ``fail[ed] to
explain what, if any, concrete remedies might address these antitrust
violations.'' As such, while the Sherman Act may complement the rules
we adopt in the Order, it would not be sufficient on its own to protect
edge providers, consumers, and the open internet.
476. Similarly, it is not clear that all conduct that harms edge
providers,
[[Page 45505]]
consumers, and the open internet would necessarily violate section 5 of
the FTC Act's prohibition on ``unfair or deceptive acts or practices''
even while BIAS providers are not classified as common carriers and
thus are subject to the FTC Act. Whether an act is unfair or deceptive
under consumer protection law each depends on its own subjective test.
Commenters argue that the FTC is a more appropriate enforcer of open
internet principles, emphasize that the FTC has the authority to
enforce BIAS provider pledges and commitments not to block, throttle,
or otherwise harm consumers. But these commenters do not address
whether the FTC would have any enforcement authority with respect to a
BIAS provider that does not make affirmative pledges or commitments.
Nor is it clear how the FTC would rule should a BIAS provider engage in
other types of conduct that do not amount to blocking or throttling,
but that nevertheless harm edge providers and the open internet. As
such, we disagree that consumer protection law is adequate to protect
the open internet.
477. We also find that there are significant advantages to adopting
ex ante bright-line rules compared with relying on an ex post case-by-
case approach, the latter of which is necessary for the DOJ and FTC.
First, ex ante bright-line rules can reduce regulatory uncertainty and
provide better guidance to BIAS providers, edge providers, and end
users. In the antitrust context, the U.S. Supreme Court has created
certain per se rules that prohibit particular types of conduct. It has
described this per se approach as ``reflect[ing] broad generalizations
holding true in so many cases that inquiry into whether they apply to
the case at hand would be needless and wasteful.'' Where, as here,
however, no commenter claims that the blocking or throttling of a
specific edge-provider's lawful content will increase consumer or
social welfare, we find it reasonable and efficient to adopt a bright-
line prohibition. In contrast, ex post case-by-case enforcement like
that under the FTC and DOJ involves greater expense, longer delays in
prosecuting enforcement actions, and greater uncertainty as to which
types of conduct are allowed or proscribed.
478. We further find that the oversight and enforcement elements of
the RIF Order's framework likely do not provide consumers a meaningful
opportunity to obtain relief. The primary means by which the RIF Order
suggests consumers might seek redress for harmful BIAS provider conduct
is to submit complaints to the FTC, with the hope that the complaint
might spark an agency investigation. The Mozilla court criticized the
RIF Order's reliance on antitrust and consumer protection law.
Moreover, the Supreme Court's decision in AMG Capital Management v.
Federal Trade Commission restricted the FTC's ability to seek monetary
relief on behalf of consumers. Finally, while the Commission also
suggested that consumers could seek non-legal forms of relief by
switching to an alternative BIAS provider and bringing public attention
to the BIAS provider conduct at issue to influence that provider into
changing its behavior, we find that there may be high costs associated
with trying to switch providers. While some of these options may
provide relief for some subset of consumers, overall, they are far from
widely available. As part of arguments opposing the re-adoption of
internet conduct rules, some commenters highlight the example of a
small ISP in the Pacific Northwest as positive proof that consumer
backlash can prevent violations of open internet principles. In this
circumstance, a small BIAS provider announced that it would block
access to social media sites that had permanently banned the former
president. After public criticism, the BIAS provider backtracked. We do
not doubt that transparency plays an important role in policing BIAS
provider behavior, as this example demonstrates. However, we observe
that this particular situation involves an important public figure and
some of the largest social media companies in the country. It is not
clear that a situation that did not involve some of the largest figures
in the country would gain the same type of traction with the public,
and a smaller edge provider would not be in the same position as those
in this example to draw attention to the behavior. This lack of
predictability makes reliance on transparency an uncertain course for
consumers to obtain relief. As discussed above, the D.C. Circuit
expressed concern that the RIF Order ``failed to provide any meaningful
analysis of whether [antitrust and consumer protection] laws would, in
practice, prevent blocking and throttling.'' Furthermore, the harms
contemplated in section V.A.3 may not always be observable to the
average consumer.
479. Finally, we agree with Public Knowledge that ``Congress
correctly identified that telecommunications services require sector-
specific rules from an expert regulator: the FCC.'' To the extent that
the conduct complained of does not involve a violation of a bright-line
rule, as with enforcement under the Sherman Act and to the extent that
section 5 of the FTC Act might apply, it seems inefficient to place
enforcement responsibility with generalist agencies rather than with
the FCC, which possesses the technical and market knowledge and
expertise concerning communications and broadband technologies. Indeed,
the common carrier exception in section 5 of the FTC Act appears to
presume that telecommunications carriers should instead be principally
governed by sector-specific FCC rules. Moreover, because the FCC is
constantly monitoring the telecommunications markets that it is charged
with regulating, it is more likely to detect and deter conduct that
harms the open internet. Finally, the FCC is better placed to enforce
open internet rules and such violations where remedying harmful conduct
is likely to require ongoing monitoring and supervision by the expert
agency's enforcement oversight. Thus, we reaffirm our belief that the
Commission, as the expert agency on communications, is best positioned
to safeguard internet openness. In the RIF Order, the Commission
removed its own authority to enforce open internet requirements,
leaving the responsibility of addressing harmful BIAS provider conduct
to the FTC. The current Chair of the FTC has recognized the need for
the Commission's critical oversight. In remarks released in 2021, Chair
Lina M. Khan noted that ``the Federal Communications Commission has the
clearest legal authority and expertise to fully oversee internet
service providers.'' She continued that she ``support[s] efforts to
reassert [the FCC's] authority and once again put in place the
nondiscrimination rules, privacy protections, and other basic
requirements needed to create a healthier market.'' In response to the
2023 Open Internet NPRM, several commenters agreed, arguing that the
Commission's general expertise is needed.
B. Rules To Safeguard and Secure the Open Internet
1. Bright-Line Rules
480. The record in this proceeding is rife with support for the
reinstatement of strong, enforceable open internet rules to prohibit
BIAS providers from blocking, throttling, or engaging in paid or
affiliated prioritization arrangements. Without rules in place to
safeguard and secure the open internet, the incentives BIAS providers
have to act in ways that are harmful to investment and innovation
threaten both broadband networks and edge content, as the D.C.
[[Page 45506]]
Circuit has recognized. We find that a safe, secure, and open internet
is too important to consumers and innovators to leave unprotected. As
in 2015, we believe that conduct-based rules targeting specific
practices are necessary, and accordingly adopt bright-line rules to
prohibit blocking, throttling, and paid prioritization by providers of
both fixed and mobile BIAS. For the reasons described below, we find
each of these practices inherently unjust and unreasonable, in
violation of section 201(b) of the Act, and that these practices
threaten the virtuous cycle of innovation and investment.
481. We disagree with commenters that assert that reinstatement of
conduct rules is unnecessary because BIAS providers have not engaged in
widespread blocking or throttling of traffic since the elimination of
the conduct rules in 2018. As an initial matter, there exists
evidence--as well as numerous consumer allegations--that BIAS providers
have not refrained from this conduct. Contrary to industry assertions
claiming that rules are unnecessary because YourT1Wifi.com reversed its
policy, we do not believe that consumers should have to rely on public
outcry alone to be able to reach all content of their choosing. The
Commission has received nearly 40,000 consumer complaints since
adoption of the RIF Order raising speed, throttling, open internet, and
data cap concerns. Some consumers assert, for example, that certain
video traffic was throttled by their BIAS provider, as demonstrated by
the fact that VPN-masked video traffic had no similar issues. We make
no determinations regarding the allegations in these complaints in the
Order. To the extent that some BIAS providers have acted consistently
with open internet principles, we agree with Netflix and Mozilla that
the combination ``of individual state laws and a pending regulatory
proceeding disincentivized ISPs from undermining the open internet.''
In any event, we find that it is not acceptable for consumers to be
beholden to the voluntary whims of their BIAS provider or be
selectively protected depending on the State in which they live or the
size of their provider, nor is it sufficient to promote innovation
among edge providers. As we explain throughout this section, there is
nothing in the record that convinces us that customers of small BIAS
providers are entitled to less protection than customers of large BIAS
providers. Nor do we find that imposition of these open internet rules
on small BIAS providers will be so burdensome as to justify a six-month
or one-year delay in implementation for these providers (except where
we provide a temporary exemption for certain of the transparency rule
requirements, as discussed below), particularly given that ACA Connects
itself indicates that small BIAS providers are already complying with
the open internet principles. We are similarly not convinced of the
need for a FNPRM, as requested by WISPA, examining, among other things,
whether the ``Regulatory Flexibility Act requires the Commission to
exempt small BIAS providers from the rules'' and the ``costs to comply
with all of the regulatory obligations the Commission has imposed on
BIAS providers over the past two years,'' and ``propos[ing] to
permanently exempt small providers from the bright line rules, the
general conduct rule, and the new transparency requirements.'' The
Commission sought comment on the effect of the proposed rules and
policies on small entities in the 2023 Open Internet NPRM and the
accompanying Initial Regulatory Flexibility Analysis. The Commission
has carefully considered these impacts in adopting the requirements in
the Order, and as such, a FNPRM examining these issues is not
necessary. In adopting strong, enforceable open internet rules, we will
ensure a safe and open internet for all consumers nationwide and
promote innovation that fuels the virtuous cycle.
a. Preventing Blocking of Lawful Content, Applications, Services, and
Non-Harmful Devices
482. We reinstate a bright-line rule prohibiting BIAS providers
from blocking lawful content, applications, services, or non-harmful
devices. This ``no-blocking'' principle has long been a cornerstone of
the Commission's policies. While first applied in the internet context
as part of the Commission's Internet Policy Statement, the no-blocking
concept dates back to the Commission's protection of end users' rights
to attach lawful, non-harmful devices to communications networks. We
continue to find, as the Commission has previously, that ``the freedom
to send and receive lawful content and to use and provide applications
and services without fear of blocking continues to be essential to the
internet's openness.'' Because of BIAS providers' potential incentives
to block edge providers' content in certain circumstances, the need to
protect a consumer's right to access lawful content, applications,
services, and to use non-harmful devices is as important today as it
was when the Commission adopted the first no-blocking rule in 2010.
Consistent with our proposal, we reinstate the no-blocking rule, which
is widely supported in the record, providing that a person engaged in
the provision of 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.
483. Consistent with the 2015 no-blocking rule, the phrase
``content, applications, and services'' refers to all traffic
transmitted to or from end users of a broadband internet access
service, including traffic that may not fit clearly into any of these
categories. The no-blocking rule applies to transmissions of lawful
content only and does not prevent or restrict a BIAS provider from
refusing to transmit unlawful material, such as child pornography or
copyright-infringing materials. The no-blocking rule also entitles end
users to connect, access, and use any lawful device of their choice,
provided that the device does not harm the network. The no-blocking
rule prohibits network practices that block a specific application or
service, or any particular class of applications or services, unless it
is found to be reasonable network management. Finally, as with the 2010
and 2015 no-blocking rules, this document's no-blocking rule prohibits
BIAS providers from charging edge providers a fee to avoid having edge
providers' content, services, or applications blocked from reaching
BIAS providers' end-user customers.
484. We agree with the Free State Foundation that, ``[b]y offering
subscribers access to whatever lawful internet content they want,
broadband ISPs enhance the perceived value of their services and
thereby increase demand, subscribership, and opportunities for
financial returns and profits.'' Further, we expect that provider costs
for compliance with the no-blocking rule will be minimal, given that
many BIAS providers have continued to comply with the no-blocking rule
even after its repeal in 2018, and that providers themselves assert
that they have every incentive not to block traffic.
b. Preventing Throttling of Lawful Content, Applications, Services, and
Non-Harmful Devices
485. Consistent with our proposal, we reinstate a separate bright-
line rule prohibiting BIAS providers from impairing or degrading lawful
internet traffic on the basis of content, application, service, or use
of non-harmful device--conduct that was
[[Page 45507]]
prohibited under the commentary to the no-blocking rule adopted in the
2010 Open Internet Order, and that the Commission explicitly prohibited
in 2015. We use the term ``throttling'' to refer to conduct that is not
outright blocking, but that inhibits the delivery of particular
content, applications, or services, or particular classes of content,
applications, or services.
486. We adopt the following no-throttling rule applicable to BIAS
providers, which tracks the language of the Commission's 2015 Open
Internet Order, providing that a person engaged in the provision of
broadband internet access service, insofar as such person is so
engaged, shall not impair or degrade lawful internet traffic on the
basis of internet content, application, or service, or use of a non-
harmful device, subject to reasonable network management.
487. With the no-throttling rule, we ban conduct that is not
outright blocking, but inhibits the delivery of particular content,
applications, or services, or particular classes of content,
applications, or services. Likewise, we prohibit conduct that impairs
or degrades lawful traffic to a non-harmful device or class of devices.
We interpret this prohibition to include, for example, any conduct by a
BIAS provider that impairs, degrades, slows down, or renders
effectively unusable particular content, services, applications, or
devices, that is not reasonable network management. Our interpretation
of ``throttling'' encompasses a wide variety of conduct that could
impair or degrade an end user's ability to access content of their
choosing. We clarify that a BIAS provider's decision to speed up ``on
the basis of internet content, applications, or services'' would
``impair or degrade'' other content, applications, or services which
are not given the same treatment. For purposes of this rule, ``content,
applications, and services'' has the same meaning given to this phrase
in the no-blocking rule. Like the no-blocking rule, BIAS providers may
not impose a fee on edge providers to avoid having the edge providers'
content, service, or application throttled. Further, transfers of
unlawful content or unlawful transfers of content are not protected by
the no-throttling rule. As in past Orders, we continue to recognize
that in order to optimize end-user experience, BIAS providers must be
permitted to engage in reasonable network management practices. We
note, however, that the record reflects that ``[t]here are many factors
that limit video impact, including the fact that video providers use
adaptive bitrates to select video resolution (bitrates) according to
available bandwidth, they use congestion-control algorithms while
transmitting, and network providers expanded network capacity during
the COVID lockdown era.''
488. Because our no-throttling rule addresses instances in which a
BIAS provider targets particular content, applications, services, or
non-harmful devices, it does not address the practice of slowing down
or speeding up an end user's connection to the internet based on a
choice clearly made by the end user. For example, a BIAS provider may
offer a data plan in which a subscriber receives a set amount of data
at one speed tier and any remaining data at a lower tier. We note that
user-selected data plans with reduced speeds must comply with our
transparency rule, such that the limitations of the plan are clearly
and accurately communicated to the subscriber. If there were internet
openness concerns with the particulars of a data plan, the Commission
could undertake a review under the general conduct standard, discussed
below. In contrast, if a BIAS provider degraded the delivery of a
particular application or class of application, it would violate the
bright-line no-throttling rule. Further, consistent with the 2015 Open
Internet Order, the no-throttling rule also addresses conduct that
impairs or degrades content, applications, or services that might
compete with a BIAS provider's affiliated content. For example, if a
BIAS provider and an unaffiliated entity both offered over-the-top
applications, the no-throttling rule would prohibit the BIAS provider
from constraining bandwidth for the competing over-the-top offering to
prevent it from reaching the BIAS provider's end user in the same
manner as the affiliated application.
489. We agree with the Information Technology Industry Council that
the no-throttling rule ``ensures the internet remains a vibrant
platform for any individual, startup, or company to provide new,
innovative, and competitive offerings without needing to worry that
access to their offerings may be blocked or degraded for
anticompetitive purposes.'' Because we find that BIAS providers have
the incentive and ability to throttle or otherwise interfere with
traffic of competing content providers, we conclude that a bright-line
rule prohibiting throttling, subject to reasonable network management,
is necessary. Further, we believe that the bright-line rule we adopt in
the Order to protect consumers' right to access lawful internet traffic
of their choice without impairment or degradation will not impose
significant compliance burdens or costs, particularly given that many
BIAS providers continue to advertise on their website that they do not
throttle traffic except in limited circumstances. Finally, we disagree
with commenters that argue that concerns about throttling lack
persuasiveness, citing the datedness of examples provided in the
record. Professor David Choffnes explains that data show that ``nearly
every cellular provider that offers mobile BIAS in the US throttles at
least one video streaming service,'' explaining that there is ``direct
empirical evidence that ISPs in the US . . . [use] special networking
equipment called middleboxes that inspect the contents of our network
traffic to make guesses as to what application is being used, and then
potentially limit the bandwidth available to that application in
response.'' While we do not rely on these findings as justification for
the no-throttling rule, they remain instructive regarding BIAS
providers' technical ability to throttle traffic.
c. No Paid or Affiliated Prioritization
490. We reinstate the prohibition on paid or affiliated
prioritization practices, subject to a narrow waiver process. In the
2023 Open Internet NPRM, the Commission proposed to reestablish a ban
on arrangements in which a BIAS provider accepts consideration
(monetary or otherwise) from a third party to manage its network in a
manner that benefits particular content, applications, services, or
devices, or manages its network in a manner that favors the content,
applications, services, or devices of an affiliated entity. The Act
defines ``affiliate'' as ``a person that (directly or indirectly) owns
or controls, is owned or controlled by, or is under common ownership or
control with, another person. For purposes of this paragraph, the term
`own' means to own an equity interest (or the equivalent thereof) of
more than 10 percent.'' After consideration of the record, we conclude
that paid prioritization network practices harm consumers, competition,
and innovation, as well as create disincentives to promote broadband
deployment and, as such, we reinstate a bright-line rule prohibiting
such practices.
491. We adopt the following paid prioritization rule applicable to
BIAS providers, which tracks the language of the Commission's 2015 Open
Internet Order, providing that a person engaged in the provision of
broadband internet access service, insofar as such person is engaged,
shall not engage in paid prioritization. ``Paid prioritization'' refers
to the management of a broadband provider's network to directly or
[[Page 45508]]
indirectly favor some traffic over other traffic, including through use
of techniques such as traffic shaping, prioritization, resource
reservation, or other forms of preferential traffic management, either
(a) in exchange for consideration (monetary or otherwise) from a third
party, or (b) to benefit an affiliated entity.
492. We find that the same concerns present in 2015 remain true in
the Order, that preferential treatment arrangements have the potential
to create a chilling effect, disrupting the internet's virtuous cycle
of innovation, consumer demand, and investment. While small BIAS
providers argue that they have neither the incentive nor market power
to limit access to edge provider applications, services, and devices,
and ``reciprocally to control or limit edge provider access to their
small customer bases,'' for the reasons we describe below we find it
appropriate to establish a bright-line rule applicable to all BIAS
providers in order to provide certainty to BIAS and edge providers
alike. In the 2023 Open Internet NPRM, we tentatively concluded that,
absent open internet rules, BIAS providers might engage in practices
that ``could unravel the virtuous cycle'' and that there are ``far more
edge services that are small . . . which the RIF Order does not
acknowledge or evaluate.'' We sought comment on these tentative
conclusions and on whether small edge providers had any leverage in
negotiations with BIAS providers and on whether BIAS providers
``seeking paid prioritization arrangements . . . would
disproportionately harm small edge providers. As discussed above, we
find, in general, that BIAS providers have the incentive and ability
engage in conduct that harms edge providers, particularly small edge
providers. Based on the record and related research on competition in
vertically related markets, we find more specifically that forms of
paid and affiliate prioritization can be used by BIAS providers in ways
that may harm edge providers and edge innovation. In particular, BIAS
providers may use paid or affiliated prioritization to raise the costs
of edge providers that compete with their vertically integrated edge
affiliates or with edge providers with whom they have a contractual
arrangement. In addition, if BIAS providers can profitably charge edge
providers for prioritized access, they may have an incentive to
strategically degrade, or decline to maintain or increase, the quality
of service to non-prioritized uses and users in order to raise the
profits from selling priority access. Thus, BIAS providers might
withhold or decline to expand capacity in order to ``squeeze'' and
degrade nonprioritized traffic, thus increasing network congestion.
These types of conduct create competitive disadvantages for
unaffiliated edge providers. Other things being equal, they increase
the costs of innovation for edge providers and reduce the number of
innovation experiments. In turn, this will likely decrease the rate of
edge and network innovation.
493. The Commission has previously found it well established that
BIAS providers have both the incentive and the ability to engage in
paid prioritization. In its Verizon opinion, the D.C. Circuit noted the
powerful incentives BIAS providers have to accept fees from edge
providers in return for excluding their competitors or for granting
prioritized access to end users. The record reflects commenter concerns
regarding preferential treatment arrangements, with many advocating for
a flat ban on paid prioritization. Commenters argue, for example, that
permitting paid prioritization will result in a two-tiered internet,
with a ``fast'' lane for those willing and able to pay, and a ``slow''
lane for everyone else. Other commenters argue that paid prioritization
will distort the market; harm competition, consumers, edge providers
(particularly small edge providers), and free expression; and
discourage innovation. The American Library Association also expressed
concern that permitting paid prioritization would also disadvantage
``non-profit or public interest entities such as libraries and other
public institutions that often operate under very tight budgets.''
494. Our concerns regarding paid prioritization are compounded by
the fact that documenting the harms could prove challenging, as it is
impossible to identify small businesses and new applications that are
stifled before they become commercially viable. We are also concerned
that the widespread use of paid prioritization practices would cause
damage to internet openness that would be difficult to reverse. As we
noted in the 2023 Open Internet NPRM, we find it encouraging that some
BIAS providers continue to advertise that they do not engage in paid or
affiliated prioritization practices. As with our no-blocking and no-
throttling bright-line rules, however, we continue to believe that the
potential harm to the open internet is too significant to rely on
promises from BIAS providers because ``the future openness of the
internet should not turn on the decision[s] of a particular company.''
495. The record reflects some positive use cases of paid
prioritization, and conversely, some costs associated with a ban on
such practices. For example, ADTRAN asserts that ``requiring free
prioritization ignores the costs that are incurred in enabling that
service and encourages over-consumption,'' and also highlights uses of
paid prioritization in other settings. The International Center for Law
and Economics emphasizes the importance of prioritization when
congestion is detected on the network. While we do not discount the
potential benefits of paid prioritization, we remain convinced that the
potential harms to consumers and the open internet outweigh any
speculative benefits.
496. As in 2015, we find that there are advantages to adopting a
bright-line rule prohibiting paid prioritization. For one, we believe
it will protect consumers against a harmful practice that may be
difficult to understand, even if disclosed. In addition, this approach
relieves small edge providers, innovators, and consumers of the burden
of detecting and challenging instances of harmful paid prioritization.
Prohibiting paid prioritization outright will also likely help foster
broadband network investment by setting clear boundaries of acceptable
and unacceptable behavior. Thus, we find it most appropriate to adopt a
bright-line rule banning paid prioritization arrangements, while
entertaining waiver requests under limited circumstances. Consistent
with the 2015 Open Internet Order and the record, we clarify that the
ban on paid prioritization does not restrict the ability of a BIAS
provider to enter into an agreement with a CDN to store content locally
within the BIAS provider's network.
497. Under the Commission's longstanding waiver rule, the
Commission may waive any rule in whole or in part, for good cause
shown. A general waiver of the Commission's rules is only appropriate
if special circumstances warrant a deviation from the general rule and
such a deviation will serve the public interest. In 2015, the
Commission found that it was appropriate to adopt specific rules
concerning the factors that it will use to examine a waiver request of
the paid prioritization ban, and we proposed to adopt a waiver rule for
the paid prioritization ban consistent with the 2015 Open Internet
Order. We conclude that it remains appropriate to accompany a rule
prohibiting paid prioritization arrangements with specific guidance on
how the Commission would evaluate subsequent waiver requests.
[[Page 45509]]
498. Accordingly, we adopt a rule concerning waiver of the paid
prioritization ban that establishes a balancing test, consistent with
our proposal, providing that the Commission may waive the ban on paid
prioritization only if the petitioner demonstrates that the practice
would provide some significant public interest benefit and would not
harm the open nature of the internet.
499. In accordance with the framework established in 2015,
applicants seeking a waiver of the paid prioritization ban will be
required to make two related showings. First, the applicant must
demonstrate that the practice will have some significant public
interest benefit. The applicant can make such a showing by providing
evidence that the practice furthers competition, innovation, consumer
demand, or investment. Second, the applicant must demonstrate that the
practice does not harm the open nature of the internet, including, but
not limited to, providing evidence that the practice: (i) does not
materially degrade or threaten to materially degrade the BIAS of the
general public; (ii) does not hinder consumer choice; (iii) does not
impair competition, innovation, consumer demands, or investment; and
(iv) does not impede any forms of expression, types of service, or
points of view. An applicant seeking waiver relief under this rule
faces a high bar. We anticipate approving such exemptions only in
exceptional cases.
500. We disagree with commenters that assert that delays associated
with the waiver process will deter investment and innovation in
prioritization services. As an initial matter, we find that
prioritization services themselves generally deter investment and
innovation. In any event, the Commission has shown itself capable of
handling a variety of different types of waiver requests on a timely
basis, so assertions about delay are speculative at this juncture. We
also disagree with the parties that suggest the waiver process we re-
adopt in the Order provides insufficient guidance to potential waiver
applicants. We are not merely relying on the Commission's general
longstanding waiver standard and instead provide specific factors that
the Commission will evaluate in considering such waiver requests,
which, for instance, provide guidance on how a party might show a
``public benefit'' or show how the conduct ``does not harm the open
nature of the internet.''
2. General Conduct Rule
501. In addition to the three bright-line rules, we also reinstate
a no-unreasonable interference/disadvantage standard, under which the
Commission can prohibit practices that unreasonably interfere with the
ability of consumers or edge providers to select, access, and use BIAS
to reach one another, thus causing harm to the open internet. This no-
unreasonable interference/disadvantage general conduct standard will
operate on a case-by-case basis, applying a non-exhaustive list of
factors, and is designed to evaluate other current or future BIAS
provider policies or practices--not covered by the bright-line rules--
and prohibit those that harm the open internet. Our prohibitions on
blocking, throttling, and paid prioritization are critical to
protecting and promoting the open internet, and we expect that these
bans will prevent many of the harms identified above. We conclude,
however, as the Commission found in 2015, that the Commission needs a
mechanism to enable it to respond to attempts by BIAS providers to
wield their gatekeeper power in ways that might otherwise compromise
the open internet. In other words, the general conduct rule is a
necessary backstop to ensure that BIAS providers do not find a
technical or economic means to evade the bright-line prohibitions on
blocking, throttling, and paid prioritization.
502. In the 2023 Open Internet NPRM, we proposed adopting a general
conduct rule that tracks the language and approach that the Commission
adopted in the 2015 Open Internet Order. We sought comment on our
analysis that a general conduct rule is still needed to operate as a
catch-all backstop to the three bright-line prohibitions we proposed,
and on the need and characteristics of any potential modifications we
should make to the version of the rule that the Commission had
previously adopted, if commenters deemed such a rule necessary. We also
sought comment on the accuracy of the RIF Order's critiques that the
general conduct rule was ``vague and ha[d] created regulatory
uncertainty in the marketplace hindering investment and innovation,''
and steps the Commission might take to increase BIAS providers'
understanding of potentially prohibited practices under a re-adopted
rule.
503. The Commission has long identified the need to protect
consumers and edge providers from discriminatory conduct by BIAS
providers. In 2010, the Commission enshrined this goal in a no-
unreasonable discrimination rule that enabled the Commission to
evaluate, on a case-by-case basis, the conduct of fixed BIAS providers
based on a number of factors. At the time, the 2010 Open Internet Order
exempted mobile BIAS providers from the anti-discrimination rule. When
challenged, the D.C. Circuit accepted the Commission's underlying
policy rationale for the regulations in the 2010 Open Internet Order,
including its nondiscrimination rule; however, the court vacated the
Commission's anti-discrimination and no-blocking rules for imposing de
facto common carrier status on BIAS providers in violation of the
Commission's then-classification of BIAS as an information service. In
2015, when the Commission reclassified BIAS as a telecommunications
service, it adopted a revised general conduct rule that was designed to
prevent BIAS providers from unreasonably interfering with, or
disadvantaging, consumers' ability to reach the internet content,
services, and applications of their choosing or edge providers' ability
to access consumers using the internet. The D.C. Circuit subsequently
upheld the 2015 Open Internet Order in full, including the Commission's
new no-unreasonable interference/disadvantage standard (i.e., the 2015
general conduct rule).
504. We agree with the goals of the Commission's previous
nondiscrimination and general conduct rules, and we conclude that such
a rule is still needed as a backstop to the bright-line prohibitions on
blocking, throttling, and paid prioritization to protect the open
nature of the internet. Accordingly, we adopt the following general
conduct rule to address unreasonable discrimination, providing that any
person engaged in the provision of broadband internet access service,
insofar as such person is so engaged, shall not unreasonably interfere
with or unreasonably disadvantage (a) end users' ability to select,
access, and use broadband internet access service or the lawful
internet content, applications, services, or devices of their choice,
or (b) edge providers' ability to make lawful content, applications,
services, or devices available to end users. Reasonable network
management shall not be considered a violation of this rule.
For the purposes of this rule, we define ``edge provider'' as ``any
individual or entity that provides any content, application, or service
over the internet, and any individual or entity that provides a device
used for accessing any content, application, or service over the
internet.'' And we define ``end user'' as ``any individual or entity
that uses a broadband internet access service.'' Consistent with the
Commission's guidance in 2015, we note that the general conduct
standard we adopt in the Order ``represents our
[[Page 45510]]
interpretation of sections 201 and 202 in the broadband internet access
context and, independently, our interpretation--upheld by the Verizon
court--that rules to protect internet openness promote broadband
deployment via the virtuous cycle under section 706 of the 1996 Act.''
505. We find that this rule is necessary to protect the ability of
consumers and edge providers to use the open internet for several
reasons. First, we agree with the American Civil Liberties Union and
other commenters that the rule will allow the Commission to respond to
harmful conduct not easily categorized as blocking, throttling, or paid
prioritization. Second, because of the ``constantly evolving nature of
technologies underlying the internet ecosystem,'' it is difficult to
predict all of the practices that might harm the openness of the
internet, and we agree with those commenters, such as the Ad Hoc
Telecom Users Committee and Cloudflare, who argue that the Commission
needs flexibility to address consumer and competitive harms as
technology evolves. And third, the general conduct rule will provide
the Commission a means of addressing BIAS providers that develop
policies and practices that evade the bright-line prohibitions. As
Professor Jon Peha notes, even with the adoption of the bright-line
rules, BIAS providers would still have the incentive to act as
gatekeepers.
506. Consistent with our proposal, we adopt a case-by-case approach
that will consider the totality of the circumstances when analyzing
whether conduct satisfies the general conduct standard to protect the
open internet. We endeavor to maintain an internet ecosystem that
balances the Commission's ability to protect consumers and edge
providers from harmful conduct, while still allowing BIAS providers the
flexibility and encouragement to develop new technologies and business
practices. We conclude, based on the record before us, that evaluating
potential conduct on a case-by-case basis will allow the Commission to
respond to emerging practices that may harm the open nature of the
internet while enabling BIAS providers to offer innovative services
that keep pace with evolving technology and business practices. We make
clear that the general conduct rule is not an attempt to institute any
form of rate regulation; nor is it an attempt by the Commission to
expand our bright-line conduct rules in an indeterminate manner. The
general conduct rule is designed to operate as a backstop to the
Commission's prohibitions on blocking, throttling, and paid
prioritization to address, on a case-by-case basis, practices that may
harm the open nature of the internet.
507. To provide guidance to BIAS providers regarding the
application of the general conduct rule, we adopt a non-exhaustive list
of factors that we will consider to aid in our analysis. These factors
include: (i) whether a practice allows end-user control and enables
consumer choice; (ii) whether a practice has anticompetitive effects in
the market for applications, services, content, or devices; (iii)
whether a practice affects consumers' ability to select, access, or use
lawful broadband services, applications, or content; (iv) the effect a
practice has on innovation, investment, or broadband deployment; (v)
whether a practice threatens free expression; (vi) whether a practice
is application agnostic; and (vii) whether a practice conforms to best
practices and technical standards adopted by open, broadly
representative, and independent internet engineering, governance
initiatives, or standards-setting organizations. Consistent with the
2015 Open Internet Order, we note that in addition to this list, there
may be other considerations relevant to determining whether a
particular practice violates the no-unreasonable interference/
disadvantage standard. We decline to adopt the New York State School
Boards Association's proposal that we adopt an additional factor that
``weighs whether a practice will inhibit the ability of educational
institutions to provide educational materials to students.'' We believe
that the educational access concerns raised are adequately covered by
the existing ``free expression'' and ``consumer ability to access''
factors or could be considered on a case-by-case basis as needed.
508. When the D.C. Circuit upheld the general conduct rule as
adopted in the 2015 Open Internet Order, it recognized the need to
build flexibility into the rule. The court noted that, if regulations
were too specific, it would open up large loopholes, a concern that the
court observed was especially applicable because of the speed at which
broadband technology evolves. We conclude that evaluating potential
conduct against these factors will allow BIAS providers to ``reasonably
discern whether certain practices would violate the rule,'' and that
``having clear standards for evaluation of questionable behavior in the
form of the general conduct factors . . . will permit more rapid
resolution of potentially harmful practices.'' To address concerns
raised in the record concerning the meaning of the factors, how the
factors will be weighed against each other, and the list's non-
exhaustive nature, we describe in detail each of the factors below and
we establish an advisory opinion process for BIAS providers to seek
Commission advice on potential conduct, if they so choose. We
anticipate that the factors we outline for consideration of practices
will provide important guideposts for consumers, edge providers, and
BIAS providers on whether practices are likely to unreasonably
disadvantage or interfere with end users ability to reach the internet
content, services, and applications of their choosing or of edge
providers to access consumers using the internet.
509. End-User Control. We reaffirm our conclusion from the 2015
Open Internet Order and find that a practice that allows end-user
control and that is consistent with promoting consumer choice is less
likely to unreasonably interfere with or cause an unreasonable
disadvantage affecting the end user's ability to use the internet as he
or she sees fit. It is critical that consumers' decisions, rather than
those of BIAS providers, remain the driving force behind the
development of the internet. We observe that there are competing
narratives surrounding certain mobile plans that provide different
video resolution levels. We find that the current record lacks
sufficient specificity about specific plans to make a definitive
determination. Practices that favor end-user control and empower
meaningful consumer choice are more likely to satisfy the general
conduct standard than those that do not. As the Commission recognized
in 2010 and 2015, we remain aware of the reality that user control and
network control are not mutually exclusive. Rather, practices will fall
somewhere on a spectrum between more end-user control and more BIAS
provider control. There also may be practices that involve complete
BIAS provider control that nonetheless satisfy the general conduct
rule. Some commenters point to the fact that the Commission recognizes
this range between end-user control and BIAS provider control as
evidence of this factor's vagueness problem. However, we find that our
approach is consistent with the Commission's regulatory approach in
other contexts that require the Commission, and providers, to balance
competing interests, and we believe that this approach provides
appropriate guidance to BIAS providers while still enabling them to
experiment and innovate with practices that function across this
[[Page 45511]]
spectrum. We emphasize that in all practices, BIAS providers should be
fully transparent to the end user and effectively reflect end users'
choices. The Electronic Frontier Foundation asserts that ``in practice
transparency is a poor substitute for meaningful choice.'' As part of
our case-by-case analysis for this factor, the Commission will examine
whether transparency regarding the practice at issue actually enables
meaningful consumer choice.
510. Competitive Effects. As discussed above, we find that BIAS
providers have incentives to interfere with and disadvantage the
operation of third-party internet-based services that compete with the
providers' own services or with those of an edge provider with which
the BIAS provider has a contractual relationship. A practice that has
anticompetitive effects in the market for applications, services,
content, or devices would likely unreasonably interfere with, or
unreasonably disadvantage, edge providers' ability to reach consumers
in ways that would have a dampening effect on innovation, interrupting
the virtuous cycle. We find that practices like this, i.e.,
anticompetitive practices, are likely to harm consumers' and edge
providers' ability to use BIAS to reach one another. For example, fees
that discourage consumer choice among BIAS providers could fall within
the rule's scope. In contrast, more competition leads to more options
for consumers in services, applications, content, and devices.
Therefore, we find that practices that would enhance competition would
weigh in favor of promoting consumers' and edge providers' ability to
use BIAS to reach one another. We disagree with Free State Foundation's
contention that considering the competitive effects of a practice is
unhelpful because it is not tied to particular economic theory.
Commission staff, and in particular the Commission's Office of
Economics and Analytics, is well versed in examining the competitive
effects of our rules and of industry practices, using generally
accepted economic theory and analytical techniques. And this is
particularly true where the Commission has examined potentially
anticompetitive conduct by vertically integrated firms. For example,
since the introduction of competition into the interstate long-distance
telephone market, the Commission has repeatedly investigated claimed
anticompetitive concerns raised by vertically integrated firms.
Furthermore, as part of the Commission's review of the competitive
effects of a given practice, we will also review the relevant entities'
corporate structure, to consider the extent of an entity's vertical
integration as well as its relationships with affiliated entities.
511. Consumer Protection. As in 2015, we intend the general conduct
rule to act as a strong consumer protection standard. It prohibits BIAS
providers from employing any deceptive or unfair practice that will
unreasonably interfere with or unreasonably disadvantage end-user
consumers' ability to select, access, or use broadband services,
applications, or content, so long as the services are lawful, subject
to the exception for reasonable network management. For example, unfair
or deceptive billing practices, as well as practices that fail to
protect the confidentiality of end users' proprietary information, will
be unlawful if they unreasonably interfere with or unreasonably
disadvantage end-user consumers' ability to select, access, or use
broadband services, applications, or content, so long as the services
are lawful, subject to the exception for reasonable network management.
As the Commission explained in 2015, while each practice will be
evaluated on a case-by-case basis, this rule is intended to include
protection against fraudulent practices such as ``cramming'' and
``slamming'' that have long been viewed as unfair and disadvantageous
to consumers.
512. Effect on Innovation, Investment, or Broadband Deployment. We
continue to find that internet openness drives a ``virtuous cycle'' in
which innovations at the edges of the network enhance consumer demand,
leading to expanded investments in broadband infrastructure that, in
turn, spark new innovations at the edge. As such, a practice that will
act to stifle innovation, investment, or broadband deployment would
likely unreasonably interfere with or unreasonably disadvantage end
users' or edge providers' use of the internet.
513. Free Expression. Consistent with the Commission's findings in
the 2015 Open Internet Order, we believe that practices that threaten
the use of the internet as a platform for free expression would also
likely unreasonably interfere with or unreasonably disadvantage
consumers' and edge providers' ability to use broadband service to
communicate with each other, thereby causing harm to that ability. Such
practices, in turn, would dampen consumer demand for broadband
services, disrupting the virtuous cycle, and harming end user and edge
provider use of the internet under the general conduct rule we adopt in
the Order. As the Commission found in 2015, we find that the general
conduct standard we adopt in the Order does not unconstitutionally
burden any of the First Amendment rights held by BIAS providers because
BIAS providers are conduits, not speakers, with respect to BIAS.
514. Application Agnosticism. We further find that application-
agnostic (sometimes referred to as use-agnostic) practices likely will
not cause an unreasonable interference with or an unreasonable
disadvantage to end users' or edge providers' ability to use BIAS to
communicate with each other. Because application-agnostic practices do
not interfere with end users' choices about which content,
applications, services, or devices to use, neither do they distort
competition and unreasonably disadvantage certain edge providers, they
likely would not cause harm by unreasonably interfering with or
unreasonably disadvantaging end users or edge providers' ability to
communicate using BIAS. A network practice is application-agnostic if
it does not differentiate in treatment of traffic, or if it
differentiates in treatment of traffic without reference to the
content, application, or device. We will consider a practice to be
application-specific if it is not application-agnostic. Application-
specific network practices include, for example, those applied to
traffic that has a particular source or destination, that is generated
by a particular application or by an application that belongs to a
particular class of applications, that uses a particular application-
or transport-layer protocol, or that has particular characteristics
(e.g., the size, sequencing, and/or timing of packets). There may still
be circumstances where application-agnostic practices raise competitive
concerns, and as such may violate our standard to protect the open
internet. As with all practices, the Commission will evaluate these
situations on a case-by-case basis.
515. Standard Practices. Lastly, in evaluating whether a practice
violates our general conduct rule, we will consider whether a practice
conforms to best practices and technical standards adopted by open,
broadly representative, and independent internet engineering,
governance initiatives, or standards-setting organizations. These
technical advisory groups play an important role in the internet
ecosystem, and at times are convened by the Commission. We make clear,
however, that we are not delegating authority to interpret or implement
our rules to outside bodies.
516. Rejection of Alternatives. We decline to adopt the alternative
approaches to the general conduct rule suggested in the record,
including:
[[Page 45512]]
reliance on the ``just and reasonable'' language of sections 201 and
202; prohibiting unreasonable discrimination; assessing only whether
the practice at issue promotes or hinders free expression, and whether
the practice is ``application agnostic''; or adopting a ``commercial
reasonableness'' standard for overseeing BIAS provider conduct under
section 706 of the 1996 Act and our ancillary authority. As we explain
above, we find it important for the Commission to be able to weigh all
of the factors we describe in order to provide the maximum flexibility
to providers in managing their networks and developing innovative
services, plans, and packages for customers, particularly given the
rapidly developing and evolving technological landscape in both the
network and at the edge, and some of the proposed alternatives would
not advance that interest as well as the rule we adopt. We agree with
commenters that evaluating conduct using the multi-factor analysis
under the general conduct rule will likely result in faster resolution
for BIAS providers, and is easier for consumers and edge providers to
use when evaluating BIAS provider conduct. We also find that, as a
general matter, practices evaluated under the alternative standards
outlined in the record would likely result in the same outcome if
evaluated under the general conduct standard we adopt in the Order,
given the substantial overlap in the factors. For example, Professor
Jon Peha explains that under a bright-line prohibition against
unreasonable discrimination, it would be permissible if a subscriber
chose for their BIAS provider to discriminate in order to ensure that a
telemedicine application receives superior quality of service. As part
of its consideration of the practice under the general conduct standard
we adopt, the Commission would weigh the fact that the practice allows
end-user control and is consistent with promoting consumer choice.
However, we believe the factors we outline for consideration of
practices will provide more clarity to consumers, edge providers, and
BIAS providers, as well as more flexibility for BIAS providers to
innovate. We consequently find that the additional guidance provided by
our general conduct rule has certain advantages for case-by-case
adjudications over proceeding purely under the text of sections 201 and
202 alone. Finally, as the Commission concluded in 2015, we are
unpersuaded that adopting a rule prohibiting commercially unreasonable
practices is the most appropriate approach for protecting and promoting
an open internet. Internet openness involves many relationships that
are not business-to-business and serves many purposes that are
noncommercial. Further, smaller edge providers also may not ``have the
resources to fight against commercially unreasonable practices, which
could result in an unfair playing field before the Commission,''
potentially stifling innovation and harming competition.
517. We conclude that the language we adopt in the Order offers
sufficient clarity to BIAS providers, consumers, and edge providers on
what conduct is prohibited, while still allowing and encouraging
innovation and technological development. We disagree with those
commenters who argue that the proposed general conduct rule is too
vague and unclear, and that the rule's alleged vagueness would cause
regulatory uncertainty that will stifle investment and harm innovation.
Because of the insight into our approach provided by the rule itself
and our guidance above, we conclude that stakeholders have more
clarity--not less--than they would have had if we relied on sections
201 and 202 of the Act alone. We nevertheless retain authority to
address practices under sections 201 and 202 of the Act except to the
extent that we forbear from doing so.
518. Second, our advisory opinion process is available to allow
BIAS providers to seek a determination of the legality of a practice,
without having to actually engage in that practice and risk being held
in violation in order to obtain a decision. As explained below, the
Enforcement Bureau will not bring an enforcement action against a
requesting party with respect to any action taken in good faith
reliance upon an advisory opinion if all of the relevant facts were
fully, completely, and accurately presented to the Bureau, and where
such action was promptly discontinued upon notification of recission or
revocation of the Commission's or the Bureau's approval.
519. Third, although we conclude that our rule, coupled with the
guidance above, gives providers warning of a range of prohibited
conduct, our priority with this rule is ensuring that harmful practices
can be stopped when they are identified. Thus, although we certainly
will consider the imposition of penalties when specific interpretations
or applications of our rule address particular conduct, we otherwise
will focus solely on remedying the provider's behavior going forward.
This is consistent with the approach the Commission has taken in the
past in cases of violations of internet policy.
520. Finally, as the D.C. Circuit found in 2016 when it upheld the
2015 Open Internet Order in full, the Commission's general conduct rule
is not impermissibly vague, and provides sufficient notice to the
affected entities of what conduct would be prohibited moving forward.
We adopt the same rule and framework in the Order that the D.C. Circuit
upheld in 2016, and, as discussed further below, we conclude that the
general conduct rule, and the multi-factor framework we offer to
provide guidance on its application, provides BIAS providers sufficient
notice regarding what conduct is prohibited under the rule.
521. Application to Zero Rating. In the 2023 Open Internet NPRM, we
sought comment on whether there were additional steps we should take to
ensure that BIAS providers understand the types of conduct and
practices that might be prohibited under the proposed general conduct
standard, asking, for example, whether ``there are any zero rating or
sponsored data practices that raise particular concerns under the
proposed general conduct standard.'' Based on the record, and
consistent with the 2015 Open Internet Order and our proposal, we find
it appropriate to assess zero-rating programs under the general conduct
standard to determine whether such practices cause harm to the open
nature of the internet. We address the implications of our decision on
zero rating on California's net neutrality law in the preemption
discussion. We acknowledge that sponsored data programs--where a BIAS
provider zero rates an edge product for economic benefit, either by
receiving consideration from a third party to have the edge product
zero rated or where a BIAS provider favors an affiliate's edge
products--raise concerns under the general conduct standard.
Nonetheless, we will continue to evaluate such programs based on a
totality of the circumstances.
522. Zero rating is the practice of a BIAS provider exempting edge
services, devices, applications, and/or content (edge products) from an
end user's usage allowance or data cap. Zero rating enables the BIAS
provider to make some edge products cheaper to access, which can put
those edge products at an advantage over others. In the 2015 Open
Internet Order, the Commission recognized that zero rating had the
potential to distort the market and incentivize restrictive caps, but
noted that ``new service offerings, depending on how they are
structured, could benefit consumers and competition.''
[[Page 45513]]
Based on this, the Commission stated that it would ``look at and assess
such practices under the no-unreasonable interference/disadvantage
standard, based on the facts of each individual case, and take action
as necessary.''
523. The record indicates that zero-rating programs can be
structured in a manner that benefits consumers, competition, and
traffic management. Allowing a mechanism that lowers the cost of
accessing certain edge products could be beneficial to consumers, and
at least one commenter contends that zero-rating programs can help
bring new entrants online.
524. However, the record also reveals concerns about certain forms
of zero rating, such as where BIAS providers use zero rating to favor
some edge products over others, especially as a business practice in
exchange for consideration or to favor a provider's affiliates.
Commenters claim that since adoption of the 2015 Open Internet Order,
BIAS providers have adopted such programs that favor affiliates and
charge competing edge providers high per-gigabyte rates. Commenters
express concern that where there is an economic incentive to use zero
rating to favor some edge products over others, zero rating can create
the same harms to the open internet as paid prioritization. Further,
the record reflects that sponsored data programs may favor large edge
providers, as they are the only providers that can afford to
participate in such programs. These comments also suggest that zero
rating, like paid prioritization, is a practice that could result in
distortions in the internet market by creating negative externalities
that raise the cost for the entire edge market, which can decrease
innovation and harm the virtuous cycle.
525. Given the potential benefits and harms of zero-rating
practices and their potential effect on the virtuous cycle, we will
analyze zero-rating programs under the multi-factor analysis of the
general conduct standard to ensure that innovative offerings are
permitted and encouraged where the open internet is not harmed. By
placing zero-rating programs under the general conduct standard, we do
not preclude beneficial zero-rating innovations that may assist BIAS
providers needing to manage scarce resources fairly and reasonably,
while also potentially allowing lower-cost access to edge products of
exceptional societal value or of value to particular consumers, as
chosen by those consumers. But each zero-rating program can be
different, and we find that applying the multi-factor analysis of the
general conduct standard on a case-by-case basis allows for such
innovations while curbing potentially market-distorting behavior by
BIAS providers.
526. To provide greater clarity, we identify certain types of
programs that may raise concerns under the general conduct standard
because they may be more likely to unreasonably interfere with, or
unreasonably disadvantage, consumers and edge providers. Specifically,
a zero-rated program is likely to raise concerns under the general
conduct standard where it zero rates an edge product (1) in exchange
for consideration (monetary or otherwise) from a third party, or (2) to
favor an affiliated entity. These sponsored data programs are examples
of business practices that are not a part of reasonable network
management and therefore fall outside of ``best practices and technical
standards'' developed by standards-setting organizations. The
information in the record regarding sponsored data programs offered
since 2015 indicates that those programs raise concerns under the
general conduct standard, in that they may unreasonably interfere with
end users' ability to select, access, and use BIAS or the lawful
internet content, applications, services, or devices of their choice
and unreasonably disadvantage edge providers' ability to make lawful
content, applications, services, or devices available to end users,
raising the cost to bring innovative new options to the edge market.
Thousands of express comments filed in the docket state that ``[t]he
agency must move forward a strong rule that rejects zero rating.''
527. We are not convinced by commenters that argue that sponsored
data programs should always be permitted because they lower the cost of
subscribing to BIAS. The record suggests that zero-rating programs can
increase the prices to consumers directly, and indirectly in the form
of passed-through charges by the edge provider. Nor are we convinced by
suggestions made by two commenters that sponsored data programs are the
equivalent of toll free calling, presumably because with toll free
calling, the business assumes the cost of the call rather than the
consumer. On this basis alone, they suggest that sponsored data
programs, like toll free calling, should be permitted. In suggesting
that zero rating should be treated the same as toll free calling,
however, one commenter notes that zero rating should still be ``offered
on a nondiscriminatory basis with special attention paid to its use by
content providers co-owned with the telecommunications provider to
avoid cross-subsidy situations.'' We find this comparison to be
unpersuasive, given the many distinctions between toll free calling in
the telephony context, as compared to edge products offered over BIAS
(e.g., an 800 number is used to reach a business, whereas the edge
product is often the edge provider's entire business; the edge provider
might be dependent on the BIAS provider to reach the BIAS provider's
end users). Finally, other proponents of sponsored data zero-rating
contend that such programs can increase consumer choice when accessing
edge products. However, other commenters suggest sponsored data zero-
rating programs can distort consumer choice by pressuring consumers to
access the cheaper edge products chosen for them by the BIAS provider,
counter to the aims of an open internet. Despite these concerns, we
will continue to evaluate such programs based on a totality of the
circumstances, including potential benefits.
528. While we identify sponsored data programs as the type of
practices that may raise concerns under the general conduct standard,
subject to a totality of circumstances determination, we note that
there could be other types of zero-rating practices that are less
likely to raise concerns under the general conduct standard, again
based on a case-by-case evaluation. For example, some commenters have
asserted that zero rating all edge products during low traffic hours or
zero rating all of the edge products within the same category of
products would be unlikely to cause unreasonable interference/
disadvantage to edge products, as well as being application agnostic
under the general conduct rule factors. New America's Open Technology
Institute asks the Commission to clarify that it is ``likely to find
that a zero rating practice is unreasonably discriminatory if BIAS
customers are offered an exemption from their data caps or limits for
the applications, content or service provided by one or more specific
edge providers to the exclusion of other similar or competing edge
providers, whether or not the BIAS provider receives payment or is
favoring an affiliate.'' While zero rating all apps in the same
category is more likely to be an acceptable zero rating practice under
the general conduct standard, providers, acting in good faith, may have
difficulty determining which apps should and should not be included in
the same categories or have other logistical issues when including
similar apps. Accordingly, we will review such zero rating on a case-
by-case basis under the
[[Page 45514]]
general conduct standard. Professor van Schewick observes that there
can be competitive concerns with any categorization. We will consider
those practices, as well as any other zero-rating practices, under the
general conduct standard, which relies on case-by-case review based on
established factors.
529. Application to Data Caps. Data caps--also referred to as usage
allowances or in some cases, a type of usage-based billing--are a BIAS
provider restriction on the amount of data a customer can consume over
a specified period of time (e.g., 25GB per month). Professor Scott
Jordan urges the Commission to find that data caps that do not qualify
as reasonable network management are likely to violate the general
conduct standard. In particular, Professor Jordan explains that, based
on his research, data caps that are not tailored to a primary purpose
of managing congestion are likely to have negative effects on
competition, network investments, broadband deployment, innovation, and
investment by edge providers; and are likely to reduce end user
control. In their white paper submitted by USTelecom and NCTA, Dr. Mark
Israel et al. dispute Professor Jordan's claims, asserting that usage-
based pricing ``offers a mechanism for broadband providers to create
incentives for users to internalize the costs that they impose on
broadband networks and to distribute the greater costs of the network
onto those users that make greater use of the network while putting
downward pressure on the prices that light users pay,'' and that if
such plans were prohibited by the Commission, ``moderate and light
users (including those with lower incomes) would likely be forced to
pay more than if [data caps are] allowed.''
530. We agree with Professor Jordan that the Commission can
evaluate data caps under the general conduct standard. We do not at
this time, however, make any blanket determinations regarding the use
of data caps based on the record before us. The record demonstrates
that while BIAS providers can implement data caps in ways that harm
consumers or the open internet, particularly when not deployed
primarily as a means to manage congestion, data caps can also be
deployed as a means to manage congestion or to offer lower-cost
broadband services to consumers who use less bandwidth. As such, we
conclude that it is appropriate to proceed incrementally with respect
to data caps, and we will evaluate individual data cap practices under
the general conduct standard based on the facts of each individual
case, and take action as necessary.
3. Transparency Rule
531. Transparency has long been a key element of the Commission's
framework for protecting the open nature of the internet, recognized
and upheld by both the courts and Congress, and in the Order, we update
our transparency rule to reflect that important role. Specifically, we
modify the transparency rule by reversing the changes made to the text
of the rule under the RIF Order, restoring the requirements to disclose
certain network practices and performance characteristics eliminated by
the RIF Order, and adopting changes to the means of disclosure,
including adopting a direct notification requirement. We find that
these actions appropriately balance the benefits to consumers and edge
providers and the costs to BIAS providers. As explained below, we find
that any changes or modifications to disclosures required by the
Broadband Label Order (87 FR 76959 (Dec. 16, 2022)) are most
appropriately addressed in response to that proceeding's FNPRM (87 FR
77048 (Dec. 16, 2022)).
532. In the 2010 Open Internet Order, the Commission adopted a
transparency rule that required a BIAS provider to ``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.'' The
2011 Advisory Guidance advised providers on appropriate methods for
disclosing performance metrics, network practices, and commercial
terms, and clarified how providers could comply with the requirement to
provide such information to consumers at the ``point-of-sale.'' The
2014 Advisory Guidance reminded providers that their transparency rule
disclosures and advertising claims must be consistent.
533. Finding that BIAS end-users and edge providers would be better
served and informed by additional disclosures, the Commission adopted
targeted, incremental enhancements to the 2010 transparency rule in the
2015 Open Internet Order requiring providers to disclose additional
information about performance characteristics, commercial terms, and
network practices. Specifically, in regards to performance
characteristics, the Commission required providers to disclose all
performance characteristics, including packet loss, for each broadband
service offered, and mandated that all performance-related disclosures
reasonably reflect the performance a consumer could expect in the
geographic area in which the consumer would be purchasing service. The
Commission also required that BIAS providers provide more precise
information regarding commercial terms, including the full monthly
service charge during the promotional period, the full monthly charge
after the expiration of a promotional rate, any one-time or recurring
fees or surcharges, and data caps and allowances. Regarding network
practices, the Commission required BIAS providers to make additional
disclosures pertaining to congestion management, application-specific
behavior, device attachment rules, and security. Lastly, the Commission
required BIAS providers to directly notify end users ``if their
individual use of a network will trigger a network practice, based on
their demand prior to a period of congestion that is likely to have a
significant impact on the end user's use of service.'' To assist
providers with compliance, the Commission also offered a voluntary
broadband label ``safe harbor.'' Shortly thereafter, the Commission
also adopted the 2016 Advisory Guidance, detailing acceptable methods
for reporting performance characteristics and clarifying the ``point-
of-sale'' requirements.
534. In 2017, however, the Commission reversed course and in the
RIF Order eliminated the enhancements adopted by the 2015 Open Internet
Order, including the requirements to: (1) disclose packet loss; (2)
ensure performance related-characteristics reasonably reflect the
performance a consumer could expect in the geographic area in which the
consumer would be purchasing service; (3) ensure network performance is
measured over a reasonable period of time and during times of peak
service; (4) disclose any network practice applied to traffic
associated with a particular user or user group, including any
application-agnostic degradation of service to a particular end user;
and (5) directly notify a user if an individual use of a network would
trigger a network practice based on demand prior to a period of
congestion that is likely to have a significant impact on the end
user's service. The Commission also eliminated the 2016 Advisory
Guidance, which advised providers on how to report performance
characteristics consistent with the 2015 Open Internet Order
enhancements. Additionally,
[[Page 45515]]
because the RIF Order eliminated the bright-line rules prohibiting
blocking, throttling, and paid or affiliated prioritization practices,
the Commission revised the obligations of the transparency rule to
require BIAS providers to disclose such practices. The Commission also
revised the text of the rule to require that any person providing
broadband internet access service shall publicly disclose accurate
information regarding the network management practices, performance,
and commercial terms of its broadband internet access services to
enable consumers to make informed choices regarding the purchase and
use of such services and entrepreneurs and other small businesses to
develop, market, and maintain internet offerings, in order to reflect
the Commission's reliance on section 257 of the Act as authority for
the transparency rule. The Verizon court upheld the transparency rule
as a reasonable exercise of the Commission's authority under section
706 of the 1996 Act. In the RIF Order, the Commission departed from its
long-held view and instead concluded that the directives to the
Commission in section 706 of the 1996 Act are better interpreted as
hortatory, and not as grants of regulatory authority. As a result, the
Commission relied on authority under section 257 of the Act for the
transparency rule. Section 257(a) directs the Commission to ``identify[
] and eliminat[e] . . . market entry barriers for entrepreneurs and
other small businesses in the provision and ownership of
telecommunications services and information services, or in the
provision of parts or services to providers of telecommunications
services and information services.'' Section 257(c) directed the
Commission to triennially report to Congress on such marketplace
barriers and how they have been addressed by regulation or could be
addressed by recommended statutory changes. Congress later repealed
subsection (c) of section 257 and replaced it with section 13, which
imposes a substantially similar reporting requirement.
535. As part of the Infrastructure Act in 2021, Congress directed
the Commission to promulgate rules for an FDA nutrition-style label of
broadband facts to be displayed at the point-of-sale by providers based
on the 2015 Open Internet Order broadband label safe harbor. In
November 2022, the Commission adopted the Broadband Label Order
implementing this congressional direction, which requires ``ISPs to
display, at the point of sale, labels that disclose certain information
about broadband prices, introductory rates, data allowances, and
broadband speeds, and to include links to information about their
network management practices, [and] privacy policies.'' The Commission
recently declined broad reconsideration of the broadband label rules in
the Broadband Label Reconsideration Order (88 FR 63853 (Sept. 18,
2023)) but does have an ongoing Broadband Label FNPRM (87 FR 77048
(Dec. 16, 2022)). Providers also must make clear whether the price for
a given service is an introductory rate and, if so, what the price will
be after the introductory period ends. Since April 10, 2024, providers
with more than 100,000 subscribers have been obligated to display the
broadband label.
a. Content of the Transparency Rule
536. We adopt the transparency rule originally adopted in 2010 and
reaffirmed in 2015. Doing so caters to a broader relevant audience of
interested parties than the audience identified in the RIF Order. As
such, we revise the transparency rule to provide that 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.
537. The RIF Order revised the text of the transparency rule, which
had been in place since 2010 and upheld by the courts twice as a lawful
exercise of the Commission's regulatory authority under section 706 of
the 1996 Act, and independently under the Commission's exercise of its
authority under Title II. When the Commission found it did not have
independent regulatory authority under section 706 in the RIF Order,
finding instead that section 706 was ``merely hortatory,'' it
eliminated the Commission's underlying authority for the transparency
rule. Instead, it chose to rely solely on section 257 of the Act and
revised the text of the rule to reflect that reliance. As discussed
further below, we reaffirm our interpretation of section 706 of the
1996 Act as an independent source of regulatory authority, and rely on
our regulatory authority under section 706, our authority under Title
II of the Act to prohibit unjust and unreasonable practices, and our
authority under section 257 as the legal bases for the transparency
rule. As such, we return to the prior formulation of the transparency
rule, which more appropriately captures the relevant audience of BIAS
providers' transparency disclosures--content, application, service, and
device providers. Reinstating the text of the transparency rule from
the 2010 Open Internet Order is also consistent with the Commission's
finding in the Broadband Label Order that while the labels primarily
serve as a quick reference tool, ``the transparency rule seeks to
enable a deeper dive into details of broadband internet service
offerings, which could be relevant not only for consumers as a whole,
but also for consumers with particularized interests or needs, as well
as a broader range of participants in the internet community--notably
including the Commission itself.'' We find that content, application,
service, and device providers are vital to the health of the internet
ecosystem and that given their reliance on broadband services,
returning the scope of the transparency rule to explicitly cover their
interests is warranted and alleviates any confusion created by the
changes adopted in the RIF Order.
538. Consistent with prior Commission guidance, we make clear that
BIAS providers must maintain the accuracy of all disclosures. Thus,
``whenever there is a material change in a provider's disclosure of
commercial terms, network practices, or performance characteristics,
the provider has a duty to update the disclosure in a manner that is
`timely and prominently disclosed in plain language accessible to
current and prospective end users and edge providers, the Commission,
and third parties who wish to monitor network management practices for
potential violations of open internet principles.' '' A ``material
change'' is ``any change that a reasonable consumer or edge provider
would consider important to their decisions on their choice of
provider, service, or application.''
539. Beginning with the 2010 Open Internet Order, the Commission
has provided guidance on the network management practices, performance,
and commercial terms that BIAS providers must disclose. We repeat the
relevant guidance here, updated as appropriate based on the record.
Network Practices
Congestion Management. Descriptions of congestion
management practices, if any. These descriptions should include the
types of traffic subject to practices; purposes served by practices;
the practices' effects on end
[[Page 45516]]
users' experience; criteria used in practices, such as indicators of
congestion that trigger a practice, including any usage limits
triggering the practice, and the typical frequency of congestion; usage
limits and the consequences of exceeding them; and references to
engineering standards, where appropriate.
User-Based Practices. Practices that are applied to
traffic associated with a particular user or user group, including any
application-agnostic degradation of service to a particular end user,
the purpose of the practice, which users or data plans may be affected,
the triggers that activate the use of the practice, the types of
traffic that are subject to the practice, and the practice's likely
effects on end users' experiences.
Affiliated Prioritization. Any practice that directly or
indirectly favors some traffic over other traffic, including through
use of techniques such as traffic shaping, prioritization, or resource
reservation, to benefit an affiliate, including identification of the
affiliate.
Paid Prioritization. Any practice that directly or
indirectly favors some traffic over other traffic, including through
use of techniques such as traffic shaping, prioritization, or resource
reservation, in exchange for consideration, monetary or otherwise.
Zero Rating. Any practice that exempts edge services,
devices, applications, and content (edge products) from an end user's
usage allowance or data cap.
Application-Specific Behavior. Whether and, if applicable,
why the provider blocks or rate-controls specific protocols or protocol
ports, modifies protocol fields in ways not prescribed by the protocol
standard, or otherwise inhibits or favors certain applications or
classes of applications.
Device Attachment Rules. Any restrictions on the types of
devices and any approval procedures for devices to connect to the
network. Mobile providers must disclose their third-party device and
application certification procedures, if any; clearly explain their
criteria for any restrictions on the use of their network; and
expeditiously inform device and application providers of any decisions
to deny access to the network or of a failure to approve their
particular devices or applications. Mobile providers should also follow
the guidance the Commission provided to licensees of the upper 700 MHz
C Block spectrum regarding compliance with their disclosure
obligations, particularly regarding disclosure to third-party
application developers and device manufacturers of criteria and
approval procedures (to the extent applicable). For example, these
disclosures include, to the extent applicable, establishing a
transparent and efficient approval process for third parties, as set
forth in Rule Sec. 27.16(b).
Security. Practices used to ensure end-user security or
security of the network, including types of triggering conditions that
cause a mechanism to be invoked (but excluding information that could
reasonably be used to circumvent network security). As the Commission
has previously explained, we expect BIAS providers to exercise their
judgment in deciding whether it is necessary and appropriate to
disclose particular security measures. We do not expect BIAS providers
to disclose internal network security measures that do not bear on a
consumer's choices.
Performance Characteristics
Service Description. A general description of the service,
including the service technology, expected and actual access speed and
latency, packet loss, and the suitability of the service for real-time
applications. Fixed BIAS providers may use the methodology from the
Measuring Broadband America (MBA) program to measure actual
performance, or may disclose actual performance based on internal
testing, consumer speed test data, or other data regarding network
performance, including reliable, relevant data from third-party
sources. BIAS providers that have access to reliable information on
network performance may disclose the results of their own or third-
party testing. Those mobile BIAS providers that do not have reasonable
access to such network performance data may disclose a Typical Speed
Range (TSR) representing the range of speeds and latency that can be
expected by most of their customers, for each technology/service tier
offered, along with a statement that such information is the best
approximation available to the broadband provider of the actual speeds
and latency experienced by its subscribers. Actual network performance
data should be reasonably related to the performance the consumers
would likely experience in the geographic area in which the consumer is
purchasing service, and should be measured in terms of average
performance over a reasonable period of time and during times of peak
usage.
Impact of Non-BIAS Data Services. What non-BIAS data
services, if any, are offered to end users; whether and how any non-
BIAS data services may affect the last-mile capacity available for, and
the performance of, BIAS; and a description of whether the service
relies on particular network practices and whether similar
functionality is available to applications and services offered over
BIAS.
Commercial Terms
Pricing. For example, monthly prices, usage-based fees,
other fees, data caps and allowances, and fees for early termination or
additional network services. Monthly pricing shall include the full
monthly service charge, and any promotional rates should be clearly
noted as such, specify the duration of the promotional period, and note
the full monthly service charge the consumer will incur after the
expiration of the promotional period. We clarify that price disclosure
requirements, which have been part of the transparency rule since 2010,
will not lead to the publishing of data that will act as a de facto
tariff system, as the International Center for Law & Economics
cautions. We observe that the transparency requirements, including
publication of commercial terms, such as rates, have been upheld by the
D.C. Circuit under section 706 and in any event, Congress specifically
gave the Commission authority to require that broadband providers
publish their rates in the IIJA. Other fees include all additional one
time and/or recurring fees and/or surcharges the consumer may incur
either to initiate, maintain, or discontinue service, including the
name, definition, and cost of each additional fee. These may include
modem rental fees, installation fees, service charges, and early
termination fees, among others. BIAS providers should disclose any data
caps or allowances that are a part of the plan the consumer is
purchasing, as well as the consequences of exceeding the cap or
allowance (e.g., additional charges, loss of service for the remainder
of the billing cycle).
Privacy Policies. For example, whether network management
practices entail inspection of network traffic, and whether traffic
information is stored, provided to third parties, or used by the
carrier for non-network management purposes.
Redress Options. Practices for resolving end-user and edge
provider complaints and questions.
Below, we discuss in more detail our rationale for revisions to the
current transparency rule.
540. Network Practices. As an initial matter, because we no longer
permit blocking, throttling, affiliated prioritization, or paid
prioritization under the Order, we find that there is no need to
continue requiring providers to report such practices as was required
under the RIF Order, except to the
[[Page 45517]]
extent that a provider engages in paid or affiliated prioritization
subject to a Commission waiver. We agree with commenters who assert
that the RIF Order created unnecessary confusion around the required
network practice disclosures, and we reaffirm that providers must
disclose congestion management practices, application-specific
behavior, device attachment rules, and security practices. We also
reaffirm that the transparency rule requires that BIAS providers
disclose any practices applied to traffic associated with a particular
user or user group, including any application-agnostic degradation of
service to a particular end user. As the Commission explained in the
2015 Open Internet Order, for example, a BIAS provider ``may define
user groups based on the service plan to which users are subscribed,
the volume of data that users send or receive over a specified time
period of time or under specific network conditions, or the location of
users.'' We also require that ``disclosures of user-based or
application-based practices [must] include the purpose of the practice,
which users or data plans may be affected, the triggers that activate
the use of the practice, the types of traffic that are subject to the
practice, and the practice's likely effects on end users'
experiences.'' In addition, we require BIAS providers to disclose any
zero-rating practices, specifically, any practice that exempts
particular edge services, devices, applications, and content (edge
products) from an end user's usage allowance or data cap. We find that
requiring disclosure of information pertaining to zero-rating practices
will better enable the Commission and internet researchers to identify
those zero-rating practices that may harm the openness of the internet.
And as the Commission has previously explained, ``[t]hese disclosures
with respect to network practices are necessary: for the public and the
Commission to know about the existence of network practices that may be
evaluated under the rules, for users to understand when and how
practices may affect them, and for edge providers to develop internet
offerings.''
541. We decline the request by one commenter to require BIAS
providers to make disclosures that would permit end users to identify
application-specific usage or to distinguish which user or device
contributed to which part of the total data usage. We find, as we did
in the 2015 Open Internet Order, that collection of application-
specific usage data by a BIAS provider may require use of deep packet
inspection practices that may pose privacy concerns for consumers.
542. Performance Characteristics. We reinstate the enhanced
performance characteristics disclosures eliminated by the RIF Order to
require BIAS providers to disclose packet loss under the transparency
rule. This proceeding is not the appropriate forum for us to determine
whether such disclosures should be added to the broadband label as some
commenters request, and in any event, the Commission recently declined
this suggested addition to the broadband label in the Broadband Label
proceeding. As Professor Scott Jordan explains, the three primary
network performance metrics are speed (throughput), latency (end-to-end
delay), and packet loss, which have been consistently recognized as
such since the early days of the internet. Latency and packet loss are
particularly relevant metrics to real-time applications. We agree with
Professor Jordan that ``both latency and packet loss are critical to
the user-perceived performance of real-time applications,'' such as
video-conferencing applications, and the record reflects that the
suitability of BIAS for real-time applications depends on both of these
metrics. We believe that such information is also readily available to
BIAS providers from commercial network performance measurement
companies, along with speed and latency measurements.
543. Contrary to AT&T's assertions that requiring disclosure of
packet loss would be burdensome, we expect that many BIAS providers
``already measure packet loss today, as this primary network
performance metric is required in order to determine the suitability of
their [services] for the real-time applications that are important to
many of their customers.'' As Professors Peha and Jordan explain,
``measurements of latency, which are already required, inevitably
enable simultaneous measures of packet loss with de minimis effort.''
And to the extent CTIA argues that the Office of Management and
Budget's (OMB)'s previous ``refusal to approve packet loss should
foreclose collecting that information from mobile providers,'' we
disagree. We also note that interested parties will have the
opportunity to comment on any burdens associated with these
requirements pursuant to the Paperwork Reduction Act (PRA). In its 2016
review, OMB found that ``packet loss will not be a required performance
metric for mobile disclosure'' at this time, and directed the
Commission to assess ``i. the practical utility of packet loss as it
relates to mobile performance disclosure;'' ``ii. `accurate' methods of
calculating mobile packet loss (i.e., drive testing, voluntary app,
etc.);'' and ``iii. whether using voluntary consensus standards would
be a viable alternative.'' We agree with Professors Peha and Jordan
that the ``practical utility of packet loss as it relates to mobile
performance is clearly established by the rapidly increasing number of
end users who utilize video conference apps on their smartphones.''
Finally, while we acknowledge that the Commission recently declined to
require packet loss as part of the broadband label, the Commission
nonetheless found that packet loss ``may provide useful information to
certain consumers.'' We also observe that the disclosures required by
the transparency rule serve to inform more than just consumers--they
also serve edge providers and other interested third parties, including
the Commission. Limiting the transparency rule requirements to
information displayed via the broadband label would therefore not
provide adequate insight for edge providers, internet researchers,
certain consumers, or the Commission. As such, we reject arguments by
commenters that the Commission should not require packet loss
disclosure under the transparency rule because it declined to do so in
the Broadband Label proceeding. To the extent commenters express
concern regarding the performance characteristics disclosures required
under the Broadband Label Order, the Broadband Label proceeding is the
appropriate forum in which to address them.
544. We also reinstate the transparency requirements in the 2015
Open Internet Order and 2016 Advisory Guidance that require performance
characteristics to be reported with greater geographic granularity and
to be ``measured in terms of average performance over a reasonable
period of time and during times of peak usage.'' The record reflects
that mobile BIAS providers ``have access to substantially different
amounts of spectrum in different geographical regions, and thus speeds
may vary substantially by region,'' and that disclosure requirements
with geographic granularity are ``essential to determine real-time
application performance and provide consumers with necessary
information to make an informed choice.'' We thus disagree with AT&T
that disclosure of actual network performance reasonably related to the
performance that consumers would likely experience in the geographic
[[Page 45518]]
areas in which a customer is purchasing service is of ``little to no
meaningful or beneficial use for consumers to make informed
decisions.'' Further, we find that peak usage performance can differ
substantially from non-peak usage period performance and from all day
performance, and we agree that ``peak usage period speeds are more
useful information to consumers'' than are speeds calculated from
measurements over 24-hour periods. As such we find it appropriate to
reinstate these enhancements to the transparency rule.
545. We are not persuaded by AT&T's assertions that reporting
actual peak usage metrics on a geographically disaggregated basis would
be ``an enormous undertaking,'' and agree with Professor Jordan that
``it is implausible that broadband providers do not already today
measure broadband performance in various geographical regions,'' as
providers likely use that information to inform their decisions
regarding additional spectrum purchases in various geographical regions
as well decisions about when and where to place additional cellular
antennas to improve performance in these granular geographic areas.
546. In response to concerns about reporting peak usage in the
record, we make clear that peak usage periods may be based solely on
the local time zone, and that BIAS providers retain flexibility to
determine the appropriate peak usage periods for their network
performance metrics (but must disclose the peak usage periods chosen
for such disclosures). We decline to otherwise codify specific
methodologies for measuring the actual performance required by the
transparency rule, finding, as in 2010 and 2015, that there is a
benefit in permitting measurement methodologies to evolve and improve
over time, with further guidance from Bureaus and Offices--like in 2011
and 2016--as to acceptable methodologies. We delegate authority to the
Office of Engineering Technology (OET) and the Consumer and
Governmental Affairs Bureau (CGB) to lead this effort. We expect this
effort will include, among other things, examining the appropriate
geographic measurement units for reporting. We need not determine, at
this time, the accuracy of CTIA's assertion that ``consumers have no
idea what [Cellular Market Areas (CMAs)] are, and even if they did,
they likely would not know what CMA they are in at any given time since
they use wireless on the go.'' Consumers know where they live and
likely purchased service, and as long as BIAS providers ``show the
measurements associated with the CMA containing the consumer's listed
address,'' as T-Mobile did for several years following the 2015 Open
Internet Order, the consumer ``does not have to know where the CMAs
are, or even what a CMA is.''
547. The record demonstrates, however, that unlike their larger
counterparts, BIAS providers that have 100,000 or fewer broadband
subscribers may generally lack access to the resources necessary to
easily comply with these enhanced performance characteristic
transparency requirements. As such, we temporarily exempt (with the
potential to become permanent) BIAS providers that have 100,000 or
fewer broadband subscribers as per their most recent FCC Form 477,
aggregated over all affiliates of the provider, from the requirements
to disclose packet loss and report their performance characteristics
with greater geographic granularity and to be measured in terms of
average performance over a reasonable period of time and during times
of peak usage. We observe that our description of small providers to
which we apply this exemption aligns with exceptions the Commission has
previously provided for small providers, including the implementation
of the Safe Connections Act, a longer implementation period for certain
providers in the Broadband Label proceeding, a delayed deadline to
implement caller ID authentication rules stemming from the TRACED Act,
and in describing which small providers are exempt from certain rural
call completion rules. While we believe that reinstating these
performance characteristic transparency enhancements will have minimal
costs for most larger BIAS providers, we take seriously the concerns
raised in the record about the additional compliance costs for small
businesses. Moreover, we observe that the Commission provided a
temporary exception (with the potential to become permanent) for some
providers from the enhancements adopted in the 2015 Open Internet
Order. In light of the concerns in the record, past precedent, and the
expenditures BIAS providers that have 100,000 or fewer broadband
subscribers have already made--and continue to make--to address the
requirements adopted by the Broadband Label Order, we find that an
exemption for these providers is supported in this case. We note that
in each of those proceedings, the Commission specifically sought
comment on, and considered the impact of, its proposals on small
entities, consistent with the requirements of the Regulatory
Flexibility Act. We delegate to CGB the authority to determine whether
to maintain the exemption, and if so, the appropriate bounds of the
exemption. We direct CGB to seek comment on the question and adopt an
order announcing whether it is maintaining an exemption by no later
than 18 months after publication of the Order in the Federal Register.
WISPA also requests that the Commission apply any temporary or
permanent exemptions to BIAS providers with 250,000 or fewer
subscribers. WISPA provides no explanation as to how many additional
small providers would be covered by its proposed change to the scope of
our exemptions, nor does it explain why such an expansion ins scope is
needed, other than asserting that ``[i]f exempting small ISPs from
these rules was important in 2016, it is all the more important now
given the other burdensome regulations that the Commission has imposed
on BIAS providers.'' As such, we decline to expand the temporary
exemptions in the Order to BIAS providers with 250,000 or fewer
subscribers.
548. We decline, however, to require disclosure of additional
performance characteristics, as suggested by Measurement Lab, such as
the source, location, timing, or duration of network congestion; and
packet corruption and jitter. Noting that ``congestion may originate
beyond the broadband provider's network and the limitations of a
broadband provider's knowledge of some of these performance
characteristics,'' the Commission specifically declined to require the
source, location, timing, or duration of network congestion in 2015.
The Commission also declined to include packet corruption and jitter
because of concerns around the difficulty of defining metrics for such
performance characteristics. We find that Measurement Lab fails to
adequately address the concerns expressed by the Commission in the 2015
Open Internet Order and we thus decline to require these additional
disclosures.
549. Commercial Terms. We find that additional disclosures
pertaining to commercial terms are not necessary at this time. The
broadband label now requires largely the same commercial term
disclosures, including information about promotional rates, fees, and/
or surcharges, and all data caps or data allowances as those the
Commission required in the 2015 Open Internet Order. Thus, we find no
need to restore the commercial term enhancements required by the 2015
Open Internet Order. To the extent the record identifies requests for
additional pricing information, we find that a potential addition aimed
at informing consumers
[[Page 45519]]
about pricing would be best considered in the broadband label docket.
We also decline to require more extensive privacy disclosures, as some
commenters request, as we find that this is not the appropriate
proceeding in which to address the content of BIAS providers' privacy
notices.
550. Requested Updates to the Broadband Label. The record indicates
that in addition to packet loss, commenters urge a wide variety of
additional disclosures or changes to the broadband label, including
requirements to disclose speed ranges for fixed and mobile broadband;
to change how speeds are reported (e.g., change ``typical'' speeds and
latency to median speeds and median latency); to include specific
privacy disclosures directly on the label; to incorporate network
management tables directly on the label; to include cybersecurity
disclosures; to include network reliability measurements (e.g., number
of minutes of outage per year); and to include the labels on a user's
monthly bill (in addition to the point of sale). The Commission
considered many of these requests as part of the record in the
Broadband Label proceeding, and rejected them in the Broadband Label
Order. We find that such requests are more properly considered in that
proceeding, as are requests for additional changes or additions that
were raised in the Broadband Label FNPRM.
b. Means of Disclosure
551. We agree with New America's Open Technology Institute that
``[t]o be truly `publicly available,' these disclosures must be where
the public would expect to find them--on provider websites marketing
these services.'' As such, we require providers to disclose all
information required by the transparency rule on a publicly-available,
easily-accessible website. We believe that consumers expect to find
information about a provider's services on the provider's public
website and that most consumers would not consider visiting the
Commission's website, particularly the ECFS, to find information about
a provider's services. We find that by requiring providers to provide
disclosures on their own websites, consumers will have greater access,
and if there is any additional cost to providers, it would be minimal.
Ensuring disclosures under the transparency rule are accessible to
individuals with disabilities remains a priority, and as such, we
require BIAS providers to post the disclosures on their websites using
an accessible format. Consistent with the Commission's approach in the
Broadband Label Order, we strongly encourage BIAS providers to use the
most current version of the Web Content Accessibility Guidelines, an
approach unopposed in the record.
552. Machine-Readable Format. As with the broadband label, we
require that all transparency disclosures made pursuant to the
transparency rule also be made available in machine-readable format. By
``machine readable,'' we mean providing ``data in a format that can be
easily processed by a computer without human intervention while
ensuring no semantic meaning is lost.'' The machine-readable
disclosures should be made available in a spreadsheet file format such
as the comma-separated values (.csv) format and be available on the
same page and accessible via the same URL as the relevant ``non-
machine-readable'' disclosures (e.g., network practice disclosures
should be available in both the traditional narrative format and the
machine-readable format on the same page of the provider's website). We
agree with commenters who note that machine readability enables
interested parties to better compare the transparency disclosures of
different companies. As a result, this information can be more easily
studied by third parties and then more easily conveyed by those third
parties to end users, who may otherwise be unable to, or uninterested
in, understanding detailed privacy or network management practices. We
find, therefore, that machine readability will further increase
transparency. Notably, no commenter objects to this specific
requirement in the record. We note that some commenters did object to
the machine-readability requirement in the Broadband Label Order. In
that proceeding, however, we found that transferring the data into
machine-readable format did not impose a high burden upon providers or
require a high degree of technical difficulty. As no commenter has
raised any specific objections to machine-readability in the current
proceeding, we conclude that there is no reason to depart from the
findings we made with regard to the machine-readability requirement for
the broadband label.
c. Direct User Notification
553. Consistent with our findings in the 2015 Open Internet Order,
we require BIAS providers to directly notify end users ``if their
individual use of a network will trigger a network practice, based on
their demand prior to a period of congestion, that is likely to have a
significant impact on the end user's use of the service.'' The
Commission eliminated this requirement in the RIF Order, finding it
``unduly burdensome'' for BIAS providers, without any analysis.
Commenters in opposition of such a requirement contend that because
consumers are provided advance notice of network management practices,
any subsequent notification about particular actions is unnecessary and
unduly burdensome to providers. As the Commission explained in the 2015
Open Internet Order, however, ``[t]he purpose of such notification is
to provide the affected end users with sufficient information and time
to consider adjusting their usage to avoid application of the
practice.'' While our transparency rule requires BIAS providers to
disclose details regarding their network practices, the record provides
no evidence that consumers are easily able to track their usage to
identify when their usage is likely to trigger a network practice so
that they may then adjust their usage accordingly. We find that because
providers must already monitor their networks in order to apply network
practices when a user takes a particular action, a specific event
occurs, or a data cap threshold is reached, providers are better
positioned to advise customers about the circumstances surrounding the
applied network practice than are users positioned to track and
identify such occurrences on their own.
554. We are also skeptical of WTA's assertion that ``direct
notification would entail major hardship and unnecessary expense for
service providers to maintain accurate and up-to-date versions of the
frequently changing lists of their customers and contact addresses
(whether email, text or physical),'' as providers need customer contact
information for billing purposes. Thus, because providers must
necessarily actively monitor their networks in order to apply network
practices and already collect contact information for their users, we
believe that any additional burden would come from identifying the
particular application of a network practice and notifying the user. We
do not anticipate that the burdens associated with notifying customers
would be significant, as we expect that most providers who offer plans
without unlimited data already provide an automated notification to
users notifying them that they will be billed an additional fee for
additional data upon reaching their data threshold or provide some
method of tracking monthly usage. For example, mobile BIAS providers
either automatically notify users when they will soon go over
[[Page 45520]]
a data cap or permit them to turn on data usage notifications. AT&T
provides notification to users subject to a data threshold when they
reach 75% of the threshold. Fixed providers with data caps also provide
similar notifications or offer similar tools to track usage. Therefore,
we find that the benefits to consumers outweigh any additional costs to
BIAS providers, particularly since, as in 2015, we do not require real-
time notifications.
555. Temporary Exemption for BIAS Providers with 100,000 or Fewer
Broadband Subscribers. In response to concerns expressed in the record
pertaining to the direct customer disclosure requirement, we provide a
temporary exemption (with the potential to become permanent) to the
direct notification requirement for BIAS providers that have 100,000 or
fewer broadband subscribers as per their most recent FCC Form 477,
aggregated over all provider affiliates. We observe that this temporary
exemption aligns with the longer implementation period for the
broadband label applicable to certain providers. We believe that
providers that have 100,000 or fewer broadband subscribers are less
likely to already have in place the tools and mechanisms needed to
allow customers to track usage or provide automated direct
notifications, and we therefore afford such providers additional time
to develop appropriate systems. We delegate to CGB the authority to
determine whether to maintain the exemption, and if so, the appropriate
bounds of the exemption. We direct CGB to seek comment on the question
and adopt an Order announcing whether it is maintaining an exemption no
later than 18 months after publication of the Order in the Federal
Register.
C. Reasonable Network Management
556. The record broadly supports maintaining an exception for
reasonable network management. We agree that a reasonable network
management exception to the no-blocking rule, the no-throttling rule,
and the general conduct rule is necessary for BIAS providers to
optimize overall network performance and maintain a consistent quality
experience for consumers while carrying a variety of traffic over their
networks. The transparency rule does not include an exception for
reasonable network management. We clarify, however, that the
transparency rule ``does not require public disclosure of competitively
sensitive information or information that would compromise network
security or undermine the efficacy of reasonable network management
practices.'' Therefore, the no-blocking rule, the no-throttling rule,
and the general conduct rule will be subject to reasonable network
management for both fixed and mobile BIAS providers. We note that
unlike conduct implicating the no-blocking, no-throttling, or general
conduct rule, paid or affiliated prioritization is not a network
management practice because it does not primarily have a technical
network management purpose. In retaining the exception, we return to
the definition of reasonable network management adopted by the
Commission in 2015, providing that a network management practice is a
practice that has a primarily technical network management
justification, but does not include other business practices. A network
management practice is reasonable if it is primarily used for and
tailored to achieving a legitimate network management purpose, taking
into account the particular network architecture and technology of the
broadband internet access service.
557. When considering whether a practice violates the no-blocking
rule, no-throttling rule, or general conduct rule, the Commission may
first evaluate whether a practice falls within the exception for
reasonable network management. For a practice to even be considered
under this exception, a BIAS provider must first show that the practice
is primarily motivated by a technical network management justification
rather than other business justifications. If a practice is primarily
motivated by another non-network related justification, then that
practice will not be considered under this exception. The term
``particular network architecture and technology'' refers to the
differences across broadband access platforms of any kind, including
cable, fiber, DSL, satellite, unlicensed Wi-Fi, fixed wireless, and
mobile wireless.
558. We find that permitting reasonable network management
practices that are primarily technical in nature will provide BIAS
providers sufficient flexibility to manage their networks, while at the
same time will help protect against BIAS providers using the exception
to circumvent open internet protections. We agree with Professor Jon
Peha that if a practice can be considered reasonable network management
``simply because it is needed in support of a `business practice,' this
opens potentially a large loophole unless one severely limits the
meaning of `business practice.' '' Likewise, as Public Knowledge
explains, ``any traffic management practice, including one that is
nakedly anticompetitive, can be characterized as having some technical
purpose--for example, to slow down a rival's traffic.'' We agree that
restricting the scope of ``reasonable network management'' to practices
that are primarily justified as traffic management techniques will help
prevent the exception from becoming a loophole permitting otherwise
unlawful business and traffic management practices.
559. We believe that the reasonable network management exception
provides both fixed and mobile BIAS providers sufficient flexibility to
manage their networks. We recognize, consistent with the consensus in
the record, that the additional challenges involved in mobile BIAS
network management mean that mobile BIAS providers may have a greater
need to apply network management practices, including mobile-specific
network management practices, and to do so more often to balance supply
and demand while accommodating mobility. As the Commission has
previously observed, mobile network management practices must address
dynamic conditions that fixed networks typically do not, such as the
changing location of users as well as other factors affecting signal
quality. Similarly, SpaceX argues that satellite providers require
additional network management flexibility to account for the same
challenges that the 2015 Open Internet Order recognized in the context
of mobile and Wi-Fi networks, including dynamic conditions, spectrum
constraints, and congestion issues. WISPA likewise explains that fixed
wireless providers face challenges ``managing networks of multiple
spectrum bands.'' The ability to address these dynamic conditions in
mobile, wireless, and satellite network management is especially
important given capacity constraints these BIAS providers, many of them
small, face. The Commission will take into account when and how network
management measures are applied as well as the particular network
architecture and technology of the BIAS in question, in determining if
a network management practice is reasonable.
560. We disagree with Ericsson that just because a network
management practice can have both a primary technical reason and
include other business practices, our definition ``presents a false
dichotomy.'' As an initial matter, the standard we adopt in the Order
does not require that a network management practice's purpose be solely
technical in nature, but rather primarily technical in nature. The
exemption does not exclude practices
[[Page 45521]]
that have multiple purposes, so long as the practice's purpose is
primarily technical. It would, however, not extend to network
management practices established for other purposes that lack a
primarily technical purpose. To the extent that a BIAS provider engages
in a network management practice for purposes other than a primarily
technical reason, such practice is not per se prohibited, but would be
evaluated under the general conduct standard or assessed for compliance
with the prohibitions against blocking and throttling. We thus reject
assertions in the record that distinctions of intent are not workable,
that technical and business decision-making are not severable, or that
the 2015 definition will adversely impact ``business models that allow
mobile operators to optimize their networks in response to consumers'
choices and could even bar any practice that affects the provider's
costs or revenues.'' Further, we find unavailing commenters' assertions
that the reasonable network management exception we adopt in the Order
is vague or ambiguous. While we acknowledge, as the Commission has
previously, the advantages a more detailed definition of reasonable
network management can have on long-term network investment and
transparency, we conclude that a more detailed definition risks quickly
becoming outdated as technology evolves, as borne out by commenters'
own assertions.
561. Evaluating Network Management Practices. We recognize the need
to ensure that the reasonable network management exception will not be
used to circumvent the open internet rules while still allowing BIAS
providers flexibility to experiment and innovate as they reasonably
manage their networks. We therefore elect to maintain a case-by-case
approach. Case-by-case analysis will allow the Commission to use the
conduct-based rules adopted in the Order to take action against
practices that are known to harm consumers without interfering with
BIAS providers' beneficial network management practices. Beneficial
practices include protecting their broadband internet access services
against malicious content or offering a service limited to ``family
friendly'' materials to end users who desire only such content. The
case-by-case review also allows sufficient flexibility to address
mobile-specific management practices because, by the terms of our rule,
a determination of whether a network management practice is reasonable
takes into account the particular network architecture and technology.
We also note that our transparency rule requires disclosures that
provide an important mechanism for monitoring whether providers are
inappropriately exploiting the exception for reasonable network
management.
562. We decline to specify particular network management practices
as per se unreasonable, as advocated by WISPA, in order to afford BIAS
providers maximum flexibility in managing their dynamic networks. While
we are sensitive to the needs of small BIAS providers, we do not
believe the record currently supports a one-size-fits-all approach.
However, to provide greater clarity, particularly for small BIAS
providers, and to further inform the Commission's case-by-case
analysis, we offer the following guidance regarding legitimate network
management purposes. We also note that, consistent with the 2010 and
2015 reasonable network management exceptions, BIAS providers may
request a declaratory ruling or an advisory opinion from the Commission
before deploying a network management practice, but are not required to
do so.
563. As with the network management exception in the 2015 Open
Internet Order, BIAS providers may implement network management
practices that are primarily used for, and tailored to, ensuring
network security and integrity, including by addressing traffic that is
harmful to the network, such as traffic that constitutes a denial-of-
service attack on specific network infrastructure elements. Likewise,
BIAS providers may also implement network management practices that are
primarily used for, and tailored to, addressing traffic that is
unwanted by end users. Further, network management practices that
alleviate congestion without regard to the source, destination,
content, application, or service are also more likely to be considered
reasonable network management practices in the context of this
exception. As in the no-throttling rule and the general conduct
standard, we include classes of content, applications, services, or
devices. In evaluating congestion management practices, a subset of
network management practices, we will also consider whether the
practice is triggered only during times of congestion and whether it is
based on a user's demand during the period of congestion. In addition,
we maintain the guidance that a network management practice is more
likely to be found reasonable if it is transparent and allows the end
user to control it. Finally, we also reaffirm that reasonable network
management practices should be as application-agnostic as possible.
D. Oversight of BIAS Providers' Arrangements for Internet Traffic
Exchange
564. Because we conclude that BIAS necessarily includes the
exchange of internet traffic by an edge provider or an intermediary
with the BIAS provider's network, disputes involving a BIAS provider
regarding internet traffic exchange that interfere with the delivery of
a BIAS end user's traffic are subject to our authority under Title II
of the Act. The Commission has previously found, and the current record
reflects, that anticompetitive and discriminatory practices in this
portion of BIAS could have a deleterious effect on the open internet.
The record evidence thus undermines USTelecom's assertion that because
``transit providers and their customers almost always rely on multiple
redundant paths for the exchange of traffic to customers on any ISP's
network, and edge providers dynamically shift between transit providers
in real time to avoid congestion,'' a BIAS provider ``thus could not
execute a `degradation by congestion' strategy without limiting
capacity across all of its peering points for extended periods.'' When
internet traffic exchange breaks down--regardless of the cause--it
risks preventing consumers from reaching the services and applications
of their choosing, disrupting the virtuous cycle, and potentially
causing public safety or other harms. Further, consumers' ability to
respond to unjust or unreasonable BIAS provider practices are limited
by switching costs. We therefore retain targeted authority under
sections 201, 202, and 208 of the Act (and related enforcement
provisions) to protect against such practices, and will continue to
monitor BIAS providers' internet traffic exchange arrangements to
ensure that they are not harming or threatening to harm the open nature
of the internet. This regulatory backstop is not a substitute for
robust competition. The Commission's regulatory and enforcement
oversight, including over common carriers, is complementary to vigorous
antitrust enforcement. Thus, it will remain essential for the
Commission, as well as the DOJ, to continue to carefully monitor,
review, and where appropriate, take action against any anticompetitive
mergers, acquisitions, agreements or conduct, including where BIAS is
concerned. We conclude, consistent with the 2015 Open Internet Order,
that case-by-case review under sections 201 and 202 is the appropriate
vehicle for enforcement
[[Page 45522]]
``where disputes are primarily over commercial terms and that involve
some very large corporations, including companies like transit
providers and CDNs, that act on behalf of smaller edge providers.''
Thus, the Commission will be available to hear disputes raised under
sections 201 and 202 on a case-by-case basis. In addition, Federal
courts will also be able to adjudicate complaints brought under Title
II. We also observe that section 706 provides the Commission with an
additional, complementary source of authority to ensure that internet
traffic exchange practices do not harm the open internet.
565. We disagree with USTelecom's assertions that our oversight of
BIAS providers' arrangements for internet traffic exchange would
``result in irrationally asymmetric regulation of bilateral
negotiations'' and ``would leave the ISP's counterparty . . . an
unregulated entity immune from such complaints, giving it new
opportunities for regulatory gamesmanship.'' While BIAS providers would
be subject to the Commission's prohibitions against unjust and
unreasonable practices, the other parties to such agreements are not
without oversight; such parties would remain subject to the FTC's
oversight of ``unfair and deceptive'' practices as well as the FTC's
and DOJ's antitrust authority. Further, we observe that should a
complaint arise regarding BIAS provider internet traffic exchange
practices, practices by edge providers (and their intermediaries) would
be considered as part of the Commission's evaluation as to whether BIAS
provider practices were ``just and reasonable'' under the Act.
566. We decline to apply any open internet rules to internet
traffic exchange. We note that this exclusion also extends to
interconnection with CDNs. Internet traffic exchange agreements have
historically been and will continue to be commercially negotiated.
Given the constantly evolving market for internet traffic exchange, we
conclude that at this time it would be difficult to predict what new
arrangements will arise to serve consumers' and edge providers' needs
going forward, as usage patterns, content offerings, and capacity
requirements continue to evolve. Consistent with the Commission's
findings in 2015 and subsequent inquiries, we find that the best
approach with the respect to arrangements for internet traffic exchange
is to rely on the regulatory backstop of sections 201 and 202,which
prohibit common carriers from engaging in unjust and unreasonable
practices. Our ``light touch'' approach therefore does not directly
regulate interconnection practices. We make clear, however, that BIAS
providers may not engage in interconnection practices that ``circumvent
the prohibitions contained in the open internet rules'' or that have
the purpose or effect of evading our rules to protect internet
openness.
567. We conclude that it would be premature to adopt prescriptive
rules to address any problems that have arisen or may arise, and we
decline at this time to adopt a rule requiring BIAS providers to offer
settlement[hyphen]free peering to edge providers and transit providers
that agree to reasonably localize the exchanged traffic, or to
otherwise prohibit fees associated with internet traffic exchange
arrangements, as some commenters suggest. The record reflects competing
narratives regarding the imposition of paid peering arrangements. For
example, one research study claims that paid peering results in higher
prices for consumers, reduces consumer surplus, and results in higher
profits for broadband providers. In contrast, USTelecom asserts that
``the providers of such double-sided platforms [like ISPs] routinely
assess fees on both sides, and it is well understood that charges to
one side of the platform (here, direct-interconnection fees) exert
downward pressure on charges to the other side (here, resulting in
lower consumer broadband bills).'' USTelecom further argues that
``eliminating direct-interconnection fees would eliminate price signals
that, today, give content-originating networks efficient incentives to
reduce unnecessary costs in their transmission of internet traffic,''
explaining that ``the prospect of such fees currently gives streaming
video providers incentives to implement efficient forms of digital
compression that reduce traffic loads while still providing high video
quality to end users'' and that ``[i]mposing a new obligation of
settlement-free direct interconnection would undermine those
efficiency-inducing price signals, generate wasteful over-expenditure
of finite network resources, and thus impose on broadband providers
avoidable costs that consumers would ultimately bear in the form of
higher broadband bills.'' Lumen, in response, asserts that ``the fees
large BIAS providers attempt to impose are indeed supracompetitive . .
. and can exceed what Lumen charges for transit service,''--a highly
competitive market--demonstrating ``conclusively'' that their charges
are supracompetitive. And New America's Open Technology Institute
asserts that ``[e]dge providers have plenty of price incentives to
move, manage, and deliver traffic efficiently without the BIAS provider
extracting a toll for access to their subscribers.'' We are cautious of
imposing a one-size-fits-all rule on this dynamic sector of the
broadband industry based on the record before us, which raises
potential concerns about such arrangements but lacks detail regarding
specific incidences of such actions. Instead, we will proceed on a
case-by-case basis regarding assertions or claims that arrangements for
internet traffic exchange, including fee-based arrangements, violate
sections 201 or 202 of the Act, or are being used to circumvent or
evade open internet protections. As we note above, the Commission has
taken action to require settlement-free peering agreements where
appropriate.
E. Enforcement of Open Internet Rules
568. Effective and timely conflict resolution and clear guidance on
permitted and prohibited practices under the rules we adopt in the
Order are important to further our goal to secure and safeguard an open
internet. As in the past, we expect that many disputes that will arise
can and should be resolved by the parties without Commission
involvement. We continue to encourage parties to resolve disputes
through informal discussion and private negotiations whenever possible.
569. At the same time, we are prepared to enforce our open internet
rules as the need arises. To that end, we will rely on a multifaceted
enforcement framework comprised of advisory opinions, enforcement
advisories, Commission-initiated investigations, and informal and
formal complaints. Some commenters endorse a multi-faceted enforcement
framework. The advisory opinions and enforcement advisories should
provide upfront clarity, guidance, and predictability with respect to
the open internet rules, thereby giving providers an avenue to avoid
formal complaint litigation, remediation, or fines after the fact.
Commission-initiated investigations will also play a role in our
enforcement framework. Investigations may stem from review of informal
complaints, from which trends of behavior can be identified, or
information otherwise brought to the Commission's attention. When the
Commission determines a violation has occurred, we will pursue remedies
and penalties. Lastly, the formal complaint processes will provide
parties options to bring open internet rule violations to the
Commission's attention and to resolve specific disputes. As explained
infra, the
[[Page 45523]]
Enforcement Bureau's Market Disputes Resolution Division provides
confidential mediation services, at no cost, to assist parties in
settling or narrowing disputed issues. We find that, when necessary,
the formal complaint process will provide a backstop framework that
will effectively and timely address open internet disputes and provide
guidance on practices that are permitted or prohibited under our rules.
1. Advisory Opinions and Enforcement Advisories
570. Advisory Opinions. The Commission previously concluded in 2015
that the use of advisory opinions would be in the public interest and
had the potential to provide clarity, guidance, and predictability
concerning the Commission's open internet rules. In 2017, the RIF Order
ended the use of enforcement advisory opinions, asserting that they
were no longer necessary due to the elimination of the conduct rules.
In the Order, we reaffirm the conclusions of the 2015 Open Internet
Order, and adopt an updated process for providers seeking an advisory
opinion from Commission staff regarding the open internet rules to
provide upfront clarity, guidance, and predictability. Updated process
steps are not intended to substantively differ from those outlined in
the 2015 Open Internet Order. We continue to believe an advisory
opinion process will provide clarity and guidance to providers seeking
to comply with our regulations. We believe the advisory opinion process
we adopt in the Order will help, and not impede, innovation by
providing published guidance that illustrates how we implement our laws
and regulations.
571. Under the process we adopt in the Order, any BIAS provider may
request an advisory opinion regarding the permissibility of its
proposed policies and practices affecting access to BIAS. As noted in
our rules, requests for an advisory opinion may be filed via the
Commission's website or with the Office of the Secretary and must be
copied to the Chief of the Enforcement Bureau and the Chief of the
Investigations and Hearings Division of the Enforcement Bureau. We
hereby delegate to the Enforcement Bureau the authority to receive such
requests and issue such advisory opinions, and we direct the
Enforcement Bureau to coordinate closely with other relevant Bureaus
and Offices regarding such advisory opinions. The Enforcement Bureau
will have discretion to determine whether to issue an advisory opinion
in response to a particular request or group of requests and will
inform each requesting entity, in writing, whether the Bureau plans to
issue an advisory opinion regarding the matter in question. The
Enforcement Bureau shall decline to issue an advisory opinion if the
relevant policy or practice is the subject of a pending government
investigation or proceeding.
572. BIAS providers may submit requests for advisory opinions
regarding prospective policies and practices affecting broadband
access. A request must pertain to a policy or practice that the
requesting party intends to utilize, rather than a mere possible or
hypothetical scenario. As a general matter, the Enforcement Bureau will
prioritize requests involving substantial questions with no clear
Commission precedent and/or subject matter involving significant public
interest. Other Federal agencies have similar advisory opinion
processes. For example, the Rules of Practice of the FTC provide that
the FTC or its staff, in appropriate circumstances, may offer industry
guidance in the form of an advisory opinion. The FTC specifies that it
will consider requests for advisory opinions, where practicable, under
the following circumstances: ``(1) The matter involves a substantial or
novel question of fact or law and there is no clear Commission or court
precedent; or (2) The subject matter of the request and consequent
publication of Commission advice is of significant public interest.''
573. When submitting requests, BIAS providers must include all
material information such that Commission staff can make a fully
informed determination on the matter. Requesting parties will also be
required to certify that factual representations made to the
Enforcement Bureau are truthful, accurate, and do not contain material
omissions. The Enforcement Bureau will have discretion to request
additional information from the requesting entity and from other
parties that might have relevant information or be impacted by the
request. These might include, for example, impacted consumers or state,
local, or Tribal governments.
574. Our advisory opinion process will affect BIAS providers and
the Commission's enforcement actions as described below. First, the
process is fully voluntary. No BIAS provider will be rewarded or
penalized for seeking an advisory opinion, and the seeking (or not) of
an advisory opinion will not itself influence any enforcement-related
decision by the Commission. Second, in an advisory opinion, the
Enforcement Bureau will issue a determination of whether or not the
policy or practice detailed in the request complies with the open
internet rules. We disagree with Smithwick & Belendiuk's assertion that
that the Commission must provide the public an opportunity to comment
on a BIAS provider's request for an advisory opinion, or eliminate the
process entirely. As Smithwick & Belendiuk itself acknowledges, a BIAS
provider may ``face a legitimate potential for competitive harm if its
operational plan are made public at the advisory opinion stage,'' and
further, the Commission does not routinely seek public input on its
interpretation of its own rules.
575. The Bureau will not respond to requests for opinions that
relate to ongoing or prior conduct, and the Bureau may initiate an
enforcement investigation to determine whether such conduct violates
the open internet rules. Third, a requesting party may rely on an
advisory opinion to the extent that its request fully and accurately
describes all material facts and circumstances. Fourth, advisory
opinions will be issued without prejudice to the Enforcement Bureau's
or the Commission's ability to reconsider the questions involved, and
rescind the opinion. We disagree with commenters who assert that
advisory opinions are not helpful because they would only apply to the
requesting party and the facts at hand and not other providers or
because any guidance would be revocable and not binding. While advisory
opinions will specifically engage with the facts provided by a
requesting party, we believe published advisory opinions will inform
other providers with similar questions, and that usefulness will still
apply even if the Commission subsequently revises its guidance.
576. The Enforcement Bureau will attempt to respond to requests for
advisory opinions as efficiently as possible. We decline to establish
firm deadlines, however, because we anticipate that the nature,
complexity, and magnitude of requests may vary widely. Furthermore, it
may take time for Commission staff to request any additional
information needed to issue an opinion. Once issued, the Enforcement
Bureau will make the advisory opinion available to the public. Entities
concerned about privacy and sensitive market information may request
confidential treatment of certain information, as provided under
Commission rules. And to provide further guidance to industry and
consumers, the Bureau will also release the initial request and any
additional materials deemed necessary to contextualize the opinion.
[[Page 45524]]
577. We continue to believe an advisory opinion process will
provide clarity and guidance to providers seeking to comply with our
regulations. While some commenters assert that seeking an advisory
opinion would potentially harm the requesting party, the advisory
opinion process we adopt in the Order does not contemplate the
Enforcement Bureau taking enforcement action solely in response to a
provider seeking an advisory opinion.
2. Complaint Processes
578. Informal Complaints. As stated in the 2023 Open Internet NPRM,
the Commission's informal complaint process under Sec. 1.41 of the
rules ``remain[s] available to parties with respect'' to open internet
rules. Commenters support continued use of the informal complaint
process as an effective enforcement mechanism of our rules. For
example, NDIA affirms the value of the informal complaint pathway in
its ``accessibility to most consumers.'' The Commission previously
found, and we continue to find, that Sec. 1.41 provides ``a simple and
cost-effective option for calling attention to open internet rule
violations.'' With reclassification, Sec. Sec. 1.711 through 1.717
also apply to informal complaints arising under Title II of the Act.
Consumers may submit informal complaints online, and no filing fee is
required. Informal complaints are filed through the Commission's user-
friendly complaint interface, the Consumer Inquiries and Complaint
Center Help Center. We note that the Commission's Consumer Complaint
Center is responsive on mobile devices and that the Commission's call
center is staffed by both English- and Spanish-speaking agents who can
file complaints on behalf of consumers. Individuals who use videophones
and are fluent in American Sign Language (ASL) may call the
Commission's ASL Consumer Support line for assistance in ASL with
filing informal complaints or obtaining consumer information. Those who
wish to file an informal complaint may simply visit the Consumer
Inquiries and Complaint Center portal on the Commission's website and
click the internet icon to access relevant information and the online
complaint intake system. Consistent with our current process and
procedures, consumers may also file informal complaints by fax or
postal mail. The informal consumer complaint process facilitates a
conversation between the consumer and the provider to address disputed
issues. It does not involve arbitration, mediation, or investigation.
These complaints will be reviewed and may be served on the consumer's
BIAS provider for investigation and response to the consumer within 30
days. WISPA requests a 30-day negotiating period before filing an
informal complaint. We decline WISPA's request, but we note that the
informal complaint process is designed to allow parties to reach an
informal, negotiated resolution before proceeding to a more formal
process. Although individual informal complaints will not typically
result in written Commission Orders, the Enforcement Bureau will
examine trends or patterns in complaints to identify potential targets
for investigation and enforcement action. The availability of complaint
procedures does not bar the Commission from initiating separate and
independent enforcement proceedings for potential violations. The
Commission reviews informal complaints and, when applicable, will
initiate investigations internally in furtherance of our enforcement
efforts. These include Commission-initiated inquiries under section 403
of the Act, which may lead to the issuance of forfeitures under section
503(b) of the Act.
579. Formal Complaints. The RIF Order eliminated the open internet
complaint rules adopted in the 2010 Open Internet Order and preserved
in the 2015 Open Internet Order. With our action in the Order to
reclassify BIAS as a Title II telecommunications service, absent
adoption of a different approach, the section 208 formal complaint
rules will apply. In the 2023 Open Internet NPRM, we sought comment on
whether it would be beneficial to re-establish a formal complaint
process for complaints arising under our open internet rules and
whether our section 208 formal complaint process is sufficient for this
purpose. We agree with commenters that the formal complaint process
should continue to be part of the enforcement framework for the open
internet rules. Several commenters state that formal complaint
procedures are necessary to ensure equal access to BIAS and support
having a structured formal complaint process. In its comment, the U.S.
Chamber of Commerce objects to ``adopt[ing] a formal complaint
mechanism under section 208 of the Communications Act for alleged
instances of digital discrimination.'' The instant Order, however, only
concerns open internet rules and takes no position on the applicability
of section 202 to the digital discrimination rules. We further conclude
that the existing formal complaint rules codified at Sec. Sec. 1.720
through 1.740 of our rules should apply to formal open internet
complaints.
580. The Commission updated the existing section 208 rules in 2018,
and they govern all formal complaint proceedings delegated to the
Enforcement Bureau. These comprehensive rules are largely the same as
the prior open-internet-specific formal complaint rules, providing for
a complaint, answer, and reply, as well as discovery and briefing, as
appropriate. They also establish deadlines for the resolution of
complaints. We reject WISPA's request that the Commission be required
to render a decision on any complaint within 60 days from the date the
BIAS provider files its response to the Commission. The formal
complaint rules are designed to resolve complaints on a written record
and give defendants sufficient opportunity to respond to the
allegations against them so as to afford due process. The rules
contemplate the exchange of information and other efforts to narrow the
issues in dispute and streamline the adjudicative process. A 60-day
deadline would not provide adequate time for the development of a
complete record in a complex case. We also reject WISPA's request for a
shortened, one-year statute of limitations from the time of an alleged
open internet rule violation. Section 415 of the Act generally provides
that complaints be filed within two years from the time the cause of
action accrues, and WISPA provides no basis justifying a departure from
this statutory requirement. For these reasons we find it unnecessary,
as WISPA requests, for the Commission to seek additional comment on
streamlined enforcement procedures and timeframes for BIAS providers
with 250,000 or fewer subscribers. We find that the size of the
defendant BIAS provider (or the number of subscribers it has) does not
determine the complexity or scope of the violations alleged, nor does
it form the basis for developing a separate set of procedures or
deadlines. Furthermore, we find it unnecessary to examine whether to
establish a specific forfeiture amount for smaller providers under part
8 of the Commission's rules. The Commission's rules already provide for
discretion when assessing penalties, so there is no need to limit that
discretion solely for small BIAS providers. Moreover, we believe that
using the section 208 formal complaint rules will avoid the potential
for two different complaint processes if a complaint includes both open
internet violations and other Title II violations.
581. ACA Connects expresses concern about the burden and cost
associated with defending potential complaint
[[Page 45525]]
proceedings. We find such proceedings are likely to be rare and
unlikely to be particularly burdensome. To reiterate, we view formal
complaint litigation as a last resort. The section 208 formal complaint
rules require a complainant to certify that it has made a good faith
effort to settle the dispute. Additionally, either party may seek
voluntary mediation at the Commission--before a complaint is filed or
while the complaint is pending--in an effort to avoid litigation.
Mediation may be requested by a letter or by filing an informal
complaint with the Enforcement Bureau's Market Disputes Resolution
Division. Mediation often obviates the need for litigation or, barring
settlement of the entire dispute, may narrow issues for adjudication.
F. Legal Authority
582. We rely on multiple sources of independent, complementary
legal authority for the open internet rules we adopt in the Order,
including Titles II and III of the Act and section 706 of the 1996 Act.
These are the same sources of authority that the Commission relied upon
when it adopted rules in the 2015 Open Internet Order, which were
upheld in full by the D.C. Circuit. These sources of authority work to
safeguard and secure internet openness to ensure that the internet
continues to grow as a platform for competition, free expression, and
innovation; to be a driver of economic growth; and to be an engine of
the virtuous cycle of broadband deployment, innovation, and consumer
demand.
583. In the Order, we find that BIAS is a telecommunications
service subject to Title II, with forbearance where appropriate under
section 10 of the Act, allowing the Commission to exercise its
authority under sections 201 and 202 of the Act to ensure that BIAS
providers do not engage in unjust and unreasonable practices or
preferences. As described below, under section 706, the Commission has
the authority to adopt these open internet rules to encourage and
accelerate the deployment of broadband to all Americans. The rules are
also supported by Title III of the Act, under which the Commission has
broad spectrum management authority to protect the public interest
through spectrum licensing and regulations. Each of these sources of
authority provides an alternative ground to independently support our
open internet rules. With respect to our revised transparency rule, we
rely on the same sources of authority along with section 257 of the Act
(and associated authority now in section 13 of the Act), consistent
with the relevant reasoning of the 2010 Open Internet Order and the RIF
Order. Below, we discuss the basis and scope of each of these sources
of authority, provide an overview of prior precedents which justifies
such use, and then explain their application to the open internet rules
we adopt in the Order.
1. Title II of the Act With Forbearance
584. As in the 2015 Open Internet Order, we find that the open
internet rules we adopt in the Order are also supported by our legal
authority under Title II to regulate telecommunications services. We
rely on sections 201, 202, and 208 of the Act, along with the related
enforcement authorities of sections 206, 207, 209, 216, and 217, as
additional legal authority for the open internet rules we adopt in the
Order.
585. Section 201(a) places a duty on common carriers to furnish
communications services subject to Title II ``upon reasonable request''
and ``establish physical connections with other carriers'' where the
Commission finds it to be in the public interest.'' Section 201(b)
provides that ``[a]ll charges, practices, classifications, and
regulations for and in connection with such communication service,
shall be just and reasonable, and any such charge, practice,
classification, or regulation that is unjust or unreasonable is
declared to be unlawful.'' Section 201(b) also gives the Commission the
authority to ``prescribe such rules and regulations as may be necessary
in the public interest to carry out the provisions of this chapter.''
Section 202(a) makes it unlawful for any common carrier to make any
unjust or unreasonable discrimination in charges, practices,
classifications, regulations, facilities, or services for or in
connection with like communication service, directly or indirectly, by
any means or device, or to make or give any undue or unreasonable
preference or advantage to any particular person, class of persons, or
locality, or to subject any particular person, class of persons, or
locality to any undue or unreasonable prejudice or disadvantage.
586. Thus, the unjust and unreasonable standards in sections 201
and 202 afford the Commission significant discretion to distinguish
acceptable behavior from behavior that violates the Act. Indeed, the
very terms ``unjust'' and ``unreasonable'' are broad, inviting the
Commission to undertake the kind of line-drawing that is necessary to
differentiate just and reasonable behavior on the one hand from unjust
and unreasonable behavior on the other. As the D.C. Circuit has stated,
for example, ``the generality of these terms . . . opens a rather large
area for the free play of agency discretion, limited of course by the
familiar `arbitrary' and `capricious' standard in the Administrative
Procedure Act.'' Stated differently, because both sections ``set out
broad standards of conduct,'' it is up to the ``Commission [to] give[ ]
the standards meaning by defining practices that run afoul of carriers'
obligation, either by rulemaking or by case-by-case adjudication.''
Acting within this discretion, the Commission has exercised its
authority under section 201(b), through both adjudication and
rulemaking, to ban unjust and unreasonable carrier practices as
unlawful under the Act. The Commission need not proceed through
adjudication in announcing a broad ban on a particular practice.
Indeed, the text of section 201(b) itself gives the Commission
authority to ``prescribe such rules and regulations as may be necessary
in the public interest to carry out the provisions of this chapter.''
Although the particular circumstances have varied, in reviewing these
precedents, we find that the Commission generally takes this step where
necessary to protect competition and consumers against carrier
practices for which there was either no cognizable justification for
the action or where the public interest in banning the practice
outweighed any countervailing policy concerns.
587. Our rulemaking actions interpret and apply the statutory
authority at issue here, thereby enabling the Commission to address the
sorts of core communications policy issues that the agency has dealt
with since the enactment of the Communications Act. This is illustrated
by the many historical precedents for the regulation of carriers
consistent with the conduct rules we adopt.
588. Prohibitions on Blocking and Throttling. The conduct rules we
adopt in the Order are consistent with longstanding Commission
precedent under the Act, and in some respects also historical common
carriage requirements more generally. Our rules prohibiting blocking or
throttling of traffic except for purposes of reasonable network
management or at the desire of end users aligns with policies the
Commission long has applied to carriers under the Communications Act.
These rules also accord with longstanding requirements imposed on
common carriers of various sorts to defer to their customers regarding
the content being carried and to ensure that content gets to its
destination in a timely and reliable manner.
[[Page 45526]]
589. Restriction on paid prioritization. Our rule banning paid
prioritization also reflects the Commission's historical recognition
that just and reasonable rates and practices can require regulating
carriers' relationships with other communications suppliers. The
Commission historically has regulated those relationships as needed,
including to restrict carriers' ability to impose charges on providers
delivering them communications traffic. We recognize that in addition
to benefitting BIAS customers, our justification for the ban on paid
prioritization rests in part on the identified harms to edge provider
operations and innovation--but that, too, is consistent with how the
Commission has exercised its authority historically. For example, the
Supreme Court has rejected the view that section 201(b) limits the
Commission to addressing practices exclusively when they harm
customers, rather than also encompassing harms to communications
service suppliers, basing its rationale in part on historical
regulation under the Interstate Commerce Act. Further, a policy goal of
the historical Computer Inquiries regime was to guard against the risk
of carriers harming competitive providers of enhanced services.
590. General Conduct Rule. Our general conduct rule, by which we
evaluate conduct not covered by the bright-line rules, is consistent
with the Commission's historical exercise of authority under the Act.
Since its original enactment in 1934, the Communications Act has
prohibited unjust, unreasonable, and unjustly or unreasonably
discriminatory, rates and practices by carriers, and the Commission has
regularly judged carriers' conduct against those standards on a case-
by-case basis. The origins of common carrier duties under common law,
and then under the Interstate Commerce Act, likewise commonly were
subject to case-by-case adjudication.
591. The specific considerations that guide the application of the
general conduct rule also reflect the types of factors the Commission
historically has weighed in evaluating the justness and reasonableness
of carrier conduct.
For example, section 201(b) of the Act has long been
understood to allow for carrier practices that enable end users to
control their use of the service to which they have subscribed as just
and reasonable, absent a countervailing adverse public impact.
Consumer protection, such as protection against deceptive
or misleading practices, also has been a part of the Commission's
implementation of section 201(b) of the Act.
The Commission historically has implemented the Act to
guard against conduct that would have harmful competitive effects, as
well.
The Commission not only has considered effects on
innovation and investment in its implementation of longstanding
provisions of the Act, but since the enactment of the 1996 Act also has
relied on the mandate to advance broadband deployment in section 706 of
that statute.
The Commission also has treated compliance with industry
standards or best practices as relevant--though not dispositive--to its
evaluation of the justness and reasonableness of carrier practices.
Thus, the consideration of such factors through a case-by-case
reasonableness evaluation is fully consistent with longstanding
historical practice.
592. The record also provides broad support for relying on
authority in sections 201 and 202 of the Act. Some commenters oppose
relying on sections 201 and 202, because these sections may be unduly
burdensome, particularly on smaller providers. In such cases,
commenters urge the Commission to forbear from sections 201, 202, and
208 for smaller BIAS providers, or alternatively, initiate a new
proceeding to define the limits of obligations for small BIAS
providers. Other commenters argue that the Commission should focus on
Title II authority rather than section 706. These commenters contend
that the Commission should focus on Title II authority rather than
section 706. For the reasons set forth above, we find the open internet
rules we adopt in the Order are supported by our legal authority under
Title II.
593. As proposed in the 2023 Open Internet NPRM, and consistent
with the 2010 Open Internet Order and the RIF Order, and as affirmed by
the D.C. Circuit in Mozilla, we rely on section 257 of the Act (now in
conjunction with section 13 of the Act) as additional legal authority
for the transparency requirements we retain. Section 257(a) directs the
Commission to ``identify[ ] and eliminate[ ] . . . market entry
barriers for entrepreneurs and other small businesses in the provision
and ownership of telecommunications services and information services,
or in the provision of parts or services to providers of
telecommunications services and information services.'' The RAY BAUM'S
Act of 2018 eliminated section 257(c) of the Act, and instead included
language in new section 13 of the Act, 47 U.S.C. 163, requiring similar
review under that provision. Thus, to be clear, section 257 previously
included subsection (c), which directed the Commission to submit a
triennial report to Congress on the market entry barriers for
entrepreneurs and other small businesses. The RAY BAUM's Act now
requires the Commission to submit a biennial report that is similar to
the report previously required under section 257(c). In carrying out
section 257(a), the Commission ``shall seek to promote the policies and
purposes of this chapter favoring diversity of media voices, vigorous
economic competition, technological advancement, and promotion of the
public interest, convenience, and necessity.''
594. We continue to find that section 13(d)(3) is properly
understood as not only imposing a current obligation to ``consider
market barriers for entrepreneurs and other small businesses in the
communications marketplace in accordance with the national policy under
section 257(b),'' but also imposing an ongoing obligation to do so. In
this regard, section 13(a) directs the Commission to submit a report to
Congress, ``[i]n the last quarter of every even-numbered year, on the
state of the communications marketplace.'' The report must assess the
state of competition in the communications marketplace, including
competition to deliver voice, video, audio, and data services among
providers of telecommunications, providers of commercial mobile service
(as defined in section 332), multichannel video programming
distributors (as defined in section 522), broadcast stations, providers
of satellite communications, internet service providers, and other
providers of communications services. The report must ``assess whether
laws, regulations, regulatory practices (whether those of the Federal
Government, States, political subdivisions of States, Indian tribes or
tribal organizations (as such terms are defined in section 5304 of
title 25), or foreign governments), or demonstrated marketplace
practices pose a barrier to competitive entry into the communications
marketplace or to the competitive expansion of existing providers of
communications services.'' Section 163(d)(3) further directs that,
``[i]n assessing the state of competition . . . and regulatory barriers
. . ., the Commission shall consider market entry barriers for
entrepreneurs and other small businesses in the communications
marketplace in accordance with the national policy under section 257(b)
of this title.''
[[Page 45527]]
2. Section 706 of the 1996 Act
595. We adopt our proposal to return to the Commission's prior
judicially affirmed interpretation of section 706 of the 1996 Act as
granting the Commission regulatory authority. We do so in light of the
considerations that persuaded the Commission to adopt such
interpretations in the past, and that persuaded courts to affirm those
interpretations. Consistent with the prior approach, we rely on section
706(a) as part of our authority for the adoption of open internet
rules. We also rely on section 706(b) to the extent that the Commission
concludes under section 706(a) that advanced telecommunications
capability is not being deployed to all Americans in a reasonably
timely fashion. The Commission's most recent section 706 report issued
last month concluded that advanced telecommunications capability was
not being deployed to all Americans in a reasonable and timely fashion.
The record reflects support for returning to the Commission's prior
interpretation of section 706(a) and (b) as grants of regulatory
authority from a range of commenters, including State and local groups,
public interest groups, think tanks, academia, and others. These
commenters generally argue that interpreting section 706 as a grant of
regulatory authority provides a better reading of the statute than the
interpretation adopted in the RIF Order, is supported by judicial and
Commission precedent, is supported by legislative history, and will
survive judicial scrutiny even with limited deference. The record also
reflects commenters who oppose returning to interpreting section 706 as
a grant of regulatory authority, for reasons such as the provision
should be viewed as exhortative rather than as a directive, the
provision is not supported by statutory interpretation, and the
provision is not supported by clear congressional intent. For the
reasons discussed by the Commission in the 2010 Open Internet Order and
the 2015 Open Internet Order, the D.C. Circuit in Verizon and USTA, the
Tenth Circuit in In re FCC, and in the Order, we disagree. We also
disagree with other commenters' claims that the Commission could adopt
rules using section 706 and Title I authority.
596. The RIF Order principally grounded its rationale for changing
the interpretation of section 706 on its view that section 706 was
better interpreted as hortatory. As explained below, upon further
analysis, we conclude that interpreting section 706(a) and (b) as
grants of regulatory authority represents the better reading of the
statute and likewise provides a basis for us to change our
interpretation.
597. For one, we have ample support for relying on specific
rationales for interpreting section 706(a) and (b) of the 1996 Act as
grants of regulatory authority. In Comcast, the D.C. Circuit identified
section 706(a) as a provision that ``at least arguably . . .
delegate[s] regulatory authority to the Commission,'' and in fact
``contain[s] a direct mandate--the Commission `shall encourage.' '' In
the 2010 Open Internet Order, the Commission explained why section
706(a) and (b) each represent a grant of regulatory authority to the
Commission after considering the statutory text, regulatory and
judicial precedent, and legislative history, and rejecting objections
to that interpretation. In particular, the Commission explained that
Congress, in directing the Commission to ``encourage the deployment on
a reasonable and timely basis of advanced telecommunications capability
to all Americans . . . by utilizing . . . price cap regulation,
regulatory forbearance, measures that promote competition in the local
telecommunications market, or other regulating methods that remove
barriers to infrastructure investment,'' necessarily vested the
Commission with the statutory authority to carry out those acts.
Indeed, the relevant Senate Report explained that the provisions of
Section 706 are ``intended to ensure that one of the primary objectives
of the [1996 Act]--to accelerate deployment of advanced
telecommunications capability--is achieved,'' and stressed that these
provisions are ``a necessary fail-safe'' to guarantee that Congress's
objective is reached. As the Commission explained, it would be odd
indeed to characterize Section 706(a) as a ``fail-safe'' that
``ensures'' the Commission's ability to promote advanced services if it
conferred no actual authority. As with the 2010 Open Internet Order,
our reading, Section 706(a) authorizes the Commission to address
practices, such as blocking VoIP communications, degrading or raising
the cost of online video, or denying end users material information
about their broadband service, that have the potential to stifle
overall investment in internet infrastructure and limit competition in
telecommunications markets.
598. Consistent with what the Commission went on to explain,
section 706(a) accordingly provides the Commission with a specific
delegation of legislative authority to promote the deployment of
advanced services, including by means of the open internet rules
adopted in the 2010 Open Internet Order. As the Commission explained in
2010 Open Internet Order, our understanding of section 706(a) is also
harmonious with other statutory provisions that confer a broad mandate
on the Commission. For example, section 706(a)'s directive to
``encourage the deployment [of advanced telecommunications capability]
on a reasonable and timely basis'' using the methods specified in the
statute is no broader than other provisions of the Commission's
authorizing statutes that command the agency to ensure ``just'' and
``reasonable'' rates and practices, or to regulate services in the
``public interest.'' Our section 706(a) authority is also generally
consistent with--though narrower than--the understanding of ancillary
jurisdiction under which this Commission operated for decades before
the Comcast decision. The similarities between the two in fact explain
why the Commission had not, before the 2010 Open Internet Order, had
occasion to describe section 706(a) in this way. That is because in the
particular proceedings prior to Comcast, providing such understanding
of section 706(a) that we articulate in the 2010 Open Internet Order
would not meaningfully have increased the authority that we understood
the Commission already possessed.
599. In addition, in the 2015 Open Internet Order, the Commission
built on the foundation of its explanations in the 2010 Open Internet
Order, rejecting various objections to the interpretation of section
706(a) and (b) as grants of regulatory authority and elaborating on the
Commission's authority to adopt rules implementing that provision, and
to enforce those rules.
600. The Commission concluded in the 2015 Open Internet Order and
2010 Open Internet Order that open internet rules were a reasonable way
to implement Commission authority under section 706(a) and (b), and the
nexus between open internet rules and the directives in section 706(a)
and (b) was affirmed by the D.C. Circuit in Verizon. For those same
reasons, we find that the open internet rules we adopt here are a
reasonable exercise of section 706(a) authority. As the Commission
recently concluded that advanced telecommunications capability is not
being deployed to all Americans in a reasonable and timely fashion
under section 706(b), the open internet rules we adopt here are a
reasonable exercise of authority under that provision as well.
601. To be clear, we interpret section 706(a) and (b) as
independent, complementary sources of affirmative Commission authority
for the rules
[[Page 45528]]
adopted in the Order. Our interpretation of section 706(a) as a grant
of express authority is in no way dependent upon our findings in the
section 706(b) inquiry. Thus, even if the Commission's inquiry were to
have resulted in a positive conclusion such that our section 706(b)
authority were not triggered, this would not eliminate the Commission's
authority to take actions to encourage broadband deployment under
section 706(a). And Commission actions adopted pursuant to a negative
section 706(b) determination would not simply be swept away by a future
positive section 706(b) finding, and subsequently render those actions
unnecessary or unauthorized without any further Commission process.
Throwing away such measures because they are working would be like
``throwing away your umbrella in a rainstorm because you are not
getting wet.'' Even if that were not the case, independent section
706(a) authority would remain. We mention, however, two legal
requirements that appear relevant. First, section 408 of the Act
mandates that ``all'' Commission orders (other than orders for the
payment of money) ``shall continue in force for the period of time
specified in the order or until the Commission or a court of competent
jurisdiction issues a superseding order.'' Second, the Commission has a
``continuing obligation to practice reasoned decisionmaking'' that
includes revisiting prior decisions to the extent warranted. We are
aware of no reason why these requirements would not apply in this
context.
602. The Commission takes such measures precisely to achieve
section 706(b)'s goal of accelerating deployment.
603. Our return to an interpretation of section 706 of the 1996 Act
as granting the Commission regulatory authority and, in turn, as a
basis for open internet rules is also propelled by the realization that
BIAS has become even more essential to consumers for work, health,
education, community, and everyday life. While internet access has long
been important to daily life, the COVID-19 pandemic and the subsequent
rapid shift of work, education, and health care online has demonstrated
how essential BIAS connections are for consumers' participation in our
society and economy. In light of this reality, we believe that
returning to the Commission's prior interpretation of section 706 is
necessary and timely given the critical importance of ensuring the
Commission's authority to fulfill policy objectives and
responsibilities to protect this vital service.
604. We find that the Commission has the legal authority to return
to the prior, judicially affirmed, pre-RIF Order interpretations of
section 706(a) and (b) of the 1996 Act. The APA's requirement of
reasoned decision-making ordinarily demands that an agency acknowledge
and explain the reasons for a changed interpretation. But so long as an
agency ``adequately explains the reasons for a reversal of policy,''
its new interpretation of a statute cannot be rejected simply because
it is new. In Fox, the Supreme Court emphasized that, although an
agency must acknowledge that it is changing course when it adopts a new
construction of an ambiguous statutory provision, ``it need not
demonstrate to a court's satisfaction that the reasons for the new
policy are better than the reasons for the old one . . . .'' Rather, it
is sufficient that ``the new policy is permissible under the statute,
that there are good reasons for it, and that the agency believes it to
be better, which the conscious change of course adequately indicates.''
We have so done here.
605. We are unpersuaded by arguments in the RIF Order that section
706(a) and (b) of the 1996 Act are better interpreted as hortatory, and
not as grants of regulatory authority. For the reasons set forth below,
we find there are deficiencies in the RIF Order's analysis that lead us
to conclude that the RIF Order's reasoning, which has already been
rejected by a court, is misguided and misplaced, and once again should
be rejected. We therefore return to the Commission's prior judicially
affirmed interpretation of section 706(a) and (b) of the 1996 Act as
grants of regulatory authority and conclude that it is a better reading
of the statute.
606. First, according to the RIF Order's reasoning, the language in
section 706(a) and (b) should be viewed as statutory surplusage that
neither grants nor restrains Commission authority, but merely expresses
the sense of Congress that advanced telecommunications are important.
The D.C. Circuit has already twice affirmatively rejected this line of
reasoning. In Verizon, the court affirmed as reasonable the
Commission's interpretation that section 706(a) and (b) are grants of
regulatory authority. The court held that section 706(a) ``vest[s] the
Commission with actual authority to utilize the regulatory methods set
forth in the statute to ``encourage the development of advanced
telecommunications capability.'' This authority, Congress explained, is
a ``fail safe'' to enable the Commission to achieve the goal of
permitting all Americans to send and receive information in all forms--
voice, data, graphics, and video--over a high-speed, switched,
interactive broadband, transmission capability.'' And section 706(b)
imposes an affirmative duty on the Commission ``to conduct a regular
inquiry `concerning the availability of advanced telecommunications
capability.' '' And in the event that it determines that such
capability is not ``being deployed to all Americans in a reasonable and
timely fashion,'' the statute compels the Commission to ``take
immediate action to accelerate deployment of such capability by
removing barriers to infrastructure investment and by promoting
competition in the telecommunications market.'' In USTA, the court
likewise affirmed as reasonable the Commission's interpretations that
section 706(a) and (b) are grants of regulatory authority. Moreover,
although the Tenth Circuit failed to recognize that the Commission had,
in fact, interpreted section 706(a) as a grant of regulatory authority
in the 2010 Open Internet Order, it affirmed the Commission's reliance
on section 706(b) as a grant of regulatory authority.
607. Second, the RIF Order was too quick to dismiss the importance
of the term ``shall'' in section 706(a) (``shall encourage'') and (b)
(``shall take immediate action''), a term which describes a
particularly potent word in statutory construction that ``usually
connotes a requirement,'' and serves as a legislative mandate for
regulation. Although the RIF Order recognized that the term ``shall''
generally indicates a command that admits of no discretion, it gave
short shrift to the importance of its use in these statutory
provisions, and instead interpreted the provisions as exhortative. The
RIF Order reasoned that the Commission has other authority in the
Communications Act under which it can exercise the mandates in section
706(a) and (b), and thus there is no need to interpret these provisions
as directives, in spite of the significant contrary evidence. But the
D.C. Circuit explained in Verizon that section 706 ``does not limit the
Commission to using other regulatory authority already at its disposal,
but instead grants it the power necessary to fulfill the statute's
mandate.'' We believe that acceptance of the RIF Order's reasoning
would contravene the statute's clear language and structure and nullify
textually applicable provisions. Indeed, if such faulty reasoning were
allowed to stand, the term ``shall'' could be nullified in any other
textually applicable provision where there may be other sources of
[[Page 45529]]
authority under the Act, an outcome we reject.
608. Third, we also are unpersuaded by the RIF Order's argument
that if section 706(a) and (b) were interpreted as grants of regulatory
authority, it would enable the internet and information services to be
heavily regulated in a manner inconsistent with the policy goals
reflected in the Act. Although the RIF Order acknowledged that the
Commission's prior interpretation of section 706 was, by its own terms,
constrained in order to be consistent with the Act, it claimed that
such constraints did not adequately address its statutory concerns. In
the view of the RIF Order, seemingly the only outcomes of interpreting
section 706 as granting regulatory authority would be extreme results
where those constraints had little meaning and left the Commission with
essentially unbounded authority or were such severe limitations as to
render section 706 of little possible use. But as prior Commission and
judicial precedents explain, there are several limitations to section
706(a) authority, which makes these views unfounded. In Verizon, the
D.C. Circuit agreed with the Commission that while authority under
section 706 may be broad, it is not unbounded. Specifically, authority
under section 706(a) must fall within the scope of the Commission's
subject-matter jurisdiction over ``interstate and foreign commerce in
communications by wire and radio.'' Additionally, the Commission's
actions under section 706(a) must be designed to ``encourage the
deployment on a reasonable and timely basis of advanced
telecommunications capability to all Americans.'' Moreover, the court
in Verizon firmly concluded that the Commission's 2010 Open Internet
Order regulations fell within the scope of section 706. It explained
that the rules ``not only apply directly to broadband providers, the
precise entities to which section 706 authority to encourage broadband
deployment presumably extends, but also seek to promote the very goal
that Congress explicitly sought to promote.'' Further, the court
credited ``the Commission's prediction that the [2010] Open Internet
Order regulations will encourage broadband deployment.'' The same is
true of the open internet rules we adopt in the Order. Our regulations
again only apply to last-mile providers of BIAS--a service that is not
only within our subject-matter jurisdiction, but also expressly within
the terms of section 706. And, again, each of our rules is designed to
remove barriers in order to achieve the express purposes of section
706. We also find that our rules will provide additional benefits by
promoting competition in telecommunications markets, such as, for
example, by fostering competitive provision of VoIP and video services
and informing consumers' choices.
609. Fourth, we are also unpersuaded by the RIF Order's concerns
about our ability to enforce violations of requirements adopted under
section 706(a) and (b) of the 1996 Act. The rules we adopt in the Order
implement the provisions of the Communications Act and are thus are
covered by our Titles IV and V authorities to investigate and enforce
violations of these rules. With specific respect to section 706, in
Verizon, the D.C. Circuit suggested that section 706 was part of the
Communications Act of 1934. Under such a reading, rules adopted
pursuant to section 706 fall within our Title IV and V authorities. The
1996 Act incorporated the relevant statutory definitions in the Act,
which the Commission has broad authority to implement. The 1996 Act
also required the Commission to adopt rules or orders that turned on
the interpretation of those statutory definitions.
610. But even if this were not the case, we believe it reasonable
to interpret section 706 itself as a grant of authority to investigate
and enforce our rules. Moreover, to the extent that section 706 was not
viewed as part of the Communications Act, we have authority under
section 4(i) of the Communications Act to adopt rules implementing
section 706. Thus, even then the Commission's rules, insofar as they
are based on our substantive jurisdiction under section 706,
nonetheless would be issued under the Communications Act. ``[B]y its
terms our section 4(i) rulemaking authority is not limited just to the
adoption of rules pursuant to substantive jurisdiction under the
Communications Act, and the Verizon court cited as reasonable the
Commission's view that Congress, in placing upon the Commission the
obligation to carry out the purposes of section 706, `necessarily
invested the Commission with the statutory authority to carry out those
acts.' '' Under such a reading, rules adopted pursuant to section 706
fall within our Titles IV and V authorities. The Commission would also
have all of its standard rulemaking authority under sections 4(i),
201(b), and 303(r). Our enforcement authority was not explicitly
discussed in either the 2010 Open Internet Order or Verizon. The court
did cite as reasonable, however, the Commission's view that Congress,
in placing upon the Commission the obligation to carry out the purposes
of section 706, ``necessarily invested the Commission with the
statutory authority to carry out those acts.'' We believe it likewise
reasonable to conclude that, having provided the Commission with
affirmative legal authority to take regulatory measures to further
section 706's goals, Congress invested the Commission with the
authority to enforce those measures as needed to ensure those goals are
achieved. Courts have long recognized the Commission's authority to
interpret and implement the Communications Act of 1934. Both the 2015
Open Internet Order and the RIF Order recognized this authority.
3. Title III of the Act for Mobile Providers
611. As in the 2015 Open Internet Order, we find that the open
internet rules we adopt in the Order are further supported in the case
of mobile BIAS by our broad legal authority under Title III of the Act
to protect the public interest through spectrum licensing and
regulations, including sections 303 and 316 of the Act.
612. Section 303(b) directs the Commission, consistent with the
public interest, to ``[p]rescribe the nature of the service to be
rendered by each class of licensed stations and each station within any
class.'' The open internet rules we adopt in the Order prescribe the
nature of the service to be rendered by licensed entities providing
mobile BIAS. The rules we adopt in the Order specify the form this
service must take for those who seek licenses to offer it. In providing
such licensed service, BIAS providers must adhere to the rules we adopt
in the Order.
613. This authority is bolstered by at least two additional
provisions. First, as the D.C. Circuit has explained, section 303(r)
provides the Commission authority to ``make such rules and regulations
and prescribe such restrictions and conditions, not inconsistent with
law, as may be necessary to carry out the provisions of this chapter.''
Second, section 316 authorizes the Commission to adopt new conditions
on existing licenses if it determines that such action ``will promote
the public interest, convenience, and necessity.'' The Commission also
has ample authority to impose conditions to serve the public interest
in awarding licenses in the first instance. Moreover, this document's
rules do not make any fundamental changes to those licenses. Rather,
our rules are largely consistent with the current operation of the
internet and the current practices of mobile BIAS providers.
[[Page 45530]]
614. The RIF Order acknowledged that the Commission could rely on
Title III licensing authority to support conduct rules but declined to
follow the Commission's historical approach due to concerns about
disparate treatment of wireline and wireless internet service
providers. As discussed above, we classify BIAS as a Title II service
and mobile BIAS as commercial mobile service. We believe that our
reclassification avoids any inconsistent treatment between different
categories of BIAS providers that may have resulted under the RIF
Order's classification. Moreover, we recognize that the D.C. Circuit's
Mozilla decision includes a brief statement as part of its review of
the RIF Order's preemption decision stating that BIAS is not ``radio
transmission,'' so Title III does not apply. But the RIF Order did not
attempt to apply (or justify applying) Title III to BIAS, and the
Mozilla decision did not develop any reasoning in support of that
assertion. Rather, we read the Mozilla court's statement that ``BIAS is
not `radio transmission' '' as limited to the court's decision to
vacate the RIF Order's blanket preemption of State and local regulation
of BIAS. In particular, the D.C. Circuit found that the Commission
``fail[ed] to ground its sweeping Preemption Directive . . . in a
lawful source of statutory authority,'' and concluded that ``in any
area where the Commission lacks the authority to regulate, it equally
lacks the power to preempt state law.'' Given this backdrop, we do not
believe the court's statement should be read to call into question the
Commission's prior recognition that mobile BIAS falls within the scope
of Title III. Commenters did not address the court's statement
regarding radio transmission in the Mozilla decision or the
Commission's view that the court's statement does not call into
question our prior recognition that mobile BIAS falls within the scope
of Title III.
615. Finally, CTIA argues that the Act forbids applying Title II
common carrier regulations to BIAS, and in particular, to mobile BIAS.
Similarly, a broad coalition consisting of local groups and individuals
located throughout the U.S. urges the Commission to avoid reclassifying
any mobile data-only service, but if it does, it should maintain the
current regulatory classification under section 332(c)(2) as a non-
common-carrier private mobile service and thereafter exercise authority
over mobile data-only service under sections 301, 302, 304, 309, and
316 of the Act. For the reasons discussed above, we reject these
arguments and conclude that mobile BIAS is best viewed as a commercial
mobile service, or, in the alternative, the functional equivalent of
commercial mobile service, and therefore, not private mobile service.
G. Other Laws and Considerations
616. As the Commission did in the 2015 Open Internet Order, we make
clear that the open internet rules we adopt in the Order do not expand
or contract BIAS providers' rights or obligations with respect to other
laws or preclude them from responding to safety and security
considerations--including the needs of emergency communications and law
enforcement, public safety, and national security authorities--or
affect the ability of BIAS providers to make reasonable efforts to
address transfers of unlawful content and unlawful transfers of
content.
617. Emergency Communications and Safety and Security Authorities.
Consistent with our proposal in the 2023 Open Internet NPRM, and the
2010 and 2015 Open Internet Orders, we adopt a rule that acknowledges
the ability of BIAS providers to serve the needs of law enforcement and
the needs of emergency communications and public safety, national, and
homeland security authorities, which provides that nothing in the part
supersedes any obligation or authorization a provider of broadband
internet access service may have to address the needs of emergency
communications or law enforcement, public safety, or national security
authorities, consistent with or as permitted by applicable law, or
limits the provider's ability to do so.
618. We reiterate that the purpose of the safety and security
provision is first to ensure that open internet rules do not restrict
BIAS providers in addressing the needs of law enforcement authorities,
and second to ensure that BIAS providers do not use the safety and
security provision without the imprimatur of a law enforcement
authority, as a loophole to the rules. As the Commission has previously
explained, application of the safety and security rule should be tied
to invocation by relevant authorities rather than to a BIAS provider's
independent notion of the needs of law enforcement.
619. The record reflects no disagreement that the open internet
rules we adopt in the Order do not supersede any obligation a BIAS
provider may have--or limit its ability--to address the needs of
emergency communications or law enforcement, public safety, or homeland
or national security authorities (together, ``safety and security
authorities''). BIAS providers have obligations under statutes such as
CALEA, the Foreign Intelligence Surveillance Act, and the Electronic
Communications Privacy Act that could in some circumstances intersect
with open internet protections. Likewise, in connection with an
emergency, there may be Federal, state, tribal, and local public safety
entities, homeland security personnel, and other authorities that need
guaranteed or prioritized access to the internet in order to coordinate
disaster relief and other emergency response efforts, or for other
emergency communications.
620. Transfers of Unlawful Content and Unlawful Transfers of
Content. We also adopt our proposal to make clear that the open
internet rules protect only lawful content, and are not intended to
inhibit efforts by BIAS providers to address unlawful transfers of
content or transfers of unlawful content, to ensure that open internet
rules are not used as a shield to enable unlawful activity or to deter
prompt action against such activity. Specifically, we find that nothing
in the part prohibits reasonable efforts by a provider of broadband
internet access service to address copyright infringement or other
unlawful activity.
621. The record is generally supportive of our proposal to make
clear that the open internet rules protect only lawful content, and are
not intended to inhibit efforts by BIAS providers to address unlawful
transfer of content or transfers of unlawful content.
622. For example, as the Commission explained in the 2015 Open
Internet Order, the no-blocking rule should not be invoked to protect
copyright infringement, which has adverse consequences for the economy,
nor should it protect child pornography. We reiterate that our rules do
not alter copyright laws and are not intended to prohibit or discourage
voluntary practices undertaken to address or mitigate the occurrence of
copyright infringement. However, as in 2015, we note that we ``retain
the discretion to evaluate the reasonableness of broadband providers'
practices under this rule on a case-by-case basis.''
H. Cost-Benefit Analysis
623. In the 2023 Open Internet NPRM, we sought comment on the costs
and benefits of Title II reclassification of BIAS and the proposed open
internet rules. The record reflects a broad range of views on the
potential costs and benefits of both. We apply a cost-benefit framework
to evaluate the overall effect (net benefits or net costs) of
reclassifying BIAS as a Title II telecommunications service and the
open internet rules. While the record,
[[Page 45531]]
and indeed the nature of the benefits and costs under consideration, do
not allow us to quantify the magnitude of the effects of the key
decisions in the Order, we are able to reasonably assess their
directional impact, that is, whether the result is on-net beneficial or
costly. For example, it is difficult to quantify with precision the
benefits of a more vibrant and thriving internet ecosystem, or of
increased national security or public safety.
624. The primary benefits and costs attributable to the Order are
the changes in the economic welfare of consumers, BIAS providers, and
edge providers that would occur due to our actions. Our cost-benefit
analysis nets out transfers among these economic actors. We evaluate
the costs and benefits of reclassifying BIAS as a Title II
telecommunications service and of adopting our open internet rules
relative to the regulatory framework introduced by the RIF Order, but
adjust that baseline in light of changes since the Commission adopted
it. Therefore, we compare the expected costs and benefits of these
actions against the RIF Order framework of Title I classification of
BIAS, but account for the existence of State open internet
requirements, the statutorily required broadband label, and other
changed circumstances since the RIF Order. Relevant changes that have
occurred since the RIF Order include the national security environment
and the increased need for cybersecurity. We find that the benefits of
Title II reclassification and the proposed open internet rules outweigh
the costs.
1. Title II Reclassification
625. Fulfilling Key Public Interest Obligations and Objectives. As
discussed in detail above, our reclassification decision will ensure
the Commission can fulfill statutory obligations and important policy
objectives. BIAS providers function as gatekeepers for both their end-
user customers who access the internet, and for the edge providers,
transit providers, and CDNs that require reliable access to BIAS end-
user subscribers. The reclassification of BIAS and the rules we set
forth in the Order will ensure that the internet remains open and that
the virtuous cycle of edge innovation and broadband investment
continues unabated. Furthermore, we find our reclassification of BIAS
as a Title II service will have substantial additional benefits
enabling the Commission to defend national security, promote
cybersecurity, safeguard public safety, monitor network resiliency and
reliability, protect consumer privacy and data security, support
consumer access to BIAS, enable access to infrastructure, and improve
disability access. As explained in that section above, we conclude that
the RIF Order and RIF Remand Order did not fully consider, or gave too
little weight, to those benefits of the classification of BIAS as a
telecommunications service. Consequently, we reject those cost-benefit
analyses as predicated on a finding of too little benefit from a Title
II classification of BIAS. Although many of these policy benefits do
not readily lend themselves to quantification, they flow directly from
our reclassification of BIAS as a telecommunications service.
626. Effect on Investment. Commenters argue that one of the
greatest potential costs of reclassifying BIAS as a Title II
telecommunications service is that it will lower BIAS provider
investment incentives by reducing profits associated with the provision
of BIAS, as well as by increasing regulatory uncertainty. These
commenters claim that BIAS provider investment declined following
previous announcements of Title II reclassification, and they cite
studies that purport to demonstrate empirically that the application of
Title II to BIAS providers harms investment. As our detailed analysis
above shows, the concerns of these commenters are unfounded, as there
is little compelling evidence that applying Title II to BIAS has such a
measurable effect on investment. As we explain in that section above,
our assessment of the available evidence regarding the effect of
reclassification on investment leads to a different conclusion than
that in the RIF Order. Insofar as the RIF Order's and RIF Remand
Order's cost-benefit analyses were predicated on that different
understanding of the effect of reclassification on investment, we
reject them on that basis.
627. We first note that generic claims that regulation can be
harmful to investment and innovation do not persuade us in this
specific case. Regulation is just one of several factors that drive
investment and innovation in the broadband marketplace. Today, new
State and Federal support programs are a significant driver of BIAS
investment, and we expect Title II classification to allow BIAS-only
providers to face lower deployment costs, for example, because they
will be able to take advantage of our pole attachment rules under
section 224 or seek assistance from the Commission or courts under
section 253. In addition, the effects of regulations depend on the
nature of the regulations adopted and on market conditions, and they
may vary by market participant. As research and past experience show,
appropriate telecommunications regulation may be required to create
market conditions that are conducive to infrastructure investment, and
we conclude that this is true in the present case. The Cable Act of
1984 and its subsequent regulatory implementation by the Commission
also dramatically increased investment in the cable industry by
providing access to poles, ducts, conduits and public rights of way. In
terms of open internet regulations in particular, many studies in the
economics literature find that regulation can have positive effects on
both BIAS and edge provider investment incentives, and also find that
overall economic welfare may be higher.
628. Given the lack of clear direction provided by the theoretical
economics literature on how reclassification may affect BIAS
investment, commenters and our own analysis draw on the empirical
economics literature to evaluate the likely impact. In contrast to the
claims by commenters opposed to Title II reclassification, and the
authors of the studies they cite, our analysis persuades us that
reduced BIAS provider investment has not been causally linked to Title
II reclassification. We find that the studies in the record that claim
to establish this link are in some cases not applicable to the U.S.
context and in all cases suffer from methodological and data issues
that render their conclusions unreliable. With regard to the one
rigorous empirical study where the underlying data used by the author
were readily available, we find that, after correcting the data, which
had been revised and updated by the Bureau of Economic Analysis, and
fixing the methodological problems identified with the study, the
correct conclusion from the study is that there is no evidence that the
announcement of Title II reclassification had any statistically
significant effect on investment. We note that a second study by
Briglauer et al. was cited in the record but the underlying data for
this study were not available to us in our analysis. This study was
heavily relied upon by the RIF Order to reach a conclusion that Title
II reclassification is harmful to investment, but after these
corrections, this study supports our conclusion that there is no
empirical evidence in the record that Title II reclassification would
have any significant negative impact on broadband investment. We
therefore give little weight to these claims and view these claimed
costs as being
[[Page 45532]]
relatively limited in our cost-benefit analysis.
629. Regulatory Compliance Costs. Commenters separately argue that
Title II classification will result in higher regulatory compliance
costs compared to Title I classification, and that increased compliance
costs will disproportionately impact small BIAS providers that lack the
resources to handle the new compliance obligations. Although no
commenter provided quantitative estimates of the magnitude of these
potential compliance costs, we acknowledge that reclassifying BIAS as a
Title II telecommunications service may lead to some increase in
compliance costs. In our predictive judgment, and based on qualitative
analysis, however, we believe that these compliance costs are likely to
be small and are outweighed by the benefits of reclassification that
have been identified in our analysis.
630. We first note that any direct increase in compliance costs
from the regulatory changes adopted in the Order appears modest, and to
the extent we adopt any new rules governing BIAS in the future, we will
assess incremental compliance costs, if any, at that time as part of a
cost-benefit analysis. We further note that we have taken several steps
to reduce compliance burdens, especially for BIAS providers with
100,000 or fewer subscribers. In the cases where we do apply a Title II
provision to BIAS, we attempt to minimize compliance costs in the
application of the provision. For example, we grant blanket section 214
authority for the provision of BIAS to any entity currently providing
or seeking to provide BIAS--except those specifically identified
entities whose application for international section 214 authority was
previously denied or whose domestic and international section 214
authority was previously revoked and their current or future affiliates
and subsidiaries. Similarly, we waive the rules implementing section
222 to the extent such rules are applicable to BIAS as a
telecommunications service and any future application of rules will be
undertaken only after seeking public comment and considering the costs
of such rules. In all cases where applying a provision may increase
regulatory compliance costs, we have been careful to apply the
provisions of Title II to BIAS providers only in a manner in which the
expected benefits exceed expected costs. For example, we do not apply
sections 201 and 202 in their entirety because we conclude that the
costs of applying the provisions to impose ex ante or ex post rate
regulation on BIAS would exceed the benefits. Finally, the Title II
provisions that assist BIAS network deployment, including sections 224
and 253 (in addition to section 332), do not impose affirmative
obligations or compliance costs on BIAS providers. Rather, they simply
give BIAS providers new rights to seek assistance from the Commission
and/or courts, if they find that such assistance is on-net beneficial.
For example, a BIAS provider seeking pole access under section 224
would only do so if it were to its benefit. Similarly, a BIAS provider
would only seek Commission or court intervention under section 253 if
it were to its benefit.
631. The adoption of bright-line rules should also generally lower
overall compliance costs because they provide greater certainty to
market participants in regard to conduct that would likely result in an
enforcement action relative to the current regulatory framework
established by the RIF Order in which there is uncertainty as to which
conduct would be deemed to be harmful to edge providers or the open
internet and such conduct is subject to ex post, case-by-case
enforcement by antitrust or consumer protection authorities, or by
states that have passed open internet rules. The RIF Order framework
could therefore lead to lengthy enforcement actions and ultimately
higher compliance costs for BIAS providers as they are required to
determine through a trial-and-error process whether actions that would
violate the bright-line rules we adopt would be subject to enforcement
at the State or Federal level. In our judgment, establishing bright-
line Federal rules and enforcing those rules through a single expert
agency will achieve timelier and more consistent outcomes and reduce
the costs of uncertainty for all interest holders, and thus yield
significant public interest benefits. As noted above, our approach to
preemption also provides regulatory certainty insofar as it is clear
that the Commission, versus another Federal agency, will address, and
as needed preempt, on a case-by-case basis, State or local laws that
unduly frustrate or interfere with interstate communications.
632. ``Regulatory Creep.'' The last broad set of potential costs
that some commenters raise with respect to reclassification of BIAS as
a Title II telecommunications service pertain to ``regulatory creep.''
Although we forbear from applying Title II rate regulation provisions
to BIAS, some commenters express concern that the Commission will adopt
future rate regulation. We are not persuaded by these unsupported
assertions. We have carefully tailored application of all Title II
provisions to current broadband market conditions and avoided any
unnecessary regulations. Moreover, decades of Commission precedent
suggest that, in contrast to regulatory creep, the Commission has
tended to deregulate over time and to forbear from additional statutory
provisions and Commission rules. For example, the Commission in 1980
streamlined the regulation of non-dominant interexchange carriers by
eliminating ex ante rate regulation and streamlining existing section
214 requirements. And after Congress gave the Commission forbearance
authority under the 1996 Act, the Commission has forborne from dozens
of statutory provisions and Commission rules, where it found that
enforcement was not necessary to preserve ``just and reasonable'' terms
of service, to protect consumers, or to serve the public interest. The
Commission's forbearance decisions include eliminating tariff-filing
requirements, the ending of certain Automated Reporting Management
Information System (ARMIS) reporting requirements, and streamlining the
regulation of business data services. We see no reason the Commission
would depart from this general tendency to remove regulations when they
are no longer required due to changed circumstances. Finally, we note
that any changes to this framework or future rules the Commission
considers adopting under the Title II framework would be subject to
notice and comment and an analysis of the record, including any
purported costs, prior to adoption.
2. Bright-Line Rules
633. No-Blocking and No-Throttling Rules. While larger BIAS
providers have repeatedly assured their customers and publicly
advertised that they will not block access to legal content or engage
in throttling, not all BIAS providers have made such commitments.
Moreover, there are no assurances that providers will continue to make
or adhere to such commitments in the future, and the framework
established in the RIF Order allows BIAS providers to engage in such
activities as long as they disclose these practices to consumers. Given
that BIAS providers have incentives and the ability to engage in
blocking and throttling, our rules against this conduct protect free
expression online, reduce uncertainty for edge providers when
developing new services and applications, and provide necessary
foundations for preventing anticompetitive or discriminatory conduct
that harms edge providers and the open internet. Even if, in the
absence of rules, BIAS providers
[[Page 45533]]
generally would not block or throttle the edge services offered today,
our bright-line rules will reduce uncertainty for, and protect,
innovators seeking to offer new edge services, particularly if those
new services would compete with services that BIAS providers offer now
or will offer in the future. If investors fear future blocking or
throttling could be forthcoming despite current BIAS provider
commitments, such investments in new edge services may not be
undertaken. At the same time, the no-blocking and no-throttling rules,
because they are clear bright-line rules, should deter such conduct, or
to the extent such conduct does occur, should enable the Commission to
aggressively respond. Thus, we conclude that these rules will create
substantial economic value for edge providers and consumers, and for
the economy broadly. We note that even the RIF Order acknowledged that
``the costs of [banning blocking and throttling] are likely small,''
though it went on to State that the rule ``may create some compliance
costs.'' We agree that the costs of banning blocking and throttling are
likely to be small and further conclude that any compliance costs are
also likely small, particularly for those BIAS providers that have
committed to refrain from--and intend to continue refraining from--such
conduct. We part ways with the RIF Order insofar as it also concluded
that the benefits of those rules also are likely to be small based on
the availability of ``antitrust and consumer protection law, coupled
with consumer expectations and ISP incentives.'' As we discuss above,
by contrast, we find antitrust and consumer protection laws to be
insufficient to guard the open internet. We also conclude that the
marketplace alone is not sufficient to guard against harmful blocking
and throttling of internet traffic. Consequently, in contrast to the
RIF Order, we not only find the costs of our rules banning blocking and
throttling to be low, but we also conclude that these rules provide
meaningful benefits that more than outweigh those limited costs.
634. No Paid or Affiliated Prioritization. As discussed above, we
find that, absent regulation, BIAS providers may use paid and
affiliated prioritization in ways that harm edge providers and the open
internet. In particular, they could have the incentive and ability to
use paid or affiliated prioritization to raise the costs of edge
providers that compete with their vertically integrated edge affiliates
or with edge providers with whom they have contractual arrangements.
Moreover, if they can profitably charge edge providers for prioritized
access, BIAS providers may have an incentive to strategically degrade,
or decline to maintain or increase, the quality of service to non-
prioritized uses and users in order to raise the profits from selling
priority access. We further find that adopting a bright-line rule
prohibiting paid and affiliated prioritization has the advantage of
relieving small edge providers, innovators, and consumers of the burden
of detecting and challenging cases of socially harmful paid
prioritization.
635. The RIF Order's cost-benefit analysis concluded that a ban on
paid prioritization has a net negative effect on economic welfare. We
find that this conclusion was the result of the RIF Order heavily
discounting the benefits of banning paid prioritization identified
above and substantially overstating the costs. On the cost side, the
RIF Order first contends that ``the ban on paid prioritization has
created uncertainty and reduced ISP investment,'' but, as we have
demonstrated, claims regarding the 2015 Open Internet Order's allegedly
detrimental effect on investment were unsupported. The RIF Order
analysis further states ``that the ban [on paid prioritization] is
likely to prevent certain types of innovative applications from being
developed or adopted.'' We disagree with this statement for two
reasons. First, the rules adopted in the Order do not prohibit BIAS
providers from developing innovations that require quality of service
differentiation that are compatible with the open internet rules.
Second, while we recognize that there may also be positive use cases of
paid prioritization and some costs associated with a ban on such
practices, we find that such positive use cases may be addressed
through the waiver rule we adopt. Consequently, the RIF Order's claim
that there would be high costs in the form of forgone investment and
innovation cannot be sustained. Thus, we find the benefits of adopting
a bright-line rule prohibiting paid prioritization exceed its costs.
3. General Conduct Rule
636. We also find that the expected benefits of the general conduct
standard we adopt will exceed the expected costs. We find, as the
Commission found in 2015, that the Commission needs a backstop
mechanism to respond to attempts by BIAS providers to wield their
gatekeeper power in ways that do not violate the bright-line rules, but
nevertheless may compromise the open internet. We acknowledge that
several commenters raise concerns about possible regulatory uncertainty
created by the general conduct rule and its potential negative effects
on investment and innovation. To the extent that these commenters are
addressing the costs and benefits of our decision, we find that these
concerns should be reduced as a result of our providing a list of
factors that we will consider in our analysis and our creation of an
advisory opinion process. Indeed, in upholding the 2015 Open Internet
Order's general conduct rule, the D.C. Circuit cited with approval to
``the Commission's articulation of the Rule's objectives and the
specification of factors that will inform its application,'' and
emphasized that the Commission ``also included a description of how
each factor will be interpreted and applied'' with examples
``specifically identif[ying] the kind of conduct that would violate the
Rule.'' In this context, the court explained, ``[t]he flexible approach
adopted by the General Conduct Rule aims to address that concern [of
over-specificity leading to loopholes] in a field in which `specific
regulations cannot begin to cover all of the infinite variety of
conditions.' '' Exercising our predictive judgment, we find that the
general conduct rule should not impose significant ex ante compliance
costs on BIAS providers, but it should enable the Commission on a case-
by-case basis to address conduct that is not covered by the bright-line
rules, but that nevertheless harms consumers, edge providers, and the
open internet. Creating a flexible general conduct rule allows more
agile Commission responses to developments that might harm the open
internet, and should spur innovation experiments and experiential
learning by providing guidance on the types of actions that are likely
to harm the open internet.
637. We recognize that this conclusion differs substantially from
the RIF Order, which found that the costs of the general conduct rule
exceed the benefits. We find that the Commission's analysis in the RIF
Order significantly understated the benefits of the general conduct
rule and overstated costs. The RIF Order analysis asserts that the
benefits of the general conduct rule are nearly zero because the
consumer protection and antitrust laws provide adequate protections and
because examples of harmful conduct are rare. We disagree with both
premises as we have shown that BIAS providers have the incentive and
ability to harm edge providers and have provided examples of when such
conduct has occurred. Furthermore, we find that existing antitrust and
consumer protection enforcement are insufficient to protect
[[Page 45534]]
consumers and edge providers from BIAS provider conduct that may harm
the open internet. In addition, the primary costs associated with the
conduct rule that the RIF Order identified were that it would reduce
investment, and we have shown that the evidence the RIF Order presented
as the basis for these concerns is unreliable. We conclude that the
general conduct rule is a necessary component of a forward-looking
regulatory framework that will provide both greater flexibility for the
Commission to address new issues as they arise and greater certainty to
BIAS providers in terms of the factors that will be considered when
assessing whether new practices will be likely to harm the open
internet.
4. Transparency Rule
638. In evaluating the potential costs and benefits of the
transparency rule we adopt, we need to compare it to the status quo. As
discussed above, as part of the IIJA, Congress directed the Commission
to promulgate rules for a broadband label to be displayed at the point
of sale by BIAS providers. The Broadband Label Order responded to this
Congressional directive and reintroduced many of the transparency
requirements eliminated in the RIF Order as required by the IIJA.
Therefore, the baseline transparency framework against which costs and
benefits are compared has changed significantly since the cost-benefit
analysis performed in the RIF Order. The transparency rules established
in the Order represent only small, incremental changes relative to the
prevailing statutorily required regulations. The most important
incremental changes relative to this new baseline is our adoption of
the direct customer disclosure requirement and our re-adoption of the
2015 enhancements to the performance characteristics disclosure
requirements. However, as we explain above, given that such performance
characteristic information is widely commercially available and large
BIAS providers already have direct notification capabilities in their
networks, and that we provide a temporary exemption for BIAS providers
with 100,000 or fewer subscribers, the current change in incremental
costs of adopting this rule are small. Furthermore, adopting these
changes will provide consumer benefits that exceed these small costs by
enabling consumers to select the appropriate BIAS that meets their
needs and by ensuring that the consumer notification capabilities that
are already in place are consistently providing consumers with
sufficient information and time to consider adjusting their usage to
avoid their BIAS provider from applying a network management practice
that could result in additional unwanted charges or other adverse
effects.
5. Preemption
639. As discussed above, we preempt State or local measures that
``interfere or are incompatible with the federal regulatory framework
we establish today.'' Further, we will proceed on a case-by-case basis
to consider challenged measures ``in light of the fact specific nature
of particular preemption inquiries.'' We find that, under this standard
and approach, the Commission can preempt incompatible State and local
regulations, which we predict will reduce the costs on BIAS providers
caused by inconsistent State and local regulations and reduce
regulatory uncertainty. At the same time, this standard recognizes and
accommodates the ``concurrent regulatory authority [of states] over
communications networks.'' This stands in contrast to the situation
under the RIF Order where the D.C. Circuit invalidated the RIF Order's
attempt at preemption, thereby allowing for the emergence of
inconsistent State laws, which could increase compliance costs.
Consequently, we find that the benefits of the approach we adopt here
will exceed the costs.
IV. Constitutional Considerations
A. First Amendment
1. Free Speech Rights
640. We believe that the rules we adopt in the Order fully comport
with the First Amendment and do not unlawfully infringe any free speech
rights, contrary to the few commenters who suggest otherwise. That is
so for two reasons. First, when BIAS providers are carrying their
users' communications, they are not themselves acting as speakers or
engaged in any expressive activity subject to the First Amendment, but
instead are acting as mere conduits for the speech of others.
Alternatively, even if BIAS providers were treated as speakers
themselves when carrying their customers' communications, the rules we
adopt in the Order withstand the applicable intermediate standard of
scrutiny because they are tailored to serve important governmental
interests without unduly burdening speech. We note that most of the
comments filed by BIAS providers and their trade associations in this
proceeding have not raised or joined these First Amendment arguments.
641. The Supreme Court has rejected similar arguments that private
parties have a freestanding First Amendment right to refuse to carry or
allow third-party speech when it does not interfere with the private
party's own ability to speak. In PruneYard Shopping Center v. Robins,
the Court rejected a shopping mall's First Amendment challenge to a
State law requiring it to allow members of the public to distribute
pamphlets on the mall's property. The Court explained that allowing
others to distribute their messages would not impair the mall owner's
right to free expression because ``[t]he views expressed by members of
the public'' in a forum open to the public ``will not likely be
identified with those of the owner,'' and because the owner always
``can expressly disavow any connection with the message . . . and could
explain that the persons are communicating their own messages by virtue
of [the] state law.'' Similarly, in Rumsfeld v. Forum for Academic &
Institutional Rights, Inc., the Court unanimously rejected several law
schools' First Amendment challenge to a law requiring them to permit
military recruiters access to school facilities, despite the schools'
ideological objections to the military's employment policies, as a
condition for Federal funding. The Court held that permitting access by
military recruiters would not violate the schools' First Amendment
rights because ``[n]othing about recruiting suggests that law schools
agree with any speech by recruiters, and nothing . . . restricts what
the law schools may say about the military policies.''
642. The rules we adopt in the Order do not abridge any speech or
expression by BIAS providers because, when a BIAS provider offers BIAS
as understood by consumers and as defined in the Order--that is, 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--the BIAS provider is acting
merely as a conduit for others' speech, not as a speaker itself. In
other words, when providing BIAS, BIAS providers ``merely facilitate
the transmission of the speech of others rather than engage in speech
in their own right.'' Consumers ``expect that they can obtain access to
all content available on the internet, without the editorial
intervention of their broadband provider.'' When BIAS providers deliver
content that has been requested by their customers, they are no
different from telephone companies or package
[[Page 45535]]
delivery services like FedEx, which have never been thought to be
engaging in their own expressive activity when merely carrying the
messages of others.
643. Unlike newspapers, websites, social media platforms, or even
cable operators, BIAS providers do not select, alter, arrange,
annotate, or contextualize the content that their users request or that
edge providers deliver in response. BIAS providers neither select which
information to present nor determine how it is presented. Consumers
understand and expect BIAS providers providing BIAS to transparently
transmit information to and from the applications and services of the
consumers' choosing, not their BIAS providers' choosing, without change
in form or content. Consumers do not understand a BIAS provider to be
selecting or compiling speech to present the BIAS provider's own
expressive offering. Unlike the editors of a newspaper, the curators of
a library or museum, or the managers of a theater, BIAS providers do
not select which speech to feature, nor do they arrange or compile the
speech they transmit into a new form of expression. BIAS providers
instead deliver the content that their users independently have chosen,
without engaging in any distinct expressive activity or communicating
any distinct message.
644. The record in this proceeding confirms this conclusion. In the
2023 Open Internet NPRM, we sought comment on ``whether or to what
extent ISPs engage in content moderation, curation, or otherwise limit
or exercise control over what third-party content their users are able
to access on the internet.'' We further observed that ``some social
media platforms and other edge providers purport to engage in various
forms of content moderation or editorial control'' and asked whether
there is ``any record of ISPs announcing and engaging in comparable
activity?'' In response, no BIAS provider has identified any evidence
of BIAS providers engaging or wishing to engage in any such practices,
nor has any other commenter. We find that silence telling. Despite our
asking, there is no evidence in the record that any BIAS provider
covered by our Order engages in any exercise of editorial control,
curation, or other expressive activity. And, we note, BIAS providers
have often relied on their status as mere conduits and their lack of
editorial control to obtain immunity from copyright violations and
other liability for material distributed over their networks.
645. We further agree with the D.C. Circuit that, in providing
BIAS, BIAS providers do not communicate any distinct or discernible
message of their own: ``The Supreme Court has explained that the First
Amendment comes `into play' only . . . when an `intent to convey a
particularized message [is] present, and in the surrounding
circumstances the likelihood [is] great that the message would be
understood by those who viewed it.' '' But a BIAS provider's delivery
of content requested by a user neither reflects an intent to convey any
particular message nor is likely to be perceived or understood by the
user as conveying the provider's message. ``[W]hen a subscriber uses
his or her broadband service to access internet content of her own
choosing, she does not understand the accessed content to reflect her
broadband provider's editorial judgment or viewpoint,'' and ``nothing
about affording indiscriminate access to internet content suggests that
the broadband provider agrees with the content an end user happens to
access.''
646. Similarly, we are not persuaded that a BIAS provider's
decision to block or throttle a given website or application would,
standing alone, constitute expressive or communicative conduct
implicating the First Amendment. Blocking or throttling internet
traffic is not inherently expressive: A customer ``may have no reason
to suppose that her inability to access a particular application, or
that the markedly slow speeds she confronts when attempting to use it,
derives from her ISP's choices rather than from some deficiency in the
application. After all, if a subscriber encounters frustratingly slow
buffering of videos when attempting to use Netflix, why would she
naturally suspect the fault lies with her ISP rather than with Netflix
itself?'' Such conduct would not convey a message without some separate
``explanatory speech''--that is, the conduct would support a message
``only [if the BIAS provider] accompanied [its] conduct with speech
explaining it,'' such as a statement on its website or in its customer
bills explaining what content it restricts and why. And the Supreme
Court has explained that where conduct ``is not inherently expressive''
without separate explanatory speech, parties ``are not speaking'' when
they seek to engage in that conduct, so the conduct itself is not
protected by the First Amendment. BIAS providers may still express
their views on any internet content or other matters by stating those
views on their websites, in their customer bills, or elsewhere, and
that explanatory speech would receive full First Amendment protection--
but the separate act of blocking or throttling individual websites or
applications is not ``inherently expressive'' conduct and is not
protected by the First Amendment.
647. We find additional support for this view in the long history
of common carriage regulation in the United States. ``The common
carrier doctrine is a body of common law dating back long before our
Founding'' that ``vests [the government] with the power to impose
nondiscrimination obligations on communication and transportation
providers that hold themselves out to serve all members of the public
without individualized bargaining.'' The Supreme Court has frequently
distinguished common carriers from speakers, broadcasters, or editors
engaged in First Amendment activity. As the D.C. Circuit has observed,
common carriers ``have long been subject to nondiscrimination and equal
access obligations akin to'' those we adopt here ``without raising any
First Amendment question.'' This ``absence of any First Amendment
concern in the context of common carriers rests on the understanding
that such entities, insofar as they are subject to equal access
mandates, merely facilitate the transmission of the speech of others
rather than engage in speech in their own right.'' And ``[g]iven the
firm rooting of common carrier regulation in our Nation's
constitutional tradition, any interpretation of the First Amendment
that would make [it] facially unconstitutional would be highly
incongruous.''
648. To be sure, a different question would be presented if a BIAS
provider were to create and market a curated internet access product
that caters to some target audience and is clearly presented as such to
consumers. The rules we adopt in the Order apply only to offerings of
mass-market broadband service providing indiscriminate access to all or
substantially all internet endpoints, which consumers understand to
transparently transmit information to and from the internet
applications and services of their choosing without being curated or
edited by their BIAS provider. A curated internet product, if clearly
identified and marketed as such, would fall outside the scope of the
Order. And if a BIAS provider ``represent[s] itself to consumers as
affording them less of a `go wherever you'd like to go' service and
more of a `go where we'd like you to go' service,'' that might well be
an expressive offering receiving First Amendment protection. A BIAS
provider that wishes to provide such a curated service may freely do
so, so long as the BIAS provider ``make[s] adequately clear its
intention to provide
[[Page 45536]]
edited services of that kind, so as to avoid giving customers a
mistaken impression that they would enjoy indiscriminate access to all
content available on the internet[ ] without the editorial intervention
of their broadband provider.''
649. If a BIAS provider decides to offer a service that is clearly
identified as providing edited or curated internet access, consumers
would be free to decide whether to subscribe to that curated offering
based on its expressed editorial policies or viewpoint. No commenter
has offered evidence of any curated internet access product in the
marketplace, and we take no position on whether there is market demand
for such a product. But what BIAS providers may not do is provide
consumers what purports to be ordinary mass-market broadband service,
which consumers reasonably understand to provide indiscriminate access
to all or substantially all internet applications and services of their
choosing, and then engage in discriminatory practices that deny
customers the service they reasonably expect. Our rules thus simply
ensure that BIAS providers ``act in accordance with their customers'
legitimate expectations.'' We agree with the USTA decision that nothing
supports ``the counterintuitive notion that the First Amendment
entitles an ISP to engage in the kind of conduct barred by the net
neutrality rule--i.e., to hold itself out to potential customers as
offering them an unfiltered pathway to any web content of their own
choosing, but then, once they have subscribed, to turn around and limit
their access to certain web content based on the ISP's own commercial
preferences.''
650. Even if our rules were construed to somehow implicate BIAS
providers' First Amendment speech rights, they would still be
permissible as content-neutral regulations satisfying intermediate
scrutiny. The rules make no distinction based on content or viewpoint,
and a content-neutral regulation will be upheld if it ``furthers an
important or substantial government interest . . . unrelated to the
suppression of free expression'' and if it ``do[es] not burden
substantially more speech than is necessary.''
651. The rules we adopt in the Order serve multiple important--
indeed compelling--governmental interests. To begin, the rules
``[a]ssur[e] that the public has access to a multiplicity of
information sources'' by promoting ``the widest possible dissemination
of information from diverse and antagonistic sources.'' The Supreme
Court has declared this to be ``a governmental purpose of the highest
order,'' as it ``promotes values central to the First Amendment.'' The
rules we adopt in the Order also enable fair competition among edge
providers and ensure a level playing field for a wide variety of
speakers who might otherwise be disadvantaged, and the Supreme Court
has likewise deemed it ``undisputed'' that ``the Government has an
interest in eliminating restraints on fair competition . . . , even
when the individuals or entities subject to particular regulations are
engaged in expressive activity protected by the First Amendment.'' And
we find that our rules will substantially further the national interest
in ensuring that Americans have widespread access to a vibrant internet
on reasonable terms. Indeed, Congress has specifically directed the
Commission to ``encourage the deployment on a reasonable and timely
basis of advanced telecommunications capability to all Americans'' and
to ``promote the continued development of the internet and other
interactive computer services and other interactive media.''
652. None of these important governmental interests involves the
suppression of free expression or targets any speakers' messages based
on their content. For the reasons we have explained, moreover, we
firmly believe the actions we take in the Order further these
interests. And the rules we adopt are tailored to accomplish those
interests without placing an unnecessary burden on speech: BIAS
providers themselves remain free to speak on an unlimited range of
subjects, including by publicizing their views on their own websites or
by delivering their messages on inserts accompanying customers' monthly
bills; they simply may not unreasonably suppress the speech of others
in their capacity as conduits. And in any event, ``even on the doubtful
assumption that a narrower but still practicable . . . rule could be
drafted . . . content-neutral regulations are not `invalid simply
because there is some imaginable alternative that might be less
burdensome on speech.' ''
653. We disagree with CTIA's argument that under the Supreme
Court's Turner decisions, the government can satisfy intermediate First
Amendment scrutiny only by providing specific evidence that a given
BIAS provider possesses market power within its specific geographic
market. For one thing, Turner discussed three important interests: (1)
preserving free broadcast television, (2) promoting a multiplicity of
voices, and (3) promoting fair competition. For another, even as to
competition-related interests, the Court held that there is an
important Federal interest in ``preserving a multiplicity of broadcast
outlets regardless of whether the conduct that threatens it . . . rises
to the level of an antitrust violation.''
654. More generally, such a market power requirement would be at
odds with the ordinary operation of intermediate scrutiny under the
First Amendment, which has routinely been articulated as requiring ``an
important or substantial governmental interest . . . unrelated to the
suppression of free expression'' but never as requiring any specific
showing of market power. And it would be ahistorical for a
constitutional amendment adopted in 1791 to be predicated on modern-day
concepts of market power. To be sure, the Court in the Turner cases
found that cable companies had ``bottleneck'' control, but in doing so,
did not rely on granular empirical evidence or market-by-market
analysis, but instead largely on legislative findings, anecdotal
testimony, and general economic principles. In response to the
dissent's argument that a court must carefully and independently
examine the economic evidence, the Court acknowledged it was ultimately
upholding the challenged must-carry rules based on ``defer[ence] to the
reasonable judgment of a legislative body'' and opined that ``[t]he
level of detail in factfinding required by the dissent would be an
improper burden for courts to impose on the Legislative Branch.'' Our
explanation of ``how broadband providers' position in the market gives
them the economic power to restrict edge-provider traffic and charge
for the services they furnish edge providers''--that is, that a BIAS
provider possesses a terminating-access monopoly over edge providers'
ability to reach the BIAS provider's customer, sustained by barriers to
entry arising from switching costs and imperfect information, which
allows BIAS providers to act as gatekeepers--is at least as sufficient
to sustain the rules we adopt in the Order.
655. In sum, the rules we adopt in the Order do not
unconstitutionally abridge any speech or expression by BIAS providers.
As the record confirms, BIAS providers are merely conduits for others'
speech--not speakers themselves--when delivering content that has been
requested by their users. BIAS providers do not select, alter, arrange,
annotate, or contextualize the content that their users request or that
edge providers deliver in response, and there is no evidence in the
record that any BIAS providers covered by our order engage in any
exercise of editorial control, curation, or other expressive activity.
And even if BIAS providers
[[Page 45537]]
could somehow show that they were engaged in expression protected by
the First Amendment, the rules we adopt in the Order would still
satisfy constitutional requirements because they further important
governmental interests without any substantially greater burden on
speech than necessary to fulfill those interests.
2. Compelled Disclosure
656. CTIA--alone--briefly argues that our updated transparency rule
unconstitutionally compels speech. We disagree. The Supreme Court held
in Zauderer v. Office of Disciplinary Counsel of the Supreme Court of
Ohio (Zauderer) that requiring businesses to disclose ``purely factual
and uncontroversial information'' about their services is generally
permissible so long as the requirements are not ``unjustified'' or
``unduly burdensome.'' Our transparency rule complies with that
standard, just like the similar 2010, 2015, and 2018 transparency rules
embraced by multiple administrations and upheld through multiple court
challenges.
657. Here, as in Zauderer, our updated transparency rule is a
reasonable measure to prevent deception or consumer confusion, among
other things. The record of consumer complaints received by the
Commission reflects that consumers are often unaware of or confused by
practices that may result in slowed or impaired access to internet
applications and services, impose data caps, or otherwise fail to
provide the level of service reasonably expected at the advertised
rates. Our rules ensure that consumers purchasing BIAS receive what
they reasonably expect--that is, unimpeded access to all or
substantially all internet endpoints of their choosing. Courts have
recognized that BIAS providers have both the incentive and the ability
to engage in harmful conduct, often in ways that might not be readily
apparent to users; without enforceable transparency measures, consumers
might have no ability to know if their BIAS provider is engaging in
such practices.
658. The disclosures required by the updated transparency rule will
also provide essential information the Commission needs to fulfill its
statutory mandate to biennially report to Congress on the State of the
communications marketplace, including the State of competition in the
marketplace and any marketplace practices that pose a barrier to
competitive entry into the marketplace.
659. Other important governmental interests also strongly support
our updated transparency rule. The disclosures required by our
transparency rule protect competition and curb the incentive of BIAS
providers to interfere with, or disadvantage, third-party edge
providers' services by helping to ensure that such practices come to
light. More generally, accurate information about BIAS provider
practices encourages innovation and the development of high-quality
services, and in turn helps drive consumer demand and broadband
investment. Transparency and disclosure of BIAS provider practices
further ensure that edge providers have the information they need to
develop conforming applications and services. And transparency
ultimately helps ensure that consumers, edge providers, and all other
participants in the internet economy have confidence in the networks
and business practices of the BIAS providers they rely on for their
communications.
660. The need for our transparency rule is thus clear. And on the
other side of the ledger, CTIA makes no showing that requiring BIAS
providers to disclose ``purely factual and uncontroversial information
about the terms under which . . . services will be available'' would be
unduly burdensome.
661. Finally, even if Zauderer did not apply, we find that the
updated transparency rule would withstand scrutiny even under the
Central Hudson framework for substantially the same reasons, and for
the reasons given in the RIF Order. Recognizing that the First
Amendment ``affords a lesser protection to commercial speech than to
other constitutionally guaranteed expression,'' the government may
regulate commercial speech under Central Hudson to directly advance a
substantial government interest so long as the regulation is not more
extensive than necessary to fulfill that interest. We note that the
Central Hudson test is a peculiar fit here because it purports to
govern ``restrictions'' on speech, whereas disclosure requirements are
not restrictions.
662. As explained, our transparency rule serves multiple
substantial governmental interests in preventing deception and consumer
confusion, protecting competition, and encouraging innovation. The rule
also directly advances those interests. For consumers, ``subscribers
will be able to use the disclosed information to evaluate BIAS
offerings and determine which offering will best enable the use of the
applications and service they desire.'' ``In addition,'' these
disclosures ``help ensure accountability by ISPs and the potential for
quick remedies if problematic practices occur.'' Meanwhile, edge
providers who ``might be particularly sensitive to the manner in which
an ISP provides broadband internet access service potentially could
benefit from [this information] to better ensure the performance of
th[eir] internet applications and services'' and ``to evaluate how well
their offerings will perform.'' This transparency ``helps reduce
barriers to entry that otherwise could exist and encourages
entrepreneurs' and small businesses' ability to compete and develop and
advance innovating offerings in furtherance of our statutory
objectives.'' Moreover, disclosure of information to the Commission
will allow the Commission to publish reports and information for
consideration by consumers and edge providers, and ``will provide the
Commission the information it needs for the evaluation required by
[section 13] of the Act, enabling [the agency] to spur regulatory
action or seek legislative changes as needed.'' And the transparency
rule is appropriately tailored to these interests and no more extensive
than necessary to substantially fulfill them. The RIF Order cited
section 257 of the Act, which directed the Commission ``to report to
Congress on such marketplace barriers and how they have been addressed
by regulation or could be addressed by recommended statutory changes.''
Congress later repealed subsection (c) of section 257 and replaced it
with section 13, 47 U.S.C. 163, which imposes a substantially similar
reporting requirement.
B. Fifth Amendment Takings
663. As with the Commission's analysis under the Fifth Amendment's
Takings Clause in the 2015 Open Internet Order, we do not identify any
takings concerns with our actions here. Because our actions here merely
regulate the commercial relationship between BIAS providers and their
customers, they do not grant a right to physical occupation of the
broadband providers' property and thus do not constitute a per se
taking. Our actions also do not constitute a regulatory taking under
the relevant ad hoc balancing test because of the minimal effect on
BIAS providers' reasonable investment-backed expectations and the
nature of our actions, which are far removed from a traditional
physical invasion of property by the government. Nor are our actions
confiscatory, because our regulatory approach enables BIAS providers to
obtain a fair return on the network costs incurred in carrying traffic
to and from BIAS end users.
[[Page 45538]]
1. Per Se Taking
664. We reject claims that our actions would effect a per se taking
by granting third parties a right to physically occupy broadband
providers' facilities. The record does not reflect a concern that our
actions in the Order deprive BIAS providers of all economically
beneficial use of their property--nor would we find such a concern
merited. We therefore limit our discussion to the physical occupation
theory of per se takings. As a threshold matter, as the Commission
observed in the 2015 Open Internet Order, ``[c]ourts have repeatedly
declined to extend per se takings analysis to rules regulating the
transmission of communications traffic over a provider's facilities,''
and ``these decisions comport with the Supreme Court's perspective that
permanent physical occupation of property is a narrow category of
takings jurisprudence and is `easily identifiable' when it does
occur.'' The record here does not reveal precedent to the contrary. At
most, the record notes concurring or dissenting statements of judges or
justices--frequently merely tentatively noting and/or setting aside
possible takings questions--that predate most of the precedent on which
we rely. The record also references an argument made in cable must-
carry-related advocacy before the Commission seeking to rely on
precedent addressing the scenario where ``the Government has condemned
business property with the intention of carrying on the business, as
where public-utility property has been taken over for continued
operation by a governmental authority.'' But Kimball Laundry referenced
the government's takeover of an entire going concern, citing specific
examples involving water utilities. We are not persuaded that it
automatically follows from such precedent that any step short of that--
including regulation of the transmissions over a carrier's network--
must be understood as involving a physical intrusion that triggers a
per se taking analysis, particularly given the separate line of
precedent--not invoked here--that a per se taking occurs where a
property owner is denied all economically beneficial use of property.
Since our rules also do not impose requirements that otherwise could be
understood as requiring physical access to BIAS providers' property, we
are not persuaded that there is a government-required physical
occupation of BIAS providers' property here at all.
665. Independently, requirements like those restricting blocking
and throttling regulate BIAS providers' commercial relationship with
their end-user customers. Such requirements simply ensure that end
users can use the service that BIAS providers have offered them, and
that the end users have paid for, to obtain access to content,
applications, and services that end users have elected to receive. Note
that our rules do not apply to ``curated'' services and, where our
bright-line conduct rules apply, allow for reasonable network
management. The Commission explained in 2015 that where ``owners
voluntarily invite others onto their property--through contract or
otherwise--the courts will not find that a physical occupation has
occurred for purposes of constituting a per se taking.'' Where, as
here, BIAS providers have invited traffic on their networks through the
offering of BIAS, reasonable conduct regulations can be imposed on the
use of such properties without raising per se takings concerns. Thus,
to the extent that BIAS providers allow customers to transmit or
receive information over their networks, the imposition of reasonable
conduct rules on the provision of BIAS does not constitute a per se
taking.
666. Finally, even if the rules did impose a type of physical
occupation on the facilities of BIAS providers, such an imposition is
not an unconstitutional taking because BIAS providers are compensated
for the traffic passing over their networks through end-user revenues.
2. Regulatory Taking
667. Contrary to CTIA's claims, the actions we take in the Order
also do not constitute a regulatory taking under the ``essentially ad
hoc, factual inquiries'' into a variety of unweighted factors used by
courts. Those factors evaluate the ``economic impact of the
regulation,'' the degree of interference with ``investment-backed
expectations,'' and ``the character of the government action.''
``[E]ach of these [factors] focuses directly upon the severity of the
burden that government imposes upon private property rights.'' Because
our actions in the order are far removed from anything ``functionally
equivalent to the classic taking in which government directly
appropriates private property or ousts the owner from his domain,'' we
find no regulatory taking.
668. As relevant to the multi-factor takings analysis, we find the
economic impact of our actions on BIAS providers' property interests to
be limited. As we explain above, our classification of BIAS as a
telecommunications service is unlikely to be closely tied to BIAS
provider investment decisions, which instead are more likely driven by
broader economic conditions, technology changes, and BIAS providers'
general business development decisions. And in any case, although some
diminution in value of property is necessary, it is not itself
sufficient to constitute a taking.
669. We also find no meaningful interference with BIAS providers'
investment-based expectations. ``[T]o support a claim for a regulatory
taking, an investment-backed expectation must be reasonable,''
involving ``an objective, but fact-specific inquiry into what, under
all the circumstances, the [plaintiff] should have anticipated.'' As a
general matter, property owners cannot expect that existing legal
requirements regarding their property will remain entirely unchanged,
and the Commission explained at length in 2015 the history of
Commission jurisdiction and regulatory oversight over BIAS.
Additionally, persons operating in a regulated environment develop
fewer reliance interests in industries subject to comprehensive
regulation. Such considerations have even greater force in light of
intervening events. The regulatory approach adopted by the Commission
in the 2015 Open Internet Order was affirmed by the D.C. Circuit in the
face of legal challenges, and petitions for rehearing en banc and
certiorari were rejected by the D.C. Circuit and the Supreme Court,
respectively. We recognize that the Federal government, in opposing the
petitions for certiorari, pointed to the fact that the 2015 Open
Internet Order had been superseded by the RIF Order. But the issue is
not whether the regulatory approach in the 2015 Open Internet Order was
set in stone, but the reasonableness of any BIAS provider expectation
that such a regulatory approach was foreclosed. Irrespective of the
specific arguments made by the Federal government at that time, we see
the Supreme Court's denial of certiorari as at least one part of the
overall history relevant to evaluating BIAS providers' reasonable
expectations. By contrast, when the Commission sought to change course
in the RIF Order, the regulatory approach adopted there was vacated in
part and the classification decision was remanded. The Commission's
attempt to respond to the remand in the RIF Remand Order is subject to
petitions for reconsideration before the Commission and judicial review
in the D.C. Circuit, which have remained pending until our action in
the Order. We dispense with the petitions for reconsideration in this
item. That history subsequent to the 2015 Open Internet Order
demonstrates
[[Page 45539]]
that BIAS providers have even less basis than before to reasonably
expect that they would operate under a materially different regulatory
approach than what we adopt in the Order.
670. The character of our actions here also cuts against a finding
of a regulatory taking. In that regard, the Penn Central Court held
that a taking ``may more readily be found when the interference with
property can be characterized as a physical invasion by government . .
. than when interference arises from some public program adjusting the
benefits and burdens of economic life to promote the common good.'' As
we already have explained when rejecting a per se takings claim, our
regulatory approach to BIAS simply seeks to ensure that end users can
use the service that BIAS providers have offered them and that the end
users have paid for, rather than involving something that properly
could be understood as a physical invasion by the government.
671. Finally, because we do not regulate BIAS providers' ability to
set market rates for the broadband internet access services they offer
end users, there is no reason to believe that our actions will deprive
broadband providers of just compensation, thus fully addressing any
takings claim.
3. Confiscation
672. Commenters fare no better when they seek to invoke Fifth
Amendment precedent from the ratemaking context. As the Supreme Court
has held: ``The guiding principle [in the ratemaking context] has been
that the Constitution protects utilities from being limited to a charge
for their property serving the public which is so `unjust' as to be
confiscatory. . . . If the rate does not afford sufficient
compensation, the [government] has taken the use of utility property
without paying just compensation.'' Because we leave BIAS providers
free to set market rates for the broadband internet access services
they offer end-users, we see no evidence that our regulatory approach
``threaten[s] an [ISP's] financial integrity'' and is confiscatory.
673. We reject commenters' efforts to reach a contrary conclusion
by identifying a separate, service that BIAS providers may offer to
edge providers and focusing narrowly on what BIAS providers can charge
edge providers for such a service. As the Commission recognized in
2015, and we affirm in the Order, any such `` `edge service' is
secondary, and in support of, the promise made to the end user, and
broadband provider practices with respect to edge providers--including
terms and conditions for the transfer and delivery of traffic to (and
from) the BIAS subscriber--impact the broadband provider's provision of
the Title II broadband internet access service.'' Given the
relationship between BIAS end users and edge providers, it is the same
traffic delivery that is at issue whether viewed from the perspective
of the end user or the edge provider--the traffic demanded by end
users, for example, is the traffic that edge providers seek to deliver,
with the BIAS provider serving as the intermediary from the perspective
of either end of the exchange. From a takings standpoint, we thus
conclude that the relevant issue is whether a BIAS provider's use of
its network for the carriage of BIAS traffic is subject to confiscatory
Commission regulation. The Order leaves BIAS providers free to charge
market-based rates for the use of its facilities to carry the relevant
traffic. Indeed, the freedom to charge market-based end-user rates has
been--and remains--a consistent part of the Commission's overall
regulatory approach for BIAS whether under the framework of the 2015
Open Internet Order, the RIF Order, or the Order and is consistent with
the Commission strong commitment to not engage in rate regulation,
despite speculative claims from some commenters that the Commission may
someday decide to reverse course. We are persuaded that ``the end
result'' of the regulatory approach we adopt here allows for the
``attraction of capital and compensation for risk'' for a BIAS
provider's investment in its network used to carry BIAS traffic.
V. Order on Reconsideration
674. We now turn to the Petitions for Reconsideration of Common
Cause et al., INCOMPAS, Public Knowledge, and Santa Clara seeking
reconsideration of the RIF Remand Order. As described more fully below,
we grant these petitions to the extent consistent with and described in
the Order, and otherwise dismiss as moot all four petitions. In
particular, for the reasons discussed in the Order, we vacate the RIF
Remand Order and find that through the 2023 Open Internet NPRM and the
Order, we provide the relief petitioners have sought.
675. In Mozilla, the D.C. Circuit remanded the RIF Order for
further consideration, finding that the Commission failed to adequately
evaluate and address the potential negative effects of reclassifying
BIAS as a Title I information service on (1) protecting public safety;
(2) promoting infrastructure deployment by regulating pole attachment
rights; and (3) providing Lifeline support for BIAS to low-income
consumers through the Universal Service Fund. In response to the
court's remand, the Wireline Competition Bureau issued a Public Notice
(85 FR 12555 (Mar. 3, 2020)) seeking to refresh the record on these
issues. Subsequently, the Commission adopted the RIF Remand Order, in
which it reaffirmed its conclusions from the RIF Order and found that
reclassification of BIAS as a Title I information service would promote
public safety, facilitate broadband infrastructure deployment, and
allow the Commission to continue to provide Lifeline support for BIAS.
676. The RIF Remand Order (and, through it, the RIF Order) has
remained under further administrative and judicial review. One week
after the RIF Remand Order was published in the Federal Register, the
CPUC filed a petition for judicial review in the D.C. Circuit.
Meanwhile, Common Cause et al., INCOMPAS, Public Knowledge, and Santa
Clara filed timely petitions for agency reconsideration of the RIF
Remand Order (discussed further below). The D.C. Circuit has held
judicial review of the RIF Remand Order in abeyance pending the
Commission's consideration of the petitions for reconsideration.
677. On October 19, 2023, the Wireline Competition Bureau issued a
Public Notice (88 FR 74389 (Oct. 31, 2023)) seeking comment on the
issues raised in the four petitions for reconsideration and on the
connection between those issues and the recently adopted 2023 Open
Internet NPRM. Several commenters responded to the Bureau's Public
Notice, either in separate filings that specifically discuss the merits
of one or more petitions or as part of their overall comments to the
2023 Open Internet NPRM. To the extent necessary, we grant INCOMPAS's
request that we waive the page limitation set forth in Sec. 1.429 of
the Commission's rules that applies to Oppositions to Petitions for
Reconsideration and Replies to Oppositions. Given that the two
proceedings are interrelated and in light of the number and complexity
of issues, we find that good cause is shown and that it is in the
public interest to allow stakeholders to submit filings responsive to
both proceedings that may exceed the page limitation.
678. Petitioners ask that the Commission reverse, vacate, or
withdraw the RIF Remand Order, and request that the Commission initiate
a new rulemaking to reclassify BIAS as a Title II telecommunications
service and reinstate the open internet conduct
[[Page 45540]]
rules. Collectively, petitioners make several procedural arguments for
why the Commission should reconsider the RIF Remand Order. Common Cause
et al. and Public Knowledge each assert that procedural deficiencies in
the process the Commission used to adopt the RIF Remand Order are cause
for reconsideration. Common Cause et al. argue that because the
Commission failed to open the record to receive comment on the impact
of the COVID-19 pandemic, it failed to adequately consider harms of
reclassifying BIAS as a Title I information service on public safety,
pole attachments, and the Lifeline program. In addition, Public
Knowledge claims that because the Commission did not adopt a notice of
proposed rulemaking prior to adopting the RIF Remand Order, and instead
sought comment through a Bureau-issued public notice, the Commission
did not follow the proper rulemaking procedures under the APA.
679. Common Cause et al., INCOMPAS, and Santa Clara also each
provide several substantive arguments for why the RIF Remand Order
should be reconsidered. Common Cause et al. argue that the RIF Remand
Order weakened the Lifeline program at a time when it was most needed.
In limiting the Lifeline program to facilities-based broadband-capable
networks that support voice service, Common Cause et al. argue that the
Commission failed to account for how this would affect BIAS during the
COVID-19 pandemic and ignored evidence of BIAS-only providers that were
seeking to enter the Lifeline program. These petitioners also take
issue with the RIF Remand Order's conclusion that even if a court were
to reject the Commission's legal authority to provide Lifeline support
to the BIAS of a common carrier, the overall benefits of
reclassification would outweigh this cost. Common Cause et al. assert
that this position contradicts both the Commission's policy and
statutory goals of achieving universal service, and that it also goes
against the purpose for which the Lifeline program was first created.
680. Santa Clara argues in its Petition that, despite the
Commission's statutory mandate to consider and promote public safety,
the Commission failed to seriously consider this issue in either the
RIF Order or the RIF Remand Order. Because modern public safety efforts
rely on the public's access to BIAS, Santa Clara argues that the
Commission needs the ability to adopt ex ante conduct rules in order to
fulfill its public safety mandate. Santa Clara disagrees with the RIF
Order's analysis that consumers and edge providers will be protected
from BIAS provider misconduct by a combination of market forces,
consumer choice, public pressure, and ex post antitrust and consumer
protection remedies. And it argues that instead of responding to the
Mozilla court's criticism of this reasoning, the RIF Remand Order
simply restates it without further analysis. Furthermore, Santa Clara
criticizes the RIF Remand Order for the negative impact it will have on
the development of public-safety-focused edge provider content.
Finally, Santa Clara rejects the RIF Remand Order's conclusion that
reclassification of BIAS as a Title I information service will increase
investment and innovation, and that these benefits will outweigh any
harm to public safety, and further argues that the Commission ignored
evidence of the harmful impact of reclassification on public safety.
681. INCOMPAS asserts in its Petition that the RIF Remand Order did
not sufficiently address the Mozilla court's concerns regarding public
safety and pole attachments. INCOMPAS notes that while it supports the
Commission's reconsideration of the RIF Remand Order due to the harms
to Lifeline consumers, it focuses its petition on public safety and
pole attachment concerns because those are the issues that directly
relate to the issues that its member companies face. With regard to
public safety, INCOMPAS argues broadly that the RIF Remand Order is
flawed because it ``turns its back on the historical role of the
Commission to protect the public's ability to connect without
permission.'' More specifically, INCOMPAS asserts that the RIF Remand
Order relies on unsubstantiated claims of increased investment to
support its conclusions that the benefits of Title I classification
outweigh potential public safety concerns. INCOMPAS also argues that
the Commission wrongly dismisses the potential harms to public safety
submitted into the record and overlooks the importance of having an
expert agency with the authority to create ex ante rules to protect the
public. And in reaching its conclusions, the petitioner criticizes the
Commission for not properly accounting for the lack of competition in
the residential BIAS market or the harms that large BIAS providers will
cause consumers and edge providers. With respect to pole attachments,
INCOMPAS contends that the RIF Remand Order's examination of the issue
similarly does not comply with the Mozilla court's instructions.
INCOMPAS takes issue with the inadequate consideration the RIF Remand
Order gives to how reclassification will eliminate BIAS-only providers'
pole attachment rights; rejects the RIF Remand Order's argument that
this lack of pole attachment rights under section 224 will allow BIAS-
only providers to enter into more flexible and innovative arrangements;
and argues that, contrary to its suggestion otherwise, the RIF Remand
Order does not resolve the issue of State authority to regulate pole
attachments.
682. In light of the Commission's actions in the Order, we grant in
large part and otherwise dismiss as moot each of the four Petitions for
Reconsideration of the RIF Remand Order. The Commission will consider a
petition for reconsideration when the petitioner shows either a
material error in the Commission's original order, or raises additional
facts or arguments, not known or existing at the time of the
petitioner's last opportunity to present such matters. Petitions for
reconsideration which rely on facts or arguments not previously
presented to the Commission but which were known or existing at the
time of the petitioner's last opportunity to present such matters may
nonetheless be granted if the Commission determines that consideration
of the facts and arguments relied on is required in the public
interest. While the Petitioners raise some arguments that existed at
the time of the filing of their Petitions, we find it would serve the
public interest to consider them in the Order, when we have fully
considered how the Title II classification and our open internet rules
impact public safety, pole attachments, and Lifeline service. Indeed,
we explain above how classification of BIAS as an information service
is inconsistent with the best interpretation of the statute and cannot
be reconciled with our responsibilities with regard to public safety,
pole attachments, and universal service support to low-income
consumers. Thus, to the extent the Petitions requested that the
Commission reconsider and/or vacate the RIF Remand Order or RIF Order
itself, we do so here. As a procedural matter, we find that we have
effectively provided the relief sought by each of the Petitions through
a combination of the 2023 Open Internet NPRM and the Order's actions.
To the extent the Petitions sought readoption or reimposition of open
internet conduct rules consistent with the 2015 Open Internet Order and
reclassification and/or reversion of BIAS as a Title II
telecommunications service, we find that we have done so in the Order.
As a substantive matter, for the
[[Page 45541]]
reasons explained above, we agree with the petitioners that the
Commission's analysis in the RIF Order and RIF Remand Order was
insufficient in addressing the public safety, pole attachment, and
Lifeline-related repercussions of classifying BIAS as a Title I
information service. To the extent the Petitions sought a new open-
internet-related rulemaking in response to the Mozilla remand, we
dismiss them as moot in light of the rulemaking proceeding we have
conducted to consider precisely those issues. To the extent concerns or
issues raised in the Petitions remain, we dismiss them as moot on the
basis that the adoption of the Order effectively replace and overturn
the RIF Order and RIF Remand Order. The RIF Order was vacated in part
and otherwise remanded to the Commission by the D.C. Circuit. Because
the majority of the RIF Order framework thus remained in effect, our
action on reconsideration has only prospective consequences, rather
than having retrospective effect of the sort not possible through our
new rulemaking action here.
VI. Severability
683. We consider the actions we take in the Order to be separate
and severable such that in the event any particular action or decision
is stayed or determined to be invalid, we would find that the resulting
regulatory framework continues to fulfill our goal of preserving and
protecting the open internet and that it shall remain in effect to the
fullest extent permitted by law. Though complementary, each of the
rules, requirements, classifications, definitions, and other provisions
that we establish in the Order operate independently to promote and
protect the open internet, safeguard national security and public
safety, and promote the deployment of broadband on a timely basis.
684. Severability of Open Internet Rules from One Another. The open
internet rules we adopt in the Order each operate independently to
protect the open internet, promote the virtuous cycle, and encourage
the deployment of broadband on a timely basis. The severability of the
Commission's open internet rules was recognized by the Verizon court,
which held that the Commission's transparency rule established in the
2010 Open Internet Order was severable from the nondiscrimination and
no-blocking rules also established in that Order. We continue to apply
that view to the transparency, no-blocking, no-throttling, no-paid
prioritization, and general conduct rules we adopt in the Order. While
the Order's newly adopted rules put in place a suite of open internet
protections, we find that each of these rules, on its own, serves to
protect the open internet. Each rule protects against different
potential harms and thus operates semi-independently from one another.
For example, the no-blocking rule protects consumers' right to access
lawful content, applications, and services by constraining BIAS
providers' incentive to block competitors' content. The no-throttling
rule serves as an independent supplement to this prohibition on
blocking by banning the impairment or degradation of lawful content
that does not reach the level of blocking. Should the no-blocking rule
be declared invalid, the no-throttling rule would still afford
consumers and edge providers significant protection, and thus could
independently advance the goals of the open internet, if not as
comprehensively were the no-blocking rule still in effect. The same
reasoning holds true for the ban on paid prioritization, which protects
against particular harms independent of the other bright-line rules.
Finally, the no-unreasonable interference/disadvantage standard governs
BIAS provider conduct generally, providing independent protections
against those three harmful practices along with other and new
practices that could threaten to harm internet openness. Were any of
these individual rules held invalid, the resulting regulations would
remain valuable tools for protecting the open internet.
685. Severability of Rules Governing Mobile/Fixed Providers. We
have also made clear in the Order that our rules apply to both fixed
and mobile BIAS. These are two different services, and thus the
application of our rules to either service functions independently.
Accordingly, we find that should application of our open internet rules
to either fixed or mobile BIAS be held invalid, the application of
those rules to the remaining fixed or mobile service would still
fulfill our regulatory purposes and remain intact.
VII. Procedural Matters
686. Regulatory Flexibility Act. The Regulatory Flexibility Act of
1980, as amended (RFA), requires that an agency prepare a regulatory
flexibility analysis for notice and comment rulemakings, unless the
agency certifies that ``the rule will not, if promulgated, have a
significant economic impact on a substantial number of small
entities.'' Accordingly, the Commission has prepared a Final Regulatory
Flexibility Analysis (FRFA) concerning the potential impact of the rule
and policy changes adopted in the Order on small entities. The FRFA is
set forth in section VIII.
VIII. Final Regulatory Flexibility Analysis
687. As required by the Regulatory Flexibility Act of 1980, as
amended (RFA), an Initial Regulatory Flexibility Analysis (IRFA) was
incorporated in the Safeguarding and Securing the Open Internet Notice
of Proposed Rulemaking (2023 Open Internet NPRM), released October of
2023. The Commission sought written public comment on the proposals in
the 2023 Open Internet NPRM, including comment on the IRFA. The
comments received are discussed below in section B. This present Final
Regulatory Flexibility Analysis (FRFA) conforms to the RFA.
A. Need for, and Objectives of, the Declaratory Ruling, Order, Report
and Order, and Order on Reconsideration
688. Broadband internet access service (BIAS) connections, not
unlike other essential utilities, have proved essential to every aspect
of our daily lives, from work, education, and healthcare, to commerce,
community, and free expression. The COVID-19 pandemic revealed that
without a BIAS connection, consumers could not fully participate in
vital aspects of daily life. We find, and the record overwhelmingly
reflects, that BIAS is not a luxury, but a necessity for education,
communication, healthcare, and participation in the economy. The
actions taken in the Order to restore the Commission's Title II
authority over BIAS, reclassify mobile BIAS as a commercial mobile
service, and adopt open internet conduct rules are necessary to help
ensure the health, vitality, and security of the entire internet
ecosystem.
689. Need for, and objective of, reclassification. Our
classification decision in the Order reestablishes the Commission's
authority to protect consumers and resolves the pending challenges to
the Commission's 2017 classification decision. We conclude that BIAS is
best classified as a telecommunications service based on an analysis of
the statutory definitions for ``telecommunications service'' and
``information service'' established in the 1996 Act. This conclusion
reflects the best reading of the statutory terms applying basic
principles of textual analysis to the text, structure, and context of
the Act in light of (1) how consumers understand BIAS and (2) the
factual particulars of how the technology that enables the delivery of
BIAS functions. We also conclude that
[[Page 45542]]
BIAS is not best classified as an information service. Classifying BIAS
as a telecommunications service accords with Commission and court
precedent and is fully and sufficiently justified under the
Commission's longstanding authority and responsibility to classify
services subject to the Commission's jurisdiction, as necessary.
Additionally, as the expert agency entrusted by Congress to oversee our
country's communications networks and services, our experience
demonstrates that for the Commission to protect consumers and ensure a
safe, reliable, and open internet, it must exercise its authority to do
so under Title II of the Communications Act. As such, we also
separately conclude that multiple policy considerations, relating to
internet openness, national security, public safety, consumer privacy,
broadband deployment, and disability access, each independently and
collectively, support the reclassification of BIAS as a
telecommunications service.
690. We also reclassify mobile BIAS as a commercial mobile service.
As we explain in the Declaratory Ruling, reclassifying mobile BIAS as a
commercial mobile service is necessary to avoid the statutory
contradiction that would result if the Commission were to conclude that
mobile BIAS is a telecommunications service but not a commercial mobile
service. Moreover, as we discuss in the Declaratory Ruling, because
consumers regularly use both fixed and mobile broadband, it is critical
to protect both services equally.
691. Need for, and objectives of, the open internet rules. We
affirm our belief from the 2023 Open Internet NPRM that baseline
internet conduct rules for BIAS providers are necessary to enable the
Commission to prevent and address conduct that harms consumers and
competition. BIAS is an essential service that is critical to so many
aspects of everyday life, from healthcare and education to work,
commerce, and civic engagement. Because of its importance, we conclude
that rules are necessary to promote free expression, encourage
innovation, competition, and consumer demand, and protect public
safety. As the Commission found in both 2010 and 2015, BIAS providers
continue to have the incentive and ability to harm internet openness.
We find that the framework that the Commission adopted in 2017 provides
insufficient protection from these dangers, and that a safe, secure,
and open internet is too important to consumers and innovators to leave
unprotected. As in 2015, we find that conduct-based rules targeting
specific practices are necessary, and accordingly adopt bright-line
rules to prohibit blocking, throttling, and paid prioritization by
providers of both fixed and mobile broadband internet access service.
692. First, we reimpose a bright-line rule that prohibits providers
from blocking lawful content, applications, services, or non-harmful
devices, subject to reasonable network management. This ``no-blocking''
principle has long been a cornerstone of the Commission's policies, and
in the internet context, dates back to the Commission's Internet Policy
Statement. Second, we reimpose a separate bright-line rule prohibiting
BIAS providers from impairing or degrading lawful internet traffic on
the basis of content, application, service, or use of non-harmful
device, subject to reasonable network management. We interpret this
prohibition to include, for example, any conduct by a BIAS provider
that impairs, degrades, slows down, or renders effectively unusable
particular content, services, applications, or devices, that is not
reasonable network management. We find this prohibition to be a
necessary complement to the no-blocking rule. Without an equally strong
no-throttling rule, BIAS providers might be able to thwart the no-
blocking rule by throttling or degrading traffic that is essentially
blocking but that does not quite meet the no-blocking standard. Third,
we reimpose the prohibition on paid or affiliated prioritization
practices, subject to a narrow waiver process. As in 2015, we find that
a prohibition on paid prioritization is necessary because preferential
treatment arrangements have the potential to create a chilling effect,
disrupting the internet's virtuous cycle of innovation, consumer
demand, and investment.
693. In addition to the three bright-line rules, we also reinstate
a no-unreasonable interference/disadvantage standard, under which the
Commission can prohibit practices that unreasonably interfere with the
ability of consumers or edge providers to select, access, and use
broadband internet access service to reach one another, thus causing
harm to the open internet. This no-unreasonable interference/
disadvantage general conduct standard will operate on a case-by-case
basis, applying a non-exhaustive list of factors, and is designed to
evaluate other current or future BIAS provider policies or practices--
not covered by the bright-line rules--and prohibit those that harm the
open internet. While we believe that our prohibitions on blocking,
throttling, and paid prioritization will prevent many harms to the open
internet, we believe that reimplementing the general conduct standard
is a necessary backstop to ensure that BIAS providers do not find
technical or economic ways to evade our bright-line rules.
694. We also restore the text of the transparency rule to its
original format adopted in 2010 and reaffirmed in 2015. We believe this
change is necessary in order to encompass a broader relevant audience
of interested parties than that captured by the RIF Order and more
appropriately reflects the nature of the current transparency landscape
where the broadband labels serve as a quick reference for consumers,
and the transparency rule enables a deeper dive. Furthermore, we made
minor revisions to the disclosures required by the transparency rule to
better enable end-user consumers to make informed choices about
broadband services and similarly to provide edge providers with the
information necessary to develop new content, applications, services,
and devices that promote the virtuous cycle of investment and
innovation. In revising the specific transparency requirements, we
contemplated the recently adopted broadband label rules to minimize
unnecessary duplication and improve efficiency for providers.
B. Summary of Significant Issues Raised by Public Comments in Response
to the IRFA
695. In response to the 2023 Open Internet NPRM, four entities
filed comments or reply comments that specifically addressed the IRFA
to some degree: WISPA, NTCA--the Rural Broadband Association (NTCA),
ACA Connects, and National Rural Electric Cooperative Association
(NRECA). Some of these entities, as well as others, filed comments or
reply comments that more generally considered the small business impact
of our proposals. We considered the proposals and concerns described by
the various commenters in adopting the Order and accompanying rules.
696. Some commenters expressed concern that reclassification and
reimplementation of the open internet rules would be particularly
onerous for small providers and suggest that the Commission issue a
blanket exemption for small providers or from ``all but the most
essential'' rules. ACA Connects urges the commission to delay
application of the rules on small providers for at least six months or
one year, forbear from applying sections 201, 202, and 208 to small
providers, or defer sections 201 and 202 obligations into another
proceeding to specifically define and limit the obligations for small
providers. The National Federation of Independent Businesses
[[Page 45543]]
(NFIB) recommends that the Commission add certain language to our rules
to protect small providers. NTCA states that even with proposed
forbearance, small BIAS providers will face significant economic
burdens, and there is no marketplace justification for regulatory
intervention. WISPA urges the Commission to issue a FNPRM that examines
whether to exempt small providers from the bright-line rules, general
conduct rule, and transparency enhancements and to apply any exemptions
to BIAS providers with 250,000 or fewer subscribers. WISPA also
requests that the Commission reconsider application of sections 206,
207, 208, 214, 218 and 220 of the Act to small providers and
permanently exempt small BIAS-only providers from the Commission's
transfer-of-control requirements. We carefully considered the effects
reclassification and our rules would have on all BIAS providers and
small entities, and while we did not create exemptions for small
providers, we included temporary exemptions (with the potential to
become permanent) for providers with 100,000 or fewer subscribers from
the performance characteristic reporting enhancements and the direct
notification requirement under the transparency rule, which will have
the effect of benefitting many small providers. We do not believe
exemptions beyond that which we have provided are necessary or in the
public interest, particularly a blanket exemption from all rules, as
the record fails to demonstrate customers of small BIAS providers
should be afforded less protection than those of larger BIAS providers.
Furthermore, as we noted above, in certain cases, reclassification will
afford small providers additional rights (e.g., pole attachment rights)
to which they are currently not entitled.
697. NRECA urges the commission to define ``small entities'' as
those with 100,000 broadband customers or less rather than those with
1,500 employees or less as we proposed in our IRFA. NRECA suggests that
our proposed definition is problematic because it would ``create a
situation where a small-entity exception would swallow the general
rule.'' According to NRECA, because most covered entities would fall
within the ``small entity'' category under the Small Business
Administration (SBA) size thresholds used in the IRFA, these thresholds
would ``limit the Commission's ability to implement small-entity
exceptions that would be meaningful for truly small entities.'' NTCA
echoed NRECA's concerns regarding the definition. WISPA, however, does
not agree with NRECA's proposed definition. We decline commenters'
invitation to deviate from the SBA size standards for purposes of the
regulatory flexibility analysis. NRECA does not argue that the size
standard is inappropriate for regulatory flexibility analysis purposes.
Rather, it focuses on exemptions from the rules adopted herein ``and
for subsequent Title II regulations.'' As noted above, however, we have
largely declined to provide exemptions from the rules adopted in the
Order, as customers of all BIAS providers should be afforded their
protection. The exceptions are temporary exemptions (with the potential
to become permanent) from the performance characteristics disclosure
enhancements and direct notification requirement for BIAS providers
that we reason are less likely to already have in place the tools and
mechanisms needed to allow customers to track usage or provide
automated direct notifications or the resources to immediately report
this information.
C. Response to Comments by the Chief Counsel for Advocacy of the Small
Business Administration
698. Pursuant to the Small Business Jobs Act of 2010, which amended
the RFA, the Commission is required to respond to any comments filed by
the Chief Counsel for Advocacy of the SBA, and to provide a detailed
statement of any change made to the proposed rules as a result of those
comments. The Chief Counsel did not file any comments in response to
the proposed rules in this proceeding.
D. Description and Estimate of the Number of Small Entities to Which
Rules Will Apply
699. The RFA directs agencies to provide a description of, and
where feasible, an estimate of the number of small entities that may be
affected by the rules adopted herein. The RFA generally defines the
term ``small entity'' as having the same meaning as the terms ``small
business,'' ``small organization,'' and ``small governmental
jurisdiction.'' In addition, the term ``small business'' has the same
meaning as the term ``small-business concern'' under the Small Business
Act. Pursuant to 5 U.S.C. 601(3), the statutory definition of a small
business applies ``unless an agency, after consultation with the Office
of Advocacy of the Small Business Administration and after opportunity
for public comment, establishes one or more definitions of such term
which are appropriate to the activities of the agency and publishes
such definition(s) in the Federal Register.'' A ``small-business
concern'' is one which: (1) is independently owned and operated; (2) is
not dominant in its field of operation; and (3) satisfies any
additional criteria established by the SBA.
1. Total Small Entities
700. Small Businesses, Small Organizations, Small Jurisdictions.
Our actions, over time, may affect small entities that are not easily
categorized at present. We therefore describe, at the outset, three
broad groups of small entities that could be directly affected herein.
First, while there are industry specific size standards for small
businesses that are used in the regulatory flexibility analysis,
according to data from the SBA's Office of Advocacy, in general a small
business is an independent business having fewer than 500 employees.
These types of small businesses represent 99.9% of all businesses in
the United States, which translates to 33.2 million businesses.
701. Next, the type of small entity described as a ``small
organization'' is generally ``any not-for-profit enterprise which is
independently owned and operated and is not dominant in its field.''
The Internal Revenue Service (IRS) uses a revenue benchmark of $50,000
or less to delineate its annual electronic filing requirements for
small exempt organizations. Nationwide, for tax year 2022, there were
approximately 530,109 small exempt organizations in the U.S. reporting
revenues of $50,000 or less according to the registration and tax data
for exempt organizations available from the IRS.
702. Finally, the small entity described as a ``small governmental
jurisdiction'' is defined generally as ``governments of cities,
counties, towns, townships, villages, school districts, or special
districts, with a population of less than fifty thousand.'' U.S. Census
Bureau data from the 2022 Census of Governments indicate there were
90,837 local governmental jurisdictions consisting of general purpose
governments and special purpose governments in the United States. Of
this number, there were 36,845 general purpose governments (county,
municipal, and town or township) with populations of less than 50,000
and 11,879 special purpose governments (independent school districts)
with enrollment populations of less than 50,000. Accordingly, based on
the 2022 U.S. Census of Governments data, we estimate that at least
48,724 entities fall into the category of ``small governmental
jurisdictions.''
[[Page 45544]]
2. Wired Broadband Internet Access Service Providers
703. Wired Broadband Internet Access Service Providers (Wired
ISPs). Providers of wired broadband internet access service include
various types of providers except dial-up internet access providers.
Wireline service that terminates at an end user location or mobile
device and enables the end user to receive information from and/or send
information to the internet at information transfer rates exceeding 200
kilobits per second (kbps) in at least one direction is classified as a
broadband connection under the Commission's rules. Wired broadband
internet services fall in the Wired Telecommunications Carriers
industry. The SBA small business size standard for this industry
classifies firms having 1,500 or fewer employees as small. U.S. Census
Bureau data for 2017 show that there were 3,054 firms that operated in
this industry for the entire year. Of this number, 2,964 firms operated
with fewer than 250 employees.
704. Additionally, according to Commission data on internet access
services as of June 30, 2019, nationwide there were approximately 2,747
providers of connections over 200 kbps in at least one direction using
various wireline technologies. The Commission does not collect data on
the number of employees for providers of these services, therefore, at
this time we are not able to estimate the number of providers that
would qualify as small under the SBA's small business size standard.
However, in light of the general data on fixed technology service
providers in the Commission's 2022 Communications Marketplace Report,
we believe that the majority of wireline internet access service
providers can be considered small entities.
3. Wireline Providers
705. Wired Telecommunications Carriers. The U.S. Census Bureau
defines this industry as establishments primarily engaged in operating
and/or providing access to transmission facilities and infrastructure
that they own and/or lease for the transmission of voice, data, text,
sound, and video using wired communications networks. Transmission
facilities may be based on a single technology or a combination of
technologies. Establishments in this industry use the wired
telecommunications network facilities that they operate to provide a
variety of services, such as wired telephony services, including VoIP
services, wired (cable) audio and video programming distribution, and
wired broadband internet services. By exception, establishments
providing satellite television distribution services using facilities
and infrastructure that they operate are included in this industry.
Wired Telecommunications Carriers are also referred to as wireline
carriers or fixed local service providers.
706. The SBA small business size standard for Wired
Telecommunications Carriers classifies firms having 1,500 or fewer
employees as small. U.S. Census Bureau data for 2017 show that there
were 3,054 firms that operated in this industry for the entire year. Of
this number, 2,964 firms operated with fewer than 250 employees.
Additionally, based on Commission data in the 2022 Universal Service
Monitoring Report, as of December 31, 2021, there were 4,590 providers
that reported they were engaged in the provision of fixed local
services. Of these providers, the Commission estimates that 4,146
providers have 1,500 or fewer employees. Consequently, using the SBA's
small business size standard, most of these providers can be considered
small entities.
707. Incumbent Local Exchange Carriers (Incumbent LECs). Neither
the Commission nor the SBA have developed a small business size
standard specifically for incumbent local exchange carriers. Wired
Telecommunications Carriers is the closest industry with an SBA small
business size standard. The SBA small business size standard for Wired
Telecommunications Carriers classifies firms having 1,500 or fewer
employees as small. U.S. Census Bureau data for 2017 show that there
were 3,054 firms in this industry that operated for the entire year. Of
this number, 2,964 firms operated with fewer than 250 employees.
Additionally, based on Commission data in the 2022 Universal Service
Monitoring Report, as of December 31, 2021, there were 1,212 providers
that reported they were incumbent local exchange service providers. Of
these providers, the Commission estimates that 916 providers have 1,500
or fewer employees. Consequently, using the SBA's small business size
standard, the Commission estimates that the majority of incumbent local
exchange carriers can be considered small entities.
708. Competitive Local Exchange Carriers (Competitive LECs).
Neither the Commission nor the SBA have developed a small business size
standard specifically for incumbent local exchange carriers. Wired
Telecommunications Carriers is the closest industry with an SBA small
business size standard. The SBA small business size standard for Wired
Telecommunications Carriers classifies firms having 1,500 or fewer
employees as small. U.S. Census Bureau data for 2017 show that there
were 3,054 firms in this industry that operated for the entire year. Of
this number, 2,964 firms operated with fewer than 250 employees.
Additionally, based on Commission data in the 2022 Universal Service
Monitoring Report, as of December 31, 2021, there were 1,212 providers
that reported they were incumbent local exchange service providers. Of
these providers, the Commission estimates that 916 providers have 1,500
or fewer employees. Consequently, using the SBA's small business size
standard, the Commission estimates that the majority of incumbent local
exchange carriers can be considered small entities.
709. Interexchange Carriers (IXCs). Neither the Commission nor the
SBA have developed a small business size standard specifically for
Interexchange Carriers. Wired Telecommunications Carriers is the
closest industry with a SBA small business size standard. The SBA small
business size standard for Wired Telecommunications Carriers classifies
firms having 1,500 or fewer employees as small. U.S. Census Bureau data
for 2017 show that there were 3,054 firms that operated in this
industry for the entire year. Of this number, 2,964 firms operated with
fewer than 250 employees. Additionally, based on Commission data in the
2022 Universal Service Monitoring Report, as of December 31, 2021,
there were 127 providers that reported they were engaged in the
provision of interexchange services. Of these providers, the Commission
estimates that 109 providers have 1,500 or fewer employees.
Consequently, using the SBA's small business size standard, the
Commission estimates that the majority of providers in this industry
can be considered small entities.
710. Operator Service Providers (OSPs). Neither the Commission nor
the SBA has developed a small business size standard specifically for
operator service providers. The closest applicable industry with a SBA
small business size standard is Wired Telecommunications Carriers. The
SBA small business size standard classifies a business as small if it
has 1,500 or fewer employees. U.S. Census Bureau data for 2017 show
that there were 3,054 firms in this industry that operated for the
entire year. Of this number, 2,964 firms operated with fewer than 250
employees. Additionally, based on Commission data in the 2022 Universal
Service
[[Page 45545]]
Monitoring Report, as of December 31, 2021, there were 20 providers
that reported they were engaged in the provision of operator services.
Of these providers, the Commission estimates that all 20 providers have
1,500 or fewer employees. Consequently, using the SBA's small business
size standard, all of these providers can be considered small entities.
711. Other Toll Carriers. Neither the Commission nor the SBA has
developed a definition for small businesses specifically applicable to
Other Toll Carriers. This category includes toll carriers that do not
fall within the categories of interexchange carriers, operator service
providers, prepaid calling card providers, satellite service carriers,
or toll resellers. Wired Telecommunications Carriers is the closest
industry with a SBA small business size standard. The SBA small
business size standard for Wired Telecommunications Carriers classifies
firms having 1,500 or fewer employees as small. U.S. Census Bureau data
for 2017 show that there were 3,054 firms in this industry that
operated for the entire year. Of this number, 2,964 firms operated with
fewer than 250 employees. Additionally, based on Commission data in the
2022 Universal Service Monitoring Report, as of December 31, 2021,
there were 90 providers that reported they were engaged in the
provision of other toll services. Of these providers, the Commission
estimates that 87 providers have 1,500 or fewer employees.
Consequently, using the SBA's small business size standard, most of
these providers can be considered small entities.
4. Wireless Providers--Fixed and Mobile
712. Wireless Broadband Internet Access Service Providers (Wireless
ISPs or WISPs). Providers of wired broadband internet access service
include various types of providers except dial-up internet access
providers. Wireline service that terminates at an end user location or
mobile device and enables the end user to receive information from and/
or send information to the internet at information transfer rates
exceeding 200 kbps in at least one direction is classified as a
broadband connection under the Commission's rules. Wired broadband
internet services fall in the Wired Telecommunications Carriers
industry. The SBA small business size standard for this industry
classifies firms having 1,500 or fewer employees as small. U.S. Census
Bureau data for 2017 show that there were 3,054 firms that operated in
this industry for the entire year. Of this number, 2,964 firms operated
with fewer than 250 employees.
713. Additionally, according to Commission data on internet access
services as of June 30, 2019, nationwide there were approximately 2,747
providers of connections over 200 kbps in at least one direction using
various wireline technologies. The Commission does not collect data on
the number of employees for providers of these services, therefore, at
this time we are not able to estimate the number of providers that
would qualify as small under the SBA's small business size standard.
However, in light of the general data on fixed technology service
providers in the Commission's 2022 Communications Marketplace Report,
we believe that the majority of wireline internet access service
providers can be considered small entities.
714. Wireless Telecommunications Carriers (except Satellite). The
U.S. Census Bureau defines this industry as establishments primarily
engaged in operating and/or providing access to transmission facilities
and infrastructure that they own and/or lease for the transmission of
voice, data, text, sound, and video using wired communications
networks. Transmission facilities may be based on a single technology
or a combination of technologies. Establishments in this industry use
the wired telecommunications network facilities that they operate to
provide a variety of services, such as wired telephony services,
including VoIP services, wired (cable) audio and video programming
distribution, and wired broadband internet services. By exception,
establishments providing satellite television distribution services
using facilities and infrastructure that they operate are included in
this industry. Wired Telecommunications Carriers are also referred to
as wireline carriers or fixed local service providers.
715. The SBA small business size standard for Wired
Telecommunications Carriers classifies firms having 1,500 or fewer
employees as small. U.S. Census Bureau data for 2017 show that there
were 3,054 firms that operated in this industry for the entire year. Of
this number, 2,964 firms operated with fewer than 250 employees.
Additionally, based on Commission data in the 2022 Universal Service
Monitoring Report, as of December 31, 2021, there were 4,590 providers
that reported they were engaged in the provision of fixed local
services. Of these providers, the Commission estimates that 4,146
providers have 1,500 or fewer employees. Consequently, using the SBA's
small business size standard, most of these providers can be considered
small entities.
716. Wireless Communications Services. Wireless Communications
Services (WCS) can be used for a variety of fixed, mobile,
radiolocation, and digital audio broadcasting satellite services.
Wireless spectrum is made available and licensed for the provision of
wireless communications services in several frequency bands subject to
part 27 of the Commission's rules. Wireless Telecommunications Carriers
(except Satellite) is the closest industry with an SBA small business
size standard applicable to these services. The SBA small business size
standard for this industry classifies a business as small if it has
1,500 or fewer employees. U.S. Census Bureau data for 2017 show that
there were 2,893 firms that operated in this industry for the entire
year. Of this number, 2,837 firms employed fewer than 250 employees.
Thus, under the SBA size standard, the Commission estimates that a
majority of licensees in this industry can be considered small.
717. The Commission's small business size standards with respect to
WCS involve eligibility for bidding credits and installment payments in
the auction of licenses for the various frequency bands included in
WCS. When bidding credits are adopted for the auction of licenses in
WCS frequency bands, such credits may be available to several types of
small businesses based average gross revenues (small, very small and
entrepreneur) pursuant to the competitive bidding rules adopted in
conjunction with the requirements for the auction and/or as identified
in the designated entities section in part 27 of the Commission's rules
for the specific WCS frequency bands.
718. In frequency bands where licenses were subject to auction, the
Commission notes that as a general matter, the number of winning
bidders that qualify as small businesses at the close of an auction
does not necessarily represent the number of small businesses currently
in service. Further, the Commission does not generally track subsequent
business size unless, in the context of assignments or transfers,
unjust enrichment issues are implicated. Additionally, since the
Commission does not collect data on the number of employees for
licensees providing these services, at this time we are not able to
estimate the number of licensees with active licenses that would
qualify as small under the SBA's small business size standard.
[[Page 45546]]
719. Wireless Resellers. Neither the Commission nor the SBA have
developed a small business size standard specifically for Wireless
Resellers. The closest industry with a SBA small business size standard
is Telecommunications Resellers. The Telecommunications Resellers
industry comprises establishments engaged in purchasing access and
network capacity from owners and operators of telecommunications
networks and reselling wired and wireless telecommunications services
(except satellite) to businesses and households. Establishments in this
industry resell telecommunications and they do not operate transmission
facilities and infrastructure. Mobile virtual network operators (MVNOs)
are included in this industry. Under the SBA size standard for this
industry, a business is small if it has 1,500 or fewer employees. U.S.
Census Bureau data for 2017 show that 1,386 firms in this industry
provided resale services during that year. Of that number, 1,375 firms
operated with fewer than 250 employees. Thus, for this industry under
the SBA small business size standard, the majority of providers can be
considered small entities.
720. 1670-1675 MHz Services. These wireless communications services
can be used for fixed and mobile uses, except aeronautical mobile.
Wireless Telecommunications Carriers (except Satellite) is the closest
industry with an SBA small business size standard applicable to these
services. The SBA size standard for this industry classifies a business
as small if it has 1,500 or fewer employees. U.S. Census Bureau data
for 2017 show that there were 2,893 firms that operated in this
industry for the entire year. Of this number, 2,837 firms employed
fewer than 250 employees. Thus, under the SBA size standard, the
Commission estimates that a majority of licensees in this industry can
be considered small.
721. According to Commission data as of November 2021, there were
three active licenses in this service. The Commission's small business
size standards with respect to 1670-1675 MHz Services involve
eligibility for bidding credits and installment payments in the auction
of licenses for these services. For licenses in the 1670-1675 MHz
service band, a ``small business'' is defined as an entity that,
together with its affiliates and controlling interests, has average
gross revenues not exceeding $40 million for the preceding three years,
and a ``very small business'' is defined as an entity that, together
with its affiliates and controlling interests, has had average annual
gross revenues not exceeding $15 million for the preceding three years.
The 1670-1675 MHz service band auction's winning bidder did not claim
small business status.
722. In frequency bands where licenses were subject to auction, the
Commission notes that as a general matter, the number of winning
bidders that qualify as small businesses at the close of an auction
does not necessarily represent the number of small businesses currently
in service. Further, the Commission does not generally track subsequent
business size unless, in the context of assignments or transfers,
unjust enrichment issues are implicated. Additionally, since the
Commission does not collect data on the number of employees for
licensees providing these services, at this time we are not able to
estimate the number of licensees with active licenses that would
qualify as small under the SBA's small business size standard.
723. Wireless Telephony. Wireless telephony includes cellular,
personal communications services, and specialized mobile radio
telephony carriers. The closest applicable industry with an SBA small
business size standard is Wireless Telecommunications Carriers (except
Satellite). The size standard for this industry under SBA rules is that
a business is small if it has 1,500 or fewer employees. For this
industry, U.S. Census Bureau data for 2017 show that there were 2,893
firms that operated for the entire year. Of this number, 2,837 firms
employed fewer than 250 employees. Additionally, based on Commission
data in the 2022 Universal Service Monitoring Report, as of December
31, 2021, there were 331 providers that reported they were engaged in
the provision of cellular, personal communications services, and
specialized mobile radio services. Of these providers, the Commission
estimates that 255 providers have 1,500 or fewer employees.
Consequently, using the SBA's small business size standard, most of
these providers can be considered small entities.
724. Broadband Personal Communications Service. The broadband
personal communications services (PCS) spectrum encompasses services in
the 1850-1910 and 1930-1990 MHz bands. The closest industry with a SBA
small business size standard applicable to these services is Wireless
Telecommunications Carriers (except Satellite). The SBA small business
size standard for this industry classifies a business as small if it
has 1,500 or fewer employees. U.S. Census Bureau data for 2017 show
that there were 2,893 firms that operated in this industry for the
entire year. Of this number, 2,837 firms employed fewer than 250
employees. Thus, under the SBA size standard, the Commission estimates
that a majority of licensees in this industry can be considered small.
725. Based on Commission data as of November 2021, there were
approximately 5,060 active licenses in the Broadband PCS service. The
Commission's small business size standards with respect to Broadband
PCS involve eligibility for bidding credits and installment payments in
the auction of licenses for these services. In auctions for these
licenses, the Commission defined ``small business'' as an entity that,
together with its affiliates and controlling interests, has average
gross revenues not exceeding $40 million for the preceding three years,
and a ``very small business'' as an entity that, together with its
affiliates and controlling interests, has had average annual gross
revenues not exceeding $15 million for the preceding three years.
Winning bidders claiming small business credits won Broadband PCS
licenses in C, D, E, and F Blocks.
726. In frequency bands where licenses were subject to auction, the
Commission notes that as a general matter, the number of winning
bidders that qualify as small businesses at the close of an auction
does not necessarily represent the number of small businesses currently
in service. Further, the Commission does not generally track subsequent
business size unless, in the context of assignments or transfers,
unjust enrichment issues are implicated. Additionally, since the
Commission does not collect data on the number of employees for
licensees providing these, at this time we are not able to estimate the
number of licensees with active licenses that would qualify as small
under the SBA's small business size standard.
727. Specialized Mobile Radio Licenses. Special Mobile Radio (SMR)
licenses allow licensees to provide land mobile communications services
(other than radiolocation services) in the 800 MHz and 900 MHz spectrum
bands on a commercial basis including but not limited to services used
for voice and data communications, paging, and facsimile services, to
individuals, Federal Government entities, and other entities licensed
under part 90 of the Commission's rules. Wireless Telecommunications
Carriers (except Satellite) is the closest industry with a SBA small
business size standard applicable to these services. The SBA size
standard for this industry classifies a business as small if it has
1,500 or
[[Page 45547]]
fewer employees. For this industry, U.S. Census Bureau data for 2017
show that there were 2,893 firms in this industry that operated for the
entire year. Of this number, 2,837 firms employed fewer than 250
employees. Additionally, based on Commission data in the 2022 Universal
Service Monitoring Report, as of December 31, 2021, there were 95
providers that reported they were of SMR (dispatch) providers. Of this
number, the Commission estimates that all 95 providers have 1,500 or
fewer employees. Consequently, using the SBA's small business size
standard, these 119 SMR licensees can be considered small entities.
728. Based on Commission data as of December 2021, there were 3,924
active SMR licenses. However, since the Commission does not collect
data on the number of employees for licensees providing SMR services,
at this time we are not able to estimate the number of licensees with
active licenses that would qualify as small under the SBA's small
business size standard. Nevertheless, for purposes of this analysis the
Commission estimates that the majority of SMR licensees can be
considered small entities using the SBA's small business size standard.
729. Lower 700 MHz Band Licenses. The lower 700 MHz band
encompasses spectrum in the 698-746 MHz frequency bands. Permissible
operations in these bands include flexible fixed, mobile, and broadcast
uses, including mobile and other digital new broadcast operation; fixed
and mobile wireless commercial services (including FDD- and TDD-based
services); as well as fixed and mobile wireless uses for private,
internal radio needs, two-way interactive, cellular, and mobile
television broadcasting services. Wireless Telecommunications Carriers
(except Satellite) is the closest industry with a SBA small business
size standard applicable to licenses providing services in these bands.
The SBA small business size standard for this industry classifies a
business as small if it has 1,500 or fewer employees. U.S. Census
Bureau data for 2017 show that there were 2,893 firms that operated in
this industry for the entire year. Of this number, 2,837 firms employed
fewer than 250 employees. Thus, under the SBA size standard, the
Commission estimates that a majority of licensees in this industry can
be considered small.
730. According to Commission data as of December 2021, there were
approximately 2,824 active Lower 700 MHz Band licenses. The
Commission's small business size standards with respect to Lower 700
MHz Band licensees involve eligibility for bidding credits and
installment payments in the auction of licenses. For auctions of Lower
700 MHz Band licenses the Commission adopted criteria for three groups
of small businesses. A very small business was defined as an entity
that, together with its affiliates and controlling interests, has
average annual gross revenues not exceeding $15 million for the
preceding three years, a small business was defined as an entity that,
together with its affiliates and controlling interests, has average
gross revenues not exceeding $40 million for the preceding three years,
and an entrepreneur was defined as an entity that, together with its
affiliates and controlling interests, has average gross revenues not
exceeding $3 million for the preceding three years. In auctions for
Lower 700 MHz Band licenses seventy-two winning bidders claiming a
small business classification won 329 licenses, twenty-six winning
bidders claiming a small business classification won 214 licenses, and
three winning bidders claiming a small business classification won all
five auctioned licenses.
731. In frequency bands where licenses were subject to auction, the
Commission notes that as a general matter, the number of winning
bidders that qualify as small businesses at the close of an auction
does not necessarily represent the number of small businesses currently
in service. Further, the Commission does not generally track subsequent
business size unless, in the context of assignments or transfers,
unjust enrichment issues are implicated. Additionally, since the
Commission does not collect data on the number of employees for
licensees providing these services, at this time we are not able to
estimate the number of licensees with active licenses that would
qualify as small under the SBA's small business size standard.
732. Upper 700 MHz Band Licenses. The upper 700 MHz band
encompasses spectrum in the 746-806 MHz bands. Upper 700 MHz D Block
licenses are nationwide licenses associated with the 758-763 MHz and
788-793 MHz bands. Permissible operations in these bands include
flexible fixed, mobile, and broadcast uses, including mobile and other
digital new broadcast operation; fixed and mobile wireless commercial
services (including FDD- and TDD-based services); as well as fixed and
mobile wireless uses for private, internal radio needs, two-way
interactive, cellular, and mobile television broadcasting services.
Wireless Telecommunications Carriers (except Satellite) is the closest
industry with a SBA small business size standard applicable to licenses
providing services in these bands. The SBA small business size standard
for this industry classifies a business as small if it has 1,500 or
fewer employees. U.S. Census Bureau data for 2017 show that there were
2,893 firms that operated in this industry for the entire year. Of that
number, 2,837 firms employed fewer than 250 employees. Thus, under the
SBA size standard, the Commission estimates that a majority of
licensees in this industry can be considered small.
733. According to Commission data as of December 2021, there were
approximately 152 active Upper 700 MHz Band licenses. The Commission's
small business size standards with respect to Upper 700 MHz Band
licensees involve eligibility for bidding credits and installment
payments in the auction of licenses. For the auction of these licenses,
the Commission defined a ``small business'' as an entity that, together
with its affiliates and controlling principals, has average gross
revenues not exceeding $40 million for the preceding three years, and a
``very small business'' an entity that, together with its affiliates
and controlling principals, has average gross revenues that are not
more than $15 million for the preceding three years. Pursuant to these
definitions, three winning bidders claiming very small business status
won five of the twelve available licenses.
734. In frequency bands where licenses were subject to auction, the
Commission notes that as a general matter, the number of winning
bidders that qualify as small businesses at the close of an auction
does not necessarily represent the number of small businesses currently
in service. Further, the Commission does not generally track subsequent
business size unless, in the context of assignments or transfers,
unjust enrichment issues are implicated. Additionally, since the
Commission does not collect data on the number of employees for
licensees providing these services, at this time we are not able to
estimate the number of licensees with active licenses that would
qualify as small under the SBA's small business size standard.
735. 700 MHz Guard Band Licensees. The 700 MHz Guard Band
encompasses spectrum in 746-747/776-777 MHz and 762-764/792-794 MHz
frequency bands. Wireless Telecommunications Carriers (except
Satellite) is the closest industry with a SBA small business size
standard applicable to licenses providing services in these bands. The
SBA small business size standard for this industry classifies a
business as small if it has 1,500 or fewer employees. U.S. Census
Bureau data for 2017 show
[[Page 45548]]
that there were 2,893 firms that operated in this industry for the
entire year. Of this number, 2,837 firms employed fewer than 250
employees. Thus, under the SBA size standard, the Commission estimates
that a majority of licensees in this industry can be considered small.
736. According to Commission data as of December 2021, there were
approximately 224 active 700 MHz Guard Band licenses. The Commission's
small business size standards with respect to 700 MHz Guard Band
licensees involve eligibility for bidding credits and installment
payments in the auction of licenses. For the auction of these licenses,
the Commission defined a ``small business'' as an entity that, together
with its affiliates and controlling principals, has average gross
revenues not exceeding $40 million for the preceding three years, and a
``very small business'' an entity that, together with its affiliates
and controlling principals, has average gross revenues that are not
more than $15 million for the preceding three years. Pursuant to these
definitions, five winning bidders claiming one of the small business
status classifications won 26 licenses, and one winning bidder claiming
small business won two licenses. None of the winning bidders claiming a
small business status classification in these 700 MHz Guard Band
license auctions had an active license as of December 2021.
737. In frequency bands where licenses were subject to auction, the
Commission notes that as a general matter, the number of winning
bidders that qualify as small businesses at the close of an auction
does not necessarily represent the number of small businesses currently
in service. Further, the Commission does not generally track subsequent
business size unless, in the context of assignments or transfers,
unjust enrichment issues are implicated. Additionally, since the
Commission does not collect data on the number of employees for
licensees providing these services, at this time we are not able to
estimate the number of licensees with active licenses that would
qualify as small under the SBA's small business size standard.
738. Air-Ground Radiotelephone Service Air-Ground Radiotelephone
Service is a wireless service in which licensees are authorized to
offer and provide radio telecommunications service for hire to
subscribers in aircraft. A licensee may provide any type of air-ground
service (i.e., voice telephony, broadband internet, data, etc.) to
aircraft of any type, and serve any or all aviation markets
(commercial, government, and general). A licensee must provide service
to aircraft and may not provide ancillary land mobile or fixed services
in the 800 MHz air-ground spectrum.
739. The closest industry with an SBA small business size standard
applicable to these services is Wireless Telecommunications Carriers
(except Satellite). The SBA small business size standard for this
industry classifies a business as small if it has 1,500 or fewer
employees. U.S. Census Bureau data for 2017 show that there were 2,893
firms that operated in this industry for the entire year. Of this
number, 2,837 firms employed fewer than 250 employees. Thus, under the
SBA size standard, the Commission estimates that a majority of
licensees in this industry can be considered small.
740. Based on Commission data as of December 2021, there were
approximately four licensees with 110 active licenses in the Air-Ground
Radiotelephone Service. The Commission's small business size standards
with respect to Air-Ground Radiotelephone Service involve eligibility
for bidding credits and installment payments in the auction of
licenses. For purposes of auctions, the Commission defined ``small
business'' as an entity that, together with its affiliates and
controlling interests, has average gross revenues not exceeding $40
million for the preceding three years, and a ``very small business'' as
an entity that, together with its affiliates and controlling interests,
has had average annual gross revenues not exceeding $15 million for the
preceding three years. In the auction of Air-Ground Radiotelephone
Service licenses in the 800 MHz band, neither of the two winning
bidders claimed small business status.
741. In frequency bands where licenses were subject to auction, the
Commission notes that as a general matter, the number of winning
bidders that qualify as small businesses at the close of an auction
does not necessarily represent the number of small businesses currently
in service. Further, the Commission does not generally track subsequent
business size unless, in the context of assignments or transfers,
unjust enrichment issues are implicated. Additionally, the Commission
does not collect data on the number of employees for licensees
providing these services therefore, at this time we are not able to
estimate the number of licensees with active licenses that would
qualify as small under the SBA's small business size standard.
742. Advanced Wireless Services (AWS)--(1710-1755 MHz and 2110-2155
MHz bands (AWS-1); 1915-1920 MHz, 1995-2000 MHz, 2020-2025 MHz and
2175-2180 MHz bands (AWS-2); 2155-2175 MHz band (AWS-3); 2000-2020 MHz
and 2180-2200 MHz (AWS-4)). Spectrum is made available and licensed in
these bands for the provision of various wireless communications
services. Wireless Telecommunications Carriers (except Satellite) is
the closest industry with a SBA small business size standard applicable
to these services. The SBA small business size standard for this
industry classifies a business as small if it has 1,500 or fewer
employees. U.S. Census Bureau data for 2017 show that there were 2,893
firms that operated in this industry for the entire year. Of this
number, 2,837 firms employed fewer than 250 employees. Thus, under the
SBA size standard, the Commission estimates that a majority of
licensees in this industry can be considered small.
743. According to Commission data as of December 2021, there were
approximately 4,472 active AWS licenses. The Commission's small
business size standards with respect to AWS involve eligibility for
bidding credits and installment payments in the auction of licenses for
these services. For the auction of AWS licenses, the Commission defined
a ``small business'' as an entity with average annual gross revenues
for the preceding three years not exceeding $40 million, and a ``very
small business'' as an entity with average annual gross revenues for
the preceding three years not exceeding $15 million. Pursuant to these
definitions, 57 winning bidders claiming status as small or very small
businesses won 215 of 1,087 licenses. In the most recent auction of AWS
licenses 15 of 37 bidders qualifying for status as small or very small
businesses won licenses.
744. In frequency bands where licenses were subject to auction, the
Commission notes that as a general matter, the number of winning
bidders that qualify as small businesses at the close of an auction
does not necessarily represent the number of small businesses currently
in service. Further, the Commission does not generally track subsequent
business size unless, in the context of assignments or transfers,
unjust enrichment issues are implicated. Additionally, since the
Commission does not collect data on the number of employees for
licensees providing these services, at this time we are not able to
estimate the number of licensees with active licenses that would
qualify as small under the SBA's small business size standard.
745. 3650-3700 MHz band. Wireless broadband service licensing in
the 3650-3700 MHz band provides for nationwide, non-exclusive licensing
of terrestrial operations, utilizing
[[Page 45549]]
contention-based technologies, in the 3650 MHz band (i.e., 3650-3700
MHz). Licensees are permitted to provide services on a non-common
carrier and/or on a common carrier basis. Wireless broadband services
in the 3650-3700 MHz band fall in the Wireless Telecommunications
Carriers (except Satellite) industry with an SBA small business size
standard that classifies a business as small if it has 1,500 or fewer
employees. U.S. Census Bureau data for 2017 show that there were 2,893
firms that operated in this industry for the entire year. Of this
number, 2,837 firms employed fewer than 250 employees. Thus, under the
SBA size standard, the Commission estimates that a majority of
licensees in this industry can be considered small.
746. The Commission has not developed a small business size
standard applicable to 3650-3700 MHz band licensees. Based on the
licenses that have been granted, however, we estimate that the majority
of licensees in this service are small Internet Access Service
Providers (ISPs). As of November 2021, Commission data shows that there
were 902 active licenses in the 3650-3700 MHz band. However, since the
Commission does not collect data on the number of employees for
licensees providing these services, at this time we are not able to
estimate the number of licensees with active licenses that would
qualify as small under the SBA's small business size standard.
747. Fixed Microwave Services. Fixed microwave services include
common carrier, private-operational fixed, and broadcast auxiliary
radio services. They also include the Upper Microwave Flexible Use
Service (UMFUS), Millimeter Wave Service (70/80/90 GHz), Local
Multipoint Distribution Service (LMDS), the Digital Electronic Message
Service (DEMS), 24 GHz Service, Multiple Address Systems (MAS), and
Multichannel Video Distribution and Data Service (MVDDS), where in some
bands licensees can choose between common carrier and non-common
carrier status. Wireless Telecommunications Carriers (except Satellite)
is the closest industry with a SBA small business size standard
applicable to these services. The SBA small size standard for this
industry classifies a business as small if it has 1,500 or fewer
employees. U.S. Census Bureau data for 2017 show that there were 2,893
firms that operated in this industry for the entire year. Of this
number, 2,837 firms employed fewer than 250 employees. Thus, under the
SBA size standard, the Commission estimates that a majority of fixed
microwave service licensees can be considered small.
748. The Commission's small business size standards with respect to
fixed microwave services involve eligibility for bidding credits and
installment payments in the auction of licenses for the various
frequency bands included in fixed microwave services. When bidding
credits are adopted for the auction of licenses in fixed microwave
services frequency bands, such credits may be available to several
types of small businesses based average gross revenues (small, very
small and entrepreneur) pursuant to the competitive bidding rules
adopted in conjunction with the requirements for the auction and/or as
identified in part 101 of the Commission's rules for the specific fixed
microwave services frequency bands.
749. In frequency bands where licenses were subject to auction, the
Commission notes that as a general matter, the number of winning
bidders that qualify as small businesses at the close of an auction
does not necessarily represent the number of small businesses currently
in service. Further, the Commission does not generally track subsequent
business size unless, in the context of assignments or transfers,
unjust enrichment issues are implicated. Additionally, since the
Commission does not collect data on the number of employees for
licensees providing these services, at this time we are not able to
estimate the number of licensees with active licenses that would
qualify as small under the SBA's small business size standard.
750. Broadband Radio Service and Educational Broadband Service.
Broadband Radio Service systems, previously referred to as Multipoint
Distribution Service (MDS) and Multichannel Multipoint Distribution
Service (MMDS) systems, and ``wireless cable,'' transmit video
programming to subscribers and provide two-way high speed data
operations using the microwave frequencies of the Broadband Radio
Service (BRS) and Educational Broadband Service (EBS) (previously
referred to as the Instructional Television Fixed Service (ITFS)).
Wireless cable operators that use spectrum in the BRS often
supplemented with leased channels from the EBS, provide a competitive
alternative to wired cable and other multichannel video programming
distributors. Wireless cable programming to subscribers resembles cable
television, but instead of coaxial cable, wireless cable uses microwave
channels.
751. In light of the use of wireless frequencies by BRS and EBS
services, the closest industry with a SBA small business size standard
applicable to these services is Wireless Telecommunications Carriers
(except Satellite). The SBA small business size standard for this
industry classifies a business as small if it has 1,500 or fewer
employees. U.S. Census Bureau data for 2017 show that there were 2,893
firms that operated in this industry for the entire year. Of this
number, 2,837 firms employed fewer than 250 employees. Thus, under the
SBA size standard, the Commission estimates that a majority of
licensees in this industry can be considered small.
752. According to Commission data as December 2021, there were
approximately 5,869 active BRS and EBS licenses. The Commission's small
business size standards with respect to BRS involves eligibility for
bidding credits and installment payments in the auction of licenses for
these services. For the auction of BRS licenses, the Commission adopted
criteria for three groups of small businesses. A very small business is
an entity that, together with its affiliates and controlling interests,
has average annual gross revenues exceed $3 million and did not exceed
$15 million for the preceding three years, a small business is an
entity that, together with its affiliates and controlling interests,
has average gross revenues exceed $15 million and did not exceed $40
million for the preceding three years, and an entrepreneur is an entity
that, together with its affiliates and controlling interests, has
average gross revenues not exceeding $3 million for the preceding three
years. Of the ten winning bidders for BRS licenses, two bidders
claiming the small business status won 4 licenses, one bidder claiming
the very small business status won three licenses and two bidders
claiming entrepreneur status won six licenses. One of the winning
bidders claiming a small business status classification in the BRS
license auction has an active licenses as of December 2021.
753. The Commission's small business size standards for EBS define
a small business as an entity that, together with its affiliates, its
controlling interests and the affiliates of its controlling interests,
has average gross revenues that are not more than $55 million for the
preceding five (5) years, and a very small business is an entity that,
together with its affiliates, its controlling interests and the
affiliates of its controlling interests, has average gross revenues
that are not more than $20 million for the preceding five (5)
[[Page 45550]]
years. In frequency bands where licenses were subject to auction, the
Commission notes that as a general matter, the number of winning
bidders that qualify as small businesses at the close of an auction
does not necessarily represent the number of small businesses currently
in service. Further, the Commission does not generally track subsequent
business size unless, in the context of assignments or transfers,
unjust enrichment issues are implicated. Additionally, since the
Commission does not collect data on the number of employees for
licensees providing these services, at this time we are not able to
estimate the number of licensees with active licenses that would
qualify as small under the SBA's small business size standard.
5. Satellite Service Providers
754. Satellite Telecommunications. This industry comprises firms
``primarily engaged in providing telecommunications services to other
establishments in the telecommunications and broadcasting industries by
forwarding and receiving communications signals via a system of
satellites or reselling satellite telecommunications.'' Satellite
telecommunications service providers include satellite and earth
station operators. The SBA small business size standard for this
industry classifies a business with $38.5 million or less in annual
receipts as small. U.S. Census Bureau data for 2017 show that 275 firms
in this industry operated for the entire year. Of this number, 242
firms had revenue of less than $25 million. Additionally, based on
Commission data in the 2022 Universal Service Monitoring Report, as of
December 31, 2021, there were 65 providers that reported they were
engaged in the provision of satellite telecommunications services. Of
these providers, the Commission estimates that approximately 42
providers have 1,500 or fewer employees. Consequently, using the SBA's
small business size standard, a little more than half of these
providers can be considered small entities.
755. All Other Telecommunications. This industry is comprised of
establishments primarily engaged in providing specialized
telecommunications services, such as satellite tracking, communications
telemetry, and radar station operation. This industry also includes
establishments primarily engaged in providing satellite terminal
stations and associated facilities connected with one or more
terrestrial systems and capable of transmitting telecommunications to,
and receiving telecommunications from, satellite systems. Providers of
Internet services (e.g., dial-up ISPs) or Voice over Internet Protocol
(VoIP) services, via client-supplied telecommunications connections are
also included in this industry. The SBA small business size standard
for this industry classifies firms with annual receipts of $35 million
or less as small. U.S. Census Bureau data for 2017 show that there were
1,079 firms in this industry that operated for the entire year. Of
those firms, 1,039 had revenue of less than $25 million. Based on this
data, the Commission estimates that the majority of ``All Other
Telecommunications'' firms can be considered small.
6. Cable Service Providers
756. Cable and Other Subscription Programming. The U.S. Census
Bureau defines this industry as establishments primarily engaged in
operating studios and facilities for the broadcasting of programs on a
subscription or fee basis. The broadcast programming is typically
narrowcast in nature (e.g., limited format, such as news, sports,
education, or youth-oriented). These establishments produce programming
in their own facilities or acquire programming from external sources.
The programming material is usually delivered to a third party, such as
cable systems or direct-to-home satellite systems, for transmission to
viewers. The SBA small business size standard for this industry
classifies firms with annual receipts less than $41.5 million as small.
Based on U.S. Census Bureau data for 2017, 378 firms operated in this
industry during that year. Of that number, 149 firms operated with
revenue of less than $25 million a year and 44 firms operated with
revenue of $25 million or more. Based on this data, the Commission
estimates that a majority of firms in this industry are small.
757. Cable Companies and Systems (Rate Regulation). The Commission
has developed its own small business size standard for the purpose of
cable rate regulation. Under the Commission's rules, a ``small cable
company'' is one serving 400,000 or fewer subscribers nationwide. Based
on industry data, there are about 420 cable companies in the U.S. Of
these, only seven have more than 400,000 subscribers. In addition,
under the Commission's rules, a ``small system'' is a cable system
serving 15,000 or fewer subscribers. Based on industry data, there are
about 4,139 cable systems (headends) in the U.S. Of these, about 639
have more than 15,000 subscribers. Accordingly, the Commission
estimates that the majority of cable companies and cable systems are
small.
758. Cable System Operators (Telecom Act Standard). The
Communications Act of 1934, as amended, contains a size standard for a
``small cable operator,'' which is ``a cable operator that, directly or
through an affiliate, serves in the aggregate fewer than one percent of
all subscribers in the United States and is not affiliated with any
entity or entities whose gross annual revenues in the aggregate exceed
$250,000,000.'' For purposes of the Telecom Act Standard, the
Commission determined that a cable system operator that serves fewer
than 498,000 subscribers, either directly or through affiliates, will
meet the definition of a small cable operator. Based on industry data,
only six cable system operators have more than 498,000 subscribers.
Accordingly, the Commission estimates that the majority of cable system
operators are small under this size standard. We note however, that the
Commission neither requests nor collects information on whether cable
system operators are affiliated with entities whose gross annual
revenues exceed $250 million. Therefore, we are unable at this time to
estimate with greater precision the number of cable system operators
that would qualify as small cable operators under the definition in the
Communications Act.
7. Other
759. Electric Power Generators, Transmitters, and Distributors. The
U.S. Census Bureau defines the utilities sector industry as comprised
of ``establishments, primarily engaged in generating, transmitting,
and/or distributing electric power. Establishments in this industry
group may perform one or more of the following activities: (1) operate
generation facilities that produce electric energy; (2) operate
transmission systems that convey the electricity from the generation
facility to the distribution system; and (3) operate distribution
systems that convey electric power received from the generation
facility or the transmission system to the final consumer.'' This
industry group is categorized based on fuel source and includes
Hydroelectric Power Generation, Fossil Fuel Electric Power Generation,
Nuclear Electric Power Generation, Solar Electric Power Generation,
Wind Electric Power Generation, Geothermal Electric Power Generation,
Biomass Electric Power Generation, Other Electric Power Generation,
Electric Bulk Power Transmission and Control and Electric Power
Distribution.
[[Page 45551]]
760. The SBA has established a small business size standard for
each of these groups based on the number of employees which ranges from
having fewer than 250 employees to having fewer than 1,000 employees.
U.S. Census Bureau data for 2017 indicate that for the Electric Power
Generation, Transmission and Distribution industry there were 1,693
firms that operated in this industry for the entire year. Of this
number, 1,552 firms had less than 250 employees. Based on this data and
the associated SBA size standards, the majority of firms in this
industry can be considered small entities.
761. All Other Information Services. This industry comprises
establishments primarily engaged in providing other information
services (except news syndicates, libraries, archives, internet
publishing and broadcasting, and web search portals). The SBA small
business size standard for this industry classifies firms with annual
receipts of $30 million or less as small. U.S. Census Bureau data for
2017 show that there were 704 firms in this industry that operated for
the entire year. Of those firms, 556 had revenue of less than $25
million. Consequently, we estimate that the majority of firms in this
industry are small entities.
762. Internet Service Providers (Non-Broadband). Internet access
service providers using client-supplied telecommunications connections
(e.g., dial-up ISPs) as well as VoIP service providers using client-
supplied telecommunications connections fall in the industry
classification of All Other Telecommunications. The SBA small business
size standard for this industry classifies firms with annual receipts
of $35 million or less as small. For this industry, U.S. Census Bureau
data for 2017 show that there were 1,079 firms in this industry that
operated for the entire year. Of those firms, 1,039 had revenue of less
than $25 million. Consequently, under the SBA size standard a majority
of firms in this industry can be considered small.
E. Description of Projected Reporting, Recordkeeping and Other
Compliance Requirements for Small Entities
763. Reclassifying broadband as a Title II service may lead to some
increase in compliance costs for small entities, however we find that
these compliance costs are likely to be quite small. The Order
reimposes the text of the transparency rule from 2015, and clarifies
and adopts certain changes to the transparency rule that may impact
small entities. We reinstate rules that prohibit BIAS providers from
blocking or throttling the information transmitted over their networks
or engaging in paid or affiliated prioritization arrangements, and
reinstate a general conduct standard that prohibits practices that
cause unreasonable interference or unreasonable disadvantage to
consumers or edge providers. We modify the transparency rule by
reversing the changes made under the RIF Order, restoring the
requirements to disclose certain network practices and performance
characteristics eliminated by the RIF Order, and adopting changes to
the means of disclosure, including adopting a direct notification
requirement. Below, we summarize the recordkeeping and reporting
obligations of the Order.
764. First, we describe the specific commercial terms, network
performance characteristics, and network practices providers must
disclose to ensure compliance with the transparency rule. For example,
to fully satisfy their duty to disclose network performance
characteristics, providers must now disclose their zero rating
practices. Specifically, BIAS providers must report any practice that
exempts particular edge services, devices, applications, and content
(edge products) from an end user's usage allowance or data cap. We
reinstate the enhanced performance characteristics disclosures
eliminated in 2017 to require BIAS providers to disclose packet loss
and to require that performance characteristics be reported with
greater geographic granularity and be measured in terms of average
performance over a reasonable period of time and during times of peak
usage. We temporarily (with the potential to become permanent) exempt
BIAS providers that have 100,000 or fewer broadband subscribers as per
their most recent FCC Form 477, aggregated over all affiliates of the
provider, from these latter requirements.
765. Second, we require that providers make all necessary
disclosures on their own publicly-available websites. We no longer
permit direct disclosure to the Commission, as allowed under the RIF
Order. Additionally, we require that all disclosures made pursuant to
the transparency rule be made in machine-readable format. By ``machine
readable,'' we mean providing ``data in a format that can be easily
processed by a computer without human intervention while ensuring no
semantic meaning is lost.''
766. Third, we re-implement the requirement for BIAS providers to
directly notify end users if their particular use of a network will
trigger a network practice, based on a user's demand during more than
the period of congestion, that is likely to have a significant impact
on the end user's use of the service. The purpose of such notification
is to provide the affected end users with sufficient information and
time to consider adjusting their usage to avoid application of the
practice. Recognizing the extra burden this requirement creates, we
provide a temporary exemption, with the potential to become permanent,
for providers with 100,000 or fewer subscribers that will be
promulgated by the Consumer & Governmental Affairs Bureau. We discuss
this exemption and other steps to minimize compliance costs in section
F, below.
F. Steps Taken To Minimize the Significant Economic Impact on Small
Entities and Significant Alternatives Considered
767. The RFA requires an agency to provide ``a description of the
steps the agency has taken to minimize the significant economic impact
on small entities . . . including a statement of the factual, policy,
and legal reasons for selecting the alternative adopted in the final
rule and why each one of the other significant alternatives to the rule
considered by the agency which affect the impact on small entities was
rejected.''
768. We have considered the factors for reinstating the obligations
above and modifying the transparency rule subsequent to receiving
substantive comments from the public and potentially affected entities.
The Commission has considered the economic impact on small entities, as
identified in comments filed in response to the 2023 Open Internet NPRM
and its IRFA in reaching its final conclusions and taking action in
this proceeding.
769. We considered, for example, whether to fully reimplement the
transparency requirements from the 2015 Open Internet Order and adopted
a temporary (with the potential to become permanent) exemption for
providers with 100,000 or fewer subscribers from the compliance with
certain reporting requirements regarding performance characteristics to
minimize burdens for providers. Furthermore, in response to concerns
expressed by some commenters, we provided a temporary (with the
potential to become permanent) exemption from compliance with the
direct notification requirement for providers with 100,000 or fewer
subscribers, as such providers are less likely to already have in place
the tools and mechanisms needed to allow customers to track usage or
provide automated direct notifications. This exemption, which will have
the effect of
[[Page 45552]]
benefitting many small providers, provides regulatory flexibility while
maintaining the Commission's goals and is similar to exemptions we have
adopted in other contexts. For example, for the broadband labels
proceeding, we created a longer implementation period for certain
providers.
770. As we did in 2015, we determined that a flat ban on paid
prioritization has advantages over alternative approaches, particularly
in relieving small edge providers, innovators, and consumers of the
burden of detecting and challenging instances of harmful paid
prioritization. In developing our rule, we specifically noted the
concerns commenters expressed over the harms that would particularly
befall small edge providers should they be required to pay for priority
access. We believe that the adoption of a bright-line rule prohibiting
paid prioritization will likely lower compliance costs for small and
other entities because they provide greater certainty to market
participants. Also, costs for compliance will be lower compared to the
current regulatory framework where harmful conduct would be subject to
ex post, case-by-case enforcement by antitrust and consumer protection
authorities. This could lead to lengthy enforcement actions and higher
compliance costs for BIAS providers. In our judgment, enforcement by an
expert agency will achieve timelier and more consistent outcomes and
reduce the costs of uncertainty resulting in significant public
interest benefits.
771. In reimplementing our no-unreasonable interference/
disadvantage standard, we were mindful of how a rule that operates on a
case-by-case basis may be more difficult for smaller providers. As
such, we attempted to provide an extensive list of factors that we will
consider in our analysis. Moreover, in consideration of the concerns
raised by certain commenters that this rule will create difficulty for
smaller providers, we implemented an advisory opinion process whereby
providers may seek specific guidance from the Commission.
772. We continue to find that our existing informal complaint rule
offers an accessible and effective mechanism for parties--including
consumers and small businesses with limited resources--to report
possible noncompliance with our open internet rules without being
subject to burdensome evidentiary or pleading requirements. In
formulating our open internet formal complaint rules, we noted NFIB's
request to ``make [our] regulations as concise and simple as
possible,'' and opted to maintain our existing formal complaint rules
codified at Sec. Sec. 1.720 through 1.740 to streamline the complaint
process, which should accord with NFIB's request.
773. Upon finding that BIAS is best classified under the statute as
a telecommunications service under Title II, we broadly forbear, to the
full extent permitted by our authority under section 10 of the Act,
from applying provisions of Title II of the Act and implementing
Commission rules that would apply to BIAS by virtue of its
classification as a Title II service--including from all ex ante direct
rate regulation--to minimize the burdens an all BIAS providers,
including small BIAS providers. For provisions of Title II that the
Commission finds it is not in the public interest from which to forbear
with respect to BIAS providers, we take additional actions to minimize
the effects on small providers. For example, in applying section 222 to
BIAS, we waive application of all of the Commission's rules
implementing section 222 to BIAS. Likewise, to address the potential
impact on BIAS providers that will be subject to section 214 of the
Act, we grant blanket section 214 authority for the provision of BIAS
to any entity currently providing or seeking to provide BIAS--except
those specific identified entities whose application for international
section 214 authority was previously denied or whose domestic and
international section 214 authority was previously revoked and their
current and future affiliates and subsidiaries. We also waive the
current rules implementing section 214(a)-(d) of the Act with respect
to BIAS to the extent they are otherwise applicable. Additionally, we
find that foreign ownership in excess of the statutory benchmarks in
common carrier wireless licensees that are providing only BIAS is in
the public interest under section 310(b)(3) when such foreign ownership
is held in the licensee through a U.S.-organized entity that does not
control the licensee, and under section 310(b)(4) of the Act, and we
waive the requirements to request a declaratory ruling under Sec. Sec.
1.5000 through 1.5004 of the Commission's rules pending adoption of any
rules for BIAS. The Commission expects to release a FNPRM at a future
time to examine whether any section 214 rules specifically tailored to
BIAS, including for small providers, are warranted. Consistent with our
tailored regulatory approach, we also considered the impact of section
214 exit certification requirements and find that it is prudent and in
the public interest to forbear from requiring providers to obtain
approval from the Commission to discontinue, reduce, or impair service
to a community. We expect that this will minimize burdens on small
entities.
774. We also considered the benefits certain Title II provisions
offer to providers, particularly BIAS-only providers, which are
frequently small providers, in making its forbearance determination.
For example, the Commission did not find the standards for forbearance
to be met with respect to sections 224, 253, and 332, which all assist
providers with network deployment. Section 224 guarantees pole
attachment rights to all BIAS providers, including BIAS-only providers,
who are frequently small entities. Section 253 permits BIAS-only
providers to seek the Commission's intervention when State or local
regulations interfere with their network deployment. Meanwhile, section
332 guarantees that State and local governments act on requests by
wireless providers, including BIAS-only providers, to place, construct,
or modify personal wireless service facilities within a reasonable
period of time.
G. Report to Congress
775. The Commission will send a copy of the Declaratory Ruling,
Order, Report and Order, and Order on Reconsideration, including the
FRFA, in a report to Congress pursuant to the Congressional Review Act.
In addition, the Commission will send a copy of the Declaratory Ruling,
Order, Report and Order, and Order on Reconsideration, including the
FRFA, to the Chief Counsel for Advocacy of the SBA. A copy of the
Declaratory Ruling, Order, Report and Order, and Order on
Reconsideration and FRFA (or summaries thereof) will also be published
in the Federal Register.
IX. Ordering Clauses
776. Accordingly, it is ordered, pursuant to the authority
contained in sections 1, 2, 3, 4, 10, 13, 201, 202, 206, 207, 208, 209,
214, 215, 216, 217, 218, 219, 220, 230, 251, 254, 256, 257, 301, 303,
304, 307, 309, 310, 312, 316, 332, 403, 501, 503, and 602 of the
Communications Act of 1934, as amended, and section 706 of the
Telecommunications Act of 1996, as amended, 47 U.S.C 151, 152, 153,
154(i)-(j), 160, 163, 201, 202, 206, 207, 208, 209, 214, 215, 216, 217,
218, 219, 220, 230, 251, 254, 256, 257, 301, 303, 304, 307, 309, 310,
312, 316, 332, 403, 501, 503, 522, 1302, that the Declaratory Ruling,
Order, Report and Order, and Order on Reconsideration is adopted and
that parts 8 and 20 of the
[[Page 45553]]
Commission's Rules, 47 CFR parts 8 and 20, are amended.
777. It is further ordered, pursuant to sections 1, 4(i), 4(j),
214, 215, 218, and 403 of the Communications Act of 1934, as amended,
47 U.S.C. 151, 154(i), 154(j), 214, 215, 218, 403, and Sec. Sec. 1.1,
2.903, 63.12, 63.18, and 63.21 of the Commission's rules, 47 CFR 1.1,
2.903, 63.12, 63.18, and 63.21, that blanket section 214 authority for
the provision of broadband internet access service is granted to any
entity currently providing or seeking to provide broadband internet
access service except for China Mobile International (USA) Inc., China
Telecom (Americas) Corporation, China Unicom (Americas) Operations
Limited, Pacific Networks Corp., and ComNet (USA) LLC and their current
and future affiliates and subsidiaries.
778. It is further ordered, pursuant to sections 1, 4(i), 4(j),
214, 215, 218, and 403 of the Communications Act of 1934, as amended,
47 U.S.C. 151, 154(i), 154(j), 214, 215, 218, 403, and Sec. Sec. 1.1,
2.903, 63.12, 63.18, and 63.21 of the Commission's rules, 47 CFR 1.1,
2.903, 63.12, 63.18, and 63.21, that China Mobile International (USA)
Inc., China Telecom (Americas) Corporation, China Unicom (Americas)
Operations Limited, Pacific Networks Corp., and ComNet (USA) LLC, and
their affiliates and subsidiaries as defined pursuant to 47 CFR
2.903(c), shall discontinue any and all provision of BIAS no later than
sixty (60) days after the effective date of the Order as established in
the Federal Register.
779. It is further ordered, pursuant to sections 1, 2, 4(i), 4(j),
160, 201-205, 211, 214, and 303(r) of the Communications Act of 1934,
as amended, 47 U.S.C. 151, 152, 154(i), 154(j), 160, 201-205, 211, 214,
303(r); sections 1-6 of the Cable Landing License Act of 1921, 42 Stat.
8, 47 U.S.C. 34-39; section 402(b)(2)(B), (c) of the Telecommunications
Act of 1996, Public Law 104-104, 110 Stat. 56, 47 U.S.C. 204 note, 208
note, 214 note; and Sec. 1.3 of the Commission's rules, 47 CFR 1.3,
that Sec. Sec. 1.763, 43.82, 63.03, 63.04, 63.09 through 63.14, 63.17,
63.18, 63.20 through 63.25, 63.50 through 63.53, 63.65, 63.66, 63.100,
63.701, and 63.702 of the Commission's rules, 47 CFR 1.763, 43.82,
63.03, 63.04, 63.09 through 63.14, 63.17, 63.18, 63.20 through 63.25,
63.50 through 63.53, 63.65, 63.66, 63.100, 63.701, and 63.702, are
waived as applied to the provision of broadband internet access
service.
780. It is further ordered that a copy of the Declaratory Ruling,
Order, Report and Order, and Order on Reconsideration shall be sent by
Certified Mail, Return Receipt Requested, and by regular first-class
mail to the addresses of record of China Mobile International (USA)
Inc., China Telecom (Americas) Corporation, China Unicom (Americas)
Operations Limited, Pacific Networks Corp., and ComNet (USA) LLC, and
shall be posted in the Office of the Secretary pursuant to section 413
of the Communications Act of 1934, as amended, 47 U.S.C. 413.
781. It is further ordered, pursuant to sections 1, 2, 4(i), 4(j),
10, 303(r), 309, 310, and 403 of the Communications Act of 1934, as
amended, 47 U.S.C. 151, 152, 154(i), 154(j), 160, 303(r), 309, 310,
403, and Sec. Sec. 1.3 and 1.5000 through 1.5004 of the Commission's
rules, 47 CFR 1.3, 1.5000 through 1.5004, that the requirements to
request a declaratory ruling pursuant to section 310(b)(3)-(4) of the
Act and Sec. Sec. 1.5000 through 1.5004 of the Commission's rules are
waived for common carrier wireless licensees that are providing only
broadband internet access service pending the adoption of any rules for
broadband internet access service.
782. It is further ordered, pursuant to sections 1, 2, 4(i), 4(j),
222, and 303(r) of the Communications Act of 1934, as amended, 47
U.S.C. 151, 152, 154(i), 154(j), 222, 303(r), and Sec. 1.3 of the
Commission's rules, 47 CFR 1.3, that part 64, subpart U, of the
Commission's rules is waived as applied to the provision of broadband
internet access service.
783. It is further ordered that the Declaratory Ruling, Order,
Report and Order, and Order on Reconsideration shall be effective 60
days after publication in the Federal Register, except that those
amendments which contain new or modified information collection
requirements will not become effective until after the Office of
Management and Budget completes any review that the Wireline
Competition Bureau determines is required under the Paperwork Reduction
Act. The Commission directs the Wireline Competition Bureau to announce
the effective date for those amendments by subsequent Public Notice. It
is our intention in adopting the Declaratory Ruling, Order, Report and
Order, and Order on Reconsideration that, if any provision of the
Declaratory Ruling, Order, Report and Order, and Order on
Reconsideration, or the application thereof to any person or
circumstance, is held to be unlawful, the remaining portions of such
Declaratory Ruling, Order, Report and Order, and Order on
Reconsideration not be deemed unlawful, and the application of such
Declaratory Ruling, Order, Report and Order, and Order on
Reconsideration to other person or circumstances, shall remain in
effect to the fullest extent permitted by law.
784. It is further ordered that the Office of the Secretary,
Reference Information Center shall send a copy of the Declaratory
Ruling, Order, Report and Order, and Order on Reconsideration,
including the Final Regulatory Flexibility Analysis and Initial
Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of
the Small Business Administration.
785. It is further ordered that the Office of the Managing
Director, Performance and Program Management, shall send a copy of the
Declaratory Ruling, Order, Report and Order, and Order on
Reconsideration in a report to be sent to Congress and the Government
Accountability Office pursuant to the Congressional Review Act, see 5
U.S.C. 801(a)(1)(A).
786. It is ordered, that, pursuant to 47 CFR 1.4(b)(1), the period
for filing petitions for reconsideration or petitions for judicial
review of the Declaratory Ruling, Order, Report and Order, and Order on
Reconsideration will commence on the date that a summary of the
Declaratory Ruling, Order, Report and Order, and Order on
Reconsideration is published in the Federal Register.
787. It is further ordered that the Petitions for Reconsideration
of the Restoring Internet Freedom Remand Order (86 FR 994 (Jan. 7,
2021)) are granted to the extent described herein and otherwise
dismissed as moot.
List of Subjects for 47 CFR Parts 8 and 20
Common carriers, Communications, Communications common carriers,
Radio, Reporting and recordkeeping requirements, Satellites,
Telecommunications.
Federal Communications Commission.
Katura Jackson,
Federal Register Liaison Officer.
Final Rules
For the reasons set out in this document, the Federal
Communications Commission amends 47 CFR chapter I as follows:
0
1. Under the authority of 47 U.S.C 151, 152, 153, 154(i)-(j), 160, 163,
201, 202, 206, 207, 208, 209, 214, 215, 216, 217, 218, 219, 220, 230,
251, 254, 256, 257, 301, 303, 304, 307, 309, 310, 312, 316, 332, 403,
501, 503, 522, 1302, revise the heading for subchapter A to read as
follows:
[[Page 45554]]
Subchapter A--Internet Openness
PART 8--SAFEGUARDING AND SECURING THE OPEN INTERNET
0
2. The authority citation for part 8 is revised to read as follows:
Authority: 47 U.S.C. 151, 152, 153, 154, 163, 201, 202, 206,
207, 208, 209, 216, 217, 257, 301, 302a, 303, 304, 307, 309, 312,
316, 332, 403, 501, 503, 522, 1302, 1753.
0
3. Revise the heading for part 8 to read as set forth above.
Sec. 8.1 [Redesignated as Sec. 8.2]
0
4. Redesignate Sec. 8.1 as Sec. 8.2.
0
5. Add new Sec. 8.1 to read as follows:
Sec. 8.1 Definitions.
(a) [Reserved]
(b) 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.
(c) Edge provider. Any individual or entity that provides any
content, application, or service over the internet, and any individual
or entity that provides a device used for accessing any content,
application, or service over the internet.
(d) End user. Any individual or entity that uses a broadband
internet access service.
(e) Reasonable network management. A network management practice is
a practice that has a primarily technical network management
justification, but does not include other business practices. A network
management practice is reasonable if it is primarily used for and
tailored to achieving a legitimate network management purpose, taking
into account the particular network architecture and technology of the
broadband internet access service.
Sec. 8.2 [Amended]
0
6. Amend newly redesignated Sec. 8.2 by removing paragraph (c).
0
7. Delayed indefinitely, further amend newly redesignated Sec. 8.2 by:
0
a. Revising the introductory text of paragraph (a);
0
b. Removing paragraph (a)(7); and
0
c. Revising paragraph (b).
The revisions read as follows:
Sec. 8.2 Transparency.
(a) 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. Disclosures made under this paragraph (a)
must be displayed on the broadband internet access service provider's
website in a machine-readable format.
* * * * *
(b) Compliance with paragraphs (a)(1), (2), and (4) through (6) of
this section for providers with 100,000 or fewer subscriber lines is
required as of October 10, 2024, and for all other providers is
required as of April 10, 2024, except that compliance with the
requirement in paragraph (a)(2) of this section to make labels
accessible in online account portals will not be required for all
providers until October 10, 2024. Compliance with paragraph (a)(3) of
this section is required for all providers as of October 10, 2024.
0
8. Add Sec. 8.3 to read as follows:
Sec. 8.3 Conduct-based rules.
(a) No blocking. A person engaged in the provision of 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.
(b) No throttling. A person engaged in the provision of broadband
internet access service, insofar as such person is so engaged, shall
not impair or degrade lawful internet traffic on the basis of internet
content, application, or service, or use of a non-harmful device,
subject to reasonable network management.
(c) No paid prioritization. (1) A person engaged in the provision
of broadband internet access service, insofar as such person is so
engaged, shall not engage in paid prioritization. ``Paid
prioritization'' refers to the management of a broadband provider's
network to directly or indirectly favor some traffic over other
traffic, including through use of techniques such as traffic shaping,
prioritization, resource reservation, or other forms of preferential
traffic management, either:
(i) In exchange for consideration (monetary or otherwise) from a
third party; or
(ii) To benefit an affiliated entity.
(2) The Commission may waive the ban on paid prioritization only if
the petitioner demonstrates that the practice would provide some
significant public interest benefit and would not harm the open nature
of the internet.
(d) No unreasonable interference or unreasonable disadvantage
standard for internet conduct. (1) Any person engaged in the provision
of broadband internet access service, insofar as such person is so
engaged, shall not unreasonably interfere with or unreasonably
disadvantage:
(i) End users' ability to select, access, and use broadband
internet access service or the lawful internet content, applications,
services, or devices of their choice; or
(ii) Edge providers' ability to make lawful content, applications,
services, or devices available to end users.
(2) Reasonable network management shall not be considered a
violation of this paragraph (d).
(e) Effect on other obligations or authorizations. Nothing in this
part supersedes any obligation or authorization a provider of broadband
internet access service may have to address the needs of emergency
communications or law enforcement, public safety, or national security
authorities, consistent with or as permitted by applicable law, or
limits the provider's ability to do so. Nothing in this part prohibits
reasonable efforts by a provider of broadband internet access service
to address copyright infringement or other unlawful activity.
0
9. Add Sec. 8.6 to read as follows:
Sec. 8.6 Advisory opinions.
(a) Procedures. (1) Any entity that is subject to the Commission's
open internet rules in this part may request an advisory opinion from
the Enforcement Bureau regarding the permissibility of its proposed
policies and practices relating to broadband internet access service.
Requests for advisory opinions may be filed via the Commission's
website or with the Office of the Secretary and must be copied to the
Chief of the Enforcement Bureau and the Chief of the Investigations and
Hearings Division of the Enforcement Bureau.
(2) The Enforcement Bureau may, in its discretion, determine
whether to issue an advisory opinion in response to a particular
request or group of requests and will inform each requesting entity, in
writing, whether the Bureau plans to issue an advisory opinion
regarding the matter in question.
(3) Requests for advisory opinions must relate to a proposed policy
or practice that the requesting party
[[Page 45555]]
intends to pursue. The Enforcement Bureau will not respond to requests
for opinions that relate to ongoing or prior conduct, and the Bureau
may initiate an enforcement investigation to determine whether such
conduct violates the open internet rules in this part. Additionally,
the Bureau will not respond to requests if the same or substantially
the same conduct is the subject of a current Government investigation
or proceeding, including any ongoing litigation or open rulemaking at
the Commission.
(4) Requests for advisory opinions must be accompanied by all
material information sufficient for Enforcement Bureau staff to make a
determination on the policy or practice for which review is requested.
Requesters must certify that factual representations made to the Bureau
are truthful and accurate, and that they have not intentionally omitted
any information from the request. A request for an advisory opinion
that is submitted by a business entity or an organization must be
executed by an individual who is authorized to act on behalf of that
entity or organization.
(5) Enforcement Bureau staff will have discretion to ask parties
requesting advisory opinions, as well as other parties that may have
information relevant to the request or that may be impacted by the
proposed conduct, for additional information that the staff deems
necessary to respond to the request. Such additional information, if
furnished orally or during an in-person conference with Bureau staff,
shall be promptly confirmed in writing. Parties are not obligated to
respond to staff inquiries related to advisory opinions. If a
requesting party fails to respond to a staff inquiry, then the Bureau
may dismiss that party's request for an advisory opinion. If a party
voluntarily responds to a staff inquiry for additional information,
then it must do so by a deadline to be specified by Bureau staff.
Advisory opinions will expressly state that they rely on the
representations made by the requesting party, and that they are
premised on the specific facts and representations in the request and
any supplemental submissions.
(b) Response. After review of a request submitted under this
section, the Enforcement Bureau will:
(1) Issue an advisory opinion that will state the Bureau's present
enforcement intention with respect to whether or not the proposed
policy or practice detailed in the request complies with the
Commission's open internet rules in this part;
(2) Issue a written statement declining to respond to the request;
or
(3) Take such other position or action as it considers appropriate.
An advisory opinion states only the enforcement intention of the
Enforcement Bureau as of the date of the opinion, and it is not binding
on any party. Advisory opinions will be issued without prejudice to the
Enforcement Bureau or the Commission to reconsider the questions
involved, or to rescind or revoke the opinion. Advisory opinions will
not be subject to appeal or further review.
(c) Enforcement effect. The Enforcement Bureau will have discretion
to indicate the Bureau's lack of enforcement intent in an advisory
opinion based on the facts, representations, and warranties made by the
requesting party. The requesting party may rely on the opinion only to
the extent that the request fully and accurately contains all the
material facts and representations necessary to issuance of the opinion
and the situation conforms to the situation described in the request
for opinion. The Bureau will not bring an enforcement action against a
requesting party with respect to any action taken in good faith
reliance upon an advisory opinion if all of the relevant facts were
fully, completely, and accurately presented to the Bureau, and where
such action was promptly discontinued upon notification of rescission
or revocation of the Commission's or Bureau's approval.
(d) Public disclosure. The Enforcement Bureau will make advisory
opinions available to the public on the Commission's website. The
Bureau will also publish the initial request for guidance and any
associated materials. Parties soliciting advisory opinions may request
confidential treatment of information submitted in connection with a
request for an advisory opinion pursuant to Sec. 0.459 of this
chapter.
(e) Withdrawal of request. Any requesting party may withdraw a
request for review at any time prior to receipt of notice that the
Enforcement Bureau intends to issue an adverse opinion, or the issuance
of an opinion. The Enforcement Bureau remains free, however, to submit
comments to such requesting party as it deems appropriate. Failure to
take action after receipt of documents or information, whether
submitted pursuant to this procedure or otherwise, does not in any way
limit or stop the Bureau from taking such action at such time
thereafter as it deems appropriate. The Bureau reserves the right to
retain documents submitted to it under this procedure or otherwise and
to use them for all governmental purposes.
PART 20--COMMERCIAL MOBILE SERVICES
0
10. The authority citation for part 20 continues to read as follows:
Authority: 47 U.S.C. 151, 152(a), 154(i), 155, 157, 160, 201,
214, 222, 251(e), 301, 302, 303, 303(b), 303(r), 307, 307(a), 309,
309(j)(3), 316, 316(a), 332, 610, 615, 615a, 615b, and 615c, unless
otherwise noted.
0
11. Amend Sec. 20.3 by:
0
a. Revising the definitions of ``Commercial mobile radio service'';
0
b. Removing the definition of ``Interconnected Service'' and adding the
definition for ``Interconnected service'' in its place; and
0
c. Removing the definition for ``Public Switched Network'' and adding
the definition for ``Public switched network'' in its place.
The revision and additions read as follows:
Sec. 20.3 Definitions.
* * * * *
Commercial mobile radio service. A mobile service that is:
(1)(i) Provided for profit, i.e., with the intent of receiving
compensation or monetary gain;
(ii) An interconnected service; and
(iii) Available to the public, or to such classes of eligible users
as to be effectively available to a substantial portion of the public;
or
(2) The functional equivalent of such a mobile service described in
paragraph (1) of this definition, including a mobile broadband internet
access service as defined in Sec. 8.1 of this chapter.
(3) A variety of factors may be evaluated to make a determination
whether the mobile service in question is the functional equivalent of
a commercial mobile radio service, including: Consumer demand for the
service to determine whether the service is closely substitutable for a
commercial mobile radio service; whether changes in price for the
service under examination, or for the comparable commercial mobile
radio service, would prompt customers to change from one service to the
other; and market research information identifying the targeted market
for the service under review.
(4) Unlicensed radio frequency devices under part 15 of this
chapter are excluded from this definition of commercial mobile radio
service.
* * * * *
Interconnected service. A service:
(1) That is interconnected with the public switched network, or
interconnected with the public switched network through an
interconnected service provider, that gives subscribers
[[Page 45556]]
the capability to communicate to or receive communication from other
users on the public switched network; or
(2) For which a request for such interconnection is pending
pursuant to section 332(c)(1)(B) of the Communications Act, 47 U.S.C.
332(c)(1)(B). A mobile service offers interconnected service even if
the service allows subscribers to access the public switched network
only during specified hours of the day, or if the service provides
general access to points on the public switched network but also
restricts access in certain limited ways. Interconnected service does
not include any interface between a licensee's facilities and the
public switched network exclusively for a licensee's internal control
purposes.
* * * * *
Public switched network. The network that includes any common
carrier switched network, whether by wire or radio, including local
exchange carriers, interexchange carriers, and mobile service
providers, that uses the North American Numbering Plan, or public IP
addresses, in connection with the provision of switched services.
* * * * *
[FR Doc. 2024-10674 Filed 5-21-24; 8:45 am]
BILLING CODE 6712-01-P