Net Neutrality Proposals Will Impact State Regulators

For years now, a debate has been raging throughout the nation over how access to the Internet should – or should not – be regulated. Commonly referred to as ‘Net Neutrality’, this debate focuses on Internet traffic, and whether or not Internet service providers (ISPs) should be permitted to prioritize traffic based off where it is coming, and where it is going. Naturally, most website operators are opposed to any rules that would allow an ISP to have control over their traffic, as they fear it may prohibit or hinder access to their domains. ISPs, on the other hand, believe that they should be able to control and prioritize traffic that is carried over their equipment. Earlier this year, we got a sign that this debate may be coming to an end.

On May 15, the Federal Communications Commission (FCC) announced that it is weighing two regulatory proposals relating to Net Neutrality. The first, favored by ISPs, would allow them to create ‘fast’ and ‘slow’ broadband lanes, or otherwise prioritize Internet traffic based off its source and its destination. This route is widely opposed by most Internet domains as it would effectively end ‘Net Neutrality’, or the practice of treating all Internet traffic equally, as it currently exists. Though there are currently no clear rules against prioritizing traffic, it is not considered widespread. Netflix claimed earlier this year that it was being throttled by major ISPs and was forced to pay them directly for its users to have prioritized access to its services.

The other approach, favored by major Internet domains as well as President Obama, would reclassify broadband Internet as a telecommunications service and thus bring it under the same regulatory oversight that telephone service providers fall under. This approach would effectively allow broadband Internet to be regulated as a public utility. Not only would this allow the FCC to preserve Net Neutrality, it would open the door to numerous other federal and state-level regulations that do not apply to broadband providers.

As of right now, states legislators and regulators are at a standstill while they eagerly await a decision from the FCC on how it will act on these rules; under the Communications Act of 1996, the FCC has the authority to preempt state-level restrictions, making them hesitant to take up any proposals that could potentially be thrown out by federal regulators in the coming months. Should the FCC choose to decide in favor of regulating broadband Internet as a telecommunications service, the entire framework in which both state and federal regulators operate would be turned on its head, and states would be forced to react to this new regime.

The earliest the FCC could make a decision would be at their first meeting of 2015, on January 29, though there is currently no indication as to whether they will be prepared to. Before a final proposal can be voted on by the five Commissioners tasked with policymaking, it also must be presented to all of them at least three weeks prior to any meeting, meaning the final proposed rule would need to be circulated by January 8 to be eligible for consideration on the 29th. FCC Chairman Tom Wheeler has personally stated that he would like the agency to take its time and create sustainable rules that can live up to a court challenge, “The big dogs are going to sue regardless of what comes out,”

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