UTC Statement on Net Neutrality

The FCC adopted rules for so-called Net Neutrality yesterday. In summary, the rules shouldn't have much direct impact on utilities, except in situations where the utility is also offering broadband Internet services. What impact, if any, will be indirect to the extent that utilities use commercial service providers that are subject to the rules.

What the rules require. There are four main parts to the net neutrality rules.

1. First, the rules require transparency. Carriers (both wireline and mobile wireless) must disclose to consumers information about their network management practices.
2. Second, the rules prohibit blocking, subject to reasonable network management. Wireline carriers are prohibited from blocking any lawful content, applications or services. Mobile wireless providers are prohibited from blocking any lawful websites or competing telephone providers. Blocking may be permissible if it is determined that it constitutes "reasonable network management".
3.Third, the rules prohibit unreasonable discrimination of Internet traffic. The rule only applies to wireline (not mobile wireless) carriers.
4.Fourth, the FCC will establish an advisory committee to enforce these rules.

What the rules allow. The rules will allow carriers to enter into agreements with customers to prioritize traffic; however, such agreements will raise red flags with the FCC and may lead to an investigation. For utilities, that means that they could contract with a carrier for priority access, especially with wireless service providers that are not subject to any non-discrimination requirements. However, there is a possibility that the FCC may investigate such agreements.
In addition, the FCC raised the issue of "specialized" services developed by broadband providers. These specialized services, such as voice-over-IP, are offered by broadband providers via their broadband networks, utilizing capacity on the platform that might otherwise be devoted to public Internet broadband access services. The Commission warned broadband providers that it would monitor the extent to which these private, specialized services potentially squeeze out broadband access services, thus undermining the goals of an open Internet contemplated by the network neutrality rules.

The full order of this decision won't be available for a few weeks, but a press release outlining the rules is available at the FCC's website. UTC will prepare a more complete summary once the full order of the FCC's decision has been released. Please direct any questions to legal@utc.org.