Below are highlights from today’s Federal Communications Commission (FCC) meeting on “Preserving the Open Internet.”

Today the FCC adopted a broad set of rules to control the network management practices of Internet providers. Chairman Julius Genachowski voted with Commissioners Michael Copps and Mignon Clyburn to implement the new rules. Commissioners Robert McDowell and Meredith Atwell Baker dissented, arguing not only that the FCC lacked legal authority to act but also that “Net Neutrality” is bad public policy. Highlights from their remarks and full statements are included below.

The FCC outlined three broad rules for providers of wireless and wireline Internet services.

• Transparency: Internet access providers are now required to publicly disclose information “regarding the network management practices, performance, and commercial terms of its broadband Internet access services sufficient for consumers to make informed choices….”
• No Blocking: Providers will be prohibited from blocking “lawful content, applications, services, or non-harmful devices, subject to reasonable network management.”
• No Unreasonable Discrimination: Providers will be prohibited from discriminating against “lawful network traffic over a consumer’s broadband Internet access service.”

Statement of Commissioner Michael Copps.

Highlights from Commissioner Robert McDowell:

• This action was tried once before and the D.C. Circuit Court ruled in Comcast v. FCC that the Commission did not have the power to regulate the broadband decisions of Internet providers.
• More than 300 Members of Congress have voiced their opposition to heavy-handed regulation of the Internet.
• Congress has not acted, and the FCC is charged with implementing Congressional legislation, not passing legislation. The FCC is acting as a legislative body, outside of its legal mandate. Three political appointees should not determine what is reasonable network management.
• Nothing is broken in the Internet that requires fixing. The Internet is vibrant and competitive because it was deregulated in 1994. The U.S. has gone from nearly 0 mobile applications in 2007 to more than 500,000.
• The FCC lacks legal authority to unilaterally impose Net Neutrality rules. 
  • This order attempts to circumvent the Comcast ruling decided this April.
  • Section 706 of the Telecommunications Act does not give the FCC authority to act. The D.C. Circuit Court has stated that the Congress must vest the FCC with explicit authority to act, and there is none.  
  • If this order stands, there is no legal end in sight to the FCC’s power to control the Internet.

Statement of Commissioner Mignon Clyburn.  

Highlights from Commissioner Meredith Atwell Baker:

• Why is the FCC acting to regulate the one sector of the economy that has consistently delivered growth and jobs to Americans … to deliver on the President’s campaign promise?
• This decision lacks a framework for regulation. There is no empirical evidence for a systemic market failure, only metaphors and speculation about potential harm. The word “could” appears 61 times in the FCC order.
• Framing the issue as consumer versus big business is misguided and inappropriate. The result of this decision could result in $185 billion in higher fees for consumers.
• The FCC seeks to preserve the current Internet framework, but this approach will limit economic growth.
• This order places the FCC in the role of the Internet referee, and there is a possibility the Commission could take too prominent a role.
• The FCC acts without legal authority.
  • The FCC claims 24 different statutory bases, favoring quantity in legal persuasion over quality. The bulk of this legal authority is based on ancillary authority, an argument rejected in Comcast.
  • Section 706 was a deregulation policy that encourages broadband development, not a carte blanche for total Internet regulation.  

• The FCC is acting as a legislator, not a regulator. If the Congress still has pending legislation for Net Neutrality, how is it the Commission is acting on authority from Congress?
• The FCC has squandered months attempting to carve out a regulatory framework for Net Neutrality when the Commission could have better spent its time expanding broadband access for consumers.

Here is the statement of Chairman Julius Genachowski.

In conclusion, as the two dissenting commissioners noted, there are many troubling provisions in the FCC’s new rules, but the insufficient definition of “reasonable network management” will put the FCC in the position of a “cop on the beat.” The FCC will now be the final arbiter of what is reasonable and unreasonable. Unfortunately, the FCC’s vague definition will give little predictability to investors and service providers seeking to walk on the legal side of “reasonable.”