Restoring Internet Neutrality: How the U.S. Order to Restore Internet Freedom Came About

My name is Olga Makarova, and I am the Director of the Commercial Resource Management Department of MTS’s technical division. You are reading the fifth article in the series "Network Neutrality: Not Quite What It’s Called." In it, I will show how technical details (DNS, caching, pole attachments) became a point of contention between Washington, the states, courts, and providers.

What Changed with the Introduction of the Rules for Restoring Internet Freedom

With these rules, the FCC returned to a light-touch regulatory framework. It restored the classification of broadband internet access as a lightly regulated information service, and private mobile services as mobile internet access services, which completely contradicted the Open Internet Rules. Regulatory prohibitions on blocking, throttling, and paid prioritization of traffic were also removed.

Nevertheless, the Commission agreed with the previous definition, according to which broadband internet access service is a mass-market retail service providing internet access via wired or wireless connections and enabling the transmission and receipt of data to nearly all internet endpoints.

The Rules noted that broadband internet access does not include virtual private network (VPN) services, content delivery networks (CDN), hosting or data storage, or the internet backbone if they are separated from broadband internet access service. Historically, the Commission separated them from "mass-market" services because they do not provide the ability to send and receive data to nearly all internet endpoints.

Also, the Commission, based on the analysis of previous decisions, preserved the transparency requirements but only at the level necessary to limit the control of internet service providers over the data transmission of their clients. With the new rules, broadband providers were required to provide consumers with adequate information on traffic management practices in the network.

DNS Definition

In the rules for restoring freedom on the internet, the Commission noted that it considers DNS to be an indispensable and essential function of the broadband internet access service. It includes the capabilities of creating, acquiring, storing, transforming, processing, searching, using, and providing information, facilitates information retrieval, and is a necessity for the user. Thus, DNS not only provides a functionally integrated ability to translate addresses but also other capabilities that are critically important for providing the broadband internet access service to the consumer. Since the overwhelming majority of users use the DNS of their provider, the provider delivers an information service integrated with telecommunications.

The Order notes that caching is also a functionally integrated component of information processing and provides the ability to perform functions that fall under the definition of an information service. Caching not only improves end-user access but also determines what information to store, where, and in what format. As such, it includes storing and retrieving information in accordance with the definition of an information service. The Order notes that the consumer perceives the broadband access service not as a telecommunications service but as an integrated information service since they gain access to a vast number of resources rather than just transferring information to another user.

The Rules included an analysis of costs and benefits, which allowed for the conclusion that the advantages of the market, "light" internet regulation combined with the requirement for transparency, the application of existing antitrust laws and consumer protection laws, outweigh the benefits of strict broadband provider regulation as proposed in the Open Internet Rules.

The order restoring internet freedom established that the Commission had preferential rights to introduce and cancel rules concerning telecommunications and internet regulation. It prohibited states from introducing any rules or requirements at their level that the Commission had canceled or decided not to adopt.

Attempts to repeal the new rules

In August 2018, Mozilla Corporation petitioned the U.S. Court of Appeals for the District of Columbia Circuit to repeal the Restoring Internet Freedom order. The government petitioners included the states of New York, California, Connecticut, Delaware, Hawaii, Illinois, Iowa, Kentucky, Maine, Maryland, Massachusetts, Minnesota, Mississippi, New Jersey, New Mexico, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, Washington, D.C. (state petitioners), Santa Clara County, and the California Public Utilities Commission (CPUC).

The court upheld the Restoring Internet Freedom order with the following exceptions.

• The court concluded that the Commission had not demonstrated legitimate authority to secure preferential rights prohibiting states from introducing any rules or requirements that the Commission had canceled or decided not to adopt. Consequently, the court struck down this part of the ruling.

• The court returned the order to the Commission for clarification on the following issues:

  • The consequences of applying the order to public safety had not been analyzed;

Allowing broadband service providers to prioritize internet traffic at their discretion or charge for maximum speed could jeopardize the ability of emergency response services, critical infrastructure providers, and the public to communicate during a crisis. Evidence of this was the incident documentation related to the accidental decision by Verizon to disconnect broadband internet from Santa Clara firefighters while they were battling a destructive wildfire in California.

• The consequences of reclassification for the regulation of service providers' access to utility infrastructure facilities were not analyzed;

U.S. communications legislation establishes that the Commission must regulate tariffs, timelines, and conditions for nondiscriminatory access to infrastructure, including utilities. At the same time, any U.S. state is empowered to overturn the Commission's decision and undertake independent regulation of nondiscriminatory access. However, these requirements only apply to telecommunications services, which, according to the 2018 Internet Freedom Restoration rules, no longer include broadband access. Reclassification removes the legal right of its providers to nondiscriminatory, fair, and reasonable access to poles, ducts, and other infrastructure.

• The consequences of reclassification for the Lifeline program were not analyzed.

This program helps low-income consumers access certain communications technologies, including broadband internet access under 47 Title U.S.C. § 214, § 254. Reclassification removed the legislative basis for including broadband in the requirements of this section.

In the decision of the U.S. Court of Appeals for the District of Columbia dated October 1, 2019, No. 18-1051 Mozilla Corporation v. FCC, the court stated that in an area filled with political struggles and technical complexities, a court generally grants the regulatory agency the broadest possible discretion in interpreting and administering a technical legislative framework. However, such discretion is not unlimited and cannot be used to uphold rules that do not reflect the actual state of the industry.

The court found that the FCC’s evidence is overly focused on the fact that broadband operators, content service providers, and platform owners (edge providers) use DNS and caching to manage traffic and, therefore, cannot be classified as telecommunications service operators and must be considered information service providers. The court noted that the Commission overlooks the fundamental technological features of service provision.

However, the U.S. Court of Appeals for the District of Columbia is a lower court, and under the U.S. Supreme Court’s decision, it is required to follow the Brand X case. The court noted that, to avoid conflicting decisions, the Supreme Court should review the Brand X case in light of current realities, Congress — the provisions of the Communications Act of 1934 as amended by the Telecommunications Act of 1996, including the FCC’s authority, and the FCC must align the Rules with current realities. Until then, the judges must uphold the Commission’s actions.

The decision of the U.S. Court of Appeals for the District of Columbia dated October 1, 2019, No. 18-1051, which confirmed the FCC’s authority to adopt the Rules for Restoring Internet Freedom, was similar to the decision of the U.S. Court of Appeals for the District of Columbia dated June 14, 2016, No. 15-1063, which confirmed the FCC’s authority to adopt the Open Internet Rules. Only the Open Internet Rules and the Rules for Restoring Internet Freedom were mutually exclusive.

Senior Judge Williams noted that the Commission acted lawfully by reclassifying broadband services and removing additional regulatory burdens for the Internet, but each of the 50 states has the right to set them independently.

Williams noted that the internet cannot be neatly divided into federal and state markets, and a modern internet user would never agree to such artificial isolation. Therefore, the media's enthusiasm over a particular state introducing its own "net neutrality" rules is misleading, because such actions lead to "internet fragmentation."

Williams pointed out that traffic between and within different states is transmitted over the same internet connection. Providers will not be able to separate it in order to apply different rules to the transmission parameters of each type of traffic. Internet providers cannot simultaneously comply with state and federal laws if they conflict fundamentally. Thus, granting the Commission a preeminent right to prohibit states from introducing any rules or requirements that the Commission has repealed or decided not to implement is the first step toward preventing a conflict when a state’s efforts to regulate internet providers contradict federal regulations.

The judge concluded that disputes over whether the Commission has preeminent authority to regulate telecommunications and the internet could be resolved by Congress through clearly expressed legislative language.

Williams' concurring opinion makes it clear that the idea of maintaining different regulations at the state and federal levels carries high risks of fragmenting the internet into separate segments that will be confined within each state.

The court's decision can be found at this link.

On October 24, 2023, a bill was introduced in the U.S. Senate prohibiting the Federal Communications Commission from classifying broadband internet access services as telecommunications and imposing additional burdens on their providers. The bill was read twice in the Senate and referred to the Committee on Commerce, Science, and Transportation.

What happens next?

In the following material, I will discuss the rules of Safeguarding and Securing the Open Internet, under which the FCC, during Biden’s administration, attempted to reclassify broadband access as a telecommunications service to expand government control. At the end of the series, I will show why discussions on "net neutrality" in Russia and the USA have different natures.