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With a third Democratic Commissioner finally installed, FCC Chairwomen Jessica Rosenworcel wasted no time in releasing a rulemaking proposing to once again adopt net neutrality rules.  And, as it had done in 2015, the FCC also proposes to classify broadband internet access service as a telecommunications service subject to common carrier regulation under Title II of the Communications Act.  The FCC’s rulemaking notice can be found here.  The scope of the proposed net neutrality rules exclude enterprise broadband connections and thus may have limited, if any, impact on CCA members.

Apart from the net neutrality rules themselves, the rulemaking does raise an issue of keen interest to many CCA members – robocalls and robotexting.  The Commission asks whether classifying broadband internet access services as a telecommunications service can enhance the agency’s efforts to combat illegal robocalls or robotexts transmitted over VoIP networks or over-the-top messaging services like WhatApp or iMessage.

These issues are discussed below.

Net Neutrality Rules Generally Do Not Apply to Businesses

The net neutrality rules are primarily designed to protect consumers’ access to the internet while also protecting internet content providers from being discriminated against by internet service providers.  One can think of communications as a service features offered by CCA members as internet content that rely on ISPs for the last mile connection.  ISPs could, theoretically, attempt to use their control over the broadband connections to favor their own business services, although there does not appear to be evidence of this happening.  The FCC, however, excludes most business broadband connections from the net neutrality framework.

The Broadband Service to be Regulated is a Mass Market Service

The proposed net neutrality rules would, as they were in 2015, be applied to a specifically defined service — broadband internet access services, or BIAS.  It is that service that would be reclassified from an information service to a telecommunications service under the FCC’s proposal.  BIAS is defined as “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,” as well as “any service that the Commission finds to be providing a functional equivalent of the service.”  Mass market is “a service marketed and sold on a standardized basis to residential customers, small businesses, and other end-user customers such as school and libraries.”

BIAS “excludes enterprise service offerings, which are typically offered to larger organizations through customized or individually negotiated arrangements, and special access services.”  It would also exclude VPNs, hosting or data storage and internet backbone services, but may extend to internet peering points exchanging traffic to and from BIAS connections.  Given this definition of BIAS, net neutrality generally has not been an issue for the business market with the possible exception of small businesses who use the same kind of broadband connections used by consumers for home connections.

Should Net Neutrality Rules Apply to Other Services?

The FCC’s proposal tentatively concludes that the definition of BIAS should not be expanded to include “non-BIAS data services.”  These are services that share the BIAS connection but do not provide access to all internet points.  One example of such service is over-the-top VoIP.  The FCC has not discussed other over-the-top services that are often included in the suite of service such as video conferencing and the host of cloud-based business services offered by CCA members.  The FCC states that it will continue to monitor “non-BIAS data services” for competitive abuses with an overarching goal of preventing ISPs from discriminating against OTT providers.  Despite tentatively concluding not to extend the BIAS definition to these “non-BIAS data services” the Commission does seek comment on the question.

The Effect of Title II Classification on Combatting Robocalls and Robotexts

The FCC seeks comment on whether classification of BIAS as a telecommunications service could enhance its efforts to combat illegal robocalls or robotexts.  The FCC notes that many illegal robotexts are transmitted by OTT messaging services such as iMessage, WhatsAPP and Signal.  The FCC’s recent actions on robotexts have excluded such OTT services. The notice suggests that by classifying BIAS as a telecommunications service, the FCC might direct BIAS providers to block illegal messages transmitted over broadband networks.  Although the focus of the FCC’s suggestions is to further protect consumers, the FCC’s questions may also open a window to discuss the problems arising from 10 DLC, which stem from the classification of texting as an information service and enable differing treatment based on the content of otherwise lawful texts.  If the FCC will consider extending robotext restrictions to OTT providers, it might conversely recognize the need to exercise regulatory oversight of 10 DLC text messages and potential discriminatory conduct.

Implications for Universal Service Contributions

The Communications Act requires providers of telecommunications service to contribute to the Universal Service Fund.  Classifying BIAS as a telecommunications service would thus require broadband providers pay into the fund.  The Commission, however, proposes to forebear from imposing the contribution requirement on BIAS, just as it did in 2015, although it does seek comment on the question.  The contribution question will be decided in other proceedings.

Further Thoughts

Comments to the net neutrality notice are due December 14, 2023, and reply comments are due January 17, 2024.  There is little doubt that the FCC will adopt its proposals and classify BIAS as a telecommunications service.  An order may come out in Spring.  One key difference between the current proposal and the net neutrality order of 2015 is the scope of Title II provisions that would apply to BIAS.  The FCC has always stated it would not seek to regulate rates for BIAS, and that it would exclude other Title II provisions by exercising its forbearance authority.  The current proposal, however, would apply more Title II regulations to a reclassified BIAS than it did in 2015. CCA members should continue to monitor the record as it develops.

Please feel free to contact the CCA regulatory committee or Michael Pryor and mpryor@bhfs.com if you have any questions.