By Daniel Lyons

When the Federal Communications Commission (FCC) repealed the Obama-era net neutrality rules, activists responded by issuing doomsday predictions of the internet’s demise. Four years later, it’s safe to say their alarmism was greatly exaggerated. Under our current light-touch regulatory framework, networks flourished as America weathered an unprecedented pandemic that moved much of our collective lifestyle online.

Undeterred by this evidence and frustrated at the Senate’s inability to give the Democrats an agency majority by confirming FCC nominee Gigi Sohn, Sen. Ed Markey (D-MA) is reportedly planning to force net neutrality by legislation. While the proposed bill has not been made public, sources suggest it would reclassify broadband internet access as a Title II telecommunications service like the old telephone monopoly. Markey’s office explained this would allow the FCC to treat broadband as “an essential utility” by “reinstating net neutrality rules.”

But Title II reclassification alone would not impose net neutrality on broadband providers. That’s because, contrary to the claims of many net neutrality proponents, the Obama-era rules did not simply subject broadband networks to the same rules that Title II traditionally placed on telephone companies. When it comes to paid prioritization—the prohibition on “fast lanes” at the heart of the net neutrality movement—the Obama-era rules were more restrictive than the obligations that Title II put on the old Bell Telephone monopoly.

Unreasonable
Discrimination and Paid Prioritization

The heart of Title II is Section 202, which prohibits “unreasonable discrimination.” To win, a complainant must show that he or she received a service that was “like” a service provided to another customer and that the two customers were treated differently in the provision of that service. If the complaint meets these requirements, the burden shifts to the telecommunications provider to prove that the difference in service was reasonable.

While Section 202 covers a wide range of conduct, there is a key limitation: It prohibits only the differential treatment of “like” services. As the DC Circuit noted in 1993,

By its nature, Section 202(a) is not concerned with the price differentials between qualitatively different services or service packages. In other words, as far as ‘unreasonable discrimination’ is concerned, an apple does not have to be priced the same as an orange.

For example, AT&T offered “private line” service as an alternative to traditional public telephone service. Private line service allowed a customer to lease part of the telephone network’s capacity for private use, keeping a dedicated channel open between two phones to minimize the risk of delay or interruption if the public telephone network became congested. Private line service and traditional service were different: While both allowed voice communication, only one came with a risk of congestion. From a Section 202 perspective, they were apples and oranges; AT&T could sell both products.

Paid prioritization is to broadband what private line service was to AT&T: a premium communications service free of the risk of congestion that comes with traditional best-efforts delivery. Prioritization offers a minimum-quality-of-service guarantee, which could be useful to companies that offer congestion-sensitive content and applications. Because this service is not functionally equivalent to best-efforts delivery, Section 202 would not prohibit a broadband provider from offering both side by side. Simply put, Title II alone does not prohibit carriers from offering priority delivery to customers interested in purchasing it.

Of course, the FCC could interpret “unreasonable discrimination” more stringently for broadband providers than it does for the telephone industry. This is essentially what happened with the 2015 net neutrality rules. But reclassification legislation alone would not ban paid prioritization: The FCC would have to adopt a rule—the same FCC that is currently hamstrung from reclassifying broadband because of Sohn’s stalled nomination.

Other Concerns

While Title II classification does not reinstitute net neutrality, it does raise other concerns. Specifically, Section 201 requires carriers to provide service at “just and reasonable” rates, which creates the specter of rate regulation. The Obama-era rules specifically waived rate regulation. But since then, the rhetoric about broadband affordability has grown louder—despite the fact that residential broadband prices have fallen over the past decade. Whether Markey intends it or not, reclassification may be the camel’s nose under the tent that leads to broadband rate regulation.

I’ve long argued that legislative compromise provides the
best hope of a lasting solution to the net neutrality debate. But this ain’t
it. Markey’s reclassification proposal merely invites further agency disputes
about how Title II should apply to broadband providers, while sparking fear of
more comprehensive rate regulation in the future. A more stable compromise
would impose prohibitions on blocking, throttling, and unreasonable
prioritization in exchange for a guarantee that broadband providers are not Title II telecommunications
providers. As this bill works through Congress, I hope legislators will move
closer to this long-term equilibrium.

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