Why the FCC’s Proposed Openness Principles Cannot and Should Not Apply to Internet Application and Content Providers

Abstract

The Federal Communications Commission (“FCC”) has issued a Notice of Proposed Rulemaking (“NPRM”) that would codify rules aiming to preserve a free and open Internet for consumers. The NPRM appropriately concentrates on preventing broadband Internet access providers (“IAPs”) from acting as gatekeepers between end-users and online content and application providers. However, the NPRM does invite comments on a proposal of AT&T that openness principles be applied to Internet content and application providers. This paper strongly opposes AT&T’s imitative as both unlawful and unwise. The FCC’s appropriate concern about end user access to the Internet via IAPs does not justify an extension of regulatory oversight to include those entities providing content and applications. Regulating the vibrant application and content markets would constitute a departure from current policy and would threaten the open Internet.The paper provides an extensive analysis of what regulatory wingspan the FCC has to establish federal Internet policy. While the Commission does have some statutory authority to oversee operators of wire and radio, including IAPs, the Commission cannot extend its direct or ancillary jurisdiction to regulate providers of content and software applications. The paper also explains how the FCC has long-recognized competitive and operational distinctions between facilities-based network providers and services that depend on those networks to reach end-users. The paper concludes that factors supporting enforceable openness rules for IAPs do not exist for extending any such rules to Internet content and applications that run “over-the-top” of IAPs’ networks.