1. Net Neutrality in the US
Mona Swarnakar
02 November 2015

2. Table of Contents
 Overview and Introduction to Net Neutrality Rule
 Timeline of Provisions
 Provisions of the Rule
 Impact on Service Providers
 Monetary and Non-monetary Impact

3. Net neutrality is a hotly debated topic, with some ISPs claiming it is their right to control the
flow, as content providers use their infrastructure, while, rights groups claiming controlling
the Internet is against the principles of Internet itself
What is Net Neutrality
“An Open Internet means consumers can go where they want, when
they want. This principle is often referred to as Net Neutrality. It
means innovators can develop products and services without asking
for permission. It means consumers will demand more and better
broadband as they enjoy new lawful Internet services, applications
and content, and broadband providers cannot block, throttle, or
create special "fast lanes" for that content”.
Key Net
Neutrality
Rules
No
Blocking
No
Throttling
No Paid
Prioritization
Under this, FCC states that broadband providers can
not block access to lawful content, applications,
services, or non-harmful devices
Under this, FCC bars any broadband
provider to accept any form of favour (e.g.
fees) to prioritise some lawful Internet
traffic over other lawful traffic. Also,
under this ISPs can not create fast lanes
for their affiliates
Under this, FCC bars broadband
providers from slowing down traffic
based on type of content, applications,
services, or non-harmful devices
Net neutrality in the US revolves around three
key rules – No Blocking; No Throttling; and No
Paid Prioritisation (creation of fast lanes)
Net neutrality, also called as open Internet, network
neutrality, Internet neutrality, or net equality is the
principle that ISPs must allow access to all lawful content
(websites, applications, services, etc.) to the end-users,
regardless of the source of the content, and should not
favour any particular provider, affiliate, or content.
FCC’s definition of open internet or net neutrality
Basics of the Net Neutrality Rule in the US
Overview and Introduction to Net Neutrality Rule

4. FCC’s Open Internet (Net Neutrality) rule was accepted in February 2015, and came into affect in
12 June 2015 as the final rule. However, the debate can be traced back to 1980s when Internet
became legally available for commercial use
2005
 Sep 2005: Republican
FCC Chairman Kevin
Martin establishes a
policy statement on net
neutrality and uses
former Chairman
Powell's "Internet
Principles“ as the
foundations
2010
 Dec 2010: FCC adopts
Open Internet Order, an
order to implement net
neutrality rules. The
rules prohibited
blocking or slowing
down access to legal
content on the Internet
2015
 Feb 2015: FCC categorises
broadband Internet as a
public utility – as a Title II
telecommunications service
 Feb 2015: FCC approves
complete open Internet or
net neutrality rule
 12 June 2015: The Open
Internet rules went into
affect as final rule
2014
 May 2014: The FCC voted 3-
to-2 to open the proposal to
reinstate Net neutrality
rules
 Nov 2014: President Obama
urges the US government to
have stronger control on
broadband services in order
to have a free and open
internet
2004
 Feb 2004: FCC Chairman
Michael Powell introduces
"Four Internet Freedoms“
- Freedom to access
content; Freedom to run
applications; Freedom to
attach devices; Freedom
to obtain service plan
information
2002
 Mar 2012: FCC, under
Republican Chairman Michael
Powell, classifies broadband
Internet access as a Title I
interstate "information service“.
The classification means that
cable broadband services are
out of the coverage of utility-
style, "common carrier" rules.
1996
 Congress passes the
Telecommunications Act,
reclassifying what types of
services are considered
common carriers. This is the
first time the Internet was
included in the broadcast and
spectrum allotment, thus
been subject to regulations by
the government
 Net neutrality, which still remains a hotly debated topic in the US and world over, has results in many lawsuits in the US – against FCC,
as well as against the ISPs by both FCC and activist groups
 From the past events, it can be predicted that although the current ruling from FCC is a final rule, it will soon see lawsuits from leading
ISPs in the US, leading to another round of legal battles between FCC, activist groups, and ISPs
Timeline of Provisions

5. FCC’s net neutrality rule aims to control the interest of the end-users while controlling the
hold ISPs have on the Internet, FCC has taken into consideration the 4 million comments it
received and the comments from President Obama while devising the final rule
Who is Impacted
Anyone who provides Internet
services/ all Internet service
providers (ISPs)
 Cable broadband service
providers such as Comcast
 Telecom companies, such as
Verizon
 Wireless carriers, such as T-
Mobile and Sprint
FCC’s net neutrality rules are ensured at helping the end-user experience a free faster internet without any delay or control based on the
type of content or from whom or what device the content is coming. The rule does not include any new tax or service charge for the ISPs
and hence it is unlikely for customers to see any increase in broadband charges directly due to the imposition of the rule.
End User Impact
The rule is expected to have a
positive impact on end-user
experience
 End-users who use P2P file
sharing extensively are
expected to have a better
experience as some of the ISPs
were targeting P2P providers
 It is expected that all users
(including mobile broadband
users) will not see any blocking
of content based on where the
content is coming from (as
long as the content is lawful) –
this will result in smoother
browsing experience
Three key rules that the ISPs must follow are – no
blocking of legal content, no speed control of
legal content, and no prioritisation of any form of
content
The net neutrality rules are build upon and
require strong transparency from ISPs, requiring
them clearly and in detail explain their network
management policy to end-users
Standard for future conduct: The Internet is ever
changing and growing, which means new forms of
threat to Open Internet may emerge in the future.
Hence, FCC has included a general catchall rule
that establishes a standard for future conduct.
This prohibits ISPs from adopting rules in future
that would be against Open Internet
Reasonable network management: While ISPs
can not control any form of legal content, FCC
states that during network overload, they will be
within their rights to prioritise certain types of
data to ensure that services operate as required
Provisions of the Rule
Key Requirements and Reporting Requirements
for ISPs

6. The acceptance of Open Internet rule and re-categorisation of ISPs under Title II is expected
to have significant impact on ISPs, and will result in a stricter governance of ISPs’ practices
Impact on Service Providers
 Some ISPs had tried to control
the flow of information on their
network based on the bandwidth
consumed by content, such as
blocking of P2P sites as they
consumer more bandwidth
 However, the recent FCC ruling
completely bars them from
controlling (blocking, slowing
down, or prioritising) any form of
information despite the fact that
they may consume more
bandwidth
 The only situation where the ISPs
can control the flow of content
and information is in case of
network overload – they may
prioritise certain content to
ensure that services operate
normal
 The rule will significantly reduce
the control ISPs have on content
flow through their network
Although the ISPs has faced challenges, in the form of attempted control from FCC and lawsuits revolving around net neutrality, the final
ruling from FCC on Open Internet makes the case stronger for FCC and net neutrality supporter groups. The impact of the ruling on ISPs
can be broadly segmented into four categories –
No control on Content till
Network Overload
Greater Transparency
Greater Regulatory Control
and Governance
Chance of Seeing More
Lawsuits
 ISPs mentioned they have
always provided the required
details about their network
management practices
 However, there were
instances of legal battles
between ISPs and users as well
as FCC for unfair practices
related to information
declaration/ transparency
 Post the final rule, the ISPs
now have to clearly state all
the network management
policies (including slow down
of speed after consumption of
a certain amount of data –
every single point)
 Failure to declare any policy
will fall under violation of
transparency rule of FCC’s
Open Internet rule and the ISP
will be liable for penalties
 FCC in its February 2015 ruling
categorised broadband
Internet providers, including
mobile Internet providers as
public utility – as a Title II
telecommunications services
 This brings the ISPs under the
purview of FCC, just like the
legacy telephone service
 By coming under Title II, ISPs
will not be considered as
legally equivalent to telecom
companies, and FCC now has
the authority to apply strict
control and bans on certain
type of activities
 This will impose a stricter
control on the ISPs and hence
they have comply with the
rules set by FCC – they will see
a more strict governance and
regulatory supervision
 Since ISPs now come under
Title II, any violation of the
Open Internet rule and they
may see lawsuit – both by FCC
and activist groups
 This may significantly increase
the “legal settlement” cost in
their financial statement
 Also, due to acceptance of
Open Internet rule, chances of
rulings going against ISPs now
will increase significantly –
higher cost as well as
reputational damage

7. Although FCC has not stated any specific monetary penalty in its ruling, it recently
announced its plans to fine AT&T $100 million, indicating its aggressive stand to protect its
Open Internet rule
 FCC in its final rule for Open Internet stated that the Internet Service Providers (ISPs) not following the Open Internet rules of – No Blocking; No
Throttling; and No Paid Prioritisation – will be subject to enforcement action, including forfeitures, and other penalties.
Monetary and Non-monetary Penalties Imposed by FCC in the Past
 2005: FCC enforced its net neutrality principle by opening an investigation against Madison River Communications, a local
telecommunications carrier blocking Voice Over IP (VoIP) service. According to the agreement reached between FCC and Madison
River Communications, the company agreed to stop blocking VoIP traffic and also agreed to make a $15,000 payment to the US
Treasury in exchange for the FCC dropping its inquiry.
 2007-2009:
 In October 2007, it was observed that the largest cable company in the US, Comcast, was blocking or severely delaying
BitTorrent uploads on their network. This resulted in public litigations against Comcast.
 In 2008, FCC voted 3-to-2 favouring a complaint against Comcast. Although the FCC did not impose any fine, it order Comcast
to end such blocking in the year 2008.
 In December 2009, Comcast agreed to a payment of $16 million to individual customers for blocking P2P applications.
Comcast’s customer who used the application between April 2006 and December 2008 were eligible for the compensation.
However, individual payments to an individual class member in the suit were limited to $16.
 June-November 2015:
 FCC announced that it plans to fine AT&T $100 million in its first attempt to impose net neutrality rules.
 FCC claimed that AT&T misled customers by limiting their unlimited data plans and it reduces speeds of customers paying for
unlimited data plans after they use a certain amount of a data in a billing period.
 FCC mentioned that this data plan of AT&T violates Open Internet’s transparency requirement, wherein, the carriers must
inform the customers about their network management practices.
Monetary and Non-monetary Impact

8. 1. FCC, 2015
2. FCC Open Internet adoption, February 2015, FCC
3. FCC Open Internet detailed ruling, 26 February 2015, FCC
4. 13 things you need to know, 14 March 2015, CNET
5. FCC and Net neutrality, 07 February 2015, CNET
6. Net neutrality takes effect today, 12 June 2015, Washington Post
7. FCC net neutrality timeline, 12 March 2015, digitaltrends.com
8. The history of net neutrality in the US, 2015, hstry.co
9. A timeline of net neutrality, 2015, whatisnetneutrality.org
10. Net neutrality may face an uphill battle, 26 February 2015, ProPublica
11. Net neutrality: How we got from there to here, 24 February 2015, CNET
12. Net neutrality at the FCC: A brief history, September 2013, PCWorld
13. AT&T faces $100 million fine, 17 June 2015, National Journal
14. AT&T hit with record $100 million fine as FCC says it slowed ‘unlimited’ data, 17 June 2015, Washington Post
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