## Facts

- Congress enacted the Telecommunications Act of 1996 with the stated aim of preserving a competitive, market-driven Internet and limiting government regulation of Internet services.
- For many years after 1996, the FCC generally treated broadband Internet access under a “light-touch” framework rather than Title II common-carrier regulation.
- In 2015, the FCC’s Open Internet Order reclassified broadband Internet access service (BIAS) as a Title II “telecommunications service” and adopted conduct rules associated with “net neutrality,” including bans on blocking, throttling, and paid prioritization, plus a general conduct standard.
- In 2017, after a change in Commission leadership, the FCC initiated a new rulemaking (WC Docket No. 17-108) to reconsider the 2015 Title II classification and the related conduct rules.
- The FCC adopted the Restoring Internet Freedom Declaratory Ruling, Report and Order, and Order on December 14, 2017 (released January 4, 2018; published at 33 FCC Recd 311), addressing both fixed and mobile broadband.
- In analyzing classification, the FCC considered the Communications Act’s definitions and prior FCC and judicial precedent (including the idea that broadband providers supply capabilities such as DNS resolution and caching that relate to information processing).
- The FCC evaluated whether ex ante conduct rules were necessary in light of a disclosure-based approach and other legal regimes, including antitrust and consumer-protection law, and the scope of Federal Trade Commission (FTC) authority if broadband were not treated as a common-carrier service.
- The FCC stated that broadband is interstate in nature and addressed whether state or local requirements inconsistent with the federal framework should be displaced.
- The order included majority and dissenting statements, reflecting disagreement within the Commission about consumer protection, competition, and the best reading of the Communications Act.

## Issues

1. Whether the FCC should reverse the 2015 Open Internet Order and classify fixed BIAS as a Title I “information service,” rather than a Title II “telecommunications service,” under the Communications Act.
2. Whether mobile broadband Internet access should be treated as a “private mobile service” rather than “commercial mobile service,” affecting exposure to common-carrier regulation.
3. Whether the FCC should repeal the 2015 open-Internet conduct rules (no blocking, no throttling, no paid prioritization) and the general conduct standard.
4. Whether a disclosure-centered framework, together with antitrust and consumer-protection enforcement, is an adequate substitute for the 2015 conduct rules.
5. Whether, and to what extent, the FCC may declare that state or local measures inconsistent with the FCC’s chosen federal framework are preempted.

## Decision

- The FCC reversed the 2015 Title II classification and reclassified fixed BIAS as a Title I “information service.”
- The FCC determined that mobile broadband Internet access is a “private mobile service,” not “commercial mobile service,” and therefore is not subject to common-carrier treatment on that basis.
- The FCC repealed the 2015 bright-line conduct rules (no blocking, no throttling, no paid prioritization) and the general conduct standard.
- The FCC retained and revised a transparency rule requiring broadband providers to disclose network management practices, performance characteristics, and commercial terms to consumers and other users.
- The FCC stated that removing broadband from Title II common-carrier status would clear the way for FTC oversight of unfair or deceptive acts or practices involving broadband providers, subject to limits in the FTC Act.
- The FCC announced that state and local requirements that effectively impose obligations inconsistent with the federal approach—particularly requirements resembling the repealed federal conduct rules—would be preempted.

## Legal Principles

- When statutory terms such as “telecommunications service” and “information service” are ambiguous as applied to broadband, the FCC may choose between reasonable interpretations if it supplies a reasoned explanation tied to the statutory text, precedent, and the administrative record.
- Broadband may be classified as an “information service” when the offering to end users includes information-processing capabilities (such as the ability to retrieve or make information available via telecommunications) that the agency treats as part of the integrated service, rather than a separable pure-transmission offering.
- A service’s classification under Title I versus Title II affects the agency’s ability to impose common-carrier duties; Title I classification generally avoids per se common-carrier obligations associated with Title II.
- The FCC may use disclosure obligations as a primary regulatory tool and may rely on competition law and consumer-protection enforcement to deter harmful ISP conduct, rather than using categorical federal conduct bans.
- In evaluating mobile broadband, the FCC may apply the statutory distinction between “commercial mobile service” and “private mobile service,” including the requirement that commercial mobile service be interconnected with the public switched network as defined by the agency.
- The FCC may assert conflict-based preemption where it concludes that state or local rules would stand as an obstacle to the federal regulatory choice to repeal specific federal obligations and to rely on a different federal framework.

## Conclusion

In the Matter of Restoring Internet Freedom is the FCC’s 2017 final rulemaking decision to reverse the 2015 Open Internet Order by returning broadband Internet access to Title I “information service” status (and treating mobile broadband as a private mobile service), repealing the prior federal net-neutrality conduct rules, keeping a revised transparency requirement, describing a larger role for antitrust and consumer-protection enforcement (including potential FTC action), and declaring that state or local requirements inconsistent with the FCC’s federal approach are preempted.


In the Matter of Restoring Internet Freedom Declaratory Ruling, Report and Order, and Order, 33 FCC Recd 311 (2017)