[Federal Register Volume 80, Number 70 (Monday, April 13, 2015)]
[Rules and Regulations]
[Pages 19738-19850]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-07841]



[[Page 19737]]

Vol. 80

Monday,

No. 70

April 13, 2015

Part II





Federal Communications Commission





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47 CFR Parts 1, 8, and 20





Protecting and Promoting the Open Internet; Final Rule

Federal Register / Vol. 80 , No. 70 / Monday, April 13, 2015 / Rules 
and Regulations

[[Page 19738]]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 1, 8, and 20

[GN Docket No. 14-28, FCC 15-24]


Protecting and Promoting the Open Internet

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In this document, the Federal Communications Commission 
(Commission) establishes rules to protect and promote the open 
Internet. Specifically, the Open Internet Order adopts bright-line 
rules that prohibit blocking, throttling, and paid prioritization; a 
rule preventing broadband providers from unreasonably interfering or 
disadvantaging consumers or edge providers from reaching one another on 
the Internet; and provides for enhanced transparency into network 
management practices, network performance, and commercial terms of 
broadband Internet access service. These rules apply to both fixed and 
mobile broadband Internet access services. The Order reclassifies 
broadband Internet access service as a telecommunications service 
subject to Title II of the Communications Act. Finally, the Order 
forbears from the majority of Title II provisions, leaving in place a 
framework that will support regulatory action while simultaneously 
encouraging broadband investment, innovation, and deployment.

DATES: This rule is effective June 12, 2015.
    The modified information collection requirements in paragraphs 164, 
166, 167, 169, 173, 174, 179, 180, and 181 of this document are not 
applicable until approved by the Office of Management and Budget (OMB). 
The Federal Communications Commission will publish a separate document 
in the Federal Register announcing such approval and the relevant 
effective date(s).

FOR FURTHER INFORMATION CONTACT: Kristine Fargotstein, Competition 
Policy Division, Wireline Competition Bureau, at (202) 418-2774 or by 
email at <a href="/cdn-cgi/l/email-protection#8bc0f9e2f8ffe2e5eea5cdeaf9ece4fff8ffeee2e5cbede8e8a5ece4fd"><span class="__cf_email__" data-cfemail="8bc0f9e2f8ffe2e5eea5cdeaf9ece4fff8ffeee2e5cbede8e8a5ece4fd">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Report 
and Order on Remand, Declaratory Ruling, and Order (``Open Internet 
Order'' or ``Order'') in GN Docket No. 14-28, adopted on February 26, 
2015 and released on March 12, 2015. The full text of this document can 
be viewed at the following Internet address: https://apps.fcc.gov/edocs_public/attachmatch/FCC-15-24A1.docx. The full text of this 
document is also available for public inspection during regular 
business hours in the FCC Reference Center, 445 12th Street SW., Room 
CY-A257, Washington, DC 20554. To request materials in accessible 
formats for people with disabilities (e.g. braille, large print, 
electronic files, audio format, etc.) or to request reasonable 
accommodations (e.g. accessible format documents, sign language 
interpreters, CART, etc.), send an email to <a href="/cdn-cgi/l/email-protection#62040101575256220401014c050d14"><span class="__cf_email__" data-cfemail="a5c3c6c6909591e5c3c6c68bc2cad3">[email protected]</span></a> or call the 
Consumer & Governmental Affairs Bureau at (202) 418-0530 (voice) or 
(202) 418-0432 (TTY).

Synopsis

    In the Report and Order on Remand, Declaratory Ruling, and Order, 
we establish rules to protect and promote the open Internet, reclassify 
broadband Internet access service as a telecommunications service 
subject to Title II of the Communications Act, and forbear from the 
majority of Title II provisions.

I. Introduction

    1. The open Internet drives the American economy and serves, every 
day, as a critical tool for America's citizens to conduct commerce, 
communicate, educate, entertain, and engage in the world around them. 
The benefits of an open Internet are undisputed. But it must remain 
open: Open for commerce, innovation, and speech; open for consumers and 
for the innovation created by applications developers and content 
companies; and open for expansion and investment by America's broadband 
providers. For over a decade, the Commission has been committed to 
protecting and promoting an open Internet.
    2. Four years ago, the Commission adopted open Internet rules to 
protect and promote the ``virtuous cycle'' that drives innovation and 
investment on the Internet--both at the ``edges'' of the network, as 
well as in the network itself. In the years that those rules were in 
place, significant investment and groundbreaking innovation continued 
to define the broadband marketplace. For example, according to US 
Telecom, broadband providers invested $212 billion in the three years 
following adoption of the rules--from 2011 to 2013--more than in any 
three year period since 2002.
    3. Likewise, innovation at the edge moves forward unabated. For 
example, 2010 was the first year that the majority of Netflix customers 
received their video content via online streaming rather than via DVDs 
in red envelopes. Today, Netflix sends the most peak downstream traffic 
in North America of any company. Other innovative service providers 
have experienced extraordinary growth--Etsy reports that it has grown 
from $314 million in merchandise sales in 2010 to $1.35 billion in 
merchandise sales in 2013. And, just as importantly, new kinds of 
innovative businesses are busy being born. In the video space alone, in 
just the last sixth months, CBS and HBO have announced new plans for 
streaming their content free of cable subscriptions; DISH has launched 
a new package of channels that includes ESPN, and Sony is not far 
behind; and Discovery Communications founder John Hendricks has 
announced a new over-the-top service providing bandwidth-intensive 
programming. This year, Amazon took home two Golden Globes for its new 
series ``Transparent.''
    4. The lesson of this period, and the overwhelming consensus on the 
record, is that carefully-tailored rules to protect Internet openness 
will allow investment and innovation to continue to flourish. 
Consistent with that experience and the record built in this 
proceeding, today we adopt carefully-tailored rules that would prevent 
specific practices we know are harmful to Internet openness--blocking, 
throttling, and paid prioritization--as well as a strong standard of 
conduct designed to prevent the deployment of new practices that would 
harm Internet openness. We also enhance our transparency rule to ensure 
that consumers are fully informed as to whether the services they 
purchase are delivering what they expect.
    5. Carefully-tailored rules need a strong legal foundation to 
survive and thrive. Today, we provide that foundation by grounding our 
open Internet rules in multiple sources of legal authority--including 
both section 706 of the Telecommunications Act and Title II of the 
Communications Act. Moreover, we concurrently exercise the Commission's 
forbearance authority to forbear from application of 27 provisions of 
Title II of the Communications Act, and over 700 Commission rules and 
regulations. This is a Title II tailored for the 21st century, and 
consistent with the ``light-touch'' regulatory framework that has 
facilitated the tremendous investment and innovation on the Internet. 
We expressly eschew the future use of prescriptive, industry-wide rate 
regulation. Under this approach, consumers can continue to enjoy 
unfettered access to the Internet over their fixed and mobile broadband 
connections, innovators can continue to

[[Page 19739]]

enjoy the benefits of a platform that affords them unprecedented access 
to hundreds of millions of consumers across the country and around the 
world, and network operators can continue to reap the benefits of their 
investments.
    6. Informed by the views of nearly 4 million commenters, our staff-
led roundtables, numerous ex parte presentations, meetings with 
individual Commissioners and staff, and more, our decision today--once 
and for all--puts into place strong, sustainable rules, grounded in 
multiple sources of our legal authority, to ensure that Americans reap 
the economic, social, and civic benefits of an open Internet today and 
into the future.

II. Executive Summary

    7. The benefits of rules and policies protecting an open Internet 
date back over a decade and must continue. Just over a year ago, the 
D.C. Circuit in Verizon v. FCC struck down the Commission's 2010 
conduct rules against blocking and unreasonable discrimination. But the 
Verizon court upheld the Commission's finding that Internet openness 
drives a ``virtuous cycle'' in which innovations at the edges of the 
network enhance consumer demand, leading to expanded investments in 
broadband infrastructure that, in turn, spark new innovations at the 
edge. The Verizon court further affirmed the Commission's conclusion 
that ``broadband providers represent a threat to Internet openness and 
could act in ways that would ultimately inhibit the speed and extent of 
future broadband deployment.''
    8. Threats to Internet openness remain today. The record reflects 
that broadband providers hold all the tools necessary to deceive 
consumers, degrade content, or disfavor the content that they don't 
like. The 2010 rules helped to deter such conduct while they were in 
effect. But, as Verizon frankly told the court at oral argument, but 
for the 2010 rules, it would be exploring agreements to charge certain 
content providers for priority service. Indeed, the wireless industry 
had a well-established record of trying to keep applications within a 
carrier-controlled ``walled garden'' in the early days of mobile 
applications. That specific practice ended when Internet Protocol (IP) 
created the opportunity to leap the wall. But the Commission has 
continued to hear concerns about other broadband provider practices 
involving blocking or degrading third-party applications.
    9. Emerging Internet trends since 2010 give us more, not less, 
cause for concern about such threats. First, mobile broadband networks 
have massively expanded since 2010. They are faster, more broadly 
deployed, more widely used, and more technologically advanced. At the 
end of 2010, there were about 70,000 devices in the U.S. that had LTE 
wireless connections. Today, there are more than 127 million. We 
welcome this tremendous investment and innovation in the mobile 
marketplace. With carefully-tailored rules in place, that investment 
can continue to flourish and consumers can continue to enjoy unfettered 
access to the Internet over their mobile broadband connections. Indeed, 
mobile broadband is becoming an increasingly important pathway to the 
Internet independent of any fixed broadband connections consumers may 
have, given that mobile broadband is not a full substitute for fixed 
broadband connections. And consumers must be protected, for example 
from mobile commercial practices masquerading as ``reasonable network 
management.'' Second, and critically, the growth of online streaming 
video services has spurred further evolution of the Internet. 
Currently, video is the dominant form of traffic on the Internet. These 
video services directly confront the video businesses of the very 
companies that supply them broadband access to their customers.
    10. The Commission, in its May Notice of Proposed Rulemaking, asked 
a fundamental question: ``What is the right public policy to ensure 
that the Internet remains open?'' It proposed to enhance the 
transparency rule, and follow the Verizon court's blueprint by relying 
on section 706 to adopt a no-blocking rule and a requirement that 
broadband providers engage in ``commercially reasonable'' practices. 
The Commission also asked about whether it should adopt other bright-
line rules or different standards using other sources of Commission 
authority, including Title II. And if Title II were to apply, the 
Commission asked about how it should exercise its authority to forbear 
from Title II obligations. It asked whether mobile services should also 
be classified under Title II.
    11. Three overarching objectives have guided us in answering these 
questions, based on the vast record before the Commission: America 
needs more broadband, better broadband, and open broadband networks. 
These goals are mutually reinforcing, not mutually exclusive. Without 
an open Internet, there would be less broadband investment and 
deployment. And, as discussed further below, all three are furthered 
through the open Internet rules and balanced regulatory framework we 
adopt today. (Consistent with the Verizon court's analysis, this Order 
need not conclude that any specific market power exists in the hands of 
one or more broadband providers in order to create and enforce these 
rules. Thus, these rules do not address, and are not designed to deal 
with, the acquisition or maintenance of market power or its abuse, real 
or potential. Moreover, it is worth noting that the Commission acts in 
a manner that is both complementary to the work of the antitrust 
agencies and supported by their application of antitrust laws. See 
generally 47 U.S.C. 152(b) (``[N]othing in this Act . . . shall be 
construed to modify, impair, or supersede the applicability of any of 
the antitrust laws.''). Nothing in this Order in any way precludes the 
Antitrust Division of the Department of Justice or the Commission 
itself from fulfilling their respective responsibilities under section 
7 of the Clayton Act (15 U.S.C. 18), or the Commission's public 
interest standard as it assesses prospective transactions.)
    12. In enacting the Administrative Procedure Act (APA), Congress 
instructed expert agencies conducting rulemaking proceedings to ``give 
interested persons an opportunity to participate in the rule making 
through submission of written data, views, or arguments.'' It is public 
comment that cements an agency's expertise. As was explained in the 
seminal report that led to the enactment of the APA:

    The reason for [an administrative agency's] existence is that it 
is expected to bring to its task greater familiarity with the 
subject than legislators, dealing with many subjects, can have. But 
its knowledge is rarely complete, and it must always learn the 
frequently clashing viewpoints of those whom its regulations will 
affect.

    13. Congress could not have imagined when it enacted the APA almost 
seventy years ago that the day would come when nearly 4 million 
Americans would exercise their right to comment on a proposed 
rulemaking. But that is what has happened in this proceeding and it is 
a good thing. The Commission has listened and it has learned. Its 
expertise has been strengthened. Public input has ``improve[d] the 
quality of agency rulemaking by ensuring that agency regulations will 
be `tested by exposure to diverse public comment.' '' There is general 
consensus in the record on the need for the Commission to provide 
certainty with clear, enforceable rules. There is also general 
consensus on the need to have such rules. Today the Commission, 
informed by all of those views, makes a decision grounded in the 
record. The Commission has considered

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the arguments, data, and input provided by the commenters, even if not 
in agreement with the particulars of this Order; that public input has 
created a robust record, enabling the Commission to adopt new rules 
that are clear and sustainable.

A. Strong Rules That Protect Consumers From Past and Future Tactics 
That Threaten the Open Internet

1. Clear, Bright-Line Rules
    14. Because the record overwhelmingly supports adopting rules and 
demonstrates that three specific practices invariably harm the open 
Internet--Blocking, Throttling, and Paid Prioritization--this Order 
bans each of them, applying the same rules to both fixed and mobile 
broadband Internet access service.
    15. No Blocking. Consumers who subscribe to a retail broadband 
Internet access service must get what they have paid for--access to all 
(lawful) destinations on the Internet. This essential and well-accepted 
principle has long been a tenet of Commission policy, stretching back 
to its landmark decision in Carterfone, which protected a customer's 
right to connect a telephone to the monopoly telephone network. Thus, 
this Order adopts a straightforward ban:

    A person engaged in the provision of broadband Internet access 
service, insofar as such person is so engaged, shall not block 
lawful content, applications, services, or non-harmful devices, 
subject to reasonable network management.

    16. No Throttling. The 2010 open Internet rule against blocking 
contained an ancillary prohibition against the degradation of lawful 
content, applications, services, and devices, on the ground that such 
degradation would be tantamount to blocking. This Order creates a 
separate rule to guard against degradation targeted at specific uses of 
a customer's broadband connection:

    A person engaged in the provision of broadband Internet access 
service, insofar as such person is so engaged, shall not impair or 
degrade lawful Internet traffic on the basis of Internet content, 
application, or service, or use of a non-harmful device, subject to 
reasonable network management.

    17. The ban on throttling is necessary both to fulfill the 
reasonable expectations of a customer who signs up for a broadband 
service that promises access to all of the lawful Internet, and to 
avoid gamesmanship designed to avoid the no-blocking rule by, for 
example, rendering an application effectively, but not technically, 
unusable. It prohibits the degrading of Internet traffic based on 
source, destination, or content. (To be clear, the protections of the 
no-blocking and no-throttling rules apply to particular classes of 
applications, content and services as well as particular applications, 
content, and services.) It also specifically prohibits conduct that 
singles out content competing with a broadband provider's business 
model.
    18. No Paid Prioritization. Paid prioritization occurs when a 
broadband provider accepts payment (monetary or otherwise) to manage 
its network in a way that benefits particular content, applications, 
services, or devices. To protect against ``fast lanes,'' this Order 
adopts a rule that establishes that:

    A person engaged in the provision of broadband Internet access 
service, insofar as such person is so engaged, shall not engage in 
paid prioritization. ``Paid prioritization'' refers to the 
management of a broadband provider's network to directly or 
indirectly favor some traffic over other traffic, including through 
use of techniques such as traffic shaping, prioritization, resource 
reservation, or other forms of preferential traffic management, 
either (a) in exchange for consideration (monetary or otherwise) 
from a third party, or (b) to benefit an affiliated entity. (Unlike 
the no-blocking and no-throttling rules, there is no ``reasonable 
network management'' exception to the paid prioritization rule 
because paid prioritization is inherently a business practice rather 
than a network management practice.)

    19. The record demonstrates the need for strong action. The Verizon 
court itself noted that broadband networks have ``powerful incentives 
to accept fees from edge providers, either in return for excluding 
their competitors or for granting them prioritized access to end 
users.'' Mozilla, among many such commenters, explained that 
``[p]rioritization . . . inherently creates fast and slow lanes.'' 
Although there are arguments that some forms of paid prioritization 
could be beneficial, the practical difficulty is this: The threat of 
harm is overwhelming, case-by-case enforcement can be cumbersome for 
individual consumers or edge providers, and there is no practical means 
to measure the extent to which edge innovation and investment would be 
chilled. And, given the dangers, there is no room for a blanket 
exception for instances where consumer permission is buried in a 
service plan--the threats of consumer deception and confusion are 
simply too great.
2. No Unreasonable Interference or Unreasonable Disadvantage to 
Consumers or Edge Providers
    20. The key insight of the virtuous cycle is that broadband 
providers have both the incentive and the ability to act as gatekeepers 
standing between edge providers and consumers. As gatekeepers, they can 
block access altogether; they can target competitors, including 
competitors to their own video services; and they can extract unfair 
tolls. Such conduct would, as the Commission concluded in 2010, 
``reduce the rate of innovation at the edge and, in turn, the likely 
rate of improvements to network infrastructure.'' In other words, when 
a broadband provider acts as a gatekeeper, it actually chokes consumer 
demand for the very broadband product it can supply.
    21. The bright-line bans on blocking, throttling, and paid 
prioritization will go a long way to preserve the virtuous cycle. But 
not all the way. Gatekeeper power can be exercised through a variety of 
technical and economic means, and without a catch-all standard, it 
would be that, as Benjamin Franklin said, ``a little neglect may breed 
great mischief.'' Thus, the Order adopts the following standard:

    Any person engaged in the provision of broadband Internet access 
service, insofar as such person is so engaged, shall not 
unreasonably interfere with or unreasonably disadvantage (i) end 
users' ability to select, access, and use broadband Internet access 
service or the lawful Internet content, applications, services, or 
devices of their choice, or (ii) edge providers' ability to make 
lawful content, applications, services, or devices available to end 
users. Reasonable network management shall not be considered a 
violation of this rule.

    22. This ``no unreasonable interference/disadvantage'' standard 
protects free expression, thus fulfilling the congressional policy that 
``the Internet offer[s] a forum for a true diversity of political 
discourse, unique opportunities for cultural development, and myriad 
avenues for intellectual activity.'' And the standard will permit 
considerations of asserted benefits of innovation as well as threatened 
harm to end users and edge providers.
3. Enhanced Transparency
    23. The Commission's 2010 transparency rule, upheld by the Verizon 
court, remains in full effect:

    A person engaged in the provision of broadband Internet access 
service shall publicly disclose accurate information regarding the 
network management practices, performance, and commercial terms of 
its broadband Internet access services sufficient for consumers to 
make informed choices regarding use of such services and for 
content, application, service, and device providers to develop, 
market, and maintain Internet offerings.

    24. Today's Order reaffirms the importance of ensuring 
transparency, so that consumers are fully informed about

[[Page 19741]]

the Internet access they are purchasing and so that edge providers have 
the information they need to understand whether their services will 
work as advertised. To do that, the Order builds on the strong 
foundation established in 2010 and enhances the transparency rule for 
both end users and edge providers, including by adopting a requirement 
that broadband providers always must disclose promotional rates, all 
fees and/or surcharges, and all data caps or data allowances; adding 
packet loss as a measure of network performance that must be disclosed; 
and requiring specific notification to consumers that a ``network 
practice'' is likely to significantly affect their use of the service. 
Out of an abundance of caution and in response to a request by the 
American Cable Association, we also adopt a temporary exemption from 
these enhancements for small providers (defined for the purposes of the 
temporary exception as providers with 100,000 or fewer subscribers), 
and we direct our Consumer & Governmental Affairs Bureau to adopt an 
Order by December 15, 2015 concerning whether to make the exception 
permanent and, if so, the appropriate definition of ``small.'' Lastly, 
we create for all providers a ``safe harbor'' process for the format 
and nature of the required disclosure to consumers, which we believe 
will result in more effective presentation of consumer-focused 
information by broadband providers.
4. Scope of the Rules
    25. The open Internet rules described above apply to both fixed and 
mobile broadband Internet access service. Consistent with the 2010 
Order, today's Order applies its rules to the consumer-facing service 
that broadband networks provide, which is known as ``broadband Internet 
access service'' (BIAS) (We note that our use of the term ``broadband'' 
in this Order includes but is not limited to services meeting the 
threshold for ``advanced telecommunications capability,'' as defined in 
section 706 of the Telecommunications Act of 1996, as amended. 47 
U.S.C. 1302(b). Section 706 defines that term as ``high-speed, 
switched, broadband telecommunications capability that enables users to 
originate and receive high-quality voice, data, graphics, and video 
telecommunications using any technology.'' 47 U.S.C. 1302(d)(1). The 
2015 Broadband Progress Report specifically notes that ``advanced 
telecommunications capability,'' while sometimes referred to as 
``broadband,'' differs from the Commission's use of the term 
``broadband'' in other contexts. 2015 Broadband Progress Report at n.1 
(rel. Feb. 4, 2015)) and is defined to be:

    A 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. This term also encompasses any service that the Commission 
finds to be providing a functional equivalent of the service 
described in the previous sentence, or that is used to evade the 
protections set forth in this Part.


    26. As in 2010, BIAS does not include enterprise services, virtual 
private network services, hosting, or data storage services. Further, 
we decline to apply the open Internet rules to premises operators to 
the extent they may be offering broadband Internet access service as we 
define it today.
    27. In defining this service we make clear that we are responding 
to the Verizon court's conclusion that broadband providers ``furnish a 
service to edge providers'' (and that this service was being treated as 
common carriage per se). As discussed further below, we make clear that 
broadband Internet access service encompasses this service to edge 
providers. Broadband providers sell retail customers the ability to go 
anywhere (lawful) on the Internet. Their representation that they will 
transport and deliver traffic to and from all or substantially all 
Internet endpoints includes the promise to transmit traffic to and from 
those Internet endpoints back to the user.
    28. Interconnection. BIAS involves the exchange of traffic between 
a broadband Internet access provider and connecting networks. The 
representation to retail customers that they will be able to reach 
``all or substantially all Internet endpoints'' necessarily includes 
the promise to make the interconnection arrangements necessary to allow 
that access.
    29. As discussed below, we find that broadband Internet access 
service is a ``telecommunications service'' and subject to sections 
201, 202, and 208 (along with key enforcement provisions). As a result, 
commercial arrangements for the exchange of traffic with a broadband 
Internet access provider are within the scope of Title II, and the 
Commission will be available to hear disputes raised under sections 201 
and 202 on a case-by-case basis: An appropriate vehicle for enforcement 
where disputes are primarily over commercial terms and that involve 
some very large corporations, including companies like transit 
providers and Content Delivery Networks (CDNs), that act on behalf of 
smaller edge providers.
    30. But this Order does not apply the open Internet rules to 
interconnection. Three factors are critical in informing this approach 
to interconnection. First, the nature of Internet traffic, driven by 
massive consumption of video, has challenged traditional arrangements--
placing more emphasis on the use of CDNs or even direct connections 
between content providers (like Netflix or Google) and last-mile 
broadband providers. Second, it is clear that consumers have been 
subject to degradation resulting from commercial disagreements, perhaps 
most notably in a series of disputes between Netflix and large last-
mile broadband providers. But, third, the causes of past disruption 
and--just as importantly--the potential for future degradation through 
interconnection disputes--are reflected in very different narratives in 
the record.
    31. While we have more than a decade's worth of experience with 
last-mile practices, we lack a similar depth of background in the 
Internet traffic exchange context. Thus, we find that the best approach 
is to watch, learn, and act as required, but not intervene now, 
especially not with prescriptive rules. This Order--for the first 
time--provides authority to consider claims involving interconnection, 
a process that is sure to bring greater understanding to the 
Commission.
    32. Reasonable Network Management. As with the 2010 rules, this 
Order contains an exception for reasonable network management, which 
applies to all but the paid prioritization rule (which, by definition, 
is not a means of managing a network):

    A network management practice is a practice that has a primarily 
technical network management justification, but does not include 
other business practices. A network management practice is 
reasonable if it is primarily used for and tailored to achieving a 
legitimate network management purpose, taking into account the 
particular network architecture and technology of the broadband 
Internet access service.


    33. Recently, significant concern has arisen when mobile providers' 
have attempted to justify certain practices as reasonable network 
management practices, such as applying speed reductions to customers 
using ``unlimited data plans'' in ways that effectively force them to 
switch to price plans with less generous data allowances. For example, 
in the summer of 2014, Verizon announced a change to its ``unlimited'' 
data plan for LTE customers, which would have limited the speeds of LTE 
customers using

[[Page 19742]]

grandfathered ``unlimited'' plans once they reached a certain level of 
usage each month. Verizon briefly described this change as within the 
scope of ``reasonable network management,'' before changing course and 
withdrawing the change.
    34. With mobile broadband service now subject to the same rules as 
fixed broadband service, the Order expressly recognizes that evaluation 
of network management practices will take into account the additional 
challenges involved in the management of mobile networks, including the 
dynamic conditions under which they operate. It also recognizes the 
specific network management needs of other technologies, such as 
unlicensed Wi-Fi networks.
    35. Non-Broadband Internet Access Service Data Services. The 2010 
rules included an exception for ``specialized services.'' This Order 
likewise recognizes that some data services--like facilities-based VoIP 
offerings, heart monitors, or energy consumption sensors--may be 
offered by a broadband provider but do not provide access to the 
Internet generally. The term ``specialized services'' can be confusing 
because the critical point is not whether the services are 
``specialized;'' it is that they are not broadband Internet access 
service. IP-services that do not travel over broadband Internet access 
service, like the facilities-based VoIP services used by many cable 
customers, are not within the scope of the open Internet rules, which 
protect access or use of broadband Internet access service. 
Nonetheless, these other non-broadband Internet access service data 
services could be provided in a manner that undermines the purpose of 
the open Internet rules and that will not be permitted. The Commission 
expressly reserves the authority to take action if a service is, in 
fact, providing the functional equivalent of broadband Internet access 
service or is being used to evade the open Internet rules. The 
Commission will vigilantly watch for such abuse, and its actions will 
be aided by the existing transparency requirement that non-broadband 
Internet access service data services be disclosed.
5. Enforcement
    36. The Commission may enforce the open Internet rules through 
investigation and the processing of complaints (both formal and 
informal). In addition, the Commission may provide guidance through the 
use of enforcement advisories and advisory opinions, and it will 
appoint an ombudsperson. In order to provide the Commission with 
additional understanding, particularly of technical issues, the Order 
delegates to the Enforcement Bureau the authority to request a written 
opinion from an outside technical organization or otherwise to obtain 
objective advice from industry standard-setting bodies or similar 
organizations.

B. Promoting Investment With a Modern Title II

    37. Today, our forbearance approach results in over 700 codified 
rules being inapplicable, a ``light-touch'' approach for the use of 
Title II. This includes no unbundling of last-mile facilities, no 
tariffing, no rate regulation, and no cost accounting rules, which 
results in a carefully tailored application of only those Title II 
provisions found to directly further the public interest in an open 
Internet and more, better, and open broadband. Nor will our actions 
result in the imposition of any new federal taxes or fees; the ability 
of states to impose fees on broadband is already limited by the 
congressional Internet tax moratorium.
    38. This is Title II tailored for the 21st Century. Unlike the 
application of Title II to incumbent wireline companies in the 20th 
Century, a swath of utility-style provisions (including tariffing) will 
not be applied. Indeed, there will be fewer sections of Title II 
applied than have been applied to Commercial Mobile Radio Service 
(CMRS), where Congress expressly required the application of sections 
201, 202, and 208, and permitted the Commission to forbear from others. 
In fact, Title II has never been applied in such a focused way.
    39. History demonstrates that this careful approach to the use of 
Title II will not impede investment. First, mobile voice services have 
been regulated under a similar light-touch Title II approach since 
1994--and investment and usage boomed. For example, between 1993 and 
2009 (while voice was the primary driver of mobile revenues), the 
mobile industry invested more than $271 billion in building out 
networks, during a time in which industry revenues increased by 1300 
percent and subscribership grew over 1600 percent. Moreover, more 
recently, Verizon Wireless has invested tens of billions of dollars in 
deploying mobile wireless services since being subject to the 700 MHz C 
Block open access rules, which overlap in significant parts with the 
open Internet rules we adopt today. But that is not all. Today, key 
provisions of Title II apply to certain enterprise broadband services 
that AT&T has described as ``the epicenter of the broadband 
investment'' the Commission seeks to promote. Title II has been 
maintained by more than 1000 rural local exchange carriers that have 
chosen to offer their DSL and fiber broadband services as common 
carrier offerings. And, of course, wireline DSL was regulated as a 
common-carrier service until 2005--including a period in the late '90s 
and the first five years of this century that saw the highest levels of 
wireline broadband infrastructure investment to date.
    40. In any event, recent events have demonstrated that our rules 
will not disrupt capital markets or investment. Following recent 
discussions of the potential application of Title II to consumer 
broadband, investment analysts have issued reports concluding that 
Title II with appropriate forbearance is unlikely to alter broadband 
provider conduct or have any negative effect on their value or future 
profitability. Executives from large broadband providers have also 
repeatedly represented to investors that the prospect of regulatory 
action will not influence their investment strategies or long-term 
profitability; indeed, Sprint has gone so far to say that it ``does not 
believe that a light touch application of Title II, including 
appropriate forbearance, would harm the continued investment in, and 
deployment of, mobile broadband services.'' Finally, the recent AWS 
auction, conducted under the prospect of Title II regulation, generated 
bids (net of bidding credits) of more than $41 billion--further 
demonstrating that robust investment is not inconsistent with a light-
touch Title II regime.

C. Sustainable Open Internet Rules

    41. We ground our open Internet rules in multiple sources of legal 
authority--including both section 706 and Title II of the 
Communications Act. The Verizon court upheld the Commission's use of 
section 706 as a substantive source of legal authority to adopt open 
Internet protections. But it held that, ``[g]iven the Commission's 
still-binding decision to classify broadband providers . . . as 
providers of `information services,' '' open Internet protections that 
regulated broadband providers as common carriers would violate the Act. 
Rejecting the Commission's argument that broadband providers only 
served retail consumers, the Verizon court went on to explain that 
``broadband providers furnish a service to edge providers, thus 
undoubtedly functioning as edge providers' `carriers,' '' and held that 
the 2010 no blocking and no unreasonable discrimination rules 
impermissibly

[[Page 19743]]

``obligated [broadband providers] to act as common carriers.''
    42. The Verizon decision thus made clear that section 706 affords 
the Commission substantive authority, and that open Internet 
protections are within the scope of that authority. And this Order 
relies on section 706 for the open Internet rules. But, in light of 
Verizon, absent a classification of broadband providers as providing a 
``telecommunications service,'' the Commission could only rely on 
section 706 to put in place open Internet protections that steered 
clear of regulating broadband providers as common carriers per se. 
Thus, in order to bring a decade of debate to a certain conclusion, we 
conclude that the best path is to rely on all available sources of 
legal authority--while applying them with a light touch consistent with 
further investment and broadband deployment. Taking the Verizon 
decision's implicit invitation, we revisit the Commission's 
classification of the retail broadband Internet access service as an 
information service and clarify that this service encompasses the so-
called ``edge service.''
    43. Exercising our delegated authority to interpret ambiguous terms 
in the Communications Act, as confirmed by the Supreme Court in Brand 
X, today's Order concludes that the facts in the market today are very 
different from the facts that supported the Commission's 2002 decision 
to treat cable broadband as an information service and its subsequent 
application to fixed and mobile broadband services. Those prior 
decisions were based largely on a factual record compiled over a decade 
ago, during an earlier time when, for example, many consumers would use 
homepages supplied by their broadband provider. In fact, the Brand X 
Court explicitly acknowledged that the Commission had previously 
classified the transmission service, which broadband providers offer, 
as a telecommunications service and that the Commission could return to 
that classification if it provided an adequate justification. Moreover, 
a number of parties who, in this proceeding, now oppose our 
reclassification of broadband Internet access service, previously 
argued that cable broadband should be deemed a telecommunications 
service. As the record reflects, times and usage patterns have changed 
and it is clear that broadband providers are offering both consumers 
and edge providers straightforward transmission capabilities that the 
Communications Act defines as a ``telecommunications service.''
    44. The Brand X decision made famous the metaphor of pizza 
delivery. Justice Scalia, in dissent, concluded that the Commission had 
exceeded its legal authority by classifying cable-modem service as an 
``information service.'' To make his point, Justice Scalia described a 
pizzeria offering delivery services as well as selling pizzas and 
concluded that, similarly--broadband providers were offering 
``telecommunications services'' even if that service was not offered on 
a ``stand-alone basis.''
    45. To take Justice Scalia's metaphor a step further, suppose that 
in 2014, the pizzeria owners discovered that other nearby restaurants 
did not deliver their food and thus concluded that the pizza-delivery 
drivers could generate more revenue by delivering from any neighborhood 
restaurant (including their own pizza some of the time). Consumers 
would clearly understand that they are being offered a delivery 
service.
    46. Today, broadband providers are offering stand-alone 
transmission capacity and that conclusion is not changed even if, as 
Justice Scalia recognized, other products may be offered at the same 
time. The trajectory of technology in the decade since the Brand X 
decision has been towards greater and greater modularity. For example, 
consumers have considerable power to combine their mobile broadband 
connections with the device, operating systems, applications, Internet 
services, and content of their choice. Today, broadband Internet access 
service is fundamentally understood by customers as a transmission 
platform through which consumers can access third-party content, 
applications, and services of their choosing.
    47. Based on this updated record, this Order concludes that the 
retail broadband Internet access service available today is best viewed 
as separately identifiable offers of (1) a broadband Internet access 
service that is a telecommunications service (including assorted 
functions and capabilities used for the management and control of that 
telecommunication service) and (2) various ``add-on'' applications, 
content, and services that generally are information services. This 
finding more than reasonably interprets the ambiguous terms in the 
Communications Act, best reflects the factual record in this 
proceeding, and will most effectively permit the implementation of 
sound policy consistent with statutory objectives, including the 
adoption of effective open Internet protections.
    48. This Order also revisits the Commission's prior classification 
of mobile broadband Internet access service as a private mobile 
service, which cannot be subject to common carrier regulation, and 
finds that it is best viewed as a commercial mobile service or, in the 
alternative, the functional equivalent of commercial mobile service. 
Under the statutory definition, commercial mobile services must be 
``interconnected with the public switched network (as such terms are 
defined by regulation by the Commission).'' Consistent with that 
delegation of authority to define these terms, and with the 
Commission's previous recognition that the public switched network will 
grow and change over time, this Order updates the definition of public 
switched network to reflect current technology, by including services 
that use public IP addresses. Under this revised definition, the Order 
concludes that mobile broadband Internet access service is 
interconnected with the public switched network. In the alternative, 
the Order concludes that mobile broadband Internet access service is 
the functional equivalent of commercial mobile service because, like 
commercial mobile service, it is a widely available, for profit mobile 
service that offers mobile subscribers the capability to send and 
receive communications, including voice, on their mobile device.
    49. By classifying broadband Internet access service under Title II 
of the Act, in our view the Commission addresses any limitations that 
past classification decisions placed on the ability to adopt strong 
open Internet rules, as interpreted by the D.C. Circuit in the Verizon 
case.
    50. Having classified broadband Internet access service as a 
telecommunications service, we respond to the Verizon court's holding, 
supporting our open Internet rules under the Commission's Title II 
authority and removing any common carriage limitation on the exercise 
of our section 706 authority. For mobile broadband services, we also 
ground the open Internet rules in our Title III authority to protect 
the public interest through the management of spectrum licensing.

D. Broad Forbearance

    51. In finding that broadband Internet access service is subject to 
Title II, we simultaneously exercise the Commission's forbearance 
authority to forbear from 30 statutory provisions and render over 700 
codified rules inapplicable, to establish a light-touch regulatory 
framework tailored to preserving those provisions that advance our 
goals of more, better, and

[[Page 19744]]

open broadband. We thus forbear from the vast majority of rules adopted 
under Title II. We do not, however, forbear from sections 201, 202, and 
208 (or from related enforcement provisions), (Specifically, we do not 
forbear from the enforcement authorities set forth in sections 206, 
207, 208, 209, 216, and 217. To preserve existing CALEA obligations 
that already apply to broadband Internet access service, we also 
decline to forbear from section 229.) which are necessary to support 
adoption of our open Internet rules. We also grant extensive 
forbearance, minimizing the burdens on broadband providers while still 
adequately protecting the public.
    52. In addition, we do not forbear from a limited number of 
sections necessary to ensure consumers are protected, promote 
competition, and advance universal access, all of which will foster 
network investment, thereby helping to promote broadband deployment.
    53. Section 222: Protecting Consumer Privacy. Ensuring the privacy 
of customer information both directly protects consumers from harm and 
eliminates consumer concerns about using the Internet that could deter 
broadband deployment. Among other things, section 222 imposes a duty on 
every telecommunications carrier to take reasonable precautions to 
protect the confidentiality of its customers' proprietary information. 
We take this mandate seriously. For example, the Commission recently 
took enforcement action under section 222 (and section 201(b)) against 
two telecommunications companies that stored customers' personal 
information, including social security numbers, on unprotected, 
unencrypted Internet servers publicly accessible using a basic Internet 
search. This unacceptably exposed these consumers to the risk of 
identity theft and other harms.
    54. As the Commission has recognized, ``[c]onsumers' privacy needs 
are no less important when consumers communicate over and use broadband 
Internet access than when they rely on [telephone] services.'' Thus, 
this Order finds that consumers concerned about the privacy of their 
personal information will be more reluctant to use the Internet, 
stifling Internet service competition and growth. Application of 
section 222's protections will help spur consumer demand for those 
Internet access services, in turn ``driving demand for broadband 
connections, and consequently encouraging more broadband investment and 
deployment,'' consistent with the goals of the 1996 Act.
    55. Sections 225/255/251(a)(2): Ensuring Disabilities Access. We do 
not forbear from those provisions of Title II that ensure access to 
broadband Internet access service by individuals with disabilities. All 
Americans, including those with disabilities, must be able to reap the 
benefits of an open Internet, and ensuring access for these individuals 
will further the virtuous cycle of consumer demand, innovation, and 
deployment. This Order thus concludes that application of sections 225, 
255, and 251(a)(2) is necessary to protect consumers and furthers the 
public interest, as explained in greater detail below.
    56. Section 224: Ensuring Infrastructure Access. For broadband 
Internet access service, we do not forbear from section 224 and the 
Commission's associated procedural rules (to the extent they apply to 
telecommunications carriers and services and are, thus, within the 
Commission's forbearance authority). Section 224 of the Act governs the 
Commission's regulation of pole attachments. In particular, section 
224(f)(1) requires utilities to provide cable system operators and 
telecommunications carriers the right of ``nondiscriminatory access to 
any pole, duct, conduit, or right-of-way owned or controlled'' by a 
utility. Access to poles and other infrastructure is crucial to the 
efficient deployment of communications networks including, and perhaps 
especially, new entrants.
    57. Section 254: Promoting Universal Broadband. Section 254 
promotes the deployment and availability of communications networks to 
all Americans, including rural and low-income Americans--furthering our 
goals of more and better broadband. With the exception of section 
254(d), (g), and (k) as discussed below, we therefore do not find the 
statutory test for forbearance from section 254 (and the related 
provision in section 214(e)) is met. We recognize that supporting 
broadband-capable networks is already a key component of Commission's 
current universal service policies. The Order concludes, however, that 
directly applying section 254 provides both more legal certainty for 
the Commission's prior decisions to offer universal service subsidies 
for deployment of broadband networks and adoption of broadband services 
and more flexibility going forward.
    58. We partially forbear from section 254(d) and associated rules 
insofar as they would immediately require mandatory universal service 
contributions associated with broadband Internet access service.
    59. Below, we first adopt three bright-line rules banning blocking, 
throttling, and paid prioritization, and make clear the no-unreasonable 
interference/disadvantage standard by which the Commission will 
evaluate other practices, according to their facts. These rules are 
grounded in multiple sources of statutory authority, including section 
706 and Titles II and III of the Communications Act. Second, based on a 
current factual record, we reclassify broadband Internet access service 
as a telecommunications service under Title II. And, third, guided by 
our goals of more, better, and open broadband, we exercise our 
forbearance authority to put in place a ``light touch'' Title II 
regulatory framework that protects consumers and innovators, without 
deterring investment.

III. Report and Order on Remand: Protecting and Promoting the Open 
Internet

A. History of Openness Regulation

    60. These rules are the latest in a long line of actions by the 
Commission to ensure that American communications networks develop in 
ways that foster economic competition, technological innovation, and 
free expression. Ever since the landmark 1968 Carterfone decision, the 
Commission has recognized that communications networks are most 
vibrant, and best able to serve the public interest, when consumers are 
empowered to make their own decisions about how networks are to be 
accessed and utilized. Openness regulation aimed at safeguarding 
consumer choice has therefore been a hallmark of Commission policy for 
over forty years.
    61. In Carterfone, the Commission confronted AT&T's practice of 
preventing consumers from attaching any equipment not supplied by AT&T 
to their home telephones, even if the attachment did not put the 
underlying network at risk. Finding AT&T's ``foreign attachment'' 
provisions unreasonable and unlawful, the Commission ruled that AT&T 
customers had the right to connect useful devices of their choosing to 
their home telephones, provided these devices did not adversely affect 
the telephone network.
    62. Carterfone and subsequent regulatory actions by the Commission 
severed the market for customer premises equipment (CPE) from that for 
telephone service. In doing so, the Commission allowed new participants 
and new ideas into the market, setting the stage for a wave of 
innovation that produced technologies such as the

[[Page 19745]]

answering machine, fax machine, and modem--thereby removing a barrier 
to the development of the packet switched network that would eventually 
become the Internet.
    63. Commitment to robust competition and open networks defined 
Commission policy at the outset of the digital revolution as well. In a 
series of influential decisions, known collectively as the Computer 
Inquiries, the Commission established a flexible regulatory framework 
to support development of the nascent information economy. The Computer 
Inquiries decisions separated the market for information services from 
the underlying network infrastructure, and imposed firm non-
discrimination rules for network access. This system prevented network 
owners from engaging in anti-competitive behavior and spurred the 
development and adoption of new technologies.
    64. The principles of open access, competition, and consumer choice 
embodied in Carterfone and the Computer Inquires have continued to 
guide Commission policy in the Internet era. As former Chairman Michael 
Powell noted in 2004, ``ensuring that consumers can obtain and use the 
content, applications and devices they want . . . is critical to 
unlocking the vast potential of the broadband Internet.'' In 
recognition of this fact, in 2005, the Commission unanimously approved 
the Internet Policy Statement, which laid out four guiding principles 
designed to encourage broadband deployment and ``preserve and promote 
the open and interconnected nature of the Internet.'' These principles 
sought to ensure that consumers had the right to access and use the 
lawful content, applications, and devices of their choice online, and 
to do so in an Internet ecosystem defined by competitive markets.
    65. From 2005 to 2011, the principles embodied in the Internet 
Policy Statement were incorporated as conditions by the Commission into 
several merger orders and a key 700 MHz license, including the SBC/
AT&T, Verizon/MCI, and Comcast/NBCU mergers and the Upper 700 MHz C 
block open platform requirements. Commission approval of these 
transactions was expressly conditioned on compliance with the Internet 
Policy Statement. During this time, open Internet principles were also 
applied to particular enforcement proceedings aimed at addressing anti-
competitive behavior by service providers.
    66. In June 2010, following a D.C. Circuit decision invalidating 
the Commission's exercise of ancillary authority to provide consumers 
basic protections in using broadband Internet services, the Commission 
initiated a Notice of Inquiry to ``seek comment on our legal framework 
for broadband Internet service.'' The Notice of Inquiry recognized that 
``the current legal classification of broadband Internet service is 
based on a record that was gathered a decade ago.'' It sought comment 
on three separate alternative legal frameworks for classifying and 
regulating broadband Internet service: (1) As an information service, 
(2) as a telecommunications service ``to which all the requirements of 
Title II of the Communications Act would apply,'' and (3) solely as to 
the ``Internet connectivity service,'' as a telecommunications service 
with forbearance from most Title II obligations. The Notice of Inquiry 
sought comment on both wired and wireless broadband Internet services, 
``as well as on other factual and legal issues specific to . . . 
wireless services that bear on their appropriate classification.''
    67. In December 2010, the Commission adopted the Open Internet 
Order (76 FR 59192-01, Sept. 23, 2011), a codification of the policy 
principles contained in the Internet Policy Statement. The Open 
Internet Order was based on broadly accepted Internet norms and the 
Commission's long regulatory experience in preserving open and dynamic 
communications networks. The Order adopted three fundamental rules 
governing Internet service providers: (1) No blocking; (2) no 
unreasonable discrimination; and (3) transparency. The no-blocking rule 
and no-unreasonable discrimination rules prevented broadband service 
providers from deliberately interfering with consumers' access to 
lawful content, applications, and services, while the transparency rule 
promoted informed consumer choice by requiring disclosure by service 
providers of critical information relating to network management 
practices, performance, and terms of service.
    68. The antidiscrimination rule contained in the Open Internet 
Order operated on a case-by-case basis, with the Commission evaluating 
the conduct of fixed broadband service providers based on a number of 
factors, including conformity with industry best practices, harm to 
competing services or end users, and impairment of free expression. 
This no unreasonable discrimination framework applied to commercial 
agreements between fixed broadband service providers and third parties 
to prioritize transmission of certain traffic to their subscribers. The 
Open Internet Order also specifically addressed paid prioritization 
arrangements. It did not entirely rule out the possibility of such 
agreements, but made clear that such ``pay for priority'' deals and the 
associated ``paid prioritization'' network practices were likely to be 
problematic in a number of respects. Paid prioritization ``represented 
a significant departure from historical and current practice'' that 
threatened ``great harm to innovation'' online, particularly in 
connection with the market for new services by edge providers. Paid 
priority agreements were also viewed as a threat to non-commercial end 
users, ``including individual bloggers, libraries, schools, advocacy 
organizations, and other speakers'' who would be less able to pay for 
priority service. Finally, paid prioritization was seen giving fixed 
broadband providers ``an incentive to limit the quality of service 
provided to non-prioritized traffic.'' As a result of these concerns, 
the Commission explicitly stated in the Open Internet Order that it was 
``unlikely that pay for priority would satisfy the `no unreasonable 
discrimination' standard.''
    69. In order to maintain flexibility, the Commission tailored the 
rules contained in the Open Internet Order to fit the technical and 
economic realities of the broadband ecosystem. To this end, the 
restrictions on blocking and discrimination were made subject to an 
exception for ``reasonable network management,'' allowing service 
providers the freedom to address legitimate needs such as avoiding 
network congestion and combating harmful or illegal content. 
Additionally, in order to account for then-perceived differences 
between the fixed and mobile broadband markets, the Open Internet Order 
exempted mobile service providers from the anti-discrimination rule, 
and only barred mobile providers from blocking ``consumers from 
accessing lawful Web sites'' or ``applications that compete with the 
provider's voice or video telephony services.'' Lastly, the Open 
Internet Order made clear that the rules did not prohibit broadband 
providers from offering specialized services such as VoIP; instead, the 
Commission announced that it would continue to monitor such 
arrangements to ensure that they did not pose a threat to Internet 
openness.
    70. Verizon subsequently challenged the Open Internet Order in the 
U.S. Court of Appeals for the D.C. Circuit, arguing, among other 
things, that the Open Internet Order exceeded the Commission's 
regulatory authority and violated the Act. In January 2014, the

[[Page 19746]]

D.C. Circuit upheld the Commission's determination that section 706 of 
the Telecommunications Act of 1996 granted the Commission authority to 
regulate broadband Internet service providers, and that the Commission 
had demonstrated a sound policy justification for the Open Internet 
Order. Specifically, the court sustained the Commission's findings that 
``absent rules such as those set forth in the Open Internet Order, 
broadband providers represent a threat to Internet openness and could 
act in ways that would ultimately inhibit the speed and extent of 
future broadband deployment.''
    71. Despite upholding the Commission's authority and the basic 
rationale supporting the Open Internet Order, the court struck down the 
no-blocking and antidiscrimination rules as at odds with section 3(51) 
of the Communications Act, holding that it prohibits the Commission 
from exercising its section 706 authority to impose common carrier 
regulation on a service not classified as a ``telecommunications 
service,'' and section 332(c)(2), which prohibits common carrier 
treatment of ``private mobile services.'' The D.C. Circuit vacated the 
no-blocking and antidiscrimination rules because it found that they 
impermissibly regulated fixed broadband providers as common carriers, 
which conflicted with the Commission's prior classification of fixed 
broadband Internet access service as an ``information service'' rather 
than a telecommunications service. Likewise, the court found that the 
no-blocking rule as applied to mobile broadband conflicted with the 
Commission's earlier classification of mobile broadband service as a 
private mobile service rather than a ``commercial mobile service.'' The 
Verizon court held that the ``no unreasonable discrimination'' standard 
adopted in the Open Internet Order was insufficiently distinguishable 
from the ``nondiscrimination'' standard applicable to common carriers. 
Central to the court's rationale was its finding that, as formulated in 
the Open Internet Order, both rules improperly limited fixed broadband 
Internet access providers' ability to engage in ``individualized 
bargaining.''
    72. Following the D.C. Circuit's ruling, on May 15, 2014 the 
Commission issued a Notice of Proposed Rulemaking (2014 Open Internet 
NPRM) to respond to the lack of conduct-based rules to protect and 
promote an open Internet following the D.C. Circuit's opinion in 
Verizon v. FCC. The Commission began the NPRM with a fundamental 
question: ``What is the right public policy to ensure that the Internet 
remains open?'' While the NPRM put forth various proposals, it sought 
broad comment on alternative paths to the right public policy 
solution--including areas such as the proper scope of the rules; the 
best ways to define, prevent, and treat violations of practices that 
may threaten an open Internet (including paid prioritization); 
enhancements to the transparency rule; and the appropriate source of 
legal authority to support new open Internet rules.
    73. The Commission took many steps to facilitate public engagement 
in response to the 2014 Open Internet NPRM--including the establishment 
of a dedicated email address to receive comments, a mechanism for 
submitting large numbers of comments in bulk via a Comma Separated 
Values (CSV) file, and the release of the entire record of comments and 
reply comments as Open Data in a machine-readable format, so that 
researchers, journalists, and other parties could analyze and create 
visualizations of the record. In addition, Commission staff hosted a 
series of roundtables covering a variety of topics related to the open 
Internet proceeding, including events focused on different policy 
approaches to protecting the open Internet, mobile broadband, 
enforcement issues, technology, broadband economics, and the legal 
issues surrounding the Commission's proposals.
    74. The public seized on these opportunities to comment, submitting 
an unprecedented 3.7 million comments by the close of the reply comment 
period on September 15, 2014, with more submissions arriving after that 
date. This record-setting level of public engagement reflects the vital 
nature of Internet openness and the importance of our getting the 
answer right in this proceeding. Quantitative analysis of the comment 
pool reveals a number of key insights. For example, by some estimates, 
nearly half of all comments received by the Commission were unique. 
While there has been some public dispute as to the percentage of 
comments taking one position or another, it is clear that the majority 
of comments support Commission action to protect the open Internet. 
Comments regarding the continuing need for open Internet rules, their 
legal basis, and their substance formed the core of the overall body of 
comments. In particular, support for the reclassification of broadband 
Internet access under Title II, opposition to fast lanes and paid 
prioritization, and unease regarding the market power of broadband 
Internet access service providers were themes frequently addressed by 
commenters. In offering this summary, we do not mean to overlook the 
diversity of views reflected in the impressively large record in this 
proceeding. Most of all, we are grateful to the public for using the 
power of the open Internet to guide us in determining how best to 
protect it.

B. The Continuing Need for Open Internet Protections

    75. In its remand of the Commission's Open Internet Order, the D.C. 
Circuit affirmed the underlying basis for the Commission's open 
Internet rules, holding that ``the Commission [had] more than 
adequately supported and explained its conclusion that edge provider 
innovation leads to the expansion and improvement of broadband 
infrastructure.'' The court also found ``reasonable and grounded in 
substantial evidence'' the Commission's finding that Internet openness 
fosters the edge provider innovation that drives the virtuous cycle. 
The record on remand continues to convince us that broadband 
providers--including mobile broadband providers--have the incentives 
and ability to engage in practices that pose a threat to Internet 
openness, and as such, rules to protect the open nature of the Internet 
remain necessary. Today we take steps to ensure that the substantial 
benefits of Internet openness continue to be realized.
1. An Open Internet Promotes Innovation, Competition, Free Expression, 
and Infrastructure Deployment
    76. In the 2014 Open Internet NPRM, we sought comment on and 
expressed our continued commitment to an important principle underlying 
the Commission's prior policies--that the Internet's openness promotes 
innovation, investment, competition, free expression, and other 
national broadband goals. The record before us convinces us that these 
findings, made by the Commission in 2010 and upheld by the D.C. 
Circuit, remain valid. If anything, the remarkable increases in 
investment and innovation seen in recent years--while the rules were in 
place--bear out the Commission's view. For example, in addition to 
broadband infrastructure investment, there has been substantial growth 
in the digital app economy, video over broadband, and VoIP, as well as 
a rise in mobile e-commerce. Overall Internet adoption has also 
increased since 2010. Both within the network and at its edges, 
investment and innovation have flourished while the open Internet rules 
were in force.
    77. The record before us also overwhelmingly supports the

[[Page 19747]]

proposition that the Internet's openness is critical to its ability to 
serve as a platform for speech and civic engagement, and that it can 
help close the digital divide by facilitating the development of 
diverse content, applications, and services. The record also supports 
the proposition that the Internet's openness continues to enable a 
``virtuous [cycle] of innovation in which new uses of the network--
including new content, applications, services, and devices--lead to 
increased end-user demand for broadband, which drives network 
improvements, which in turn lead to further innovative network uses.'' 
End users experienced the benefits of Internet openness that stemmed 
from the Commission's 2010 open Internet rules--increased consumer 
choice, freedom of expression, and innovation.
2. Broadband Providers Have the Incentive and Ability To Limit Openness
    78. Broadband providers function as gatekeepers for both their end 
user customers who access the Internet, and for various transit 
providers, CDNs, and edge providers attempting to reach the broadband 
provider's end-user subscribers. As discussed in more detail below, 
broadband providers (including mobile broadband providers) have the 
economic incentives and technical ability to engage in practices that 
pose a threat to Internet openness by harming other network providers, 
edge providers, and end users.
a. Economic Incentives and Ability
    79. In the 2014 Open Internet NPRM, we sought to update the record 
with information about new and continuing incentives for broadband 
providers to limit Internet openness. As explained in detail in the 
Open Internet Order, broadband providers not only have the incentive 
and ability to limit openness, but they had done so in the past. (As 
the Commission explained in the Open Internet Order, examples such as 
the Madison River case, the Comcast-Bit Torrent case, and various 
mobile wireless Internet providers restricting customers' use of 
competitive payment applications, competitive voice applications, and 
remote video applications, indicate that broadband providers have the 
technical ability to act on incentives to harm the open Internet. The 
D.C. Circuit also found that these examples buttressed the Commission's 
conclusion that broadband providers' incentives and ability to restrict 
Internet traffic could interfere with the Internet's openness.) The 
D.C. Circuit found that the Commission ``adequately supported and 
explained'' that, absent open Internet rules, ``broadband providers 
represent a threat to Internet openness and could act in ways that 
would ultimately inhibit the speed and extent of future broadband 
deployment.'' The record generated in this proceeding convinces us that 
the Commission's conclusion in the Open Internet Order--that providers 
of broadband have a variety of strong incentives to limit Internet 
openness--remains valid today.
    80. Broadband providers' networks serve as platforms for Internet 
ecosystem participants to communicate, enabling broadband providers to 
impose barriers to end-user access to the Internet on one hand, and to 
edge provider access to broadband subscribers on the other. This 
applies to both fixed and mobile broadband providers. Although there is 
some disagreement among commenters, the record provides substantial 
evidence that broadband providers have significant bargaining power in 
negotiations with edge providers and intermediaries that depend on 
access to their networks because of their ability to control the flow 
of traffic into and on their networks. Another way to describe this 
significant bargaining power is in terms of a broadband provider's 
position as gatekeeper--that is, regardless of the competition in the 
local market for broadband Internet access, once a consumer chooses a 
broadband provider, that provider has a monopoly on access to the 
subscriber. Many parties demonstrated that both mobile and fixed 
broadband providers are in a position to function as a gatekeeper with 
respect to edge providers. Once the broadband provider is the sole 
provider of access to an end user, this can influence that network's 
interactions with edge providers, end users, and others. As the 
Commission and the court have recognized, broadband providers are in a 
position to act as a ``gatekeeper'' between end users' access to edge 
providers' applications, services, and devices and reciprocally for 
edge providers' access to end users. Broadband providers can exploit 
this role by acting in ways that may harm the open Internet, such as 
preferring their own or affiliated content, demanding fees from edge 
providers, or placing technical barriers to reaching end users. Without 
multiple, substitutable paths to the consumer, and the ability to 
select the most cost-effective route, edge providers will be subject to 
the broadband provider's gatekeeper position. The D.C. Circuit noted 
that the Commission ``convincingly detailed'' broadband providers' 
market position, which gives them ``the economic power to restrict 
edge-provider traffic and charge for the services they furnish edge 
providers,'' and further stated that the Commission reasonably 
explained that ``this ability to act as a `gatekeeper' distinguishes 
broadband providers from other participants in the Internet marketplace 
who have no similar `control [over] access to the Internet for their 
subscribers and for anyone wishing to reach those subscribers.''' (We 
find, for example, that even though edge providers may possess 
bargaining power, they do not have the same ability as broadband 
providers to control the flow of traffic or block access to the 
Internet. With respect to mobile, the presence of some additional 
retail competition is not enough to alter our conclusion here.) The 
ability of broadband providers to exploit this gatekeeper role could be 
mitigated if consumers multi-homed (i.e., bought broadband service from 
multiple networks). However, multi-homing is not widely practiced and 
imposes significant additional costs on consumers. The gatekeeper role 
could also be mitigated if a consumer could easily switch broadband 
providers. But, as discussed further below, the evidence suggests 
otherwise.
    81. The broadband provider's position as gatekeeper is strengthened 
by the high switching costs consumers face when seeking a new service. 
Among the costs that consumers may experience are: High upfront device 
installation fees; long-term contracts and early termination fees; the 
activation fee when changing service providers; and compatibility costs 
of owned equipment not working with the new service. Bundled pricing 
can also play a role, as ``single-product subscribers are four times 
more likely to churn than triple-play subscribers.'' These costs may 
limit consumers' willingness and ability to switch carriers, if such a 
choice is indeed available. Commenters also point to an information 
problem, whereby consumers are unsure about the causes of problems or 
limitations with their services--for example, whether a slow speed on 
an application is caused by the broadband provider or the edge 
provider--and as such consumers may not feel that switching providers 
will resolve their Internet access issues. Additionally, consumers on 
unlimited data plans may be confused by slowed data speeds because 
broadband providers have not adequately communicated contractually-
imposed data management

[[Page 19748]]

practices and usage thresholds. Switching costs are also a critical 
factor that negatively impacts mobile broadband consumers, in 
particular due to the informational uncertainties mentioned below, 
among other reasons. Ultimately, when consumers face this kind of 
friction in switching to meaningful competitive alternatives, it 
decreases broadband provider' responsiveness to consumer demands and 
limits the provider's incentives to improve their networks. 
Additionally, 45 percent of households have only a single provider 
option for 25 Mbps/3 Mbps broadband service, indicating that 45 percent 
of households do not have any choices to switch to at this critical 
level of service.
    82. Broadband providers may seek to gain economic advantages by 
favoring their own or affiliated content over other third-party 
sources. Technological advances have given broadband providers the 
ability to block content in real time, which allows them to act on 
their financial incentives to do so in order to cut costs or prefer 
certain types of content. Data caps or allowances, which limit the 
amount and type of content users access online, can have a role in 
providing consumers options and differentiating services in the 
marketplace, but they also can negatively influence customer behavior 
and the development of new applications. Similarly, broadband providers 
have incentives to charge for prioritized access to end users or 
degrade the level of service provided to non-prioritized content. When 
bandwidth is limited during peak hours, its scarcity can cause 
reliability and quality concerns, which increases broadband providers' 
ability to charge for prioritization. Such practices could result in 
so-called ``tolls'' for edge providers seeking to reach a broadband 
provider's subscribers, leading to reduced innovation at the edge, as 
well as increased rates for end users, reducing consumer demand, and 
further disrupting the virtuous cycle. Commenters expressed 
considerable concern regarding the harmful effects of paid 
prioritization on Internet openness. Further, as discussed above, a 
broadband provider's incentive to favor affiliated content or the 
content of unaffiliated firms that pay for it to do so, to block or 
degrade traffic, to charge edge providers for access to end users, and 
to disadvantage non-prioritized transmission all increase when end 
users are less able to respond by switching to rival broadband 
providers.
    83. In addition to the harms outlined above, broadband providers' 
behavior has the potential to cause a variety of other negative 
externalities that hurt the open nature of the Internet. Broadband 
providers have incentives to engage in practices that will provide them 
short term gains but will not adequately take into account the effects 
on the virtuous cycle. In the Open Internet Order, the Commission found 
that the unaccounted-for harms to innovation are negative 
externalities, and are likely to be particularly large because of the 
rapid pace of Internet innovation, and wide-ranging because of the role 
of the Internet as a general purpose technology. Further, the 
Commission noted that a broadband provider may hesitate to impose costs 
on its own subscribers, but it will typically not take into account the 
effect that reduced edge provider investment and innovation has on the 
attractiveness of the Internet to end users that rely on other 
broadband providers--and will therefore ignore a significant fraction 
of the cost of forgone innovation. The record supports our view that 
these negative externality problems have not disappeared, and in some 
cases, may be more prevalent. In order to mitigate these negative 
results, the Commission needs to act to promote Internet openness.
    84. A final point on this question of economic incentives and 
ability is worth noting. Broadband providers have the ability to act as 
gatekeepers even in the absence of ``the sort of market concentration 
that would enable them to impose substantial price increases on end 
users.'' We therefore need not consider whether market concentration 
gives broadband providers the ability to raise prices. The Commission 
came to this conclusion in the Open Internet Order, and we conclude the 
same here. As the Commission noted in the Open Internet Order, threats 
to Internet-enabled innovation, growth, and competition do not depend 
on broadband providers having market power with respect to their end 
users. In Verizon, the court agreed, explaining that ``broadband 
providers' ability to impose restrictions on edge providers simply 
depends on end users not being fully responsive to the imposition of 
such restrictions.'' (We note further that, of course, our 
reclassification of broadband Internet access service as a 
``telecommunications service'' subject to Title II below likewise does 
not rely on such a test or any measure of market power. Indeed, our 
reclassification decision is based on whether BIAS meets the statutory 
definition of a ``telecommunications service,'' and not any additional 
economic circumstances.) As we have concluded in this section, this 
remains true today. (We note, however, that in areas where there are 
limited competitive alternatives, this may exacerbate other problems 
such as the ability to switch from one provider to another.)
b. Technical Ability
    85. As the Commission explained in the Open Internet Order, past 
instances of abuse indicate that broadband providers have the technical 
ability to act on incentives to harm the open Internet. Broadband 
providers have a variety of tools at their disposal that can be used to 
monitor and regulate the flow of traffic over their networks--giving 
them the ability to discriminate should they choose to do so. 
Techniques used by broadband providers to identify and select traffic 
may include approaches based on packet payloads (using deep packet 
inspection), network or transport layer headers (e.g., port numbers or 
priority markings), or heuristics (e.g., the size, sequencing, and/or 
timing of packets). Using these techniques, broadband providers may 
apply network practices to traffic that has a particular source or 
destination, that is generated by a particular application or by an 
application that belongs to a particular class of applications, that 
uses a particular application- or transport-layer protocol, or that is 
classified for special treatment by the user, application, or 
application provider. Application-specific network practices depend on 
the broadband provider's ability to identify the traffic associated 
with particular uses of the network. Some of these application-specific 
practices may be reasonable network management, e.g., tailored network 
security practices. However, some of these techniques may also be 
abused. Deep packet inspection, for example, may be used in a manner 
that may harm the open Internet, e.g., to limit access to certain 
Internet applications, to engage in paid prioritization, and even to 
block certain content. Similarly, traffic control algorithms can be 
abused, e.g., to give certain packets favorable placement in queues or 
to send packets along less congested routes in a manner contrary to end 
user preferences. Use of these techniques may ultimately affect the 
quality of service that users receive, which could effectively force 
edge providers to enter into paid prioritization agreements to prevent 
poor quality of content to end users.
3. Mobile Broadband Services
    86. We have discussed above the incentives and ability of broadband 
providers to act in ways that limit Internet openness, regardless of 
the

[[Page 19749]]

specific technology platform used by the provider. A significant 
subject of discussion in the record, however, concerned mobile 
broadband providers specifically, and we therefore believe it is 
appropriate to address here the incentive and ability that these 
providers have to limit Internet openness. As the Commission noted in 
the Open Internet Order, ``[c]onsumer choice, freedom of expression, 
end-user control, competition, and the freedom to innovate without 
permission are as important when end users are accessing the Internet 
via mobile broadband as via fixed.'' The Commission noted that ``there 
have been instances of mobile providers blocking certain third-party 
applications, particularly applications that compete with the 
provider's own offerings . . . .'' However, the Commission also noted 
the nascency of the mobile broadband industry, citing the recent 
development of ``app'' stores, and what it characterized at the time as 
``new business models for mobile broadband providers, including usage-
based pricing.'' Furthermore, the Commission at that time found that 
``[m]obile broadband speeds, capacity, and penetration [were] typically 
much lower than for fixed broadband'' and noted that carriers had only 
begun to offer 4G service.
    87. Citing these factors, as well as greater consumer choice, 
``meaningful recent moves toward openness in and on mobile broadband 
networks,'' and the operational constraints faced by mobile broadband 
providers, the Commission applied its open Internet rules to mobile 
broadband, but distinguished between fixed and mobile broadband in some 
regards: While it applied the same transparency rule to both fixed and 
mobile network providers, it adopted a different no-blocking standard 
for mobile broadband Internet access service, and excluded mobile 
broadband from the unreasonable discrimination rule. In the 2014 Open 
Internet NPRM, the Commission tentatively concluded that it should 
maintain the same approach going forward, but recognized that there 
have been significant changes since 2010 in the mobile marketplace. The 
Commission sought comment on whether those changes should lead it to 
revisit the treatment of mobile broadband services.
    88. Today, we find that changes in the mobile broadband marketplace 
warrant a revised approach. We find that the mobile broadband 
marketplace has evolved, and continues to evolve, but is no longer in a 
nascent stage. As discussed below, mobile broadband networks are 
faster, more broadly deployed, more widely used, and more 
technologically advanced than they were in 2010. We conclude that it 
would benefit the millions of consumers who access the Internet on 
mobile devices to apply the same set of Internet openness protections 
to both fixed and mobile networks.
    89. Network connection speed and data consumption have exploded. 
For 2010, Cisco reported an average mobile network connection speed of 
709 kbps. Since that time there has been massive expansion of mobile 
broadband networks, providing vastly increased download speeds. For 
2013, Cisco reported an average mobile connection speed of 2,058 kbps. 
This increase in speed is partially due to the deployment of faster 
network technologies. Currently, mobile broadband networks provide 
coverage and services using a variety of 3G and 4G technologies, 
including, most importantly, LTE. As a consequence of the growing 
deployment of next generation networks, there has been an increase of 
more than 200,000 percent in the number of LTE subscribers, from 
approximately 70,000 in 2010 to over 140 million in 2014. Concurrent 
with these substantial changes in mobile broadband deployment and 
download speeds, mobile data traffic has exploded, increasing from 388 
billion MB in 2010 to 3.23 trillion MB in 2013. AT&T reports that its 
wireless data traffic has grown 100,000 percent between 2007 and 2014 
and 20,000 percent over the past five years. T-Mobile states that 
``data usage continues to expand exponentially, with year-to-year 
increases of roughly 120 percent.''
    90. As consumers use smartphones and tablets more, they 
increasingly rely on mobile broadband as a pathway to the Internet. The 
Internet Association argues that mobile Internet access is essential, 
since many Americans ``are wholly reliant on mobile wireless for 
Internet access.'' In addition, evidence shows that consumers in 
certain demographic groups, including low income and rural consumers 
and communities of color, are more likely to rely on mobile as their 
only access to the Internet. Citing data from the Pew Research Center's 
Internet & American Life Project, OTI states that ``[t]he share of 
Americans relying exclusively on their smartphone[s] to access the 
Internet is far higher among Hispanics, Blacks, and adults aged 18-29, 
and households earning less than $30,000 a year.'' According to data 
from the National Health Interview Survey, 44 percent of households 
were ``wireless-only'' during January-June 2014, compared to 31.6 
percent during January-June 2011. These data also show that 59.1 
percent of adults living in poverty reside in wireless-only households, 
relative to 40.8 percent of higher income adults. Additionally, rural 
consumers and businesses often have access to fewer options for 
Internet service, meaning that these customers may have limited 
alternatives when faced with restrictions to Internet openness imposed 
by their mobile provider. Furthermore, just as consumer reliance on 
mobile broadband has grown, edge providers increasingly rely on mobile 
broadband to reach their customers. Microsoft states, for example, 
that, ``with `the pressure . . . only increasing to either go mobile or 
go home,' edge providers frequently introduce new edge services on 
mobile platforms first, and the success or failure of these edge 
providers' businesses often depends in large part on their mobile 
offerings.''
    91. Furthermore, the technology underlying today's mobile broadband 
networks, as compared to those deployed in 2010, not only provides 
operators with a greater ability to manage their networks consistent 
with the rules we adopt today, but also gives those operators a greater 
ability to engage in conduct harmful to the virtuous cycle in the 
absence of open Internet rules. As discussed above, certain behaviors 
by broadband providers may impose negative externalities on the 
Internet ecosystem, resulting in less innovation from edge providers. 
We find that the same is true today for mobile wireless broadband 
providers, particularly as mobile broadband technology has become more 
widespread and mobile broadband services have become more integrated 
into the economy.
    92. In view of the evidence showing the evolution of the mobile 
broadband marketplace, we conclude that it would best serve the public 
interest to revise our approach for mobile broadband services and apply 
the same openness requirements as those applied to providers of fixed 
broadband services. The Commission has long recognized that the 
Internet should remain open for consumers and innovators alike, 
regardless of the different technologies and services through which it 
may be accessed. Although the Commission found in 2010 that conditions 
at that time warranted a more limited application of open Internet 
rules to mobile broadband services, it nevertheless recognized the 
importance of freedom and openness for users of mobile broadband 
networks, finding that ``consumer choice, freedom of expression, end-
user control,

[[Page 19750]]

competition, and the freedom to innovate without permission are as 
important when end users are accessing the Internet via mobile 
broadband as via fixed.'' In contrast to the state of the mobile 
broadband marketplace when the Commission adopted the 2010 open 
Internet rules, the evidence in the record today shows how mobile 
broadband services have evolved to become essential, critical means of 
access to the Internet for millions of consumers every day. Because of 
this evolution and the widespread use of mobile broadband services, 
maintaining a regime under which fewer protections apply in a mobile 
environment risks creating a substantively different Internet 
experience for mobile broadband users as compared to fixed broadband 
users. Broadband users should be able to expect that they will be 
entitled to the same Internet openness protections no matter what 
technology they use to access the Internet. We agree with arguments 
made by a large number of commenters that applying a consistent set of 
requirements will help ensure that all consumers can benefit from full 
access to an open and robust Internet. We note that evidence in the 
record indicates that mobile broadband providers themselves have 
recognized the importance of open Internet practices for mobile 
broadband consumers.
    93. Despite their support of open Internet principles, several of 
the nationwide mobile providers oppose broader openness requirements 
for mobile broadband, arguing that additional rules are unnecessary in 
the mobile broadband market. T-Mobile, for example, argues that 
``robust retail competition in the mobile broadband market already 
constrains mobile provider behavior.'' Verizon comments that ``consumer 
choice and competition also have ensured a differentiated marketplace 
in which providers routinely develop innovative offerings designed to 
outcompete competitors' offerings.'' AT&T contends that additional 
rules are unnecessary as mobile broadband providers are already 
investing in the networks, innovating, reducing prices, and thriving. 
CTIA contends that ``the robust competitive conditions in the mobile 
broadband marketplace are a defining differentiator'' and that ``any 
new open Internet framework should account for the competitive mobile 
dynamic.''
    94. Based upon the significant changes in mobile broadband since 
2010 discussed above, including the increased use of mobile broadband 
and the greater ability of mobile broadband providers to engage in 
conduct harmful to the virtuous cycle, we are not persuaded that 
maintaining fewer open Internet protections for consumers of mobile 
broadband services would serve the public interest. Contrary to 
provider arguments that applying a broader set of openness requirements 
will stifle innovation and chill investment, we find that the rules we 
adopt today for all providers of services will promote innovation, 
investment, and competition. As we discuss above, an open Internet 
enables a virtuous cycle where new uses of the network drive consumer 
demand, which drives network improvements, which result in further 
innovative uses. We agree with commenters that ``mobile is a key 
component'' of the virtuous cycle. OTI comments that ``a variety of 
economic analyses suggest that the Internet's openness is a key driver 
of its value . . . . Other economic studies have found that non-neutral 
conditions in the broadband market might maximize profits for broadband 
providers but would ultimately minimize consumer welfare . . . . There 
is significant evidence that a vibrant and neutral online economy is 
critical for a healthy technology industry, which is a significant 
creator of jobs in the U.S.'' We find that these arguments apply to 
mobile broadband providers as well as to fixed, and apply even though 
there may be more competition among mobile broadband providers.
    95. We note that the Commission's experience with applying open 
platform rules to Upper 700 MHz C Block licensees, including Verizon 
Wireless, has shown that openness principles can be applied to mobile 
services without inhibiting a mobile provider's ability to compete and 
be successful in the marketplace. We find that it is reasonable to 
conclude that, even with broader application of Internet openness 
requirements, mobile broadband providers will similarly continue to 
compete and develop innovative products and services. We also expect 
that the force of consumer demand that led mobile broadband providers 
to invest in their networks over the past four years will likely 
continue to drive substantial investments in mobile broadband networks 
under the open Internet regime we adopt today.
    96. Although mobile providers generally argue that additional rules 
are not necessary to deter practices that would limit Internet 
openness, concerns related to the openness practices of mobile 
broadband providers have arisen. As we noted in the 2014 Open Internet 
NPRM, in 2012, the Commission reached a $1.25 million settlement with 
Verizon for restricting tethering apps on Verizon smartphones, based on 
openness requirements attached to Verizon's Upper 700 MHz C Block 
licenses. Also in 2012, consumers complained when they encountered 
problems accessing Apple's FaceTime application on AT&T's network. More 
recently, significant concern has arisen when mobile providers' have 
attempted to justify certain practices as reasonable network management 
practices, such as applying speed reductions to customers using 
``unlimited data plans'' in ways that effectively force them to switch 
to price plans with less generous data allowances. As Consumers Union 
observes, many mobile broadband provider practices are non-transparent, 
because customers receive ``no warning or explanation of when their 
speeds will be slowed down.'' Other commenters such as OTI also cite 
mobile providers' blocking of the Google Wallet e-payment application. 
Although providers claimed that the blocking was justified based on 
security concerns, OTI notes that ``this carrier behavior raised 
anticompetitive concerns when AT&T, Verizon and T-Mobile later unveiled 
their own mobile payment application, a competitor to Google Wallet . . 
. .'' Microsoft also describes further potential for abuse based on its 
experience in other countries without open Internet protections, 
claiming, for example, that ``several broadband access providers around 
the world have interfered or degraded Skype traffic on their 
networks.'' A recent survey of European Internet users found that 
respondents reported experiencing problems with ``blocking of internet 
content.'' Mobile services notably accounted for a significant 
percentage of negative experiences reported in the survey. OTI argues 
that, even with competition, mobile providers have an interest in 
seeking rents from edge providers and ``in securing a competitive 
advantage for their own competing apps, content and services.'' We 
agree, and find that the rules we adopt today for mobile network 
providers will help guard against future incidents that have the 
potential to affect Internet openness and undermine a mobile broadband 
consumer's right to access a free and open Internet.
    97. In addition, we agree with those commenters that argue that 
mobile broadband providers have the incentives and ability to engage in 
practices that would threaten the open nature of the Internet, in part 
due to consumer switching costs. Switching costs are a significant 
factor in enabling the ability of mobile broadband providers to act as 
gatekeepers.

[[Page 19751]]

Microsoft states that ``for the large number of applications that are 
available only in the mobile context, mobile broadband access providers 
today can be an edge provider's only option for reaching a particular 
end user,'' and argues that, because of high switching costs, few 
mobile broadband consumers routinely switch providers. Therefore, 
Microsoft argues, ``even if there is more than one mobile broadband 
access provider in a specific market, there may not be effective 
competitive alternatives (for edge providers or consumers) and these 
mobile broadband access providers retain the ability to act in a manner 
that undermines the competitive neutrality of the online marketplace.''
    98. The level of wireless churn, when viewed in conjunction with 
data on consumer satisfaction, is consistent with the existence of 
important switching costs for customers. Based on results from surveys, 
OTI and Consumers Union argue that switching costs have depressed 
mobile wireless churn rates, meaning that customers may remain with 
their service providers even when they are dissatisfied. Consumers 
Union cites a February 2015 Consumer Reports survey showing that ``27 
percent of mobile broadband consumer[s] who are dissatisfied with their 
mobile broadband service provider are reluctant to switch carriers'' 
due to several factors. That many customers stay with their mobile 
wireless providers, despite expressing dissatisfaction with their 
current provider and despite the availability of alternate plans from 
other providers, suggests the presence of significant barriers to 
switching. Furthermore, this has been a period of market and spectrum 
consolidation, which has decreased the choices available to consumers 
in many parts of the country. For example, Vonage argues that ``recent 
mergers between AT&T and Leap, and T-Mobile and MetroPCS have reduced 
the ability of wireless end users to switch to competing providers in 
the event of potential discrimination against the edge services they 
may want to access.'' Choices may be particularly limited in rural 
areas, both because fewer service providers tend to operate in these 
regions and because consumers may encounter difficulties in porting 
their numbers from national to local service providers.
    99. Switching costs may arise due to a number of factors that 
affect mobile consumers. For example, consumers may face costs due to 
informational uncertainty, particularly in the context of concerns over 
open Internet restrictions. The provision of wireless service involves 
the interaction between the wireless network operator, the various edge 
providers, the customer's handset or other equipment, and the 
conditions present in the specific location the customer wishes to use 
the service. In this environment, it can be very difficult for 
customers to ascertain the source of a service disruption, and hence 
whether switching wireless providers would solve the problem. 
Additionally, product differentiation can make it difficult for 
consumers to compare plans, which may also increase switching costs. 
Finally, customers may face a variety of hassle-related and financial 
switching costs. Disconnecting an existing service and activating a new 
one may involve early termination fees (ETFs), coordinating with 
multiple members of a family plan, billing set-up, transferring 
personal files, and porting phone numbers, each of which may create 
delays or difficulties for customers. As part of this process, some 
customers may need to replace their equipment, which may not be 
compatible with their new mobile service provider's network. OTI and 
Consumers Union argue that moving multiple members of a shared or 
family plan may be particularly expensive, since ``[n]ot only do groups 
face the cost of multiple ETFs, but frequently the contract termination 
dates become nonsynchronous due to the addition of new lines and 
individuals upgrading their devices at different points in time.'' 
Furthermore, OTI and Consumers Union argue that these costs affect an 
increasingly large proportion of consumers, since the penetration of 
shared plans has increased such that the majority of AT&T and Verizon 
Wireless customers now have shared plans.
    100. AT&T, T-Mobile, and Verizon argue that the factors that led 
the Commission to adopt a more limited set of openness rules for mobile 
in 2010 remain valid today. They argue that mobile broadband networks 
should not be viewed as mature as mobile technologies continue to 
develop and evolve. They also contend that the extraordinary growth in 
use of mobile broadband services requires that providers have more 
flexibility to be able to handle the increased traffic and ensure 
quality of service for subscribers. T-Mobile, for example, asserts that 
``while mobile networks are more robust and offer greater speeds and 
capacity than they did when the 2010 rules were enacted, they also face 
greater demands; their need for agile and dynamic network management 
tools has actually increased.''
    101. We recognize that mobile service providers must take into 
account factors such as mobility and reliance on spectrum. As discussed 
more fully below in the context of each of the rules, however, we find 
that the requirements we adopt today are sufficiently tailored to 
provide carriers with the flexibility they need to accommodate these 
conditions. Moreover, as described further below, we conclude that 
retaining an exception to the no-blocking rule, the no-throttling rule, 
and the no-unreasonable interference/disadvantage standard we adopt 
today for reasonable network management will allow sufficient 
flexibility for mobile service providers.
4. The Commission Must Act To Preserve Internet Openness
    102. Given that broadband providers--both fixed and mobile--have 
both the incentives and ability to harm the open Internet, we again 
conclude that the relatively small incremental burdens imposed by our 
rules are outweighed by the benefits of preserving the open nature of 
the Internet, including the continued growth of the virtuous cycle of 
innovation, consumer demand, and investment. We note, for example, that 
the disclosure requirements adopted in this order are widely 
understood, have industry-based definitions, and are commonly used in 
commercial Service Level Agreements by many broadband providers. Open 
Internet rules benefit investors, innovators, and end users by 
providing more certainty to each regarding broadband providers' 
behavior, and helping to ensure the market is conducive to optimal use 
of the Internet. Open Internet rules are also critical for ensuring 
that people living and working in rural areas can take advantage of the 
substantial benefits that the open Internet has to offer. In minority 
communities where many individuals' only Internet connection may be 
through a mobile device, robust open Internet rules help make sure 
these communities are not negatively impacted by harmful broadband 
provider conduct. Such rules additionally provide essential safeguards 
to ensure that the Internet flourishes as a platform for education and 
research.
    103. The Commission's historical open Internet policies and rules 
have blunted the incentives, discussed above, to engage in behavior 
harmful to the open Internet. Commenters who argue that rules are not 
necessary overlook the role that the Commission's rules and policies 
have played in fostering that result. Without rules in place to protect 
the open Internet, the overwhelming incentives broadband providers have 
to act in ways that are harmful to

[[Page 19752]]

investment and innovation threaten both broadband networks and edge 
content. Paid prioritization agreements, for example, have the 
potential to distort the market by causing prices not to reflect 
efficient cost recovery and by altering consumer choices for content 
and edge providers. The record reflects the view that paid arrangements 
for priority treatment, such as broadband providers discriminating 
among content providers or prioritizing one provider's or its own 
content over others, likely damage the open Internet, harming 
competition and consumer choice. Additionally, blocking and throttling 
harm a consumer's right to access lawful content, applications, and 
services, and to use non-harmful devices.

C. Strong Rules That Protect Consumers From Practices That Can Threaten 
the Open Internet

    104. We are keenly aware that in the wake of the Verizon decision, 
there are no rules in place to prevent broadband providers from 
engaging in conduct harmful to Internet openness, such as blocking a 
consumer from accessing a requested Web site or degrading the 
performance of an innovative Internet application. (We acknowledge 
other laws address behavior similar to that which our rules are 
designed to prevent; however, as discussed below, we do not find 
existing laws sufficient to adequately protect consumers' access to the 
open Internet. For example, some parties have suggested that existing 
antitrust laws would address discriminatory conduct of an 
anticompetitive nature. We also note that certain ``no blocking'' 
obligations continue to apply to the use of Upper 700 MHz C Block 
licenses.) While many providers have indicated that, at this time, they 
do not intend to depart from the previous rules, an open Internet is 
too important to consumers and innovators to leave unprotected. 
Therefore, we today reinstate strong, enforceable open Internet rules. 
As in 2010, we believe that conduct-based rules targeting specific 
practices are necessary.
    105. No-Blocking. First, we adopt a bright-line rule prohibiting 
broadband providers from blocking lawful content, applications, 
services, or non-harmful devices. This ``no-blocking'' principle has 
long been a cornerstone of the Commission's policies. While first 
applied in the Internet context as part of the Commission's Internet 
Policy Statement, the no-blocking concept dates back to the 
Commission's protection of end users' rights to attach lawful, non-
harmful devices to communications networks.
    106. No-Throttling. Second, we adopt a separate bright-line rule 
prohibiting broadband providers from impairing or degrading lawful 
Internet traffic on the basis of content, application, service, or use 
of non-harmful device. This conduct was prohibited under the commentary 
to the no-blocking rule adopted in the 2010 Open Internet Order. 
However, to emphasize the importance of this concept we delineate under 
a separate rule a ban on impairment or degradation, to prevent 
broadband providers from engaging in behavior other than blocking that 
negatively impacts consumers' use of content, applications, services, 
and devices.
    107. No Paid Prioritization. Third, we respond to the deluge of 
public comment expressing deep concern about paid prioritization. Under 
the rule we adopt today, the Commission will ban all paid 
prioritization subject to a narrow waiver process.
    108. No-Unreasonable Interference/Disadvantage Standard. In 
addition to these three bright-line rules, we also set forth a no-
unreasonable interference/disadvantage standard, under which the 
Commission can prohibit practices that unreasonably interfere with the 
ability of consumers or edge providers to select, access, and use 
broadband Internet access service to reach one another, thus causing 
harm to the open Internet. This no-unreasonable interference/
disadvantage standard will operate on a case-by-case basis and is 
designed to evaluate other current or future broadband Internet access 
provider policies or practices--not covered by the bright-line rules-- 
and prohibit those that harm the open Internet.
    109. Transparency Requirements. We also adopt enhancements to the 
existing transparency rule to more effectively serve end-user 
consumers, edge providers of broadband products and services, and the 
Internet community. These enhanced transparency requirements are modest 
in nature, and we decline to adopt requirements proposed in the NPRM 
that raised concern for smaller broadband providers in particular, such 
as disclosures as to the source of congestion.
1. Clear, Bright Line Rules
    110. The record in this proceeding reveals that three practices in 
particular demonstrably harm the open Internet: Blocking, throttling, 
and paid prioritization. For the reasons described below, we find each 
of these practices is inherently unjust and unreasonable, in violation 
of section 201(b) of the Act, and that these practices threaten the 
virtuous cycle of innovation and investment that the Commission intends 
to protect under its obligation and authority to take steps to promote 
broadband deployment under section 706 of the 1996 Act. We accordingly 
adopt bright-line rules banning blocking, throttling, and paid 
prioritization by providers of both fixed and mobile broadband Internet 
access service.
a. Preventing Blocking of Lawful Content, Applications, Services, and 
Non-Harmful Devices
    111. We continue to find, for the same reasons the Commission found 
in the 2010 Open Internet Order and reiterated in the 2014 Open 
Internet NPRM, that ``the freedom to send and receive lawful content 
and to use and provide applications and services without fear of 
blocking is essential to the Internet's openness.'' Because of 
broadband providers' incentives to block competitors' content, the need 
to protect a consumer's right to access lawful content, applications, 
services, and to use non-harmful devices is as important today as it 
was when the Commission adopted the first no-blocking rule in 2010.
    112. In the 2014 Open Internet NPRM, the Commission tentatively 
concluded that it should re-adopt the text of the vacated no-blocking 
rule. The record overwhelmingly supports the notion of a no-blocking 
principle and re-adopting the text of the original rule. (A broad 
cross-section of broadband providers, edge providers, public interest 
organizations, and individuals support this approach.) Further, we note 
that many broadband providers still voluntarily continue to abide by 
the 2010 no-blocking rule, even though they have not been legally 
required to do so by a rule of general applicability since the Verizon 
decision. After consideration of the record and guidance from the D.C. 
Circuit, we adopt the following no-blocking rule applicable to both 
fixed and mobile broadband providers of broadband Internet access 
service:

A person engaged in the provision of broadband Internet access 
service, insofar as such person is so engaged, shall not block 
lawful content, applications, services, or non-harmful devices, 
subject to reasonable network management.

    113. Similar to the 2010 no-blocking rule, the phrase ``content, 
applications, and services'' again refers to all traffic transmitted to 
or from end users of a broadband Internet access service, including 
traffic that may not fit clearly into any of these categories. Further, 
the no-blocking rule adopted today again

[[Page 19753]]

applies to transmissions of lawful content and does not prevent or 
restrict a broadband provider from refusing to transmit unlawful 
material, such as child pornography or copyright-infringing materials. 
(Similar to the 2010 no-blocking rule, this obligation does not impose 
any independent legal obligation on broadband providers to be the 
arbiter of what is lawful.) Today's no-blocking rule also entitles end 
users to connect, access, and use any lawful device of their choice, 
provided that the device does not harm the network. The no-blocking 
rule prohibits network practices that block a specific application or 
service, or any particular class of applications or services, unless it 
is found to be reasonable network management. Finally, as with the 2010 
no-blocking rule, today's no-blocking rule prohibits broadband 
providers from charging edge providers a fee to avoid having the edge 
providers' content, service, or application blocked from reaching the 
broadband provider's end-user customer. (We note that during oral 
argument in the Verizon case, Verizon told the court that ``in 
paragraph 64 of the Order the Agency also sets forth the no charging of 
edge providers rule as a corollary to the no blocking rule, and that's 
a large part of what is causing us our harm here.'' In response, Judge 
Silberman stated, ``if you were allowed to charge, which are you 
assuming you're allowed to charge because of the anti-common carrier 
point of view, if somebody refused to pay then just like in the dispute 
between C[B]S and Warner, Time Warner . . . you could refuse to 
carry.'' Verizon's counsel responded: ``[r]ight.'' Verizon Oral Arg. 
Tr. at 28.)
    114. Rejection of the Minimum Level of Access Standard. The 2014 
Open Internet NPRM proposed that the no-blocking rule would prohibit 
broadband providers from depriving edge providers of a minimum level of 
access to the broadband provider's subscribers and sought comment on 
how to define that minimum level of service. After consideration of the 
record, we reject the minimum level of access standard. Broadband 
providers, edge providers, public interest organizations, and other 
parties note the practical and technical difficulties associated with 
setting any such minimum level of access. For example, some parties 
note the uncertainty created by an indefinite standard. Other parties 
observe that in creating any such standard of service for no-blocking, 
the Commission risks jeopardizing innovation. We agree with these 
arguments and many others in the record expressing concern with the 
proposed minimum level of access standard.
    115. The no-blocking rule we adopt today prohibits broadband 
providers from blocking access to lawful Internet content, 
applications, services, and non-harmful devices. We believe that this 
approach will allow broadband providers to honor their service 
commitments to their subscribers without relying upon the concept of a 
specified level of service to those subscribers or edge providers under 
the no-blocking rule. We further believe that the separate no-
throttling rule discussed below provides appropriate protections 
against harmful conduct that degrades traffic but does not constitute 
outright blocking.
    116. Application of the No-Blocking Rule to Mobile. In 2010, the 
Commission limited the no-blocking rule for mobile to lawful Web sites 
and applications that competed with a provider's voice or video 
telephony services, subject to reasonable network management. The 2014 
Open Internet NPRM, citing ``the operational constraints that affect 
mobile broadband services, the rapidly evolving nature of the mobile 
broadband technologies, and the generally greater amount of consumer 
choice for mobile broadband services than for fixed,'' proposed to 
retain the 2010 no-blocking rule. The Commission sought comment on this 
proposal.
    117. For the reasons set forth above, including consumer 
expectations, the Commission's experience with open Internet 
regulations in the 700 MHz C Block, and the advances in the mobile 
broadband industry since 2010, we conclude instead that the same no-
blocking rule should apply to both fixed and mobile broadband Internet 
access services. Accordingly, as with fixed service, a consumer's 
mobile broadband provider cannot block a consumer from accessing lawful 
content, applications, services, or non-harmful devices, regardless of 
whether the content, applications, services, or devices (In evaluating 
the reasonable network management exception to the no-blocking rule, 
the Commission will drawing upon its experience with the no-blocking 
rule in the 700 MHz C Block.) compete with a provider's own offerings, 
subject to reasonable network management.
    118. All national mobile broadband providers, among others, opposed 
the application of the broader no-blocking rule to mobile broadband, 
arguing, for example, that mobile broadband providers need the ability 
to block unwanted traffic and spam. They also argue that the particular 
challenges of managing a mobile broadband network, for example the 
unknown effects of apps, require additional flexibility to block 
traffic. As discussed below, we recognize that additional flexibility 
may be required in mobile network management practices, but find that 
the reasonable network management exception we adopt today allows 
sufficient flexibility: The blocking of harmful or unwanted traffic 
remains a legitimate network management purpose, and is permissible 
when pursued through reasonable network management practices.
b. Preventing Throttling of Lawful Content, Applications, Services, and 
Non-Harmful Devices
    119. In the 2014 Open Internet NPRM, the Commission proposed that 
degradation of lawful content or services below a specified level of 
service would violate a no-blocking rule. While certain broadband 
Internet access provider conduct may result in degradation of an end 
user's Internet experience that is tantamount to blocking, we believe 
that this conduct requires delineation in an explicit rule rather than 
through commentary as part of the no-blocking rule. Thus, we adopt a 
separate no-throttling rule applicable to both fixed and mobile 
providers of broadband Internet access service:

A person engaged in the provision of broadband Internet access 
service, insofar as such person is so engaged, shall not impair or 
degrade lawful Internet traffic on the basis of Internet content, 
application, or service, or use of a non-harmful device, subject to 
reasonable network management.

    120. With the no-throttling rule, we ban conduct that is not 
outright blocking, but inhibits the delivery of particular content, 
applications, or services, or particular classes of content, 
applications, or services. Likewise, we prohibit conduct that impairs 
or degrades lawful traffic to a non-harmful device or class of devices. 
We interpret this prohibition to include, for example, any conduct by a 
broadband Internet access service provider that impairs, degrades, 
slows down, or renders effectively unusable particular content, 
services, applications, or devices, that is not reasonable network 
management. For purposes of this rule, the meaning of ``content, 
applications, and services'' has the same as the meaning given to this 
phrase in the no-blocking rule. Like the no-blocking rule, broadband 
providers may not impose a fee on edge providers to avoid having the 
edge providers' content, service, or application throttled. Further, 
transfers of unlawful content or unlawful transfers of content are not 
protected by the no-throttling rule. We will consider

[[Page 19754]]

potential violations of the no-throttling rule under the enforcement 
provisions outlined below.
    121. We find that a prohibition on throttling is as necessary as a 
rule prohibiting blocking. Without an equally strong no-throttling 
rule, parties note that the no-blocking rule will not be as effective 
because broadband providers might otherwise engage in conduct that 
harms the open Internet but falls short of outright blocking. For 
example, the record notes the existence of numerous practices that 
broadband providers can engage in to degrade an end user's experience.
    122. Because our no-throttling rule addresses instances in which a 
broadband provider targets particular content, applications, services, 
or non-harmful devices, it does not address a practice of slowing down 
an end user's connection to the Internet based on a choice made by the 
end user. For instance, a broadband provider may offer a data plan in 
which a subscriber receives a set amount of data at one speed tier and 
any remaining data at a lower tier. If the Commission were concerned 
about the particulars of a data plan, it could review it under the no-
unreasonable interference/disadvantage standard. In contrast, if a 
broadband provider degraded the delivery of a particular application 
(e.g., a disfavored VoIP service) or class of application (e.g., all 
VoIP applications), it would violate the bright-line no-throttling 
rule. We note that user-selected data plans with reduced speeds must 
comply with our transparency rule, such that the limitations of the 
plan are clearly and accurately communicated to the subscriber.
    123. The no-throttling rule also addresses conduct that impairs or 
degrades content, applications, or services that might compete with a 
broadband provider's affiliated content. For example, if a broadband 
provider and an unaffiliated entity both offered over-the-top 
applications, the no-throttling rule would prohibit broadband providers 
from constraining bandwidth for the competing over-the-top offering to 
prevent it from reaching the broadband provider's end user in the same 
manner as the affiliated application.
    124. As in the 2010 Open Internet Order, we continue to recognize 
that in order to optimize the end-user experience, broadband providers 
must be permitted to engage in reasonable network management practices. 
We emphasize, however, that to be eligible for consideration under the 
reasonable network management exception, a network management practice 
that would otherwise violate the no-throttling rule must be used 
reasonably and primarily for network management purposes, and not for 
business purposes. (While not within the definition of ``throttling'' 
for purposes of our no-throttling rule, the slowing of subscribers' 
content on an application agnostic basis, including as an element of 
subscribers' purchased service plans, will be evaluated under the 
transparency rule and the no-unreasonable interference/disadvantage 
standard.)
c. No Paid Prioritization
    125. In the 2014 Open Internet NPRM, the Commission sought comment 
on suggestions to impose a flat ban on paid prioritization services, 
including whether all paid prioritization practices, or some of them, 
could be treated as per se violations of the commercially-reasonable 
standard or any other standard based on any source of legal authority. 
For reasons explained below, we conclude that paid prioritization 
network practices harm consumers, competition, and innovation, as well 
as create disincentives to promote broadband deployment and, as such, 
adopt a bright-line rule against such practices. Accordingly, today we 
ban arrangements in which the broadband service provider accepts 
consideration (monetary or otherwise) from a third party to manage the 
network in a manner that benefits particular content, applications, 
services, or devices. We also ban arrangements where a provider manages 
its network in a manner that favors the content, applications, services 
or devices of an affiliated entity. (We consider arrangements of this 
kind to be paid prioritization, even when there is no exchange of 
payment or other consideration between the broadband Internet access 
service provider and the affiliated entity.) Any broadband provider 
that engages in such practices will be subject to enforcement action, 
including forfeitures and other penalties. (Other forms of traffic 
prioritization, including practices that serve a public safety purpose, 
may be acceptable under our rules as reasonable network management.) We 
adopt the following rule banning paid prioritization arrangements:

A person engaged in the provision of broadband Internet access 
service, insofar as such person is so engaged, shall not engage in 
paid prioritization.
    ``Paid prioritization'' refers to the management of a broadband 
provider's network to directly or indirectly favor some traffic over 
other traffic, including through use of techniques such as traffic 
shaping, prioritization, resource reservation, or other forms of 
preferential traffic management, either (a) in exchange for 
consideration (monetary or otherwise) from a third party, or (b) to 
benefit an affiliated entity.

    126. The paid prioritization ban we adopt today is based on the 
record that has developed in this proceeding. The record is rife with 
commenter concerns regarding preferential treatment arrangements, with 
many advocating a flat ban on paid prioritization. Commenters assert 
that permitting paid prioritization will result in the bifurcating of 
the Internet into a ``fast'' lane for those willing and able to pay and 
a ``slow'' lane for everyone else. As several commenters observe, 
allowing for the purchase of priority treatment can lead to degraded 
performance--in the form of higher latency, increased risk of packet 
loss, or, in aggregate, lower bandwidth--for traffic that is not 
covered by such an arrangement. Commenters further argue that paid 
prioritization will introduce artificial barriers to entry, distort the 
market, harm competition, harm consumers, discourage innovation, 
undermine public safety and universal service, and harm free 
expression. Vimeo, for instance, argues that paid prioritization 
``would disadvantage user-generated video and independent filmmakers'' 
that lack the resources of major film studios to pay priority rates for 
dissemination of content. Engine Advocacy meanwhile asserts that 
``[s]ome unfunded early startups may not be able to afford [to pay for 
priority treatment] (particularly if the product would be data-
intensive) and will not start a company,'' resulting in ``reduce[d] 
entrepreneurship.'' Commenters assert that if paid prioritization 
became widespread, it would make reliance on consumers' ordinary, non-
prioritized access to the Internet an increasingly unattractive and 
competitively nonviable option. The Commission's conclusion is 
supported by a well-established body of economic literature, (The 
access provided by the core network is an intermediate input into the 
myriad of final products produced by edge providers. While it is 
granted that for a firm selling final goods, price discrimination can 
be both profitable and enhance welfare, it has been argued that the 
reverse is also true when intermediate goods are considered.) including 
Commission staff working papers.
    127. It is well-established that broadband providers have both the 
incentive and ability to engage in paid prioritization. In its Verizon 
opinion, the DC Circuit noted that providers ``have powerful incentives 
to accept fees from edge providers, either in return for

[[Page 19755]]

excluding their competitors or for granting them prioritized access to 
end users.'' Indeed, at oral argument Verizon's counsel announced that 
``but for [the 2010 Open Internet Order] rules we would be exploring 
[such] commercial arrangements.'' While we appreciate that several 
broadband providers have claimed that they do not engage in paid 
prioritization or that they have no plans to do so, (For example, we 
note that in Verizon's letter to Chairman Leahy, the company states 
``[a]s we have said before, and affirm again here, Verizon has no plans 
to engage in paid prioritization of Internet traffic.'' Verizon Letter 
to Leahy at 1. However, in contrast to this statement, at oral argument 
in the Verizon case, counsel for Verizon explained that the company 
would pursue such arrangements if not for the 2010 Open Internet rules 
which prevented them.) such statements do not have the force of a legal 
rule that prevents them from doing so in the future. The future 
openness of the Internet should not turn on the decision of a 
particular company. We are concerned that if paid prioritization 
practices were to become widespread, the damage to Internet openness 
could be difficult to reverse. We agree that ``[u]nraveling a web of 
discriminatory deals after significant investments have been made, 
business plans have been built, and technologies have been deployed 
would be a complicated undertaking both logistically and politically.'' 
Further, documenting the harms could prove challenging, as it is 
impossible to identify small businesses and new applications that are 
stifled before they become commercially viable. Prioritizing some 
traffic over others based on payment or other consideration from an 
edge provider could fundamentally alter the Internet as a whole by 
creating artificial motivations and constraints on its use, damaging 
the web of relationships and interactions that define the value of the 
Internet for both end users and edge providers, and posing a risk of 
harm to consumers, competition, and innovation. Thus, because of the 
very real concerns about the chilling effects that preferential 
treatment arrangements could have on the virtuous cycle of innovation, 
consumer demand, and investment, we adopt a bright-line rule banning 
paid prioritization arrangements. (Some commenters argue that consumer 
disclosures about such practices are sufficient. However, the average 
consumer does not have the time or specialized knowledge to sort 
through the implications, and regardless, in many areas of the country, 
consumers simply do not have multiple, equivalent choices.)
    128. In arguing against such a ban, ADTRAN asserts that it would 
``cement the advantages enjoyed by the largest edge providers that 
presently obtain the functional equivalent of priority access by 
constructing their own extensive networks that interconnect directly 
with the ISPs.'' We reject this argument. CDT correctly observes that 
``[e]stablished entities with substantial resources will always have a 
variety of advantages'' over less established ones, notwithstanding any 
rules we adopt. We do not seek to disrupt the legitimate benefits that 
may accrue to edge providers that have invested in enhancing the 
delivery of their services to end users. On the contrary, such 
investments may contribute to the virtuous cycle by stimulating further 
competition and innovation among edge providers, to the ultimate 
benefit of consumers. We also clarify that the ban on paid 
prioritization does not restrict the ability of a broadband provider 
and CDN to interconnect.
    129. We find that a flat ban on paid prioritization has advantages 
over alternative approaches identified in the record. Prohibiting this 
practice outright will help to foster broadband network investment by 
setting clear boundaries of acceptable and unacceptable behavior. It 
will also protect consumers against a harmful practice that may be 
difficult to understand, even if disclosed. In addition, this approach 
relieves small edge providers, innovators, and consumers of the burden 
of detecting and challenging instances of harmful paid prioritization. 
Given the potential harms to the virtuous cycle, we believe it is more 
appropriate to impose an ex ante ban on such practices, while 
entertaining waiver requests under exceptional circumstances.
    130. Under our longstanding waiver rule, the Commission may waive 
any rule ``in whole or in part, for good cause shown.'' General waiver 
of the Commission's rules is appropriate only if special circumstances 
warrant a deviation from the general rule, and such a deviation will 
serve the public interest. In some cases, however, the Commission 
adopts specific rules concerning the factors that will be used to 
examine a waiver or exemption request. We believe that such guidance is 
appropriate here to make clear the very limited circumstances in which 
the Commission would be willing to allow paid prioritization. 
Accordingly, we adopt a rule concerning waiver of the paid 
prioritization ban that establishes a balancing test, as follows:

The Commission may waive the ban on paid prioritization only if the 
petitioner demonstrates that the practice would provide some 
significant public interest benefit and would not harm the open 
nature of the Internet.

    131. In support of any waiver request, the applicant therefore must 
make two related showings. First, the applicant must demonstrate that 
the practice will have some significant public interest benefit, such 
as providing evidence that the practice furthers competition, 
innovation, consumer demand, or investment. Second, the applicant must 
demonstrate that the practice does not harm the nature of the open 
Internet, including, but not limited to, providing evidence that the 
practice:
    <bullet> Does not materially degrade or threaten to materially 
degrade the broadband Internet access service of the general public;
    <bullet> does not hinder consumer choice;
    <bullet> does not impair competition, innovation, consumer demand, 
or investment; and
    <bullet> does not impede any forms of expressions, types of 
service, or points of view.
    132. An applicant seeking waiver relief under this rule faces a 
high bar. We anticipate granting such relief only in exceptional cases. 
(For instance, several commenters argue that paid prioritization 
arrangements could improve the provision of telemedicine services.)
2. No Unreasonable Interference or Unreasonable Disadvantage Standard 
for Internet Conduct
    133. In the 2014 Open Internet NPRM, the Commission tentatively 
concluded that it should adopt a rule requiring broadband providers to 
use ``commercially reasonable'' practices in the provision of broadband 
Internet access service, and sought comment on this approach. (The 
Commission also tentatively concluded that it should operate separately 
from the proposed no-blocking rule, i.e., conduct acceptable under the 
no-blocking rule would still be subject to independent examination 
under the ``commercially reasonable'' standard, and sought comment on 
this approach.) The Commission also sought comment on whether there 
were alternative legal standards that the Commission should consider, 
or whether it should adopt a rule that prohibits unreasonable 
discrimination and, if so, what legal authority and theories it should 
rely upon to do so. In addition, the Commission sought comment on how 
it

[[Page 19756]]

can ensure that the rule it adopts sufficiently protects against harms 
to the open Internet, including broadband providers' incentives to 
disadvantage edge providers or classes of edge providers in ways that 
would harm Internet openness.
    134. The Commission sought comment on what factors it should adopt 
to ensure commercially reasonable practices that will protect and 
promote Internet openness, and tentatively concluded that a review of 
the totality of the circumstances should be preserved to ensure that 
rules can be applied evenly and fairly in response to changing 
circumstances. The Commission also recognized that there have been 
significant changes in the mobile marketplace since 2010, and sought 
comment on whether and, if so, how these changes should affect the 
Commission's treatment of mobile services under the rules. 
(Specifically, the Commission sought comment on whether, under the 
commercially reasonable rule, mobile networks should be subject to the 
same totality-of-the circumstances test as fixed broadband, and whether 
the Commission should apply the commercially reasonable legal standard 
to mobile broadband.)
    135. Preventing Unreasonable Interference or Unreasonable 
Disadvantage that Harms Consumers and Edge Providers. The three bright-
line rules that we adopt today prohibit specific conduct that harms the 
open Internet. The open nature of the Internet has allowed new products 
and services to flourish and has broken down geographic barriers to 
communication, allowing information to flow freely. We believe the 
rules we adopt today will alleviate many of the concerns identified in 
the record regarding broadband provider practices that could upset 
these positive outcomes. However, while these three bright-line rules 
comprise a critical cornerstone in protecting and promoting the open 
Internet, we believe that there may exist other current or future 
practices that cause the type of harms our rules are intended to 
address. For that reason, we adopt a rule setting forth a no-
unreasonable interference/disadvantage standard, under which the 
Commission can prohibit, on a case-by-case basis, practices that 
unreasonably interfere with or unreasonably disadvantage the ability of 
consumers to reach the Internet content, services, and applications of 
their choosing or of edge providers to access consumers using the 
Internet.
    136. It is critical that access to a robust, open Internet remains 
a core feature of the communications landscape, but also that there 
remains leeway for experimentation with innovative offerings. Based on 
our findings that broadband providers have the incentive and ability to 
discriminate in their handling of network traffic in ways that can harm 
the virtuous cycle of innovation, increased end-user demand for 
broadband access, and increased investment in broadband network 
infrastructure and technologies, we conclude that a no-unreasonable 
interference/disadvantage standard to protect the open nature of the 
Internet is necessary. We adopt this standard to prohibit practices in 
the broadband Internet access provider's network that harm Internet 
openness, similar to the approach proposed by the Higher Education 
coalition and the Center for Democracy and Technology. Specifically, we 
require that:

Any person engaged in the provision of broadband Internet access 
service, insofar as such person is so engaged, shall not 
unreasonably interfere with or unreasonably disadvantage (i) end 
users' ability to select, access, and use broadband Internet access 
service or the lawful Internet content, applications, services, or 
devices of their choice, or (ii) edge providers' ability to make 
lawful content, applications, services, or devices available to end 
users. Reasonable network management shall not be considered a 
violation of this rule. (As in the no throttling rule, we include 
classes of content, applications, services, or devices.)

    137. This ``no-unreasonable interference/disadvantage'' standard 
will be applied to carefully balance the benefits of innovation against 
harm to end users and edge providers. It also protects free expression, 
thus fulfilling the congressional policy that the Internet ``offer[s] a 
forum for true diversity of political discourse, unique opportunities 
for cultural development, and myriad avenues for intellectual 
activity.'' As the Commission found in 2010, and the Verizon court 
upheld, ``[r]estricting edge providers' ability to reach end users, and 
limiting end users' ability to choose which edge providers to 
patronize, would reduce the rate of innovation at the edge and, in 
turn, the likely rate of improvements to network infrastructure. 
Similarly, restricting the ability of broadband providers to put the 
network to innovative uses may reduce the rate of improvements to 
network infrastructure.'' Under the standard that we adopt today, the 
Commission can protect against harm to end users' or edge providers' 
ability to use broadband Internet access service to reach one another. 
Compared to the no unreasonable discrimination standard adopted by the 
Commission in 2010, the standard we adopt today is specifically 
designed to protect against harms to the open nature of the Internet. 
We note that the standard we adopt today represents our interpretation 
of sections 201 and 202 in the broadband Internet access context and, 
independently, our interpretation--upheld by the Verizon court--that 
rules to protect Internet openness promote broadband deployment via the 
virtuous cycle under section 706 of the 1996 Act.
a. Factors To Guide Application of the Rule
    138. We adopt our tentative conclusion to follow a case-by-case 
approach, considering the totality of the circumstances, when analyzing 
whether conduct satisfies the no-unreasonable interference/disadvantage 
standard to protect the open Internet. Below we discuss a non-
exhaustive list of factors we will use to assess such practices. In 
adopting this standard, we enable flexibility in business arrangements 
and ensure that innovation in broadband and edge provider business 
models is not unduly curtailed. We are mindful that vague or unclear 
regulatory requirements could stymie rather than encourage innovation, 
and find that this approach combined with the factors set out below 
will provide sufficient certainty and guidance to consumers, broadband 
providers, and edge providers--particularly smaller entities that might 
lack experience dealing with broadband providers--while also allowing 
parties flexibility in developing new services. (We also note that this 
Order permits parties to seek advisory opinions regarding application 
of the Commission's open Internet rules. We view these processes as 
complementary methods by which parties can seek guidance as to how the 
open Internet rules apply to particular conduct.) We note that in 
addition to the following list, there may be other considerations 
relevant to determining whether a particular practice violates the no-
unreasonable interference/disadvantage standard. This approach of 
adopting a rule of general conduct, followed by guidance as to how to 
apply it on a case-by-case basis, is not novel. The Commission took a 
similar approach in 2010 when it adopted the ``no unreasonable 
discrimination'' rule, which was followed by a discussion of four 
factors (end-user control, use-agnostic discrimination, standard 
practices, and transparency). Indeed, for this new rule, we are 
providing at least as much guidance, if not more, as we did in 2010 for 
the application of the no unreasonable discrimination rule.
    139. End-User Control. A practice that allows end-user control and 
is

[[Page 19757]]

consistent with promoting consumer choice is less likely to 
unreasonably interfere with or cause an unreasonable disadvantage 
affecting the end user's ability to use the Internet as he or she sees 
fit. The Commission has long recognized that enabling consumer choice 
is the best path toward ensuring competitive markets, economic growth, 
and technical innovation. It is therefore critical that consumers' 
decisions, rather than those of service providers, remain the driving 
force behind the development of the Internet. To this end, practices 
that favor end-user control and empower meaningful consumer choice are 
more likely to satisfy the no-unreasonable interference/disadvantage 
standard than those that do not. However, as was true in 2010, we are 
cognizant that user control and network control are not mutually 
exclusive, and that many practices will fall somewhere on a spectrum 
from more end-user-controlled to more broadband provider-controlled. 
Further, there may be practices controlled entirely by broadband 
providers that nonetheless satisfy the no-unreasonable interference/
disadvantage standard. In all events, however, we emphasize that such 
practices should be fully transparent to the end user and effectively 
reflect end users' choices.
    140. Competitive Effects. As the Commission has found previously, 
broadband providers have incentives to interfere with and disadvantage 
the operation of third-party Internet-based services that compete with 
the providers' own services. Practices that have anti-competitive 
effects in the market for applications, services, content, or devices 
would likely unreasonably interfere with or unreasonably disadvantage 
edge providers' ability to reach consumers in ways that would have a 
dampening effect on innovation, interrupting the virtuous cycle. As 
such, these anticompetitive practices are likely to harm consumers' and 
edge providers' ability to use broadband Internet access service to 
reach one another. Conversely, enhanced competition leads to greater 
options for consumers in services, applications, content, and devices, 
and as such, practices that would enhance competition would weigh in 
favor of promoting consumers' and edge providers' ability to use 
broadband Internet access service to reach one another. In examining 
the effect on competition of a given practice, we will also review the 
extent of an entity's vertical integration as well as its relationships 
with affiliated entities.
    141. Consumer Protection. The no-unreasonable interference/
disadvantage standard is intended to serve as a strong consumer 
protection standard. It prohibits broadband providers from employing 
any deceptive or unfair practice that will unreasonably interfere with 
or disadvantage end-user consumers' ability to select, access, or use 
broadband services, applications, or content, so long as the services 
are lawful, subject to the exception for reasonable network management. 
For example, unfair or deceptive billing practices, as well as 
practices that fail to protect the confidentiality of end users' 
proprietary information, will be unlawful if they unreasonably 
interfere with or disadvantage end-user consumers' ability to select, 
access, or use broadband services, applications, or content, so long as 
the services are lawful, subject to the exception for reasonable 
network management. While each individual case will be evaluated on its 
own merits, this rule is intended to include protection against 
fraudulent practices such as ``cramming'' and ``slamming'' that have 
long been viewed as unfair and disadvantageous to consumers.
    142. Effect on Innovation, Investment, or Broadband Deployment. As 
the Verizon court recognized, Internet openness drives a ``virtuous 
cycle'' in which innovations at the edges of the network enhance 
consumer demand, leading to expanded investments in broadband 
infrastructure that, in turn, spark new innovations at the edge. As 
such, practices that stifle innovation, investment, or broadband 
deployment would likely unreasonably interfere with or unreasonably 
disadvantage end users' or edge providers' use of the Internet under 
the legal standard we set forth today.
    143. Free Expression. As Congress has recognized, the Internet 
``offer[s] a forum for a true diversity of political discourse, unique 
opportunities for cultural development, and myriad avenues for 
intellectual activity.'' Practices that threaten the use of the 
Internet as a platform for free expression would likely unreasonably 
interfere with or unreasonably disadvantage consumers' and edge 
providers' ability to use BIAS to communicate with each other, thereby 
causing harm to that ability. Further, such practices would dampen 
consumer demand for broadband services, disrupting the virtuous cycle, 
and harming end user and edge provider use of the Internet under the 
legal standard we set forth today. (We also note that the no-
unreasonable interference/disadvantage standard does not 
unconstitutionally burden any of the First Amendment rights held by 
broadband providers because broadband providers are conduits, not 
speakers, with respect to broadband Internet access services.)
    144. Application Agnostic. Application-agnostic (sometimes referred 
to as use-agnostic) practices likely do not cause an unreasonable 
interference or an unreasonable disadvantage to end users' or edge 
providers' ability to use BIAS to communicate with each other. (A 
network practice is application-agnostic if it does not differentiate 
in treatment of traffic, or if it differentiates in treatment of 
traffic without reference to the content, application, or device. A 
practice is application-specific if it is not application-agnostic. 
Application-specific network practices include, for example, those 
applied to traffic that has a particular source or destination, that is 
generated by a particular application or by an application that belongs 
to a particular class of applications, that uses a particular 
application- or transport-layer protocol, or that has particular 
characteristics (e.g., the size, sequencing, and/or timing of packets). 
We note, however, that there do exist circumstances where application-
agnostic practices raise competitive concerns, and as such may violate 
our standard to protect the open Internet.) Application-agnostic 
practices do not interfere with end users' choices about which content, 
applications, services, or devices to use, nor do they distort 
competition and unreasonably disadvantage certain edge providers. As 
such, they likely would not cause harm by unreasonably interfering with 
or disadvantaging end users or edge providers' ability to communicate 
using BIAS.
    145. Standard Practices. In evaluating whether a practice violates 
our no-unreasonable interference/disadvantage standard to protect 
Internet openness, we will consider whether a practice conforms to best 
practices and technical standards adopted by open, broadly 
representative, and independent Internet engineering, governance 
initiatives, or standards-setting organization. Consideration of input 
from technical advisory groups accounts for the important role these 
organizations have to play in developing communications policy. We make 
clear, however, that we are not delegating authority to interpret or 
implement our rules to outside bodies.

[[Page 19758]]

b. Application to Mobile
    146. As discussed earlier, because of changes that have occurred in 
the mobile marketplace since 2010, including the widespread deployment 
of 4G LTE networks and the significant increase in use of mobile 
broadband Internet access services, we find that it is appropriate to 
revise our approach for mobile broadband and apply the same openness 
protections to both fixed and mobile broadband Internet access 
services, including prohibiting mobile broadband providers from 
engaging in practices that harm Internet openness. We find that 
applying the no-unreasonable interference/disadvantage standard to 
mobile broadband services will help ensure that consumers using mobile 
broadband services are protected against provider practices that would 
unreasonably restrict their ability to access a free and open Internet.
    147. AT&T, T-Mobile, and Verizon oppose application of a 
``commercially reasonable practices'' rule to mobile broadband 
networks. They argue that competition in the mobile broadband market 
already ensures that service providers have no incentive to 
discriminate. CTIA argues that applying a commercial reasonableness 
standard would deter innovation and limit the ability of providers to 
differentiate themselves in the marketplace because providers would 
have to factor in the risk of complaints and investigations. Nokia 
argues that the Commission should ensure that its rules allow a range 
of service options. Free State recommends that if the Commission adopts 
a legally enforceable standard, it should establish a presumption that 
mobile network management practices benefit consumer welfare and that 
presumption could only be overcome ``by actual evidence of 
anticompetitive conduct.''
    148. We find that even if the mobile market were sufficiently 
competitive, competition alone is not sufficient to deter mobile 
providers from taking actions that would limit Internet openness. As 
noted above, there have been incidents where mobile providers have 
acted in a manner inconsistent with open Internet principles and we 
find that there is a risk that providers will continue to have the 
incentive to take actions that would favor their own content or 
services. We also agree with commenters that mobile providers' need for 
flexibility to manage their network can be accommodated through the 
reasonable network management exception.

    149. In addition, we find that applying the no-unreasonable 
interference/disadvantage standard to mobile broadband will not affect 
providers' ability to differentiate themselves in the marketplace. We 
have crafted the standard we adopt today to prohibit these practices 
that harm Internet openness while still permitting innovation and 
experimentation. Nothing in the standard restricts carriers from 
developing new services or implementing new business models.
c. Rejection of the ``Commercially Reasonable'' Standard
    150. Based on the record before us, we are persuaded that adopting 
a legal standard prohibiting commercially unreasonable practices is not 
the most effective or appropriate approach for protecting and promoting 
an open Internet. Internet openness involves many relationships that 
are not business-to-business and serves many purposes that are 
noncommercial. (In the data roaming context, two commercial entities 
deal directly with one another to negotiate a fee-for-service 
agreement, and there is a direct business relationship with contractual 
privity and a purely commercial purpose on both sides of the 
transaction. Open Internet protections, by contrast, apply to a context 
where there may be no direct negotiation and no direct agreement 
between key parties. Moreover, while broadband providers are commercial 
entities with commercial purposes, many of the parties seeking to route 
traffic to broadband subscribers are not.) Commenters also expressed 
concerns that the commercially reasonable standard would involve a 
multifactor framework that was not focused on the goals of this open 
Internet proceeding. In addition, some commenters expressed concern 
that the legal standard would require permission before innovation, 
thus creating higher barriers to entry and attendant transaction costs. 
Smaller edge providers expressed concern that they do not have the 
resources to fight against commercially unreasonable practices, which 
could result in an unfair playing field before the Commission. Still 
others argued that the standard would permit paid prioritization, which 
could disadvantage smaller entities and individuals. Given these 
concerns, we decline to adopt our proposed rule to prohibit practices 
that are not commercially reasonable. Instead, as discussed above, we 
adopt a governing standard that looks to whether consumers or edge 
providers face unreasonable interference or unreasonable disadvantages, 
and makes clear that the standard is not limited to whether a practice 
is agreeable to commercial parties.
d. Sponsored Data and Usage Allowances
    151. While our bright-line rule to treat paid prioritization 
arrangements as unlawful addresses technical prioritization, the record 
reflects mixed views about other practices, including usage allowances 
and sponsored data plans. Sponsored data plans (sometimes called zero-
rating) enable broadband providers to exclude edge provider content 
from end users' usage allowances. On the one hand, evidence in the 
record suggests that these business models may in some instances 
provide benefits to consumers, with particular reference to their use 
in the provision of mobile services. Service providers contend that 
these business models increase choice and lower costs for consumers. 
Commenters also assert that sophisticated approaches to pricing also 
benefit edge providers by helping them distinguish themselves in the 
marketplace and tailor their services to consumer demands. Commenters 
assert that such sponsored data arrangements also support continued 
investment in broadband infrastructure and promote the virtuous cycle, 
and that there exist spillover benefits from sponsored data practices 
that should be considered. On the other hand, some commenters strongly 
oppose sponsored data plans, arguing that ``the power to exempt 
selective services from data caps seriously distorts competition, 
favors companies with the deepest pockets, and prevents consumers from 
exercising control over what they are able to access on the Internet,'' 
again with specific reference to mobile services. In addition, some 
commenters argue that sponsored data plans are a harmful form of 
discrimination. The record also reflects concerns that such 
arrangements may hamper innovation and monetize artificial scarcity.
    152. We are mindful of the concerns raised in the record that 
sponsored data plans have the potential to distort competition by 
allowing service providers to pick and choose among content and 
application providers to feature on different service plans. At the 
same time, new service offerings, depending on how they are structured, 
could benefit consumers and competition. Accordingly, we will look at 
and assess such practices under the no-unreasonable interference/
disadvantage standard, based on the

[[Page 19759]]

facts of each individual case, and take action as necessary.
    153. The record also reflects differing views over some broadband 
providers' practices with respect to usage allowances (also called 
``data caps''). Usage allowances place limits on the volume of data 
downloaded by the end user during a fixed period. Once a cap has been 
reached, the speed at which the end user can access the Internet may be 
reduced to a slower speed, or the end user may be charged for excess 
data. Usage allowances may benefit consumers by offering them more 
choices over a greater range of service options, and, for mobile 
broadband networks, such plans are the industry norm today, in part 
reflecting the different capacity issues on mobile networks. 
Conversely, some commenters have expressed concern that such practices 
can potentially be used by broadband providers to disadvantage 
competing over-the-top providers. Given the unresolved debate 
concerning the benefits and drawbacks of data allowances and usage-
based pricing plans, (Regarding usage-based pricing plans, there is 
similar disagreement over whether these practices are beneficial or 
harmful for promoting an open Internet.) we decline to make blanket 
findings about these practices and will address concerns under the no-
unreasonable interference/disadvantage on a case-by-case basis.
3. Transparency Requirements To Protect and Promote Internet Openness
    154. In this section, we adopt enhancements to the existing 
transparency rule, which covers both content and format of disclosures 
by providers of broadband Internet access service. As the Commission 
has previously noted, disclosure requirements are among the least 
intrusive and most effective regulatory measures at its disposal. We 
find that the enhanced transparency requirements adopted in the present 
Order serve the same purposes as those required under the 2010 Open 
Internet Order: Providing critical information to serve end-user 
consumers, edge providers of broadband products and services, and the 
Internet community. The transparency rule, including the enhancements 
adopted today, also will aid the Commission in enforcing the other open 
Internet rules and in ensuring that no service provider can evade them 
through exploitation of narrowly-drawn exceptions for reasonable 
network management or through evasion of the scope of our rules.
    155. In the 2014 Open Internet NPRM, we tentatively concluded that 
we should enhance the existing transparency rule for end users, edge 
providers, the Internet community, and the Commission to have the 
information they need to understand the services they receive and to 
monitor practices that could undermine the open Internet. The NPRM 
sought comment on a variety of possible enhancements, including whether 
to require tailored disclosures for specific constituencies (end users, 
edge providers, the Internet community); ways to make the content and 
format of disclosures more accessible and understandable to end users; 
specific changes to disclosures for network practices that would 
benefit edge providers; whether there are more effective or more 
comprehensive ways to measure network performance; whether to require 
providers to disclose meaningful information regarding source, 
location, speed, packet loss, and duration of congestion; and whether 
and how any enhancements should apply to mobile broadband providers in 
a manner different from their application to fixed broadband providers.
    156. Based on the record compiled in response to those proposals, 
below we set forth targeted, incremental enhancements to the existing 
transparency rule. We first recap the existing transparency rule, which 
forms the baseline off of which we build today. Having established that 
baseline, we describe specific enhancements--including refinements and 
expansions in the required disclosures of commercial terms, performance 
characteristics, and network practices; adoption of a requirement that 
broadband providers notify end users directly if their individual use 
of a network will trigger a network practice, based on their demand 
prior to a period of congestion, that is likely to have a significant 
impact on the use of the service. We then address a request to exempt 
small providers from enhancements to the transparency rule, discuss the 
relationship of the enhancements to the existing transparency rule, and 
note the role that we anticipate further guidance from Commission staff 
will continue to play in applying the transparency rule in practice. 
Lastly, we adopt a voluntary safe harbor (but not a requirement) for a 
standalone disclosure format that broadband providers may use in 
meeting the existing requirement to disclose information that meets the 
needs of end users.
a. The Existing Transparency Rule
    157. The D.C. Circuit in Verizon upheld the transparency rule, 
which remains in full force, applicable to both fixed and mobile 
providers. In enhancing this rule, we build off of the solid foundation 
established by the Open Internet Order. In that Order, the Commission 
concluded that effective disclosure of broadband providers' network 
management practices, performance, and commercial terms of service 
promotes competition, innovation, investment, end-user choice, and 
broadband adoption. As a result, the Commission adopted a transparency 
rule requiring both fixed and mobile providers to ``publicly disclose 
accurate information regarding the network management practices, 
performance, and commercial terms'' of their broadband Internet access 
service. The rule specifies that such disclosures be ``sufficient for 
consumers to make informed choices regarding the use of such services 
and for content, application, service, and device providers to develop, 
market, and maintain Internet offerings.''
    158. The 2010 Open Internet Order went on to provide guidance on 
both the information to be disclosed and the method of disclosure. 
Within each category of required disclosure (network management 
practices, performance characteristics, and commercial terms), the Open 
Internet Order described the type of information to be disclosed. For 
example, under performance characteristics, the Commission specified, 
among other things, disclosure of ``expected and actual access speed 
and latency'' as well as the ``impact of specialized services.'' All 
disclosures were required to be made ``timely and prominently[,] in 
plain language accessible to current and prospective end users and edge 
providers, the Commission, and third parties who wish to monitor 
network management practices for potential violations of open Internet 
principles.''
    159. In 2011 and 2014, Commission staff provided guidance on 
interpreting the transparency rule. For example, in addition to other 
points, the 2011 guidance issued by the Enforcement Bureau and Office 
of General Counsel (2011 Advisory Guidance) described the means by 
which fixed and mobile broadband providers should meet the requirement 
to disclose actual performance of the broadband Internet access 
services they offer and to disclose network management practices, 
performance, characteristics, and commercial terms ``at the point of 
sale.'' The 2011 Advisory Guidance also

[[Page 19760]]

clarified the statement in the Open Internet Order that effective 
disclosures ``will likely include some or all of the'' information 
listed in paragraphs 56 and 98, but also that the list was ``not 
necessarily exhaustive, nor is it a safe harbor,'' and that ``there may 
be additional information, not included [in paragraphs 56 and 98], that 
should be disclosed for a particular broadband service to comply with 
the rule in light of relevant circumstances.'' Acknowledging the 
concern of some providers that ``they could be liable for failing to 
disclose additional types of information that they may not be aware are 
subject to disclosure,'' the 2011 Advisory Guidance stated that 
disclosure of the information described in those paragraphs ``will 
suffice for compliance with the transparency rule at this time.''
    160. In an advisory issued in July 2014 (2014 Advisory Guidance), 
the Enforcement Bureau explained that the transparency rule ``prevents 
a broadband Internet access provider from making assertions about its 
service that contain errors, are inconsistent with the provider's 
disclosure statement, or are misleading or deceptive.'' Accurate 
disclosures ``ensure that consumers--as well as the Commission and the 
public as a whole--are informed about a broadband Internet access 
provider's network management practices, performance, and commercial 
terms.'' As the 2014 Advisory Guidance recognized, the transparency 
rule ``can achieve its purpose of sufficiently informing consumers only 
if advertisements and other public statements that broadband Internet 
access providers make about their services are accurate and consistent 
with any official disclosures that providers post on their Web sites or 
make available in stores or over the phone.'' Thus, ``a provider making 
an inaccurate assertion about its service performance in an 
advertisement, where the description is most likely to be seen by 
consumers, could not defend itself against a transparency rule 
violation by pointing to an `accurate' official disclosure in some 
other public place.'' Allowing such defenses would undermine the core 
purpose of the transparency rule.
    161. Today, we build off of this baseline: The transparency rule 
requirements established in 2010, and interpreted by the 2011 and 2014 
Advisory Guidance. We also take this opportunity to make two 
clarifications to the existing rule. First, all of the pieces of 
information described in paragraphs 56 and 98 of the Open Internet 
Order have been required as part of the current transparency rule, and 
we will continue to require the information as part of our enhanced 
rule. The only exception is the requirement to disclose ``typical 
frequency of congestion,'' which we no longer require since it is 
superseded by more precise disclosures already required by the rule, 
such as actual performance. Second, the requirement that all 
disclosures made by a broadband provider be accurate includes the need 
to maintain the accuracy of these disclosures. Thus, whenever there is 
a material change in a provider's disclosure of commercial terms, 
network practices, or performance characteristics, the provider has a 
duty to update the disclosure in a manner that is ``timely and 
prominently disclosed in plain language accessible to current and 
prospective end users and edge providers, the Commission, and third 
parties who wish to monitor network management practices for potential 
violations of open Internet principles.'' (We decline, however, to 
adopt a specific timeframe concerning the updating of disclosures 
following a material change (e.g., 24 hours).) For these purposes, a 
``material'' change is any change that a reasonable consumer or edge 
provider would consider important to their decisions on their choice of 
provider, service, or application.
b. Enhancing the Transparency Rule
    162. We adopt the tentative conclusion in the 2014 Open Internet 
NPRM to enhance the existing transparency rule in certain respects. We 
conclude that enhancing the existing transparency rule as described 
below will better enable end-user consumers to make informed choices 
about broadband services by providing them with timely information 
tailored more specifically to their needs, and will similarly provide 
edge providers with the information necessary to develop new content, 
applications, services, and devices that promote the virtuous cycle of 
investment and innovation.
(i) Enhancements to Content of Required Disclosures
    163. As noted above, the existing transparency rule requires 
specific disclosures with respect to network practices, performance 
characteristics, and commercial terms. As we noted in the 2014 Open 
Internet NPRM, the Commission has continued to receive numerous 
complaints from consumers suggesting that broadband providers are not 
providing information that end users and edge providers need to 
receive. We noted that consumers continue to express concern that the 
speed of their service falls short of advertised speeds, that billed 
amounts are greater than advertised rates, and that consumers are 
unable to determine the source of slow or congested service. In 
addition, we noted that end users are often surprised that broadband 
providers slow or terminate service based on ``excessive use'' or based 
on other practices, and that consumers report confusion regarding data 
thresholds or caps. Further, the need for enhanced transparency is 
bolstered by the needs of certain user groups who rely on broadband as 
their primary avenue for communications, such as people with 
disabilities. These enhancements will also serve edge providers. The 
record supports our conclusions that more specific and detailed 
disclosures are necessary to ensure that edge providers can ``develop, 
market, and maintain Internet offerings.'' Such disclosures will also 
help the wider Internet community monitor provider practices to ensure 
compliance with our Open Internet rules and providers' own policies.
    164. Commercial Terms. The existing transparency rule defines the 
required disclosure of ``commercial terms'' to include pricing, privacy 
policies, and redress options. While we do not take additional action 
concerning the requirement to disclose privacy policies and redress 
options, the record demonstrates need for specific required disclosures 
about price and related terms. In particular, we specify the 
disclosures of commercial terms for prices, other fees, and data caps 
and allowances as follows:
    <bullet> Price--The full monthly service charge. Any promotional 
rates should be clearly noted as such, specify the duration of the 
promotional period, and note the full monthly service charge the 
consumer will incur after the expiration of the promotional period.
    <bullet> Other Fees--All additional one time and/or recurring fees 
and/or surcharges the consumer may incur either to initiate, maintain, 
or discontinue service, including the name, definition, and cost of 
each additional fee. (The Commission agrees that the magnitude of these 
fees bears on consumer decision-making when choosing or switching 
providers. As a result, the provision of explicit information regarding 
these fees by providers both promotes competition and assists in 
consumer decision making.) These may include modem rental fees, 
installation fees, service charges, and early termination fees, among 
others.

[[Page 19761]]

    <bullet> Data Caps and Allowances--Any data caps or allowances that 
are a part of the plan the consumer is purchasing, as well as the 
consequences of exceeding the cap or allowance (e.g., additional 
charges, loss of service for the remainder of the billing cycle).
    To be clear, these disclosures may have been required in certain 
circumstances under the existing transparency rule in order to provide 
information ``sufficient for consumers to make informed choices.'' 
Here, we now require that this information always be disclosed. In 
addition, per the current rule, disclosures of commercial terms shall 
also include the provider's privacy policies (``[f]or example, whether 
network management practices entail inspection of network traffic, and 
whether traffic information is stored, provided to third parties, or 
used by the carrier for non-network management purposes'') and redress 
options (``practices for resolving end-user and edge provider 
complaints and questions'').
    165. Performance Characteristics. The existing transparency rule 
requires broadband providers to disclose accurate information regarding 
network performance for each broadband service they offer. This 
category includes a service description (``[a] general description of 
the service, including the service technology, expected and actual 
access speed and latency, and the suitability of the service for real-
time applications'') and the impact of specialized services (``[i]f 
applicable, what specialized services, if any, are offered to end 
users, and whether and how any specialized services may affect the 
last-mile capacity available for, and the performance, or broadband 
Internet access service'').
    166. With respect to network performance, we adopt the following 
enhancements:
    <bullet> The existing transparency rule requires disclosure of 
actual network performance. In adopting that requirement, the 
Commission mentioned speed and latency as two key measures. Today we 
include packet loss as a necessary part of the network performance 
disclosure.
    <bullet> We expect that disclosures to consumers of actual network 
performance data should be reasonably related to the performance the 
consumer would likely experience in the geographic area in which the 
consumer is purchasing service.
    <bullet> We also expect that network performance will be measured 
in terms of average performance over a reasonable period of time and 
during times of peak usage. (We recognize that parties have expressed 
concern about providing disclosures about network performance on a 
real-time basis. The enhancements to the transparency rule we adopt 
today do not include such a requirement. Given that the performance of 
mobile broadband networks is subject to a greater array of factors than 
fixed networks, we note that disclosure of a range of speeds may be 
more appropriate for mobile broadband consumers.)
    <bullet> We clarify that, for mobile broadband providers, the 
obligation in the existing transparency rule to disclose network 
performance information for ``each broadband service'' refers to 
separate disclosures for services with each technology (e.g., 3G and 
4G). Furthermore, with the exception of small providers, mobile 
broadband providers today can be expected to have access to reliable 
actual data on performance of their networks representative of the 
geographic area in which the consumer is purchasing service--through 
their own or third-party testing--that would be the source of the 
disclosure. (Per the 2011 Advisory Guidance, those mobile broadband 
providers that ``lack reasonable access'' to reliable information on 
their network performance metrics may disclose a ``Typical Speed Range 
(TSR)'' to meet the requirement to disclose actual performance. In any 
event, we expect that mobile broadband providers' disclosure of actual 
performance data will be based on accepted industry practices and 
principles of statistical validity.) Commission staff also continue to 
refine the mobile MBA program, which could at the appropriate time be 
declared a safe harbor for mobile broadband providers. (Participation 
in the Measuring Broadband America (MBA) program continues to be a safe 
harbor for fixed broadband providers in meeting the requirement to 
disclose actual network performance. The 2011 Advisory Guidance further 
stated that fixed providers that choose not to participate in MBA may 
measure and disclose performance of their broadband offerings using the 
MBA's methodology, internal testing, consumer speed data, or other 
data, including reliable, relevant data from third-party sources. 
Various software-based broadband performance tests are available as 
potential tools for end users and companies to estimate actual 
broadband performanceAs noted above, we anticipate that the measurement 
methodology used for the MBA project will continue to be refined, which 
in turn will enhance the effectiveness of network performance 
disclosures generally.)
    We decline to otherwise codify specific methodologies for measuring 
the ``actual performance'' required by the existing transparency rule. 
We find that, as in 2010, there is benefit in permitting measurement 
methodologies to evolve and improve over time, with further guidance 
from Bureaus and Offices--like in 2011--as to acceptable methodologies. 
(We expect that acceptable methodologies will be grounded in commonly 
accepted principles of scientific research, good engineering practices, 
and transparency.) We delegate authority to our Chief Technologist to 
lead this effort.
    167. In addition, the existing rule concerning performance 
characteristics requires disclosure of the ``impact'' of specialized 
services, including ``what specialized services, if any, are offered to 
end users, and ``whether and how any specialized services may affect 
the last-mile capacity available for, and the performance of, broadband 
Internet access service.'' As discussed below, today we more properly 
refer to these services as ``non-BIAS data services.'' Given that the 
Commission will closely scrutinize offerings of non-BIAS data services 
and their impact on competition, we clarify that in addition to the 
requirements of the existing rule concerning what was formerly referred 
to as ``specialized services,'' disclosure of the impact of non-BIAS 
data services includes a description of whether the service relies on 
particular network practices and whether similar functionality is 
available to applications and services offered over broadband Internet 
access service.
    168. The 2014 Open Internet NPRM tentatively concluded that we 
should require that broadband providers disclose meaningful information 
regarding the source, location, timing, speed, packet loss, and 
duration of network congestion. As discussed above, we continue to 
require disclosure of actual network speed and latency (as in 2010), 
and also require disclosure of packet loss. We decline at this time to 
require disclosure of the source, location, timing, or duration of 
network congestion, noting that congestion may originate beyond the 
broadband provider's network and the limitations of a broadband 
provider's knowledge of some of these performance characteristics. 
(Short-term congestion occurs whenever instantaneous demand exceeds 
capacity. Since demand often consists of the aggregation of a large 
number of users' traffic, it is technologically difficult to determine

[[Page 19762]]

the sources of each component of the aggregate traffic) We also asked 
whether the Commission should expand its transparency efforts to 
include measurement of other aspects of service. We decline at this 
time to require disclosure of packet corruption or jitter, noting that 
commenters expressed concerns regarding the difficulty of defining 
metrics for such performance characteristics. (Furthermore, corrupted 
packets may be included in the packet loss performance characteristic.)
    169. Network Practices. The existing transparency rule requires 
disclosure of network practices, including specific disclosures related 
to congestion management, application-specific behavior, device 
attachment rules, and security. (Additionally, ``mobile broadband 
providers should follow the guidance the Commission provided to 
licensees of the upper 700 MHz C Block spectrum regarding compliance 
with their disclosure obligations, particularly regarding disclosure to 
third-party application developers and device manufacturers of criteria 
and approval procedures (to the extent applicable). For example, these 
disclosures include, to the extent applicable, establishing a 
transparent and efficient approval process for third parties, as set 
forth in section 27.16(d).'' 2010 Open Internet Order (76 FR 59129-01, 
59210, Sept. 23, 2011), 25 FCC Rcd at 17959, para. 98 As discussed 
above, this information remains part of the transparency rule, with the 
exception of the requirement to disclose the ``typical frequency of 
congestion.'') Today, in recognition of significant consumer concerns 
presented in the record, we further clarify that disclosure of network 
practices shall include practices that are applied to traffic 
associated with a particular user or user group, including any 
application-agnostic degradation of service to a particular end user. 
(For example, a broadband Internet access service provider may define 
user groups based on the service plan to which users are subscribed, 
the volume of data that users send or receive over a specified time 
period of time or under specific network conditions, or the location of 
users.) We also clarify that disclosures of user-based or application-
based practices should include the purpose of the practice, which users 
or data plans may be affected, the triggers that activate the use of 
the practice, the types of traffic that are subject to the practice, 
and the practice's likely effects on end users' experiences. While some 
of these disclosures may have been required in certain circumstances 
under the existing transparency rule, here we clarify that this 
information should always be disclosed. These disclosures with respect 
to network practices are necessary: for the public and the Commission 
to know about the existence of network practices that may be evaluated 
under the rules, for users to understand when and how practices may 
affect them, and for edge providers to develop Internet offerings.
    170. The 2014 Open Internet NPRM asked whether we should require 
disclosures that permit end users to identify application-specific 
usage or to distinguish which user or device contributed to which part 
of the total data usage. We decline at this time to require such 
disclosures, noting that collection of application-specific usage by a 
broadband provider may require use of deep packet inspection practices 
that may pose privacy concerns for consumers.
(ii) Enhancements to the Means of Disclosure
    171. The existing transparency rule requires, at a minimum, the 
prominent display of disclosures on a publicly available Web site and 
disclosure of relevant information at the point of sale. (Broadband 
providers must actually disclose information required for consumers to 
make an ``informed choice'' regarding the purchase or use of broadband 
services at the point of sale. It is not sufficient for broadband 
providers simply to provide a link to their disclosures.) We enhance 
the rule to require a mechanism for directly notifying end users if 
their individual use of a network will trigger a network practice, 
based on their demand prior to a period of congestion, that is likely 
to have a significant impact on the end user's use of the service. The 
purpose of such notification is to provide the affected end users with 
sufficient information and time to consider adjusting their usage to 
avoid application of the practice.
(iii) Small Businesses
    172. The record reflects the concerns of some commenters that 
enhanced transparency requirements will be particularly burdensome for 
smaller providers. ACA, for example, suggests that smaller providers be 
exempted from the provision of such disclosures. ACA states that its 
member companies are complying with the current transparency 
requirements, which ``strike the right balance between edge provider 
and consumer needs for pertinent information and the need to provide 
ISPs with some flexibility in how they disclose pertinent 
information.'' We believe that the transparency enhancements adopted 
today are modest in nature. For example, we have declined to require 
certain disclosures proposed in the 2014 Open Internet NPRM such as the 
source of congestion, packet corruption, and jitter in recognition of 
commenter concerns with the benefits and difficulty of making these 
particular disclosures. We also do not require ``real-time'' 
disclosures. These proposed disclosures appear to form the bulk of 
ACA's concerns. Nevertheless, we take seriously the concerns that ACA 
raises and those of smaller broadband providers generally.
    173. Out of an abundance of caution, we grant a temporary exemption 
for these providers, with the potential for that exemption to become 
permanent. It is unclear, however, how best to delineate the boundaries 
of this exception. Clearly, it should include those providers likely to 
be most disproportionately affected by new disclosure requirements. ACA 
``acknowledge[s] that Congress and the Commission have defined `small' 
in various ways.'' One metric to which ACA points is the approach that 
the Commission used in its 2013 Rural Call Completion Order, which 
excepted providers with 100,000 or fewer subscriber lines, aggregated 
across all affiliates, from certain recordkeeping, retention, and 
reporting rules. We adopt this definition for purposes of the temporary 
exemption that we adopt today. Accordingly, we hereby adopt a temporary 
exemption from the enhancements to the transparency rule for those 
providers of broadband Internet access service (whether fixed or 
mobile) with 100,000 or fewer broadband subscribers as per their most 
recent Form 477, aggregated over all the providers' affiliates.
    174. Yet we believe that both the appropriateness of the exemption 
and the threshold require further deliberation. Accordingly, the 
exemption we adopt is only temporary. We delegate to the Consumer & 
Governmental Affairs Bureau (CGB) the authority to determine whether to 
maintain the exemption and, if so, the appropriate threshold for it. We 
direct CGB to seek comment on the question and to adopt an Order 
announcing whether it is maintaining an exemption and at what level by 
no later than December 15, 2015. Until such time, notwithstanding any 
approval received by the Office of Management & Budget for the 
enhancements adopted today, such enhancements will not apply to 
providers of broadband Internet access service with 100,000 or fewer 
subscribers.

[[Page 19763]]

    175. To be clear, all providers of broadband Internet access 
service, including small providers, remain subject to the existing 
transparency rule adopted in 2010. The temporary exemption adopted 
today, and any permanent exemption adopted by CGB, applies only to the 
enhanced disclosures described above. As ACA states in its request for 
an exemption for small providers, ``[i]rrespective of which definition 
of small that is chosen by the Commission, exempt ISPs would still be 
required to comply with the transparency requirements contained in 
section 8.3 of the Commission's rules today.''
(iv) Safe Harbor for Form of Disclosure to Consumers
    176. The existing transparency rule requires disclosures sufficient 
both to enable ``consumers to make informed choices regarding use of 
[broadband] services'' and ``content, application, service, and device 
providers to develop, market, and maintain Internet offerings.'' As in 
2010, a central purpose of the transparency rule remains to provide 
information useful to both constituencies. As we noted in the 2014 Open 
Internet NPRM, we are concerned that disclosures are not consistently 
provided in a manner that adequately satisfies the divergent 
informational needs of all affected parties. For example, disclosures 
at times are ill-defined; do not consistently measure service 
offerings, making comparisons difficult; or are not easily found on 
provider Web sites. In the 2014 Open Internet NPRM, we therefore 
proposed requiring separate disclosure statements to meet both the 
basic informational needs of consumers and the more technical needs of 
edge providers.
    177. The record reflects concerns, however, as to a requirement to 
offer tailored disclosures. For example, ACA states that disclosures 
tailored to edge providers ``would require small ISPs, who manage their 
own networks and may only have a handful of network operators, 
engineers, and head end staff to make onerous expenditures of both 
personnel hours and financial resources.'' Bright House ``question[s] 
the feasibility of creating disclosures tailored to the varied and 
potentially unique needs of the hundreds of such providers, 
particularly with no reciprocal obligation.'' Similarly, Tech Freedom 
and the International Center for Law and Economics assert that 
``requiring ISPs to tailor their disclosures to the various parties the 
ISPs deal with (i.e., consumers, edge providers, the Internet 
community, and the FCC) greatly increases the burden of complying with 
these disclosures, especially as such disclosures must be periodically 
updated to reflect changes to ISPs' network management practices.'' In 
light of these concerns, we decline to require separate disclosures at 
this time.
    178. In declining to mandate separate disclosures, however, we do 
not intend to diminish the existing requirement for disclosure of 
information sufficient for both end users and edge providers. The 
Commission has not established that a single disclosure would always 
satisfy the rule; rather, it merely stated broadband providers ``may be 
able'' to satisfy the transparency rule through a single disclosure. We 
are especially concerned that in some cases a single disclosure 
statement may be too detailed and technical to meet the needs of 
consumers, rather than a separate consumer-focused disclosure. As noted 
in the 2014 Open Internet NPRM, both academic research and the 
Commission's experience with consumer issues have demonstrated that the 
manner in which providers display information to consumers can have as 
much impact on consumer decisions as the information itself. A stand-
alone format has proven effective in conveying useful information in 
other contexts. We also note that the OIAC and OTI have proposed the 
use of a label to disclose the most important information to users of 
broadband service. In addition, the United Kingdom's largest Internet 
service providers agreed to produce a comparable table of traffic 
management information called a Key Facts Indicator.
    179. Therefore, we are establishing a voluntary safe harbor for the 
format and nature of the required disclosure to consumers. To take 
advantage of the safe harbor, a broadband provider must provide a 
consumer-focused, standalone disclosure. We decline, however, to 
mandate the exact format for such disclosures at this time. (We note 
that although we have sought comment on what format would be most 
effective, the record is lacking on specific details as to how such a 
disclosure should be formatted.) Rather, we seek the advice of our 
Consumer Advisory Committee, which is composed of both industry and 
consumer interests, including those representing people with 
disabilities. (The Committee's purpose is to make recommendations to 
the Commission regarding consumer issues within Commission's 
jurisdiction and to facilitate the participation of consumers 
(including people with disabilities and underserved populations, such 
as Native Americans and persons living in rural areas) in proceedings 
before the Commission.) We find that the Committee's experience with 
consumer disclosure issues (For example, the Committee has studied the 
value of standardized disclosures and their contents.) makes it an 
ideal body to recommend a disclosure format that should be clear and 
easy to read--similar to a nutrition label--to allow consumers to 
easily compare the services of different providers. We believe the CAC 
is uniquely able to recommend a disclosure format that both anticipates 
and addresses provider compliance burdens while ensuring the utility of 
the disclosures for consumers.
    180. We direct the CAC to formulate and submit to the Commission a 
proposed disclosure format, based on input from a broad range of 
stakeholders, within six months of the time that its new membership is 
reconstituted, but, in any event, no later than October 31, 2015. The 
disclosure format must be accessible to persons with disabilities. We 
expect that the CAC will consider whether to propose the same or 
different formats for fixed and mobile broadband providers. In 
addition, we expect that the CAC will consider whether and how a 
standard format for mobile broadband providers will allow providers to 
continue to differentiate their services competitively, as well as how 
mobile broadband providers can effectively disclose commercial terms to 
consumers regarding myriad plans in a manner that is not 
administratively burdensome. The Commission delegates authority to the 
Wireline Competition Bureau, Wireless Telecommunications Bureau, and 
Consumer & Governmental Affairs Bureau to issue a Public Notice 
announcing whether the proposed format or formats meet its expectations 
for the safe harbor for making consumer-facing disclosures. If the 
format or formats do not meet such expectations, the Bureaus may ask 
the CAC to consider changes and submit a revised proposal for the 
Bureaus' review within 90 days of the Bureaus' request.
    181. Broadband providers that voluntarily adopt this format will be 
presumed to be in compliance with the requirement to make transparency 
disclosures in a format that meets the needs of consumers. Providers 
that choose instead to maintain their own format--for example, a 
unitary disclosure intended both for consumers and edge providers--will 
bear the burden, if challenged, of explaining how a single disclosure 
statement meets the needs of both consumers and edge providers. To be 
clear, use of the consumer disclosure format is a safe

[[Page 19764]]

harbor with respect to the format of the required disclosure to 
consumers. A broadband provider meeting the safe harbor could still be 
found to be in violation of the rule, for example, if the content of 
that disclosure (e.g., prices) is misleading or inaccurate, or the 
provider makes misleading or inaccurate statements in another context, 
such as advertisements or other statements to consumers. Moreover, 
broadband providers using the safe harbor should continue to provide 
the more detailed disclosure statement for the benefit of edge 
providers.
c. Enforcement and Relationship to the Existing Transparency Rule
    182. Despite these enhancements to the existing transparency rule, 
we clarify that we are being specific in order to provide additional 
guidance. The transparency rule has always required broadband providers 
to disclose information ``sufficient for consumers to make informed 
choices'' (Even where a particular category of information discussed 
above was not specified in the 2010 Open Internet Order that does not 
mean that disclosure of that information has not consistently been 
required under the transparency rule. If such information is necessary 
for a consumer to make an ``informed choice'' regarding the purchase or 
use of broadband service, disclosure of that information is a 
fundamental requirement of the transparency rule.) and that test could, 
in particular circumstances, include the enhancements that we expressly 
adopt today. We also reiterate that under both the existing 
transparency rule and the enhancements adopted in this Order, all 
disclosures that broadband providers make about their network 
practices, performance, and commercial terms of broadband services must 
be accurate and not misleading.
    183. In the 2014 Open Internet NPRM we also requested comment on 
how the Commission could best enforce the transparency rule. In 
particular, we noted that a key objective of the transparency rule is 
to enable the Commission to collect information necessary to access, 
report, and enforce the open Internet rules. For example, we sought 
comment on whether to require broadband providers to certify that they 
are in compliance with the required disclosures and/or submit reports 
containing descriptions of current disclosure practices, particularly 
if the existing flexible approach is amended to require more specific 
disclosures. Some commenters caution against measures that are 
unnecessary, susceptible to abuse, or burdensome. Others express 
support for stronger or more efficient enforcement mechanisms. At this 
time we decline to require certification by broadband providers. Should 
evidence be provided, however, that certification is necessary, we will 
revisit this issue at a later date.
    184. We also remind providers that if their disclosure statements 
fail to meet the requirements established in 2010 and enhanced today, 
they may be subject to investigation and forfeiture. The Enforcement 
Bureau will closely scrutinize failure by providers to meet their 
obligations in fulfilling the transparency rule.
d. Role of Further Advisory Guidance
    185. The 2011 and 2014 Advisory Guidance documents illustrate the 
role of further guidance from Commission staff in interpreting and 
applying the general requirements of the transparency rule. We 
anticipate that as technology, the marketplace, and the needs of 
consumers, edge providers, and other stakeholders evolve, further such 
guidance may be appropriate concerning the transparency rule, including 
with respect to the enhancements adopted today. The most immediate 
example concerns ongoing improvements and evolutions in the 
methodologies for measuring broadband providers' actual performance, as 
discussed in further detail above. We also point out that broadband 
providers are able to seek advisory opinions from the Enforcement 
Bureau concerning any of the open Internet regulations, including the 
transparency rule.

D. Scope of the Rules

    186. The open Internet rules we adopt today apply to fixed and 
mobile broadband Internet access service. We make clear, however, that 
while the definition of broadband Internet access service encompasses 
arrangements for the exchange of Internet traffic, the open Internet 
rules we adopt today do not apply to that portion of the broadband 
Internet access service.
1. Broadband Internet Access Service
    187. As discussed below, we continue to define ``broadband Internet 
access service'' (BIAS) as:

A 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. This term also encompasses any service that the Commission 
finds to be providing a functional equivalent of the service 
described in the previous sentence, or that is used to evade the 
protections set forth in this part.

    188. ``Broadband Internet access service'' continues to include 
services provided over any technology platform, including but not 
limited to wire, terrestrial wireless (including fixed and mobile 
wireless services using licensed or unlicensed spectrum), and 
satellite. ``Broadband Internet access service'' encompasses all 
providers of broadband Internet access service, as we delineate them 
here, regardless of whether they lease or own the facilities used to 
provide the service. (The Commission has consistently determined that 
resellers of telecommunications services are telecommunications 
carriers, even if they do not own any facilities. We note that the 
rules apply not only to facilities-based providers of broadband service 
but also to resellers of that service. In applying these obligations to 
resellers, we recognize, as the Commission has in other contexts, that 
consumers will expect the protections and benefits afforded by 
providers' compliance with the rules, regardless of whether the 
consumer purchase service from a facilities-based provider or a 
reseller. We note that a reseller's obligation under the rules is 
independent from the obligation of the facilities-based provider that 
supplies the underlying service to the reseller, though the extent of 
compliance by the underlying facilities-based provider will be a factor 
in assessing compliance by the reseller.) ``Fixed'' broadband Internet 
access service refers to a broadband Internet access service that 
serves end users primarily at fixed endpoints using stationary 
equipment, such as the modem that connects an end user's home router, 
computer, or other Internet access device to the network. The term 
encompasses the delivery of fixed broadband over any medium, including 
various forms of wired broadband services (e.g., cable, DSL, fiber), 
fixed wireless broadband services (including fixed services using 
unlicensed spectrum), and fixed satellite broadband services. 
``Mobile'' broadband Internet access service refers to a broadband 
Internet access service that serves end users primarily using mobile 
stations. It also includes services that use smartphones or mobile-
network-enabled tablets as the primary endpoints for connection to the 
Internet, (We note that ``public safety services,'' as defined in 
section 337 of the Act, are excluded from the definition of mobile 
broadband Internet access service.) as well as mobile satellite 
broadband services. (We provide these definitions of ``fixed'' and 
``mobile'' for illustrative purposes. In contrast to the Commission's 
2010 Open Internet

[[Page 19765]]

Order, here we are applying the same regulations to both fixed and 
mobile broadband Internet access services.)
    189. We continue to define ``mass market'' as ``a service marketed 
and sold on a standardized basis to residential customers, small 
businesses, and other end-user customers such as schools and 
libraries.'' To be clear, ``mass market'' includes broadband Internet 
access services purchased with support of the E-rate and Rural 
Healthcare programs, as well as any broadband Internet access service 
offered using networks supported by the Connect America Fund (CAF). (In 
the 2010 Open Internet Order, the Commission found that ``mass market'' 
included broadband Internet access services purchased with support of 
the E-rate program. Since that time, the Commission has extended 
universal service support for broadband services through the Lifeline 
and Rural Health Care programs. Thus, for the same reasons the 
Commission defined mass market services to include BIAS purchased with 
the support of the E-rate program in 2010, we now find that mass market 
also includes BIAS purchased with the support of Lifeline and Rural 
Health Care programs.) To the extent that institutions of higher 
learning purchase mass market services, those institutions would be 
included within the scope of the schools and libraries portion of our 
definition. The term ``mass market'' does not include enterprise 
service offerings, which are typically offered to larger organizations 
through customized or individually-negotiated arrangements, or special 
access services.
    190. We adopt our tentative conclusion in the 2014 Open Internet 
NPRM that broadband Internet access service does not include virtual 
private network (VPN) services, content delivery networks (CDNs), 
hosting or data storage services, or Internet backbone services (to the 
extent those services are separate from broadband Internet access 
service). The Commission has historically distinguished these services 
from ``mass market'' services and, as explained in the 2014 Open 
Internet NPRM, they ``do not provide the capability to receive data 
from all or substantially all Internet endpoints.'' We do not disturb 
that finding here. Likewise, when a user employs, for example, a 
wireless router or a Wi-Fi hotspot to create a personal Wi-Fi network 
that is not intentionally offered for the benefit of others, he or she 
is not providing a broadband Internet access service under our 
definition.
    191. We again decline to apply the open Internet rules to premises 
operators--such as coffee shops, bookstores, airlines, private end-user 
networks (e.g. libraries and universities), and other businesses that 
acquire broadband Internet access service from a broadband provider to 
enable patrons to access the Internet from their respective 
establishments--to the extent they may be offering broadband Internet 
access service as we define it today. (While we decline to apply open 
Internet rules to premises operators to the extent they may offer 
broadband Internet access service, that decision does not affect other 
obligations that may apply to premises operators under the Act.) We 
find, as we did in 2010, that a premises operator that purchases BIAS 
is an end user and that these services ``are typically offered by the 
premise operator as an ancillary benefit to patrons.'' Further, 
applying the open Internet rules to the provision of broadband service 
by premises operators would have a dampening effect on these entities' 
ability and incentive to offer these services. As such, we do not apply 
the open Internet rules adopted today to premises operators. (We 
reiterate the guidance in the 2010 Open Internet Order that although 
not bound by our rules, we encourage premises operators to disclose 
relevant restrictions on broadband service they make available to their 
patrons.) The record evinces no significant disagreement with this 
analysis. (We note, however, that this exception does not affect other 
obligations that a premise operator may have independent of our open 
Internet rules.)
    192. Our definition of broadband Internet access service includes 
services ``by wire or radio,'' which encompasses mobile broadband 
service. Thus, our definition of broadband Internet access service also 
extends to the same services provided by mobile providers. As discussed 
above, the record demonstrates the pressing need to apply open Internet 
rules to fixed and mobile broadband services alike, and changes in the 
mobile marketplace no longer counsel in favor of treating mobile 
differently under the rules. Thus, we apply the open Internet rules 
adopted today to both fixed and mobile networks. (Although we adopt the 
same rules for both fixed and mobile services, we recognize that with 
respect to the reasonable network management exception, the rule may 
apply differently to fixed and mobile broadband providers.)
    193. As we discuss more fully below, broadband Internet access 
service encompasses the exchange of Internet traffic by an edge 
provider or an intermediary with the broadband provider's network. 
Below, we find that broadband Internet access service is a 
telecommunications service, subject to sections 201, 202, and 208 
(along with key enforcement provisions). (We note that broadband 
Internet access services are also subject to sections 222, 224, 225, 
254, and 255.) As a result, the Commission will be available to hear 
disputes regarding arrangements for the exchange of traffic with a 
broadband Internet access provider raised under sections 201 and 202 on 
a case-by-case basis: an appropriate vehicle for enforcement where 
disputes are primarily over commercial terms and that involve some very 
large corporations, including companies like transit providers and 
CDNs, that act on behalf of smaller edge providers. However, for 
reasons discussed more fully below, we exclude this portion of 
broadband Internet access service--interconnection with a broadband 
Internet access service provider's network--from application of our 
open Internet rules. We note that this exclusion also extends to 
interconnection with CDNs.
2. Internet Traffic Exchange
    194. In the 2010 Open Internet Order, the Commission applied its 
open Internet rules ``only as far as the limits of a broadband 
provider's control over the transmission of data to or from its 
broadband customers,'' and excluded the exchange of traffic between 
networks from the scope of the rules. In the 2014 Open Internet NPRM, 
the Commission tentatively concluded that it should maintain this 
approach, but explicitly sought comment on suggestions that the 
Commission should expand the scope of the open Internet rules to cover 
issues related to Internet traffic exchange. (As a general matter, 
Internet traffic exchange involves the exchange of IP traffic between 
networks. An Internet traffic exchange arrangement determines which 
networks exchange traffic and the destinations to which those networks 
will deliver that traffic. In aggregate, Internet traffic exchange 
arrangements allow an end user of the Internet to interact with other 
end users on other Internet networks, including content or services 
that make themselves available by having a public IP address, similar 
to how the global public switched telephone network consists of 
networks that route calls based on telephone numbers. When we adopted 
the 2014 Open Internet NPRM, the Chairman issued a separate, written 
statement suggesting that ``the question of interconnection (`peering') 
between the

[[Page 19766]]

consumer's network provider and the various networks that deliver to 
that ISP . . . is a different matter that is better addressed 
separately.'' 2014 Open Internet NPRM, 29 FCC Rcd at 5647. While this 
statement reflected the Notice's tentative conclusion concerning 
Internet traffic exchange, it in no way detracts from the fact that the 
Notice also sought comment on ``whether we should change our 
conclusion,'' whether to adopt proposals to ``expand the scope of the 
open Internet rules to cover issues related to traffic exchange,'' and 
how to ``ensure that a broadband provider would not be able to evade 
our open Internet rules by engaging in traffic exchange practices that 
would be outside the scope of the rules as proposed.'')
    195. As discussed below, we classify fixed and mobile broadband 
Internet access service as telecommunications services. The definition 
for broadband Internet access service includes the exchange of Internet 
traffic by an edge provider or an intermediary with the broadband 
provider's network. We note that anticompetitive and discriminatory 
practices in this portion of broadband Internet access service can have 
a deleterious effect on the open Internet, and therefore retain 
targeted authority to protect against such practices through sections 
201, 202, and 208 of the Act (and related enforcement provisions), but 
will forbear from a majority of the other provisions of the Act. Thus, 
we conclude that, at this time, application of the no-unreasonable 
interference/disadvantage standard and the prohibitions on blocking, 
throttling, and paid prioritization to the Internet traffic exchange 
arrangements is not warranted.
    196. Trends in Internet Traffic Exchange. Internet traffic exchange 
is typically based on commercial negotiations. Changes in consumer 
behavior, traffic volume, and traffic composition have resulted in new 
business models for interconnection. Since broadband Internet access 
service providers cannot, on their own, connect to every end point on 
the Internet in order to provide full Internet access to their 
customers, they historically paid third-party backbone service 
providers for transit. Backbone service providers interconnected 
upstream until traffic reached Tier 1 backbone service providers, which 
peered with each other and thereby provided their customer networks 
with access to the full Internet. In this hierarchical arrangement of 
networks, broadband Internet access providers negotiated with backbone 
service providers; broadband Internet access providers generally did 
not negotiate with edge providers to gain access to content. However, 
in recent years, new business models of Internet traffic exchange have 
emerged, premised on changes in traffic flows and in broadband Internet 
access provider networks. A number of factors drive these trends in 
Internet traffic exchange.
    197. Critically, the growth of online streaming video services has 
sparked further evolution of the Internet. Content providers have come 
to rely on the services of commercial and private CDNs, which cache 
content close to end users, providing increased quality of service and 
avoiding transit costs. While CDNs rely on transit to feed the array of 
CDN cache servers, they deliver traffic to broadband Internet access 
service providers via transit service or by entering into peering 
arrangements, directly interconnecting with broadband Internet access 
service providers.
    198. In addition, several large broadband Internet access service 
providers, such as AT&T, Comcast, Time Warner Cable, and Verizon, have 
built or purchased their own backbones, giving them the ability to 
directly interconnect with other networks and edge providers and 
thereby lowering and eliminating payments to third-party transit 
providers. These interconnection arrangements are ``peering,'' 
involving the exchange of traffic only between the two networks and 
their customers, rather than paid transit, which provides access to the 
full Internet over a single interconnection. Peering gives the 
participants greater control over their traffic and any issues arising 
with the traffic exchange are limited to those parties, and not other 
parties over other interconnection links. Historically, broadband 
Internet access service providers paid for transit and therefore had an 
incentive to agree to settlement-free peering with a CDN to reduce 
transit costs; however, where large broadband Internet access service 
providers have their own national backbones and have settlement-free 
peering with other backbones, they may no longer have an incentive to 
agree to settlement-free peering with CDNs in order to avoid transit 
costs. As shown below in Chart 1, the evolution from reliance on 
transit to peering arrangements also means an evolution from a traffic 
exchange arrangement that provides access to the full Internet to a 
traffic exchange arrangement that only provides for the exchange of 
traffic from a specific network provider and its customers.

[[Page 19767]]

[GRAPHIC] [TIFF OMITTED] TR13AP15.000

    199. Recent Disputes. Recently, Internet traffic exchange disputes 
have reportedly involved not de-peering, as was more frequently the 
case in the last decade, but rather degraded experiences caused by 
congested ports between providers. In addition, these disputes have 
evolved from conflicts that may last a few days, to disputes that have 
been sustained for well over a year, and have gone from disputes 
between backbone service networks, to disputes between providers of 
broadband Internet access service and transit service providers, CDNs, 
or edge providers. The typical dispute has involved, on one side, a 
large broadband provider, and on the other side, a commercial transit 
provider (such as Cogent or Level 3) and/or a large CDN. Multiple 
parties point out, however, that interconnection problems can harm more 
than just the parties in a dispute. When links are congested and 
capacity is not augmented, the networks--and applications, large and 
small, running over the congested links into and out of those 
networks--experience degraded quality of service due to reduced 
throughput, increased packet loss, increased delay, and increased 
jitter. At the end of the day, consumers bear the harm when they 
experience degraded access to the applications and services of their 
choosing due to a dispute between a large broadband provider and an 
interconnecting party. Parties also assert that these disputes raise 
concerns about public safety and network reliability. To address these 
growing concerns, a number of parties have called for extending the 
rules proposed in the 2014 Open Internet NPRM to Internet traffic 
exchange practices.
    200. The record reflects competing narratives. Some edge and 
transit providers assert that large broadband Internet access service 
providers are creating artificial congestion by refusing to upgrade 
interconnection capacity at their network entrance points for 
settlement-free peers or CDNs, thus forcing edge providers and CDNs to 
agree to paid peering arrangements. These parties suggest that paid 
arrangements resulting from artificially congested interconnection 
ports at the broadband Internet access service provider network edge 
could create the same consumer harms as paid arrangements in the last-
mile, and lead to paid prioritization, fast lanes, degradation of 
consumer connections, and ultimately, stifling of innovation by edge 
providers. Further, edge providers argue that they are covering the 
costs of carrying this traffic through the network, bringing it to the 
gateway of the Internet access service, unlike in the past where both 
parties covered their own costs to reach the Tier 1 backbones where 
traffic would then be exchanged on a settlement-free basis. Edge and 
transit providers argue that the costs of adding interconnection 
capacity or directly connecting with edge providers are de minimis. 
Further, they assert that traffic ratios ``are arbitrarily set and 
enforced and are not reflective of how [broadband providers] sell 
broadband connections and how consumers use them.'' Thus, these edge 
and transit providers assert that a focus on only the last-mile portion 
of the Internet traffic path will fail to adequately constrain the 
potential for anticompetitive behavior on the part of broadband 
Internet access service providers that serve as gatekeepers to the edge 
providers, transit providers, and CDNs seeking to deliver Internet 
traffic to the broadband providers' end users.
    201. In contrast, large broadband Internet access service providers 
assert that edge providers such as Netflix are imposing a cost on 
broadband Internet access service providers who must constantly upgrade 
infrastructure to keep up with the demand. Large broadband Internet 
access service providers explain that when an edge provider sends 
extremely large volumes of traffic to a broadband Internet access 
service provider--e.g., through a CDN or a third-party transit service 
provider--the broadband provider must invest in additional 
interconnection capacity (e.g., new routers or ports on existing 
routers) and middle-mile transport capacity in order to accommodate 
that traffic, exclusive of ``last-mile'' costs from the broadband 
Internet access provider's central offices, head ends, or cell sites to 
end-user locations. Commenters assert that if the broadband Internet 
access service provider absorbs these interconnection and transport 
costs, all of the broadband provider's subscribers will see their bills 
rise. They argue that this is unfair to subscribers who do not use the 
services, like Netflix, that are driving the need for additional 
capacity. Broadband Internet

[[Page 19768]]

access service providers explain that settlement-free peering 
fundamentally is a barter arrangement in which each side receives 
something of value. These parties contend that if the other party is 
only sending traffic, it is not contributing something of value to the 
broadband Internet access service provider.
    202. Mechanism to Resolve Traffic Exchange Disputes. As discussed, 
Internet traffic exchange agreements have historically been and will 
continue to be commercially negotiated. We do not believe that it is 
appropriate or necessary to subject arrangements for Internet traffic 
exchange (which are subsumed within broadband Internet access service) 
to the rules we adopt today. We conclude that it would be premature to 
adopt prescriptive rules to address any problems that have arisen or 
may arise. (We decline to adopt these and similar types of proposals 
for the same reasons we decline to apply the open Internet rules to 
traffic exchange.) It is also premature to draw policy conclusions 
concerning new paid Internet traffic exchange arrangements between 
broadband Internet access service providers and edge providers, CDNs, 
or backbone services. (For instance, Akamai expresses concern that 
adoption of rules governing interconnection could be used as a 
justification by some broadband providers to refuse direct 
interconnection to CDNs and other content providers generally, on the 
theory that connecting with any CDN necessitates connecting with all 
CDNs, regardless of technical feasibility. We do not intend such a 
result by our decision today to assert authority over interconnection.) 
While the substantial experience the Commission has had over the last 
decade with ``last-mile'' conduct gives us the understanding necessary 
to craft specific rules based on assessments of potential harms, we 
lack that background in practices addressing Internet traffic exchange. 
For this reason, we adopt a case-by-case approach, which will provide 
the Commission with greater experience. Thus, we will continue to 
monitor traffic exchange and developments in this market.
    203. At this time, we believe that a case-by-case approach is 
appropriate regarding Internet traffic exchange arrangements between 
broadband Internet access service providers and edge providers or 
intermediaries--an area that historically has functioned without 
significant Commission oversight. (We note, however, that the 
Commission has looked at traffic exchange in the context of mergers 
and, sometimes imposed conditions on traffic exchange.) Given the 
constantly evolving market for Internet traffic exchange, we conclude 
that at this time it would be difficult to predict what new 
arrangements will arise to serve consumers' and edge providers' needs 
going forward, as usage patterns, content offerings, and capacity 
requirements continue to evolve. Thus, we will rely on the regulatory 
backstop prohibiting common carriers from engaging in unjust and 
unreasonable practices. Our ``light touch'' approach does not directly 
regulate interconnection practices. Of course, this regulatory backstop 
is not a substitute for robust competition. The Commission's regulatory 
and enforcement oversight, including over common carriers, is 
complementary to vigorous antitrust enforcement. Indeed, mobile voice 
services have long been subject to Title II's just and reasonable 
standard and both the Commission and the Antitrust Division of the 
Department of Justice have repeatedly reviewed mergers in the wireless 
industry. Thus, it will remain essential for the Commission, as well as 
the Department of Justice, to continue to carefully monitor, review, 
and where appropriate, take action against any anti-competitive 
mergers, acquisitions, agreements or conduct, including where broadband 
Internet access services are concerned.
    204. Broadband Internet access service involves the exchange of 
traffic between a last-mile broadband provider and connecting networks. 
(We disagree with commenters who argue that arrangements for Internet 
traffic exchange are private carriage arrangements, and thus not 
subject to Title II. As we explain below in today's Declaratory Ruling, 
Internet traffic exchange is a component of broadband Internet access 
service, which meets the definition of ``telecommunications service.'') 
The representation to retail customers that they will be able to reach 
``all or substantially all Internet endpoints'' necessarily includes 
the promise to make the interconnection arrangements necessary to allow 
that access. As a telecommunications service, broadband Internet access 
service implicitly includes an assertion that the broadband provider 
will make just and reasonable efforts to transmit and deliver its 
customers' traffic to and from ``all or substantially all Internet 
endpoints'' under sections 201 and 202 of the Act. In any event, BIAS 
provider practices with respect to such arrangements are plainly ``for 
and in connection with'' the BIAS service. Thus, disputes involving a 
provider of broadband Internet access service regarding Internet 
traffic exchange arrangements that interfere with the delivery of a 
broadband Internet access service end user's traffic are subject to our 
authority under Title II of the Act. (We note that the Commission has 
forborne from application of many of the requirements of Title II to 
broadband Internet access service.)
    205. We conclude that our actions regarding Internet traffic 
exchange arrangements are reasonable based on the record before us, 
which demonstrates that broadband Internet access providers have the 
ability to use terms of interconnection to disadvantage edge providers 
and that consumers' ability to respond to unjust or unreasonable 
broadband provider practices are limited by switching costs. These 
findings are limited to the broadband Internet access services we 
address today. (We observe that should a complaint arise regarding BIAS 
provider Internet traffic exchange practices, practices by edge 
providers (and their intermediaries) would be considered as part of the 
Commission's evaluation as to whether BIAS provider practices were 
``just and reasonable'' under the Act.) When Internet traffic exchange 
breaks down--regardless of the cause--it risks preventing consumers 
from reaching the services and applications of their choosing, 
disrupting the virtuous cycle. We recognize the importance of timely 
review in the midst of commercial disputes. The Commission will be 
available to hear disputes raised under sections 201 and 202 on a case-
by-case basis. We believe this is an appropriate vehicle for 
enforcement where disputes are primarily between sophisticated entities 
over commercial terms and that include companies, like transit 
providers and CDNs, that act on behalf of smaller edge providers. We 
also observe that section 706 provides the Commission with an 
additional, complementary source of authority to ensure that Internet 
traffic exchange practices do not harm the open Internet. As explained 
above, we have decided not to adopt specific regulations that would 
detail the practices that would constitute circumvention of the open 
Internet regulations we adopt today. Instead, and in a manner similar 
to our treatment of non-BIAS services, we will continue to monitor 
Internet traffic exchange arrangements and have the authority to 
intervene to ensure that they are not harming or threatening to harm 
the open nature of the Internet.
    206. The record also reflects a concern that our decision to adopt 
this regulatory backstop violates the

[[Page 19769]]

Administrative Procedure Act. (Verizon claims that ``in light of the 
Commission's past statements on interconnection, to suddenly regulate 
[interconnection] agreements for the first time in a final rule in this 
proceeding would violate the notice and comment requirements of the 
Administrative Procedure Act'' and that even issuing a Further Notice 
of Proposed Rulemaking would not allow the Commission to impose Title 
II regulations on interconnection services. The dissenting statements 
likewise assert that the 2014 Open Internet NPRM did not provide notice 
of the possibility that the Commission would assert authority over 
interconnection.) We disagree. To be clear, consistent with the NPRM's 
proposal, we are not applying the open Internet rules we adopt today to 
Internet traffic exchange. Rather, certain regulatory consequences flow 
from the Commission's classification of BIAS, including the traffic 
exchange component, as falling within the ``telecommunications 
services'' definition in the Act. In all events, the 2014 Open Internet 
NPRM provided clear notice about the possibility of expanding the scope 
of the open Internet rules to cover issues related to traffic exchange. 
(Section 553 provides that ``[g]eneral notice of proposed rulemaking 
shall be published in the Federal Register,'' and that ``[a]fter notice 
required by this section, the agency shall give interested persons an 
opportunity to participate in the rule making'' through submission of 
comments. 5 U.S.C. 553(b), (c). The Commission published the NPRM in 
the Federal Register at 79 FR 37448, July 1, 2014. It also made clear 
that the Commission was considering whether to reclassify retail 
broadband services. In addition, the 2014 Open Internet NPRM asked: 
``How can we ensure that a broadband provider would not be able to 
evade our open Internet rules by engaging in traffic exchange practices 
that would be outside the scope of the rules as proposed?'' As 
discussed above, our assertion of authority over Internet traffic 
exchange practices addresses that question by providing us with the 
necessary case-by-case enforcement tools to identify practices that may 
constitute such evasion and address them. Further, to the extent that 
any doubts remain about whether the 2014 Open Internet NPRM provided 
sufficient notice, the approach adopted today is also a logical 
outgrowth of the original proposal included in the 2014 Open Internet 
NPRM. The numerous submissions in the record at every stage of the 
proceeding seeking to influence the Commission in its decision to adopt 
policies regulating Internet traffic exchange illustrate that the 
Commission not only gave interested parties adequate notice of the 
possibility of a rule, but that parties considered Commission action on 
that proposal a real possibility.
3. Non-BIAS Data Services
    207. In the 2014 Open Internet NPRM, the Commission tentatively 
concluded that it should not apply its conduct-based rules to services 
offered by broadband providers that share capacity with broadband 
Internet access service over providers' last-mile facilities, while 
closely monitoring the development of these services to ensure that 
broadband providers are not circumventing the open Internet rules. 
After reviewing the record, we believe the best approach is to adopt 
this tentative conclusion to permit broadband providers to offer these 
types of services while continuing to closely monitor their development 
and use. While the 2010 Open Internet Order and the 2014 Open Internet 
NPRM used the term ``specialized services'' to refer to these types of 
services, the term ``non-BIAS data services'' is a more accurate 
description for this class of services. While the services discussed 
below are not broadband Internet access service, and thus the rules we 
adopt do not apply to these services, we emphasize that we will act 
decisively in the event that a broadband provider attempts to evade 
open Internet protections (e.g., by claiming that a service that is the 
equivalent of Internet access is a non-BIAS data service not subject to 
the rules we adopt today).
    208. We provide the following examples of services and 
characteristics of those services that, at this time, likely fit within 
the category of services that are not subject to our conduct-based 
rules. As indicated in the 2010 Open Internet Order, some broadband 
providers' existing facilities-based VoIP and Internet Protocol-video 
offerings would be considered non-BIAS data services under our rules. 
Further, the 2010 Open Internet Order also noted that connectivity 
bundled with e-readers, heart monitors, or energy consumption sensors 
would also be considered other data services to the extent these 
services are provided by broadband providers over last-mile capacity 
shared with broadband Internet access service. Additional examples of 
non-BIAS data services may include limited-purpose devices such as 
automobile telematics, and services that provide schools with 
curriculum-approved applications and content.
    209. These services may generally share the following 
characteristics identified by the Open Internet Advisory Committee. 
First, these services are not used to reach large parts of the 
Internet. Second, these services are not a generic platform--but rather 
a specific ``application level'' service. And third, these services use 
some form of network management to isolate the capacity used by these 
services from that used by broadband Internet access services.
    210. We note, however, that non-BIAS data services may still be 
subject to enforcement action. Similar to the Commission's approach in 
2010, if the Commission determines that a particular service is 
``providing a functional equivalent of broadband Internet access 
service, or . . . is [being] used to evade the protections set forth in 
these rules,'' we will take appropriate enforcement action. Further, if 
the Commission determines that these types of service offerings are 
undermining investment, innovation, competition, and end-user benefits, 
we will similarly take appropriate action. We are especially concerned 
that over-the-top services offered over the Internet are not impeded in 
their ability to compete with other data services. (Further, we 
anticipate that consumers of competing over-the-top services will not 
be disadvantaged in their ability to access 911 service.)
    211. The record overwhelmingly supports our decision to continue 
treating non-BIAS data services differently than broadband Internet 
access service under the open Internet rules. This approach will 
continue to drive additional investment in broadband networks and 
provide end users with valued services without otherwise constraining 
innovation. Further, as noted by numerous commenters, since other data 
services were permitted in the 2010 Open Internet Order, we have seen 
little resulting evidence of broadband providers using these services 
to undermine the 2010 rules.
    212. Nevertheless, non-BIAS data services still could be used to 
evade the open Internet rules. Due to these concerns, we will continue 
to monitor the market for non-BIAS data services to ensure that these 
services are not causing or threatening to cause harm to the open 
nature of the Internet. Since the 2010 Open Internet Order, broadband 
Internet access providers have been required to disclose the impact of 
non-BIAS data services on the performance of and the capacity available 
for broadband Internet access services. As discussed in detail above,

[[Page 19770]]

we will continue to monitor the existence and effects of non-BIAS data 
services under the broadband providers' transparency obligations.
    213. We disagree with commenters who argue that the Commission 
should adopt a more-detailed definition for non-BIAS data services to 
safeguard against any such circumvention of the rules. Several 
commenters provided definitions of what they believe should constitute 
non-BIAS data services. Others, however, expressed concerns that a 
formal definition of non-BIAS data services risks potentially limiting 
future innovation and investment, ultimately negatively impacting 
consumer welfare. We share these concerns and thus decline to further 
define what constitutes ``non-BIAS data services'' or adopt additional 
policies specific to such services at this time. Again, however, we 
will closely monitor the development and use of non-BIAS data services 
and have authority to intervene if these services are utilized in a 
manner that harms the open Internet.
4. Reasonable Network Management
    214. The 2014 Open Internet NPRM proposed to retain a reasonable 
network management exception to the conduct-based open Internet rules, 
following the approach adopted in the 2010 Open Internet Order that 
permitted exceptions for ``reasonable network management'' practices to 
the no-blocking and no unreasonable discrimination rules. The 2014 Open 
Internet NPRM also tentatively concluded that the Commission should 
retain the definition of reasonable network management adopted as part 
of the 2010 rules that ``[a] network management practice is reasonable 
if it is appropriate and tailored to achieving a legitimate network 
management purpose, taking into account the particular network 
architecture and technology of the broadband Internet access service.''
    215. The record broadly supports maintaining an exception for 
reasonable network management. We agree that a network management 
exception to the no-blocking rule, the no-throttling rule, and the no-
unreasonable interference/disadvantage standard is necessary for 
broadband providers to optimize overall network performance and 
maintain a consistent quality experience for consumers while carrying a 
variety of traffic over their networks. (As discussed above, the 
transparency rule does not include an exception for reasonable network 
management. We clarify, however, that the transparency rule ``does not 
require public disclosure of competitively sensitive information or 
information that would compromise network security or undermine the 
efficacy of reasonable network management practices.'') Therefore, the 
no-blocking rule, the no-throttling rule, and the no-unreasonable 
interference/disadvantage standard will be subject to reasonable 
network management for both fixed and mobile providers of broadband 
Internet access service. In addition to retaining the exception, we 
retain the definition of reasonable network management with slight 
modifications:

    A network management practice is a practice that has a primarily 
technical network management justification, but does not include 
other business practices. A network management practice is 
reasonable if it is primarily used for and tailored to achieving a 
legitimate network management purpose, taking into account the 
particular network architecture and technology of the broadband 
Internet access service.

    216. For a practice to even be considered under this exception, a 
broadband Internet access service provider must first show that the 
practice is primarily motivated by a technical network management 
justification rather than other business justifications. If a practice 
is primarily motivated by such an other justification, such as a 
practice that permits different levels of network access for similarly 
situated users based solely on the particular plan to which the user 
has subscribed, then that practice will not be considered under this 
exception. The term ``particular network architecture and technology'' 
refers to the differences across broadband access platforms of any 
kind, including cable, fiber, DSL, satellite, unlicensed Wi-Fi, fixed 
wireless, and mobile wireless.
    217. As noted above, reasonable network management is an exception 
to the no-blocking rule, no-throttling rule, and no-unreasonable 
interference/disadvantage standard, but not to the rule against paid 
prioritization. (Paid prioritization would be evaluated under the 
standards set forth in section II.C.1.c supra) This is because unlike 
conduct implicating the no-blocking, no-throttling, or no-unreasonable 
interference/disadvantage standard, paid prioritization is not a 
network management practice because it does not primarily have a 
technical network management purpose. (For purposes of the open 
Internet rules, prioritization of affiliated content, applications, or 
services is also considered a form of paid prioritization.) When 
considering whether a practice violates the no-blocking rule, no-
throttling rule, or no-unreasonable interference/disadvantage standard, 
the Commission may first evaluate whether a practice falls within the 
exception for reasonable network management.
    218. Evaluating Network Management Practices. The 2014 Open 
Internet NPRM proposed that the Commission adopt the same approach for 
determining the scope of network management practices considered to be 
reasonable as adopted in the 2010 Open Internet Order. (The Commission 
decided to determine the scope of reasonable network management on a 
case-by-case basis in the Open Internet Order and we maintain those 
same factors today.) We recognize the need to ensure that the 
reasonable network management exception will not be used to circumvent 
the open Internet rules while still allowing broadband providers 
flexibility to experiment and innovate as they reasonably manage their 
networks. We therefore elect to maintain a case-by-case approach. The 
case-by-case review also allows sufficient flexibility to address 
mobile-specific management practices because, by the terms of our rule, 
a determination of whether a network management practice is reasonable 
takes into account the particular network architecture and technology. 
We also note that our transparency rule requires disclosures that 
provide an important mechanism for monitoring whether providers are 
inappropriately exploiting the exception for reasonable network 
management.
    219. To provide greater clarity and further inform the Commission's 
case-by-case analysis, we offer the following guidance regarding 
legitimate network management purposes. We also note that, similar to 
the 2010 reasonable network management exception, broadband providers 
may request a declaratory ruling or an advisory opinion from the 
Commission before deploying a network management practice, but are not 
required to do so.
    220. As with the network management exception in the 2010 Open 
Internet Order, broadband providers may implement network management 
practices that are primarily used for, and tailored to, ensuring 
network security and integrity, including by addressing traffic that is 
harmful to the network, such as traffic that constitutes a denial-of-
service attack on specific network infrastructure elements. Likewise, 
broadband providers may also implement network management practices 
that are primarily used for, and tailored to, addressing traffic that 
is unwanted by end users. Further, we reiterate the guidance of the 
2010 Open Internet Order that network management practices that 
alleviate congestion without regard to the source, destination, 
content, application, or

[[Page 19771]]

service are also more likely to be considered reasonable network 
management practices in the context of this exception. (As in the no 
throttling rule and the no unreasonable interference or unreasonable 
disadvantage standard, we include classes of content, applications, 
services, or devices.) In evaluating congestion management practices, a 
subset of network management practices, we will also consider whether 
the practice is triggered only during times of congestion and whether 
it is based on a user's demand during the period of congestion.
    221. We also recognize that some network management practices may 
have a legitimate network management purpose, but also may be exploited 
by a broadband provider. We maintain the guidance underlying the 2010 
Open Internet Order's case-by-case analysis that a network management 
practice is more likely to be found reasonable if it is transparent, 
and either allows the end user to control it or is application-
agnostic.
    222. As in 2010, we decline to adopt a more detailed definition of 
reasonable network management. For example, one proposal suggests that 
the Commission limit the circumstances in which network management 
techniques can be used so they would only be reasonable if they were 
used temporarily, for exceptional circumstances, and have a 
proportionate impact to solve a targeted problem. We acknowledge the 
advantages a more detailed definition of network management can have on 
long-term network investment and transparency, but at this point, there 
is not a need to place such proscriptive limits on broadband providers. 
(While some commenters note that there have not been any major 
technological changes in how broadband providers manage traffic since 
2010, others indicate that broadband providers have acquired additional 
techniques that allow them to manage traffic in real-time.) 
Furthermore, a more detailed definition of reasonable network 
management risks quickly becoming outdated as technology evolves. Case-
by-case analysis will allow the Commission to use the conduct-based 
rules adopted today to take action against practices that are known to 
harm consumers without interfering with broadband providers' beneficial 
network management practices. (Beneficial practices include protecting 
their Internet access services against malicious content or offering a 
service limited to offering ``family friendly'' materials to end users 
who desire only such content.)
    223. We believe that the reasonable network management exception 
provides both fixed and mobile broadband providers sufficient 
flexibility to manage their networks. We recognize, consistent with the 
consensus in the record, that the additional challenges involved in 
mobile broadband network management mean that mobile broadband 
providers may have a greater need to apply network management 
practices, including mobile-specific network management practices, and 
to do so more often to balance supply and demand while accommodating 
mobility. As the Commission observed in 2010, mobile network management 
practices must address dynamic conditions that fixed, wired networks 
typically do not, such as the changing location of users as well as 
other factors affecting signal quality. The ability to address these 
dynamic conditions in mobile network management is especially important 
given capacity constraints many mobile broadband providers face. 
Moreover, notwithstanding any limitations on mobile network management 
practices necessary to protect the open Internet, we anticipate that 
mobile broadband providers will continue to be able to use a multitude 
of tools to manage their networks, including an increased number of 
network management tools available in 4G LTE networks.
    224. We note in a similar vein that providers relying on unlicensed 
Wi-Fi networks have specific network management needs. For example, 
these providers can ``face spectrum constraints and congestion issues 
that can pose particular network-management challenges'' and also 
``must accept and manage interference from other users in the 
unlicensed bands.'' Again, the Commission will take into account when 
and how network management measures are applied as well as the 
particular network architecture and technology of the broadband 
Internet access service in question, in determining if a network 
management practice is reasonable. For these reasons, we reject the 
argument that rules with exceptions only for reasonable network 
management practices would ``tie the hands of operators and make it 
more challenging to meet consumers' needs'' or that ``the mere threat 
of post hoc regulatory review . . . would disrupt and could chill 
optimal network management practices.'' In recognizing the unique 
challenges, network architecture, and network management of mobile 
broadband networks (and others, such as unlicensed Wi-Fi networks), we 
conclude that the reasonable network management exception addresses 
this concern and strikes an appropriate balance between the need for 
flexibility and ensuring the Commission has the tools necessary to 
maintain Internet openness.

E. Enforcement of the Open Internet Rules

1. Background
    225. Timely and effective enforcement of the rules we adopt in this 
Order is crucial to preserving an open Internet, enhancing competition 
and innovation, and providing clear guidance to consumers and other 
stakeholders. As has been the case since we adopted our original open 
Internet rules in 2010, we anticipate that many disputes that will 
arise can and should be resolved by the parties without Commission 
involvement. We encourage parties to resolve disputes through informal 
discussions and private negotiations whenever possible. To the extent 
disputes are not resolved, the Commission will continue to provide 
backstop mechanisms to address them. We also will proactively monitor 
compliance and take strong enforcement action against parties who 
violate the open Internet rules.
    226. In the 2010 Open Internet Order, the Commission established a 
two-tiered framework for enforcing open Internet rules. The Commission 
allowed parties to file informal complaints pursuant to section 1.41 of 
our rules and promulgated new procedures to govern formal complaints 
alleging violations of the open Internet rules. This framework was not 
affected by the D.C. Circuit's decision in Verizon. It therefore 
remains in effect and will apply to complaints regarding the rules we 
adopt in this Order. Informal complaints provide end users, edge 
providers, and others with a simple and efficient vehicle for bringing 
potential open Internet violations to the attention of the Commission. 
The formal complaint rules permit any person to file a complaint with 
the Commission alleging an open Internet rule violation and to 
participate in an adjudicatory proceeding to resolve the complaint. In 
addition to these mechanisms for resolving open Internet complaints, 
the Commission continuously monitors press reports and other public 
information, which may lead the Enforcement Bureau to initiate an 
investigation of potential open Internet rule violations.
    227. In the 2014 Open Internet NPRM, the Commission sought comment 
on the efficiency and functionality of the complaint processes adopted 
in the

[[Page 19772]]

2010 Open Internet Order and on mechanisms we should consider to 
improve enforcement and dispute resolution. We tentatively concluded 
that our open Internet rules should include at least three fundamental 
elements: (1) Legal certainty, so that broadband providers, edge 
providers, and end users can plan their activities based on clear 
Commission guidance; (2) flexibility to consider the totality of the 
facts in an environment of dynamic innovation; and (3) effective access 
to dispute resolution. We affirm the importance of these principles 
below and discuss several enhancements to our existing open Internet 
complaint rules to advance them. In addition, we adopt changes to our 
complaint processes to ensure that they are accessible and user-
friendly to consumers, small businesses, and other interested parties, 
as well as changes to ensure that that our review of complaints is 
inclusive and informed by groups with relevant technical or other 
expertise.
2. Designing an Effective Enforcement Process
a. Legal Certainty
    228. We sought comment in the 2014 Open Internet NPRM on ways to 
design an effective enforcement process that provides legal certainty 
and predictability to the marketplace. In addition to our current 
complaint resolution framework, we requested input on what other forms 
of guidance would be helpful. We solicited feedback on whether the 
Commission should: (1) Establish an advisory opinion process, akin to 
``business review letters'' issued by the Department of Justice (DOJ), 
and/or non-binding staff opinions, through which parties could ask the 
Commission for a statement of its current enforcement intentions with 
respect to certain practices under the new rules; and (2) publish 
enforcement advisories that provide additional insight into the 
application of the rules. Many commenters recognized the benefits of 
clear rules and greater predictability regarding open Internet 
protections.
(i) Advisory Opinions
    229. We conclude that use of advisory opinions similar to those 
issued by DOJ's Antitrust Division is in the public interest and would 
advance the Commission's goal of providing legal certainty. (We decline 
to adopt non-binding staff opinions in light of our decision to 
establish an advisory opinion process similar to the DOJ Antitrust 
Division's business review letter approach, as well as existing 
voluntary mediation processes to resolve open Internet disputes that 
are available through the Enforcement Bureau's Market Disputes and 
Resolutions Division.) Although the Commission historically has not 
used advisory opinions to promote compliance with our rules, we 
conclude that they have the potential to serve as useful tools to 
provide clarity, guidance, and predictability concerning the open 
Internet rules. (Parties also have the option to file a petition for 
declaratory ruling under section 1.2 of the Commission's rules, 47 CFR 
1.2. In contrast to declaratory rulings, advisory opinions may only 
relate to prospective conduct, and the Enforcement Bureau will not seek 
comment on advisory opinions via public notice.) Advisory opinions will 
enable companies to seek guidance on the propriety of certain open 
Internet practices before implementing them, enabling them to be 
proactive about compliance and avoid enforcement actions later. The 
Commission may use advisory opinions to explain how it will evaluate 
certain types of behavior and the factors that will be considered in 
determining whether open Internet violations have occurred. Because 
these opinions will be publicly available, we believe that they will 
reduce the number of disputes by providing guidance to the industry.
    230. In this Order, we adopt rules promulgating basic requirements 
for obtaining advisory opinions, as well as limitations on their 
issuance. Any entity that is subject to the Commission's jurisdiction 
may request an advisory opinion regarding its own proposed conduct that 
may implicate the rules we adopt in this Order, the rules that remain 
in effect from the 2010 Open Internet Order, or any other rules or 
policies related to the open Internet that may be adopted in the 
future.
    231. Requests for advisory opinions may be filed via the 
Commission's Web site or with the Office of the Secretary and must be 
copied to the Commission staff specified in the rules. We delegate 
authority to issue advisory opinions to the Enforcement Bureau, which 
will coordinate with other Bureaus and Offices on the issuance of 
opinions. The Enforcement Bureau will have discretion to choose whether 
it will respond to the request. If the Bureau declines to respond to a 
request, it will inform the requesting party in writing. As a general 
matter, the Bureau will be more likely to respond to requests where the 
proposed conduct involves a substantial question of fact or law and 
there is no clear Commission or court precedent, or the subject matter 
of the request and consequent publication of Commission advice is of 
significant public interest. In addition, the Bureau will decline to 
respond to requests if the same conduct is the subject of a current 
government investigation or proceeding, including any ongoing 
litigation or open rulemaking.
    232. Requests for advisory opinions must relate to prospective or 
proposed conduct that the requesting party intends to pursue. The 
Enforcement Bureau will not respond to hypothetical questions or 
inquiries about proposals that are mere possibilities. The Bureau also 
will not respond to requests for opinions that relate to ongoing or 
prior conduct, and the Bureau may initiate an enforcement investigation 
to determine whether such conduct violates the open Internet rules.
    233. Requests for advisory opinions should include all material 
information sufficient for Commission staff to make a determination on 
the proposed conduct; however, staff will have discretion to ask 
parties requesting opinions, as well as other parties that may have 
information relevant to the request or that may be impacted by the 
proposed conduct, for additional information that the staff deems 
necessary to respond to the request. Because advisory opinions will 
rely on full and truthful disclosures by the requesting entities, 
requesters must certify that factual representations made to the 
Enforcement Bureau are truthful and accurate, and that they have not 
intentionally omitted any material information from the request. 
Advisory opinions will expressly state that they rely on the 
representations made by the requesting party, and that they are 
premised on the specific facts and representations in the request and 
any supplemental submissions.
    234. Although the Enforcement Bureau will attempt to respond to 
requests for advisory opinions expeditiously, we decline to establish 
any firm deadlines to rule on them or issue response letters. The 
Commission appreciates that if the advisory opinion process is not 
timely, it will be less valuable to interested parties. However, 
response times will likely vary based on numerous factors, including 
the nature and complexity of the issues, the magnitude and sufficiency 
of the request and the supporting information, and the time it takes 
for the requester to respond to staff requests for additional 
information. An advisory opinion will provide the Enforcement Bureau's 
conclusion regarding whether or not the proposed conduct will comply 
with the open Internet rules. The Bureau will have discretion to 
indicate in an advisory opinion that it does not intend

[[Page 19773]]

to take enforcement action based on the facts, representations, and 
warranties made by the requesting party. The requesting party may rely 
on the opinion only to the extent that the request fully and accurately 
contains all the material facts and representations necessary for the 
opinion and the situation conforms to the situation described in the 
request for opinion. The Enforcement Bureau will not bring an 
enforcement action against a requesting party with respect to any 
action taken in good faith reliance upon an advisory opinion if all of 
the relevant facts were fully, completely, and accurately presented to 
the Bureau, and where such action was promptly discontinued upon 
notification of rescission or revocation of the Commission's or the 
Bureau's approval.
    235. Advisory opinions will be issued without prejudice to the 
Enforcement Bureau's ability to reconsider the questions involved, or 
to rescind or revoke the opinion. Similarly, because advisory opinions 
issued at the staff level are not formally approved by the full 
Commission, they will be issued without prejudice to the Commission's 
right to later rescind the findings in the opinion. Because advisory 
opinions will address proposed future conduct, they necessarily will 
not concern any case or controversy that is ripe for appeal.
    236. The Enforcement Bureau will make advisory opinions available 
to the public. In order to provide meaningful guidance to other 
stakeholders, the Bureau will also publish the initial request for 
guidance and any associated materials. Thus, the rules that we adopt 
establish procedures for entities soliciting advisory opinions to 
request confidential treatment of certain information.
    237. Many commenters support the use of advisory opinions as a 
means for the Commission to provide authoritative guidance to parties 
about the application of open Internet rules and the Commission's 
enforcement intentions. In addition, some commenters suggest that 
review letters and staff opinions should be voluntary. We agree that 
solicitation of advisory opinions should be purely voluntary, and that 
failure to seek such an opinion will not be used as evidence that an 
entity's practices are inconsistent with our rules.
    238. The Wireless Internet Service Providers Association (WISPA) 
opposes the adoption of an advisory opinion process ``because it 
assumes an inherent uncertainty in the rules and creates a `mother may 
I' regime--essentially creating a system where a broadband provider 
must ask the Commission for permission when making business 
decisions.'' According to WISPA, ``[t]his system would increase 
regulatory uncertainty and stifle broadband providers from innovating 
new technologies or business methods. It also would be expensive for a 
small provider to implement, requiring legal and professional 
expertise.''
    239. We find that WISPA's concerns are misguided. Because requests 
for advisory opinions will be entirely voluntary, we disagree with the 
contention that their use would force broadband providers to seek 
permission before implementing new policies or technologies and thereby 
stifle innovation. In addition, we agree with other commenters that 
advisory opinions would provide more, not less, certainty regarding the 
legality of proposed business practices.
(ii) Enforcement Advisories
    240. We conclude that the periodic publication of enforcement 
advisories will advance the Commission's goal of promoting legal 
certainty regarding the open Internet rules. In the 2014 Open Internet 
NPRM, we inquired whether the Commission should issue guidance in the 
form of enforcement advisories that provide insight into the 
application of Commission rules. Enforcement advisories are a tool that 
the Commission has used in numerous contexts, including the current 
open Internet rules. We asked whether continued use of such advisories 
would be helpful where issues of potential general application come to 
the Commission's attention, and whether these advisories should be 
considered binding policy of the Commission or merely a recitation of 
staff views.
    241. Numerous commenters maintain that the Commission should 
continue to use enforcement advisories to offer clarity, guidance, and 
predictability concerning the open Internet rules. We agree. 
Enforcement advisories do not create new policies, but rather are 
recitations and reminders of existing legal standards and the 
Commission's current enforcement intentions. (We disagree with the 
contention that public notice and comment should be a prerequisite for 
the Commission to issue an enforcement advisory. The Commission uses 
its rulemaking procedures when we are adopting rule changes that 
require notice and comment. Conversely, enforcement advisories are used 
to remind parties of existing legal standards.) We see no need to 
deviate from our current practice of issuing such advisories to 
periodically remind parties about legal standards regarding the open 
Internet rules.
b. Flexibility
(i) Means of Enforcement and General Enforcement Mechanisms
    242. We will preserve the Commission's existing avenues for 
enforcement of open Internet rules--self-initiated investigation by the 
Enforcement Bureau, informal complaints, and formal complaints. 
Commenters agree with the value of retaining these three main 
mechanisms for commencing enforcement of potential open Internet 
violations, as this combination ensures multiple entry points to the 
Commission's processes and gives both complainants and the Commission 
enforcement flexibility.
    243. In addition, the Commission will continue to honor requests 
for informal complaints to remain anonymous, and will also continue to 
maintain flexible channels for reporting suspected violations, like 
confidential calls to the Enforcement Bureau. Although some commenters 
raise concerns about anonymous complaint filings, others stress the 
importance of having the option to request anonymity when filing an 
informal complaint. We note, however, that complainants who are not 
anonymous frequently have better success getting their concerns 
addressed because the service provider can then troubleshoot their 
specific concerns.
    244. We also adopt our tentative conclusion in the 2014 Open 
Internet NPRM that enforcement of the transparency rule should proceed 
under the same dispute mechanisms that apply to other rules contained 
in this Order. We believe that providing both complainants and the 
Commission with flexibility to address violations of the transparency 
rule will continue to be important and that the best means to ensure 
compliance with both the transparency rule and the other rules we adopt 
today is to apply a uniform and consistent enforcement approach.
    245. Finally, we conclude that violations of the open Internet 
rules will be subject to any and all penalties authorized under the 
Communications Act and rules, (Section 706 was enacted as part of the 
1996 Telecommunications Act, and it is therefore subject to any and all 
penalties under the Act and our rules. See Verizon, 740 F.3d at 650 
(``Congress expressly directed that the 1996 Act . . . be inserted into 
the Communications Act of 1934.'') (quoting AT&T Corp. v. Iowa 
Utilities Board, 525 U.S. 366, 377 (1999)).) including but not limited 
to admonishments, citations, notices of violation, notices of apparent

[[Page 19774]]

liability, monetary forfeitures and refunds, cease and desist orders, 
revocations, and referrals for criminal prosecution. Moreover, 
negotiated Consent Decrees can contain damages, restitution, compliance 
requirements, attorneys' fees, declaratory relief, and equitable 
remedies like injunctions, equitable rescissions, reformations, and 
specific performance.
(ii) Case-by-Case Analysis
    246. The 2014 Open Internet NPRM emphasized that the process for 
providing and promoting an open Internet must be flexible enough to 
accommodate the ongoing evolution of Internet technology. We therefore 
tentatively concluded that the Commission should continue to use a 
case-by-case approach, taking into account the totality of the 
circumstances, in considering alleged violations of the open Internet 
rules.
    247. We affirm our proposal to continue to analyze open Internet 
complaints on a case-by-case basis. (We reject the suggestion that the 
Commission promulgate additional rules of conduct because it is 
unrealistic to expect that in this varied and rapidly evolving 
technological environment the agency will be able to anticipate the 
specific conduct that will give rise to future disputes.) We agree with 
commenters that flexible rules, administered through case-by-case 
analysis, will enable us to pursue meaningful enforcement, consider 
consumers' individual concerns, and account for rapidly changing 
technology.
(iii) Fact-Finding Processes
    248. In the 2014 Open Internet NPRM, we sought comment about how to 
most effectively structure a flexible fact finding process in analyzing 
open Internet complaints. We asked what level of evidence should be 
required in order to bring a claim. With regard to formal complaint 
proceedings, we also asked what showing should be required for the 
burden of production to shift from the party bringing the claim to the 
defendant, as well as whether parties could seek expedited treatment.
    249. Informal Complaints. Our current rules permitting the filing 
of informal complaints include a simple and straightforward evidentiary 
standard. Under section 1.41 of our rules, ``[r]equests should set 
forth clearly and concisely the facts relied upon, the relief sought, 
the statutory and/or regulatory provisions (if any) pursuant to which 
the request is filed and under which relief is sought, and the interest 
of the person submitting the request.'' Although our rules do not 
establish any specific pleading requirements for informal complaints, 
parties filing them should attempt to provide the Commission with 
sufficient information and specific facts that, if proven true, would 
constitute a violation of the open Internet rules.
    250. We find that our existing informal complaint rule offers an 
accessible and effective mechanism for parties--including consumers and 
small businesses with limited resources--to report possible 
noncompliance with our open Internet rules without being subject to 
burdensome evidentiary or pleading requirements. We conclude that there 
is no basis in the record for modifying the existing standard and 
decline to do so.
    251. Formal Complaints. Our current open Internet formal complaint 
rules provide broad flexibility to adapt to the myriad potential 
factual situations that might arise. For example, as noted in the 2010 
Open Internet Order, some cases can be resolved based on the pleadings 
if the complaint and answer contain sufficient factual material to 
decide the case. A simple case could thus be adjudicated in an 
efficient, streamlined manner. For more complex matters, the existing 
rules give the Commission discretion to require other procedures, 
including discovery, briefing, a status conference, oral argument, an 
evidentiary hearing, or referral to an administrative law judge (ALJ). 
Similarly, the rules provide the Commission discretion to grant 
temporary relief where appropriate.
    252. In addition, our open Internet formal complaint process 
already contemplates burden shifting. (As we noted in the 2010 Open 
Internet Order, our current processes permit the Commission to shift 
the burden of production where appropriate.) Generally, complainants 
bear the burden of proof and must demonstrate by a preponderance of the 
evidence that an alleged violation has occurred. A complainant must 
plead with specificity the basis of its claim and provide facts and 
documentation, when possible, to establish a prima facie rule 
violation. Defendants must answer each claim with particularity and 
furnish facts, supported by documentation or affidavit, demonstrating 
that the challenged practice complies with our rules. Defendants do not 
have the option of merely pointing out that the complainant has failed 
to meet his or her burden; they must show that they are in compliance 
with the rules. The complainant then has an opportunity to respond to 
the defendant's submission. We retain our authority to shift the burden 
of production when, for example, the evidence necessary to assess the 
alleged unlawful practice is predominately in the possession of the 
broadband provider. If a complaining party believes the burden of 
production should shift, it should explain why in the complaint. 
Complainants also must clearly state the relief requested. We conclude 
that we should retain our existing open Internet procedural rules and 
that all formal complaints that relate to open Internet disputes, 
including Internet traffic exchange disputes, will be subject to those 
rules. Although comparable to the section 208 formal complaint rules, 
the open Internet rules are less burdensome on complainants, who in 
this context are likely to be consumers or small edge providers with 
limited resources. (The section 208 rules, for example, require 
complainants to submit information designations, proposed findings of 
fact and conclusions of law, and affidavits demonstrating the basis for 
complainant's belief for unsupported allegations and why complainant 
could not ascertain facts from any source. See, e.g., 47 CFR 1.721(a) 
(5), (6), (10). The open Internet formal complaint rules do not contain 
similar requirements.) Moreover, as described above, the open Internet 
procedural rules allow the Commission broader flexibility in tailoring 
proceedings to fit particular cases. (For example, under the open 
Internet rules, the Commission may order an evidentiary hearing before 
an administrative law judge (ALJ) or Commission staff. See 47 CFR 
8.14(e)(1), (g). The section 208 rules contain no such provision. In 
addition, unlike the section 208 rules, the open Internet rules do not 
contain numerical limits on discovery requests. Compare id. section 
8.14(f) with id. section 1.729(a).)
    253. Several commenters stress the need for speedy resolution of 
complaints, given the rapid pace of Internet commerce and the potential 
consumer harms and market chilling effects deriving from slow 
resolution. While we share these concerns, we decline to adopt fixed, 
short deadlines for resolving formal complaints but pledge to move 
expeditiously. As noted in the 2010 Open Internet Order, the Commission 
may shorten deadlines or otherwise revise procedures to expedite the 
adjudication of complaints. Additionally, the Commission will 
determine, on the basis of the evidence before it, whether temporary 
relief should be afforded any party pending final resolution of a 
complaint and, if so, the nature of any such temporary relief. (The 
Supreme Court has affirmed

[[Page 19775]]

the Commission's authority to impose interim injunctive relief pursuant 
to section 4(i) of the Act.) As noted above, some open Internet cases 
may be straightforward and suitable for decision in a 60 to 90 day 
timeframe. Other cases may be more factually and technologically 
complex, requiring more time for the parties to pursue discovery and 
build an adequate record, and sufficient time for the Commission to 
make a reasoned decision. Therefore, we find that the existing 
process--allowing parties to request expedited treatment--best fits the 
needs of potential open Internet formal complaints.
c. Effective Access To Dispute Resolution
    254. In this section, we adopt the proposal from the 2014 Open 
Internet NPRM to establish an ombudsperson to assist consumers, 
businesses, and organizations with open Internet complaints and 
questions by ensuring these parties have effective access to the 
Commission's processes that protect their interests. The record filed 
supports our conclusion that these parties would benefit from having an 
ombudsperson as a point of contact within the Commission for questions 
and complaints.
    255. Comments in support of the establishment of an ombudsperson 
clearly demonstrate the range of groups a dedicated ombudsperson can 
serve. For example, the American Association of People with 
Disabilities expressed particular interest in the potential of the 
ombudsperson to monitor concerns regarding accessibility and the open 
Internet. In addition, the comments of Higher Education Libraries asked 
that libraries be amongst the groups served by the ombudsperson and 
those of the Alaska Rural Coalition expressed interest in the 
ombudsperson also being accessible to small carriers with concerns. In 
contrast, some commenters expressed concerns about the creation of a 
dedicated ombudsperson. However, as described below, the ombudsperson 
will work as a point of contact and a source of assistance as needed, 
not as an advocate or as an officer who must be approached for 
approval, addressing many of these concerns.
    256. The Open Internet Ombudsperson will serve as a point of 
contact to provide assistance to individuals and organizations with 
questions or complaints regarding the open Internet to ensure that 
small and often unrepresented groups reach the appropriate bureaus and 
offices to address specific issues of concern. For example, the 
ombudsperson will be able to provide initial assistance with the 
Commission's dispute resolution procedures by directing such parties to 
the appropriate templates for formal and informal complaints. We expect 
the ombudsperson will assist interested parties in less direct but 
equally important ways. These could include conducting trend analysis 
of open Internet complaints and, more broadly, market conditions, that 
could be summarized in reports to the Commission regarding how the 
market is functioning for various stakeholders. The ombudsperson may 
investigate and bring attention to open Internet concerns, and refer 
matters to the Enforcement Bureau for potential further investigation. 
The ombudsperson will be housed in the Consumer & Governmental Affairs 
Bureau, which will remain the initial informal complaint intake point, 
and will coordinate with other bureaus and offices, as appropriate, to 
facilitate review of inquiries and complaints regarding broadband 
services.
3. Complaint Processes and Forms of Dispute Resolution
a. Complaint Filing Procedures
    257. In the 2014 Open Internet NPRM, we sought comment on how open 
Internet complaints should be received, processed, and enforced. We 
asked if there were ways to improve access to our existing informal and 
formal complaint processes, especially for consumers, small businesses, 
and other entities with limited resources and knowledge of how our 
complaint processes work. We also asked whether the current enforcement 
and dispute resolution tools at the Commission's disposal are 
sufficient for resolving violations of open Internet rules.
    258. Informal Complaints. First, we will implement processes to 
make it easier to lodge informal open Internet complaints, including a 
new, more intuitive online complaint interface. The Commission recently 
launched a new Consumer Help Center, which provides a user-friendly, 
streamlined means to access educational materials on consumer issues 
and to file complaints. Consumers who seek to file an open Internet 
complaint should visit the Consumer Help Center portal and click the 
Internet icon for the materials or the online intake system for 
complaints. The complaint intake system is designed to guide the 
consumer efficiently through the questions that need to be answered in 
order to file a complaint. The Consumer Help Center will make available 
aggregate data about complaints received, including those pertaining to 
open Internet issues. Some data is currently available, with additional 
and more granular data to be provided over time. We believe these 
efforts will improve access to the Commission's open Internet complaint 
processes.
    259. Formal Complaints. With respect to formal complaints, we amend 
the Commission's Part 8 open Internet rules to require electronic 
filing of all pleadings in open Internet formal complaint proceedings. 
Currently, parties to such proceedings must file hard copies of 
pleadings with the Office of the Secretary. This process is time-
consuming for the parties and makes it difficult for the public to 
track case developments. Although members of the public may obtain 
copies of the pleadings from the Commission's Reference Information 
Center, there is no way to search for or view pleadings electronically. 
Today's actions modernize and reform these existing procedures. (The 
rule changes described in this section do not apply to open Internet 
informal complaints. Consumers will continue to have the ability to 
file informal complaints electronically with the Consumer & 
Governmental Affairs Bureau. The form for filing an informal complaint 
is available at https://consumercomplaints.fcc.gov/hc/en-us.)
    260. In 2011, the Commission released a Report and Order revising 
part 1 and part 0 of its rules. One aspect of the Part 1 Order was a 
requirement that docketing and electronic filing begin to be utilized 
in proceedings involving ``[n]ewly filed section 208 formal common 
carrier complaints and newly filed section 224 pole attachment 
complaints before the Enforcement Bureau.'' On November 12, 2014, the 
Commission released an Order that amended its procedural rules 
governing formal complaints under section 208 and pole attachment 
complaints under section 224 to require electronic filing. We 
established within ECFS a ``Submit a Non-Docketed Filing'' module where 
all such complaints must be filed because staff must review a complaint 
for conformance with the Commission's rules before the matter can 
receive its own unique ECFS proceeding number.
    261. We now extend those rule changes to open Internet formal 
complaints. (We hereby amend the caption for the ECFS docket to 
``section 208 and 224 and Open Internet Complaint Inbox, Restricted 
Proceedings.'' We also amend rule 8.16, which governs confidentiality 
of proprietary information, to conform to the changes we made regarding 
confidentiality in the section 208 and section 224 complaint rules. See 
infra

[[Page 19776]]

Appendix (detailing revisions to 47 CFR 8.16).) When filing such a 
complaint, as of the effective date of this Order, the complainant will 
be required to select ``Open Internet Complaint: Restricted 
Proceeding'' from the ``Submit a Non-Docketed Filing'' module in ECFS. 
The filing must include the complaint, as well as all attachments to 
the complaint. (All electronic filings must be machine-readable, and 
files containing text must be formatted to allow electronic searching 
and/or copying (e.g., in Microsoft Word or PDF format). Non-text 
filings (e.g., Microsoft Excel) must be submitted in native format. Be 
certain that filings submitted in .pdf or comparable format are not 
locked or password-protected. If those restrictions are present (e.g., 
a document is locked), the ECFS system may reject the filing, and a 
party will need to resubmit its document within the filing deadline. 
The Commission will consider granting waivers to this electronic filing 
requirement only in exceptional circumstances.) When using ECFS to 
initiate new proceedings, a complainant no longer will have to file its 
complaint with the Office of the Secretary unless the complaint 
includes confidential information.
    262. Enforcement Bureau staff will review new open Internet formal 
complaints for conformance with procedural rules (including fee 
payment). As of the effective date of this Order, complainants no 
longer will submit a hard copy of the complaint with the fee payment as 
described in rule 1.1106. Instead, complainants must first transmit the 
complaint filing fee to the designated payment center and then file the 
complaint electronically using ECFS. (Complainants may transmit the 
complaint filing fee via check, wire transfer, or electronically using 
the Commission's Fee Filer System (Fee Filer).)
    263. Assuming a complaint satisfies this initial procedural review, 
Enforcement Bureau staff then will assign an EB file number to the 
complaint (EB Identification Number), give the complaint its own case-
specific ECFS proceeding number, and enter both the EB Identification 
Number and ECFS proceeding number into ECFS. At that time, Enforcement 
Bureau staff will post a Notice of Complaint Letter in the case-
specific ECFS proceeding and transmit the letter (and the complaint) 
via email to the defendant. On the other hand, if a filed complaint 
does not comply with the Commission's procedural rules, Enforcement 
Bureau staff will serve a rejection letter on the complainant and post 
the rejection letter and related correspondence in ECFS. Importantly, 
the rejection letter will not preclude the complainant from curing the 
procedural infirmities and refiling the complaint.
    264. As of the effective date of this Order, all pleadings, 
attachments, exhibits, and other documents in open Internet formal 
complaint proceedings must be filed using ECFS, both in cases where the 
complaint was initially filed in ECFS and in pending cases filed under 
the old rules. With respect to complaints filed prior to the effective 
date of this Order, Enforcement Bureau staff will assign an individual 
ECFS proceeding number to each existing proceeding and notify existing 
parties by email of this new ECFS number. This ECFS proceeding number 
will be in addition to the previously-assigned number. The first step 
in using ECFS is to input the individual case's ECFS proceeding number 
or EB Identification Number. The new rules allow parties to serve post-
complaint submissions on opposing parties via email without following 
up by regular U.S. mail. Parties must provide hard copies of 
submissions to staff in the Market Disputes Resolution Division of the 
Enforcement Bureau upon request.
    265. Consistent with existing Commission electronic filing 
guidelines, any party asserting that materials filed in an open 
Internet formal complaint proceeding are proprietary must file with the 
Commission, using ECFS, a public version of the materials with any 
proprietary information redacted. The party also must file with the 
Secretary's Office an unredacted hard copy version that contains the 
proprietary information and clearly marks each page, or portion 
thereof, using bolded brackets, highlighting, or other distinct 
markings that identify the sections of the filing for which a 
proprietary designation is claimed. (Filers must ensure that 
proprietary information has been properly redacted and thus is not 
viewable. If a filer inadvertently discloses proprietary information, 
the Commission will not be responsible for that disclosure.) Each page 
of the redacted and unredacted versions must be clearly identified as 
the ``Public Version'' or the ``Confidential Version,'' respectively. 
Both versions must be served on the same day.
b. Alternative Dispute Resolution
    266. The Commission sought comment on various modes of alternative 
dispute resolution for resolving open Internet disputes. Currently, 
parties with disputes before the Commission are free to voluntarily 
engage in mediation, which is offered by the Market Disputes Resolution 
Division (MDRD) at no charge to the parties. This process has worked 
well and has led to the effective resolution of numerous complaints. We 
will take steps to improve awareness of this approach. In the 2014 Open 
Internet NPRM, we asked whether other approaches, such as arbitration, 
should be considered, in order to ensure access to dispute resolution 
by smaller edge providers and other entities without resources to 
engage in the Commission's formal complaint process.
    267. We decline to adopt arbitration procedures or to mandate 
arbitration for parties to open Internet complaint proceedings. Under 
the rules adopted today, parties are still free to engage in mediation 
and outside arbitration to settle their open Internet disputes, but 
alternative dispute resolution will not be required. (As a general 
matter, the Commission lacks the ability to subdelegate its authority 
over these disputes to a private entity, like a third-party arbitrator, 
see U.S. Telecom Ass'n v. FCC, 359 F.3d 554, 566 (D.C. Cir. 2004) 
(``[W]hile federal agency officials may subdelegate their decision-
making authority to subordinates absent evidence of contrary 
congressional intent, they may not subdelegate to outside entities-
private or sovereign-absent affirmative evidence of authority to do 
so''), and ``may not require any person to consent to arbitration as a 
condition of entering into a contract or obtaining a benefit.'' As 
noted in the 2014 Open Internet NPRM, however, mandatory third-party 
arbitration may be allowed so long as it is subject to de novo review 
by the Commission.) Commenters generally do not favor arbitration in 
this context and recommend that the Commission not adopt it as the 
default method for resolving complaints. Commenters suggest that 
mandatory arbitration, in particular, may more frequently benefit the 
party with more resources and more understanding of dispute procedure, 
and therefore should not be adopted. We agree with these concerns and 
conclude that adoption of arbitration rules is not necessary or 
appropriate in this context.
c. Multistakeholder Processes and Technical Advisory Groups
    268. In the 2014 Open Internet NPRM, the Commission sought comment 
on whether enforcement of open Internet rules--including resolution of 
open Internet disputes--could be supported by multistakeholder 
processes that enable the development of independent standards to guide 
the Commission in compliance determinations. The Commission also asked 
whether it

[[Page 19777]]

should incorporate the expertise of technical advisory groups into 
these determinations.
    269. We conclude that incorporating groups with technical expertise 
into our consideration of formal complaints has the potential to inform 
the Commission's judgment and improve our understanding of complex and 
rapidly evolving technical issues. By requiring electronic filing of 
all pleadings in open Internet formal complaint proceedings, we will 
enable interested parties to more easily track developments in the 
proceedings and participate as appropriate. Although formal complaint 
proceedings are generally restricted for purposes of the Commission's 
ex parte rules, interested parties may seek permission to file an 
amicus brief. The Commission ``consider[s] on a case-by-case basis 
motions by non-parties wishing to submit amicus-type filings addressing 
the legal issues raised in [a] proceeding,'' and grants such requests 
when warranted. (If a party to the proceeding is a member of or is 
otherwise represented by an entity that requests leave to file an 
amicus brief, the entity must disclose that affiliation in its 
request.) Thus, for example, the Commission granted a motion for leave 
to file an amicus brief in a section 224 pole attachment complaint 
proceeding ``in light of the broad policy issues at stake.
    270. To further advance the values underlying multistakeholder 
processes--inclusivity, transparency, and expertise--we also amend our 
Part 8 formal complaint rules by delegating authority to the 
Enforcement Bureau, in its discretion, to request a written opinion 
from an outside technical organization. As reviewing courts have 
established, ``[a] federal agency may turn to an outside entity for 
advice and policy recommendations, provided the agency makes the final 
decisions itself.''
    271. In this instance, given the potential complexity of the issues 
in open Internet formal complaint proceedings, it may be particularly 
useful to obtain objective advice from industry standard-setting bodies 
or other similar organizations. Providing Commission staff with this 
flexibility also will enable more informed determinations of technical 
Internet issues that reflect current industry standards and permit 
staff to keep pace with rapidly changing technology. (Whenever 
possible, the Enforcement Bureau should request advisory opinions from 
expert organizations whose members do not include any of the parties to 
the proceeding. If no such organization exists, the Enforcement Bureau 
may refer issues to an expert organization with instructions that 
representatives of the parties to the complaint proceeding may not 
participate in the organization's consideration of the issues referred 
or the drafting of its advisory opinion.) Expert organizations will not 
be required to respond to requests from the Enforcement Bureau for 
opinions; however, any organization that elects to do so must provide 
the opinion within 30 days of the request--unless otherwise specified 
by the staff--in order to facilitate timely dispute resolution. We find 
that this approach will allow for the inclusivity the multistakeholder 
process offers, while also providing the predictability and legal 
certainty of the Commission's formal dispute resolution process.
    272. For informal complaints and investigations, the Enforcement 
Bureau's efforts will continue to be informed by resolutions of formal 
complaints, and will also continue to be informed by the standards 
developed by existing multistakeholder, industry, and consumer groups. 
The Enforcement Bureau will also work with interested parties on an 
informal basis to identify ways to promote compliance with the open 
Internet rules.

F. Legal Authority

    273. We ground the open Internet rules we adopt today in multiple 
sources of legal authority--section 706, Title II, and Title III of the 
Communications Act. We marshal all of these sources of authority toward 
a common statutorily-supported goal: To protect and promote Internet 
openness as platform for competition, free expression and innovation; a 
driver of economic growth; and an engine of the virtuous cycle of 
broadband deployment.
    274. We therefore invoke multiple, complementary sources of legal 
authority. As a number of parties point out, our authority under 
section 706 is not mutually exclusive with our authority under Titles 
II and III of the Act. Rather, we read our statute to provide several, 
alternative sources of authority that work in concert toward common 
ends. As described below, under section 706, the Commission has the 
authority to adopt these open Internet rules to encourage and 
accelerate the deployment of broadband to all Americans. In the 
Declaratory Ruling and Order below, we find, based on the current 
factual record, that BIAS is a telecommunications service subject to 
Title II and exercise our forbearance authority to establish a ``light-
touch'' regulatory regime, which includes the application of sections 
201 and 202. This finding both removes the common carrier limitation 
from the exercise of our affirmative section 706 authority and also 
allows us to exercise authority directly under sections 201 and 202 of 
the Communications Act in adopting today's rules. Finally, these rules 
are also supported by our Title III authority to protect the public 
interest through spectrum licensing. In this section, we discuss the 
basis and scope of each of these sources of authority and then explain 
their application to the open Internet rules we adopt today.
1. Section 706 Provides Affirmative Legal Authority for Our Open 
Internet Rules
    275. Section 706 affords the Commission affirmative legal authority 
to adopt all of today's open Internet rules. Section 706(a) directs the 
Commission to take actions that ``shall encourage the deployment on a 
reasonable and timely basis of advanced telecommunications capability 
to all Americans.'' To do so, the Commission may utilize ``in a manner 
consistent with the public interest, convenience, and necessity, price 
cap regulation, regulatory forbearance, measures that promote 
competition in the local telecommunications market, or other regulating 
methods that remove barriers to infrastructure investment.'' Section 
706(b), in turn, directs that the Commission ``shall take immediate 
action to accelerate deployment of such capability by removing barriers 
to infrastructure investment and by promoting competition in the 
telecommunications market,'' if it finds after inquiry that advanced 
telecommunications capability is not being deployed to all Americans in 
a reasonable and timely fashion. ``Advanced telecommunications 
capability'' is defined as ``high-speed, switched, broadband 
telecommunications capability that enables users to originate and 
receive high-quality voice, data, graphics, and video 
telecommunications using any technology.'' Sections 706(a) and (b) each 
provide an express, affirmative grant of authority to the Commission 
and the rules we adopt today fall well within their scope.
    276. Section 706(a) and (b) Are Express Grants of Authority. In 
Verizon, the D.C. Circuit squarely upheld as reasonable the 
Commission's reading of section 706(a) as an affirmative grant of 
authority. (Verizon, 740 F.3d at 637 (``The question, then, is this: 
Does the Commission's current understanding of section 706(a) as a 
grant of regulatory authority represent a reasonable

[[Page 19778]]

interpretation of an ambiguous statute? We believe it does.'') A few 
commenters argue that the court incorrectly concluded that section 
706(a) and (b) are express grants of authority. For the reasons 
discussed in the text, by the Commission in the 2010 Open Internet 
Order, and the court in Verizon and In re FCC, we disagree.) Finding 
that provision ambiguous, the court upheld the Commission's 
interpretation as consistent with the statutory text, (As the Verizon 
court explained, for example, ``section 706(a)'s reference to state 
commissions does not foreclose such a reading'' of section 706(a) as an 
express grant of authority. Id. at 638. Nor, as one of the dissents 
suggests, (see Pai Dissent at 55), is the statute's reference to 
``[s]tate commission'' rendered meaningless by the Commission's 
reaffirmation that BIAS is an interstate service for regulatory 
purposes. The Commission's interpretation does not preclude all state 
commission action in this area, just that which is inconsistent with 
the federal regulatory regime we adopt today.) legislative history, and 
the Commission's lengthy history of regulating Internet access.
    277. Separately addressing section 706(b), the D.C. Circuit held, 
citing similar reasons, that the ``Commission has reasonably 
interpreted section 706(b) to empower it to take steps to accelerate 
broadband deployment if and when it determines that such deployment is 
not ``reasonable and timely.'' The 10th Circuit, in upholding the 
Commission's reform of our universal service and inter-carrier 
compensation regulatory regime, likewise concluded that the Commission 
reasonably construed section 706(b) as an additional source of 
authority for those regulations.
    278. In January, the Commission adopted the 2015 Broadband Progress 
Report, which determined that advanced telecommunications capability is 
not being deployed in a reasonable and timely manner to all Americans. 
That determination triggered our authority under section 706(b) to take 
immediate action, including the adoption of today's open Internet 
rules, to accelerate broadband deployment to all Americans.
    279. We interpret sections 706(a) and 706(b) as independent, 
complementary sources of affirmative Commission authority for today's 
rules. Our interpretation of section 706(a) as a grant of express 
authority is in no way dependent upon our findings in the section 
706(b) inquiry. Thus, even if the Commission's inquiry were to have 
resulted in a positive conclusion such that our section 706(b) 
authority were not triggered this would not eliminate the Commission's 
authority to take actions to encourage broadband deployment under 
section 706(a). (The Commission takes such measures precisely to 
achieve section 706(b)'s goal of accelerating deployment. That they may 
succeed in achieving that goal so as to contribute to a positive 
section 706(b) finding does not subsequently render them unnecessary or 
unauthorized without any further Commission process. Even if that were 
not the case, independent section 706(a) authority would remain. We 
mention, however, two legal requirements that appear relevant. First, 
section 408 of the Act mandates that ``all'' FCC orders (other than 
orders for the payment of money) ``shall continue in force for the 
period of time specified in the Order or until the Commission or a 
court of competent jurisdiction issues a superseding Order.'' 47 U.S.C. 
408. Second, the Commission has a ``continuing obligation to practice 
reasoned decisionmaking'' that includes revisiting prior decisions to 
the extent warranted. Aeronautical Radio v. FCC, 928 F.2d 428 (D.C. 
Cir. 1991). We are aware of no reason why these requirements would not 
apply in this context.)
    280. We reject arguments that we lack rulemaking authority to 
implement section 706 of the 1996 Act. In Verizon, the D.C. Circuit 
suggested that section 706 was part of the Communications Act of 1934. 
Under such a reading, the Commission would have all its standard 
rulemaking authority under sections 4(i), 201(b) and 303(r) to adopt 
rules implementing that provision. (47 U.S.C. 154(i) (``The Commission 
may . . . make such rules and regulations . . . not inconsistent with 
this chapter, as may be necessary in the execution of its 
functions.''); 47 U.S.C. 201(b) (``The Commission may prescribe such 
rules and regulations as may be necessary in the public interest to 
carry out the provisions of this chapter.''); 47 U.S.C. 303(r) 
(``Except as otherwise provided in this chapter, the Commission from 
time to time, as public convenience, interest, or necessity requires, 
shall . . . [m]ake such rules and regulations and prescribe such 
restrictions and conditions, not inconsistent with law, as may be 
necessary to carry out the provisions of this chapter''). Even if this 
were not the case, by its terms our section 4(i) rulemaking authority 
is not limited just to the adoption of rules pursuant to substantive 
jurisdiction under the Communications Act, and the Verizon court cited 
as reasonable the Commission's view that Congress, in placing upon the 
Commission the obligation to carry out the purposes of section 706, 
``necessarily invested the Commission with the statutory authority to 
carry out those acts.''
    281. The Open Internet Rules Fall Well Within the Scope of Our 
section 706 Authority. In Verizon, the D.C. Circuit agreed with the 
Commission that while authority under section 706 may be broad, it is 
not unbounded. Both the Commission and the court have articulated its 
limits. First, section 706 regulations must be within the scope of the 
Commission's subject matter jurisdiction over ``interstate and foreign 
communications by wire and radio.'' (Some have read this to require 
that regulations under section 706 must be ancillary to existing 
Commission authority in Title II, III or VI of the Act. We disagree. To 
be sure, with the Commission's exercise of both section 706 and 
ancillary authority, regulations must be within the Commission's 
subject matter jurisdiction. Indeed, this is the first prong of the 
test for ancillary jurisdiction. American Library Ass'n v. FCC, 406 
F.3d 689, 703-04 (D.C. Cir. 2005). But we do not read the Verizon 
decision as applying the second prong--which requires that the 
regulation be sufficiently linked to another provision of the Act--to 
our exercise of section 706 authority. Section 706 ``does not limit the 
Commission to using other regulatory authority already at its disposal, 
but instead grants it the power necessary to fulfill the statute's 
mandate.'' See Verizon, 740 F.3d at 641 (citing 2010 Open Internet 
Order, 25 FCC Rcd at 17972, para. 123)) And second, any such 
regulations must be designed to achieve the purpose of section 706(a)--
to ``encourage the deployment on a reasonable and timely basis of 
advanced telecommunications capability to all Americans.''
    282. In Verizon, the court firmly concluded that the Commission's 
2010 Open Internet Order regulations fell within the scope of section 
706. It explained that the rules ``not only apply directly to broadband 
providers, the precise entities to which section 706 authority to 
encourage broadband deployment presumably extends, but also seek to 
promote the very goal that Congress explicitly sought to promote.'' 
Further, the court credited ``the Commission's prediction that the Open 
Internet Order regulations will encourage broadband deployment.'' The 
same is true of the open Internet rules we adopt today. Our regulations 
again only apply to last-mile providers of broadband services--services 
that are not only within our subject matter

[[Page 19779]]

jurisdiction, but also expressly within the terms of section 706. (In 
response to parties expressing concerns that section 706 could be read 
to impose regulations on edge providers or others in the Internet 
ecosystem, we emphasize that today's rules apply only to last-mile 
broadband providers. We reject calls from other commenters to exercise 
our section 706 authority to adopt open Internet regulations for edge 
providers. Today's rules are specifically designed to address broadband 
providers' incentives and ability to erect barriers that harm the 
virtuous cycle. We see no basis for applying these rules to any other 
providers.) And, again, each of our rules is designed to remove 
barriers in order to achieve the express purposes of section 706. We 
also find that our rules will provide additional benefits by promoting 
competition in telecommunications markets, for example, by fostering 
competitive provision of VoIP and video services and informing 
consumers' choices.
2. Authority for the Open Internet Rules Under Title II with 
Forbearance
    283. In light of our Declaratory Ruling below, the rules we adopt 
today are also supported by our legal authority under Title II to 
regulate telecommunications services. For the reasons set forth below, 
we have found that BIAS is a telecommunications service and, for mobile 
broadband, commercial mobile services or its functional equivalent. 
While we forbear from applying many of the Title II regulations to this 
service, we have applied sections 201, 202, and 208 (along with related 
enforcement authorities). These provisions provide an alternative 
source of legal authority for today's rules.
    284. Section 201(a) places a duty on common carriers to furnish 
communications services subject to Title II ``upon reasonable request'' 
and ``establish physical connections with other carriers'' where the 
Commission finds it to be in the public interest. Section 201(b) 
provides that ``[a]ll charges, practices, classifications, and 
regulations for and in connection with such communication service, 
shall be just and reasonable, and any such charge, practice, 
classification, or regulation that is unjust or unreasonable is 
declared to be unlawful.'' It also gives the Commission the authority 
to ``prescribe such rules and regulations as may be necessary in the 
public interest to carry out the provisions of this chapter.'' Section 
202(a) makes it ``unlawful for any common carrier to make any unjust or 
unreasonable discrimination in charges, practices, classifications, 
regulations, facilities, or services for or in connection with like 
communication service, directly or indirectly, by any means or device, 
or to make or give any undue or unreasonable preference or advantage to 
any particular person, class of persons, or locality, or to subject any 
particular person, class of persons, or locality to any undue or 
unreasonable prejudice or disadvantage.'' As described below, these 
provisions provide additional independent authority for the rules we 
adopt today.
3. Title III Provides Additional Authority for Mobile Broadband 
Services
    285. With respect to mobile broadband Internet access services, 
today's open Internet rules are further supported by our authority 
under Title III of the Act to protect the public interest through 
spectrum licensing. While this authority is not unbounded, we exercise 
it here in reliance upon particular Title III delegations of authority.
    286. Section 303(b) directs the Commission, consistent with the 
public interest, to ``[p]rescribe the nature of the service to be 
rendered by each class of licensed stations and each station within any 
class.'' Today's conduct regulations do precisely this. They lay down 
rules about ``the nature of the service to be rendered'' by licensed 
entities providing mobile broadband Internet access service, making 
clear that this service may not be offered in ways that harm the 
virtuous cycle. Today's rules specify the form this service must take 
for those who seek licenses to offer it. In providing such licensed 
service, broadband providers must adhere to the rules we adopt today.
    287. This authority is bolstered by at least two additional 
provisions. First, as the D.C. Circuit has explained, section 303(r) 
supplements the Commission's ability to carry out its mandates via 
rulemaking. Second, section 316 authorizes the Commission to adopt new 
conditions on existing licenses if it determines that such action 
``will promote the public interest, convenience, and necessity.'' (The 
Commission also has ample authority to impose conditions to serve the 
public interest in awarding licenses in the first instance. See 47 
U.S.C. 309(a); 307(a).) Nor do today's rules work any fundamental 
change to those licenses. Rather we understand our rules to be largely 
consistent with the current operation of the Internet and the current 
practices of mobile broadband service providers.
4. Applying These Legal Authorities to Our Open Internet Rules
    288. Bright line rules. Applying these statutory sources of 
authority, we have ample legal bases on which to adopt the three 
bright-line rules against blocking, throttling, and paid 
prioritization. To begin, we have found that broadband providers have 
the incentive and ability to engage in such practices--which disrupt 
the unity of interests between end users and edge providers and thus 
threaten the virtuous cycle of broadband deployment. As the D.C. 
Circuit found with respect to the 2010 conduct rules, such broadband 
provider practices fall squarely within our section 706 authority. The 
court struck down the 2010 conduct rules after finding that the 
Commission failed to provide a legal justification that would take the 
rules out of the realm of impermissibly mandating common carriage, but 
did not find anything impermissible about the need for such rules to 
protect the virtuous cycle. Given our classification of broadband 
Internet access service as a telecommunications service, the court's 
rationale for vacating our 2010 conduct rules no longer applies and, 
for the reasons discussed above, we have legal justification to support 
our bright-line rules under section 706.
    289. Our bright-line rules are also well grounded in our Title II 
authority. In Title II contexts, the Commission has made clear that 
blocking traffic generally is unjust and unreasonable under section 
201. The Commission has likewise found it unjust and unreasonable for a 
carrier to refuse to allow non-harmful devices to attach to the 
network. And with respect to throttling, Commission precedent has 
likewise held that ``no carriers . . . may block, choke, reduce or 
restrict traffic in any way.'' We see no basis for departing from such 
precedents in the case of broadband Internet access services. As 
discussed above, the record here demonstrates that blocking and 
throttling broadband Internet access services harm consumers and edge 
providers, threaten the virtuous cycle, and deter broadband deployment. 
Consistent with our prior Title II precedents, we conclude that 
blocking and throttling of broadband Internet access services is an 
unjust and unreasonable practice under section 201(b).
    290. Some parties have suggested that the Commission cannot adopt a 
rule banning paid prioritization under Title II. We disagree and 
conclude that paid prioritization is an unjust and unreasonable 
practice under section 201(b). The unjust and unreasonable

[[Page 19780]]

standards in sections 201 and 202 afford the Commission significant 
discretion to distinguish acceptable behavior from behavior that 
violates the Act. Indeed, the very terms ``unjust'' and 
``unreasonable'' are broad, inviting the Commission to undertake the 
kind of line-drawing that is necessary to differentiate just and 
reasonable behavior on the one hand from unjust and unreasonable 
behavior on the other. (As the D.C. Circuit has stated, for example, 
``the generality of these terms . . . opens a rather large area for the 
free play of agency discretion, limited of course by the familiar 
`arbitrary' and `capricious' standard in the Administrative Procedure 
Act.'' Bell Atlantic Tel. Co. v. FCC, 79 F.3d 1195, 1202 (D.C. Cir. 
1996). Stated differently, because both sections ``set out broad 
standards of conduct,'' it is up to the ``Commission [to] give[] the 
standards meaning by defining practices that run afoul of carriers' 
obligation, either by rulemaking or by case-by-case adjudication.'')
    291. Acting within this discretion, the Commission has exercised 
its authority, both through adjudication and rulemaking, under section 
201(b) to ban unjust and unreasonable carrier practices as unlawful 
under the Act. (The Commission need not proceed through adjudication in 
announcing a broad ban on a particular practice. Indeed, the text of 
section 201(b) itself gives the Commission authority to ``prescribe 
such rules and regulations as may be necessary in the public interest 
to carry out the provisions of this chapter.'' 47 U.S.C. 201(b).) 
Although the particular circumstances have varied, in reviewing these 
precedents, we find that the Commission generally takes this step where 
necessary to protect competition and consumers against carrier 
practices for which there was either no cognizable justification for 
the action or where the public interest in banning the practice 
outweighed any countervailing policy concerns. Based on the record 
here, we find that paid prioritization presents just such a case, 
threatening harms to consumers, competition, innovation, and deployment 
that outweigh any possible countervailing justification of public 
interest benefit. Our interpretation and application of section 201(b) 
in this case to ban paid prioritization is further bolstered by the 
directive in section 706 to take actions that will further broadband 
deployment.
    292. Several commenters argue that we cannot ban paid 
prioritization under section 202(a), pointing to Commission precedents 
allowing carriers to engage in discrimination so long as it is 
reasonable. As discussed above, however, we adopt this rule pursuant to 
sections 201(b) and 706, not 202(a). And nothing about section 202(a) 
prevents us from doing so. We recognize that the Commission has 
historically interpreted section 202(a) to allow carriers to engage in 
reasonable discrimination, including by charging some customers more 
for better, faster, or more service. But those precedents stand for the 
proposition that such discrimination is permitted, not that it must be 
allowed in all cases. (To be sure, section 202(a) prohibits 
``unreasonable discrimination'' for ``like'' communications services. 
But this provision does not, on its face, deprive the Commission of the 
authority to take actions under other provisions of the Act against 
discrimination that may not constitute ``unreasonable discrimination'' 
under section 202(a).) None of those cases of discrimination presented 
the kinds of harms demonstrated in the record here--harms that form the 
basis of our decision to ban the practice as unjust and unreasonable 
under section 201(b), not 202(a). Furthermore, none of those precedents 
involved practices that the Commission has twice found threaten to 
create barriers to broadband deployment that should be removed under 
section 706. In light of our discretion in interpreting and applying 
sections 201 and 202 and insofar as section 706(a) is ``a `fail-safe' 
that `ensures' the Commission's ability to promote advanced services,'' 
we decline to interpret section 202(a) as preventing the Commission 
from exercising its authority under sections 201(b) and 706 to ban paid 
prioritization practices that harm Internet openness and deployment. 
(To the extent our prior precedents suggest otherwise, for the reasons 
discussed in the text, we disavow such an interpretation as applied to 
the open Internet context.)
    293. With respect to mobile broadband Internet access services, our 
bright-line rules are also grounded in the Commission's Title III 
authority to ensure that spectrum licensees are providing service in a 
manner consistent with the public interest.
    294. No-Unreasonable Interference/Disadvantage Standard. As with 
our bright-line rules, the no-unreasonable interference/disadvantage 
standard we adopt today is supported by our section 706 authority. 
Beyond the practices addressed by our bright-line rules, we recognize 
that broadband providers may implement unknown practices or engage in 
new types of practices in the future that could threaten harm by 
unreasonably interfering with the ability of end users and edge 
providers to use broadband Internet access services to reach one 
another. Such unreasonable interference creates a barrier that impedes 
the virtuous cycle, threatening the open nature of the Internet to the 
detriment of consumers, competition, and deployment. For conduct 
outside the three bright-line rules, we adopt the no-unreasonable 
interference/disadvantage standard to ensure that broadband providers 
do not engage in practices that threaten the open nature of the 
Internet in other or novel ways. This standard is tailored to the open 
Internet harms we wish to prevent, including harms to consumers, 
competition, innovation, and free expression--all of which could impair 
the virtuous cycle and thus deter broadband deployment, undermining the 
goals of section 706.
    295. The no-unreasonable interference/disadvantage standard is also 
supported by section 201 and 202 of the Act, which require broadband 
providers to engage in practices that are just and reasonable, and not 
unreasonably discriminatory. The prohibition on no-unreasonable 
interference/disadvantage represents our interpretation of these 201 
and 202 obligations in the open Internet context--an interpretation 
that is informed by section 706's goals of promoting broadband 
deployment. (Given the generality of the terms in sections 201 and 202, 
the Commission has significant discretion when interpreting how those 
sections apply to the different services subject to Title II.) In other 
words, for BIAS, we will evaluate whether a practice is unjust, 
unreasonable, or unreasonably discriminatory using this no-unreasonable 
interference/disadvantage standard. We note, however, that this rule--
on its own--does not constitute common carriage per se. (Not all 
requirements which apply to common carriers need impose common carriage 
per se. See Verizon, 740 F.3d at 652 (citing Cellco, 700 F.3d at 547 
(``[C]ommon carriage is not all or nothing--there is a gray area in 
which although a given regulation might be applied to common carriers, 
the obligations imposed are not common carriage per se. It is in this 
realm--the space between per se common carriage and per se private 
carriage--that the Commission's determination that a regulation does or 
does not confer common carrier status warrants deference.'')); Id. at 
653 (citing NARUC v. FCC, 533 F.2d 601, 608 (D.C. Cir. 1976) (NARUC II) 
(``Since it is clearly possible for a given entity to carry on many 
types of activities, it is at least

[[Page 19781]]

logical to conclude that one may be a common carrier with regard to 
some activities but not others.'')).) The no-unreasonable interference/
disadvantage standard, standing alone, contains no obligation to 
provide broadband service to any consumer or edge provider and would 
not, in its isolated application, necessarily preclude individualized 
negotiations so long as they do not otherwise unreasonably interfere 
with the ability of end users and edge providers to use broadband 
Internet access services to reach one another. Rather, particular 
practices or arrangements that are not barred by our rules against 
blocking, throttling, and paid prioritization will be evaluated based 
on the facts and circumstances they present using a series of factors 
specifically designed to protect the virtuous cycle of innovation and 
deployment. Thus, this is a rule tied to particular harms. Broadband 
providers, having chosen to provide BIAS, may not do so in a way that 
harms the virtuous cycle.
    296. For mobile broadband providers, the no-unreasonable 
interference/disadvantage standard finds additional support in the 
Commission's Title III authority as discussed above. The Commission has 
authority to ensure that broadband providers, having obtained a 
spectrum license to provide mobile broadband service, must provide that 
service in a manner consistent with the public interest. (The 
Commission has broad authority to prescribe the nature of services to 
be rendered by licensed stations, consistent with the public interest. 
47 U.S.C. 303(b); Cellco Partnership v. FCC, 700 F.3d 534, 542 (D.C. 
Cir. 2012) (``Although Title III does not `confer an unlimited power,' 
the Supreme Court has emphasized that it does endow the Commission with 
`expansive powers' and a `comprehensive mandate to `encourage the 
larger and more effective use of radio in the public interest.' '') 
(internal citations omitted) (quoting NBC v. United States, 319 U.S. 
190, 216, 219 (1943)).) This standard provides guidance on how the 
Commission will evaluate particular broadband practices, not otherwise 
barred by our bright-line rules, to ensure that they are consistent 
with the public interest.
    297. Transparency Rule. The D.C. Circuit severed and upheld the 
Commission's 2010 transparency rule in Verizon. While the majority did 
not expressly opine on the legal authority for the Commission's prior 
transparency rule, we feel confident that like the 2010 transparency 
rule, the enhanced transparency rule we adopt today falls well within 
multiple, independent sources of the Commission's authority. Beginning 
with section 706, the transparency rule ensures that consumers have 
sufficient information to make informed choices thereby facilitating 
competition in the local telecommunications market (to the extent 
competitive choices are available). (To encourage deployment of 
``advanced telecommunications capability,'' section 706(a) authorizes 
the Commission to engage in measures that ``promote competition in the 
local telecommunications market.'' 47 U.S.C. 1302(a). And section 
706(b) references ``promoting competition in the telecommunications 
market'' as among the immediate actions that Commission shall take to 
accelerate deployment of ``advanced telecommunications capability'' 
upon a determination that it is not being reasonably and timely 
deployed. 47 U.S.C. 1302(b). We interpret these references to the 
``telecommunications market'' to include the market for ``advanced 
telecommunications capability.'' In any event, having classified 
broadband Internet access services as ``telecommunications services,'' 
the Commission actions to promote competition among broadband Internet 
access services clearly promote competition in the ``telecommunications 
market.'') Furthermore, these disclosures remove potential information 
barriers by ensuring that edge providers have the necessary information 
to develop innovative products and services that rely on the broadband 
networks to reach consumers, a crucial arc of the virtuous cycle of 
broadband deployment. Our transparency rule is also supported by Title 
II. The Commission has relied on section 201(b) in related billing 
contexts to ensure that carriers convey accurate and sufficient 
information about the services they provide to consumers. We do so here 
as well. (For the reasons discussed above, we likewise rely on Title 
III to ensure that spectrum licensees provide mobile broadband Internet 
access service consistent with the public interest.)
    298. Enforcement. We also make clear that we have ample authority 
to enforce the rules we adopt today. Our rules today carry out the 
provisions of the Communications Act and are thus are covered by our 
Title IV and V authorities to investigate and enforce violations of 
these rules. With specific respect to section 706, as noted above, in 
Verizon, the D.C. Circuit suggested that section 706 was part of the 
Communications Act of 1934. Under such a reading, rules adopted 
pursuant to section 706 fall within our Title IV and V authorities. But 
even if this were not the case, we believe it reasonable to interpret 
section 706 itself as a grant of authority to investigate and enforce 
our rules. (Moreover, as discussed above, to the extent that section 
706 was not viewed as part of the Communications Act, we have authority 
under section 4(i) of the Communications Act to adopt rules 
implementing section 706. Thus, even then the Commission's rules, 
insofar as they are based on our substantive jurisdiction under section 
706, nonetheless would be issued under the Communications Act.) Our 
enforcement authority was not explicitly discussed in either the 2010 
Open Internet Order or the Verizon case. As noted above, the court did 
cite as reasonable, however, the Commission's view that Congress, in 
placing upon the Commission the obligation to carry out the purposes of 
section 706, ``necessarily invested the Commission with the statutory 
authority to carry out those acts.'' We believe it likewise reasonable 
to conclude that, having provided the Commission with affirmative legal 
authority to take regulatory measures to further section 706's goals, 
Congress invested the Commission with the authority to enforce those 
measures as needed to ensure those goals are achieved. Indeed, some 
have suggested that the Commission could take enforcement action 
pursuant to section 706 itself, without adopting rules.

G. Other Laws and Considerations

    299. In the 2014 Open Internet NPRM, the Commission tentatively 
concluded that it should retain provisions which make clear that the 
open Internet rules do not alter broadband providers' rights or 
obligations with respect to other laws, safety and security 
considerations, or the ability of broadband providers to make 
reasonable efforts to address transfers of unlawful content and 
unlawful transfers of content. We affirm this tentative conclusion and 
reiterate today that our rules are not intended to expand or contract 
broadband providers' rights or obligations with respect to other laws 
or safety and security considerations--including the needs of emergency 
communications and law enforcement, public safety, and national 
security authorities. Similarly, open Internet rules protect only 
lawful content, and are not intended to inhibit efforts by broadband 
providers to address unlawful transfers of content or transfers of 
unlawful content.

[[Page 19782]]

1. Emergency Communications and Safety and Security Authorities
    300. In the 2010 Open Internet Order we adopted a rule that 
acknowledges the ability of broadband providers to serve the needs of 
law enforcement and the needs of emergency communications and public 
safety, national, and homeland security authorities. This rule remains 
in effect today. To make clear that open Internet protections coexist 
with other legal frameworks governing the needs of safety and security 
authorities, we retain this rule, which reads as follows:

    Nothing in this part supersedes any obligation or authorization 
a provider of broadband Internet access service may have to address 
the needs of emergency communications or law enforcement, public 
safety, or national security authorities, consistent with or as 
permitted by applicable law, or limits the provider's ability to do 
so.

    301. In retaining this rule, we reiterate that the purpose of the 
safety and security provision is first to ensure that open Internet 
rules do not restrict broadband providers in addressing the needs of 
law enforcement authorities, and second to ensure that broadband 
providers do not use the safety and security provision without the 
imprimatur of a law enforcement authority, as a loophole to the rules. 
Application of the safety and security rule should be tied to 
invocation by relevant authorities rather than to a broadband 
provider's independent notion of the needs of law enforcement.
    302. The record is generally supportive of our proposal to 
reiterate that open Internet rules do not supersede any obligation a 
broadband provider may have--or limit its ability--to address the needs 
of emergency communications or law enforcement, public safety, or 
homeland or national security authorities (together, ``safety and 
security authorities''). Broadband providers have obligations under 
statutes such as the Communications Assistance for Law Enforcement Act, 
the Foreign Intelligence Surveillance Act, and the Electronic 
Communications Privacy Act that could in some circumstances intersect 
with open Internet protections. Likewise, in connection with an 
emergency, there may be federal, state, tribal, and local public safety 
entities, homeland security personnel, and other authorities that need 
guaranteed or prioritized access to the Internet in order to coordinate 
disaster relief and other emergency response efforts, or for other 
emergency communications. Most commenters recognize the benefits of 
clarifying that these obligations are not inconsistent with open 
Internet rules.
    303. Some commenters have proposed revisions to the existing rule 
which would expand its application to public utilities and other 
critical infrastructure operators. Because we make sufficient 
accommodation for these concerns elsewhere, we choose not to modify 
this provision to include critical infrastructure.
2. Transfers of Unlawful Content and Unlawful Transfers of Content
    304. In the NPRM, we tentatively concluded that we should retain 
the definition of reasonable network management we previously adopted, 
which does not include preventing transfer of unlawful content or the 
unlawful transfer of content as a reasonable practice. We affirm this 
tentative conclusion and re-state that open Internet rules do not 
prohibit broadband providers from making reasonable efforts to address 
the transfer of unlawful content or unlawful transfers of content to 
ensure that open Internet rules are not used as a shield to enable 
unlawful activity or to deter prompt action against such activity. For 
example, the no-blocking rule should not be invoked to protect 
copyright infringement, which has adverse consequences for the economy, 
nor should it protect child pornography. We reiterate that our rules do 
not alter the copyright laws and are not intended to prohibit or 
discourage voluntary practices undertaken to address or mitigate the 
occurrence of copyright infringement. After consideration of the 
record, we retain this rule, which is applicable to both fixed and 
mobile broadband providers engaged in broadband Internet access service 
and reads as follows:

Nothing in this part prohibits reasonable efforts by a provider of 
broadband Internet access service to address copyright infringement 
or other unlawful activity.

    305. Some commenters contend that this rule promotes the widespread 
use of intrusive packet inspection technologies by broadband providers 
to filter objectionable content and that such monitoring poses a threat 
to customers' privacy rights. Certainly, many broadband providers have 
the technical tools to conduct deep packet inspection of unencrypted 
traffic on their networks, and consumer privacy is a paramount concern 
in the Internet age. Nevertheless, we believe that broadband monitoring 
concerns are adequately addressed by the rules we adopt today, so we 
decline to alter this provision. This rule is limited to protecting 
``reasonable efforts . . . to address copyright infringement or other 
unlawful activity.'' We retain the discretion to evaluate the 
reasonableness of broadband providers' practices under this rule on a 
case-by-case basis. Consumers also have many tools at their disposal to 
protect their privacy against deep packet inspection--including SSL 
encryption, virtual private networks, and routing methods like TOR. 
Further, the complaint processes we adopt today add to these technical 
methods and advance consumer interests in this area.

IV. Declaratory Ruling: Classification of Broadband Internet Access 
Services

    306. The Verizon court upheld the Commission's use of section 706 
as a substantive source of legal authority to adopt open Internet 
protections. But it held that, ``[g]iven the Commission's still-binding 
decision to classify broadband providers . . . as providers of 
`information services,' '' open Internet protections that regulated 
broadband providers as common carriers would violate the Act. Rejecting 
the Commission's argument that broadband providers only served retail 
consumers, the Verizon court went on to explain that ``broadband 
providers furnish a service to edge providers, thus undoubtedly 
functioning as edge providers' `carriers,' '' and held that the 2010 
no-blocking and no-unreasonable discrimination rules impermissibly 
``obligated [broadband providers] to act as common carriers.''
    307. The Verizon decision thus made clear that section 706 affords 
the Commission with substantive authority and that open Internet 
protections are within the scope of that authority. And this Order 
relies on section 706 for the open Internet rules. But, in light of 
Verizon, absent a classification of broadband providers as providing a 
``telecommunications service,'' the Commission may only rely on section 
706 to put in place open Internet protections that steer clear of what 
the court described as common carriage per se regulation.
    308. Taking the Verizon decision's implicit invitation, we revisit 
the Commission's classification of the retail broadband Internet access 
service as an information service (The Commission has previously 
classified cable modem Internet access service, wireline broadband 
Internet access service, and Broadband over Power Line (BPL)-enabled 
Internet access service as information services. The Commission has 
referred to these services as ``wired'' broadband Internet access 
services. The Commission has also previously

[[Page 19783]]

classified ``wireless'' broadband Internet access, which it defined as 
a service that ``uses spectrum, wireless facilities and wireless 
technologies to provide subscribers with high-speed (broadband) 
Internet access capabilities, . . . whether offered using mobile, 
portable, or fixed technologies,'' as information services) and clarify 
that this service encompasses the so-called ``edge service.'' Based on 
the updated record, we conclude that retail broadband Internet access 
service is best understood today as an offering of a 
``telecommunications service.'' (As discussed in greater detail below, 
our classification decision arises from our reconsideration of past 
interpretations and applications of the Act. We thus conclude that the 
classification decisions in this Order appropriately apply only on a 
prospective basis. See, e.g., Verizon v. FCC, 269 F.3d 1098 (D.C. Cir. 
2001) (``In a case in which there is a substitution of new law for old 
law that was reasonably clear, a decision to deny retroactive effect is 
uncontroversial.'') (internal quotations omitted).)
    309. Below we discuss the history of the classification of 
broadband Internet access service, describe our rationale for 
revisiting that classification, and provide a detailed explanation of 
our reclassification of broadband Internet access service.

A. History of Broadband Internet Classification

    310. Congress created the Commission ``[f]or the purpose of 
regulating interstate and foreign commerce in communication by wire and 
radio so as to make available, so far as possible, to all people of the 
United States . . . a rapid, efficient, Nation-wide, and world-wide 
wire and radio communication service with adequate facilities at 
reasonable charges, for the purpose of the national defense, [and] for 
the purpose of promoting safety of life and property through the use of 
wire and radio communication.'' section 2 of the Communications Act 
grants the Commission jurisdiction over ``all interstate and foreign 
communication by wire or radio.'' As the Supreme Court explained in the 
radio context, Congress charged the Commission with ``regulating a 
field of enterprise the dominant characteristic of which was the rapid 
pace of its unfolding'' and therefore intended to give the Commission 
sufficiently ``broad'' authority to address new issues that arise with 
respect to ``fluid and dynamic'' communications technologies. (National 
Broadcasting Co., Inc. v. United States, 319 U.S. 190, 219 (1943). The 
Court added that ``[i]n the context of the developing problems to which 
it was directed, the Act gave the Commission . . . expansive powers . . 
. [and] a comprehensive mandate.'') No one disputes that Internet 
access services are within the Commission's subject-matter jurisdiction 
and historically have been supervised by the Commission.
    311. The Computer Inquiries. In 1966, the Commission initiated its 
Computer Inquiries ``to ascertain whether the services and facilities 
offered by common carriers are compatible with the present and 
anticipated communications requirements of computer users.'' In the 
decision known as Computer I, the Commission required ``maximum 
separation'' between large carriers that offered data transmission 
services subject to common carrier requirements and their affiliates 
that sold data processing services. Refining this approach, in Computer 
II and Computer III the Commission required telephone companies that 
provided ``enhanced services'' over their own transmission facilities 
to separate out and offer on a common carrier basis the transmission 
component underlying their enhanced services.
    312. Commenters disagree about the significance of the Computer 
Inquiries. We believe the Computer Inquiries are relevant in at least 
two important respects. First, in Computer II the Commission 
distinguished ``basic'' from ``enhanced'' services, a distinction that 
Congress embraced when it adopted the Telecommunications Act of 1996. 
Basic services offered on a common carrier basis were subject to Title 
II; enhanced services were not. When Congress enacted the definitions 
of ``telecommunications service'' and ``information service'' in the 
Telecommunications Act of 1996, it substantially incorporated the 
``basic'' and ``enhanced'' service classifications. Because the 
statutory definitions substantially incorporated the Commission's 
terminology under the Computer Inquiries, Commission decisions 
regarding the distinction between basic and enhanced services--in 
particular, decisions regarding features that are ``adjunct to basic'' 
services--are relevant in this proceeding. (The Commission's definition 
of ``adjunct to basic'' services has been instrumental in determining 
which functions fall within the ``telecommunications systems 
management'' exception to the ``information service'' definition.)
    313. Second, the Computer Inquiries disprove the claim that the 
Commission has never before mandatorily applied Title II to the 
transmission component of Internet access service. (As discussed below, 
a large number of rural local exchange carriers (LECs) have also chosen 
to offer broadband transmission service as a telecommunications service 
subject to the provisions of Title II.) From 1980 to 2005, facilities-
based telephone companies were obligated to offer the transmission 
component of their enhanced service offerings--including broadband 
Internet access service offered via digital subscriber line (DSL)--to 
unaffiliated enhanced service providers on nondiscriminatory terms and 
conditions pursuant to tariffs or contracts governed by Title II. There 
is no disputing that until 2005, Title II applied to the transmission 
component of DSL service.
    314. Prior Classification Decisions. Several commenters, as well as 
the dissenting statements, claim that an unbroken line of Commission 
and court precedent, dating back to the Stevens Report in 1998, 
supports the classification of Internet access service as an 
information service, and that this classification is effectively etched 
in stone. These commenters ignore not only the Supreme Court but our 
precedent demonstrating that the relevant statutory definitions are 
ambiguous, and that classifying broadband Internet access service as a 
telecommunications service is a permissible interpretation of the Act. 
Indeed, several of the most vocal opponents of reclassification 
previously argued that the Commission not only may, but should, 
classify the transmission component of broadband Internet access 
service as a telecommunications service. (Contemporaneously, Verizon 
and the United States Telecom Association argued in the Gulf Power 
litigation before the Supreme Court that cable modem service includes a 
telecommunications service.)
    315. To begin with, these commenters misconstrue the scope of the 
Stevens Report, which was a report to Congress concerning the 
implementation of universal service mandates, and not a binding 
Commission Order classifying Internet access services. Moreover, when 
the Commission issued that report, in 1998, broadband Internet access 
service was at ``an early stage of deployment to residential 
customers'' and constituted a tiny fraction of all Internet 
connections. Virtually all households with Internet connections used 
traditional telephone service to dial-up their Internet Service 
Provider (ISP), which was typically a separate entity from their 
telephone company. In the Stevens Report, the Commission

[[Page 19784]]

stated that Internet access service as it was then typically being 
provided was an ``information service.'' The Stevens Report reserved 
judgment on whether entities that provided Internet access over their 
own network facilities were offering a separate telecommunications 
service. The Commission further noted that ``the question may not 
always be straightforward whether, on the one hand, an entity is 
providing a single information service with communications and 
computing components, or, on the other hand, is providing two distinct 
services, one of which is a telecommunications service.'' A few months 
after sending the Stevens Report to Congress, the Commission concluded 
that ``[a]n end-user may utilize a telecommunications service together 
with an information service, as in the case of Internet access.'' In a 
follow-up order, the Commission affirmed its conclusion that ``xDSL-
based advanced services constitute telecommunications services as 
defined by section 3(46) of the Act.'' (The definition of 
telecommunications service is now in section 3(53) of the Act, 47 
U.S.C. 153(53). The Advanced Services Remand Order was vacated in part 
by the D.C. Circuit in WorldCom v. FCC, 246 F.3d 690 (D.C. Cir. 2001). 
Specifically, the D.C. Circuit vacated the remand of the Commission's 
classification of DSL-based advanced services as ``telephone exchange 
service'' or ``exchange access.'' ``Telephone exchange service'' and 
``exchange access'' are relevant in determining whether a provider is a 
``local exchange carrier.'' It has no bearing on the classification of 
a particular service offering as a telecommunications or information 
service under the Act. As such, the further history of the Advanced 
Services Remand Order is inapposite to the Commission's discussion of 
telecommunications and information services in that Order.)
    316. The courts addressed the statutory classification of broadband 
Internet access service in June 2000, when the United States Court of 
Appeals for the Ninth Circuit held in AT&T Corp. v. City of Portland 
that cable modem service is a telecommunications service to the extent 
that the cable operator ``provides its subscribers Internet 
transmission over its cable broadband facility,'' and an information 
service to the extent the operator acts as a ``conventional'' ISP. The 
Ninth Circuit's decision thus put cable companies' broadband 
transmission service on a regulatory par with DSL transmission service. 
(In 2001, SBC Communications and BellSouth acknowledged the 
significance of the Computer Inquiries, the Advanced Services Order, 
and the Ninth Circuit's decision in City of Portland: ``The Commission 
currently views the DSL-enabled transmission path underlying incumbent 
LEC broadband Internet services as a `telecommunications service' under 
the Act. As the Ninth Circuit recognized, the exact same logic applies 
to cable broadband: `to the extent that [a cable ISP] provides its 
subscribers Internet transmission over its cable broadband facility, it 
is providing a telecommunications service as defined in the 
Communications Act.' '')
    317. Three months later, the Commission issued the Cable Modem 
Notice of Inquiry, which sought comment on whether cable modem service 
should be treated as a telecommunications service under Title II or an 
information service subject to Title I. In response, the Bell Operating 
Companies (BOCs) unanimously argued that the Commission lawfully could 
determine that cable modem service includes a telecommunications 
service. Verizon and Qwest argued that the transmission component of 
cable modem service is a telecommunications service. SBC Communications 
and BellSouth (both now part of AT&T) argued that the Commission should 
classify cable modem service as an integrated information service 
subject to Title I, but acknowledged that the Commission could lawfully 
find that cable modem service includes both a telecommunications 
service and an information service. Verizon, SBC, and BellSouth also 
agreed that the Commission could adopt a ``middle ground'' legal 
framework by finding that cable modem service is, in part, a 
telecommunications service, but grant relief from pricing and tariffing 
obligations by either declaring all providers of broadband Internet 
access service to be nondominant or by forbearing from enforcing those 
obligations. (Cable operators generally argued that the Commission 
should classify cable modem service as either a cable service or an 
information service, but not as a telecommunications service.)
    318. In March 2002, the Commission exercised its authority to 
interpret ambiguous language in the Act and addressed the 
classification of cable modem service in the Cable Modem Declaratory 
Ruling. The Commission stated that ``[t]he Communications Act does not 
clearly indicate how cable modem service should be classified or 
regulated.'' Based on a factual record that had been compiled at that 
time, the Commission described cable modem service as ``typically 
includ[ing] many and sometimes all of the functions made available 
through dial-up Internet access service, including content, email 
accounts, access to news groups, the ability to create a personal Web 
page, and the ability to retrieve information from the Internet.'' The 
Commission noted that cable modem providers often consolidated these 
functions ``so that subscribers usually do not need to contract 
separately with another Internet access provider to obtain discrete 
services or applications.'' (The Commission defined cable modem service 
as ``a service that uses cable system facilities to provide residential 
subscribers with high-speed Internet access, as well as many 
applications or functions that can be used with high-speed Internet 
access.'')
    319. The Commission identified a portion of cable modem service as 
``Internet connectivity,'' which it described as establishing a 
physical connection to the Internet and operating or interconnecting 
with the Internet backbone, and sometimes including protocol 
conversion, Internet Protocol (IP) address number assignment, DNS, 
network security, caching, network monitoring, capacity engineering and 
management, fault management, and troubleshooting. The Ruling also 
noted that ``[n]etwork monitoring, capacity engineering and management, 
fault management, and troubleshooting are Internet access service 
functions that . . . serve to provide a steady and accurate flow of 
information between the cable system to which the subscriber is 
connected and the Internet.'' The Commission distinguished these 
functions from ``Internet applications provided through cable modem 
services,'' including ``email, access to online newsgroups, and 
creating or obtaining and aggregating content,'' ``home pages,'' and 
``the ability to create a personal Web page.''
    320. The Commission found that cable modem service was ``an 
offering . . . which combines the transmission of data with computer 
processing, information provision, and computer interactivity, enabling 
end users to run a variety of applications.'' The Commission further 
concluded that, ``as it [was] currently offered,'' cable modem service 
as a whole met the statutory definition of ``information service'' 
because its components were best viewed as a ``single, integrated 
service that enables the subscriber to utilize Internet access 
service,'' with a telecommunications component that was ``not . . . 
separable from the data

[[Page 19785]]

processing capabilities of the service.'' Significantly, the Commission 
did not address whether DNS or any other features of cable modem 
service fell within the telecommunications systems management exception 
to the definition of ``information service'' as there was no reason to 
do so. The Cable Modem Declaratory Ruling also included a notice of 
proposed rulemaking seeking comment on, among other things, whether the 
Commission should require cable operators to give unaffiliated 
broadband Internet access service providers access to cable broadband 
networks.
    321. In October 2003, the United States Court of Appeals for the 
Ninth Circuit vacated the Commission's finding that cable modem service 
is an integrated information service. The court concluded that it was 
bound by the prior decision in City of Portland that ``the transmission 
element of cable broadband service constitutes telecommunications 
service under the terms of the Communications Act.''
    322. In 2005, the Supreme Court reversed the Ninth Circuit's 
decision and upheld the Cable Modem Declaratory Ruling in Brand X. The 
Court held that the word ``offering'' in the Communications Act's 
definitions of ``telecommunications service'' and ``information 
service'' is ambiguous, and that the Commission's finding that cable 
modem service is a functionally integrated information service was a 
permissible, though perhaps not the best, interpretation of the Act.
    323. Following Brand X, the Commission issued the Wireline 
Broadband Classification Order, which applied the ``information 
services'' classification at issue in the Cable Modem Declaratory 
Ruling to facilities-based wireline broadband Internet access services 
as well and eliminated the resulting regulatory asymmetry between cable 
companies and telephone companies offering wired Internet access 
service via DSL and other facilities. The Wireline Broadband 
Classification Order based this decision on a finding that ``providers 
of wireline broadband Internet access service offer subscribers the 
ability to run a variety of applications'' that fit the definition of 
information services, including those that enable access to email and 
the ability to establish home pages. The Commission therefore concluded 
that ``[w]ireline broadband Internet access service, like cable modem 
service, is a functionally integrated, finished service that 
inextricably intertwines information-processing capabilities with data 
transmission such that the consumer always uses them as a unitary 
service.'' The Commission also eliminated the Computer Inquiry 
requirements for wireline Internet access service. In 2006, the 
Commission issued the BPL-Enabled Broadband Order, which extended the 
information service classification to Internet access service provided 
over power lines.
    324. Subsequently, in 2007 the Commission released the Wireless 
Broadband Classification Order, which determined that wireless 
broadband Internet access service was likewise an information service 
under the Communications Act. The Wireless Broadband Classification 
Order also found that although ``the transmission component of wireless 
broadband Internet access service is `telecommunications' . . . the 
offering of the telecommunications transmission component as part of a 
functionally integrated Internet access service offering is not 
`telecommunications service' under section 3 of the [Communications] 
Act.''
    325. The Wireless Broadband Classification Order also considered 
the application of section 332 of Title III to wireless broadband 
Internet access service and concluded that ``mobile wireless broadband 
Internet access service does not meet the definition of `commercial 
mobile service' within the meaning of section 332 of the Act as 
implemented by the Commission's CMRS rules because such broadband 
service is not an `interconnected service,' as defined in the Act and 
the Commission's rules.''
    326. In 2010, the D.C. Circuit rejected the Commission's attempt to 
enforce open Internet principles based on the Commission's Title I 
ancillary authority in Comcast v. FCC. Following Comcast, the 
Commission issued a Notice of Inquiry (Broadband Classification NOI) 
that sought comment on the appropriate approach to broadband policy in 
light of the D.C. Circuit's decision. Shortly thereafter, the 
Commission released the 2010 Open Internet Order. The 2010 Order was 
based in part on a revised understanding of the Commission's Title I 
authority--as well as a variety of other statutory provisions including 
section 706--and was again challenged before the D.C. Circuit in 
Verizon v. FCC. Although the Verizon court accepted the Commission's 
reinterpretation of section 706 as an independent grant of legislative 
authority over broadband services, the court nonetheless vacated the 
no-blocking and antidiscrimination provisions of the Order as imposing 
de facto common carrier status on providers of broadband Internet 
access service in violation of the Commission's classification of those 
services as information services. (The Court also found that that 
authority did not allow the Commission to subject information services 
or providers of private mobile services to treatment as common 
carriers.)
    327. In response to the Verizon decision, the Commission released a 
Notice of Proposed Rulemaking (NPRM) seeking public input on the ``best 
approach to protecting and promoting Internet openness.'' Among other 
things, the 2014 Open Internet NPRM asked for discussion of the proper 
legal authority on which to base open Internet rules. The Commission 
proposed to rely on section 706 of the Telecommunications Act of 1996, 
but at the same time stated that it would ``seriously consider the use 
of Title II of the Communications Act as the basis for legal 
authority.'' The NPRM sought comment on the benefits of both section 
706 and Title II, and emphasized its recognition that ``both section 
706 and Title II are viable solutions.''

B. Rationale for Revisiting the Commission's Classification of 
Broadband Internet Access Services

    328. We now find it appropriate to revisit the classification of 
broadband Internet access service as an information service. The 
Commission has steadily and consistently worked to protect the open 
Internet for the last decade, starting with the adoption of the 
Internet Policy Statement up through its recent 2014 Open Internet NPRM 
following the D.C. Circuit's Verizon decision. Although the Verizon 
court accepted the Commission's interpretation of section 706 as an 
independent grant of authority over broadband services, it nonetheless 
vacated the no-blocking and antidiscrimination provisions of the Open 
Internet Order. As the Verizon decision explained, to the extent that 
conduct-based rules remove broadband service providers' ability to 
enter into individualized negotiations with edge providers, they impose 
per se common carrier status on broadband Internet access service 
providers, and therefore conflict with the Commission's prior 
designation of broadband Internet access services as information 
services. Thus, absent a finding that broadband providers were 
providing a ``telecommunications service,'' the D.C. Circuit's Verizon 
decision defined the bounds of the Commission's authority to adopt open 
Internet protections to those that do not amount to common carriage.
    329. The Brand X Court emphasized that the Commission has an 
obligation to consider the wisdom of its

[[Page 19786]]

classification decision on a continuing basis. An agency's evaluation 
of its prior determinations naturally includes consideration of the law 
affecting its ability to carry out statutory policy objectives. As 
discussed above, the record in the Open Internet proceeding 
demonstrates that broadband providers continue to have the incentives 
and ability to engage in practices that pose a threat to Internet 
openness, and as such, rules to protect the open nature of the Internet 
remain necessary. To protect the open Internet, and to end legal 
uncertainty, we must use multiple sources of legal authority to protect 
and promote Internet openness, to ensure that the Internet continues to 
grow as a platform for competition, free expression, and innovation; a 
driver of economic growth; and an engine of the virtuous cycle of 
broadband deployment, innovation, and consumer demand. Thus, we now 
find it appropriate to examine how broadband Internet access services 
are provided today.
    330. Changed factual circumstances cause us to revise our earlier 
classification of broadband Internet access service based on the 
voluminous record developed in response to the 2014 Open Internet NPRM. 
In the 2002 Cable Modem Declaratory Ruling, the Commission observed 
that ``the cable modem service business is still nascent, and the shape 
of broadband deployment is not yet clear. Business relationships among 
cable operators and their service offerings are evolving.'' However, 
despite the rapidly changing market for broadband Internet access 
services, the Commission's decisions classifying broadband Internet 
access service are based largely on a factual record compiled over a 
decade ago, during this early evolutionary period. The premises 
underlying that decision have changed. As the record demonstrates and 
we discuss in more detail below, we are unable to maintain our prior 
finding that broadband providers are offering a service in which 
transmission capabilities are ``inextricably intertwined'' with various 
proprietary applications and services. Rather, it is more reasonable to 
assert that the ``indispensable function'' of broadband Internet access 
service is ``the connection link that in turn enables access to the 
essentially unlimited range of Internet-based services.'' This is 
evident, as discussed below, from: (1) Consumer conduct, which shows 
that subscribers today rely heavily on third-party services, such as 
email and social networking sites, even when such services are included 
as add-ons in the broadband Internet access provider's service; (2) 
broadband providers' marketing and pricing strategies, which emphasize 
speed and reliability of transmission separately from and over the 
extra features of the service packages they offer; and (3) the 
technical characteristics of broadband Internet access service. We also 
note that the predictive judgments on which the Commission relied in 
the Cable Modem Declaratory Ruling anticipating vibrant intermodal 
competition for fixed broadband cannot be reconciled with current 
marketplace realities.

C. Classification of Broadband Internet Access Service

    331. In this section, we reconsider the Commission's prior 
decisions that classified wired and wireless broadband Internet access 
service as information services, and conclude that broadband Internet 
access service is a telecommunications service subject to our 
regulatory authority under Title II of the Communications Act 
regardless of the technological platform over which the service is 
offered. (A ``telecommunications service'' is ``the offering of 
telecommunications for a fee directly to the public, or to such classes 
of users as to be effectively available directly to the public, 
regardless of the facilities used.'' 47 U.S.C. 153(53). 
``Telecommunications'' is ``the transmission, between or among points 
specified by the user, of information of the user's choosing, without 
change in the form or content of the information as sent and 
received.'' Id. 153(50).) We both revise our prior classifications of 
wired broadband Internet access service and wireless broadband Internet 
access service, and classify broadband Internet access service provided 
over other technology platforms. In doing so, we exercise the well-
established power of federal agencies to interpret ambiguous provisions 
in the statutes they administer. The Supreme Court summed up this 
principle in Brand X:

In Chevron, this Court held that ambiguities in statutes within an 
agency's jurisdiction to administer are delegations of authority to 
the agency to fill the statutory gap in reasonable fashion. Filling 
these gaps, the Court explained, involves difficult policy choices 
that agencies are better equipped to make than courts. If a statute 
is ambiguous, and the implementing agency's construction is 
reasonable, Chevron requires a federal court to accept the agency's 
construction of the statute, even if the agency's reading differs 
from what the court believes is the best statutory interpretation.

    332. The Court's application of this Chevron test in Brand X makes 
clear our delegated authority to revisit our prior interpretation of 
ambiguous statutory terms and reclassify broadband Internet access 
service as a telecommunications service. The Court upheld the 
Commission's prior information services classification because ``the 
statute fails unambiguously to classify the telecommunications 
component of cable modem service as a distinct offering. This leaves 
federal telecommunications policy in this technical and complex area to 
be set by the Commission. . . .'' Where a term in the Act ``admit[s] of 
two or more reasonable ordinary usages, the Commission's choice of one 
of them is entitled to deference.'' The Court concluded, given the 
``technical, complex, and dynamic'' questions that the Commission 
resolved in the Cable Modem Declaratory Ruling, ``[t]he Commission is 
in a far better position to address these questions than we are.''
    333. Furthermore, reading the Brand X majority, concurring, and 
dissenting opinions together, it is apparent that most, and perhaps 
all, of the nine Justices believed that it would have been at least 
permissible under the Act to have classified the transmission service 
included with wired Internet access service as a telecommunications 
service. Justice Thomas, writing for the majority, noted that ``our 
conclusion that it is reasonable to read the Communications Act to 
classify cable modem service solely as an `information service' leaves 
untouched Portland's holding that the Commission's interpretation is 
not the best reading of the statute.'' Justice Breyer concurred with 
Justice Thomas, stating that he ``believe[d] that the Federal 
Communications Commission's decision f[e]ll[ ] within the scope of its 
statutorily delegated authority,'' although ``perhaps just barely.'' 
And in dissent, Justice Scalia, joined by Justices Souter and Ginsburg, 
found that the Commission had adopted ``an implausible reading of the 
statute'' and that ``the telecommunications component of cable-modem 
service retains such ample independent identity'' that it could only 
reasonably be classified as a separate telecommunications service.
    334. It is also well settled that we may reconsider, on reasonable 
grounds, the Commission's earlier application of the ambiguous 
statutory definitions of ``telecommunications service'' and 
``information service.'' Indeed, in Brand X, the Supreme Court, in the 
specific context of classifying cable modem service, instructed the 
Commission to reexamine its application of the Communications Act to 
this service ``on a continuing basis'':


[[Page 19787]]


[I]f the agency adequately explains the reasons for a reversal of 
policy, ``change is not invalidating, since the whole point of 
Chevron is to leave the discretion provided by the ambiguities of a 
statute with the implementing agency.'' ``An initial agency 
interpretation is not instantly carved in stone. On the contrary, 
the agency . . . must consider varying interpretations and the 
wisdom of its policy on a continuing basis,'' for example, in 
response to changed factual circumstances, or a change in 
administrations. . . .

    335. More recently, in FCC v. Fox Television Stations, Inc., the 
Supreme Court emphasized that, although an agency must acknowledge that 
it is changing course when it adopts a new construction of an ambiguous 
statutory provision, ``it need not demonstrate to a court's 
satisfaction that the reasons for the new policy are better than the 
reasons for the old one. . . .'' Rather, it is sufficient that ``the 
new policy is permissible under the statute, that there are good 
reasons for it, and that the agency believes it to be better, which the 
conscious change of course adequately indicates.'' We discuss in detail 
below why our conclusion that broadband Internet access service is a 
telecommunications service is well within our authority. Having 
determined that Congress gave the Commission authority to determine the 
appropriate classification of broadband Internet access service--and 
having provided sufficient justification of changed factual 
circumstances to warrant a reexamination of the Commission's prior 
classification--we find, upon interpreting the relevant statutory 
terms, that broadband Internet access service, as offered today, 
includes ``telecommunications,'' and falls within the definition of a 
``telecommunications service.''
1. Scope
    336. As discussed below, we conclude that broadband Internet access 
service is a telecommunications service. We define ``broadband Internet 
access service'' as a mass-market (By mass market, we mean services 
marketed and sold on a standardized basis to residential customers, 
small businesses, and other end-user customers such as schools and 
libraries. ``Schools'' would include institutions of higher education 
to the extent that they purchase these standardized retail services. 
See Higher Education and Libraries Comments at 11 (noting that 
institutions of higher education are not ``residential customers'' or 
``small businesses'' and uncertainty about whether institutions of 
higher education (and their libraries) are included in the term 
``schools'' because the term is sometimes interpreted as applying only 
to K through 12 schools). For purposes of this definition, ``mass 
market'' also includes broadband Internet access service purchased with 
the support of the E-rate, and Rural Healthcare programs, as well as 
any broadband Internet access service offered using networks supported 
by the Connect America Fund (CAF), but does not include enterprise 
service offerings or special access services, which are typically 
offered to larger organizations through customized or individually 
negotiated arrangements.) 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 explained 
above, see supra note, our use of the term ``broadband'' in this Order 
includes but is not limited to services meeting the threshold for 
``advanced telecommunications capability.'') This term also encompasses 
any service that the Commission finds to be providing a functional 
equivalent of the service described in the previous sentence. (The 
Verizon decision upheld the Commission's regulation of broadband 
Internet access service pursuant to section 706 and the definition of 
``broadband Internet access service'' has remained part of the 
Commission's regulations since adopted in 2010. Certain parties have 
raised issues in the record regarding the regulatory status of mobile 
messaging services, e.g., SMS/MMS. We note that the rules we adopt 
today prohibit broadband providers from, for example, blocking 
messaging services that are delivered over a broadband Internet access 
service. We decline to further address here arguments regarding the 
status of messaging within our regulatory framework, but instead plan 
to address these issues in the context of the pending proceeding 
considering a petition to clarify the regulatory status of text 
messaging services.)
    337. The term ``broadband Internet access service'' includes 
services provided over any technology platform, including but not 
limited to wire, terrestrial wireless (including fixed and mobile 
wireless services using licensed or unlicensed spectrum), and 
satellite. (In classifying wireless broadband Internet access as an 
information service, the Commission excluded broadband provided via 
satellite from classification. Thus, our action here expressly 
classifies the service for the first time. We observe that while our 
classification includes broadband Internet access services provided 
using capacity over fixed or mobile satellite or submarine cable 
landing facilities, our classification of these services as 
telecommunications services or CMRS does not require changes to the 
authorizations for satellite earth stations, satellite space stations, 
or submarine cable landing facilities.) For purposes of our discussion, 
we divide the various forms of broadband Internet access service into 
the two categories of ``fixed'' and ``mobile,'' rather than between 
``wired'' and ``wireless'' service. With these two categories of 
services--fixed and mobile--we intend to cover the entire universe of 
Internet access services at issue in the Commission's prior broadband 
classification decisions as well as all other broadband Internet access 
services offered over other technology platforms that were not 
addressed by prior classification orders. We also make clear that our 
classification finding applies to all providers of broadband Internet 
access service, as we delineate them here, regardless of whether they 
lease or own the facilities used to provide the service. (The 
Commission has consistently determined that resellers of 
telecommunications services are telecommunications carriers, even if 
they do not own any facilities. Further, as the Supreme Court observed 
in Brand X, ``the relevant definitions do not distinguish facilities-
based and non-facilities-based carriers.'') ``Fixed'' broadband 
Internet access service refers to a broadband Internet access service 
that serves end users primarily at fixed endpoints using stationary 
equipment, such as the modem that connects an end user's home router, 
computer, or other Internet access device to the network. The term 
encompasses the delivery of fixed broadband over any medium, including 
various forms of wired broadband services (e.g., cable, DSL, fiber), 
fixed wireless broadband services (including fixed services using 
unlicensed spectrum), and fixed satellite broadband services. 
``Mobile'' broadband Internet access service refers to a broadband 
Internet access service that serves end users primarily using mobile 
stations. Mobile broadband Internet access includes, among other 
things, services that use smartphones or mobile-network-enabled tablets 
as the primary endpoints for connection to the Internet. (We note that 
section 337(f)(1) of the Act excludes public safety services from the 
definition of mobile broadband Internet access service. 47 U.S.C. 
337(f)(1).) The term also

[[Page 19788]]

encompasses mobile satellite broadband services.
    338. In the Verizon opinion, the D.C. Circuit concluded that, in 
addition to the retail service provided to consumers, ``broadband 
providers furnish a service to edge providers, thus undoubtedly 
functioning as edge providers `carriers.' '' It was because the court 
concluded that the Commission had treated this distinct service as 
common carriage, that it ``remand[ed] the case to the Commission for 
further proceedings consistent with this opinion.'' We conclude now 
that the failure of the Commission's analysis was a failure to explain 
that the ``service to edge providers'' is subsumed within the promise 
made to the retail customer of the BIAS service. For the reasons we 
review herein, the reclassification of BIAS necessarily resolves the 
edge-provider question as well. In other words, the Commission agrees 
that a two-sided market exists and that the beneficiaries of the non-
consumer side either are or potentially could be all edge providers. 
Because our reclassification decision treats BIAS as a Title II 
service, Title II applies, as well, to the second side of the market, 
which is always a part of, and subsidiary to, the BIAS service. The 
Verizon court implicitly followed that analysis when it treated the 
classification of the retail end user service as controlling with 
respect to its analysis of the edge service; its conclusion that an 
edge service could be not be treated as common carriage turned entirely 
on its understanding that the provision of retail broadband Internet 
access services had been classified as ``information services.'' The 
reclassification of BIAS as a Title II service thus addresses the 
court's conclusion that ``the Commission would violate the 
Communications Act were it to regulate broadband providers as common 
carriers.''
    339. Many commenters, while holding vastly different views on our 
reclassification of BIAS, are united in the view we need not reach the 
regulatory classification of the service that the Verizon court 
identified as being furnished to the edge. (We thus decline to adopt 
proposals identifying and classifying a separate service provided to 
edge providers that were presented in the record, and on which we 
sought comment, including those by Mozilla, the Center for Democracy 
and Technology, and Professors Wu and Narechania. We believe that our 
actions here adequately address the concerns raised by these proposals, 
consistent with both law and fact.) We agree. Our reclassification of 
the broadband Internet access service means that we can regulate, 
consistent with the Communications Act, broadband providers to the 
extent they are ``engaged'' in providing the broadband Internet access 
service. As discussed above, a broadband Internet access service 
provider's representation to its end-user customer that it will 
transport and deliver traffic to and from all or substantially all 
Internet endpoints necessarily includes the promise to transmit traffic 
to and from those Internet end points back to the user. Thus, the so-
called ``edge service'' is secondary, and in support of, the promise 
made to the end user, and broadband provider practices with respect to 
edge providers--including terms and conditions for the transfer and 
delivery of traffic to (and from) the BIAS subscriber--impact the 
broadband provider's provision of the Title II broadband Internet 
access service. (This is not a novel arrangement. Under traditional 
contract principles, Party A (a broadband provider) can contract with 
Party B (a consumer) to provide services to Party C (an edge provider). 
That the service is being provided to Party C does not, in any way, 
conflict with the legal conclusion that the terms and conditions under 
which that service is being provided are governed by the agreement--and 
here the regulatory framework-- between Parties A and B. Most content 
that flows across the broadband provider's ``last-mile'' network to the 
retail consumer does not involve a direct agreement between Parties B 
and C but, as the Verizon court observed, an edge provider, like 
Amazon, could enter into an agreement with a broadband provider, like 
Comcast.) For example, where an edge provider attempts to purchase 
favorable treatment for its traffic (such as through zero rating), that 
treatment would be experienced by the BIAS subscriber (such as through 
an exemption of the edge-provider's data from a usage limit) and the 
impact on the BIAS subscriber, if any, would be assessed under Title 
II. That is, the legal question before the Commission turns on whether 
the provision of that service to the edge provider would be 
inconsistent with the provision of the retail service under Title II. 
That is because the same data is flowing between end user and edge 
consumer. (This conclusion does not contradict the economic view that a 
broadband provider is operating in a two-sided market. See, e.g., supra 
note. A newspaper looks the same whether viewed by an advertiser or a 
subscriber, even though their economic relationship with the newspaper 
publisher is different. Here the operation of the broadband Internet 
access service is so intertwined with the edge service so as to compel 
the conclusion that the BIAS reclassification controls any service that 
is being provided to an edge provider.) In other words, to the extent 
that it is necessary to examine a separate edge service, that service 
is simply derivative of BIAS, constitutes the same traffic, and, in any 
event, fits comfortably within the command that practices provided ``in 
connection with'' a Title II service that must themselves be just and 
reasonable.
    340. Broadband Internet access service does not include virtual 
private network (VPN) services, content delivery networks (CDNs), 
hosting or data storage services, or Internet backbone services. The 
Commission has historically distinguished these services from ``mass 
market'' services and, as explained in the 2014 Open Internet NPRM, 
they ``do not provide the capability to transmit data to and receive 
data from all or substantially all Internet endpoints.'' (In 
classifying broadband Internet access service as a telecommunications 
service today, the Commission does not, and need not, reach the 
question of whether and how these services are classified under the 
Communications Act.) We do not disturb that finding here. Finally, we 
observe that to the extent that coffee shops, bookstores, airlines, 
private end-user networks such as libraries and universities, and other 
businesses acquire broadband Internet access service from a broadband 
provider to enable patrons to access the Internet from their respective 
establishments, provision of such service by the premise operator would 
not itself be considered a broadband Internet access service unless it 
was offered to patrons as a retail mass market service, as we define it 
here. Likewise, when a user employs, for example, a wireless router or 
a Wi-Fi hotspot to create a personal Wi-Fi network that is not 
intentionally offered for the benefit of others, he or she is not 
offering a broadband Internet access service, under our definition, 
because the user is not marketing and selling such service to 
residential customers, small business, and other end-user customers 
such as schools and libraries.
2. The Market Today: Current Offerings of Broadband Internet Access 
Service
    341. We begin our analysis by examining how broadband Internet 
access service was and currently is offered. In the 2002 Cable Modem 
Declaratory Ruling, the Commission observed that ``the cable modem 
service business is still nascent, and the shape

[[Page 19789]]

of broadband deployment is not yet clear. Business relationships among 
cable operators and their service offerings are evolving.'' Despite the 
rapidly changing market for broadband Internet access services, the 
Commission's decisions classifying broadband Internet access service 
are based largely on a factual record compiled over a decade ago, 
during this early evolutionary period. The record in this proceeding 
leads us to the conclusion that providers today market and offer 
consumers separate services that are best characterized as (1) a 
broadband Internet access service that is a telecommunications service; 
and (2) ``add-on'' applications, content, and services that are 
generally information services.
    342. In the past, the Commission has identified a number of ways to 
determine what broadband providers ``offer'' consumers. In the Cable 
Modem Declaratory Ruling, for example, the Commission concluded that 
``the classification of cable modem service turns on the nature of the 
functions that the end user is offered.'' In the Wireline Broadband 
Classification Order, the Commission noted that ``whether a 
telecommunications service is being provided turns on what the entity 
is `offering . . . to the public,' and customers' understanding of that 
service.'' In the Wireless Broadband Classification Order, the 
Commission stated that ``[a]s with both cable and wireline Internet 
access, [the] definition appropriately focuses on the end user's 
experience, factoring in both the functional characteristics and speed 
of transmission associated with the service.'' Similarly, in Brand X, 
both the majority and dissenting opinions examined how consumers 
perceive and use cable modem service, technical characteristics of the 
services and how it is provided, and analogies to other services.
a. Broadband Internet Access Services at Time of Classification
    343. ``Wired'' Broadband Services. The Commission's Cable Modem 
Declaratory Ruling described cable modem service as ``typically 
includ[ing] many and sometimes all of the functions made available 
through dial-up Internet access service, including content, email 
accounts, access to news groups, the ability to create a personal Web 
page, and the ability to retrieve information from the Internet, 
including access to the World Wide Web.'' The Commission also 
identified functions provided with cable modem service that it called 
``Internet connectivity functions.'' (Earlier, in its 2001 AOL/Time 
Warner merger order describing the emerging high speed Internet access 
services offered through cable modems, the Commission found that 
``Internet access services consist principally of connectivity to the 
Internet provided to end users.'') These included establishing a 
physical connection to the Internet and interconnecting with the 
Internet backbone, protocol conversion, Internet Protocol address 
number assignment, domain name resolution through DNS, network 
security, caching, network monitoring, capacity engineering and 
management, fault management, and troubleshooting. In addition, the 
Commission noted that ``[n]etwork monitoring, capacity engineering and 
management, fault management, and troubleshooting are Internet access 
service functions that . . . . serve to provide a steady and accurate 
flow of information between the cable system to which the subscriber is 
connected and the Internet.'' The Ruling noted that ``[c]omplementing 
the Internet access functions are Internet applications provided 
through cable modem service. These applications include traditional ISP 
services such as email, access to online newsgroups, and creating or 
obtaining and aggregating content. The cable modem service provider 
will also typically offer subscribers a `first screen' or `home page' 
and the ability to create a personal Web page.'' The Commission 
explained that ``[e]-mail, newsgroups, the ability for the user to 
create a Web page that is accessible by other Internet users, and DNS 
are applications that are commonly associated with Internet access 
service,'' and that ``[t]aken together, they constitute an information 
service.'' In the Wireline Broadband Classification Order, the 
Commission found that end users subscribing to wireline broadband 
Internet access service ``expect to receive (and pay for) a finished, 
functionally integrated service that provides access to the Internet.''
    344. The Commission's subsequent wired broadband classification 
decisions did not describe wired broadband Internet access services 
with any greater detail.
    345. Wireless Broadband Services. In 2007, the Commission described 
wireless broadband Internet access service as a service ``that uses 
spectrum, wireless facilities and wireless technologies to provide 
subscribers with high-speed (broadband) Internet access capabilities.'' 
The Commission noted that ``many of the mobile telephone carriers that 
provide mobile wireless broadband service for mobile handsets offer a 
range of IP-based multimedia content and services--including ring 
tones, music, games, video clips and video streaming--that are 
specially designed to work with the small screens and limited keypads 
of mobile handsets. This content is typically sold through a carrier-
branded, carrier-controlled portal.''
b. The Growth of Consumer Demand and Market Supply
    346. The record in this proceeding reveals that, since we collected 
information to address the classification of cable modem service over a 
decade ago, the market for both fixed and mobile broadband Internet 
access service has changed dramatically. Between December 2000 and 
December 2013, the number of residential Internet connections with 
speeds over 200 kbps in at least one direction increased from 5.2 
million to 87.6 million. In 2000, only 5 percent of American households 
had a fixed Internet access connection with speeds of over 200 kbps in 
at least one direction, as compared to approximately 72 percent of 
American households with this same connection today. Indeed, as of 
December 2013, 60 percent of households have a fixed Internet 
connection with minimum speeds of at least 3 Mbps/768 kbps. Moreover, 
between December 2009 and December 2013, the number of mobile handsets 
with a residential data plan with a speed of at least 200 kbps in one 
direction increased from 43.7 million to 159.2 million, a 265 percent 
increase. (In addition, the mobile residential figures may overstate 
residential handsets because mobile filers report the number of 
``consumer'' handsets that are not billed to a corporate, non-corporate 
business, government, or institutional customer account, and thus could 
include handsets for which the subscriber is reimbursed by their 
employee.) By November 2014, 73.6 percent of the entire U.S. age 13+ 
population was communicating with smart phones, a figure which has 
continued to rise rapidly over the past several years. Cisco forecasts 
that by 2019, North America will have nearly 90 percent of its 
installed base converted to smart devices and connections, and smart 
traffic will grow to 97 percent of the total global mobile traffic. In 
2013, the United States and Canada were home to almost 260 million 
mobile subscriptions for smartphones, mobile PCs, tablets, and mobile 
routers. In 2014, that number was expected to increase by 20 percent, 
to 300 million subscriptions; by 2020, to 450 million, or a population 
penetration rate of almost 124 percent. In addition, the explosion in 
the deployment of Wi-Fi technology in the past few years has

[[Page 19790]]

resulted in consumers increasingly using that technology to access 
third party content, applications, and services on the Internet, in 
connection with either a fixed broadband service or a mobile broadband 
service.
    347. This widespread penetration of broadband Internet access 
service has led to the development of third-party services and devices 
and has increased the modular way consumers have come to use them. As 
more American households have gained access to broadband Internet 
access service, the market for Internet-based services provided by 
parties other than broadband Internet access providers has flourished. 
Consumers' appetite for third-party services has also received a boost 
from the shift from dial-up to broadband, as a high-speed connection 
makes the Internet much more useful to consumers. (For example, early 
studies showed that broadband users are far more likely than dial-up 
users to go online to seek out news, look for travel information, share 
computer files with others, create content, and download games and 
videos.) The impact of broadband on consumers' demand for third-party 
services is evident in the explosive growth of online content and 
application providers. In early 2003, a year after the Cable Modem 
Declaratory Ruling, there were approximately 36 million Web sites. 
Today there are an estimated 900 million. When the Commission assessed 
the cable modem service market in the Cable Modem Declaratory Ruling, 
the service at issue was offered with various online applications, 
including email, newsgroups, and the ability to create a Web page. The 
Commission observed that subscribers to cable modem services ``usually 
d[id] not need to contract separately'' for ``discrete services or 
applications'' such as email. Today, broadband service providers still 
provide various Internet applications, including email, online storage, 
and customized homepages, in addition to newer services such as music 
streaming and instant messaging. But consumers are very likely to use 
their high-speed Internet connections to take advantage of competing 
services offered by third parties.
    348. For example, companies such as Google and Yahoo! offer popular 
alternatives to the email services provided to subscribers as part of 
broadband Internet access service packages. According to Experian, 
Gmail and Yahoo! Mail were among the ten Internet sites most frequently 
visited during the week of January 17, 2015, with approximately 400 
million and 350 million visits respectively. Some parties even advise 
consumers specifically not to use a broadband provider-based email 
address; because a consumer cannot take that email address with them if 
he or she switches providers, some assert that using a broadband 
provider-provided email address results in a disincentive to switch to 
a competitive provider due to the attendant difficulties in changing an 
email address. Third-party alternatives are also widely available for 
other services that may be provided along with broadband Internet 
access service. (DNS, caching, and other services that enable the 
efficient transmission of data over broadband connections are 
considered in section IV.C.3. below.) For example, firms such as Apple, 
Dropbox, and Carbonite provide ``cloud-based'' storage; services like 
Go Daddy provide Web site hosting; users rely on companies such as 
WordPress and Tumblr to provide blog hosting; and firms such as 
Netvibes and Yahoo! provide personalized homepages. GigaNews and Google 
provide access to newsgroups, while many broadband providers have 
themselves ceased offering this service entirely.
    349. More generally, both fixed and mobile consumers today largely 
use their broadband Internet access connections to access content and 
services that are unaffiliated with their broadband Internet access 
service provider. In this regard, perhaps the most significant trend is 
the growing popularity of third-party video streaming services. By one 
estimate, Netflix and YouTube alone account for 50 percent of peak 
Internet download traffic in North America. Other sites among the most 
popular in the United States include the search engines Google and 
Yahoo!; social networking sites Facebook and LinkedIn; e-commerce sites 
Amazon, eBay and Craigslist; the user-generated reference site 
Wikipedia; a diverse array of user-generated media sites including 
Reddit, Twitter, and Pinterest; and news sources such as nytimes.com 
and CNN.com. Overall, broadband providers themselves operate very few 
of the Web sites that broadband Internet access services are most 
commonly used to access.
    350. Thus, as a practical matter, broadband Internet access service 
is useful to consumers today primarily as a conduit for reaching 
modular content, applications, and services that are provided by 
unaffiliated third parties. As the Center for Democracy & Technology 
puts it, ``[t]he service that broadband providers offer to the public 
is widely understood today, by both the providers and their customers, 
as the ability to connect to anywhere on the Internet--to any of the 
millions of Internet endpoints--for whatever purposes the user may 
choose.'' (CDT contrasts the current state of affairs with an earlier 
time ``when Internet access service providers sought to differentiate 
themselves by offering `walled gardens' of proprietary content and 
users looked to their access provider to serve as a kind of curator of 
the chaos of the Internet.'') Indeed, the ability to transmit data to 
and from Internet endpoints has become the ``one indispensable 
function'' that broadband Internet access service uniquely provides.
c. Marketing
    351. That broadband Internet access services today are primarily 
offerings of Internet connectivity and transmission capability is 
further evident by how these services are marketed and priced. 
Commenters cite numerous examples of advertisements that emphasize 
transmission speed as the predominant feature that characterizes 
broadband Internet access service offerings. For example, Comcast 
advertises that its XFINITY Internet service offers ``the consistently 
fast speeds you need, even during peak hours,'' and RCN markets its 
high-speed Internet service as providing the ability ``to upload and 
download in a flash.'' Verizon claims that ``[w]hatever your life 
demands, there's a Verizon FiOS plan with the perfect upload/download 
speed for you,'' while the name of Verizon's DSL-based service is 
simply ``High Speed Internet.'' Furthermore, fixed broadband providers 
use transmission speeds to classify tiers of service offerings and to 
distinguish their offerings from those of competitors. AT&T U-Verse, 
for instance, offers four ``Internet Package[s]'' at different price 
points, differentiated in terms of the ``Downstream Speeds'' they 
provide. Verizon meanwhile asserts that ``the 100% fiber-optic network 
that powers FiOS'' enables ``a level of speed and capacity that cable 
can't always compete with--especially when it comes to upload speeds.'' 
On the mobile side, mobile broadband providers similarly emphasize 
transmission speed as well as reliability and coverage as factors that 
characterize their mobile broadband Internet access service offering. 
AT&T, for example, claims that it has the ``[n]ation's most reliable 4G 
LTE network'' and that what 4G LTE means is ``speeds up to 10x faster 
than 3G.'' Sprint advertises its ``Sprint Spark'' service as having its 
``fastest ever data speeds and stronger in-building signal.''
    352. The advertisements discussed above link higher transmission 
speeds

[[Page 19791]]

and service reliability with enhanced access to the Internet at large--
to any ``points'' a user may wish to reach--not only to Internet-based 
applications or services that are provided in conjunction with 
broadband access. RCN, for instance, claims that its ``110 Mbps High-
Speed Internet'' offering is ``ideal for watching Netflix,'' a third-
party video streaming service. Verizon claims that FiOS's ``75/75 
Mbps'' speed ``works well for uploading and sharing videos on YouTube 
and serious multi-user gaming'' presumably by using the FiOS service to 
access any combination of third-party and Verizon-affiliated content 
and services the user chooses. AT&T notes that its 4G LTE service 
``lets you stream clear, crisp video faster than ever before, download 
songs in a few beats, apps almost instantly, and so much more.'' 
Broadband providers also market access to the Internet through Wi-Fi. 
Comcast, for example, notes that with its XFinity Internet services, 
subscribers can enjoy ``access to millions of hotspots nationwide and 
stay connected while away from home.'' T-Mobile advertises the ability 
to place calls and send messages over Wi-Fi.
    353. Fixed and mobile broadband Internet access service providers 
also price and differentiate their service offerings on the basis of 
the quality and quantity of data transmission the offering provides. 
AT&T U-Verse, for instance, offers four ``Internet Package[s]'' at 
different price points, differentiated in terms of the ``Downstream 
Speeds'' they provide. On the mobile side, monthly data allowances--
i.e., caps on the amount of data a user may transmit to and from 
Internet endpoints--are among the features that factor most heavily in 
the pricing of service plans.
    354. In short, broadband Internet access service is marketed today 
primarily as a conduit for the transmission of data across the 
Internet. (The marketing materials discussed here also indicate that 
broadband providers hold themselves out indifferently to the public 
when offering broadband Internet access service. Within particular 
service areas, broadband providers tend to offer uniform prices and 
services to potential customers. As discussed above, these offers are 
widely available through advertisements and marketing materials.) The 
record suggests that fixed broadband Internet access service providers 
market distinct service offerings primarily on the basis of the 
transmission speeds associated with each offering. Similarly, mobile 
providers market their service offerings primarily on the basis of the 
speed, reliability, and coverage of their network. Marketing broadband 
services in this way leaves a reasonable consumer with the impression 
that a certain level of transmission capability--measured in terms of 
``speed'' or ``reliability''--is being offered in exchange for the 
subscription fee, even if complementary services are also included as 
part of the offer.
3. Broadband Internet Access Service Is a Telecommunications Service
    355. We now turn to applying the statutory terms at issue in light 
of our updated understanding of how both fixed and mobile broadband 
Internet access services are offered. Three definitional terms are 
critical to a determination of the appropriate classification of 
broadband Internet access service. First, the Act defines 
``telecommunications'' as ``the transmission, between or among points 
specified by the user, of information of the user's choosing, without 
change in the form or content of the information as sent and 
received.'' Second, the Act defines ``telecommunications service'' as 
``the offering of telecommunications for a fee directly to the public, 
or to such classes of users as to be effectively available directly to 
the public, regardless of the facilities used.'' Finally, ``information 
service'' is defined in the Act as ``the offering of a capability for 
generating, acquiring, storing, transforming, processing, retrieving, 
utilizing, or making available information via telecommunications . . . 
, but does not include any use of any such capability for the 
management, control, or operation of a telecommunications system or the 
management of a telecommunications service.'' We observe that the 
critical distinction between a telecommunications and an information 
service turns on what the provider is ``offering.'' If the offering 
meets the statutory definition of telecommunications service, then the 
service is also necessarily a common carrier service.
    356. In reconsidering our prior decisions and reaching a different 
conclusion, we find that this result best reflects the factual record 
in this proceeding, and will most effectively permit the implementation 
of sound policy consistent with statutory objectives. For the reasons 
discussed above, we find that broadband Internet access service, as 
offered by both fixed and mobile providers, is best seen, and is in 
fact most commonly seen, as an offering (in the words of Justice 
Scalia, dissenting in Brand X) ``consisting of two separate things'': 
``Both `high-speed access to the Internet' and other `applications and 
functions.' '' Although broadband providers in many cases provide 
broadband Internet access service along with information services, such 
as email and online storage, we find that broadband Internet access 
service is today sufficiently independent of these information services 
that it is a separate ``offering.'' We also find that domain name 
service (DNS) (DNS is most commonly used to translate domain names, 
such as ``nytimes.com,'' into numerical IP addresses that are used by 
network equipment to locate the desired content.) and caching, (Caching 
is the storing of copies of content at locations in a network closer to 
subscribers than the original source of the content. This enables more 
rapid retrieval of information from Web sites that subscribers wish to 
see most often.) when provided with broadband Internet access services, 
fit squarely within the telecommunications systems management exception 
to the definition of ``information service.'' (Hereinafter, we refer to 
this exception as the ``telecommunications systems management'' 
exception.) Thus, when provided with broadband Internet access 
services, these integrated services do not convert broadband Internet 
access service into an information service. (One of the dissenting 
statements asserts that Congress could not have delegated to the 
Commission the authority to determine whether broadband Internet access 
service is a telecommunications service because ``[h]ad Internet access 
service been a basic service, dominant carriers could have offered it 
(and all related computer-processing functionality) outside the 
parameters of the Computer Inquiries,'' but ``I cannot find a single 
suggestion that anyone in Congress, anyone at the FCC, anyone in the 
courts, or anyone at all thought this was the law during the passage of 
the Telecommunications Act'' in 1996. See Pai Dissent at 37. We 
disagree with this line of reasoning. First, it contradicts the Supreme 
Court's 2005 holding in Brand X, where the Court explicitly 
acknowledged that the Commission had previously classified the 
transmission service, which broadband providers offer, as a 
telecommunications service and that the Commission could return to that 
classification if it provided an adequate justification. Second, and 
underscoring the ambiguity that the Brand X court identified in finding 
that the Commission had Chevron deference in its classification of 
broadband Internet access service, the dissenting statement fails to 
identify any

[[Page 19792]]

compelling evidence that Congress thought broadband Internet access 
service was an information service.)
    357. The Commission Does Not Bear a Special Burden in This 
Proceeding. Opponents of classifying broadband Internet access service 
as a telecommunications service advocate a narrow reading of the 
Supreme Court's decision in Brand X. They contend that the Court's 
decision to affirm the classification of cable modem service as an 
information service was driven by specific factual findings concerning 
DNS and caching, and argue that the Commission may not revisit its 
decision unless it can show that the facts have changed. Opponents also 
cite a passage from the Supreme Court's Fox decision suggesting that an 
agency must provide ``a more detailed justification than what would 
suffice for a new policy on a blank slate'' where the agency's ``new 
policy rests upon factual findings that contradict those which underlay 
its prior policy,'' or ``when its prior policy has engendered serious 
reliance interests that must be taken into account.''
    358. We disagree with these commenters on both counts. The Fox 
court explained that in these circumstances, ``it is not that further 
justification is demanded by the mere fact of policy change; but that a 
reasoned explanation is needed for disregarding facts and circumstances 
that underlay or were engendered by the prior policy.'' As the D.C. 
Circuit more recently confirmed, ``[t]his does not . . . equate to a 
`heightened standard' for reasonableness.'' The Commission need only 
show ``that the new policy is permissible under the statute, that there 
are good reasons for it, and that the agency believes it to be 
better.'' Above, we more than adequately explain our changed view of 
the facts and circumstances in the market for broadband Internet access 
services--which is evident from consumers' heavy reliance on third-
party services and broadband Internet access providers' emphasis on 
speed and reliability of transmission separately from and over the 
extra features of the service packages they offer. Furthermore, our 
understanding of the facts of how the elements of broadband Internet 
access service work has not changed. No one has ever disputed what DNS 
is or how it works. The issue is whether it falls within the definition 
of ``information service'' or the telecommunications systems management 
exception. If the latter, as we find below, prior factual findings that 
DNS was inextricably intertwined with the transmission feature of cable 
modem service do not provide support for the conclusion that cable 
modem service is an integrated information service.
    359. Moreover, opponents' reading of Brand X ignores the reasoning 
and holding of the Court's opinion overall. As discussed above, the 
Brand X opinion confirms that the Supreme Court viewed the statutory 
classification of cable modem service as a judgment call for the 
Commission to make. If the Commission had concluded that the 
transmission component of cable modem service was a telecommunications 
service, and provided a reasoned explanation for its decision, it is 
evident that the Court would have deferred to that finding.
    360. In Fox, the Supreme Court also suggested that an agency may 
need to provide ``a more detailed justification'' for a change in 
policy when the prior policy ``has engendered serious reliance 
interests.'' Opponents of reclassification contend that broadband 
providers have invested billions of dollars to deploy new broadband 
network facilities in reliance on the Title I classification decisions 
and it would be unreasonable to change course now. We disagree. As a 
factual matter, the regulatory status of broadband Internet access 
service appears to have, at most, an indirect effect (along with many 
other factors) on investment. Moreover, the regulatory history 
regarding the classification of broadband Internet access service would 
not provide a reasonable basis for assuming that the service would 
receive sustained treatment as an information service in any event. As 
noted above, the history of the Computer Inquiries indicates that, at a 
minimum the regulatory status of these or similar offerings involved a 
highly regulated activity for many years. The first formal ruling on 
the classification of broadband Internet access service came from the 
Ninth Circuit in 2000, which held that the best reading of the relevant 
statutory definitions was that cable modem service in fact includes a 
telecommunications service. The Cable Modem Declaratory Ruling was 
expressly limited to cable modem service ``as it [was] currently 
offered.'' The lawfulness of the Commission's 2002 Cable Modem 
Declaratory Ruling remained unsettled until the Supreme Court affirmed 
it in 2005, and the Commission's Wireline Broadband Classification 
Order was not affirmed until two years later, in 2007. In 2010, the 
Commission sought comment on reclassifying broadband Internet access 
services, and sought to refresh the record again in 2014. While the 
Commission did classify wireless broadband Internet access service as 
an information service in 2007, the Comcast and Verizon decisions, in 
2009 and 2014 respectively, called into doubt the Commission's ability 
to rely upon its Title I ancillary authority to protect the public 
interest and carry out its statutory duties to promote broadband 
investment and deployment. The legal status of the information service 
classification thus has been called into question too consistently to 
have engendered such substantial reliance interests that our 
reclassification decision cannot now be sustained absent extraordinary 
justifications. Finally, the forbearance relief we grant in the 
accompanying order in conjunction with our reclassification decision 
keeps the scope of our proposed regulatory oversight within the same 
general boundaries that the Commission earlier anticipated drawing 
under its Title I authority. We thus reject the claims that our action 
here unlawfully upsets reasonable reliance interests. In any event, we 
provide in this ruling a compelling explanation of why changes in the 
marketing, pricing, and sale of broadband Internet access service, as 
well as the technical characteristics of how the service is offered, 
now justify a revised classification of the service. (In response to 
arguments raised in the dissenting statements, we clarify that, even 
assuming, arguendo, that the facts regarding how BIAS is offered had 
not changed, in now applying the Act's definitions to these facts, we 
find that the provision of BIAS is best understood as a 
telecommunications service, as discussed below, see infra sections 
IV.C.3.b., IV.C.3.c., and disavow our prior interpretations to the 
extent they held otherwise.)
a. Broadband Internet Access Service Involves Telecommunications
    361. Broadband Internet Access Service Transmits Information of the 
User's Choosing Between Points Specified by the User. As discussed 
above, the Act defines ``telecommunications'' as ``the transmission, 
between or among points specified by the user, of information of the 
user's choosing, without change in the form or content of the 
information as sent and received.'' It is clear that broadband Internet 
access service is providing ``telecommunications.'' Users rely on 
broadband Internet access service to transmit ``information of the 
user's choosing,'' ``between or among points specified by the user.'' 
Time Warner Cable asserts that broadband Internet access service cannot 
be a telecommunications service because--as end users do not know where 
online

[[Page 19793]]

content is stored--Internet communications allegedly do not travel to 
``points specified by the user'' within the statutory definition of 
``telecommunications.'' We disagree. We find that the term ``points 
specified by the user'' is ambiguous, and conclude that uncertainty 
concerning the geographic location of an endpoint of communication is 
irrelevant for the purpose of determining whether a broadband Internet 
access service is providing ``telecommunications.'' Although Internet 
users often do not know the geographic location of edge providers or 
other users, there is no question that users specify the end points of 
their Internet communications. (For example, in transmissions from the 
user to an edge provider, a user either directly specifies the domain 
name of the edge provider or utilizes a search engine to determine the 
domain name. The application that a user chooses then uses DNS to 
translate the domain name into an IP address associated with the edge 
provider, which is placed into the packet as its destination. For 
transmissions from an edge provider to a user, the edge provider places 
the user's IP address into the packet as the destination IP address.) 
Consumers would be quite upset if their Internet communications did not 
make it to their intended recipients or the Web site addresses they 
entered into their browser would take them to unexpected Web pages. 
Likewise, numerous forms of telephone service qualify as 
telecommunications even though the consumer typically does not know the 
geographic location of the called party. These include, for example, 
cell phone service, toll free 800 service, and call bridging service. 
In all of these cases, the user specifies the desired endpoint of the 
communication by entering the telephone number or, in the case of 
broadband Internet access service, the name or address of the desired 
Web site or application. More generally, we have never understood the 
definition of ``telecommunications'' to require that users specify--or 
even know--information about the routing or handling of their 
transmissions along the path to the end point, nor do we do so now. 
Further, that there is not a one-to-one correspondence between IP 
addresses and domain names, and that DNS often routes the same domain 
name to different locations based on its inference of which location is 
most likely to be the one the end user wants, does not alter this 
analysis. It is not uncommon in the toll-free arena for a single number 
to route to multiple locations, and such a circumstance does not 
transform that service to something other than telecommunications.
    362. Information is Transmitted Without Change in Form or Content. 
Broadband Internet access service may use a variety of protocols to 
deliver content from one point to another. However, the packet payload 
(i.e., the content requested or sent by the user) is not altered by the 
variety of headers that a provider may use to route a given packet. The 
information that a broadband provider places into a packet header as 
part of the broadband Internet access service is for the management of 
the broadband Internet access service and it is removed before the 
packet is handed over to the application at the destination. Broadband 
providers thus move packets from sender to recipient without any change 
in format or content, and ``merely transferring a packet to its 
intended recipient does not by itself involve generating, acquiring, 
transforming, processing, retrieving, utilizing, or making available 
information.'' (A BIAS provider, when utilizing the Internet Protocol, 
may fragment packets into multiple pieces. However, such fragmentation 
does not change the form or content, as the pieces are reassembled 
before the packet is handed over to the application at the 
destination.) Rather, ``it is the nature of [packet delivery] that the 
`form and content of the information' is precisely the same when an IP 
packet is sent by the sender as when that same packet is received by 
the recipient.'' (For example, when a person sends an email, he or she 
expects that the content of the email, and any attachments, to be 
delivered to the recipient unaltered in content or form. We note that a 
user may choose to use an application, such as email, that is a 
separate information service offered by the BIAS provider. When this 
occurs, the provider of the information service may place information 
into the packet payload that changes the form or content. However, this 
change in form or content is purely implemented as part of the 
separable information service. The broadband provider, in transmitting 
the packet via BIAS, does not alter the form or content of the packet 
payload.)
b. Broadband Internet Access Service Is a ``Telecommunications 
Service''
    363. Having affirmatively determined that broadband Internet access 
service involves ``telecommunications,'' we also find that broadband 
Internet access service is a ``telecommunications service.'' A 
``telecommunications service'' is the ``offering of telecommunications 
for a fee directly to the public, . . . regardless of the facilities 
used.'' We find that broadband Internet access service providers offer 
broadband Internet access service ``directly to the public.'' As 
discussed above, the record indicates that broadband providers 
routinely market broadband Internet access services widely and to the 
general public. Because a provider is a common carrier ``by virtue of 
its functions,'' we find that such offerings are made directly to the 
public within the Act's definition of telecommunications service. We 
draw this conclusion based upon the common circumstances under which 
providers offer the service, and we reject the suggestion that we must 
evaluate such offerings on a narrower carrier-by-carrier or geographic 
basis. Further, that some broadband providers require potential 
broadband customers to disclose their addresses and service locations 
before viewing such an offer does not change our conclusion. The 
Commission has long maintained that offering a service to the public 
does not necessarily require holding it out to all end users. Some 
individualization in pricing or terms is not a barrier to finding that 
a service is a telecommunications service. (To the extent our prior 
precedents might suggest otherwise, we disavow such an interpretation 
in this context.)
    364. In addition, the implied promise to make arrangements for 
exchange of Internet traffic as part of the offering of broadband 
Internet access service does not constitute a private carriage 
arrangement. (Commission precedent ``holds that a carrier will not be a 
common carrier `where its practice is to make individualized decisions 
in particular cases whether and on what terms to serve.' '') First, in 
offering broadband Internet access service to its end-user customers, 
the broadband provider has voluntarily undertaken an obligation to 
arrange to transfer that traffic on and off its network. Broadband 
providers hold themselves out to carry all edge provider traffic to the 
broadband provider's end user customers regardless of source and 
regardless of whether the edge provider itself has a specific 
arrangement with the broadband provider. Merely asserting that the 
traffic exchange component of the service may have some individualized 
negotiation does not alter the nature of the underlying service. 
Second, the record reflects that broadband providers assert that 
multiple routes to reach their networks are widely and readily 
available. They cannot, at the same time, assert that all arrangements 
for delivering traffic to their end-user subscribers are

[[Page 19794]]

individually negotiated with every edge provider. Third, the record 
reflects that the majority of arrangements for traffic exchange are 
informal handshake agreements without formalized terms and conditions 
that would indicate any kind of individualized negotiations. We 
recognize that there are some interconnection agreements that do 
contain more individualized terms and conditions. However, this 
circumstance is not inherently different from similarly individualized 
commercial agreements for certain enterprise broadband services, which 
the Commission has long held to be common carriage telecommunications 
services subject to Title II. That the individualized terms may be 
negotiated does not change the underlying fact that a broadband 
provider holds the service out directly to the public. As discussed 
above, it must necessarily do so, in order to offer and provide its 
broadband Internet access service. Further, we note that these types of 
individualized negotiations are analogous to other telecommunications 
providers whose customer service representatives may offer variable 
terms and conditions to customers in circumstances where the customer 
threatens to switch service providers. We therefore find that the 
implied representation that broadband Internet access service providers 
will arrange for transport of traffic on and off their networks as part 
of the BIAS offering does not constitute private carriage. As such, we 
find that broadband Internet access service is offered ``directly to 
the public,'' and falls within the definition of ``telecommunications 
service.'' (If an offering meets the definition of telecommunications 
service, then the service is also necessarily a common carrier 
service.)
c. Broadband Internet Access Service Is Not an ``Information Service''
    365. We further find that broadband Internet access service is not 
an information service. The Act defines ``information service'' as 
``the offering of a capability for generating, acquiring, storing, 
transforming, processing, retrieving, utilizing, or making available 
information via telecommunications . . . but does not include any use 
of any such capability for the management, control, or operation of a 
telecommunications system or the management of a telecommunications 
service.'' To the extent that broadband Internet access service is 
offered along with some capabilities that would otherwise fall within 
the information service definition, they do not turn broadband Internet 
access service into a functionally integrated information service. To 
the contrary, we find these capabilities either fall within the 
telecommunications systems management exception or are separate 
offerings that are not inextricably integrated with broadband Internet 
access service, or both.
    366. DNS Falls Within the Telecommunications Systems Management 
Exception to the Definition of Information Services. As the Supreme 
Court spotlighted in Brand X, the Commission predicated its prior 
conclusion that cable modem service was an integrated information 
service at least in part on the view that it ``transmits data only in 
connection with the further processing of information.'' That was so, 
under the theory of the Cable Modem Declaratory Ruling, because ``[a] 
user cannot reach a third-party's Web site without DNS, which (among 
other things) matches the Web site address the end user types into his 
browser (or `clicks' on with his mouse) with the IP address of the Web 
page's host server.'' The Commission had assumed without analysis that 
DNS, when provided with Internet access service, is an information 
service. The Commission credited record evidence that DNS ``enable[s] 
routing'' and that ``[w]ithout this service, Internet access would be 
impractical for most users.'' In his Brand X dissent, however, Justice 
Scalia correctly observed that DNS ``is scarcely more than routing 
information, which is expressly excluded from the definition of 
`information service' '' by the telecommunications systems management 
exception set out in the last clause of section 3(24) of the Act. (The 
definition of ``information service'' has since been moved from 
subsection 20 to subsection 24 of section 3 but has not itself been 
revised. The telecommunications systems management exception in section 
3(24) provides that the term ``information service'' ``does not 
include'' the use of any data processing, storage, retrieval or similar 
capabilities ``for the management, control, or operation of a 
telecommunications system or the management of a telecommunications 
service.'') Thus, in his view, such functions cannot be relied upon to 
convert what otherwise would be a telecommunications service into an 
information service. Therefore, consideration of whether DNS service 
falls within the telecommunications systems management exception could 
have been determinative in the Court's outcome in Brand X, had it 
considered the question.
    367. Although the Commission assumed in the Cable Modem Declaratory 
Ruling--sub silentio--that DNS fell outside the telecommunications 
systems management exception, (The Commission's subsequent conclusions 
that wireline broadband services offered by telephone companies and 
broadband offered over power lines were unitary information services 
followed the same theory, also without any analysis of the 
telecommunications systems management exception.) Justice Scalia's 
assessment finds support both in the language of section 3(24), and in 
the Commission's consistently held view that ``adjunct-to-basic'' 
functions fall within the telecommunications systems management 
exception to the ``information service'' definition. (Throughout the 
history of computer-based communication, Title II covered more than 
just the simple transmission of data. Some features and services that 
met the literal definition of ``enhanced service,'' but did not alter 
the fundamental character of the associated basic transmission service, 
were considered ``adjunct-to-basic'' and treated as basic (i.e., 
telecommunications) services even though they went beyond mere 
transmission. Thus, the Commission's definition of ``basic services'' 
(the regulatory predecessor to ``telecommunications services'') 
includes, among other things, those intelligent features that run the 
network or improve its usefulness to consumers, such as a carrier's use 
of ``companding [compressing/expanding] techniques, bandwidth 
compression techniques, circuit switching, message or packet switching, 
error control techniques, etc. that facilitate economical, reliable 
movement of information does not alter the nature of the basic 
service.'' Basic service can also include ``memory or storage within 
the network . . . used only to facilitate the transmission of the 
information from the origination to its destination,'') Such functions, 
the Commission has held: (1) Must be ``incidental'' to an underlying 
telecommunications service--i.e., `` `basic' in purpose and use'' in 
the sense that they facilitate use of the network; and (2) must ``not 
alter the fundamental character of [the telecommunications service].'' 
By established Commission precedent, they include ``speed dialing, call 
forwarding, [and] computer-provided directory assistance,'' each of 
which shares with DNS the essential characteristic of using computer 
processing to convert the number or keystroke that the end user enters 
into another number capable of routing the communication to the

[[Page 19795]]

intended recipient. Similarly, traditional voice telephone calls to 
toll free numbers, pay-per-call numbers, and ported telephone numbers 
require a database query to translate the dialed telephone number into 
a different telephone number and/or to otherwise determine how to route 
the call properly, and there is no doubt that the inclusion of that 
functionality does not somehow convert the basic telecommunications 
service offering into an information service. (Consider also the role 
that telephone operators traditionally played in routing telephone 
calls. Traditional telephony required a telephone operator to route and 
place calls requested by the customer. We do not believe that anyone 
would argue that such arrangements would turn traditional telephone 
service into an information service.)
    368. Citing language from a staff decision to the effect that 
adjunct-to-basic functions do not include functions that are ``useful 
to end users, rather than carriers,'' AT&T argues that DNS must fall 
outside of the telecommunications systems management exception because 
``Internet access providers use DNS functionality not merely (or even 
primarily) to `manage' their networks more efficiently, but to make the 
Internet as a whole easily accessible and convenient for their 
subscribers.'' We disagree. The particular function at issue in the 
cited staff decision--the ``storage and retrieval of information that 
emergency service personnel use to respond to E911 calls''--was not 
instrumental in placing calls or managing the communications network, 
but simply allowed certain telecommunications consumers (E911 answering 
centers and first responders) to identify the physical location of the 
distressed caller in order to render assistance, a benefit to be sure, 
but one unrelated to telecommunications. By contrast, DNS--like the 
speed dialing, call forwarding, and computer-provided directory 
assistance functions that already have been definitively classified as 
falling within the telecommunications systems management exception to 
section 3(24)--allows more efficient use of the telecommunications 
network by facilitating accurate and efficient routing from the end 
user to the receiving party. (Notwithstanding the close resemblance 
between DNS and these features that the Commission previously has found 
to be within the telecommunications systems management exception, 
USTelecom contends that ``DNS does not manage or control a 
telecommunications system or a telecommunications service.'' USTelecom 
Reply at 32. As with call forwarding, speed dialing, and computer-
provided directory assistance, however, DNS manages the network in the 
sense of facilitating efficient routing and call completion. In any 
event, even if DNS were not viewed as facilitating network management, 
it clearly would fall within the exception as a capability used for the 
``operation of a telecommunications system.'' 47 U.S.C. 153(24). 
Responding to assertions in one of the dissenting statements, (Pai 
Dissent at 36 through 37), we expressly find this rationale applies 
equally to other services that arguably serve the interests of 
subscribers, such as, for example, caching. While these services do 
provide a benefit to subscribers in the form of faster, more efficient 
service, they also serve to manage the network by facilitating 
efficient retrieval of requested information, reducing a broadband 
provider's costs in the provision of the service. In addition, caching 
and other services which provide a benefit to subscribers, like DNS, 
also serve as a capability used for the operation of a 
telecommunications system by enabling the efficient retrieval of 
information.)
    369. AT&T's other arguments regarding DNS also fail. Contrary to 
its suggestion, the fact that the analogous speed dialing, call 
forwarding, and computer-provided directory assistance functions that 
the Commission has designated as falling within the telecommunications 
systems management exception were adjunct to ``legacy telephone 
(`basic') services'' rather than to ``Internet-based services'' 
provides no basis to discard the logic of that analysis in the 
broadband context. Nor are we persuaded by AT&T's observation that DNS 
systems provide additional ``reverse look-up'' functions (i.e., 
converting a numeric IP address into a domain name) that are 
``analogous to (though far more sophisticated than) `reverse directory 
assistance' '' services that were deemed to be enhanced services in the 
legacy circuit-switched telephone service environment. Even assuming, 
arguendo, that such ``reverse look-up'' functions were analogous, we do 
not believe that the inclusion of such functionality would convert what 
was otherwise a telecommunications service into an information service. 
As the Supreme Court recognized, an entity may not avoid Title II 
regulation of its telecommunications service simply by packaging that 
service with an information service. As the Court explained, ``a 
telephone company that packages voice mail with telephone service 
offers a transparent transmission path--telephone service--that 
transmits information independent of the information-storage 
capabilities provided by voice mail. For instance, when a person makes 
a telephone call, his ability to convey and receive information using 
the call is only trivially affected by the additional voice-mail 
capability.'' Likewise, we find that to the extent a DNS ``reverse 
look-up'' functionality is included with the offering of broadband 
Internet access service, the service itself--the transmission of data 
to and from all or substantially all Internet endpoints--is only 
trivially dependent on, if at all, the ``reverse look-up'' function 
cited by AT&T. We find that this analysis applies equally to the DNS 
``assist capabilities'' cited by AT&T, in which the provider's DNS 
functionality may also be used occasionally to guess what a user meant 
when she mistyped an address. (In the context of voice telephone 
service, the Commission has recognized that the availability of reverse 
directory capability does not transform that service from a 
telecommunications service into an information service.)
    370. Although we find that DNS falls within the telecommunications 
systems management exception, even if did not, DNS functionality is not 
so inextricably intertwined with broadband Internet access service so 
as to convert the entire service offering into an information service. 
First, the record indicates that ``IP packet transfer does work just as 
well without DNS, but is simply less useful, just as a telephone system 
is less useful without a phone book.'' Indeed, ``[t]here is little 
difference between DNS support offered by a broadband Internet access 
provider and the 411 directory service offered by many providers of 
telephone service. Both allow a user to discover how to reach another 
party, but no one argued that telephone companies were not providing a 
telecommunications service because they offered 411.'' Second, the 
factual assumption that DNS lookup necessarily is provided by the 
broadband Internet access provider is no longer true today, if it ever 
was. While most users rely on their broadband providers to provide DNS 
lookup, the record indicates that third-party-provided-DNS is now 
widely available, (To be clear, we do not find that DNS is a 
telecommunications service (or part of one) when provided on a stand-
alone basis by entities other than the provider of Internet access 
service. In such instances, there would be no telecommunications 
service to which DNS is adjunct, and the storage

[[Page 19796]]

functions associated with stand-alone DNS would likely render it an 
information service.) and the availability of the service from third 
parties cuts against a finding that Internet transmission and DNS are 
inextricably intertwined, whether or not they were at the time of the 
Commission's earlier classification decisions. In any event, the fact 
that DNS may be offered by a provider of broadband Internet access 
service does not affect our conclusion that the telecommunications is 
offered directly to the public.
    371. Accordingly, we now reconsider our prior analysis and conclude 
for two reasons that the bundling of DNS by a provider of broadband 
Internet access service does not convert the broadband Internet access 
service offering into an integrated information service. (We also 
observe that add-on services to DNS, such as DNS security extensions, 
do not convert BIAS into an information service. DNS security 
extensions provide authentication that the messages sent between DNS 
servers, and between a DNS server and a DNS client, are not altered. As 
such, DNS security extensions facilitate accurate DNS information, and, 
like DNS itself, are incidental to BIAS, and do not alter the 
fundamental character of BIAS. We accordingly disagree with the 
contrary interpretation of the role of DNS security extensions 
described in one of the dissenting statements.) This is both because 
DNS falls within the telecommunications systems management exception to 
the definition of information service and because, regardless of its 
classification, it does not affect the fundamental nature of broadband 
Internet access service as a distinct offering of telecommunications.
    372. Caching Falls Within the Telecommunications Systems Management 
Exception. Opponents of revisiting the Commission's earlier 
classification decisions also point to caching as another feature of 
broadband Internet access service packages that the Commission relied 
upon to find such packages to be information services. In the Cable 
Modem Declaratory Ruling, the Commission described caching as ``the 
storing of copies of content at locations in the network closer to 
subscribers than their original sources.'' While the Commission noted 
the caching function in the Cable Modem Declaratory Ruling, it did not 
rely on the caching function (as opposed to the DNS capability) as a 
basis for its classification determination. (To the extent that Brand X 
can be read as reaching a different conclusion, we find the Court's 
characterization of ``caching'' as enabling ``subscribers [to] reach 
third-party Web sites via the World Wide Web, and browse their 
contents, [only] because their service provider offers the capability 
for . . . acquiring, [storing] . . . retrieving [and] utilizing 
information'' to be technically inaccurate.) When offered as part of a 
broadband Internet access service, caching, like DNS, is simply used to 
facilitate the transmission of information so that users can access 
other services, in this case by enabling the user to obtain ``more 
rapid retrieval of information'' through the network. (Caching is akin 
to a ``store and forward technology [used] in routing messages through 
the network as part of a basic service.'') Thus, it falls easily within 
the telecommunications systems management exception to the information 
service definition. We observe that this caching function provided by 
broadband providers as part of a broadband Internet service, is 
distinct from third party caching services provided by parties other 
than the provider of Internet access service (including content 
delivery networks, such as Akamai), which are separate information 
services. (Third party ``content delivery networks'' provide extensive 
caching services. See Akamai Comments at 3 (explaining that it deploys 
its technologies deep in the networks of last-mile broadband Internet 
providers and caches content locally, and stating that it has deployed 
approximately 150,000 servers in thousands of locations inside over 
1,200 global networks located in over 650 cities and 92 countries))
    373. Other Features Within the Telecommunications Systems 
Management Exception. Opponents raise, as well, a variety of new 
network-oriented, security-related computer processing capabilities 
that are used to address broader threats to their broadband networks 
and customers, including the processing of Internet traffic to check 
for worms and viruses and features that block access to certain Web 
sites. They claim that, as with DNS, a consumer cannot utilize the 
service without also receiving many of these security mechanisms. 
Whether or not a consumer necessarily must utilize security-related 
blocking functions when using a provider's broadband Internet access 
service, we find that, like DNS and caching, such capabilities provide 
telecommunications systems management functions that do not transform 
what otherwise would be a telecommunications service into an 
information service. Some security functions, e.g., blocking denial of 
service attacks, fall within the telecommunications systems management 
exception because they are used exclusively for the management, 
control, or operation of the telecommunications system. Many such 
network security functions are analogs of outbound and inbound ``call 
blocking'' services, such as those blocking calls to 900 and 976 
numbers and those blocking calls from telemarketers, that have always 
been considered adjunct-to-basic with respect to voice telephony. Other 
security functions--firewalls and parental controls, for example--
either fall within the telecommunications systems management exception 
because they are used exclusively for management of the 
telecommunication service or are separable information services that 
are offered by providers other than providers of broadband Internet 
access service. Such security features simply filter out unwanted 
traffic, and do not alter the fundamental character of the underlying 
telecommunications service offered to users. All of these functions 
ensure that users can use other Internet applications and services 
without worrying about interference from third parties.
    374. CTIA contends that the integration between transmission and 
processing that characterizes mobile broadband Internet access service 
requires that it be classified as an information service, and notes 
that such integration is essential ``whether a user is browsing a Web 
site, engaged in mobile video conferencing, or undertaking any of the 
myriad other activities made possible by mobile broadband.'' We find 
that that, rather than transforming what otherwise would be a 
telecommunications service into an information service, the functions 
CTIA describes fall within the telecommunications management exception 
because they serve to facilitate the transmission of information and 
allow mobile subscribers to make use of other Internet applications and 
services. Other commenters contend that broadband providers' assignment 
of Internet Protocol (IP) addresses is also an information service that 
renders broadband Internet access service an information service. We 
disagree. IP address assignment is akin to telephone number assignment, 
making a user's computer locatable by other users on the network. Thus, 
this function serves to enable the transmission of information for the 
use of other services. The fact that the end user's equipment must 
periodically obtain an IP address from

[[Page 19797]]

the broadband provider's server does not change the fundamental purpose 
of the service. It is analogous to adjunct-to-basic services that the 
Commission has held fall squarely within the telecommunications systems 
management exception.
    375. Finally, Comcast asserts that ``with the rise of IPv6 as the 
eventual replacement for IPv4 as the protocol for identifying and 
routing Internet content, Comcast and other [providers] also now 
provide the functionality necessary to transform an IPv4 address into 
an IPv6 address (and vice versa),'' a ``processing function'' it claims 
is ``part and parcel of broadband Internet access service.'' We 
conclude that, as with DNS functions, the IP conversion functionality 
is akin to traditional adjunct-to-basic services, which fall under the 
telecommunications systems management exception. As discussed above, 
such functions must be ``incidental'' to an underlying 
telecommunications service, and must not alter the fundamental 
character of the telecommunications service. We find that the 
conversion of IPv4 to IPv6 and vice versa does not alter the 
information being transmitted, but rather enables the transmission of 
the information, analogous to traditional voice telephone calls to toll 
free numbers, pay-per-call numbers, and ported telephone numbers that 
require a database query to translate the dialed telephone number into 
a different telephone number and/or to otherwise determine how to route 
the call properly. As with these traditional services, the inclusion of 
this functionality does not somehow convert the basic 
telecommunications service offering into an information service.
    376. Broadband Internet Access Service Is Not Inextricably 
Intertwined With Add-On Information Services. Some commenters contend 
that broadband Internet access service must be a functionally 
integrated information service because it is offered in conjunction 
with information services, such as cloud-based storage services, email, 
and spam protection. We find that such services are not inextricably 
intertwined with broadband transmission service, but rather are a 
``product of the [provider's] marketing decision not to offer the two 
separately.'' The transmission service provided by broadband providers 
is functionally distinguishable from the Internet application add-ons 
they provide. Service providers cannot avoid the scope of Title II 
merely by bundling broadband Internet access service with information 
services. As the Supreme Court majority in Brand X recognized, citing 
the Stevens Report, ``a company `cannot escape Title II regulation' '' 
of a telecommunications service ```simply by packaging that service 
with voice mail' '' or similar information services.
    377. We find that these services identified in the record--email, 
cloud-based storage, and spam protection--are separable information 
services. We conclude that email accounts and cloud-based storage 
provided along with broadband Internet access services are akin to 
voicemail services offered along with traditional telephone service. As 
the Court found, ``a telephone company that packages voice mail with 
telephone service offers a transparent transmission path--telephone 
service--that transmits information independent of the information-
storage capabilities provided by voicemail . . . . [W]hen a person 
makes a telephone call, his ability to convey and receive information 
using the call is only trivially affected by the additional voice-mail 
capability.'' Likewise, the broadband Internet access service that 
consumers purchase is only trivially affected, if at all, by the email 
and cloud-based storage functionalities that broadband providers may 
offer with broadband Internet access service. Finally, security 
functions such as spam blocking are add-ons to separable information 
services such as email, and are themselves separable information 
services.
    378. It is also notable that engineers view the Internet in terms 
of network ``layers'' that perform distinct functions. Each network 
layer provides services to the layer above it. Thus the lower layers, 
including those that provide transmission and routing of packets, do 
not rely on the services provided by the higher layers. In particular, 
the transmission of information of a user's choosing (which is a 
service offered by lower layers) does not depend on add-on information 
services such as cloud-based storage services, email, or spam 
protection (which are services offered at the application layer). Also, 
application layer services that fall within the telecommunications 
management exception (e.g., DNS, caching, or security services offered 
as part of broadband Internet access service) similarly do not depend 
on add-on information services. As such, add-on information services 
are separated from the functions, like DNS, that facilitate 
transmission, and are not ``inextricably intertwined'' with broadband 
Internet access services.
    379. Other recent developments also show that consumers' use of 
today's Internet to access content and applications is not inextricably 
intertwined with the underlying transmission component. For instance, 
consumers are increasingly accessing content and applications on the 
Internet using Wi-Fi-only devices that take advantage of Wi-Fi hotspots 
not provided by the consumer's underlying broadband service provider. 
Similarly, consumers can sometimes use Wi-Fi-enabled smartphones not 
only to access the Internet via their service provider's mobile 
broadband network or Wi-Fi hotspots, but also using Wi-Fi hotspots 
offered by premises operators. Further, many consumers purchase content 
that can be accessed over any of a number of different transmission 
paths and devices over the Internet--for example, video over a fixed 
broadband connection to a flat-screen television, or over a Wi-Fi 
router connected to a fixed broadband connection to a tablet, or over a 
mobile broadband network to a smartphone.
    380. In addition, countless third parties are now embedding 
electronics, software, sensors, and other forms of connectivity into a 
wide variety of everyday devices, such as wearables, appliances, 
thermostats, and parking meters that rely on Internet connectivity to 
provide value to the American consumer, including through mHealth, 
Smart Grid, connected education, and other initiatives. The growth of 
the Internet of Things is yet another clear indication that devices and 
services that consumers use with today's Internet are not inextricably 
intertwined with the underlying transmission component.
    381. Finally, we observe that the Commission itself recognized in 
2005 that the ``link'' between the transmission element of broadband 
Internet access service and the information service was not 
inextricable. Specifically, the 2005 Wireline Broadband Classification 
Order granted wireline broadband providers the option of offering the 
transmission component of broadband Internet access as a distinct 
common carrier service under Title II on a permissive basis, and a 
large number of rural carriers have exercised this option for nearly a 
decade. As NTCA explains, ``[t]he fact that the Commission recognized 
as far back as 2005 that the transmission component could be separated 
out, and the fact that it has been separated out and offered separately 
on a tariffed basis by a large number of carriers undercuts any 
argument'' that the transmission service and the services that ride 
atop that service are inextricably intertwined. Further, the 2007 
Wireless Broadband Classification Order permitted providers of mobile 
broadband Internet access

[[Page 19798]]

service to offer the ``transmission component [of wireless broadband 
Internet access service] as a telecommunications service.
d. Opponents' Remaining Challenges Are Insubstantial
    382. Some commenters contend that our ruling is contrary to a 
Congressional intent for keeping the Internet unregulated. We are not, 
however, regulating the Internet, per se, or any Internet applications 
or content. Rather, our reclassification of broadband Internet access 
service involves only the transmission component of Internet access 
service. As the D.C. Circuit has explained, ``Congress did not choose 
between'' competing ``market-based'' and ``common-carrier, equal 
access'' philosophies for broadband regulation; rather, ``the FCC 
possesses significant, albeit not unfettered, authority and discretion 
to settle on the best regulatory or deregulatory approach to 
broadband--a statutory reality that assumes great importance when 
parties implore courts to overrule FCC decisions on this topic.'' We 
recognize that the Commission's previous classification decisions 
concluded that classifying broadband Internet access service as an 
information service would ``establish a minimal regulatory 
environment'' that would promote the Commission's goal of ``ubiquitous 
availability of broadband to all Americans.'' We do not today abandon 
that goal but instead seek to promote it through a ``light-touch'' 
regulatory framework for broadband Internet access services under Title 
II. As noted earlier, there will be no rate regulation, no unbundling 
of last-mile facilities, no tariffing, and a carefully tailored 
application of only those Title II provisions found to directly further 
the public interest in an open Internet.
    383. Several commenters argue that we should rely exclusively on 
industry self-regulation to promote the policies discussed above. While 
we applaud voluntary industry initiatives, we find the self-regulation 
option to be lacking in a number of respects. First, for the reasons 
discussed in our forbearance analysis in section IV, we find that 
applying the few provisions in Title II necessary to implement the 
policy objectives identified above is in the public interest. We 
conclude that in the absence of credible Commission authority to step 
in when necessary in the public interest, voluntary measures will prove 
inadequate. Second, even the best-intentioned voluntary regulation 
initiatives are more likely to protect consumers when there is an 
expert agency that can provide a backstop to inadequate industry action 
that may result from collective action or coordination problems beyond 
any single firm's control.
    384. Other commenters argue that classifying broadband Internet 
access service as a telecommunications service would impermissibly 
compel providers of broadband Internet access service to operate as 
common carriers. This argument misconstrues the nature of our ruling. 
Our decision to classify broadband Internet access service as a 
telecommunications service subject to the requirements of Title II 
derives from the characteristics of this service as it exists and is 
offered today. We do not ``require'' that any service ``be offered on a 
common carriage basis,'' but rather identify an existing service that 
is appropriately offered on a common carriage basis ``by virtue of its 
functions,'' as explained in detail above. Our classification decision 
is easily distinguished from the rules struck down in Midwest Video II, 
as those rules impermissibly attached common carrier obligations to 
services the Commission plainly lacked statutory authority to regulate 
in this manner. Congress has not spoken directly to the regulatory 
treatment of broadband Internet access services. Our classification of 
these services as telecommunications services is a permissible exercise 
of our delegated authority, one which we have adequately justified and 
defended based on the record before us. Because we have appropriately 
classified these services as telecommunications services, we do not run 
afoul of the Act's provision that a ``tele com muni ca tions carrier 
shall be treated as a common carrier under this Act only to the extent 
that it is engaged in providing telecommunications services.'' We thus 
reject the argument that our ruling impermissibly compels common 
carriage.
    385. Commenters also argue that the classification of broadband 
Internet access service as a telecommunications service results in this 
service being classified as both a telecommunications service and an 
information service, in violation of Congressional intent. We agree 
with commenters that these are best construed as mutually exclusive 
categories, and our classification ruling appropriately keeps them 
distinct. In classifying broadband Internet access service as a 
telecommunications service, we conclude that this service is not a 
functionally integrated information service consisting of a 
telecommunications component ``inextricably intertwined'' with 
information service components. Rather, we conclude, for the reasons 
explained above, that broadband Internet access service as it is 
offered and provided today is a distinct offering of telecommunications 
and that it is not an information service. As further explained above, 
any functional integration of DNS or caching with broadband Internet 
access service does not disrupt this classification, as both of those 
functions fall within the ``telecommunications systems management 
exception'' to the definition of an information service. Nor does the 
mere ``packaging'' of information services such as email with broadband 
Internet access service convert the latter into an information service. 
Our classification of broadband Internet access service therefore does 
not create any definitional inconsistency.
    386. We also reject the argument that the classification of 
broadband Internet access service as an information service is implicit 
in the definition of ``interactive computer service'' set forth in 
section 230 of the Communications Act, a provision focused on the 
blocking and screening of offensive material. We find it unlikely that 
Congress would attempt to settle the regulatory status of broadband 
Internet access services in such an oblique and indirect manner, 
especially given the opportunity to do so when it adopted the 
Telecommunications Act of 1996. At any rate, the definition does not 
expressly classify broadband Internet access service, as we define that 
term herein, as an information service. (For one thing, the phrase 
``any information service, system or access software provider'', see 47 
U.S.C. 230 (f), may be broader in scope than the term ``information 
service'' as defined in section 3 of Act. To read the text otherwise 
would suggest that Congress intended the liability protections of 
section 230 to apply narrowly, excluding, for example, local exchange 
carriers that offered DSL, which as noted above was classified as a 
telecommunications service until 2005.) We therefore find no basis in 
section 230 for reconsidering our judgment that this service is 
properly understood to be a telecommunications service, for the reasons 
explained above.
    387. Finally, we disagree with the suggestion that our decision to 
``reclassify, to forbear, and to adopt rules grounded in Title II'' is 
not a ``logical outgrowth'' of the 2014 Open Internet NPRM. The 
approach we adopt today is more than a logical outgrowth of the NPRM; 
it is one that the NPRM expressly identified as an alternative course 
of action. It is one on which the Commission sought comment in almost

[[Page 19799]]

every section of the NPRM. (Thus, at the very outset, in addition to 
``the [section 706] blueprint offered by the D.C. Circuit'' on which 
the dissent now seeks to focus, Pai Dissent at 16-19, the Commission 
made clear that in looking for the ``best approach to protecting and 
promoting Internet openness,'' it ``will seriously consider the use of 
Title II,'' ``seeks comment on the benefits of both . . ., including 
the benefits of one approach over the other,'' and ``emphasize[s] . . . 
that the Commission recognizes that both section 706 and Title II are 
viable solutions and seek[s] comment on their potential use.'' The NPRM 
in this proceeding is thus nothing like the NPRM that was at issue in 
Prometheus. Prometheus Radio Project v. FCC, 652 F.3d 431 (3rd Cir. 
2011). We also note that, under the APA, notice-and-comment rulemaking 
requirements apply only to the extent that we herein adopt legislative 
rules. 5 U.S.C. 553(b)(A), 553(d)(2).) It is one that several broadband 
Internet access service providers vigorously opposed in their comments 
in light of their own reading of the NPRM. (Dissents to the NPRM 
likewise reflect that this approach was on the table. See 2014 Open 
Internet NPRM, 29 FCC Rcd at 5653-55 (dissenting Statement of 
Commissioner Pai) (recognizing ``[i]t's not news that people of good 
faith disagree'' on the right approach, stating that ``[s]ome would 
like to regulate broadband providers as utilities under Title II,'' and 
discussing the scope of Title II's ``unjust or unreasonable 
discrimination'' requirement, the consequences of reclassification 
under Title II, and the alleged regulatory uncertainties posed under 
either section 706 ``or Title II''). Dissents to the NPRM likewise 
reflect that this approach was on the table. See 2014 Open Internet 
NPRM, 29 FCC Rcd at 5653 through 55 (dissenting Statement of 
Commissioner Pai) (recognizing ``[i]t's not news that people of good 
faith disagree'' on the right approach, stating that ``[s]ome would 
like to regulate broadband providers as utilities under Title II,'' and 
discussing the scope of Title II's ``unjust or unreasonable 
discrimination'' requirement, the consequences of reclassification 
under Title II, and the alleged regulatory uncertainties posed under 
either section 706 ``or Title II'').)
4. Mobile Broadband Internet Access Service Is Commercial Mobile 
Service
    388. As outlined above, we conclude that broadband Internet access 
service, whether provided by fixed or mobile providers, is a 
telecommunications service. We also find that mobile broadband Internet 
access service is a commercial mobile service. In any event, however, 
even if that service falls outside the definition of ``commercial 
mobile service,'' we find that it is the functional equivalent of a 
commercial mobile service and, thus, not a private mobile service.
    389. Congress adopted the commercial mobile service provisions in 
the Act with the goal of creating regulatory symmetry among similar 
mobile services. Section 332(d)(1) of the Communications Act defines 
``commercial mobile service'' as ``any mobile service . . . that is 
provided for profit and makes interconnected service available (A) to 
the public or (B) to such classes of eligible users as to be 
effectively available to a substantial portion of the public, as 
specified by regulation by the Commission.'' We find that mobile 
broadband Internet access service meets this definition. First, we find 
that mobile broadband Internet access service is a ``mobile service'' 
because subscribers access the service through their mobile devices. 
Next, we find that mobile broadband Internet access service is provided 
``for profit'' because service providers offer it to subscribers with 
the intent of receiving compensation. We also conclude the mobile 
broadband Internet access services are widely available to the public, 
without restriction on who may receive them.
    390. Finally, we conclude that mobile broadband Internet access 
service is an interconnected service. Section 332(d)(2) states that the 
term ``interconnected service'' means ``service that is interconnected 
with the public switched network (as such terms are defined by 
regulation by the Commission) . . . .'' The Commission has defined 
``interconnected service'' as a service ``that gives subscribers the 
capability to communicate to or receive communication from all other 
users on the public switched network.'' The Commission has defined the 
term ``public switched network'' to mean ``[a]ny common carrier 
switched network, whether by wire or radio, including local exchange 
carriers, interexchange carriers, and mobile service providers, that 
use[s] the North American Numbering Plan in connection with the 
provision of switched services.''
    391. While mobile broadband Internet access service does not use 
the North American Numbering Plan, we conclude for the reasons set out 
below that we should update our definition of public switched network 
pursuant to the authority granted to the Commission in section 332 so 
that our definition reflects the current network landscape rather than 
that existing more than 20 years ago. In its Order defining the terms 
``interconnected'' and ``public switched network'' the Commission 
concluded that the term ``public switched network'' should not be 
defined in a static way, recognizing that the network is continuously 
growing and changing because of new technology and increasing demand. 
The purpose of the public switched network, the Commission noted, is 
``to allow the public to send or receive messages to or from anywhere 
in the nation.'' This quality of ``ubiquitous access,'' for which the 
NANP was viewed as a proxy in 1994, was consistent with the key 
distinction underlying the formulation of the CMRS definition by 
Congress--differentiating the emerging cellular-based technology for 
``commercial'' SMR service being deployed by Nextel's predecessor as a 
mass market service from the traditional ``private'' SMR dispatch 
services employed by taxi services and other private fleets. Today, 
consistent with our authority under the Act, and with the Commission's 
previous recognition that the ``public switched network'' will grow and 
change over time, we update the definition of public switched network 
to reflect current technology. Specifically, we revise the definition 
of ``public switched network'' to mean ``the network that includes any 
common carrier switched network, whether by wire or radio, including 
local exchange carriers, interexchange carriers, and mobile service 
providers, that use[s] the North American Numbering Plan, or public IP 
addresses, in connection with the provision of switched services.'' 
This definition reflects the emergence and growth of packet switched 
Internet Protocol-based networks. Revising the definition of public 
switched network to include networks that use standardized addressing 
identifiers other than NANP numbers for routing of packets recognizes 
that today's broadband Internet access networks use their own unique 
addressing identifier, IP addresses, to give users a universally 
recognized format for sending and receiving messages across the country 
and worldwide. (This definitional change to our regulations in no way 
asserts Commission jurisdiction over the assignment or management of IP 
addressing by the Internet Numbers Registry System.) We find that 
mobile broadband Internet access service is interconnected with the 
``public switched network'' as we define it today and is therefore an 
interconnected service.


[[Page 19800]]


Some commenters contend that the Commission is barred from taking 
any actions that would change the definition of ``public switched 
network.'' CTIA, for example, argues that a revision to the 
definition of ``public switched network'' is ``beyond the scope of 
this rulemaking'' because the 2014 Open Internet NPRM ``only asks 
whether mobile broadband falls within the definition of CMRS and 
does not propose any changes to the well-established definitions in 
section 20.3 of the FCC's rules.'' AT&T similarly argues that the 
Commission has not provided sufficient public notice. CTIA also 
argues that, even if there were notice, the Commission could not 
interpret the definition of ``public switched network'' to include 
the Internet, stating that ``[w]hile section 332 directs the 
Commission to define `public switched network' by regulation, that 
definition must be consistent with the statutory text and 
congressional intent. Here, whatever limited discretion the 
Commission has as to that definition, it cannot be interpreted 
broadly enough to cover the broadband Internet.'' Verizon agrees 
that the NPRM did not provide notice that the Commission might 
change its regulations or their interpretation. In addition, Verizon 
argues that, although the Commission is statutorily authorized to 
define ``public switched network,'' the definition must still be 
consistent with the statutory text and congressional intent. 
Accordingly, Verizon contends, ``no matter how the Commission may 
redefine the `public switched network' any new definition still 
would need to be anchored to the public switched telephone networks, 
which is what section 332 was designed to address.''

    392. Contrary to these arguments, we find that revising the 
definition of ``public switched network'' and classifying mobile 
broadband Internet access service as a commercial mobile service is a 
logical outgrowth of the proposals in the 2014 Open Internet NPRM. As 
discussed above, in the NPRM, the Commission proposed relying on 
section 706 of the Telecommunications Act of 1996 for legal authority 
to adopt rules to protect the open Internet but indicated that it would 
also seriously consider the use of Title II of the Communications Act 
as a basis for legal authority. The Commission sought comment on 
whether, in the event that it decided to reclassify broadband Internet 
access service under Title II, mobile broadband Internet access service 
would fit within the definition of ``commercial mobile service'' under 
section 332 of the Act and the Commission's rules implementing that 
section. In addition, the NPRM noted that the Commission's Broadband 
Classification NOI also asked whether the Commission should revisit its 
classification of wireless broadband Internet access services, noted 
that the NOI docket ``remains open,'' and directed that the record be 
refreshed in that proceeding ``including the inquiries contained 
herein.'' In the Broadband Classification NOI, the Commission sought 
comment on ``legal issues specific to . . . wireless services that bear 
on their appropriate classification.'' More specifically, it asked 
``which of the three legal frameworks'' described therein (which 
included a Title II approach) ``would best support the Commission's 
policy goals for wireless broadband.'' In particular, it asked ``[t]o 
what extent should section 332 of the Act affect our classification of 
wireless broadband Internet services?'' In the 2014 Open Internet NPRM, 
the Commission also noted that section 332 requires that wireless 
services that meet the definition of commercial mobile services be 
regulated as common carriers under Title II. The NPRM also asked about 
the extent to which forbearance should apply, if the Commission were to 
classify mobile broadband Internet access service as a CMRS service 
subject to Title II, and noted that the Broadband Classification NOI 
also asked whether the Commission could and should apply section 
332(c)(1) as well as section 10 in its forbearance analysis for mobile 
services. The 2014 Open Internet NPRM also sought comment on defining 
mobile broadband Internet access service and on application of Internet 
openness requirements to mobile broadband services.
    393. We find that our decision today to classify mobile broadband 
Internet access service as both a telecommunications service under 
Title II and CMRS is a logical outgrowth of these discussions and 
requests for comments. The discussion and questions posed in the 2014 
Open Internet NPRM gave clear notice that the Commission was 
considering whether to reclassify mobile broadband Internet access 
under Title II as a telecommunications service and whether mobile 
broadband Internet access service would fit within the definition of 
``commercial mobile service'' under the Act and the Commission's rules, 
including whether mobile broadband would meet the ``interconnected 
service'' component of the commercial mobile service definition. It was 
``reasonably foreseeable'' that in answering that question the 
Commission would explore the scope of that component of the definition. 
Stated another way, ``interested parties should have anticipated that 
the change [in that definition] was possible, and thus reasonably 
should have filed their comments on the subject during the notice-and-
comment period.'' While we think this proposition is clear from the 
questions posed by the 2014 Open Internet NPRM, we further note that in 
this case mobile broadband providers ``themselves had no problem 
understanding the scope of the issues up for consideration; several . . 
. submitted comments'' on the issue. And, other parties commented that 
the Commission should update its definition of the term ``public 
switched network.'' Moreover, as referenced above, evidence in the 
record shows that a number of parties have directly addressed the 
application of section 332(d) and the Commission's implementing rules 
to mobile broadband Internet access and thus have been aware that the 
Commission was considering taking action to update the definition of 
``public switched network'' and reclassify mobile broadband Internet 
access as commercial mobile service.
    394. We also disagree with arguments that we are barred from 
updating the definition of public switched network to include networks 
that use addressing identifiers beyond NANP numbers associated with 
traditional telephone networks. CTIA, Verizon, and AT&T argue that the 
history of the legislation that defined ``commercial mobile service'' 
indicates that Congress intended the term ``public switched network'' 
to mean the ``public switched telephone network.'' CTIA, for example, 
argues that when Congress used the term ``public switched network'' in 
1993, ``it did so knowing that the Commission and the courts routinely 
used that term interchangeably with `public switched telephone network' 
'' and that ``[i]t is axiomatic that, when Congress `borrows' a term of 
art that has been given meaning by the courts or the relevant agency, 
it `intended [that term] to have its established meaning.' '' It argues 
also that ``the Conference Report accompanying the legislation confirms 
that, although Congress used the term `public switched network,' it 
viewed that term as synonymous with `the [p]ublic switched telephone 
network.' '' AT&T notes that Congress ``used the term `the public 
switched network' '' and that ``Congress's use of the definite article 
`the' and the singular `network' makes clear that it was referring to a 
single `public switched network' '' The parties also argue that the 
text of the FirstNet public safety legislation supports their argument 
because it distinguishes between the ``public switched network'' and 
the ``public Internet. AT&T contends also that the text of section 230 
supports its views.

[[Page 19801]]

    395. We agree with other commenters that these arguments do not 
give sufficient weight to Congressional intent as reflected in the text 
of the statute itself. As noted above, section 332(d)(2) of the Act 
uses the term ``public switched network'' rather than ``public switched 
telephone network.'' Moreover, as CTIA, Verizon, and AT&T acknowledge, 
the statute expressly delegates authority to the Commission to define 
the term ``public switched network.'' While we agree with CTIA that the 
delegation of authority does not provide boundless discretion, we find 
that what is clear from the statutory language is not what the 
definition of ``public switched network'' was intended to cover but 
rather that Congress expected the notion to evolve and therefore 
charged the Commission with the continuing obligation to define it. In 
short, by defining such terms by reference to the way they ``are 
defined by regulation by the Commission,'' Congress expressly delegated 
this policy judgment to the Commission. As noted above, in defining the 
terms ``interconnected service'' and ``public switched network,'' the 
Commission concluded that the term ``public switched network'' should 
not be defined in a static way and recognized that the network is 
continuously growing and changing because of new technology and 
increasing demand. The Commission expressly rejected calls in 1994 to 
define the public switched network as the ``public switched telephone 
network'' finding that a broader definition was consistent with 
Congress's decision to use the term ``public switched network,'' rather 
``than the more technologically based term `public switched telephone 
network.' '' (Contrary to one of the dissenting statements, (Pai 
Dissent at 46-47 & n.337), the Commission made clear it was not 
limiting the term ``public switched network'' to the traditional 
network. First, as noted above, it rejected that view in favor of the 
position of other commenters that ``the network should not be defined 
in a static way,'' an interpretation it found more consistent with the 
determination by Congress not to employ the term ``public switched 
telephone network.'' Second, it stated that any switched common carrier 
service that is interconnected with the traditional local or 
interexchange switched network would be defined ``as part of'' the 
public switched network ``for purposes of our definition,'' Second CMRS 
Report and Order, 9 FCC Rcd at 1436 through 1437, 59 FR 18493, Apr. 19, 
1994. Even as early as 1994, the comments on which the Commission 
relied for its definition, id. at 1437, para. 60, made this very point. 
Comments of other wireless providers, with whom the Commission agreed 
about avoiding ``a static way'' of defining the network, id. at 1436, 
para. 59, made the same point.) Today, we build upon this analysis and 
update our definition of ``public switched network'' to reflect changes 
in technology. Reflecting the foregoing changes in technology and 
telecommunications infrastructure, our definition contemplates a single 
network comprised of all users of public IP addresses and NANP numbers, 
and not two separate networks as AT&T argues. We find that this action 
is consistent both with the text of the statute and Congressional 
intent. (We are not persuaded by AT&T's arguments that rely, not on the 
foregoing language or purpose of the 1993 statute at issue, but on 
subsequent statutes enacted for different purposes in 1996 and 2012. 
Quite apart from canons of statutory construction, this argument 
disregards the signal difference in section 332(d), which delegates the 
question of the scope of its terms to the Commission in light of its 
experience and market developments over time. We note, however, that 
AT&T's reliance on the ``policy'' of the 1996 Act reflected in section 
230 is similar to one that Verizon made but that was not found by the 
Verizon court to be a bar to its conclusion that ``section 706 grants 
the Commission authority to promote broadband deployment by regulating 
how broadband providers treat edge providers.'')
    396. We recognize that, in the 2007 Wireless Broadband 
Classification Order, the Commission previously concluded that section 
332--``as implemented by the Commission's CMRS rules''--did not 
contemplate wireless broadband Internet access service ``as provided 
today,'' citing the Second CMRS Report and Order's finding that `` 
`commercial mobile service' must still be interconnected with the local 
exchange or interexchange switched network as it evolves.'' The 
Commission also found that mobile broadband Internet access was not an 
``interconnected service'' based on its reading of the Commission's 
existing rule, because the service did not provide its users with the 
capability to reach all other users of the public switched network. In 
addition, in 2011, in its order adopting data roaming requirements, the 
Commission defined services subject to the data roaming rule as 
services that are not interconnected with the public switched network. 
(The Commission defined ``commercial mobile data service'' which is 
subject to the data roaming rule as ``any mobile data service that is 
not interconnected with the public switched network.'' Opponents of 
reclassifying mobile broadband Internet access services have argued 
that the D.C. Circuit's decisions on data roaming and on the 2010 Open 
Internet Order bar the Commission from reclassifying mobile broadband 
Internet access as commercial mobile service. First, we note that the 
issue of revising the Commission's definitions was neither raised nor 
discussed in the data roaming or open Internet decisions. Moreover, 
contrary to these arguments, we find that the Court's acceptance of the 
Commission's previous decisions based on its existing definitions does 
not preclude the Commission from revisiting and revising its 
definitions, as expressly permitted by the language of section 332. We 
note that if a mobile service is not interconnected to the public 
switched network (as updated herein) and otherwise meets the definition 
of ``commercial mobile data service'' in section 20.3 of the 
Commission's rules, it will continue to be subject to the data roaming 
rules.) However, the 2007 Wireless Broadband Classification Order (on 
which the 2011 Data Roaming Order also relied) was premised both on its 
view of the service ``as provided today'' and on ``an internal 
contradiction'' that a finding that wireless broadband Internet access 
was a commercial mobile would have caused with the finding that it was 
an ``information service.'' Moreover, in neither instance did the 
Commission consider whether it should revise the definition of ``public 
switched network,'' on which its conclusion in the 2007 Wireless 
Broadband Classification Order was premised.
    397. Today, we update the definition of ``public switched network'' 
to reflect current technology and conclude that mobile broadband 
Internet access is an interconnected service. First, as outlined above, 
we find that mobile broadband is an ``interconnected service'' because 
it interconnects with ``public switched network'' as we define it 
today. We find also that mobile broadband is an interconnected service 
because it gives its users the capability to send and receive 
communications from all other users of the Internet. In defining the 
term ``interconnected service'' in the Second CMRS Report and Order, 
the Commission indicated its belief that, by using the term 
``interconnected service,'' Congress intended to focus on whether 
mobile

[[Page 19802]]

services ``make interconnected service broadly available through their 
use of the public switched network.'' In addition, the Commission noted 
that Congress's purpose was to ``ensure that a mobile service that 
gives its customers the capability to communicate or to receive 
communications from other users of the public switched network should 
be treated as a common carriage offering.'' This was by contrast with 
the alternative ``private mobile service'' classification, which by 
statute includes services not ``effectively available to a substantial 
portion of the public.'' Mobile broadband Internet access service fits 
the former classification as millions of subscribers use it to send and 
receive communications on their mobile devices every day. In sharp 
contrast to 2007 when the Commission characterized mobile broadband 
Internet access services as being in a nascent stage, today the mobile 
broadband marketplace has evolved such that hundreds of millions of 
consumers now use mobile broadband to access the Internet. For example, 
as noted earlier, by November 2014, 73.6 percent of the entire U.S. age 
13+ population was communicating with smart phones, a figure which has 
continued to rise rapidly over the past several years. In addition, the 
number of mobile connections already exceeds the U.S. population and 
Cisco forecasts that by 2019, North America will have nearly 90% of its 
installed based converted to smart devices and connections, and smart 
traffic will grow to 97% of the total global mobile traffic. Mobile 
broadband subscribers, who use the same devices to receive voice and 
data communications, can also send or receive communications to or from 
anywhere in the nation, whether connected with other mobile broadband 
subscribers, fixed broadband subscribers, or the hundreds of millions 
of Web sites available to them over the Internet. This evidence of the 
extensive changes that have occurred in the mobile marketplace 
demonstrates the ubiquity and wide scale use of mobile broadband 
Internet access service today.
    398. Today we update the definition of ``public switched network'' 
to reflect current mass market communications network technologies and 
configurations, and the rapidly growing and virtually universal use of 
mobile broadband service. It also is more consistent with Congressional 
intent to recognize as an ``interconnected service'' today's broadly 
available mobile broadband Internet access service, which connects with 
the Internet and provides its users with the ability to send and 
receive communications from all other users connected to the Internet, 
(whether fixed or mobile). As CTIA recognizes, Congress's intent in 
enacting section 332 was to create a symmetrical regulatory framework 
among similar mobile services that were made available ``to the public 
or . . . to such classes of eligible users as to be effectively 
available to a substantial portion of the public.'' Given the universal 
access provided today and in the foreseeable future by and to mobile 
broadband and its present and anticipated future penetration rates in 
the United States, we find that our decision today classifying mobile 
broadband Internet access as a commercial mobile service is consistent 
with Congress's objective. As noted above, that is a policy judgment 
that section 332(d) expressly delegated to the Commission, consistent 
with its broad spectrum management authority under Title III.
    399. Moreover, we agree with commenters who argue that mobile 
broadband Internet access service meets the definition of 
interconnected service for a wholly independent reason: Because--even 
under our existing definition of ``public switched network'' adopted in 
1994--users have the ``capability,'' as provided in section 20.3 of our 
rules, to communicate with NANP numbers using their broadband 
connection through the use of VoIP applications. Other parties 
disagree, arguing that, regardless of the attributes of VoIP services 
that ride over broadband Internet access networks, broadband Internet 
access service itself does not offer the ability to reach all NANP 
endpoints. These parties note also that the Commission itself has 
previously concluded that mobile broadband Internet access, in and of 
itself, does not provide the ability to reach all other users of the 
public switched network.
    400. We find that the Commission's previous determination about the 
relationship between mobile broadband Internet access and VoIP 
applications in the context of section 332 no longer accurately 
reflects the current technological landscape. Today, users on mobile 
networks can communicate with users on traditional copper based 
networks and IP based networks, making more and more networks using 
different technologies interconnected. In addition, mobile subscribers 
continue to increase their use of smartphones and tablets and the 
significant growth in the use of mobile broadband Internet access 
services has spawned a growing mobile application ecosystem. The 
changes in the marketplace have increasingly blurred the distinction 
between services using NANP numbers and services using public IP 
addresses and highlight the convergence between mobile voice and data 
networks that has occurred since the Commission first addressed the 
classification of mobile broadband Internet access in 2007. Today, 
mobile VoIP, as well as over-the-top mobile messaging, is among the 
increasing number of ways in which users communicate indiscriminately 
between NANP and IP endpoints on the public switched network. In view 
of these changes in the nature of mobile broadband service offerings, 
we find that mobile broadband Internet access service today, through 
the use of VoIP, messaging, and similar applications, effectively gives 
subscribers the capability to communicate with all NANP endpoints as 
well as with all users of the Internet. (In support of arguments 
regarding interconnection, one of the dissents (Pai Dissent at 51 
n.362), cites the inapposite Time Warner Cable Request for Declaratory 
Ruling That Competitive Local Exchange Carriers May Obtain 
Interconnection under section 251 of the Communications Act of 1934, as 
Amended, to Provide Wholesale Telecommunications Services to VoIP 
Providers, Memorandum Opinion and Order, 22 FCC Rcd 3513, 3520, paras. 
15 through 16 (Wireline Comp. Bur. 2007). Our interpretation here of 
the Commission's own rule as to what constitutes the ``capability'' to 
communicate with NANP endpoints is a completely different question from 
whether wholesale carriers are entitled to interconnection rights under 
section 251 of the Act regardless of the regulatory status of VoIP 
services provided to end users, which was the issue addressed by the 
staff in the Time Warner Cable request for a Declaratory Ruling.)
    401. We also note that, under the Commission's definition of 
``interconnected service'' in section 20.3 of the rules, a service is 
interconnected even if ``. . . the service provides general access to 
points on the public switched network but also restricts access in 
certain limited ways.'' Thus, the Commission's definition, while 
requiring that the interconnected service provide the ``capability'' 
for access to all other users of the public switched network, also 
recognizes that services that restrict access to the public switched 
network, in certain limited ways, should also be viewed as 
interconnected. (In adopting the definition of interconnected service 
in

[[Page 19803]]

the Second CMRS Report and Order, the Commission recognized that 
interconnected services could be limited and noted that ``[i]n defining 
interconnected service in terms of transmissions to or from `anywhere' 
on the PSN, we note that it is necessary to qualify the scope of the 
term `anywhere'; if a service that provides general access to points on 
the PSN also restricts calling in certain limited ways (e.g., calls 
attempted to be made by the subscriber to `900' telephone numbers are 
blocked), then it is our intention still to include such a service 
within the definition of `interconnected service' for purposes of our 
part 20 rules.'') Accordingly, to the extent that there is an argument 
that, even with an updated definition of public switched network, 
mobile broadband Internet access still would not meet the definition of 
interconnected because it would only enable communications with some 
rather than all users of the public switched network, i.e., users with 
NANP numbers, we disagree and find that the Commission's rules 
recognize that interconnected services may be limited in certain ways. 
Our interpretation of the Commission's rules is consistent with their 
purpose, which is to ascertain whether the interconnected service is 
``broadly available.'' It is also most consistent with, and must be 
informed by, the key section 332(d) guidepost that Congress provided to 
the Commission in granting it authority to define these terms. This 
guidepost refers to a service available to ``the public'' or to such 
classes of eligible users as to be effectively available ``to a 
substantial portion of the public.'' This focus of the inquiry on 
availability to the public or a substantial portion of it is also 
consistent with the specific purpose of the statute, which was to 
create a symmetrical regulatory framework for similar commercial 
services then being offered to consumers by cellular licenses and by 
SMR licensees who were using licenses that traditionally had been used 
to provide wireless service only to limited groups of users (e.g., taxi 
fleets). (To make this point clear, and in the exercise of our 
authority to ``specif[y] by regulation'' what services qualify as CMRS 
services that make interconnected service available to the public or to 
such classes of eligible users as to be effectively available to a 
substantial portion of the public, we have made a conforming change to 
the definition of Interconnected Service in section 20.3 of the 
Commission's rules.)
    402. Lastly, because today we classify mobile broadband Internet 
access service as a telecommunications service, designating it also as 
commercial mobile service subject to Title II is most consistent with 
Congressional intent to apply common carrier treatment to 
telecommunications services. Specifically, as in 2007, but for 
different reasons in light of our reclassification of the service as a 
``telecommunications service,'' we find that classifying mobile 
broadband Internet access service as a commercial mobile service is 
necessary to avoid a statutory contradiction that would result if the 
Commission were to conclude both that mobile broadband Internet access 
was a telecommunications service and also that it was not a commercial 
mobile service. A statutory contradiction would result from such a 
finding because, while the Act requires that providers of 
telecommunications services be treated as common carriers, it prohibits 
common carrier treatment of mobile services that do not meet the 
definition of commercial mobile service. Finding mobile broadband 
Internet access service to be commercial mobile service avoids this 
statutory contradiction and is most consistent with the Act's intent to 
apply common carrier treatment to providers of telecommunication 
services.
    403. Mobile Broadband Internet Access Service Is Not a Private 
Mobile Service. Our conclusion that mobile broadband Internet access 
service is a commercial mobile service, through the application of our 
updated definition of ``public switched network,'' leads unavoidably to 
the conclusion that it is not a private mobile service. Indeed, we 
believe that today's mobile broadband Internet access service, with 
hundreds of millions of subscribers and the characteristics discussed 
above, is not akin to the private mobile service of 1994, such as a 
private taxi dispatch service, services that offered users access to a 
discrete and limited set of endpoints. Even, however, if that were not 
so, there is another reason that mobile broadband Internet access 
service is not a private mobile service: It is the functional 
equivalent of a commercial mobile service, even under the previous 
definition of ``public switched network.'' As with the policy judgments 
reflected in the other two definitional subsections of section 332(d) 
and described above, Congress expressly delegated authority to the 
Commission to determine whether a particular mobile service may be the 
functional equivalent of a commercial mobile service. Specifically, 
section 332 of the Act defines ``private mobile service'' as ``any 
mobile service . . . that is not a commercial mobile service or the 
functional equivalent of a commercial mobile service, as specified by 
regulation by the Commission.'' We find that mobile broadband Internet 
access service is functionally equivalent to commercial mobile service 
because, like commercial mobile service, it is a widely available, for 
profit mobile service that offers mobile subscribers the capability to 
send and receive communications on their mobile device to and from the 
public. Although the services use different addressing identifiers, 
from an end user's perspective, both are commercial services that allow 
users to communicate with the vast majority of the public.
    404. CTIA, Verizon, and AT&T argue that mobile broadband Internet 
access service cannot be considered the functional equivalent of 
commercial mobile service. First, they argue that the Commission failed 
to provide notice that it might deem mobile broadband the functional 
equivalent of CMRS. Next, CTIA argues that ``Congress intended the 
hallmark of CMRS to be the provision of interconnected service through 
use of the PSTN. No service lacking this essential attribute could 
amount to a functional equivalent of CMRS.'' Verizon argues that 
``because mobile broadband Internet access service cannot, on its own, 
be used to place calls to telephone numbers, and CMRS cannot be used to 
connect with (for example) Google's search engine or Amazon.com or any 
of the millions of other sources of online content, these two services 
are not substitutes, and cannot be deemed functionally equivalent.'' 
AT&T and CTIA argue that mobile broadband Internet access is not a 
substitute for CMRS and therefore is not the functional equivalent of 
CMRS. Verizon, CTIA, and AT&T argue that the issue of whether or not 
mobile VoIP applications or services themselves may be interconnected 
with the public switched network should have no bearing on the 
determination of whether mobile broadband Internet access service 
itself may be viewed as the functional equivalent of commercial mobile 
service.
    405. We disagree with these arguments. First, for the reasons 
discussed above, we disagree with the parties' arguments regarding 
notice. We find that our decision today that mobile broadband Internet 
access service may be viewed as the functional equivalent of commercial 
mobile service is a logical outgrowth of the discussions and questions 
presented in the 2014 Open Internet NPRM. As noted above, our 2014 Open 
Internet NPRM sought

[[Page 19804]]

comment on the option of revising the classification of mobile 
broadband Internet access service and on whether it would fit within 
the definition of commercial mobile service under section 332 of the 
Act and the Commission's rules implementing that section, including 
section 20.3. Section 20.3 of the Commission's rules defines commercial 
mobile radio service as a mobile service that is: ``Provided for 
profit, i.e., with the intent of receiving compensation or monetary 
gain; an interconnected service; and available to the public or to such 
classes of eligible users as to be effectively available to a 
substantial portion of the public; or the functional equivalent of such 
a mobile service . . . .'' Interested parties should have reasonably 
foreseen and in fact were aware that the Commission would analyze the 
functional equivalence of mobile broadband Internet access service as 
part of its consideration of whether it should revise the 
classification of mobile broadband Internet access and whether mobile 
broadband Internet access would fit within the definition of commercial 
mobile service under section 332. Indeed, several parties have 
submitted comments on this question.
    406. We also disagree with CTIA's contention that, if a mobile 
service is not an interconnected service through the use of the public 
switched telephone network, it may not be considered the functional 
equivalent of commercial mobile service. This argument would render the 
functional equivalence language in the statute superfluous by 
essentially requiring a functionally equivalent service to meet the 
literal definition of commercial mobile service. We find that Congress 
included the functional equivalence provision in the statute precisely 
to address such new developments for services that may not meet the 
literal definition of commercial mobile service. We also disagree with 
Verizon that, because mobile broadband subscribers may use their 
service to communicate with a different and broader range of entities, 
the two services cannot be functionally equivalent. As noted above, 
both mobile broadband Internet access service and commercial mobile 
service provide their users with a service that enables ubiquitous 
access to the vast majority of the public. The fact that the services 
may also enable communications in other ways or with different groups 
does not make them less useful as substitutes for commercial mobile 
service. Moreover, regardless of whether providers may offer voice and 
data services separately, as discussed above, from both a technical as 
well as a consumer perspective, there are increasingly fewer 
distinctions or interoperability issues between these types of 
services. The marketplace changes that have occurred since the 
Commission first addressed the classification of mobile broadband 
Internet access service in 2007 support our finding that mobile 
broadband Internet access service offered to the mass market must be 
viewed today as the functional equivalent of commercial mobile service.
    407. We recognize that, in the Second CMRS Report and Order, the 
Commission created a petition-based process for parties interested in 
challenging the classification of a particular service as private 
mobile service, and indicated that it would consider a variety of 
factors to determine whether a particular service is the functional 
equivalent of a CMRS service. Specifically, as AT&T and CTIA point out, 
the Commission said it would consider consumer demand for the service 
in question to determine whether the service is closely substitutable 
for a commercial mobile radio service; whether changes in price for the 
service under examination, or for the comparable commercial mobile 
radio service, would prompt customers to change from one service to the 
other; and market research information identifying the targeted market 
for the service under review. Section 20.9 of the Commission's rules 
articulates the same standard for parties interested in challenging the 
classification of a service as a private mobile service. While we do 
not amend section 20.9's separate provision for a petition process in 
other contexts, for the reasons stated above related to today's 
widespread distribution and use of mobile broadband devices, we are 
amending section 20.3 to reflect our conclusion that mobile broadband 
Internet access service is the functional equivalent of CMRS.
5. The Reclassification of Broadband Internet Access Service Will 
Preserve Investment Incentives
    408. In this section, we address potential effects of our 
classification decision on investment and innovation in the Internet 
ecosystem. Our classification of broadband Internet access service 
flows from the marketplace realities in how this service is offered. In 
reaching these conclusions, we also consider whether the resulting 
regulatory environment produces beneficial conditions for investment 
and innovation while also ensuring that we are able to protect 
consumers and foster competition. We find that classifying broadband 
Internet access service as a telecommunications service--but forbearing 
from applying all but a few core provisions of Title II--strikes an 
appropriate balance by combining minimal regulation with meaningful 
Commission oversight. This approach is based on the proven model 
Congress and the Commission have applied to CMRS, under which 
investment has flourished.
    409. Based on our review of the record, the proven application of 
the CMRS model, and our predictive judgment about the future of the 
ecosystem under our new legal framework, we conclude that the new 
framework will not have a negative impact on investment and innovation 
in the Internet marketplace as a whole. As is often the case when we 
confront questions about the long-term effects of our regulatory 
choices, the record in this proceeding presents conflicting viewpoints 
regarding the likely impact of our decisions on investment. We cannot 
be certain which viewpoint will prove more accurate, and no party can 
quantify with any reasonable degree of accuracy how either a Title I or 
a Title II approach may affect future investment. Moreover, regulation 
is just one of many factors affecting investment decisions. Although we 
appreciate carriers' concerns that our reclassification decision could 
create investment-chilling regulatory burdens and uncertainty, we 
believe that any effects are likely to be short term and will dissipate 
over time as the marketplace internalizes our Title II approach, as the 
record reflects and we discuss further, below. More significantly, to 
the extent that our decision might in some cases reduce providers' 
investment incentives, we believe any such effects are far outweighed 
by positive effects on innovation and investment in other areas of the 
ecosystem that our core broadband policies will promote. Industry 
representatives support this judgment, stating that combined 
reclassification and forbearance decisions will provide the regulatory 
predictability needed to spur continued investment and innovation not 
only in infrastructure but also in content and applications.
    410. Investment Incentives. The 2014 Open Internet NPRM generated 
spirited debate about the consequences that classifying broadband 
Internet access service as a telecommunications service would have for 
investment incentives. Opponents of reclassification assert that Title 
II requirements will stifle innovation and investment. Other

[[Page 19805]]

commenters vigorously support the opposite position, asserting that 
reliance on section 706 authority to support open Internet rules is a 
course fraught with prolonged uncertainty that will stifle investment 
and that has already had detrimental economic effects. These and other 
commenters claim that a cautious regulatory approach based on Title II 
will provide much-needed predictability to investors and consumers 
alike, while ensuring that the Commission has the statutory authority 
necessary to protect the open Internet, promote competition, and 
protect consumers.
    411. The key drivers of investment are demand and competition. 
Internet traffic is expected to grow substantially in the coming years, 
and the profits associated with satisfying that growth provide a strong 
incentive for broadband providers to continue to invest in their 
networks. In addition, continuing advances in technology are lowering 
the cost of providing Internet access service. The possibility of 
enhancing profit margins can be expected to induce broadband providers 
to make the appropriate network investments needed to capture a 
reduction in costs made possible only through technological advances.
    412. Competition not only creates the correct incentives for 
investment and promotes innovation in the broadband infrastructure 
needed to support robust and ubiquitous Internet access service, but 
also spurs innovation and investment at the ``edge'' of the network, 
where content and applications are created and deployed. As one 
commenter explains, ``Title II promotes competitive entry in at least 
two ways.'' First, section 224 (from which we do not forbear in the 
context of broadband Internet access service, as discussed below) 
``ensures that telecommunications carriers receive access to the poles 
of local exchange carriers and other utilities at just, reasonable, and 
nondiscriminatory rates,'' an ``important investment benefit that will 
enable those deploying fiber-to-the-home or other competitive networks 
to deploy more expeditiously and efficiently.'' (Conversely, ACA 
asserts that reclassification would result in increased pole attachment 
rates for many of its members, which would have the effect of lowering 
investment incentives both for continued investment in existing 
facilities and for new deployments. We do not agree with ACA's 
prediction concerning investment incentives. As we explain further 
below, we are committed to avoiding an outcome in which entities 
misinterpret today's decision as an excuse to increase pole attachment 
rates of cable operators providing broadband Internet access service. 
It is not the Commission's intent to see any increase in the rates for 
pole attachments paid by cable operators that also provide broadband 
Internet access service, and we caution utilities against relying on 
this decision to that end. This Order does not itself require any party 
to increase the pole attachment rates it charges attachers providing 
broadband Internet access service, and we would consider such outcomes 
unacceptable as a policy matter. We will be monitoring marketplace 
developments following this Order and will promptly take further action 
in that regard if warranted. In any case, such arguments do not 
persuade us not to reclassify broadband Internet access service, since 
in reclassifying that service we simply acknowledge the reality of how 
it is being offered today.) Title II also ``offers other benefits at 
the state level, including access to public rights of way,'' which some 
broadband providers reportedly utilize to deploy networks.
    413. Further, contrary to the assertions of opponents of 
reclassification, sensible regulation and robust investment are not 
mutually exclusive. The investment record of incumbent LECs since 
passage of the 1996 Act calls into question claims that regulation 
necessarily stifles investment. Indeed, it appears that AT&T, Verizon, 
and Qwest (now CenturyLink) increased their capital investments as a 
percentage of revenues immediately after the Commission expanded Title 
II requirements pursuant to the Telecommunications Act of 1996, (The 
1996 Telecom Act imposed a set of new obligations on incumbent local 
exchange carriers, including, most importantly, the duty to provide 
competing carriers access to unbundled network elements at cost-based 
rates. See 47 U.S.C. 251(c)(3), 252(d)(1). The Commission adopted rules 
implementing the unbundling requirements in 1996.) while investment 
levels decreased after 2001, during a period when the Commission 
relieved providers of many unbundling requirements and other regulatory 
obligations. And, of course, wireline DSL was regulated as a common-
carrier service until 2005--a period in the late `90s and the first 
five years of this century, which saw the highest levels of wireline 
broadband infrastructure investment to date. At a minimum, this 
evidence demonstrates that robust investment can and does occur even 
when new regulations are adopted. Our conclusions are not premised on 
the assumption that regulation never harms investment, nor do we deny 
that deregulation often promotes investment; rather, we reject 
assertions that reclassification will substantially diminish overall 
broadband investment. This is further supported by examining broadband 
providers' investment histories since the announcement of the Broadband 
Classification NOI in 2010. While the Commission did not utilize 
reclassification to support its 2010 Open Internet Order, it did not 
close the docket on the Broadband Classification NOI, indicating that 
reclassification remained an open question. The record demonstrates 
that broadband providers continued to invest, at ever increasing 
levels, in their networks post-2010, after which broadband providers 
were clearly on notice that the Commission was considering 
reclassifying broadband Internet access service as a telecommunications 
service and imposing certain Title II regulations upon them.
    414. A number of market analysts concur that dire predictions of 
disastrous effects on investment are overblown. Although some 
commenters claim that then-Chairman Genachowski's May 6, 2010 
announcement that the Commission would consider adopting a Title II 
approach prompted analysts to downgrade the ratings of Internet access 
service providers and sent stock prices downward, the effect of this 
announcement on stock prices, if any, is by no means clear. (Free Press 
explains that following the announcement of the 2010 Broadband 
Classification NOI, ``[m]ost of the ISP stocks barely moved from this 
announcement. Verizon and AT&T each fell 2 percent. Cable stocks did 
drop more (on substantially higher volume), but this was primarily due 
to . . . over-valuation of these stocks following better-than-expected 
Q1 earnings reports. This was compounded by the broader market concerns 
stemming from the EU debt crisis.'' Free Press Comments at 114. In the 
months following the announcement the ``ILECs, Cable and Wireless 
companies were outperforming the broader market, and vastly 
outperforming the edge companies' stocks. Comcast was the only ISP in 
negative territory, yet still outperformed the broader market. And its 
issues were more related to the merger than the [NOI].'') Further, 
there was no appreciable movement in capital markets following 
substantial public discussion of the potential use of Title II in 
November. What is clear from this debate is that stock price 
fluctuations can be caused by many different factors

[[Page 19806]]

and are susceptible to various interpretations. (At any moment in time, 
the price of a stock reflects the market's valuation of the cash-flow-
generating capability of the firm. Because a firm's cash flow is based 
on a multitude of factors, it is improper to infer that observed stock 
price changes reflect the market's belief that infrastructure 
investment will decline.) Accordingly, we find unpersuasive the 
arguments that Title II classification would have a negative impact on 
stock value.
    415. Tellingly, major infrastructure providers have indicated that 
they will in fact continue to invest under the framework we adopt, 
despite suggesting otherwise in their filed comments in this 
proceeding. For example, Sprint asserts in a letter in this proceeding 
that ``[s]o long as the FCC continues to allow wireless carriers to 
manage our networks and differentiate our products, Sprint will 
continue to invest in data networks regardless of whether they are 
regulated by Title II, section 706, or some other light touch 
regulatory regime.'' It adds that ``Sprint does not believe that a 
light touch application of Title II, including appropriate forbearance, 
would harm the continued investment in, and deployment of, mobile 
broadband services.'' Verizon's chief financial officer, Francis 
Shammo, told investors in a conference call in response to a question 
about the effect of ``this move to Title II,'' that ``I mean to be real 
clear, I mean this does not influence the way we invest. I mean we're 
going to continue to invest in our networks and our platforms, both in 
Wireless and Wireline FiOS and where we need to. So nothing will 
influence that. I mean if you think about it, look, I mean we were born 
out of a highly regulated company, so we know how this operates.''
    416. Today's Order addressing forbearance from Title II and 
accompanying rules for BIAS will resolve concerns about uncertainty 
regarding the application of Title II to these services, which some 
argue could chill investment. By grounding our regulatory authority on 
firm statutory footing and defining the scope of our intended 
regulation, our decision establishes the regulatory predictability 
needed by all sectors of the Internet industry to facilitate prudent 
business planning, without imposing undue burdens that might interfere 
with entrepreneurial opportunities. Moreover, the forbearance we grant 
we today is broad in scope and extends to obligations that might be 
viewed as characteristic of ``utility-style'' regulation. In 
particular, we forbear from imposing last-mile unbundling requirements, 
a regulatory obligation that several commenters argue has led to 
depressed investment in the European broadband marketplace. As such, we 
disagree with commenters who assert that classification of BIAS as a 
telecommunications service would chill investment due to fears that 
future Commissions will reverse our forbearance decision, and that 
forbearance will engender protracted litigation. (Other commenters also 
wrongly suggest that we plan to apply ``old world'' common carrier 
rules to Internet access service, conjuring the specter of pervasive 
and intrusive cost-of-service rate regulation.)
    417. Some opponents argue that classifying broadband Internet 
access services as telecommunications services will necessarily lead to 
regulation of Internet backbone services, CDNs, and edge services, 
compounding the suppressive effects on investment and innovation 
throughout the ecosystem. Our findings today regarding the changed 
broadband market and services offered are specific to the manner in 
which these particular broadband Internet access services are offered, 
marketed, and function. We do not make findings with regard to the 
other services, offerings, and entities over which commenters raise 
concern, and in fact explicitly exclude such services from our 
definition of broadband Internet access services.
    418. CALinnovates submitted a commissioned White Paper by NERA 
Economic Consulting, asserting that reclassification will have a strong 
negative effect on innovation (with associated harms to investment and 
employment). The White Paper asserts that small edge providers will be 
harmed by reclassification, as Title II provisions ``will serve to 
increase the capital costs for innovators both directly and indirectly 
as well as to foster the sort of regulatory uncertainty that deters 
investors from ever investing.'' We disagree. The White Paper assumes 
that broadband Internet access services will be subject to the full 
scope of Title II provisions, and ascribes increased costs to 
regulatory uncertainty. As discussed below, we forbear from application 
of many of Title II's provisions to broadband Internet access services, 
and in doing so, provide the regulatory certainty necessary to 
continued investment and innovation. We also reject the argument, set 
forth by the Phoenix Center, that reclassification would require 
broadband providers ``to create, and then tariff, a termination service 
for Internet content under section 203 of the Communications Act.''
    419. US Telecom submitted a study finding that under Title II 
regulation, wireline broadband providers are likely to invest 
significantly less than they would absent Title II regulation over the 
next five years, putting at risk much of the large capital investments 
that will be needed to meet the expected increases in demand for data 
service. The study contains several substantial analytical flaws which 
call its conclusions into question. First, the study inaccurately 
assumes that no wireless services are Title II services. In fact, 
wireless voice service is subject to Title II with forbearance, similar 
to the approach that we adopt here for BIAS. Second, the empirical 
models in the study incorrectly leave out factors that are important 
determinants of the dependent variables. For example, the level of the 
firm's demand for wireline services and its predicted rate of growth 
are left out as factors that clearly should be considered as 
determinants of wireline capital expenditures in Table 1. The 
statistical models in the paper are thus forced to either over- or 
under-estimate the role of the variables that are considered in the 
study, and as a result the predicted level of wireline investment 
subject to Title II regulation and its predicted rate of growth are not 
correct. We also agree with Free Press' argument that the study ignores 
the reality that once last-mile networks are built, the substantial 
initial investment has already been outlayed. For example, for the 
authors to observe that there was less investment in wireline networks 
than in wireless networks following the 2009 recession merely observes 
that wireline networks were largely constructed prior to 2009, while 
mobile wireless data networks were not. Further, as Free Press asserts, 
the study ignores evidence of massive network investments by incumbent 
LECs in the Ethernet market, which is regulated under Title II. The US 
Telecom study also did not factor in the potential effect of 
forbearance on investment decisions. We are thus unpersuaded that this 
study is determinative regarding the effect that reclassification will 
have on investment.
    420. CMRS, Enterprise Broadband, and Voluntary Title II. Our 
conclusions are further borne out in examining the market for those 
services that are already subject to Title II. The Commission's 
experience with CMRS, to which Title II explicitly applies, 
demonstrates that application of Title II is not inconsistent with 
robust investment in a service. The sizable investments made by CMRS 
providers, who operate under a market-based Title II regulatory regime, 
allow us to predict

[[Page 19807]]

with ample confidence that our narrowly circumscribed application of 
Title II to broadband Internet access service will not cripple the 
regulated industries or deprive consumers of the benefits of continued 
investment and innovation in network infrastructure and Internet 
applications.
    421. In 1993, Congress established a new regulatory framework for 
CMRS by giving the Commission the authority to forbear from applying 
any provision of Title II to CMRS except sections 201, 202, or 208. 
(This statutory framework, set forth in section 332 of the 
Communications Act, also preempts State or local government regulation 
of CMRS rates and entry, but permits State or local regulation of other 
CMRS terms and conditions.) Congress prescribed the standard for 
forbearance in terms nearly identical to the standard it later adopted 
for common carriage services in the Telecommunications Act of 1996. In 
1994, the Commission implemented its new authority by forbearing from 
applying sections 203, 204, 205, 211, 212, and portions of 214, thereby 
relieving providers of the burdens associated with the filing of 
tariffs, Commission investigation of new and existing rates, rate 
prescription and refund orders, regulations governing interlocking 
directorates, and regulatory control of market entry and exit. CMRS 
providers remain subject to the remaining provisions in parts I and II 
of Title II. Recognizing that the ``continued success of the mobile 
telecommunications industry is significantly linked to the ongoing flow 
of investment capital into the industry,'' the Commission sought to 
ensure that its policies fostered robust investment, and it chose a 
regulatory path intended to establish ``a stable, predictable 
regulatory environment that facilitates prudent business planning.''
    422. Mobile providers have thrived under a market-based Title II 
regime. During the period between 1993 and the end of 2009, while 
mobile voice was the primary driver of mobile revenues, wireless 
subscribership grew over 1600 percent, with more than 285 million 
subscribers at the end of 2009. Industry revenues increased from $10.9 
billion in 1993 to over $152 billion--a 1300 percent increase. Further, 
between 1993 and 2009, the industry invested more than $271 billion in 
building out their wireless networks, which was in addition to monies 
spent acquiring spectrum. (We note that Verizon argues that wireless 
investment began increasing around 2003 due to growth in mobile 
broadband, and disputes the idea that this investment was driven by 
CMRS voice services. However, given that mobile broadband was not 
classified as a Title I information service until 2007, it is not clear 
the extent to which increases in investment before then can be 
attributed to a non-CMRS regulatory environment. Furthermore, voice 
service has continued to account for a significant portion of revenues. 
Free Press cites data showing substantial investment growth in the late 
1990s (a time of increased demand for voice services) and the late 
2000s to present (a period of increased smartphone use). During the 
latter years, as discussed above, Verizon's LTE network was subject to 
openness rules imposed by spectrum licensing conditions. Regardless of 
which assumptions are made, it is clear that there has been substantial 
network investment by mobile wireless providers during a significant 
period of time in which these providers' services have been subject to 
Title II regulation or openness requirements. Indeed, the data suggest 
that network investments have been driven more by overall market 
conditions, including consumer demand, than by the particular 
regulatory framework in place.) Verizon Wireless, in particular, has 
invested tens of billions of dollars in deploying mobile wireless 
services since being subject to the 700 MHz C Block open access rules, 
which overlap in significant parts with the open Internet rules we 
adopt today. Similarly, during this period, the wireless industry built 
nearly 235,000 cell sites across the country--more than an 1800 percent 
increase over the approximately 13,000 sites at the end of 1993. 
Wireless voice service is now available to over 99.9 percent of the 
U.S. population. More than 99.4 percent of subscribers are served by at 
least two providers, and more than 96 percent are served by at least 
three providers. Finally, the recent AWS auction, conducted under the 
specter of Title II regulation, generated bids (net of bidding credits) 
of more than $41 billion--demonstrating that robust investment is not 
inconsistent with a light-touch Title II regime. Fears that our 
classification decision will lead to excessive regulation of Internet 
access service should be dispelled by our record of regulating the 
wireless voice industry for nearly twenty years under Title II.
    423. In addition, the key provisions of Title II apply to certain 
enterprise broadband services. In a series of forbearance orders in 
2007 and 2008, the Commission forbore from application of a number of 
Title II's provisions to AT&T, Qwest, Embarq, and Frontier. Since that 
time, those services have been subject to sections 201, 202, and 208, 
as well as certain other provisions that the Commission determined were 
in the public interest. AT&T has recently called this framework an 
``unqualified regulatory success story,'' and claimed that these 
services ``represent the epicenter of broadband investment that the 
Commission's national broadband policies seek to promote.'' The record 
does not evince any evidence that continued ``light touch'' Title II 
regulation has hindered investment in these services.
    424. We observe that Title II currently applies not just to 
interconnected mobile voice and data services and to enterprise 
broadband services, but also the wired broadband offerings of more than 
1000 rural local exchange carriers (LECs) that voluntarily offer their 
DSL and fiber broadband services as common carrier offerings ``in order 
to participate in National Exchange Carrier Association (NECA) tariff 
pools, which allow small carriers to spread costs and risks amongst 
themselves,'' without harmful effects on investment. (As discussed 
above, see section IV.C.1., the broadband Internet access service we 
define today is itself a transmission service. We disagree with the 
argument that in classifying BIAS, rather than a transmission 
``component'' of BIAS, we are diverging from prior precedent regarding 
these DSL services and what the Justices were debating in Brand X. See 
Pai Dissent at 40 through 42. Whether we refer to that function as 
``access,'' ``connectivity,'' or ``transmission,'' we have defined BIAS 
today such that it is the capability to send and receive packets to all 
or substantially all Internet endpoints. Thus, the service we define 
and classify today is the same transmission service as that discussed 
in prior Commission orders.) As NTCA, which represents many of these 
entities, explained, ``[c]ontrary to the dire, and somewhat hyperbolic, 
predictions of a few, the application of Title II only and strictly to 
the transport and transmission component underpinning retail broadband 
service will not cause investment in broadband networks and the 
services that ride atop them to grind to a halt. To the contrary, a 
continued lack of clear `rules of the road' is far more likely to have 
a deleterious effect on investment nationwide by providers large and 
small.'' Thus, we disagree with assertions by the American Cable 
Association that ``Title II `reclassification' or partial 
`classification' of broadband Internet access service would have 
immediate

[[Page 19808]]

and disastrous economic consequences for small and medium-sized ISPs.''

D. Judicial Estoppel Does Not Apply Here

    425. Finally, we reject the argument that we are judicially 
estopped from finding that broadband Internet access service is a 
telecommunications service. Judicial estoppel is an equitable doctrine 
that courts may invoke at their discretion to prevent a party that 
prevailed on an issue in one case from taking a contrary position in 
another case. Several commenters contend that because the Commission 
successfully argued before the Supreme Court in Brand X that cable 
modem service is an information service, the Commission is judicially 
estopped from finding that broadband Internet access service is a 
telecommunications service.
    426. We disagree. Although the Supreme Court has not adopted a 
blanket rule barring estoppel against the government, if it exists at 
all it is ``hen's teeth rare.'' Judicial estoppel may be invoked 
against the government only when ``it conducts what `appears to be a 
knowing assault upon the integrity of the judicial system,''' such as 
when the inconsistent positions are tantamount to a knowing 
misrepresentation or even fraud upon the court. Judicial estoppel will 
not be applied when the shift in position ``is the result of a change 
in public policy.''
    427. In Brand X, the Supreme Court confirmed not only that an 
administrative agency can change its interpretation of an ambiguous 
statute, but that it ```must consider varying interpretations and the 
wisdom of its policy on a continuing basis.''' Following that 
directive, we have reexamined the Commission's prior classification 
decisions and now conclude that broadband Internet access service is a 
telecommunications service. This Declaratory Ruling is the result of 
what we believe to be the better reading of the Communications Act 
under current factual and legal circumstances; it manifestly is not the 
product of fraud or other egregious misconduct.
    428. Moreover, judicial estoppel does not apply unless a party's 
current position is ``clearly inconsistent'' with its position in an 
earlier legal proceeding. In the Brand X litigation and now, the 
Commission has consistently maintained the position that the relevant 
statutory provisions are susceptible to more than one reasonable 
interpretation. Counsel for the Commission argued in Brand X that the 
Commission reasonably construed ambiguous statutory language in finding 
that cable modem service is an information service. The Supreme Court 
agreed and deferred to the Commission's judgment, but recognized that a 
contrary interpretation also would be permissible: ``[O]ur conclusion 
that it is reasonable to read the Communications Act to classify cable 
modem service solely as an `information service' leaves untouched 
Portland's holding that the Commission's interpretation is not the best 
reading of the statute.'' Although we respect the Commission's prior 
classification decisions and the policy considerations underlying them, 
we believe the better view at this time is that broadband Internet 
access is a telecommunications service as defined in the Act. Because 
our decision does not result in ```the perversion of the judicial 
process,''' judicial estoppel should not be applied here.

E. State and Local Regulation of Broadband Services

    429. We reject the argument that ``potential state tax 
implications'' counsel against the classification of broadband Internet 
access service as a telecommunications service. Our classification of 
broadband Internet access service as a telecommunications service 
appropriately derives from the factual characteristics of these 
services as they exist and are offered today. At any rate, we observe 
that the recently reauthorized Internet Tax Freedom Act (ITFA) 
prohibits states and localities from imposing ``[t]axes on Internet 
access.'' This prohibition applies notwithstanding our regulatory 
classification of broadband Internet access service. Indeed, the 
legislative history of ITFA emphasizes that Congress drafted its 
definition of ``Internet access'' to be independent of the regulatory 
classification determination in order to ``clarify that all 
transmission components of Internet access, regardless of the 
regulatory treatment of the underlying platform, are covered under the 
ITFA's Internet tax moratorium.'' (Moreover, today's decision would not 
bring broadband providers within the ambit of any state or local laws 
that impose property taxes on ``telephone companies'' or ``utilities,'' 
as those terms are commonly understood. As noted herein, we are not 
regulating broadband Internet access service as a utility or telephone 
company.)
    430. Today, we reaffirm the Commission's longstanding conclusion 
that broadband Internet access service is jurisdictionally interstate 
for regulatory purposes. (The record generally supports the continued 
application of this conclusion to broadband Internet access service.) 
As a general matter, mixed-jurisdiction services are typically subject 
to dual federal/state jurisdiction, except where it is impossible or 
impractical to separate the service's intrastate from interstate 
components and the state regulation of the intrastate component 
interferes with valid federal rules or policies. (Notwithstanding the 
interstate nature of BIAS, states of course have a role with respect to 
broadband. As the Commission has stated ``finding that this service is 
jurisdictionally interstate [] does not by itself preclude'' all 
possible state requirements regarding that service.) With respect to 
broadband Internet access services, the Commission has previously found 
that, ``[a]lthough . . . broadband Internet access service traffic may 
include an intrastate component, . . . broadband Internet access 
service is properly considered jurisdictionally interstate for 
regulatory purposes.'' The Commission thus has evaluated possible state 
regulations of broadband Internet access service to guard against any 
conflict with federal law. Though we adopt some changes to the legal 
framework regulating broadband, the Commission has consistently applied 
this jurisdictional conclusion to broadband Internet access services, 
and we see no basis in the record to deviate from this established 
precedent. The ``Internet's inherently global and open architecture'' 
enables edge providers to serve content through a multitude of 
distributed origination points, making end-to-end jurisdictional 
analysis extremely difficult--if not impossible--when the services at 
issue involve the Internet.
    431. We also make clear that the states are bound by our 
forbearance decisions today. Under section 10(e), ``[a] State 
commission may not continue to apply or enforce any provision'' from 
which the Commission has granted forbearance. With respect to universal 
service, we conclude that the imposition of state-level contributions 
on broadband providers that do not presently contribute would be 
inconsistent with our decision at the present time to forbear from 
mandatory federal USF contributions, and therefore we preempt any state 
from imposing any new state USF contributions on broadband--at least 
until the Commission rules on whether to provide for such 
contributions. (Preemptive delay of state and local regulations is 
appropriate when the Commission determines that such action best serves 
federal communications policies. We note that we are not aware of any 
current state

[[Page 19809]]

assessment of broadband providers for state universal service funds, as 
we understand that those carriers that have chosen voluntarily to offer 
Internet transmission as a Title II service classify such revenues as 
100 percent interstate.) We recognize that section 254 expressly 
contemplates that states will take action to preserve and advance 
universal service, but as discussed below, our actions in this regard 
will benefit from further deliberation.
    432. Finally, we announce our firm intention to exercise our 
preemption authority to preclude states from imposing obligations on 
broadband service that are inconsistent with the carefully tailored 
regulatory scheme we adopt in this Order. While we establish a 
comprehensive regulatory framework governing broadband Internet access 
services nationwide today, situations may nonetheless arise where 
federal and state actions regarding broadband conflict. (We note also 
that we do not believe that the classification decision made herein 
would serve as justification for a state or local franchising authority 
to require a party with a franchise to operate a ``cable system'' (as 
defined in section 602 of the Act) to obtain an additional or modified 
franchise in connection with the provision of broadband Internet access 
service, or to pay any new franchising fees in connection with the 
provision of such services.) The Commission has used preemption to 
protect federal interests when a state regulation conflicts with 
federal rules or policies, and we intend to exercise this authority to 
preempt any state regulations which conflict with this comprehensive 
regulatory scheme or other federal law. For example, should a state 
elect to restrict entry into the broadband market through certification 
requirements or regulate the rates of broadband Internet access service 
through tariffs or otherwise, we expect that we would preempt such 
state regulations as in conflict with our regulations. While we 
necessarily proceed on a case-by-case basis in light of the fact 
specific nature of particular preemption inquiries, we will act 
promptly, whenever necessary, to prevent state regulations that would 
conflict with the federal regulatory framework or otherwise frustrate 
federal broadband policies.

V. Order: Forbearance for Broadband Internet Access Services

    433. Having classified broadband Internet access service as a 
telecommunications service, we now consider whether the Commission 
should grant forbearance as to any of the resulting requirements of the 
Act or Commission rules. As proposed in the 2014 Open Internet NPRM, we 
do not forbear from sections 201, 202, and 208, along with key 
enforcement authority under the Act, both as a basis of authority for 
adopting open Internet rules as well as for the additional protections 
those provisions directly provide. As discussed below, we also do not 
forbear from certain provisions in the context of broadband Internet 
access service to protect customer privacy, advance access for persons 
with disabilities, and foster network deployment. Because we believe 
that those protections and our open Internet rules collectively will 
strike the right balance at this time of minimizing the burdens on 
broadband providers while still adequately protecting the public, 
particularly given the objectives of section 706 of the 1996 Act, we 
otherwise grant substantial forbearance.

A. Forbearance Framework

    434. Section 10 provides that the Commission ``shall'' forbear from 
applying any regulation or provision of the Communications Act to 
telecommunications carriers or telecommunications services if the 
Commission determines that:

    (1) Enforcement of such regulation or provision is not necessary 
to ensure that the charges, practices, classifications, or 
regulations by, for, or in connection with that telecommunications 
carrier or telecommunications service are just and reasonable and 
are not unjustly or unreasonably discriminatory;
    (2) enforcement of such regulation or provision is not necessary 
for the protection of consumers; and
    (3) forbearance from applying such provision or regulation is 
consistent with the public interest. (For the same reasons set forth 
herein with respect to the forbearance granted under our section 
10(a) analysis, forbearance from those same provisions and 
regulations in the case of the mobile broadband Internet access 
services also is consistent with the virtually identical forbearance 
standards for CMRS set forth in section 332(c)(1)(A).)

    435. The Commission previously has considered whether a current 
need exists for a rule in evaluating whether a rule is ``necessary'' 
under the first two prongs of the three-part section 10 forbearance 
test. In particular, the current need analysis assists in interpreting 
the word ``necessary'' in sections 10(a)(1) and 10(a)(2). For those 
portions of our forbearance analysis that do require us to assess 
whether a rule is necessary, the D.C. Circuit concluded that ```it is 
reasonable to construe `necessary' as referring to the existence of a 
strong connection between what the agency has done by way of regulation 
and what the agency permissibly sought to achieve with the disputed 
regulation.''' In contrast, section 10(a)(3) requires the Commission to 
consider whether forbearance is consistent with the public interest, an 
inquiry that also may include other considerations.
    436. Also central to our analysis, section 706 of the 1996 Act 
``explicitly directs the FCC to `utiliz[e]' forbearance to `encourage 
the deployment on a reasonable and timely basis of advanced 
telecommunications capability to all Americans.''' In its most recent 
Broadband Progress Report, the Commission found ``that broadband is not 
being deployed to all Americans in a reasonable and timely fashion.'' 
This, in turn, triggers a duty under section 706 for the Commission to 
``take immediate action to accelerate deployment.'' Within the 
statutory framework that Congress established, the Commission 
``possesses significant, albeit not unfettered, authority and 
discretion to settle on the best regulatory or deregulatory approach to 
broadband.''
    437. This proceeding is unlike typical forbearance proceedings in 
that, often, a petitioner files a petition seeking relief pursuant to 
section 10(c). In such proceedings, ``the petitioner bears the burden 
of proof--that is, of providing convincing analysis and evidence to 
support its petition for forbearance.'' However, under section 10, the 
Commission also may forbear on its own motion. Because the Commission 
is forbearing on its own motion, it is not governed by its procedural 
rules insofar as they apply, by their terms, to section 10(c) petitions 
for forbearance. (We thus also reject criticisms of possible 
forbearance based on arguments that the 2014 Open Internet NPRM would 
not satisfy those rules. Indeed, while the Commission modeled its 
forbearance procedural rules on procedures from the notice and comment 
rulemaking context in certain ways, in other, significant ways it drew 
upon procedures used outside that context. Thus, the Commission's 
adoption of these rules neither expressly bound the Commission nor 
reflected its view of the general standards relevant to a notice and 
comment rulemaking.) Further, the fact that the Commission may adopt a 
rule placing the burden on a party filing a section 10(c) petition for 
forbearance in implementing an ambiguous statutory provision in section 
10 of the Act, does not require the Commission to assume that burden 
where it forbears on its own motion, and we reject suggestions to the 
contrary. Because the Commission is not responding to a petition under 
section 10(c), we conduct our forbearance

[[Page 19810]]

analysis under the general reasoned decision making requirements of the 
Administrative Procedure Act, without the burden of proof requirements 
that section 10(c) petitioners face. We conclude that the analysis 
below readily satisfies both the standards of section 10 (We conclude 
that the section 10 analytical framework described above comports with 
the statutory requirements, and is largely consistent with alternative 
formulations suggested by others. To the extent that such comments 
could be read to suggest different analyses in any respects, we reject 
them as not required by section 10, as we interpret it above.) and the 
reasoned decision making requirements of the APA and thus reject claims 
that broad forbearance accompanying classification decisions 
necessarily would be arbitrary and capricious.
    438. We reject arguments suggesting that persuasive evidence of 
competition is a necessary prerequisite to granting forbearance under 
section 10 even if the section 10 criteria otherwise are met. For 
example, the Commission has in the past granted forbearance from 
particular provisions of the Act or regulations where it found the 
application of other requirements (rather than marketplace competition) 
adequate to satisfy the section 10(a) criteria, and nothing in the 
language of section 10 precludes the Commission from proceeding on that 
basis where warranted. (Section 10(b) does direct the Commission to 
consider whether forbearance will promote competitive market conditions 
as part of the public interest analysis under section 10(a)(3). 
However, while a finding that forbearance will promote competitive 
market conditions may provide sufficient grounds to find forbearance in 
the public interest under section 10(a)(3), see id., nothing in the 
text of section 10 makes such a finding a necessary prerequisite for 
forbearance where the Commission can make the required findings under 
section 10(a) for other reasons. For similar reasons we reject the 
suggestion that more geographically granular data or information or an 
otherwise more nuanced analysis are needed with respect to some or all 
of the forbearance granted in this Order. The record and our analysis 
supports forbearance from applying the statutory provisions and 
Commission regulations to the extent described below based on 
considerations that we find to be common nationwide, and as discussed 
in our analysis of the record below, we do not find persuasive evidence 
or arguments to the contrary in the record as to any narrower 
geographic area(s) or as to particular provisions or regulations.) 
Thus, although, in appropriate circumstances, persuasive evidence of 
competition can be a sufficient basis to grant forbearance, it is not 
inherently necessary to a grant of forbearance under section 10. The 
Qwest Phoenix Order, cited by some commenters in this regard, is not to 
the contrary. Unlike here, the Commission in the Qwest Phoenix Order 
was addressing a petition where the rationale for forbearance was 
premised on the state of competition. (Insofar as the Commission 
likewise was responding to arguments that competition was sufficient to 
warrant forbearance when acting on other forbearance petitions, this 
distinguishes those decisions, as well. Likewise, to the extent that 
the Commission has found competition to be a sufficient basis to grant 
forbearance on its own motion in the past, that does not dictate that 
it only can grant forbearance under such circumstances. Rather, the 
Commission grants forbearance where it finds that the section 10(a) 
criteria are met.) This proceeding does not involve a similar request 
for relief, and, indeed, the Qwest Phoenix Order itself specifically 
observed that ``a different analysis may apply when the Commission 
addresses advanced services, like broadband services,'' where the 
Commission, among other things, ``must take into consideration the 
direction of section 706.'' For similar reasons we reject as 
inconsistent with the text of section 10 and our associated precedent 
the argument that forbearance only is appropriate when the grant of 
forbearance will itself spur conduct that mitigates the need for the 
forborne-from requirements.

B. Maintaining the Customer Safeguards Critical to Protecting and 
Preserving the Open Internet

    439. As discussed below, we find sections 201 and 202 of the Act, 
along with section 208 and certain fundamental Title II enforcement 
authority, necessary to ensure just and reasonable conduct by broadband 
providers and necessary to protect consumers under sections 10(a)(1) 
and (a)(2). We also find that forbearance from these provisions would 
not be in the public interest under section 10(a)(3), and therefore do 
not grant forbearance from those provisions and associated enforcement 
procedural rules with respect to the broadband Internet access service 
at issue here.
1. Authority To Protect Consumers and Promote Competition: Sections 201 
and 202
    440. The Commission has found that sections 201 and 202 ``lie at 
the heart of consumer protection under the Act,'' and we find here that 
forbearance from those provisions would not be in the public interest 
under section 10(a)(3). The Commission has never previously forborne 
from applying these ``bedrock consumer protection obligations,'' and we 
generally do not find forbearance warranted here. This conclusion is 
consistent with the views of many commenters that any service 
classified as a telecommunications service should remain subject to 
those provisions. However, particularly in light of the protections the 
open Internet rules provide and the ability to employ sections 201 and 
202 in case-by-case adjudications, we are otherwise persuaded to 
forbear from applying sections 201 and 202 of the Act in a manner that 
would enable the adoption of ex ante rate regulation of broadband 
Internet access service in the future, as discussed below. (To be 
clear, this ex ante rate regulation forbearance does not extend to 
inmate calling services and therefore has no effect on our ability to 
address rates for inmate calling services under section 276.)
    441. For one, sections 201 and 202 help enable us to preserve and 
protect Internet openness broadly, and applying those provisions 
benefits the public broadly by helping foster innovation and 
competition at the edge, thereby promoting broadband infrastructure 
investment nationwide. As explained above, the open Internet rules 
adopted in this Order reflect more specific protections against unjust 
or unreasonable rates or practices for or in connection with broadband 
Internet access service. These benefits--which can extend beyond the 
specific dealings between a given broadband provider and a given 
customer--persuade us that forbearance from sections 201 and 202 here 
is not in the public interest.
    442. Retaining these provisions, moreover, is in the public 
interest because it provides the Commission direct statutory authority 
to protect Internet openness and promote fair competition while 
allowing the Commission to adopt a tailored approach and forbear from 
most other requirements. As discussed below, this includes forbearance 
from the pre-existing ex ante rate regulations and other Commission 
rules implementing sections 201 and 202. (We thus reject the arguments 
of some commenters against the application of these

[[Page 19811]]

provisions insofar as they assume that such additional regulatory 
requirements also will apply in the first instance.) As another 
example, this authority supports our forbearance from other 
interconnection requirements in the Act. Such considerations provide 
additional grounds for our conclusion that section 10(a)(3) is not 
satisfied as to forbearance from sections 201 and 202 of the Act with 
respect to broadband Internet access service.
    443. We also conclude that it would not be in the public interest 
to forbear from applying sections 201 and 202 given concerns that 
limited competition could, absent the backstop provided by that 
authority, result in harmful effects. Among other things, broadband 
providers are in a position to be gatekeepers to the end-user customers 
of their broadband Internet access service. In addition, although there 
is some amount of competition for broadband Internet access service, it 
is limited in key respects. While harmful practices by broadband 
providers--whether in general or as to particular customers--
conceivably could motivate an end user to select a different provider 
of broadband Internet access service, the record does not provide 
convincing evidence of the nature or extent of such effects in 
particular. (Commenters citing generalized information about the extent 
of switching among broadband providers does not address the specific 
concerns that we identify here about consumers' likelihood and ability 
to switch broadband providers based on particular practices by those 
providers, nor on the likelihood that any such switching would deter 
the harmful conduct.) To the contrary, for example, data show that the 
majority of Americans face a choice of only two providers of fixed 
broadband for service at speeds of 3 Mbps/768 kbps to 10 Mbps/768 kbps, 
and no choice at all (zero or one service provider) for service at 25/3 
Mbps. We also find significant costs associated with switching service 
that further limit the potential benefits of any competition that would 
otherwise exist. These collectively persuade us that we cannot simply 
conclude, as a general matter, that there is extensive competition 
sufficient to constrain providers' conduct here. Moreover, as the 
Commission found in the CMRS context, competition would ``not 
necessarily protect all consumers from all unfair practices. The market 
may fail to deter providers from unreasonably denying service to, or 
discriminating against, customers whom they may view as less 
desirable.'' In addition, and again similar to the Commission's 
conclusion in the CMRS context, even in a competitive market certain 
conditions could create incentives and opportunities for service 
providers to engage in discriminatory and unfair practices. (For the 
same reasons discussed above, we are not persuaded to reach a different 
forbearance decision based on asserted levels of competition faced by 
small- or mid-sized broadband providers.) Furthermore, no matter how 
many options end users have in selecting a provider of Internet access 
service, or how readily they could switch providers, an edge provider 
only can reach a particular end user through his or her broadband 
provider. We thus reject suggestions that market forces will be 
sufficient to ensure that providers of broadband Internet access 
service do not act in a manner contrary to the public interest.
    444. Against this backdrop we are unpersuaded by arguments seeking 
forbearance from sections 201 and 202 based on generalized arguments 
about marketplace developments, such as network investment or changes 
in performance or price per megabit, in the recent past. However, 
counterarguments in the record, longer-term trends, and our experience 
in the CMRS context where sections 201 and 202 have applied, leave us 
unpersuaded that the inapplicability of sections 201 and 202 were a 
prerequisite for any such marketplace developments. We are similarly 
unpersuaded by arguments comparing the U.S. broadband marketplace with 
those in Europe, given, among other things, the differences between the 
regulatory approach there and the regulatory framework that results 
from this Order. We thus find those arguments for forbearance 
sufficiently speculative and subject to debate that they do not 
overcome our public interest analysis above.
    445. For these same reasons, we are not persuaded that application 
of sections 201 and 202 is not necessary to ensure just, reasonable, 
and nondiscriminatory conduct by broadband providers and for the 
protection of consumers under sections 10(a)(1) and (a)(2). As 
discussed above, applying these provisions enables us to protect 
customers of broadband Internet access service from potentially harmful 
conduct by broadband providers both by providing a basis for our open 
Internet rules and for the important statutory backstop they provide 
regarding broadband provider practices more generally.
    446. We also observe that our forbearance decision as to sections 
201 and 202 for broadband Internet access service is informed by the 
CMRS experience, where Congress specifically recognized the importance 
of sections 201 and 202 (along with section 208) in excluding those 
provisions from possible forbearance under section 332(c)(1)(A). 
Application of sections 201 and 202 has not frustrated investment in 
the wireless marketplace, nor has it led to ex ante regulation of rates 
charged to consumers for wireless voice service. Indeed, we find that 
the successful application of this legal framework in the CMRS context 
responds to the concerns of some commenters about the potential 
burdens, or uncertainty, resulting from the application of sections 201 
and 202, which they contend could create disincentives for investment 
even standing alone and apart from ex ante rules. (While Verizon 
attempts to distinguish the CMRS experience by claiming that, unlike 
voice service, ``broadband has never been subject to Title II,'' 
Verizon Jan. 26, 2015 Ex Parte Letter at 5, this is both factually 
incorrect for the reasons described above, nor does it meaningfully 
address the fact that the CMRS marketplace has seen substantial growth 
and investment under the regulatory framework that the Commission did 
apply.) Moreover, within their scope, our open Internet rules reflect 
our interpretation of how sections 201 and 202 apply, providing further 
guidance and addressing possible concerns about uncertainty regarding 
the application of sections 201 and 202. Beyond that, we are not 
persuaded that concerns about the burdens or uncertainty associated 
with sections 201 and 202 counsel in favor of a contrary public 
interest finding under section 10(a)(3), particularly given the very 
generalized concerns commenters raised.
    447. Although some have argued that section 706 of the 1996 Act 
provides sufficient authority to adopt open Internet protections, and 
we do, in fact, conclude that section 706 provides additional support 
here, we nonetheless conclude that the application of sections 201 and 
202 is appropriate to remove any ambiguity regarding our authority to 
enforce strong, clear open Internet rules. (For example, although we 
find that we have authority under section 706 of the 1996 Act to 
implement appropriate enforcement mechanisms, our reliance on sections 
201 and 202 as additional sources of authority (coupled with the 
enforcement provisions from which we do not forbear, as discussed 
below), eliminates possible arguments to the contrary.) Further, 
comments focused

[[Page 19812]]

exclusively on section 706 authority neglect the direct role that 
sections 201 and 202 will play in the overall regulatory framework we 
adopt, with respect to practices for or in connection with broadband 
Internet access service that are not directly governed by our rules.
    448. We are persuaded, in part, by arguments that we should forbear 
from sections 201 and/or 202 outside the open Internet context, 
although we reject calls to entirely forbear from applying sections 201 
and 202 outside that context or that we otherwise adopt a more granular 
decision regarding forbearance from provisions in sections 201 and/or 
202. While open Internet considerations have led the Commission to 
revisit its prior decisions, our ultimate classification decision here 
simply acknowledges the reality of how these services are being offered 
today. (We thus reject claims that we somehow are using forbearance to 
increase regulation. Rather, we are using it to tailor the regulatory 
regime otherwise applicable to these telecommunications services.) 
Having classified BIAS as a telecommunications service, we exercise our 
forbearance authority to establish a tailored Title II regulatory 
framework that adequately protects consumers, ensures just and 
reasonable broadband provider conduct, and furthers the public 
interest--consistent with our goals of more, better, and open 
broadband. In addition, insofar as commenters cite the same arguments 
about past network investment or changes in performance or price per 
megabit in the recent past that we discussed above, we again find them 
sufficiently speculative and subject to debate that they do not 
overcome our forbearance analysis for sections 201 and 202 above. 
Moreover, as we noted above, our decision not to forbear from applying 
sections 201 and 202 not only enables our open Internet regulatory 
framework but supports our grant of broad forbearance from other 
provisions and regulations, as discussed below. In particular, as 
discussed below, we find that our sections 201 and 202 authority 
provides a more flexible framework better suited to this marketplace 
than many of the alternative regulations that otherwise would apply.
    449. Nor do commenters adequately explain how forbearance could be 
tailored in these ways, at least in the context of case-by-case 
adjudication. For broadband providers' interconnection practices, which 
are not covered by the open Internet rules we adopt today, we expressly 
rely on the backstop of sections 201 and 202 for case-by-case decision 
making. We also rely on both sections 201 and 202 for conduct that is 
covered by the open Internet rules adopted here. Those rules reflect 
the Commission's interpretation of how sections 201 and 202 apply in 
that context, and thus the requirements of section 201 and 202 are 
coextensive as to broadband Internet access service covered by those 
rules. Commenters do not indicate, nor does the record otherwise 
reveal, an administrable way for the Commission to grant the requested 
partial forbearance while still pursuing such case-by-case decisions in 
the future. Further, while section 706 of the 1996 Act would remain, as 
well, we find that sections 201 and 202 provide a more certain 
foundation for evaluating providers' conduct and pursuing enforcement 
if warranted in relevant circumstances arising in the future. We thus 
are not persuaded that even these more limited proposals for 
forbearance from provisions in sections 201 and/or 202 as applied on a 
case-by-case basis would be in the public interest under section 
10(a)(3).
    450. Although we conclude that the section 10 criteria are not met 
with respect to the full scope of forbearance that these commenters 
seek, because we do not and cannot envision adopting new ex ante rate 
regulation of broadband Internet access service in the future, we 
forbear from applying sections 201 and 202 to broadband services to 
that extent. As described above, our approach here is informed by the 
success of the CMRS framework, which has not, in practice, involved ex 
ante rate regulation. In addition, as courts have recognized, when 
exercising its section 10 forbearance authority ``[g]uided by section 
706,'' the Commission permissibly may ``decide[ ] to balance the future 
benefits'' of encouraging broadband deployment ``against [the] short 
term impact'' from a grant of forbearance. Under the totality of the 
circumstances here, including the protections of our open Internet 
rules--which focus on what we identify and the most significant 
problems likely to arise regarding these broadband services--and our 
ability to address issues ex post under sections 201 and 202 we do not 
find ex ante rate regulations necessary for purposes of section 
10(a)(1) and (a)(2). Further, guided by section 706, and reflecting the 
tailored regulatory approach we adopt in this item, we find it in the 
public interest to forbear from applying sections 201 and 202 insofar 
as they would support the adoption of ex ante rate regulations for 
broadband Internet access service in the future.
    451. To the extent some commenters express concern about future 
rules that the Commission might adopt based on this section 201 and 202 
authority, we cannot, and do not, envision going beyond our open 
Internet rules to adopt ex ante rate regulations based on that section 
201 and 202 authority in this context. Consequently, we forbear from 
sections 201 and 202 in that respect, as discussed above. In this 
Order, we decide only that forbearance from sections 201 and 202 of the 
Act to broadband Internet access service is not warranted under section 
10 to the extent described above. Indeed, we find here that the 
application of sections 201 and 202 of the Act enable us to forbear 
from other requirements, including pre-existing tariffing requirements 
and Commission rules governing rate regulation, which we find are not 
warranted here. Thus, any pre-existing rate regulations adopted by the 
Commission under its Title II authority--including any regulations 
adopted under sections 201 and 202--will not be imposed on broadband 
Internet access service as a result of this Order. Finally, while other 
types of rules also potentially could be adopted based on section 201 
and 202 authority, any Commission rules adopted in the future would 
remain subject to judicial review under the APA. (In this regard, 
commenters advocating forbearance from sections 201 and 202 to guard 
against new rules that the Commission might adopt pursuant to that 
authority do not meaningfully explain what incremental benefit that 
would achieve given that any future Commission proceeding would be 
required to adopt such rules in any case.)
2. Enforcement
    452. We also retain certain fundamental Title II enforcement 
provisions, as well as the Commission's rules governing section 208 
complaint proceedings. In particular, we decline to forbear from 
applying section 208 of the Act and the associated procedural rules, 
which provide a complaint process for enforcement of applicable 
provisions of the Act or any Commission rules. Section 208 permits 
``[a]ny person, any body politic, or municipal organization, or State 
commission, complaining of anything done or omitted to be done by any 
common carrier subject to this chapter in contravention of the 
provisions thereof'' to file a complaint with the Commission and seek 
redress. We also retain additional statutory provisions that we find 
necessary to ensuring a meaningful enforcement process. In particular, 
we decline to forbear from sections 206, 207, and 209 as a necessary 
adjunct to the section 208 complaint process. As the Commission

[[Page 19813]]

has held previously, forbearing from sections 206, 207, and 209 ``would 
eviscerate the protections of section 208'' because ``[w]ithout the 
possibility of obtaining redress through collection of damages, the 
complaint remedy is virtually meaningless.'' We similarly do not 
forbear from sections 216 and 217, which ``merely extend the Title II 
obligations of [carriers] to their trustees, successors in interest, 
and agents. The sections were intended to ensure that a common carrier 
could not evade complying with the Act by acting through others over 
whom it has control or by selling its business.'' Thus, we decline to 
forbear from enforcing these key Title II enforcement provisions with 
respect to broadband Internet access service.
    453. We find that forbearance from these key enforcement provisions 
and the associated procedural rules does not satisfy any of the section 
10(a) criteria. As discussed above, we decline to forbear from 
enforcement of sections 201 and 202 as they apply to broadband Internet 
access service. To make application of these provisions meaningful, the 
possibility of enforcement needs to be available. Consequently, insofar 
as we find above that sections 201 and 202 are necessary to guard 
against unjust, unreasonable, or unjustly or unreasonably 
discriminatory conduct by broadband providers and to protect consumers, 
that presumes the viability of enforcement. For these same reasons, 
forbearance from these key Title II enforcement provisions would not be 
in the public interest. Thus, our conclusion that section 10(a) is not 
met as to these key Title II enforcement provisions builds on our prior 
conclusion to that effect as to sections 201 and 202. (Consistent with 
our analysis above, see supra para.447, although section 706 of the 
1996 Act would remain, these Title II enforcement provisions provide a 
more certain foundation for pursuing enforcement if warranted in 
relevant circumstances arising in the future.)
    454. In the event that a carrier violates its common carrier 
duties, the section 208 complaint process would permit challenges to a 
carrier's conduct, and many commenters advocate for section 208 to 
apply. The Commission's procedural rules establish mechanisms to carry 
out that enforcement function in a manner that is well-established and 
clear for all parties involved. The Commission has never previously 
forborne from section 208. Indeed, we find it instructive that in the 
CMRS context Congress specifically precluded the Commission from using 
section 332 to forbear from section 208. Commenters also observe the 
important interrelationship between section 208 and sections 206, 207, 
209, 216, and 217, which the Commission itself has recognized in the 
past, as discussed above. In addition, to forbear from sections 216 and 
217 would create a loophole in our ability to evenly enforce the Act, 
which would imperil our ability to protect consumers and to protect 
against unjust or unreasonable conduct, and would be contrary to the 
public interest. The prospect that carriers may be forced to defend 
their practices before the Commission supports the strong public 
interest in ensuring the reasonableness and non-discriminatory nature 
of those actions, protecting consumers, and advancing our overall 
public interest objectives. (For the reasons discussed above, we thus 
reject the assertions of some commenters that enforcement is unduly 
burdensome. In particular, we are not persuaded that such concerns 
outweigh the overarching interest advanced by the enforceability of 
sections 201 and 202. Nothing in the record demonstrates that our need 
for enforcement differs among broadband providers based on their size, 
and we thus are not persuaded that a different conclusion in our 
forbearance analysis should be reached in the case of small broadband 
providers, for example.) While some commenters express fears of 
``threats of abusive litigation'' or other burdens arising from the 
application of these provision, other commenters correctly note the 
speculative nature of those arguments given the lack of evidence of 
such actions where those provisions historically have applied 
(including in the CMRS context). In hearing section 207 claims, courts 
have historically been careful to consider the Commission's views as a 
matter of primary jurisdiction on the reasonableness of a practice 
under section 201(b), both in general and before awarding damages under 
section 207. In a number of cases, courts have held that there is no 
entitlement to damages under section 207 for a claim under section 
201(b) unless the Commission has already determined that a particular 
practice is ``unreasonable.'' We endorse that approach here. At a 
minimum, we believe that courts reviewing BIAS practices under section 
207 in the first instance should recognize the Commission's primary 
jurisdiction in a context such as this. The doctrine of primary 
jurisdiction is particularly important here, because the broadband 
Internet ecosystem is highly dynamic and the Commission has carefully 
designed a regulatory framework for BIAS to protect Internet openness 
and other important communications network values without deterring 
broadband investment and innovation. As a result, for all of the 
forgoing reasons, we conclude that none of the section 10(a) criteria 
are met as to forbearance from these fundamental Title II enforcement 
provisions and the associated Commission procedural rules with respect 
to the broadband Internet access service.

C. Forbearance Analysis Specific to Broadband Internet Access Service

    455. As discussed elsewhere, with respect to broadband Internet 
access service we find that the standard for forbearance is not met 
with respect to the following limited provisions:

    (a) Sections 201, 202, and 208, along with the related 
enforcement provisions of sections 206, 207, 209, 216, and 217, and 
the associated complaint procedures; and the Commission's 
implementing regulations (but, to be clear, the Commission forbears 
from all ratemaking regulations adopted under sections 201 and 202);
    (b) Section 222, which establishes core customer privacy 
protections;
    (c) Section 224 and the Commission's implementing regulations, 
which grant certain benefits that will foster network deployment by 
providing telecommunications carriers with regulated access to 
poles, ducts, conduits, and rights-of-way;
    (d) Sections 225, 255, and 251(a)(2), and the Commission's 
implementing regulations, which collectively advance access for 
persons with disabilities; except that the Commission forbears from 
the requirement that providers of broadband Internet access service 
contribute to the Telecommunications Relay Service (TRS) Fund at 
this time. These provisions and regulations support the provision of 
TRS and require providers of broadband Internet access service, as 
telecommunications carriers, to ensure that the service is 
accessible to and usable by individuals with disabilities, if 
readily achievable; and
    (e) Section 254, the interrelated requirements of section 
214(e), and the Commission's implementing regulations to strengthen 
the Commission's ability to support broadband, supporting the 
Commission's ongoing efforts to support broadband deployment and 
adoption; the Commission forbears from immediate contributions 
requirements, however, in light of the ongoing Commission 
proceeding.

    456. We naturally also do not forbear from applying open Internet 
rules and section 706 of the 1996 Act itself. For convenience, we 
collectively refer to these provisions and regulations for purposes of 
this Order as the ``core broadband Internet access service 
requirements.''
    457. Beyond those core broadband Internet access service 
requirements we

[[Page 19814]]

grant extensive forbearance as permitted by our authority under section 
10 of the Act. As described in greater detail below, it is our 
predictive judgment that the statutory and regulatory requirements that 
remain are sufficient to ensure just, reasonable, and not unjustly or 
unreasonably discriminatory conduct by providers of broadband Internet 
access service and to protect consumers with respect to broadband 
Internet access service. Those same considerations, plus the overlay of 
section 706 of the 1996 Act and our desire to proceed incrementally 
when considering what new requirements that should apply here, likewise 
persuade us that this forbearance is in the public interest.
    458. Our forbearance decision in this subsection focuses on 
addressing consequences arising from the classification decision in 
this Order regarding broadband Internet access service. (The 2014 Open 
Internet NPRM here did not contemplate possible forbearance from the 
open Internet rules themselves, and thus they are beyond the scope of 
regulations addressed by this forbearance decision. In any case, the 
very reasons that persuade us to adopt the rules in the Order likewise 
demonstrate that forbearance from those rules would not satisfy the 
section 10(a) criteria here.) Thus, we do not forbear with respect to 
requirements to the extent that they already applied prior to this 
Order without regard to the classification of broadband Internet access 
service. For example, as discussed in greater detail below, this 
includes things like certain requirements of the Twenty-First Century 
Communications and Video Accessibility Act of 2010 (CVAA), as well as 
things like liability-limitation provisions that do not vary in 
application based on the classification of broadband Internet access 
service. Similarly, to the extent that provisions or regulations apply 
to an entity by virtue of other services it provides besides broadband 
Internet access service, the forbearance in this Order does not extend 
to that context. (This Order does not alter any additional or broader 
forbearance previously granted that already might encompass broadband 
Internet access service in certain circumstances, for example, insofar 
as broadband Internet access service, when provided by mobile 
providers, is a CMRS service. As one example, the Commission has 
granted some forbearance from section 310(d) for certain wireless 
licensees that meet the definition of ``telecommunications carrier,'' 
but section 310(d) is not itself framed in terms of ``common carriers'' 
or ``telecommunications carriers'' or providers of ``CMRS'' or the 
like, nor is it framed in terms of ``common carrier services,'' 
``telecommunications services,'' ``CMRS services'' or the like. To the 
extent that such forbearance thus goes beyond the forbearance for 
wireless providers granted in this Order, this Order does not narrow or 
otherwise modify that pre-existing grant of forbearance. For clarity, 
we observe, however, that the broadband Internet access service covered 
by our open Internet rules is beyond the scope of a petition for 
forbearance from Verizon regarding certain broadband services that was 
deemed granted by operation of law on March 19, 2006.)
    459. In addition, prior to this Order some incumbent local exchange 
carriers or other common carriers chose to offer Internet transmission 
services as telecommunications services subject to the full range of 
Title II requirements. Our forbearance with respect to broadband 
Internet access service does not encompass such services. As a result, 
such providers remain subject to the rights and obligations that arise 
under Title II and the Commission's rules by virtue of their elective 
provision of such services, (For example, if a rate-of-return incumbent 
LEC (or other provider) voluntarily offers Internet transmission 
outside the forbearance framework adopted in this Order, it remains 
subject to the pre-existing Title II rights and obligations, including 
those from which we forbear in this Order.) along with the rules 
adopted to preserve and protect the open Internet to the extent that 
those services fall within the scope of those rules. (If such a 
provider wants to change to offer Internet access services pursuant to 
the construct adopted in this Order, it should notify the Wireline 
Competition Bureau 60 days prior to implementing such a change.)
1. Provisions That Protect Customer Privacy, Advance Access for Persons 
With Disabilities, and Foster Network Deployment
    460. We generally grant extensive forbearance from the provisions 
and requirements that newly apply by virtue of our classification of 
broadband Internet access service. However, the record persuades us 
that we should not forbear with respect to certain key provisions that 
protect customer privacy, advance access for persons with disabilities, 
and foster network deployment.
a. Customer Privacy (Section 222)
    461. As supported by a number of commenters, we decline to forbear 
from applying section 222 of the Act in the case of broadband Internet 
access service. We do, however, find the section 10(a) criteria met to 
forbear at this time from applying our implementing rules, pending the 
adoption of rules to govern broadband Internet access service in a 
separate rulemaking proceeding. Section 222 of the Act governs 
telecommunications carriers' protection and use of information obtained 
from their customers or other carriers, and calibrates the protection 
of such information based on its sensitivity. Congress provided 
protections for proprietary information, according the category of 
customer proprietary network information (CPNI) the greatest level of 
protection. Section 222 imposes a duty on every telecommunications 
carrier to protect the confidentiality of its customers' private 
information. Section 222 also imposes restrictions on carriers' ability 
to use, disclose, or permit access to customers' CPNI without their 
consent.
    462. We find that forbearance from the application of section 222 
with respect to broadband Internet access service is not in the public 
interest under section 10(a)(3), and that section 222 remains necessary 
for the protection of consumers under section 10(a)(2). The Commission 
has long supported protecting the privacy of users of advanced 
services, and retaining this provision thus is consistent with the 
general policy approach. The Commission has emphasized that 
``[c]onsumers' privacy needs are no less important when consumers 
communicate over and use broadband Internet access than when they rely 
on [telephone] services.'' As broadband Internet access service users 
access and distribute information online, the information is sent 
through their broadband provider. Broadband providers serve as a 
necessary conduit for information passing between an Internet user and 
Internet sites or other Internet users, and are in a position to obtain 
vast amounts of personal and proprietary information about their 
customers. Absent appropriate privacy protections, use or disclosure of 
that information could be at odds with those customers' interests.
    463. We find that if consumers have concerns about the privacy of 
their personal information, such concerns may restrain them from making 
full use of broadband Internet access services and the Internet, 
thereby lowering the

[[Page 19815]]

likelihood of broadband adoption and decreasing consumer demand. As the 
Commission has found previously, the protection of customers' personal 
information may spur consumer demand for those services, in turn 
``driving demand for broadband connections, and consequently 
encouraging more broadband investment and deployment'' consistent with 
the goals of the 1996 Act. Notably, commenters opposing the application 
of section 222 to broadband Internet access service make general 
arguments about the associated burdens, but do not include a meaningful 
analysis of why the section 10(a) criteria are met (or why relief 
otherwise should be granted) nor why the concerns they identify--even 
assuming arguendo that they were borne out by evidence beyond that 
currently in the record--should outweigh the privacy concerns 
identified here. We therefore conclude that the application and 
enforcement of section 222 to broadband Internet access services is in 
the public interest, and necessary for the protection of consumers. (We 
are not persuaded that those arguments justify a different outcome 
here, both for the reasons discussed previously, and because commenters 
do not meaningfully explain how these arguments impact the section 10 
analysis here, given that the need to protect consumer privacy is not 
self-evidently linked to such marketplace considerations. Nothing in 
the record suggests that concerns about consumer privacy are limited to 
broadband providers of a particular size, and we thus are not persuaded 
that a different conclusion in our forbearance analysis should be 
reached in the case of small broadband providers, for example.)
    464. We also reject arguments that section 706 itself provides 
adequate protections such that forbearance from section 222 is 
warranted. While section 706 of the 1996 Act would continue to apply 
even if we granted forbearance here, we find that section 222 provides 
a more certain foundation for evaluating providers' conduct and 
pursuing enforcement if warranted in relevant circumstances arising in 
the future. (We also note, for example, that this approach obviates the 
need to determine whether or to what extent section 222 is more 
specific than section 706 of the 1996 Act in relevant respects, and 
thus could be seen as exclusively governing over the provisions of 
section 706 of the 1996 Act as to some set of privacy issues. The 
approach we take avoids this potential uncertainty, and we thus need 
not and do not address this question.) Among other things, while the 
concerns discussed in the preceding paragraph have a nexus with the 
standards of sections 706(a) and (b), as discussed earlier in this 
section, the public interest in protecting customer privacy is not 
limited to the universe of concerns encompassed by section 706.
    465. We recognize that some commenters, while expressing concern 
about consumer privacy, nonetheless suggest that the Commission 
conceivably need not immediately apply section 222 and its implementing 
rules, pending further proceedings. (While CDT references the questions 
regarding the application of section 222 and our implementing rules 
raised in the 2010 Broadband Classification NOI, that NOI cited reasons 
why the Commission might immediately apply section 222 and the 
Commission's implementing rules if it reclassified broadband Internet 
access service as well as reasons why it might defer the application of 
those requirements. We thus find that the 2010 NOI does not itself 
counsel one way or the other, and in light of the record here, we 
decline to defer the application of section 222) We are persuaded by 
those arguments, but only as to the Commission's rules. With respect to 
the application of section 222 of the Act itself, as discussed above, 
with respect to broadband Internet access service the record here 
persuades us that the section 10(a) forbearance criteria are not met to 
justify such relief. Indeed, even as to services that historically have 
been subject to section 222, questions about the application of those 
privacy requirements can arise and must be dealt with by the Commission 
as technology evolves, and the record here does not demonstrate 
specific concerns suggesting that Commission clarification of statutory 
terms as needed would be inadequate in this context.
    466. We are, however, persuaded that the section 10(a) criteria are 
met for us to grant forbearance from applying our rules implementing 
section 222 insofar as they would be triggered by the classification of 
broadband Internet access service here. Beyond the core broadband 
Internet access service requirements, we apply section 222 of the Act, 
which itself directly provides important privacy protections. Further, 
on this record, we are not persuaded that the Commission's current 
rules implementing section 222 necessarily would be well suited to 
broadband Internet access service. The Commission fundamentally 
modified these rules in various ways subsequent to decisions 
classifying broadband Internet access service as an information 
service, and certain of those rules appear more focused on concerns 
that have been associated with voice service. For example, the current 
rules have requirements with respect to ``call detail information,'' 
defined as ``[a]ny information that pertains to the transmission of 
specific telephone calls, including, for outbound calls, the number 
called, and the time, location, or duration of any call and, for 
inbound calls, the number from which the call was placed, and the time, 
location, or duration of any call.'' More generally, the existing CPNI 
rules do not address many of the types of sensitive information to 
which a provider of broadband Internet access service is likely to have 
access, such as (to cite just one example) customers' web browsing 
history. Insofar as rules focused on addressing problems in the voice 
service context are among the central underpinnings of our CPNI rules, 
we find the better course to be forbearance from applying all of our 
CPNI rules at this time. As courts have recognized, when exercising its 
section 10 forbearance authority ``[g]uided by section 706,'' the 
Commission permissibly may ``decide[ ] to balance the future benefits'' 
of encouraging broadband deployment ``against [the] short term impact'' 
from a grant of forbearance. In light of the record here and given that 
the core broadband Internet access requirements and section 222 itself 
will apply, and guided by section 706, we find that applying our 
current rules implementing sections 222--which, in critical respects, 
appear to be focused on addressing problems that historically arise 
regarding voice service--is not necessary to ensure just and reasonable 
rates and practice or for the protection of consumers under sections 
10(a)(1) and (a)(2) and that forbearance is in the public interest 
under section 10(a)(3). We emphasize, however, that forbearance from 
our existing CPNI rules in the context of broadband Internet access 
services does not in any way diminish the applicability of these rules 
to services previously found to be within their scope.
b. Disability Access Provisions (Sections 225, 255, 251(a)(2))
    467. We agree with commenters that we should apply section 225 and 
the Commission's implementing rules--rather than forbear for broadband 
Internet access service--because of the need to ensure meaningful 
access to all Americans, except to the extent provided below with 
respect to contributions to the Interstate TRS Fund. Section 225 
mandates the availability of interstate and intrastate

[[Page 19816]]

TRS to the extent possible and in the most efficient manner to 
individuals in the United States who are deaf, hard of hearing, deaf-
blind, and who have speech disabilities. The Act directs that TRS 
provide the ability for such individuals to engage in communication 
with other individuals, in a manner that is ``functionally equivalent 
to the ability of a hearing individual who does not have a speech 
disability to communicate using voice communication services.'' To 
achieve this, the Commission has required all interstate service 
providers (other than one-way paging services) to provide TRS. People 
who are blind, hard of hearing, deaf-blind, and who have speech 
disabilities increasingly rely upon Internet-based video 
communications, both to communicate directly (point-to-point) with 
other persons who are deaf or hard of hearing who use sign language and 
through video relay service (VRS) with individuals who do not use the 
same mode of communication that they do. In doing so, they rely on high 
definition two-party or multiple-party video conferencing that 
necessitates a broadband connection. As technologies advance, section 
225 maintains our ability to ensure that individuals who are deaf, hard 
of hearing, deaf-blind, and who have speech disabilities can engage in 
service that is functionally equivalent to the ability of a hearing 
individuals who do not have speech disabilities to use voice 
communication services. Limits imposed on bandwidth use through network 
management practices that might otherwise appear neutral, could have an 
adverse effect on iTRS users who use sign language to communicate by 
degrading the underlying service carrying their video communications. 
The result could potentially deny these individuals functionally 
equivalent communications service. Additionally, if VRS and other iTRS 
users are limited in their ability to use Internet service or have to 
pay extra for iTRS and point-to-point services, this could cause 
discrimination against them because for many such individuals, TRS is 
the only form of communication that affords service that is 
functionally equivalent to what voice users have over the telephone. 
Moreover, limiting their bandwidth capacity could compromise their 
ability to obtain access to emergency services via VRS and other forms 
of iTRS, which is required by the Commission's rules implementing 
section 225.
    468. While we base the open Internet rules adopted here solely on 
section 706 of the 1996 Act and other provisions of the Act besides 
section 225--and thus do not adopt any new section 225-based rules in 
this Order--largely preserving this provision is important not only to 
the extent that it might be used in the future as the basis for new 
rules adopting additional protections but also to avoid any inadvertent 
uncertainty regarding Internet-based TRS providers' obligations under 
existing rules. To be compensated from the federal TRS fund, providers 
must provide service in compliance with section 225 and the 
Commission's TRS rules and orders. As discussed in the prior paragraph, 
however, a number of TRS services are carried via users' broadband 
Internet access services. Forbearing from applying section 225 and our 
TRS service requirements would risk creating loopholes in the 
protections otherwise afforded users of iTRS services or even just 
uncertainty that might result in degradation of iTRS. More 
specifically, if we forbear from applying these provisions, we run the 
risk of allowing actions taken by Internet access service providers to 
come into conflict with the overarching goal of section 225, i.e., 
ensuring that the communication services made available through TRS are 
functionally equivalent, that is, mirror as closely as possible the 
voice communication services available to the general public. 
Enforcement of this functional equivalency mandate will protect against 
such degradation of service. In sum, with the exception of TRS 
contribution requirements discussed below, we find that the enforcement 
of section 225 is necessary for the protection of consumers under 
section 10(a)(2), and that forbearance would not be in the public 
interest under section 10(a)(3).
    469. Notwithstanding the foregoing, for now we do forbear in part 
from the application of TRS contribution obligations that otherwise 
would newly apply to broadband Internet access service. Section 
225(d)(3)(B) and our implementing rules require federal TRS 
contributions for interstate telecommunications services, which now 
would uniformly include broadband Internet access service by virtue of 
the classification decision in this order. Applying new TRS 
contribution requirements on broadband Internet access potentially 
could spread the base of contributions to the TRS Fund, having the 
benefit of adding to the stability of the TRS Fund. Nevertheless, 
before taking any steps that would depart from the status quo in this 
regard, the Commission would like to assess the need for such 
additional funding, and the appropriate contribution level, given the 
totality of concerns implicated in this context. As courts have 
recognized, when exercising its section 10 forbearance authority 
``[g]uided by section 706,'' the Commission permissibly may ``decide[ ] 
to balance the future benefits'' of encouraging broadband deployment 
``against [the] short term impact'' from a grant of forbearance. Our 
decision, guided by section 706, to tailor the regulations applied to 
broadband Internet access service thus tips the balance in favor of the 
finding that applying new TRS fund contribution requirements at this 
time is not necessary to ensure just, reasonable and nondiscriminatory 
conduct by the provider of broadband Internet access service or for the 
protection of consumers under sections 10(a)(1) and (a)(2) and that 
forbearance is in the public interest under section 10(a)(3). The 
competing considerations here make this a closer call under our section 
10(a) analysis, however, and thus we limit our action only to 
forbearing from applying section 225(d)(3)(B) and our implementing 
rules insofar as they would immediately require new TRS contributions 
from broadband Internet access services but not insofar as they 
authorize the Commission to require such contributions should the 
Commission elect to do so in a rulemaking in the future. In particular, 
we find it in the public interest to limit our forbearance in this 
manner to enable us to act even more nimbly in the future should we 
need to do so based on future developments.
    470. Nothing in our forbearance from TRS Fund contribution 
requirements for broadband Internet access service is intended to 
encompass, however, situations where incumbent local exchange carriers 
or other common carriers voluntarily choose to offer Internet 
transmission services as telecommunications services subject to the 
full scope of Title II requirements for such services. As a result, 
such providers remain subject to the Interstate TRS Fund contribution 
obligations that arise under section 225 and the Commission's rules by 
virtue of their elective provision of such services until such time as 
the Commission further addresses such contributions in the future.
    471. Consistent with some commenters' proposals, with respect to 
broadband Internet access service we also do not forbear from applying 
sections 255 and the associated rules, which require telecommunications 
service providers and equipment manufacturers to make their services 
and equipment accessible to individuals

[[Page 19817]]

with disabilities, unless not readily achievable. We also do not find 
the statutory forbearance test met for related protections afforded 
under section 251(a)(2) and our implementing rules, which precludes the 
installation of ``network features, functions, or capabilities that do 
not comply with the guidelines and standards established pursuant to 
section 255.'' We therefore do not forbear from this provision and our 
associated rules. In prior proceedings, the Commission has emphasized 
its commitment to implementing the important policy goals of section 
255 in the Internet service context. Evidence cited in the National 
Broadband Plan also demonstrated that, while broadband adoption has 
grown steadily, it ``lags considerably'' among certain groups, 
including individuals with disabilities. Adoption of Internet access 
services by persons with disabilities can enable these individuals to 
achieve greater productivity, independence, and integration into 
society in a variety of ways. (Moreover, broadband can make 
telerehabilitation services possible, by providing long-term health and 
vocational support within the individual's home. Broadband can also 
provide increased access to online education classes and digital books 
and will offer real time interoperable voice, video and text 
capabilities for E911. In addition, as commenters note, ``society as a 
whole'' can ``benefit[] when people with disabilities have access to 
[broadband Internet access] services in a manner equivalent to the non-
disabled population.'' CFILC Dec. 17, 2014 Ex Parte Letter at 1.) These 
capabilities, however, are not available to persons with disabilities 
if they face barriers to Internet service usage, such as inaccessible 
hardware, software, or services. We anticipate that increased adoption 
of services and technologies accessible to individuals with 
disabilities will, in turn, spur further availability of such 
capabilities, and of Internet access services more generally.
    472. Our forbearance analysis regarding sections 255, 251(a)(2), 
and our implementing rules also is informed by the incremental nature 
of the requirements imposed. In particular, the Twenty-First Century 
Communications and Video Accessibility Act of 2010 (CVAA), expanding 
beyond the then-existing application of section 255, adopted new 
section 716 of the Act, which requires that providers of advanced 
communications services (ACS) and manufacturers of equipment used for 
ACS make their services and products accessible to people with 
disabilities, unless it is not achievable to do so. These mandates 
already apply according to their terms in the context of broadband 
Internet access service. The CVAA also adopted a requirement, in 
section 718, that ensures access to Internet browsers in wireless 
phones for people who are blind and visually impaired. In addition, the 
CVAA directs the Commission to enact regulations to prescribe, among 
other things, that networks used to provide ACS ``may not impair or 
impede the accessibility of information content when accessibility has 
been incorporated into that content for transmission through . . . 
networks used to provide [ACS].'' Finally, new section 717 creates new 
enforcement and recordkeeping requirements applicable to sections 255, 
716, and 718. Thus, a variety of accessibility requirements already 
have applied in the context of broadband Internet access service under 
the CVAA.
    473. We are persuaded by the record of concerns about accessibility 
in the context of broadband Internet access service that we should not 
rest solely on the protections of the CVAA, however. But we do clarify 
the interplay of those provisions. At the time of section 255's 
adoption in the 1996 Act, Congress stated its intent to ``foster the 
design, development, and inclusion of new features in communications 
technologies that permit more ready accessibility of communications 
technology by individuals with disabilities . . . as preparation for 
the future given that a growing number of Americans have 
disabilities.'' More recently, Congress adopted the CVAA after 
recognizing that since it added section 255 to the Communications Act, 
``Internet-based and digital technologies . . . driven by growth in 
broadband . . . are now pervasive, offering innovative and exciting 
ways to communicate and share information.'' Congress thus clearly had 
Internet-based communications technologies in mind when enacting the 
accessibility provisions of sections section 716 (as well as the 
related provisions of sections 717 through 718), and in providing 
important protections with respect to ACS. Thus, insofar as there is 
any conflict between the requirements of sections 255, 251(a)(2), and 
our implementing rules, on the one hand, and sections 716 through 718 
and our implementing rules on the other hand, we interpret the latter 
requirements as controlling. On the other hand, insofar as sections 
255, 251(a)(2), and our implementing rules impose different 
requirements that are reconcilable with the CVAA, we find it 
appropriate to apply those additional protections in the context of 
broadband Internet access service for the reasons described above. (We 
recognize that the Commission previously has held that ``[s]ection 2(a) 
of the CVAA exempts entities, such as Internet service providers, from 
liability for violations of section 716 when they are acting only to 
transmit covered services or to provide an information location tool. 
Thus, service providers that merely provide access to an electronic 
messaging service, such as a broadband platform that provides an end 
user with access to a web-based email service, are excluded from the 
accessibility requirements of section 716.'' Our decision here is not 
at odds with Congress' approach to such services under the CVAA, 
however, because we also have found that ``relative to section 255, 
section 716 requires a higher standard of achievement for covered 
entities.'' Thus, under our decision here, broadband Internet access 
service will remain excluded from the ``higher standard of 
achievement'' required by the CVAA to the extent provided by that law, 
and instead will be subject to the lower standard imposed under section 
255 in those cases where the CVAA does not apply.) Thus, for example, 
outside the self-described scope of the CVAA, providers of broadband 
Internet access services must ensure that network services and 
equipment do not impair or impede accessibility pursuant to the 
sections 255/251(a)(2) framework. (Because this section requires pass 
through of telecommunications in an accessible format, and 47 CFR 
14.20(c) requires pass through of ACS in an accessible format, the two 
sections work in tandem with each other, and forbearance from sections 
255 and 251(a)(2) would therefore result in a diminution of 
accessibility.) In particular, we find that these provisions and 
regulations are necessary for the protection of consumers and 
forbearance would not be in the public interest. (We recognize that 
section 716 provides that ``[t]he requirements of this section shall 
not apply to any equipment or services, including interconnected VoIP 
service, that are subject to the requirements of section 255 of this 
title on the day before October 8, 2010. Such services and equipment 
shall remain subject to the requirements of section 255 of this 
title.'' 47 U.S.C. 617(f). We do not read that as requiring that 
section 716 must necessarily be mutually exclusive with section 255, 
however. Had Congress wished to achieve that result, it easily instead 
could have stated that ``the

[[Page 19818]]

requirements of this section shall not apply to any equipment or 
services . . . that are subject to the requirements of section 255'' 
(or vice versa) and left it at that. By also including the limiting 
language ``that are subject to the requirements of section 255 of this 
title on the day before October 8, 2010,'' we believe the statute 
reasonably is interpreted as leaving open the option that services that 
become subject to section 255 thereafter also could be subject to both 
the requirements of section 255 and the requirements of the CVAA. 
Indeed, although broadband Internet access previously was classified as 
an information service and thus not subject to section 255 on October 
8, 2010, at the time the CVAA was enacted the Commission had initiated 
the 2010 NOI to consider whether to reclassify that service as a 
telecommunications service, which would, at that time, become subject 
to section 255 as a default matter.)
    474. We reject the cursory or generalized arguments of some 
commenters that we need not apply these protections, or that we might 
defer doing so, pending further proceedings. For the reasons discussed 
above, with respect to broadband Internet access service the record 
here persuades us that the application of these requirements is 
necessary for the protection of consumers under section 10(a)(2) and 
that forbearance is not in the public interest under section 10(a)(3). 
Nor are we otherwise persuaded to stay or waive our implementing rules 
based on this record. Commenters opposing the application of these 
protections with respect to broadband Internet access service either 
with no limit on time, or specifically in the near term, make general 
arguments about the associated burdens. However, they do not include a 
meaningful analysis of why the section 10(a) criteria are met (or why 
relief otherwise should be granted) nor why the concerns they 
identify--even assuming arguendo that they were borne out by evidence 
beyond that currently in the record--should outweigh the disability 
access concerns identified here. (Some commenters contend that the 
Commission should forbear from all of Title II based on generalized 
arguments about the marketplace, such as past network investment or 
changes in performance or price per megabit in the recent past. We are 
not persuaded that those arguments justify a different outcome as to 
any of the disability access provisions or requirements at issue in 
this section, both for the reasons discussed previously, and because 
commenters do not meaningfully explain how these arguments impact the 
section 10 analysis here, given that the need to protect disability 
access is not self-evidently linked to such marketplace considerations. 
Nothing in the record suggests that concerns about disability access 
are limited to broadband providers of a particular size, and we thus 
are not persuaded that a different conclusion in our forbearance 
analysis should be reached in the case of small broadband providers, 
for example.)
    475. We also reject arguments that section 706 itself provides 
adequate protections such that forbearance from the disability access 
provisions of sections 225, 255 and 251(a)(2) and associated 
regulations is warranted. While section 706 of the 1996 Act would 
continue to apply even if we granted forbearance here, consistent with 
our conclusions in other sections, we find that these disability access 
provisions provide a more certain foundation for evaluating providers' 
conduct and pursuing enforcement if warranted in relevant circumstances 
arising in the future. (We also note, for example, that this approach 
obviates the need to determine whether or to what extent these 
disability access provisions are more specific than section 706 of the 
1996 Act in relevant respects, and thus could be seen as exclusively 
governing over the provisions of section 706 of the 1996 Act as to some 
set of disability access issues. The approach we take avoids this 
potential uncertainty, and we thus need not and do not address this 
question.) Among other things, while our interest in ensuring 
disability access often may have a nexus with the standards of sections 
706(a) and (b), the record does not reveal that the public interest in 
ensuring access for persons with disabilities is limited just to the 
universe of concerns encompassed by section 706.
    476. In addition to the provisions discussed above, section 710 of 
the Act addresses hearing aid compatibility. Given the important 
additional protections for persons with disabilities enabled by this 
provision, (For reasons similar to those discussed in the text above 
regarding other disability access provisions, we do not find it in the 
public interest to grant forbearance from section 710 of the Act, nor 
do we find such forbearance otherwise warranted under the section 10(a) 
criteria.) we anticipate addressing the applicability of mobile 
wireless hearing aid compatibility requirements to mobile broadband 
Internet access service devices in the pending rulemaking proceeding. 
(We note that the Commission's existing implementing rules do not 
immediately impose the Commission's hearing aid compatibility 
requirements implementing section 710 of the Act on mobile wireless 
broadband providers by virtue of the classification decisions in this 
Order. We note, however, that certain obligations in the Commission's 
rules implementing section 255 addressing interference with hearing 
technologies and the effective wireless coupling to hearing aids, may 
be appropriately imposed on such providers by virtue of this Order, 
given our decision not to forbear from application of section 255 and 
its implementing regulations.)
c. Access to Poles, Ducts, Conduit and Rights-of-Way (section 224)
    477. Consistent with the recommendations of certain broadband 
provider commenters, because we find that the section 10(a) criteria 
are not met, we decline to forbear from applying section 224 and the 
Commission's associated rules with respect to broadband Internet access 
service. Section 224 of the Act governs the Commission's regulation of 
pole attachments. The Commission has recognized repeatedly the 
importance of pole attachments to the deployment of communications 
networks, and we thus conclude that applying these provisions will help 
ensure just and reasonable rates for broadband Internet access service 
by continuing pole access and thereby limiting the input costs that 
broadband providers otherwise would need to incur. Leveling the pole 
attachment playing field for new entrants that offer solely broadband 
services also removes barriers to deployment and fosters additional 
broadband competition. For similar reasons we find that applying these 
provisions will protect consumers and advance the public interest under 
sections 10(a)(2) and (a)(3). (Some commenters contend that the 
Commission should forbear from all of Title II based on generalized 
arguments about the marketplace, such as past network investment or 
changes in performance or price per megabit in the recent past. We are 
not persuaded that those arguments justify a different outcome 
regarding section 224 and our associated rules, both for the reasons 
discussed previously, and because commenters do not meaningfully 
explain how these arguments impact the section 10 analysis here, given 
that the need for regulated access to access to poles, ducts, conduit, 
and rights-of-way is not self-evidently linked to such marketplace 
considerations. Nor does the record reveal that concerns about

[[Page 19819]]

adequate access to poles, ducts, conduit and rights-of-way are limited 
to broadband providers of a particular size, and we thus are not 
persuaded that these concerns would differ in the case of small 
broadband providers, for example.)
    478. Further, in significant part, section 224 imposes obligations 
on utilities, as owners of poles, ducts, conduits, or rights-of-way, to 
ensure that cable operators and telecommunications carriers obtain 
access to poles on just, reasonable, and nondiscriminatory rates, terms 
and conditions. The definition of a utility, however, includes entities 
other than telecommunications carriers, and pole attachments themselves 
are not ``telecommunications services.'' Section 10 allows the 
Commission to forbear from statutory requirements and implementing 
regulations as applied to ``a telecommunications carrier or 
telecommunications service,'' or class thereof, if the statutory 
criteria are satisfied. To the extent that section 224 imposes 
obligations on entities other than telecommunications carriers, it is 
not within the Commission's authority to forbear from this provision 
and our implementing rules under section 10.
    479. Moreover, even if the Commission could forbear from the 
entirety of section 224 notwithstanding the concerns with such 
forbearance noted above, it is doubtful that this approach would leave 
us with authority to regulate the rates for attachments used for 
broadband Internet access service. In particular, such forbearance 
seemingly would eliminate any requirements governing pole owners' rates 
for access to poles by telecommunications carriers or cable operators. 
Such an outcome would not serve the public interest.
    480. We also are not persuaded that we could forbear exclusively 
from the telecom rate formula in section 224(e), and then adopt a lower 
rate--such as the cable rate--pursuant to section 224(b). In 
particular, applying the `specific governs the general' canon of 
statutory interpretation, the Supreme Court interpreted the rate 
formulas in sections 224(d) and (e) as controlling, within their self-
described scope, over the Commission's general authority to ensure just 
and reasonable rates for pole attachments under section 224(b). We 
question whether forbearing from applying section 224(e) would actually 
alter the scope of our authority under section 224(b), or if instead 
rates for carriers' telecommunications service attachments would remain 
governed by the (now forborne-from) section 224(e), leaving a void as 
to regulation of rates for such attachments. Further, attempting to use 
an approach like this to regulate pole rental rates more stringently to 
achieve lower rates, the Commission seemingly would be using 
forbearance to increase regulation. Given the deregulatory purposes 
underlying the adoption of section 10, we do not believe that the use 
of forbearance in that manner would be in the public interest.
    481. Although we are not persuaded that forbearance would be 
appropriate to address these concerns, we are committed to avoiding an 
outcome in which entities misinterpret today's decision as an excuse to 
increase pole attachment rates of cable operators providing broadband 
Internet access service. To be clear, it is not the Commission's intent 
to see any increase in the rates for pole attachments paid by cable 
operators that also provide broadband Internet access service, and we 
caution utilities against relying on this decision to that end. This 
Order does not itself require any party to increase the pole attachment 
rates it charges attachers providing broadband Internet access service, 
and we would consider such outcomes unacceptable as a policy matter.
    482. We note in this regard that in the 2011 Pole Attachment Order, 
the Commission undertook comprehensive reform of pole attachment 
rules--including by revising the telecommunications rate formula for 
pole attachments in a way that ``generally will recover the same 
portion of pole costs as the current cable rate.'' As NCTA, COMPTEL and 
tw telecom observed following that Order, the Commission's ``expressed 
intent of providing rate parity between telecommunications providers 
and cable operators by amending the telecommunications formula to 
produce rates comparable to the cable formula--thereby removing the 
threat of potential rate increases associated with new services and 
reducing the incentives for pole owners to dispute the legal 
classification of communications services--will provide much-needed 
regulatory certainty that will permit broadband providers to extend 
their networks to unserved communities while fairly compensating pole 
owners.'' However, these parties also expressed concern that the 
particular illustration used by the Commission in the rule text could 
be construed as suggesting that the new formula includes only instances 
where there are three and five attaching entities, rather than 
providing the ``corresponding cost adjustments scaled to other entity 
counts.'' We are concerned by any potential undermining of the gains 
the Commission achieved by revising the pole attachment rates paid by 
telecommunications carriers. We accordingly will be monitoring 
marketplace developments following this Order and can and will promptly 
take further action in that regard if warranted.
    483. To the extent that there is a potential for an increase in 
pole attachment rates for cable operators that also provide broadband 
Internet access service, we are highly concerned about its effect on 
the positive investment incentives that arise from new providers' 
access to pole infrastructure. We are encouraged by entry into the 
marketplace of parties that offer broadband Internet access service, 
and we believe that providing these new parties with access to pole 
infrastructure under section 224 would outweigh any hypothetical rise 
in pole attachment rates for some incumbent cable operators in some 
circumstances --particularly in light of our expressed intent to take 
prompt action if necessary to address the application of the 
Commission's pole rental rate formulas in a way that removes any doubt 
concerning the advancement of the goals intended by our 2011 reforms. 
Moreover, subsumed within our finding that today's decision does not 
justify any increase in pole attachment rates is an emphatic conclusion 
that no utility could impose any increase retroactively.
    484. We also reject arguments that section 706 itself provides 
adequate protections such that forbearance from the pole access 
provisions of section 224 and related regulations is warranted. While 
section 706 of the 1996 Act would continue to apply even if we granted 
forbearance here, consistent with our conclusions in other sections, we 
find that section 224 and our implementing regulations provide a more 
certain foundation for evaluating providers' conduct and pursuing 
enforcement if warranted in relevant circumstances arising in the 
future. (We also note, for example, that this approach obviates the 
need to determine whether or to what extent section 224's pole access 
provisions are more specific than section 706 of the 1996 Act in 
relevant respects, and thus could be seen as exclusively governing over 
the provisions of section 706 of the 1996 Act as to some set of pole 
access issues. The approach we take avoids this potential uncertainty, 
and we thus need not and do not address this question.)

[[Page 19820]]

d. Universal Service Provisions (sections 254, 214(e))
    485. We find the statutory test is met to grant certain forbearance 
under section 10(a) from applying sections 254(d), (g), and (k), as 
discussed below, but we otherwise will apply section 254, section 
214(e) and our implementing rules with respect to broadband Internet 
access service, as recommended by a number of commenters. Section 254, 
the statutory foundation of our universal service programs, requires 
the Commission to promote universal service goals, including ``[a]ccess 
to advanced telecommunications and information services . . . in all 
regions of the Nation.'' Section 214(e) provides the framework for 
determining which carriers are eligible to participate in universal 
service programs. Even prior to the classification of broadband 
Internet access service adopted here, the Commission already supported 
broadband services to schools, libraries, and health care providers and 
supported broadband-capable networks in high-cost areas. Broadband 
Internet access service was, and is, a key focus of those universal 
service policies, and classification today simply provides another 
statutory justification in support of these policies going forward. 
Under our broader section 10(a)(3) public interest analysis, the 
historical focus of our universal service policies on advancing end-
users' access to broadband Internet access service persuades us to give 
much less weight to arguments that we should proceed incrementally in 
this context. In particular, the Commission already has provided 
support for deployment of broadband-capable networks and imposed 
associated public interest obligations requiring the provision of 
broadband Internet access service. In connection with the Lifeline 
program, for instance, the Commission has established the goal of 
``ensuring the availability of broadband service for low-income 
Americans.'' We therefore conclude that these universal service policy-
making provisions of section 254, and the interrelated requirements of 
section 214(e), give us greater flexibility in pursuing those policies, 
and outweighs any limited incremental effects (if any) on broadband 
providers in this context. (We note that commenters opposing the 
application of section 254 as a whole (or those provisions of section 
254 from which we do not forbear below) or arguing that such action 
could be deferred pending future proceedings, appear to make only 
generalized, non-specific arguments, which we do not find sufficient to 
overcome our analysis above. In addition, some commenters contend that 
the Commission should forbear from all of Title II based on generalized 
arguments about the marketplace, such as past network investment or 
changes in performance or price per megabit in the recent past. We are 
not persuaded that those arguments justify a different outcome 
regarding section 254, both for the reasons discussed previously, and 
because commenters do not meaningfully explain how these arguments 
impact the section 10 analysis here, given that, even taken at face 
value, arguments based on such marketplace considerations do not 
purport to sufficiently address the policy concerns underlying section 
254 and our universal service programs. Nothing in the record suggests 
that we should tailor our advancement of universal service policies to 
broadband providers of a particular size, and we thus are not persuaded 
that a different conclusion in our forbearance analysis should be 
reached in the case of small broadband providers, for example.) Because 
forbearance would not be in the public interest under section 10(a)(3), 
we apply these provisions of section 254 and 214(e) and our 
implementing rules with respect to broadband Internet access service.
    486. We also reject arguments that section 706 itself provides 
adequate protections such that forbearance from the provisions of 
sections 254 and 214(e) discussed above is warranted. While section 706 
of the 1996 Act would continue to apply even if we granted forbearance 
here, we find that these provisions provide a more certain foundation 
for implementing our universal service policies and enforcing our 
associated rules, consistent with our conclusions in other sections. 
(We also note, for example, that this approach obviates the need to 
determine whether or to what extent these universal service provisions 
are more specific than section 706 of the 1996 Act in relevant 
respects, and thus could be seen as exclusively governing over the 
provisions of section 706 of the 1996 Act as to some set of universal 
issues. The approach we take avoids this potential uncertainty, and we 
thus need not and do not address this question.) Among other things, 
while our interest in ensuring universal service often may have a nexus 
with the standards of sections 706(a) and (b), the record does not 
reveal that the public interest in ensuring universal access is limited 
just to the universe of concerns encompassed by section 706.
    487. Notwithstanding the foregoing, for now we do forbear in part 
from the first sentence of section 254(d) and our associated rules 
insofar as they would immediately require new universal service 
contributions associated with broadband Internet access service. The 
first sentence of section 254(d) authorizes the Commission to impose 
universal service contributions requirements on telecommunications 
carriers--and, indeed, goes even further to require ``[e]very 
telecommunications carrier that provides interstate telecommunications 
services'' to contribute. (In implementing that statutory provision, 
the Commission concluded that federal contributions would be based on 
end-user telecommunications revenues.) Under that provision and our 
implementing rules, providers are required to make federal universal 
service support contributions for interstate telecommunications 
services, which now would include broadband Internet access service by 
virtue of the classification decision in this order.
    488. Consistent with our analysis of TRS contributions above, we 
note that on one hand, newly applying universal service contribution 
requirements on broadband Internet access service potentially could 
spread the base of contributions to the universal service fund, 
providing at least some benefit to customers of other services that 
contribute, and potentially also to the stability of the universal 
service fund through the broadening of the contribution base. We note, 
however, that the Commission has sought comment on a wide range of 
issues regarding how contributions should be assessed, including 
whether to continue to assess contributions based on revenues or to 
adopt alternative methodologies for determining contribution 
obligations. (Moreover, the Commission has referred the question of how 
the Commission should modify the universal service contribution 
methodology to the Federal-State Joint Board on Universal Service 
(Joint Board) and requested a recommended decision by April 7, 2015. We 
recognize that a short extension of that deadline for the Joint Board 
to make its recommendation to the Commission may be necessary in light 
of the action we take today. Our action in this Order thus will not 
``short circuit'' the rulemaking concerning contributions issues as 
some commenters fear.) We therefore conclude that limited forbearance 
is warranted at the present time in order to allow the Commission to 
consider the issues presented based on a full record in that docket. 
(As noted below, we do not forbear from the mandatory

[[Page 19821]]

obligation of carriers that have chosen voluntarily to offer broadband 
as a Title II service to contribute to the federal universal service 
fund. Because we do nothing today to disturb the status quo with 
respect to current contributions obligations for the reasons explained 
above, and there will be a future opportunity to consider these issues 
in the contributions docket, we find that certain arguments raised in 
the record today are better taken up in that proceeding.)
    489. As reiterated in our discussion of TRS contributions above, 
courts have recognized when exercising its section 10 forbearance 
authority ``[g]uided by section 706,'' the Commission permissibly may 
``decide[] to balance the future benefits'' of encouraging broadband 
deployment ``against [the] short term impact'' from a grant of 
forbearance. Our decision, guided by section 706, to tailor the 
regulations applied to broadband Internet access service thus tips the 
balance in favor of the finding that applying new universal service 
fund contribution requirements at this time is not necessary to ensure 
just and reasonable rates and practices or for the protection of 
consumers under sections 10(a)(1) and (a)(2), and that forbearance is 
in the public interest under section 10(a)(3) while the Commission 
completes its pending rulemaking regarding contributions reform. (While 
some commenters cite regulatory parity as a reason not to forbear from 
universal service contribution requirements, they do not explain how 
such concerns are implicated insofar as every provider's broadband 
Internet access service is subject to this same forbearance from 
universal service contribution requirements. In any event, those 
arguments are better addressed in the contributions rulemaking docket 
based on the full record developed therein) The competing 
considerations here make this a closer call under our section 10(a) 
analysis, however, and thus as in the TRS contribution context, we 
limit our action only to forbearing from applying the first sentence of 
section 254(d) and our implementing rules insofar as they would 
immediately require new universal service contributions for broadband 
Internet access services sold to end users but not insofar as they 
authorize the Commission to require such contributions in a rulemaking 
in the future. Thus, while broadband Internet access services will not 
be subject to new universal service contributions at this time, our 
action today is not intended to prejudge or limit how the Commission 
may proceed in the future. (Because our action today precludes for the 
time being federal universal service contribution assessments on 
broadband Internet access services that are not currently assessed, we 
conclude that any state requirements to contribute to state universal 
service support mechanisms that might be imposed on such broadband 
Internet access services would be inconsistent with federal policy and 
therefore are preempted by section 254(f)--at least until such time 
that the Commission rules on whether to require federal universal 
service contributions by providers of broadband Internet access 
service. We note that we are not aware of any current state 
contribution obligation for broadband Internet access service; our 
understanding is that broadband providers that voluntarily offer 
Internet transmission as a Title II service treat 100 percent of those 
revenues as interstate. We recognize that section 254 expressly 
contemplates that states will take action to preserve and advance 
universal service, and our actions in this regard will benefit from 
further deliberation.)
    490. Nothing in our forbearance with respect to the first sentence 
of section 254(d) for broadband Internet access service is intended to 
encompass, however, situations where incumbent local exchange carriers 
or other common carriers voluntarily choose to offer Internet 
transmission services as telecommunications services subject to the 
full scope of Title II requirements for such services. As a result, 
such providers remain subject to the mandatory contribution obligations 
that arise under section 254(d) and the Commission's rules by virtue of 
their elective provision of such services until such time as the 
Commission further addresses contributions reform in the pending 
proceeding.
    491. We also forbear from applying sections 254(g) and (k) and our 
associated rules. Section 254(g) requires ``that the rates charged by 
providers of interexchange telecommunications services to subscribers 
in rural and high cost areas shall be no higher than the rates charged 
by each such provider to its subscribers in urban areas.'' Section 
254(k) prohibits the use of revenues from a non-competitive service to 
subsidize a service that is subject to competition. Commenters' 
arguments to apply provisions of section 254 appear focused on the 
provisions dealt with above--i.e., provisions providing for support of 
broadband networks or services or addressing universal service 
contributions--and do not appear to focus at all on why we should not 
forbear from applying the requirements of sections 254(g) and (k) and 
our implementing rules. In particular, consistent with the more 
detailed discussion in our analysis below, we are not persuaded that 
applying these provisions is necessary for purposes of sections 
10(a)(1) and (a)(2), particularly given the availability of the core 
broadband Internet access service requirements. Likewise, under the 
tailored regulatory approach we find warranted here, informed by our 
responsibilities under section 706, we conclude that forbearance from 
enforcing sections 254(g) and (k) is in the public interest under 
section 10(a)(3). We thus forbear from applying these provisions 
insofar as they would be newly triggered by the classification of 
broadband Internet access service in this Order. Nothing in our 
forbearance with respect to section 254(k) for broadband Internet 
access service is intended to encompass, however, situations where 
incumbent local exchange carriers or other common carriers voluntarily 
choose to offer Internet transmission services as telecommunications 
services subject to the full scope of Title II requirements such 
services. As a result, such providers remain subject to the obligations 
that arise under section 254(k) and the Commission's rules by virtue of 
their elective provision of such services. (For example, if a rate-of-
return incumbent LEC (or other provider) voluntarily offers Internet 
transmission outside the forbearance framework adopted in this Order, 
it remains subject to the pre-existing Title II rights and obligations, 
including those from which we forbear in this Order.)
2. Broad Forbearance From 27 Title II Provisions for Broadband Internet 
Access Service
    492. Beyond those core broadband Internet access service 
requirements we grant extensive forbearance as permitted by our 
authority under section 10 of the Act based on our predictive judgment 
regarding the adequacy of other protections where needed, coupled with 
the role of section 706 of the 1996 Act and our desire to tailor the 
requirements that should apply here, likewise persuade us that this 
forbearance is in the public interest. The analyses and forbearance 
decisions regarding broadband Internet access service reflect the broad 
support in the record for expansive forbearance. With respect to 
proposals to retain particular statutory provisions or requirements, we 
are not persuaded by the record here that forbearance is not justified 
for the reasons discussed below.

[[Page 19822]]

    493. As a threshold matter, we reject arguments from certain 
commenters that include bare assertions that we should not forbear as 
to particular provisions or regulations without any meaningful 
supporting analysis or discussion under the section 10(a) framework. To 
the extent that these commenters argue for a narrower result than the 
forbearance we grant here, such conclusory arguments do not undercut 
our finding that the section 10(a) criteria are met as to the 
forbearance granted here with respect to broadband Internet access 
service. For similar reasons we reject arguments that the Commission 
should ``exempt from forbearance . . . Section 228 . . . provid[ing] 
customers with protections from abusive practices by pay-per-call 
service providers'' insofar as they do not explain how such a provision 
meaningfully would apply in the context of broadband Internet access 
service or why the section 10(a) criteria are not met in that context. 
As a result, these arguments do not call into question our section 
10(a) findings below in the context of the broadband Internet access 
service. With respect to proposals to retain other statutory 
provisions, we conclude that commenters fail to demonstrate at this 
time that other, applicable requirements or protections are inadequate, 
for the reasons discussed below.
    494. For each of the remaining statutory and regulatory obligations 
triggered by our classification decision, the realities of the near-
term past under the prior ``information service'' classification inform 
our section 10(a) analysis. Although that practical baseline is not 
itself dispositive of the appropriate regulatory treatment of broadband 
Internet access service, the record reveals numerous concerns about the 
burdens--or, at a minimum, regulatory uncertainty--that would be 
fostered by a sudden, substantial expansion of the actual or potential 
regulatory requirements and obligations relative to the status quo from 
the near-term past. (We are not persuaded by arguments that a tailored 
regulatory approach like that adopted here inherently would be inferior 
to the adoption of a more regulatory approach in this Order. Rather, we 
base our decision to adopt such a tailored approach based both on our 
own analysis of the overall record regarding investment incentives 
(which can involve multifaceted considerations), and the wisdom we see 
in exercising our discretion to proceed incrementally, as discussed in 
greater detail below.) It is within the agency's discretion to proceed 
incrementally, and we find that adopting an incremental approach here--
by virtue of the forbearance granted here--guards against any 
unanticipated and undesired detrimental effects on broadband deployment 
that could arise. We note in this regard that when exercising its 
section 10 forbearance authority ``[g]uided by section 706,'' the 
Commission permissibly may ``decide[ ] to balance the future benefits'' 
of encouraging broadband deployment ``against [the] short term impact'' 
from a grant of forbearance. Under the section 10(a) analysis, we are 
particularly persuaded to give greater weight at this time to the 
likely benefits of proceeding incrementally given the speculative or 
otherwise limited nature of the arguments in the current record 
regarding the possible near-term harms from forbearance of the scope 
adopted here.
    495. We further conclude that our analytical approach as to all the 
provisions and regulations from which we forbear in this Order is 
consistent with section 10(a). Under section 10(a)(1), we consider here 
whether particular provisions and regulations are ``necessary'' to 
ensure ``just and reasonable'' conduct by broadband Internet access 
service providers. Interpreting those ambiguous terms, we conclude that 
we reasonably can account for policy trade-offs that can arise under 
particular regulatory approaches. (While the specific balancing at 
issue in EarthLink v. FCC, 462 F.3d at 8-9, may have involved trade-
offs regarding competition, we nonetheless believe the view expressed 
in that decision accords with our conclusion here that we permissibly 
can interpret and apply all the section 10(a) criteria to also reflect 
the competing policy concerns here. As the D.C. Circuit also has 
observed, within the statutory framework that Congress established, the 
Commission ``possesses significant, albeit not unfettered, authority 
and discretion to settle on the best regulatory or deregulatory 
approach to broadband.'') For one, we find it reasonable in the 
broadband Internet access service context for our interpretation and 
application of section 10(a)(1) to be informed by section 706 of the 
1996 Act. (Given the characteristics specific to broadband Internet 
access service that we find on the record here--including, among other 
things, protections from the newly-adopted open Internet rules and the 
overlay of section 706--we limit our forbearance from the relevant 
provisions and regulations to the context of broadband Internet access 
service. Outside that context, they will continue to apply as they have 
previously, unaffected by this Order. We thus reject claims that the 
actions or analysis here effectively treat forborne-from provisions or 
regulations as surplusage or that we are somehow ignoring significant 
portions of the Act.) As discussed above, section 706 of the 1996 Act 
``explicitly directs the FCC to `utiliz[e]' forbearance to `encourage 
the deployment on a reasonable and timely basis of advanced 
telecommunications capability to all Americans,' '' and our recent 
negative section 706(b) determination triggers a duty under section 706 
for the Commission to ``take immediate action to accelerate 
deployment.'' As discussed in greater detail below, a tailored 
regulatory approach avoids disincentives for broadband deployment, 
which we weigh in considering what outcomes are just and reasonable--
and whether the forborne-from provisions are necessary to ensure just 
and reasonable conduct--under our section 10(a)(1) analyses in this 
item. Furthermore, our forbearance in this Order, informed by recent 
experience and the record in this proceeding, reflects the recognition 
that, beyond the specific bright-line rules adopted above, particular 
conduct by a broadband Internet access service provider can have mixed 
consequences, rendering case-by-case evaluation superior to bright-line 
rules. Consequently, based on those considerations, it is our 
predictive judgment that, outside the bright line rules applied under 
this Order, just and reasonable conduct by broadband providers is 
better ensured under section 10(a)(1) by the case-by-case regulatory 
approach we adopt--which enables us to account for the countervailing 
policy implications of given conduct--rather than any of the more 
bright-line requirements that would have flowed from the provisions and 
regulations from which we forbear. (As explained above, we conclude 
that while competition can be a sufficient basis to grant forbearance, 
it is not inherently necessary in order to find section 10 satisfied. 
Given our assessment of the advantages of the regulatory framework 
applied under this Order, we also reject suggestions that, where the 
Commission does not rely on sufficient competition to justify 
forbearance, alternative ex ante regulations would always be necessary 
to ensure just and reasonable conduct and otherwise provide a basis for 
finding the section 10(a) criteria to be met. Further, while the Final 
Regulatory Flexibility Analysis estimates a large

[[Page 19823]]

possible universe of broadband Internet access service providers, we do 
not find a basis to conclude that they all--or a sufficiently 
significant number of them--are likely to be simultaneously subject to 
complaints to render the case-by-case approach unworkable or inferior 
to additional bright line rules, and thus reject concerns to the 
contrary.) These same considerations underlie our section 10(a)(2) 
analyses, as well, since advancing broadband deployment and ensuring 
appropriately nuanced evaluations of the consequences of broadband 
provider conduct better protects consumers. Likewise, these same policy 
considerations are central to the conclusion that the forbearance 
granted in this Order, against the backdrop of the protections that 
remain, best advance the public interest under section 10(a)(3).
a. Tariffing (Sections 203, 204)
    496. We find the section 10(a) criteria met and forbear from 
applying section 203 of the Act insofar as it newly applies to 
providers by virtue of our classification of broadband Internet access 
service. That provision requires common carriers to file a schedule of 
rates and charges for interstate common carrier services. As a 
threshold matter, we find broad support in the record for expansive 
forbearance, as discussed above. Moreover, as advocated by some 
commenters, it is our predictive judgment that other protections that 
remain in place are adequate to guard against unjust and unreasonable 
and unjustly and unreasonably discriminatory rates and practices in 
accordance with section 10(a)(1) and to protect consumers under section 
10(a)(2). We likewise conclude that those other protections reflect the 
appropriate calibration of regulation of broadband Internet access 
service at this time, such that forbearance is in the public interest 
under section 10(a)(3).
    497. As discussed below, sections 201 and 202 of the Act and our 
open Internet rules are designed to preserve and protect Internet 
openness, prohibiting unjust and unreasonable and unjustly or 
unreasonably discriminatory conduct by providers of broadband Internet 
access service for or in connection with broadband Internet access 
service and protecting the retail mass market customers of broadband 
Internet access service. In particular, under our open Internet rules 
and the application of sections 201 and 202, we establish both ex ante 
legal requirements and a framework for case-by-case evaluations 
governing broadband providers' actions. In calibrating the legal 
framework in that manner, we consider, among other things, the 
operation of the marketplace in conjunction with open Internet 
protections. It is our predictive judgment that these protections will 
be adequate to protect the interests of consumers--including the 
interest in just, reasonable, and nondiscriminatory conduct--that might 
otherwise be threatened by the actions of broadband providers. 
Importantly, broadband providers also are subject to complaints and 
Commission enforcement in the event that they violate sections 201 or 
202 of the Act, the open Internet rules, or other elements of the core 
broadband Internet access requirements. We thus find on the record here 
that section 203's requirements are not necessary to ensure just and 
reasonable and not unjustly or unreasonably discriminatory rates and 
practices under section 10(a)(1) nor for the protection of consumers 
under 10(a)(2).
    498. The predictive judgment underlying our section 10 analysis is 
informed by recent experience. Historically, tariffing requirements 
were not applied to broadband Internet access service under our prior 
``information service'' classification. This provides us a practical 
reference point as part of our overall evaluation of the types of 
concerns that are likely to arise in this context, underlying our 
predictive judgment regarding the sufficiency of the rules and 
requirements that remain. Consequently, providers will not be subject 
to ex ante rate regulation nor any requirement of advanced Commission 
approval of rates and practices as otherwise would have been imposed 
under section 203.
    499. We also find that the forbearance for broadband Internet 
access service satisfies sections 10(a)(1) and (a)(2) and is consistent 
with the public interest under section 10(a)(3) in light of the 
objectives of section 706. In addition to our specific conclusions 
above, we find more broadly that forbearing from section 203 is 
consistent with the overall approach that we conclude strikes the right 
regulatory balance for broadband Internet access service at this time. 
In particular, given the overlay of section 706 of the 1996 Act, we 
conclude that the better approach at this time is to focus on applying 
the core broadband Internet access service requirements rather than 
seeking to apply the additional provisions and regulations triggered by 
the classification of broadband Internet access service from which we 
forbear. As explained above, section 706 of the 1996 Act ``explicitly 
directs the FCC to `utiliz[e]' forbearance to `encourage the deployment 
on a reasonable and timely basis of advanced telecommunications 
capability to all Americans.' '' The D.C. Circuit has further held that 
the Commission ``possesses significant, albeit not unfettered, 
authority and discretion to settle on the best regulatory or 
deregulatory approach to broadband.'' We find that the scope of 
forbearance adopted in this order strikes the right balance at this 
time between, on the one hand, providing the regulatory protections 
clearly required by the evidence and our analysis to, among other 
things, guard the virtuous cycle of Internet innovation and investment 
and, on the other hand, avoiding additional regulations that do not 
appear required at this time and that risk needlessly detracting from 
providers' broadband investments.
    500. Additionally, section 10(b) requires the Commission, as part 
of its public interest analysis, to analyze the impact forbearance 
would have on competitive market conditions. Although there is some 
evidence of competition for broadband Internet access service, it 
appears to be limited in key respects, and the record also does not 
provide a strong basis for concluding that the forbearance granted in 
this Order is likely to directly impact the competitiveness of the 
marketplace for broadband Internet access services. We note that the 
forbearance we grant is part of an overall regulatory approach designed 
to promote infrastructure investment in significant part by preserving 
and promoting innovation and competition at the edge of the network. 
Thus, even if the grant of forbearance does not directly promote 
competitive market conditions, it does so indirectly by enabling us to 
strike the right balance at this time in our overall regulatory 
approach. Our regulatory approach, viewed broadly, thus does advance 
competition in important ways. Ultimately, however, while we consider 
the section 10(b) criteria in our section 10(a)(3) public interest 
analysis, our public interest determination rests on other grounds. In 
particular, under the entirety of our section 10(a)(3) analysis, as 
discussed above, we conclude that the public interest supports the 
forbearance adopted in this Order. (These same section 10(b) findings 
likewise apply in the case of our other section 10(a)(3) public 
interest evaluations with respect to broadband Internet access service, 
and should be understood as incorporated there.)
    501. We thus are not persuaded by other commenters arguing that the 
Commission's ability to forbear from section 203 depends on findings of 
sufficient competition. As explained above, persuasive evidence of

[[Page 19824]]

competition is not the sole possible grounds for granting forbearance. 
As also explained above, we conclude at this time that the Open 
Internet rules and other elements of the core broadband Internet access 
service requirements meet our identified needs in this specific 
context. The Commission also has recognized previously that tariffing 
imposes administrative costs. We also consider our objective of 
striking the right balance of a regulatory and deregulatory approach, 
consistent with section 706 of the 1996 Act. (Indeed, even when 
forbearing from section 203 in the CMRS context, the Commission not 
only relied in part on the presence of competition, but also that 
continued application of sections 201, 202, and 208 ``provide[s] an 
important protection in the event there is a market failure,'' and 
``tariffing imposes administrative costs and can themselves be a 
barrier to competition in some circumstances.'' Those are in accord 
with key elements of our conclusions here.) Collectively, these 
persuade us not to depart from the section 10(a) analysis above, 
irrespective of the state of competition.
    502. Nor are we persuaded by commenters' specific arguments that 
tariffs filed under section 203 provide ``the necessary information to 
distinguish between providers'' and thus should not be subject to 
forbearance for broadband Internet access service. As certain of these 
commenters themselves note, such objectives might be met in other ways. 
To the extent that disclosures regarding relevant broadband provider 
practices are needed, our Open Internet transparency rule is designed 
to serve those ends. Commenters do not meaningfully explain why the 
transparency rule is inadequate, and thus their arguments do not 
persuade us to depart from our section 10(a) findings above in the case 
of section 203.
    503. We likewise reject the proposals of other commenters that we 
structure our forbearance from section 203 to permissively, rather than 
mandatorily, detariff broadband Internet access service. As a threshold 
matter, we note that, as discussed above, our forbearance with respect 
to broadband Internet access services does not encompass incumbent 
local exchange carriers or other common carriers that offer Internet 
transmission services as telecommunications services subject to the 
full range of Title II requirements under the pre-existing legal 
framework, which does provide for permissive detariffing. Under the 
framework adopted in this Order, however, we are not persuaded that our 
open Internet rules provide for readily administrable evaluation of the 
justness and reasonableness of tariff filings. Nor does the record 
reveal that we can rely on competitive constraints to help ensure the 
justness and reasonableness of tariff filings. Furthermore, as the 
Commission previously has recognized, permitting voluntary tariff 
filings can raise a number of public interest concerns, and consistent 
with those findings, we mandatorily detariff broadband Internet access 
service for purposes of the regulatory framework adopted in this Order.
    504. Some commenters also advocate that the Commission retain 
section 204. Section 204 provides for Commission investigation of a 
carrier's rates and practices newly filed with the Commission, and to 
order refunds, if warranted. For the reasons described above, however, 
we forbear from sections 203's tariffing requirements for broadband 
Internet access service, and adopt mandatory detariffing. Given that 
decision, commenters do not indicate what purpose section 204 still 
would serve, and we thus do not depart in this context from our 
overarching section 10(a) forbearance analysis above.
b. Enforcement-Related Provisions (Sections 205, 212)
    505. We find forbearance from applying certain enforcement-related 
provisions of Title II beyond the core Title II enforcement authority 
discussed above warranted under section 10(a), and we reject arguments 
to the contrary. Section 205 provides for Commission investigation of 
existing rates and practices and to prescribe rates and practices if it 
determines that the carrier's rates or practices do not comply with the 
Communications Act. The Commission previously has forborne from 
enforcing section 205 where it sought to adopt a tailored, limited 
regulatory environment and where, notwithstanding that forbearance, 
given the continued application of sections 201 and 202 and other 
complaint processes. For similar reasons here, we find at this time 
that the core Title II enforcement authority, along with the ability to 
pursue claims in court, as discussed below, provide adequate 
enforcement options and the statutory forbearance test is met for 
section 205. Consistent with our analysis above, it thus is our 
predictive judgment that these provisions are not necessary to ensure 
just, reasonable and nondiscriminatory conduct by providers of 
broadband Internet access service or to protect consumers under 
sections 10(a)(1) and (a)(2). In addition, as above, under the tailored 
regulatory approach we find warranted here, informed by our 
responsibilities under section 706, we conclude that forbearance is in 
the public interest under section 10(a)(3). We thus reject claims that 
forbearance from section 205, insofar as it is triggered by our 
classification of broadband Internet access service, is not warranted. 
(Although Public Knowledge et al. cite marketplace differences between 
CMRS and broadband Internet access service, they do not explain why 
those differences necessitate a narrower forbearance decision in this 
context--particularly since we do not rely on the state of competition 
as a rationale for our forbearance decision--whether as to section 205, 
or as to the other provisions discussed there (sections 204, 211, 
212).)
    506. We also forbear from applying section 212 to the extent that 
it newly applies by virtue of our classification of broadband Internet 
access service. Section 212 empowers the Commission to monitor 
interlocking directorates, i.e., the involvement of directors or 
officers holding such positions in more than one common carrier. In the 
CMRS context, the Commission granted forbearance from section 212 on 
the grounds that forbearance would reduce regulatory burdens without 
adversely affecting rates in the CMRS market. The Commission noted that 
section 212 was originally placed in the Communications Act to prevent 
interlocking officers from engaging in anticompetitive practices, such 
as price fixing. The Commission found, however, that protections of 
section 201(b), 221, (The Commission noted that section 221 provided 
protections against interlocking directorates, but section 221(a) was 
repealed in the Telecommunications Act of 1996. This section gave the 
Commission the power to review proposed consolidations and mergers of 
telephone companies. While section 221(a) allowed the Commission to 
bolster its analysis to forbear from section 212 in the Wireless 
Forbearance Order, the protections against interlocking directorates 
provided by section 201(b) and 15 U.S.C. 19 provide sufficient 
protection to forbear from section 212 for broadband Internet access 
services.) and antitrust laws were sufficient to protect consumers 
against the potential harms from interlocking directorates. Forbearance 
also reduced an unnecessary regulatory cost imposed on carriers. The 
Commission later extended this forbearance to dominant carriers and 
carriers not yet found to be non-dominant, repealing part 62 of its 
rules and granting forbearance from the provisions of section 212. 
Commenters

[[Page 19825]]

have not explained why we should not find the protections of section 
201(b) and antitrust law adequate here, as well. It likewise is our 
predictive judgment that other protections will adequately ensure just, 
reasonable, and nondiscriminatory conduct by providers of broadband 
Internet access service and protect consumers here, and thus conclude 
that the application of section 212 is not necessary for purposes of 
sections 10(a)(1) or (a)(2). Moreover, as above, under the tailored 
regulatory approach we find warranted here, informed by our 
responsibilities under section 706, we conclude that forbearance is in 
the public interest under section 10(a)(3).
c. Information Collection and Reporting Provisions (Sections 211, 213, 
215, 218 Through 220)
    507. In addition, although some commenters advocate that the 
Commission retain provisions of the Act that provide ``discretionary 
powers to compel production of useful information or the filing of 
regular reports,'' we find the section 10(a) factors met and grant 
forbearance. However, the cited provisions principally are used by the 
Commission to implement its traditional rate-making authority over 
common carriers. Here, we do not apply tariffing requirements or ex 
ante rate regulation of broadband Internet access service of the sort 
for which these requirements would be needed. Indeed, we cannot and do 
not envision adopting such requirements in the future. Thus, we do not 
find it necessary or in the public interest to apply these provisions 
simply in anticipation of such an exceedingly unlikely scenario. 
Moreover, as particularly relevant here, section 706 of the 1996 Act, 
along with other statutory provisions, give the Commission authority to 
collect necessary information. We recognize that the Commission 
generally did not forbear from these requirements in the CMRS context, 
noting the minimal regulatory burdens they imposed on such providers, 
and observing that reservation of this Commission authority would allow 
further consideration of possible information collection requirements, 
given that ``the cellular market is not yet fully competitive.'' As 
explained above, in this context, however, we find forbearance to be 
the more prudent course, and therefore in the public interest under 
section 10(a)(3), given both our intention of tailoring the regulations 
applicable to broadband Internet access service given our 
responsibility under section 706 to encourage deployment. Because we 
also do not find the information collection and reporting provisions 
raised by commenters to be necessary at this time within the meaning of 
sections 10(a)(1) and (a)(2), we forbear from applying these provisions 
insofar as they otherwise newly would apply by virtue of our 
classification of broadband Internet access service.
d. Discontinuance, Transfer of Control, and Network Reliability 
Approval (Section 214)
    (Unless otherwise indicated, for convenience, this item uses 
``discontinuance,'' to also include reduction or impairment of service 
under section 214.)
    508. We also find section 10(a) met for purposes of forbearing from 
applying section 214 discontinuance approval requirements. We reject 
the arguments of some commenters that we should not forbear, which 
focus in particular on concerns about discontinuances in rural areas or 
areas with only one provider. As a threshold matter, our universal 
service rules are designed to advance the deployment of broadband 
networks, including in rural and high-cost areas. Notably, this 
includes certain public interest obligations on the part of high-cost 
universal service support recipients to offer broadband Internet access 
service. Consequently, these provide important protections, especially 
in rural areas or areas that might only have one provider. Further, the 
conduct standards in our open Internet rules provide important 
protections against reduction or impairment of broadband Internet 
access service short of the complete cessation of providing that 
service. Thus, while we agree with commenters regarding the importance 
of broadband Internet access service, including in rural areas or areas 
served by only one provider, the generalized arguments of those 
commenters do not explain why the protections described above, in 
conjunction with the core broadband Internet access service 
requirements more broadly, are not likely to be sufficient to guard 
against unjust or unreasonable conduct by providers of broadband 
Internet access service or to protect consumers.
    509. Moreover, the Commission has recognized in the past that 
section 214 discontinuance requirements impose some costs, although the 
significance of those costs is greater where (unlike here) the 
marketplace for the relevant service is competitive. Further, as 
discussed above, we find the most prudent regulatory approach at this 
time is to proceed incrementally when adding regulations beyond what 
had been the prior status quo. (The overlay of section 706 of the 1996 
Act here, including how it informs our decision to proceed 
incrementally, distinguishes this from the Commission's prior 
evaluation of relief from Title II for CMRS. Consequently, although we 
look to the precedent from the CMRS context--as we do other forbearance 
precedent--to the extent that it is instructive, the mere fact that we 
declined to forbear from applying a provision in the CMRS context does 
not demonstrate that we should continue to apply it here as some 
suggest.) Given those considerations, and against the backdrop of other 
protections here, as discussed above, commenters have not persuaded us 
that applying section 214 discontinuance requirements with respect to 
broadband Internet access service is necessary within the meaning of 
sections 10(a)(1) and (a)(2) or that forbearance would not be in the 
public interest under section 10(a)(3). We thus forbear from applying 
section 214 discontinuance requirements to the extent that they would 
be triggered by our classification of broadband Internet access service 
here.
    510. We also reject arguments against forbearance from applying 
section 214 to enable the Commission to engage in merger review. As 
these commenters recognize, prior to this Order the Commission already 
has commonly reviewed acquisitions of or mergers among entities that 
provide broadband services. (For example, the Commission reviews all 
applications for transfer or assignment of a wireless license, 
including licenses used to provide broadband services, pursuant to 
section 310(d) of the Act to determine whether the applicants have 
demonstrated that the proposed transfer or assignment will serve the 
public interest, convenience, and necessity. As this review is not 
triggered by reclassification, nothing in this Order limits or 
otherwise affects our review under section 310.) Although these 
comments speculate about a future time when communications services 
have evolved in such a way that the Commission would lack some other 
basis for its review, the record here does not demonstrate that it is 
sufficiently imminent to warrant deviating from our section 10 analysis 
regarding section 214 above. Notably, today we apply the core broadband 
Internet access service requirements that provide important constraints 
on broadband providers' conduct and protections for consumers. Thus, 
similar to our analysis above, it is our predictive judgment that other 
protections will be sufficient to ensure just, reasonable, and 
nondiscriminatory

[[Page 19826]]

conduct by providers of broadband Internet access service and to 
protect consumers for purposes of sections 10(a)(1) and (a)(2). Given 
our objective to proceed in a tailored manner, we likewise find it in 
the public interest to forbear from applying section 214 with respect 
to broadband Internet access service insofar as that provision would 
require Commission approval of transfers of control involving that 
service.
    511. We also grant forbearance with respect to section 214(d), 
under which the Commission may require a common carrier ``to provide 
itself with adequate facilities for the expeditious and efficient 
performance of its service.'' The duty to maintain ``adequate 
facilities'' includes ``undertak[ing] improvements in facilities and 
expansion of services to meet public demand.'' In practice, we expect 
that the exercise of this duty here would overlap significantly with 
the sorts of behaviors we would expect providers to have marketplace 
incentives to engage in voluntarily as part of the ``virtuous cycle.'' 
(Thus, even if our open Internet rules do not directly address this 
issue, by helping promote the virtuous cycle more generally, they also 
will help ensure that broadband providers have marketplace incentives 
to behave in this manner.) Beyond that, comments contending that the 
Commission should not forbear as to that provision do not explain why 
the core broadband Internet access service requirements do not provide 
adequate protection at this time. Thus, as under our analysis above, it 
is our predictive judgment that other protections will be sufficient to 
ensure just, reasonable, and nondiscriminatory conduct by providers of 
broadband Internet access service and to protect consumers for purposes 
of sections 10(a)(1) and (a)(2). Likewise, informed by section 706 we 
have an objective of tailoring the regulatory approach here, and thus 
find forbearance warranted under section 10(a)(3) insofar as section 
214(d) would apply by virtue of our classification of broadband 
Internet access service.
e. Interconnection and Market-Opening Provisions (Sections 251, 252, 
256)
    512. At this time, we conclude that the availability of other 
protections adequately address commenters' concerns about forbearance 
from the interconnection (Although commenters appear to use the term 
``interconnection'' to mean a potentially wide range of different 
things, for purposes of this section we use that term solely in the 
manner it is used and defined for purpose of these provisions.) 
provisions under the section 251/252 framework (As discussed above, 
however, we do not forbear from applying section 251(a)(2) with respect 
to broadband Internet access service, and that provision thus is 
outside the scope of the discussion here.) and under section 256. (As a 
result of the forbearance granted from section 251 below, section 252 
thus is inapplicable, insofar it is simply a tool for implementing the 
section 251 obligations. Although we do not forbear from applying 
section 251(a)(2) with respect to broadband Internet access service, we 
note that the Commission previously has held that the procedures of 
section 252 are not applicable in matters simply involving section 
251(a). To the extent that the Commission nonetheless could be seen as 
newly applying section 252 with respect to broadband Internet access 
service as a result of our classification decision here, we find the 
section 10 criteria met to grant forbearance from that provision for 
the same reasons discussed with respect to section 251 in the text 
above.) We thus forbear from applying those provisions to the extent 
that they are triggered by the classification of broadband Internet 
access service in this Order. The Commission retains authority under 
sections 201, 202 and the open Internet rules to address 
interconnection issues should they arise, including through evaluating 
whether broadband providers' conduct is just and reasonable on a case-
by-case basis. We therefore conclude that these remaining legal 
protections that apply with respect to providers of broadband Internet 
access service will enable us to act if needed to ensure that a 
broadband provider does not unreasonably refuse to provide service or 
interconnect. (Our finding of significant overlap between the authority 
retained by the Commission under section 201 and the interconnection 
requirements of section 251 is reinforced by Congress' inclusion of 
section 251(g) and (i), which, notwithstanding the requirements of 
section 251, preserve the Commission's pre-1996 Act interconnection 
requirements as well as its ongoing authority under section 201.) 
Further, we find that applying the legal structure adopted in this 
Order better enables us to achieve a tailored framework than requiring 
compliance with interconnection under section 251, in that the 
application of that framework leaves more to the Commission's 
discretion, rather than being subject to mandatory regulation under 
section 251. Because we retain our authority to apply and enforce these 
other protections, we reject commenters' suggestion that the section 
10(a) forbearance criteria are not met as to sections 251 and 256. 
(This is particularly true as to section 256, which does not provide 
the Commission any additional authority that it does not otherwise 
have.) Rather, consistent with our analysis for other provisions, we 
find that other protections render application of these provisions 
unnecessary for purposes of sections 10(a)(1) and (a)(2) and the 
forbearance reflects our tailored regulatory approach, informed by 
section 706, and thus is in the public interest under section 10(a)(3).
    513. We also reject arguments suggesting that we should not forbear 
from applying sections 251(b) and (c) with respect to broadband 
Internet access service. For example, sections 251(b)(1), (4), and (5) 
impose obligations on LECs regarding resale, access to rights-of-way, 
and reciprocal compensation. Section 251(c) subjects incumbent LECs to 
unbundling, resale, collocation, and other competition policy 
obligations. (We reject claims that section 251(c) has not been fully 
implemented ``[b]ecause the Commission has never applied section 251(c) 
to the provision of broadband Internet access service'' as at odds with 
that precedent. The Commission has adopted rules implementing section 
251(c), and the fact that the manner in which those rules apply might 
vary with the classification of a particular service (or changes in 
that classification) does not alter that fact. Therefore, the 
prohibition in section 10(d) of the Act against forbearing from section 
251(c) prior to such a determination is not applicable.) While we 
recognize the important competition policy goals that spurred Congress' 
adoption of these requirements in the 1996 Act, we are persuaded to 
forbear from applying these provisions under the circumstances here. In 
particular, we find the interests of customers of customers of 
broadband Internet access service, under section 10(a)(1) and (a)(2), 
and the public interest more generally, under section 10(a)(3) is best 
served by an overall regulatory framework that includes forbearance 
from these provisions, which balances the need for appropriate 
Commission oversight with the goal of tailoring its regulatory 
requirements. The Commission previously has sought to balance the 
advancement of competition policy with the duty to encourage advanced 
services deployment pursuant to section 706. Moreover, to the extent 
that entities otherwise are LECs or incumbent LECs, the forbearance

[[Page 19827]]

granted in this decision does not eliminate any previously-applicable 
requirements of sections 251(b) and (c) and our implementing rules. In 
addition, the Commission retains authority to address unjust or 
unreasonable conduct through its section 201 and 202 authority. Thus, 
we do not find the competition policy requirements of sections 251 and 
259 and the implementing rules necessary within the meaning of section 
10(a)(1) or (2), and conclude that forbearance would be in the public 
interest under section 10(a)(3). As a result, we forbear from those 
requirements in the context of broadband Internet access service to the 
extent that those provisions newly apply by virtue of our 
classification of that service here.
f. Subscriber Changes (Section 258)
    514. We also are persuaded, under the section 10(a) framework, to 
forbear from applying section 258's prohibition on unauthorized carrier 
changes, and we reject suggestions to the contrary by some commenters. 
In the voice service context, that provision, and the Commission's 
implementing rules, provide important protections given the ability of 
a new provider to effectuate a carrier change not only without the 
consent of the customer but also without direct involvement of the 
customer's existing carrier. While unauthorized carrier change problems 
theoretically might arise even outside such a context, the record here 
does not reveal whether or how, in practice, unauthorized changes in 
broadband Internet access service providers could occur. As a result, 
on this record we are not persuaded what objective would be served by 
application of this provision at all, particularly given the 
protections provided by the core broadband Internet access service 
requirements. As under our analysis of other provisions, we conclude 
that application of section 258 is not necessary for purposes of 
sections 10(a)(1) and (a)(2) and that forbearance is in the public 
interest. Therefore, insofar as our classification of broadband 
Internet access service would newly give rise to the application of 
section 258, we forbear from applying section 258 to that service.
g. Other Title II Provisions
    515. Beyond the provisions already addressed above, we also forbear 
from applying those additional Title II provisions that could give rise 
to new requirements by virtue of our classification of broadband 
Internet access service to the extent of our section 10 authority. We 
find it notable that no commenters raised significant concerns about 
forbearing from these requirements, which reinforces our analysis 
below.
    516. For one, we conclude the three-party statutory test under 
section 10(a) is met to forbear from applying certain provisions 
concerning BOCs in sections 271 through 276 of the Act to the extent 
that they would impose new requirements arising from the classification 
of broadband Internet access service in this Order. Sections 271, 272, 
274, and 275 establish requirements and safeguards regarding the 
provision of interLATA services, electronic publishing, and alarm 
monitoring services by the Bell Operating Companies (BOCs) and their 
affiliates. Section 273 addresses the manufacturing, provision, and 
procurement of telecommunications equipment and customer premises 
equipment (CPE) by the BOCs and their affiliates, the establishment and 
implementation of technical standards for telecommunications equipment 
and CPE, and joint network planning and design, among other matters. 
Section 276 addresses the provision of ``payphone service,'' and in 
particular establishes nondiscrimination standards applicable to BOC 
provision of payphone service.
    517. With one exception (discussed below), we conclude that the 
application of any newly-triggered provisions of sections 271 through 
276 to broadband Internet access service is not necessary within the 
meaning of section 10(a)(1) or (2), and that forbearance from these 
requirements is consistent with the public interest under section 
10(a)(3). Many of the provisions in these sections have no current 
effect. Other provisions in these sections impose continuing 
obligations that are at most tangentially related to the provision of 
broadband Internet access service. Forbearance from any application of 
these provisions with respect to broadband Internet access service 
insofar as they are newly triggered by our classification of that 
service will not meaningfully affect the charges, practices, 
classifications, or regulations for or in connection with that service, 
consumer protection, or the public interest. (Consistent with our 
general approach to forbearance here, which seeks to address new 
requirements that could be triggered by our classification of broadband 
Internet access service, we do not forbear with respect to provisions 
to the extent that they already applied prior to this Order. For 
example, section 271(c) establishes substantive standards that a BOC 
was required to meet in order to obtain authorization to provide 
interLATA services in an in-region state, and which it and must 
continue to meet in order to retain that authorization. In addition, 
section 271(c)(2)(B)(iii), requires that a BOC provide 
nondiscriminatory access to poles, ducts, conduits, and rights-of-way 
in accordance with the requirements of section 224 of the Act, does not 
depend upon the classification of BOCs' broadband Internet access 
service. In combination with section 271(d)(6), this provision provides 
the Commission with an additional mechanism to enforce section 224 
against the BOCs. We also do not forbear from section 271(d)(6) to the 
extent that it provides for enforcement of the provisions we do not 
forbear from here. In addition, while the BOC-specific provisions of 
section 276 theoretically could be newly implicated insofar as the 
reclassification of broadband Internet access service might result in 
some entities newly being treated as a BOC, the bulk of section 276 
appears independent of the classification of broadband Internet access 
service and we thus do not forbear as to those provisions.)
    518. Forbearance for certain other provisions not meaningfully 
addressed by commenters also flows from our analysis of certain 
provisions that commenters did raise or that are discussed in greater 
detail elsewhere. First, as described elsewhere, we forbear from all ex 
ante rate regulations, tariffing and related recordkeeping and 
reporting requirements insofar as they would arise from our 
classification of broadband Internet access service. Second, we 
likewise forbear from unbundling and network access requirements that 
would newly apply based on the classification decision in this Order. 
It is our predictive judgment that other protections--notably the core 
broadband Internet access service requirements--will be adequate to 
ensure just, reasonable, and nondiscriminatory conduct by providers of 
broadband Internet access service and to protect consumers for purposes 
of sections 10(a)(1) and (a)(2). Further, informed by our 
responsibilities under section 706, we adopt an incremental regulatory 
approach that we find strikes the appropriate public interest balance 
under section 10(a)(3). For these same reasons, we forbear from section 
221's property records classification and valuation provisions, which 
would be used in the sort of ex ante rate regulation that we do not 
find warranted for broadband Internet access service. Likewise, just as 
we forbear from broader unbundling obligations, that same analysis 
persuades us to forbear

[[Page 19828]]

from applying section 259's infrastructure sharing and notification 
requirements.
    519. We also grant forbearance from other miscellaneous provisions 
to the extent that they would newly apply as a result of our 
classification insofar as they do not appear necessary or even relevant 
for broadband Internet access service of broadband Internet access 
service. For one, section 226, the Telephone Operator Consumer Services 
Improvement Act (``TOCSIA''), protects consumers making interstate 
operator services calls from pay telephones, and other public 
telephones, against unreasonably high rates and anti-competitive 
practices. Section 227(c)(3) provides for carriers to have certain 
notification obligations as it relates to the requirements of the 
Telephone Consumer Protection Act (TCPA), and section 227(e) restricts 
the provision of inaccurate caller identification information 
associated with any telecommunications service. Section 228 regulates 
the offering of pay-per-call services and requires carriers, inter 
alia, to maintain lists of information providers to whom they assign a 
telephone number, to provide a short description of the services the 
information providers offer, and a statement of the cost per minute or 
the total cost for each service. Section 260 regulates local exchange 
carrier practices with respect to the provision of telemessaging 
services. It is not clear how these provisions would be relevant to 
broadband Internet access service, and commenters to not provide 
meaningful arguments in that regard. Thus, for that reason, as well as 
the continued availability of the core broadband Internet access 
service requirements, we find enforcement of these provisions, to the 
extent they would newly apply by virtue of our classification of 
broadband Internet access service, is not necessary to ensure that the 
charges, practices, classifications, or regulations by, for, or in 
connection with broadband providers are just and reasonable and are not 
unjustly or unreasonably discriminatory under section 10(a)(1). 
Enforcement also is not necessary for the protection of consumers under 
section 10(a)(2), and forbearance from applying these provisions is 
consistent with the public interest under section 10(a)(3), 
particularly given our conclusion, informed by section 706, that it is 
appropriate to proceed incrementally here.
    520. We also note that the provisions of section 276 underlying the 
Commission's regulation of inmate calling services (ICS) and the ICS 
rules themselves do not appear to vary depending on whether broadband 
Internet access service is an ``information service'' or 
``telecommunications service.'' We note, however, that The DC 
Prisoners' Legal Services Project, Inc., et al. (the ICS Petitioners) 
express concern that forbearance under this order could be misconstrued 
as a limitation on the Commission's authority with respect to any 
advanced ICS services (such as video visitation) that may replace or 
supplement traditional ICS telephone calls. It is not our intent to 
limit in any way the Commission's ability to address ICS, particularly 
given the Commission's finding in 2013 that the ICS market ``is failing 
to protect the inmates and families who pay [ICS] charges.'' We 
therefore find that forbearance would fail to meet the statutory test 
of section 10 of the Act, in that the protections of section 276 remain 
necessary to protect consumers and serve the public interest. 
Accordingly, out of an abundance of caution we make clear that we are 
not forbearing from applying section 276 to the extent applicable to 
ICS, as well as the ICS rules.
h. Truth-in-Billing Rules
    521. We also find the section 10(a) criteria met and forbear from 
applying our truth-in-billing rules insofar as they are triggered by 
our classification of broadband Internet access service here. The core 
broadband Internet access requirements, including the requirement of 
just and reasonable conduct under section 201(b), will provide 
important protections in this context even without specific rules. 
Moreover, even advocates of such protections observe that this ``may 
require further examination by the Commission,'' and do not actually 
propose that the current truth-in-billing rules immediately apply in 
practice, instead recommending that the Commission ``temporarily stay 
these rules [and] implement interim provisions.'' They do not explain 
what such interim provisions should be, however, and as we explain 
below we are not persuaded that a stay or time-limited forbearance 
provides advantages relative to the approach we adopt here. 
Consequently, as in our analysis above, we are not persuaded that our 
truth-in-billing rules are necessary for purposes of sections 10(a)(1) 
and (a)(2), particularly given the availability of the core broadband 
Internet access service requirements. Likewise, as above, under the 
tailored regulatory approach we find warranted here, informed by our 
responsibilities under section 706, we conclude that forbearance is in 
the public interest under section 10(a)(3).
i. Roaming-Related Provisions and Regulations
    522. We find section 10(a) met for purposes of granting certain 
conditional forbearance from roaming regulations. We recognize that the 
reclassification decisions elsewhere in this Order potentially alter 
the scope of an MBIAS provider's roaming obligations. The Commission 
has previously established two different regimes to govern the roaming 
obligations of commercial mobile providers. The first regime, 
established in 2007 pursuant to authority under sections 201 and 202 of 
the Act, imposes obligations to provide automatic roaming on CMRS 
carriers that ``offer real-time, two-way switched voice or data service 
that is interconnected with the public switched network and utilizes an 
in-network switching facility.'' Such carriers were required, on 
reasonable request, to provide automatic roaming on reasonable and not 
unreasonably discriminatory terms and conditions.
    523. Because this regime did not extend to data services that were 
not at that time classified as CMRS, the Commission adopted another 
roaming regime in 2011 under its Title III authority, applicable to 
``commercial mobile data services,'' which were defined to include all 
those commercial mobile services that are not interconnected with the 
public switched network, including (under the definition of ``public 
switched network'' applicable at that time) MBIAS. Under this data 
roaming provision, covered service providers were required to offer 
roaming arrangements to other such providers on commercially reasonable 
terms and conditions, subject to certain specified limits.
    524. Our determination herein to reclassify MBIAS as CMRS 
potentially affects the roaming obligations of MBIAS providers in two 
ways. First, absent any action by the Commission to preserve data 
roaming obligations, the determination that MBIAS is an interconnected 
service would result in providers of MBIAS no longer being subject to 
the data roaming rule, which as noted above, applies only to non-
interconnected services. Second, the determination that MBIAS is CMRS 
potentially subjects MBIAS providers to the terms of the CMRS roaming 
rules.
    525. We decide to retain for MBIAS, at this time, the roaming 
obligations that applied prior to reclassification of that service, 
consistent with our intent to proceed incrementally with regard to 
regulatory changes for MBIAS, and in

[[Page 19829]]

the absence of significant comment in the instant record regarding the 
specific roaming requirements that should apply to MBIAS after 
reclassification. We therefore forbear from the application of the CMRS 
roaming rule, section 20.12(d), to MBIAS providers, conditioned on such 
providers continuing to be subject to the obligations, process, and 
remedies under the data roaming rule codified in section 20.12(e). That 
condition, coupled with the core broadband Internet access service 
requirements that remain, persuade us that the forborne-from rules are 
not necessary at this time for purposes of sections 10(a)(1) and (a)(2) 
and that such conditional forbearance is in the public interest under 
section 10(a)(3). We commit, however, to commence in the near term a 
separate proceeding to revisit the data roaming obligations of MBIAS 
providers in light of our reclassification decisions today. Such a 
proceeding will permit us to make an informed decision, based on a 
complete and focused record, on the proper scope of MBIAS providers' 
roaming obligations after reclassification. Pending the outcome of that 
reexamination, MBIAS providers covered by our conditional forbearance 
continue to be subject to the obligations under the data roaming rule, 
and we will take any action necessary to enforce those obligations. To 
ensure, however, that providers have certainty regarding their roaming 
obligations pending the outcome of the roaming proceeding, we further 
provide that determinations adopted in that proceeding will apply only 
prospectively, i.e. only to conduct occurring after the effective date 
of any rule changes. The data roaming rule, rather than the automatic 
roaming rule or Title II, will govern conduct prior to any such 
changes.
j. Terminal Equipment Rules
    526. We also determine under section 10(a) to forbear from applying 
certain terminal equipment rules to the extent that they would newly 
apply by virtue of the classification of broadband Internet access 
service. (While Full Service Network/TruConnect refer generally to our 
``Part 68'' rules, that Part also includes our hearing aid 
compatibility rules, and as described above, the Commission's existing 
hearing aid compatibility rules do not immediately impose new hearing 
aid compatibility requirements on mobile wireless broadband providers 
by virtue of the classification decisions in this Order, and we do not 
forbear from applying those rules or section 710 of the Act. Section 
710 of the Act and our hearing aid compatibility rules thus are not 
encompassed by the discussion here.) Notably, our open Internet rules 
themselves prevent broadband Internet access service providers from 
restricting the use of non-harmful devices, subject to reasonable 
network management. (Insofar as any Part 68 rules subject to 
forbearance here also permitted carriers to take steps to protect their 
networks, we expect that such steps also would constitute reasonable 
network management under our open Internet rules.) Consequently, as in 
our analysis above, we are not persuaded that the application of 
terminal equipment rules, insofar as they would newly apply to 
broadband Internet access service providers by virtue of our 
classification decision here, are necessary for purposes of sections 
10(a)(1) and (a)(2), particularly given the availability of the core 
broadband Internet access service requirements, and in particular our 
bright-line rules. Likewise, as above, under the tailored regulatory 
approach we find warranted here, informed by our responsibilities under 
section 706, we conclude that forbearance is in the public interest 
under section 10(a)(3).
3. Other Provisions and Regulations
    527. Having discussed in detail here and above the analyses that 
persuade us to grant broad forbearance from Title II provisions to the 
extent of our section 10 authority, we conclude that the same analysis 
justifies forbearance from other provisions and regulations insofar as 
they would be triggered by the classification of broadband Internet 
access service in this Order. In particular, beyond the Title II 
provisions and certain implementing rules discussed above, the 
classification of broadband Internet access service could give rise to 
obligations related to broadband providers' provision of that service 
under Title III, Title VI and Commission rules.
    <bullet> First, certain provisions of Titles III and VI and 
Commission rules (For clarity, we note that by ``rules'' we mean both 
codified and uncodified rules. In addition, by ``associated'' 
Commission rules, we mean rules implementing requirements or 
substantive Commission jurisdiction under provisions in Title II, III, 
and/or VI of the Act from which we forbear.) associated with those 
Titles or the provisions of Title II from which we forbear may apply by 
their terms to providers classified in particular ways. (The Order's 
classification of broadband Internet access service could trigger 
requirements that apply by their terms to ``common carriers,'' 
``telecommunications carriers,'' ``providers'' of common carrier or 
telecommunications services, or ``providers'' of CMRS or commercial 
mobile services. Similarly, other provisions of the Act and Commission 
rules may impose requirements on entities predicated on the entities' 
classification as a ``common carrier,'' ``telecommunications carrier,'' 
``provider'' of common carrier or telecommunications service, or 
``provider'' of CMRS or commercial mobile service without being framed 
in those terms.) As to this first category of requirements, and except 
as to the core broadband Internet access service requirements, we 
forbear from any such provisions and regulations to the full extent of 
our authority under section 10, but only insofar as a broadband 
provider falls within those categories or provider classifications by 
virtue of its provision of broadband Internet access service, but not 
insofar as those entities fall within those categories of 
classifications by virtue of other services they provide.
    <bullet> Second, certain provisions of Titles III and VI and 
Commission rules associated with those Titles or the provisions of 
Title II from which we forbear may apply by their terms to services 
classified in particular ways. (The classification of broadband 
Internet access service as a telecommunications service and, in the 
mobile context, also CMRS service under the Communications Act, thus 
could trigger any requirements that apply by their terms to ``common 
carrier services,'' ``telecommunications services,'' or ``CMRS'' or 
``commercial mobile'' services. Similarly, other provisions of the Act 
and Commission rules may impose requirements on services predicated on 
a service's classification as a ``common carrier service,'' 
``telecommunications service,'' ``CMRS'' or ``commercial mobile'' 
service without being framed in those terms.) Regarding this second 
category of requirements (to the extent not already covered by the 
first category, above), and except as to the core broadband Internet 
access service requirements, we forbear from any such provisions and 
regulations to the full extent of our authority under section 10 
specifically with respect to broadband Internet access service, but do 
not forbear from these requirements as to any other services (if any) 
that broadband providers offer that are subject to these requirements.
    <bullet> Third, while commenters do not appear to have identified 
such rules, there potentially could be other Commission rules for which 
our underlying authority derives from provisions of the Act all of 
which we forbear from under the first two categories of requirements 
identified

[[Page 19830]]

above, or under our Title II forbearance discussed above, but which are 
not already subject to that identified scope of forbearance. To the 
extent not already identified in the first two categories of 
requirements above, and except as to the core broadband Internet access 
service requirements, we forbear to the full extent of our authority 
under section 10 from rules based entirely on our authority under 
provisions we forbear from under the first and second categories above 
(or for which the forborne-from provisions provide essential authority) 
insofar as the rules newly apply as a result of the classification of 
broadband Internet access service.
    <bullet> Fourth, we include within the scope of our broad 
forbearance for broadband Internet access service any pre-existing 
rules with the primary focus of implementing the requirements and 
substantive Commission jurisdiction in sections 201 and/or 202, 
including forbearing from pre-existing pricing, accounting, billing and 
recordkeeping rules. (This forbearance would not include rules 
implementing our substantive jurisdiction under provisions of the Act 
from which we do not forbear that merely cite or rely on sections 201 
or 202 in some incidental way, such as by, for example, relying on the 
rulemaking authority provided in section 201(b). Consistent with our 
discussions above, this category also does not include our open 
Internet rules.) As with the rules identified under the first and 
second categories above, we do not forbear insofar as a provider is 
subject to these rules by virtue of some other service it provides.
    <bullet> Fifth, the classification of broadband Internet access 
service as a telecommunications service could trigger certain 
contributions to support mechanisms or fee payment requirements under 
the Act and Commission rules, including some beyond those encompassed 
by the categories above. Insofar as any provisions or regulations not 
already covered above would immediately require the payment of 
contributions or fees by virtue of the classification of broadband 
Internet access service (rather than merely providing Commission 
authority to assess such contributions or fees) they are included 
within the scope of our forbearance. As under the first and second 
categories above, we do not forbear insofar as a provider is subject to 
these contribution or fee payments by virtue of some other service it 
provides.
    Just as we found in our analysis of Title II provisions, it is our 
predictive judgment that other protections--notably the core broadband 
Internet access service requirements--will be adequate to ensure just, 
reasonable, and nondiscriminatory conduct by providers of broadband 
Internet access service and to protect consumers for purposes of 
sections 10(a)(1) and (a)(2). Further, informed by our responsibilities 
under section 706, we adopt an incremental regulatory approach that we 
find strikes the appropriate public interest balance under section 
10(a)(3). These collectively persuade us that forbearance for the 
additional categories of provisions and regulations above is justified 
to the extent of our section 10 authority.
    528. We further make clear that our approach to forbearance in this 
Order, which excludes certain categories of provisions and regulations, 
effectively addresses the concerns of a number of commenters regarding 
the scope of our forbearance. First, we forbear here only to the extent 
of our authority under section 10 of the Act. Section 10 provides that 
``the Commission shall forbear from applying any regulation or any 
provision of this chapter to a telecommunications carrier or 
telecommunications service, or class of telecommunications carriers or 
telecommunications services'' if certain conditions are met. Certain 
provisions or regulations do not fall within the categories of 
provisions of the Act or Commission regulations encompassed by that 
language because they are not applied to telecommunications carriers or 
telecommunications services, and we consequently do not forbear as to 
those provisions or regulations.
    529. Second, we do not forbear from provisions or regulations that 
are not newly triggered by the classification of broadband Internet 
access service. The 2014 Open Internet NPRM sought comment on possible 
forbearance premised on addressing the consequences that flowed from 
any classification decisions it might adopt. Although some commenters 
include sweeping requests that we forbear from all of Title II or the 
like, in practice, they, too, appear focused on the consequences of 
classification decisions. Nor do we find on the record here that the 
section 10 criteria met with respect to such forbearance, and in 
particular do not find it in the public interest, in the context of 
this item, to forbear with respect to requirements that already applied 
to broadband Internet access service and providers of that service 
prior to this Order. Rather, broadband providers remain free to seek 
relief from such provisions or regulations through appropriate filings 
with the Commissions.
    530. A number of commenters' arguments are addressed on one or more 
of these grounds. (In addition to those discussed below, these 
considerations explain, for example, why we do not grant forbearance 
with respect to sections 303(b), 303(r) and 316, upon which we rely for 
authority for our open Internet rules.) For example, as to the first 
set of exclusions, we note that section 257 imposes certain obligations 
on the Commission without creating enforceable obligations that the 
Commission would apply to telecommunications carriers or 
telecommunications services, so we do not forbear from applying those 
provisions. For the same reasons, we do not forbear with respect to 
provisions insofar as they merely reserve state authority.
    531. We further note, for example, that the immunity from liability 
in section 230(c) applies to providers or users of an ``interactive 
computer service,'' and its application does not vary based on the 
classification of broadband Internet access service here. Consequently, 
it is not covered by the scope of forbearance in this order. We also 
note that the restrictions on obscene and illicit content in sections 
223 and 231(to the extent enforced)--as well as the associated 
limitations on liability--in many cases, do not vary with the 
classification decisions in this Order, and thus likewise are not 
encompassed by the forbearance in this Order. (As a narrow exception to 
this general conclusion, section 223(c)(1) conceivably could be newly 
applied to broadband providers by virtue of the classification 
decisions in this Order. No commenter meaningfully argues that the 
Commission should apply this provision to broadband providers, and that 
fact, coupled with the other protections that remain, persuade us that, 
insofar as the Commission would apply this provision, such application 
is not necessary for purposes of sections 10(a)(1) and (a)(2). 
Likewise, consistent with the tailored regulatory approach adopted in 
this Order, we find it in the public interest under section 10(a)(3) to 
forbear insofar as the Commission otherwise would newly apply that 
provision to a broadband provider as a result of this Order.) To the 
extent that certain of these provisions would benefit broadband 
providers and could instead be viewed as provisions that are newly 
applied to broadband providers by virtue of the classification 
decisions in this Order, it would better promote broadband deployment, 
and thus better serve the public interest, if we continue to apply 
those provisions. We thus find

[[Page 19831]]

that such forbearance would not be in the public interest under section 
10(a)(3).
    532. Some commenters also advocate that the Commission not forbear 
from applying ``the provisions of the Communications Assistan[ce] for 
Law Enforcement Act under section 229.'' Section 229(a)-(d) direct the 
Commission to adopt rules implementing the requirements of CALEA and 
authorize the Commission to investigate and enforce those rules. 
Section 229(e) enables providers to recover certain costs of CALEA 
compliance. Section 229 is not, by its terms, limited to 
``telecommunications services'' as defined by the Communication Act, 
and CALEA obligations already apply to broadband Internet access 
service. Thus, in carrying out section 229, the Commission's role 
already extended to broadband Internet service, and all 
telecommunications carriers subject to CALEA are already required to 
comply with all Commission rules adopted pursuant to section 229. 
Declining to forbear from applying section 229 and our associated rules 
is consistent with the overall approach, discussed above, of focusing 
on addressing newly-arising requirements flowing from our 
classification decision, and thus is in the public interest. Given that 
CALEA's statutory obligations will apply regardless of any forbearance 
granted by the Commission under the Communications Act, and given the 
lack of any substantial argument in the record in favor of forbearance 
from section 229, we conclude that maintaining the Commission's 
existing rulemaking and oversight role as established by section 229 
better advances the public interest. As services and technologies 
evolve over time, CALEA implementation will need to evolve as well. 
Section 229 establishes a rulemaking and oversight role for the 
Commission that helps enable those future changes. If we were to 
forbear from section 229 (assuming arguendo that we could find the 
forbearance standard to be satisfied), we thus would frustrate the 
ability of CALEA implementation to evolve with technology, an outcome 
that we find fundamentally inconsistent with the continued 
applicability of CALEA itself and therefore with the public interest.
    533. We also do not forbear from certain rules governing the 
wireless licensing process. First, our rules require applicants for 
licenses under our flexible use rules to designate the regulatory 
status of proposed services (i.e., common carrier, non-common carrier, 
or both) in the initial license application, and make subsequent 
amendment to the designation, as necessary. With regard to these rules, 
we find that forbearance of the regulatory status designation would 
result in inaccurate license information and therefore is not 
warranted. In particular, we conclude that such forbearance would be 
contrary to the public interest under section 10(a)(3).
    534. Second, sections 1.933 and 1.939 of our rules, 47 CFR 1.933, 
1.939, implementing sections 309(b) and (d)(1) of the Act, 47 U.S.C. 
309(b), (d)(1), set out processes for license applications for 
authorization, major modification, major amendment, substantial 
assignment, or transfer. Applications that involve, in whole or in 
part, licenses to be used for ``Wireless Telecommunications Services,'' 
as defined in section 1.907 of our rules, are subject to a public 
notice process providing opportunity for petitions to deny, but 
applications that involve only ``Private Wireless Services,'' as 
defined in section 1.907 of our rules are not subject to that process.
    535. With regard to these rules, we find that reclassification is 
unlikely to trigger a different process under these rules, for two 
reasons. We note that mobile BIAS today is being provided using 
licenses that are governed under our flexible use rules (i.e., under 
parts 20, 22, 24, 26, and 27) and that are being used as well to 
provide services, such as mobile voice, already provided as CMRS. Thus, 
these applications have been subject to these provisions because they 
have also been used to provide CMRS services. To the extent applicants 
seek licenses for reclassified service under other parts, such as Part 
101, or are otherwise not covered by the above reasoning, we find that 
forbearance from these procedures is not warranted, as the public 
notice process requirements are important to ensure that common carrier 
licensing serves the public interest. Accordingly, we do not find 
forbearance from applying these rules in the public interest under 
section 10(a)(3), and thus we do not forbear from application of 
section 309(b) and (d)(1) of the Act, or from rules 1.931, 1.933, 
1.939, 22.1110, and 27.10.

D. Potential Objections to Our General Approach to Forbearance for 
Broadband Internet Access Service

    536. While we address above specific arguments against forbearance 
as to particular provisions or requirements, we note that we also 
reject certain overarching concerns about our forbearance decision 
here. For one, we grant substantial forbearance in this item, rather 
than deferring such forbearance decisions to future proceedings. We are 
able to conclude on this record that the section 10(a) criteria are met 
with respect to the forbearance we grant, and taking such action here 
enables us to strike the right regulatory and deregulatory balance 
regarding broadband Internet access service, as discussed above. Under 
these circumstances we reject arguments that we should defer 
forbearance to future proceedings. Likewise, given our finding that the 
section 10(a) criteria are met for the forbearance adopted here, we 
reject generalized arguments that the scope of forbearance here should 
be the same as that historically granted in the CMRS context. We 
conclude that such overarching claims do not address distinguishing 
factors here, including our decision that it is in the public interest 
to proceed incrementally given the regulatory experience of the near-
term past coupled with the Commission's responsibilities under section 
706 of the 1996 Act, as discussed above. Further, because we grant 
substantial forbearance in this Order rather than deferring those 
issues to a future proceeding, we also reject concerns that the process 
of obtaining forbearance will be burdensome or uncertain, insofar as 
they are based on a presumption that such relief only would be granted 
via subsequent proceedings. (The posture here is distinguishable from 
the circumstances underlying the Brand X case, where a court had 
classified cable modem service as a telecommunications service without 
simultaneous forbearance of the sort we adopt here, and thus we reject 
arguments seeking to rely on court filings there.)
    537. Nor are we persuaded by arguments that the adoption of interim 
rules or the stay of all but certain rules should be used in lieu of 
forbearance, since those arguments do not explain in meaningful detail 
what specific interim rules would be adopted or the scope of what rules 
would be excluded from any stay, nor how, absent forbearance, interim 
rules or a stay by the Commission could address requirements imposed by 
the Act, rather than merely by Commission regulation. To the extent 
that commenters' arguments instead advocate that forbearance should be 
interim or time-limited, under today's approach, we retain adequate 
authority to modify our regulatory approach in the future, should 
circumstances warrant. We thus are not persuaded that there is any 
material, incremental advantage or benefit to adopting forbearance on 
an interim or time-limited basis.

[[Page 19832]]

    538. We also reject claims that the Commission cannot grant 
forbearance here because it did not provide adequate notice and an 
opportunity for comment. We need not and do not address here whether 
forbearance is, in all cases, informal rulemaking, because in this 
instance we have, in fact, proceeded via rulemaking and provided 
sufficient notice and an opportunity to comment in that regard. section 
553(b) and (c) of the APA requires agencies to give public notice of a 
proposed rulemaking that includes ``either the terms or substance of 
the proposed rule or a description of the subjects and issues 
involved'' and to give interested parties an opportunity to submit 
comments on the proposal. The notice ``need not specify every precise 
proposal which [the agency] may ultimately adopt as a rule''; it need 
only ``be sufficient to fairly apprise interested parties of the issues 
involved.'' Moreover, the APA's notice requirements are satisfied where 
the final rule is a ``logical outgrowth'' of the actions proposed. As 
long as parties should have anticipated that the rule ultimately 
adopted was possible, it is considered a ``logical outgrowth'' of the 
original proposal, and there is no violation of the APA's notice 
requirements.
    539. Those notice standards are satisfied with respect to the 
forbearance adopted here. The 2014 Open Internet NPRM observed:

If the Commission were to reclassify broadband Internet access 
service as described above or classify a separate broadband service 
provided to edge providers as a ``telecommunications service,'' such 
a service would then be subject to all of the requirements of the 
Act and Commission rules that would flow from the classification of 
a service as a telecommunications service or a common carrier 
service.

Citing section 10 of the Act, the Commission then sought comment ``on 
the extent to which forbearance from certain provisions of the Act or 
our rules would be justified'' should the Commission adopt such an 
approach ``in order to strike the right balance between minimizing the 
regulatory burden on providers and ensuring that the public interest is 
served.'' (The Commission further sought comment on ``which provisions 
should be exempt from forbearance and which should receive it'' based 
on whether such action would ``protect and promote Internet openness.'' 
Id. at 5616, para. 154. These are the factors that the Commission did, 
in fact, use in evaluating the section 10(a) criteria and deciding 
whether and how much forbearance to grant here.) ``For mobile broadband 
services,'' the Commission also sought ``comment on the extent to which 
forbearance should apply, if the Commission were to classify mobile 
broadband Internet access service as a CMRS service subject to Title 
II.'' Collectively, the Commission thus provided notice of possible 
forbearance as to any provision of the Act or Commission rules 
triggered by the classification of broadband Internet access service of 
the sort we adopt in this Order. (Within that scope, the Commission 
also sought more detailed comment on specific aspects of the possible 
forbearance it might adopt, discussing similar questions raised in the 
2010 Broadband Classification NOI, particular statutory provisions from 
which the Commission might not forbear, and particular approaches the 
Commission might use to evaluating forbearance. Moreover, as discussed 
in the preceding sections above, the 2014 Open Internet NPRM yielded a 
robust record regarding forbearance.) The forbearance we grant here 
from applying certain provisions and regulations newly triggered by our 
classification decisions in order to strike the right regulatory 
balance for broadband Internet access services consistent with the 
objective of preserving and protecting Internet openness is squarely 
within that scope of notice provided by the 2014 Open Internet NPRM.
    540. We also view as misguided complaints about the potential for 
our forbearance decisions to be challenged in court or reversed in the 
future by the Commission. Having concluded that broadband Internet 
access service is a telecommunications service, certain legal 
consequences under the Act flow from that by default. We grant in this 
order the substantial forbearance from those provision and other 
Commission regulations to the extent that we find warranted at this 
time under the section 10 framework. We thereby provide broadband 
providers significant regulatory certainty. (Perfect regulatory 
certainty would not be feasible under any classification. For example, 
even just as to rules adopted under section 706 of the 1996 Act parties 
theoretically could raise judicial challenges as to the adequacy of the 
Commission's rules in meeting the objectives of section 706 and a 
future Commission likewise might elect to modify those rules.) We thus 
are not persuaded to alter our approach to forbearance based on these 
arguments.
    541. We recognize that in our approach to forbearance for broadband 
Internet access service above, we are not first exhaustively 
determining provision-by-provision and regulation-by-regulation whether 
and how particular provisions and rules apply to this service. The 
Commission has broad discretion whether to issue a declaratory ruling, 
which is what would be entailed by such an undertaking. We exercise our 
discretion not to do so here, except to the limited extent necessary to 
address arguments in the record regarding specific requirements. For 
one, the Commission need not resolve whether or how a provision or 
regulation applies before evaluating the section 10(a) criteria--
rather, it can conduct that evaluation and, if warranted, grant 
forbearance within the scope of its section 10 authority assuming 
arguendo that the provisions or regulations apply. In addition, as 
discussed in greater detail above, the Commission is proceeding 
incrementally here. As the D.C. Circuit has recognized, within the 
statutory framework that Congress established, the Commission 
``possesses significant, albeit not unfettered, authority and 
discretion to settle on the best regulatory or deregulatory approach to 
broadband.'' Thus, to achieve the balance of regulatory and 
deregulatory policies adopted here for broadband Internet access 
service, we need not--and thus do not--first resolve potentially 
complex and/or disputed interpretations and applications of the Act and 
Commission rules that could create precedent with unanticipated 
consequences for other services beyond the scope of this proceeding, 
and which would not alter the ultimate regulatory outcome in this Order 
in any event.

VI. Constitutional Considerations

    542. The actions we take today are fully consistent with the 
Constitution. Some commenters contend that the open Internet rules 
burden broadband providers' First Amendment rights and effect 
uncompensated takings of private property under the Fifth Amendment. We 
examine these arguments below and find them unfounded.

A. First Amendment

1. Free Speech Rights
    543. The rules we adopt today do not curtail broadband providers' 
free speech rights. When engaged in broadband Internet access services, 
broadband providers are not speakers, but rather serve as conduits for 
the speech of others. The manner in which broadband providers operate 
their networks does not rise to the level of speech protected by the 
First Amendment. As telecommunications services, broadband Internet 
access services, by definition, involve transmission of network users' 
speech without change in form or content, so open Internet

[[Page 19833]]

rules do not implicate providers' free speech rights. And even if 
broadband providers were considered speakers with respect to these 
services, the rules we adopt today are tailored to an important 
government interest--protecting and promoting the open Internet and the 
virtuous cycle of broadband deployment--so as to ensure they would 
survive intermediate scrutiny.
    544. This is not to say that we are indifferent to matters of free 
speech on the Internet. To the contrary, our rules serve First 
Amendment interests of the highest order, promoting ``the widest 
possible dissemination of information from diverse and antagonistic 
sources'' and ``assuring that the public has access to a multiplicity 
of information sources'' by preserving an open Internet. We merely 
acknowledge that the free speech interests we advance today do not 
inhere in broadband providers with respect to their provision of 
broadband Internet access services.
    545. Some commenters contend that because broadband providers 
distribute their own and third-party content to customers, rules that 
govern the transmission of Internet content over broadband networks 
violate their free speech rights. CenturyLink and others compare the 
operation of broadband Internet access service to ``requiring a cable 
operator to carry all broadcast stations,'' and contend that the rules 
adopted today ``displace access service providers' editorial control 
over their networks'' which would otherwise constitute protected speech 
under the First Amendment. Other commenters respond that broadband 
providers are not engaged in speech when providing broadband Internet 
access services, so they are not entitled to First Amendment 
protections in their operation of these services. Consistent with our 
determination in the 2010 Open Internet Order, we find that when 
broadband providers offer broadband Internet access services, they act 
as conduits for the speech of others, not as speakers themselves.
    546. Claiming free speech protections under the First Amendment 
necessarily involves demonstrating status as a speaker--absent speech, 
such rights do not attach. In determining the limits of the First 
Amendment's protections for courses of conduct, the Supreme Court has 
``extended First Amendment protections only to conduct that is 
inherently expressive.'' To determine whether an actor's conduct 
possesses ``sufficient communicative elements to bring the First 
Amendment into play,'' the Supreme Court has asked whether ``[a]n 
intent to convey a particularized message was present and [whether] the 
likelihood was great that the message would be understood by those who 
viewed it.''
    547. Broadband providers' conduct with respect to broadband 
Internet access services does not satisfy this test, and analogies to 
other forms of media are unavailing. CenturyLink and others compare 
their provision of broadband service to the operation of a cable 
television system, and point out that the Supreme Court has determined 
that cable programmers and cable operators engage in editorial 
discretion protected by the First Amendment. As a factual matter, 
broadband Internet access services are nothing like the cable service 
at issue in Turner I. In finding that cable programmers and cable 
operators are entitled to First Amendment protection, the Turner I 
court began with the uncontested assertion that ``cable programmers and 
operators engage in and transmit speech, and they are entitled to the 
protection of the speech and press provisions of the First Amendment.'' 
The court went on to explain that ``cable programmers and operators 
`see[k] to communicate messages on a wide variety of topics and in a 
wide variety of formats' '' through ``original programming or by 
exercising editorial discretion over which stations or programs to 
include in its repertoire.'' (Likewise, while a newspaper publisher 
chooses which material to publish, broadband providers facilitate 
access to all or substantially all Internet endpoints. See Miami Herald 
Publishing Co. v. Tornillo, 418 U.S. 241, 257 (1974). In contrast, 
broadband Internet access services more closely resemble the ``conduit 
for news, comment, and advertising'' from which the Court distinguishes 
newspaper publishing.) Cable operators thus engage in protected speech 
when they both engage in and transmit speech with the intent to convey 
a message either through their own programming directly or through 
contracting with other programmers for placement in a cable package.
    548. Broadband providers, however, display no such intent to convey 
a message in their provision of broadband Internet access services--
they do not engage in speech themselves but serve as a conduit for the 
speech of others. The record reflects that broadband providers exercise 
little control over the content which users access on the Internet. 
Broadband providers represent that their services allow Internet end 
users to access all or substantially all content on the Internet, 
without alteration, blocking, or editorial intervention. End users, in 
turn, expect that they can obtain access to all content available on 
the Internet, without the editorial intervention of their broadband 
provider. While these characteristics certainly involve transmission of 
others' speech, the accessed speech is not edited or controlled by the 
broadband provider but is directed by the end user. (To be sure, 
broadband providers engage in some reasonable network management 
designed to protect their networks from malicious content and to 
relieve congestion, but these practices bear little resemblance to the 
editorial discretion exercised by cable operators in choosing 
programming for their systems.) In providing these services, then, 
broadband providers serve as mere conduits for the messages of others, 
not as agents exercising editorial discretion subject to First 
Amendment protections.
    549. Moreover, broadband is not subject to the same limited 
carriage decisions that characterize cable systems--the Internet was 
designed as a decentralized ``network of networks'' which is capable of 
delivering an unlimited variety of content, as chosen by the end user. 
In contrast, the Turner I court emphasized that the rules under 
consideration in that case regulated cable speech by ``reduc[ing] the 
number of channels over which cable operators exercise unfettered 
control'' and ``render[ing] it more difficult for cable programmers to 
compete for carriage on the limited channels remaining.'' Neither of 
these deprivations of editorial discretion translates to the Internet 
as a content platform. The arrival of one speaker to the network does 
not reduce access to competing speakers; nor are broadband providers 
limited by our rules in the direct exercise of their free speech 
rights. Lacking the exercise of editorial control and an intent to 
convey a particularized message, we find that our rules regulate the 
unexpressive transmission of others' speech over broadband Internet 
access services, not the speech of broadband providers. As our rules 
merely affect what broadband providers ``must do . . . not what they 
may or may not say,'' the provision of broadband Internet access 
services falls outside the protections of the First Amendment outlined 
by the court in Turner I. (We further conclude that broadband 
providers' conduct is not sufficiently expressive to warrant First 
Amendment protection, as the provision of broadband Internet access 
services is not ``inherently expressive,'' but would require 
significant explanatory speech to acquire any characteristics of 
speech.)
    550. Our conclusion that broadband Internet access service 
providers act as conduits rather than speakers holds true regardless of 
how they are classified

[[Page 19834]]

under the Act. But we think this is particularly evident given our 
classification of broadband Internet access services as 
telecommunications services subject to Title II. The Act defines 
``telecommunications'' as the ``transmission, between or among points 
specified by the user, of information of the user's choosing, without 
change in the form or content of the information as sent and 
received.'' The Act also provides for common carrier treatment of any 
provider to the extent it is engaged in providing telecommunications 
services. In the communications context, common carriage requires that 
end users ``communicate or transmit intelligence of their own design 
and choosing.'' In section IV, we have found that broadband Internet 
access services fall within the definitions of ``telecommunications'' 
and ``telecommunications services'' subject to Title II common carrier 
regulation. By definition, then, the provision of telecommunications 
service does not involve the exercise of editorial control or judgment. 
(We also note that the requirement under Computer II that facilities-
based providers of ``enhanced services'' separate out and offer on a 
common carrier basis the ``basic service'' transmission component 
underlying their enhanced services, a requirement reflected in the 1996 
Act's distinction between ``telecommunications services'' and 
``information services'' was never held to raise First Amendment 
concerns. The Supreme Court has acknowledged the distinction between 
common carriers and entities with robust First Amendment rights in 
numerous contexts.)
    551. We also take note that, in other contexts, broadband providers 
have claimed immunity from copyright violations and other liability for 
material distributed on their networks because they lack control over 
what end users transmit and receive. Broadband providers are not 
subject to subpoena in a copyright infringement case because as a 
provider it ``act[s] as a mere conduit for the transmission of 
information sent by others.'' Acknowledging the unexpressive nature of 
their transmission function, Congress has also exempted broadband 
providers from defamation liability arising from content provided by 
other information content providers on the Internet. Given the 
technical characteristics of broadband as a medium and the 
representations of broadband providers with respect to their services, 
we find it implausible that broadband providers could be understood to 
being conveying a particularized message in the provision of broadband 
Internet access service.
    552. Even if open Internet rules were construed to implicate 
broadband providers' rights as speakers, our rules would not violate 
the First Amendment because they would be considered content-neutral 
regulations which easily satisfy intermediate scrutiny. In determining 
whether a regulation is content-based or content-neutral, the 
``principal inquiry . . . is whether the government adopted a 
regulation of speech because of [agreement or] disagreement with the 
message it conveys.'' The open Internet rules adopted today apply 
independent of content or viewpoint. Instead, they are triggered by a 
broadband provider offering broadband Internet access services. The 
rules are structured to operate in such a way that no speaker's message 
is either favored or disfavored, i.e. content neutral.
    553. A content-neutral regulation will survive intermediate 
scrutiny if ``it furthers an important or substantial government 
interest . . . unrelated to the suppression of free expression,'' and 
if ``the means chosen'' to achieve that interest ``do not burden 
substantially more speech than is necessary.'' The government interests 
underlying this Order are clear and numerous. Congress has expressly 
tasked the Commission with ``encourag[ing] the deployment on a 
reasonable and timely basis of advanced telecommunications capability 
to all Americans,'' and has elsewhere explained that it is the policy 
of the United States to ``promote the continued development of the 
Internet and other interactive computer services and other interactive 
media.'' Additionally, the Verizon court accepted the Commission's 
finding that ``Internet openness fosters the edge-provider innovation 
that drives [the] `virtuous cycle.' '' As discussed above, this Order 
pursues these government interests by preserving an open Internet to 
encourage competition and remove impediments to infrastructure 
investment, while enabling consumer choice, end-user control, free 
expression, and the freedom to innovate without permission.
    554. Indeed, rather than burdening free speech, the rules we adopt 
today ensure that the Internet promotes speech by ensuring a level 
playing field for a wide variety of speakers who might otherwise be 
disadvantaged. As Turner I affirmed ``assuring that the public has 
access to a multiplicity of information sources is a governmental 
purpose of the highest order, for it promotes values central to the 
First Amendment.'' (The Turner I Court continued: ``Indeed, it has long 
been a basic tenet of national communications policy that the widest 
possible dissemination of information from diverse and antagonistic 
sources is essential to the welfare of the public.'') Based on clear 
legislative interest in furthering broadband deployment and the 
paramount government interest in assuring that the public has access to 
a multiplicity of information sources, these interests clearly qualify 
as substantial under intermediate scrutiny.
    555. Additionally, the rules here are sufficiently tailored to 
accomplish these government interests. The effect on speech imposed by 
these rules is minimal. The rules do not ``burden substantially more 
speech than necessary'' because they do not burden any identifiable 
speech--the rules we adopt today apply only to broadband providers' 
conduct with regard to their broadband Internet access services. 
Providers remain free to engage in the full panoply of protected speech 
afforded to any other speaker. They are free to offer ``edited'' 
services and engage in expressive conduct through the provision of 
other data services, as well.
    556. Verizon also contends that the open Internet rules are 
impermissible under Citizens United because they result in differential 
treatment of providers of broadband service and other connected IP 
services. Our rules governing the practices of broadband providers 
differ markedly from the statutory restrictions on political speech at 
issue in Citizens United. Our rules do not impact core political 
speech, where the ``First Amendment has its fullest and most urgent 
application.'' By contrast, the open Internet rules apply only to the 
provision of broadband services in a commercial context, so reliance on 
the strict scrutiny standards applied in Citizens United is inapt. As 
described above, intermediate scrutiny under Turner I would be the 
controlling standard of review if broadband providers were found to be 
speakers. If a court were to find differential treatment under our 
rules, though, they would be justified under Turner I because speaker-
based distinctions can be deemed permissible so long as they are `` 
`justified by some special characteristic of' the particular medium 
being regulated.' '' The ability and incentive of broadband providers 
to impose artificial scarcity and pick winners and losers in the 
provision of their last-mile broadband services is just such a special 
characteristic justifying differential treatment.
    557. In sum, the rules we adopt today do not unconstitutionally 
burden any of

[[Page 19835]]

the First Amendment rights held by broadband providers. Broadband 
providers are conduits, not speakers, with respect to broadband 
Internet access services. Even if they were engaged in speech with 
respect to these services, the rules we adopt today are tailored to the 
important government interest in maintaining an open Internet as a 
platform for expression, among other things.
2. Compelled Disclosure
    558. The disclosure requirements adopted as a part of our 
transparency rule also fall well within the confines of the First 
Amendment. As explained above, these required disclosures serve 
important government purposes, ensuring that end users and edge 
providers have accurate and accessible information about broadband 
providers' services. This information is central both to preventing 
consumer deception and to the operation of the virtuous cycle of 
innovation, consumer demand, and broadband deployment.
    559. CenturyLink contends that the disclosure requirements under 
the transparency rule violate the First Amendment by compelling speech 
without a reasonable basis. They argue that the Commission has not 
established a potential problem which these disclosures are necessary 
to remedy and that this is fatal to the rules under the First 
Amendment. This argument misapprehends both the factual justification 
for the transparency rules and the constitutional legal standard 
against which any disclosure requirements would be evaluated by the 
courts.
    560. The Supreme Court has made plain in Zauderer v. Office of 
Disciplinary Counsel of Supreme Court of Ohio that the government has 
broad discretion in requiring the disclosure of information to prevent 
consumer deception and ensure complete information in the marketplace. 
Under Zauderer's rational basis test, mandatory factual disclosures 
will be sustained ``as long as disclosure requirements are reasonably 
related to the State's interest in preventing deception to consumers.'' 
As the Court observed, ``the First Amendment interests implicated by 
disclosure requirements are substantially weaker than those at stake 
when speech is actually suppressed;'' the speaker's interest is 
``minimal.'' The D.C. Circuit recently reaffirmed these principles in 
American Meat Institute v. United States Department of Agriculture, an 
en banc decision in which the Court joined the First and Second Circuit 
Courts of Appeals in recognizing that other government interests beyond 
preventing consumer deception may be invoked to sustain a disclosure 
mandate under Zauderer.
    561. The transparency rule clearly passes muster under these 
precedents. Preventing consumer deception in the broadband Internet 
access services market lies at the heart of the transparency rule we 
adopt today. The Commission has found that broadband providers have the 
incentive and ability to engage in harmful practices, as discussed 
above in section III.B.2. In the 2010 Open Internet Order, we found 
that ``disclosure ensures that end users can make informed choices 
regarding the purchase and use of broadband service.'' Since the 
original transparency rule was promulgated, the Commission has received 
hundreds of complaints regarding advertised rates, slow or congested 
services, data caps, and other potentially deceptive practices. 
Similarly, the enhancements to the transparency rule which we adopt 
today are designed to prevent confusion to all consumers of the 
broadband providers' services--end-users and edge providers alike. 
Tailored disclosures promise to provide a metric against which these 
customers can judge whether their broadband connections satisfy the 
speeds, bandwidth, and other terms advertised by broadband providers.
    562. Further buttressing these disclosure requirements are numerous 
other government interests permitted under American Meat Institute. As 
acknowledged by the D.C. Circuit in Verizon, broadband providers have 
both the economic incentive and the technical ability to interfere with 
third-party edge providers' services by imposing discriminatory 
restrictions on access and priority. The disclosures we require under 
today's transparency rule serve to curb those incentives by shedding 
light on the business practices of broadband providers. Accurate 
information about broadband provider practices encourages the 
competition, innovation, and high-quality services that drive consumer 
demand and broadband investment and deployment. Tailored disclosures 
further amplify these positive effects by ensuring that edge providers 
have critical network information necessary to develop innovative new 
applications and services and that end users have confidence in the 
broadband providers' network management and business practices. In sum, 
the other government interests supporting the rules in addition to 
preventing consumer deception--preserving an open Internet to encourage 
competition and remove impediments to infrastructure investment, while 
enabling consumer choice, end-user control, free expression, and the 
freedom to innovate without permission--are substantial and justify our 
transparency requirements.

B. Fifth Amendment Takings

    563. The open Internet rules also present no cognizable claims 
under the Fifth Amendment's Takings Clause. Today's decision simply 
identifies as common carriage the services that broadband Internet 
access service providers already offer in a manner that carries with it 
certain statutory duties. Regulatory enforcement of those duties has 
never been held to raise takings concerns. Correspondingly, our rules 
do not rise to the level of a per se taking because they do not grant 
third parties a right to physical occupation of the broadband 
providers' property. Finally, they do not constitute a regulatory 
taking because they actually enhance the value of broadband networks by 
protecting the virtuous cycle that drives innovation, user adoption, 
and infrastructure investment.
    564. As an initial matter, we note that our reclassification of 
broadband Internet access service does not result from compelling the 
common carriage offering of those services, contrary to the claims of 
some broadband providers. Rather, our decision simply identifies as 
common carriage the services that broadband Internet access service 
providers already voluntarily offer in a manner that, under the 
Communications Act, carries with it certain statutory duties, which 
have never been held to raise takings concerns. Today's Order 
recognizes that broadband Internet access service is a 
telecommunications service under Title II of the Act. While certain 
common carriage obligations attach to recognition of this fact, those 
requirements operate by virtue of the statutory structure we interpret, 
not in service to a discretionary ``policy goal the Commission seeks to 
advance.'' Such statutory obligations have never before posed takings 
issues, and we conclude that today's Order, likewise, does not violate 
the Fifth Amendment.
    565. Verizon specifically contends that without either a finding of 
monopoly power or a restriction on government entry, ``compelled common 
carriage would constitute a government taking.'' They cite approvingly 
Judge Wilkey's observation in NARUC I that ``early common carriage 
regulations were `challenged as deprivations of property without due 
process.' '' However, Judge Wilkey continues in the next sentence to 
explain that Congress has regularly imposed common carrier obligations 
without a showing of

[[Page 19836]]

monopoly power or entry restrictions. Verizon's suggestion, when 
extended to its logical conclusion, would necessitate rendering 
unconstitutional any common carriage obligations outside of true 
government-sponsored monopolies. The courts have taken a much narrower 
view of both the characteristics necessary for common carrier status 
and the effect of that status on takings claims when present in a non-
monopoly context. Correspondingly, we conclude that today's 
classifications, without a showing of monopoly power do not constitute 
takings under the Fifth Amendment.
1. Per Se Takings
    566. Some commenters argue that our rules would effect a per se 
taking by granting third parties a perpetual easement onto broadband 
providers' facilities, a form of physical occupation. These arguments 
mischaracterize the nature of the rules we adopt today and misapply 
Fifth Amendment jurisprudence. To qualify as a per se taking, the 
challenged government action must authorize a permanent physical 
occupation of private property. (The government may also commit a per 
se taking by completely depriving an owner of all economically 
beneficial use of her property. However, the record does not reflect a 
concern among commenters that our actions today deprive broadband 
providers of all economically beneficial use of their property--nor do 
we find one merited--so we limit our discussion to the permanent 
physical occupation variety of per se takings.) This rule, however, is 
``very narrow'' and it does not ``question the equally substantial 
authority upholding a State's broad power to impose appropriate 
restrictions upon an owner's use of his property.'' The Supreme Court 
has advised that a per se taking is ``relatively rare and easily 
identified'' and ``presents relatively few problems of proof.''
    567. Under this formulation, today's Order does not impose a per se 
taking on broadband providers. Regulation of the transmissions 
travelling over a broadband providers' property differs substantially 
from physical occupations which are the hallmark of per se takings, 
such as the installation of cable equipment at issue in Loretto v. 
Teleprompter CATV Corp. We do not require the permanent installation of 
any third-party equipment at broadband providers' network facilities, 
or deprive broadband providers of existing property interests in their 
networks--a broadband provider retains complete control over its 
property. (The Supreme Court has further cabined this per se takings 
rule by noting that some permanent incursions onto private property 
could be acceptable if the property owner owned the installation and 
retained discretion in how to deploy it. Were our rules found to impose 
a permanent physical occupation on broadband providers' networks, 
broadband services seem to fall squarely within this exception. 
Broadband Internet access services are characterized as distinctly 
user-directed. Further, providers retain discretion in the deployment 
of their facilities and are free to manage traffic through reasonable 
network management.) Our rules merely regulate the use of a broadband 
Internet access provider's network--they are neither physical nor 
permanent occupations of private property. Courts have repeatedly 
declined to extend per se takings analysis to rules regulating the 
transmission of communications traffic over a provider's facilities, 
and we believe that these decisions comport with the Supreme Court's 
perspective that permanent physical occupation of property is a narrow 
category of takings jurisprudence and is ``easily identifiable'' when 
it does occur.
    568. Moreover, to the extent that broadband providers voluntarily 
open their networks to end users and edge providers, reasonable 
regulation of the use of their property poses no takings issue. When 
owners voluntarily invite others onto their property--through contract 
or otherwise--the courts will not find that a permanent physical 
occupation has occurred. So long as property owners remain free to 
avoid physical incursions on their property by discontinuing the 
services to which it has been dedicated, reasonable conduct regulations 
can be imposed on the use of such properties without raising per se 
takings concerns. In point of fact, broadband providers regularly 
invite third parties to transmit signals through their physical 
facilities by contracting with end users to provide broadband Internet 
access service and promising access to all or substantially all 
Internet endpoints. Our rules do not compel broadband providers to 
offer this service--instead our rules simply regulate broadband 
providers' conduct with respect to traffic which currently freely flows 
over their facilities. Thus, to the extent that broadband providers 
allow any customer to transmit or receive information over its network, 
the imposition of reasonable conduct rules on the provision of 
broadband Internet access services does not constitute a per se taking. 
Furthermore, even if the rules did impose a type of physical occupation 
on the facilities of broadband providers, such an imposition is not an 
unconstitutional taking because broadband providers are compensated for 
the traffic passing over their networks. (With respect to the rules 
governing the broadband Internet access service, broadband providers 
are compensated through the imposition of subscription fees on their 
end users.)
2. Regulatory Takings
    569. Nor do the rules we adopt today constitute a regulatory 
taking. Outside of per se takings cases, courts analyze putative 
government takings through ``essentially ad hoc, factual inquiries'' 
into a variety of unweighted factors such as the ``economic impact of 
the regulation,'' the degree of interference with ``investment-backed 
expectations,'' and ``the character of the government action.'' 
Directing analysis of these factors is a common touchstone--whether the 
regulatory actions taken are ``functionally equivalent to the classic 
taking in which government directly appropriates private property or 
ousts the owner from his domain.'' Open Internet rules do not implicate 
such a deprivation of value or control over the networks of broadband 
providers, and so pose no regulatory takings issues.
    570. The economic impact of the rules we adopt today is limited 
because, in most circumstances, the Internet operates in an open manner 
today. Indeed, rather than reducing the value of broadband provider 
property, today's rules likely serve to enhance the value of broadband 
networks by promoting innovation on the edge of the network, thereby 
driving consumer demand for broadband Internet access and increasing 
the networks' value. Further, today's Order does not so burden 
broadband providers' discretion in managing and deploying their 
networks to effectively ``oust'' them from ownership and control of 
their networks. While we have adopted a set of bright-line rules today 
for some practices, broadband providers are still afforded a great deal 
of discretion to enter into individualized arrangements with respect to 
the provision of broadband Internet access services under the no-
unreasonable interference/disadvantage standard. The limited scope of 
the open Internet rules also injects flexibility into our regulatory 
framework and provides sufficient property protections to take our 
rules outside the ambit of the Fifth Amendment.
    571. Likewise, any investment backed expectations of broadband 
providers in prior regulatory regimes are minimal. As a general matter, 
property owners

[[Page 19837]]

cannot expect that existing legal requirements regarding their property 
will remain entirely unchanged. (Additionally, persons operating in a 
regulated environment develop fewer reliance interests in industries 
subject to comprehensive regulation.) The Commission has long regulated 
Internet access services, and there is no doubt that broadband Internet 
``falls comfortably within the Commission's jurisdiction.'' Indeed, 
with respect to broadband Internet access service, claims by broadband 
providers that our previous regulatory treatment of broadband 
engendered reliance interests runs counter to the plain language of the 
2002 Cable Modem Declaratory Ruling and the 2005 Wireline Broadband 
Classification Order, both of which contained notices of proposed 
rulemaking seeking comment on the retention of Title II-like regulation 
of those services. Also, because we do not propose to regulate ex ante 
broadband providers' ability to set market rates for the broadband 
Internet access services they offer, there is no reason to believe that 
our ruling will deprive broadband providers of the just compensation 
that is a full answer to any takings claim.
    572. In characterizing our proposed rules as a regulatory taking, 
CenturyLink looks to Kaiser Aetna, a case in which the government 
sought to establish public access rights to a private marina by 
classifying it as ``navigable waters of the United States. As described 
above, we think that analogies to real property incursions are 
inapplicable to the provision of broadband Internet access services. In 
any event, the facts of Kaiser bear little resemblance to the rights 
and interests implicated by broadband networks. Unlike the small, 
privately held marina which was not open to the public in Kaiser Aetna, 
broadband Internet access service involves access to substantially all 
Internet endpoints. While the marina in Kaiser Aetna maintained a small 
fee-paying membership, broadband Internet access services are offered 
directly to the public at large, as we recognize in their 
classification as telecommunications services. In sum, open Internet 
rules do not so burden broadband provider's control and ownership of 
their networks as to rise to the level of a regulatory taking in 
violation of the Fifth Amendment. The economic impact of our rules is 
minimal and our classifications do not frustrate any significant 
reliance interests.

VII. Severability

    573. We consider the actions we take today to be separate and 
severable such that in the event any particular action or decision is 
stayed or determined to be invalid, we would find that the resulting 
regulatory framework continues to fulfill our goal of preserving and 
protecting the open Internet and that it shall remain in effect to the 
fullest extent permitted by law. Though complementary, each of the 
rules, requirements, classifications, definitions, and other provisions 
that we establish in this Report and Order on Remand, Declaratory 
Ruling, and Order operate independently to promote the virtuous cycle, 
encourage the deployment of broadband on a timely basis, and protect 
the open Internet.
    574. Severability of Open Internet Rules from One Another. The open 
Internet rules we adopt today each operate independently to protect the 
open Internet, promote the virtuous cycle, and encourage the deployment 
of broadband on a timely basis. The Verizon court recognized as much by 
holding our initial transparency rule severable from the non-
discrimination and no blocking rules from the 2010 Open Internet Order. 
We apply that view to today's transparency rule, as well as to the no 
blocking, no throttling, and no paid prioritization rules and the no-
unreasonable interference/disadvantage adopted today. While today's 
rules put in place a suite of open Internet protections, we find that 
each of these rules, on its own, serves to protect the open Internet. 
Each rule protects against different potential harms and thus operates 
semi-independently from one another. For example, the no-blocking rule 
protects consumers' right to access lawful content, applications, and 
services by constraining broadband providers' incentive to block 
competitors' content. The no throttling rule serves as an independent 
supplement to this prohibition on blocking by banning the impairment or 
degradation of lawful content that does not reach the level of 
blocking. Should the no blocking rule be declared invalid, the no 
throttling rule would still afford consumers and edge providers 
significant protection, and thus could independently advance the goals 
of the open Internet, if not as comprehensively were the no blocking 
rule still in effect. The same reasoning holds true for the ban on paid 
prioritization, which protects against particular harms independent of 
the other bright-line rules. Finally, the no-unreasonable interference/
disadvantage standard governs broadband provider conduct generally, 
providing independent protections against those three harmful practices 
along with other and new practices that could threaten to harm Internet 
openness. Were any of these individual rules held invalid, the 
resulting regulations would remain valuable tools for protecting the 
open Internet.
    575. Severability of Rules Governing Mobile/Fixed Providers. We 
have also made clear today our rules apply to both fixed and mobile 
broadband service. These are two different services, and thus the 
application of our rules to either service functions independently. 
Accordingly, we find that should application of our open Internet rules 
to either fixed or mobile broadband Internet access services be held 
invalid, the application of those rules to the remaining mobile or 
fixed services would still fulfill our regulatory purposes and remain 
intact.

VIII. Procedural Matters

A. Regulatory Flexibility Analysis

    576. As required by the Regulatory Flexibility Act (RFA), an 
Initial Regulatory Flexibility Analysis (IRFA) was incorporated into 
the 2014 Open Internet NPRM. The Commission sought written public 
comment on the possible significant economic impact on small entities 
regarding the proposals addressed in the Open Internet NPRM, including 
comments on the IRFA. Pursuant to the RFA, a Final Regulatory 
Flexibility Analysis is set forth in the Order.

B. Paperwork Reduction Act of 1995 Analysis

    577. This document contains new information collection requirements 
subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-
13. It will be submitted to the Office of Management and Budget (OMB) 
for review under section 3507(d) of the PRA. OMB, the general public, 
and other federal agencies are invited to comment on the new 
information collection requirements contained in this proceeding. In 
addition, we note that pursuant to the Small Business Paperwork Relief 
Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), we 
previously sought specific comment on how the Commission might further 
reduce the information collection burden for small business concerns 
with fewer than 25 employees.
    578. In this present document, we require broadband providers to 
publicly disclose accurate information regarding the commercial terms, 
performance, and network management practices of their broadband 
Internet access services sufficient for end users to make informed 
choices regarding use of such services and for content, application,

[[Page 19838]]

service, and device providers to develop, market, and maintain Internet 
offerings. We have assessed the effects of this rule and find that any 
burden on small businesses will be minimal because (1) the rule gives 
broadband providers flexibility in how to implement the disclosure 
rule, and (2) the rule gives providers adequate time to develop cost-
effective methods of compliance.

C. Congressional Review Act

    579. The Commission will send a copy of this Report and Order to 
Congress and the Government Accountability Office pursuant to the 
Congressional Review Act, see 5 U.S.C. 801(a)(1)(A).

D. Data Quality Act

    580. The Commission certifies that it has complied with the Office 
of Management and Budget Final Information Quality Bulletin for Peer 
Review, 70 FR 2664 (2005), and the Data Quality Act, Ex. Public Law 
106-554 (2001), codified at 44 U.S.C. 3516 note, with regard to its 
reliance on influential scientific information in the Report and Order 
on Remand, Declaratory Ruling, and Order in GN Docket No. 14-28.

E. Accessible Formats

    581. To request materials in accessible formats for people with 
disabilities (braille, large print, electronic files, audio format), 
send an email to <a href="/cdn-cgi/l/email-protection#197f7a7a2c292d597f7a7a377e766f"><span class="__cf_email__" data-cfemail="d5b3b6b6e0e5e195b3b6b6fbb2baa3">[email protected]</span></a> or call the Consumer & Governmental 
Affairs Bureau at 202-418-0530 (voice), 202-418-0432 (tty). Contact the 
FCC to request reasonable accommodations for filing comments 
(accessible format documents, sign language interpreters, CARTS, etc.) 
by email: <a href="/cdn-cgi/l/email-protection" class="__cf_email__" data-cfemail="682e2b2b5d585c280e0b0b460f071e">[email protected]</a>; phone: (202) 418-0530 (voice), (202) 418-0432 
(TTY).

IX. Ordering Clauses

    582. Accordingly, it is ordered that, pursuant to sections 1, 2, 3, 
4, 10, 201, 202, 301, 303, 316, 332, 403, 501, and 503, of the 
Communications Act of 1934, as amended, and section 706 of the 
Telecommunications Act of 1996, as amended, 47 U.S.C. 151, 152, 153, 
154, 160, 201, 202, 301, 303, 316, 332, 403, 501, 503, and 1302, this 
Report and Order on Remand, Declaratory Ruling, and Order is adopted.
    583. It is further ordered that parts 1, 8, and 20 of the 
Commission's rules are amended as set forth in Appendix A of the Order.
    584. It is further ordered that this Report and Order on Remand, 
Declaratory Ruling, and Order shall be effective June 12, 2015, except 
that the modified information collection requirements in paragraphs 
164, 166, 167, 169, 173, 174, 179, 180, and 181 of this document are 
not applicable until approved by the Office of Management and Budget 
(OMB). The Federal Communications Commission will publish a separate 
document in the Federal Register announcing such approval and the 
relevant effective date(s). It is our intention in adopting the 
foregoing Declaratory Ruling and these rule changes that, if any 
provision of the Declaratory Ruling or the rules, or the application 
thereof to any person or circumstance, is held to be unlawful, the 
remaining portions of such Declaratory Ruling and the rules not deemed 
unlawful, and the application of such Declaratory Ruling and the rules 
to other person or circumstances, shall remain in effect to the fullest 
extent permitted by law.
    585. It is further ordered that the Commission's Consumer & 
Governmental Affairs Bureau, Reference Information Center, shall send a 
copy of Report and Order on Remand, Declaratory Ruling, and Order to 
Congress and the Government Accountability Office pursuant to the 
Congressional Review Act, see 5 U.S.C. 801(a)(1)(A).
    586. It is further ordered, that the Commission's Consumer & 
Governmental Affairs Bureau, Reference Information Center, shall send a 
copy of this Report and Order on Remand, Declaratory Ruling, and Order, 
including the Final Regulatory Flexibility Analysis, to the Chief 
Counsel for Advocacy of the Small Business Administration.
    587. It is further ordered that the Mozilla Petition to Recognize 
Remote Delivery Services in Terminating Access Networks and Classify 
Such Services as Telecommunications Services Under Title II of the 
Communications Act is denied.

X. Final Regulatory Flexibility Analysis

    588. As required by the Regulatory Flexibility Act of 1980 (RFA), 
as amended, Initial Regulatory Flexibility Analyses (IRFAs) were 
incorporated in the Notice of Proposed Rule Making (2014 Open Internet 
NPRM) for this proceeding. The Commission sought written public comment 
on the proposals in the 2014 Open Internet NPRM, including comment on 
the IRFA. The Commission received comments on the 2014 Open Internet 
NPRM IRFA, which are discussed below. This present Final Regulatory 
Flexibility Analysis (FRFA) conforms to the RFA.

A. Need for, and Objectives of, the Proposed Rules

    589. In its remand of the Commission's Open Internet Order, the 
D.C. Circuit affirmed the underlying basis for the Commission's open 
Internet rules, holding that ``the Commission [had] more than 
adequately supported and explained its conclusion that edge provider 
innovation leads to the expansion and improvement of broadband 
infrastructure.'' The court also found ``reasonable and grounded in 
substantial evidence'' the Commission's finding that Internet openness 
fosters the edge provider innovation that drives the virtuous cycle. 
Open Internet rules benefit investors, innovators, and end users by 
providing more certainty to each regarding broadband providers' 
behavior, and helping to ensure the market is conducive to optimal use 
of the Internet. Further, openness promotes the Internet's ability to 
act as a platform for speech and civic engagement, and can help close 
the digital divide by facilitating the development of diverse content, 
applications, and services. The record on remand convinces us that 
broadband providers continue to have the incentives and ability to 
engage in practices that pose a threat to Internet openness, and as 
such, rules to protect the open nature of the Internet remain 
necessary.
    590. The Commission's historical open Internet policies and rules 
have blunted broadband providers' incentives to engage in behavior 
harmful to the open Internet. Commenters who argue that rules are not 
necessary overlook the role that the Commission's rules and policies 
have played in fostering that result. Without rules in place to protect 
the open Internet, the overwhelming incentives broadband providers have 
to act in ways that are harmful to investment and innovation threaten 
both broadband networks and edge content. Accordingly, in the Order, we 
set a clear scope for and subsequently adopt a number of rules to 
address such harmful conduct.
    591. First, we note that despite traffic exchange's inclusion in 
the definition and classification of broadband Internet access service, 
we do not apply the Commission's conduct-based rules to traffic 
exchange today. Instead, we utilize the regulatory backstop of sections 
201 and 202, as well as related enforcement provisions, to provide 
oversight over traffic exchange arrangements between a broadband 
Internet access service provider and other networks. Our definition of 
broadband Internet access service

[[Page 19839]]

includes services ``by wire or radio,'' and thus the open Internet 
rules we adopt apply to both fixed and mobile broadband Internet access 
services. The record demonstrates the pressing need to apply open 
Internet rules to fixed and mobile broadband Internet access services 
alike, and as such, the Commission's prior justifications for treating 
mobile and fixed services differently under the rules are no longer 
relevant.
    592. We adopt a bright-line rule prohibiting broadband providers 
from blocking lawful content, applications, services, or non-harmful 
devices. The no-blocking rule applies to all traffic transmitted to or 
from end users of a broadband Internet access service, including 
traffic that may not fit clearly into any of these categories. Further, 
the no-blocking rule only applies to transmissions of lawful content 
and does not prevent or restrict a broadband provider from refusing to 
transmit unlawful material, such as child pornography or copyright-
infringing materials. We believe that this approach will allow 
broadband providers to honor their service commitments to their 
subscribers without requiring a specified level of service to those 
subscribers or edge providers under the no-blocking rule. We further 
believe that the separate no-throttling rule provides appropriate 
protections against harmful conduct that degrades traffic but does not 
constitute outright blocking.
    593. We also adopt a separate bright-line rule prohibiting 
broadband providers from impairing or degrading lawful Internet traffic 
on the basis of content, application, service, or use of a non-harmful 
device. While certain broadband provider conduct may result in 
degradation of an end user's Internet experience that is tantamount to 
blocking, we believe that this conduct requires delineation in an 
explicit rule rather than through commentary as part of the no-blocking 
rule. We interpret throttling to mean any conduct by a broadband 
Internet access service provider that impairs, degrades, slows down, or 
renders effectively unusable particular content, services, 
applications, or devices, which is not reasonable network management. 
We find this prohibition to be as necessary as a rule prohibiting 
blocking. Without an equally strong no-throttling rule, parties note 
that the no-blocking rule will not be as effective because broadband 
providers might otherwise be able to engage in conduct that harms the 
open Internet but falls short of the outright blocking standard.
    594. Under our bright-line rule banning paid prioritization, the 
Commission will treat all paid prioritization as illegal under our 
rules except when, in rare circumstances, a broadband provider can 
convincingly show that its practice would affirmatively benefit the 
open Internet. Broadband providers may seek a waiver of this rule 
against paid prioritization, and we provide guidance to make clear the 
very limited circumstances in which the Commission would be willing to 
allow paid prioritization. In order to justify waiver, a party would 
need to demonstrate that a practice would provide some significant 
public interest benefit and would not harm the open nature of the 
Internet.
    595. In addition to these three bright-line rules, we also set 
forth a no-unreasonable interference/disadvantage standard, under which 
the Commission can prohibit practices that unreasonably interfere with 
or unreasonably disadvantage consumers or edge providers, thus causing 
harm to the open Internet. This no-unreasonable interference/
disadvantage standard will operate on a case-by-case basis and is 
designed to evaluate other broadband provider policies or practices--
not covered by the bright-line rules-- and prohibit those that could 
harm the open Internet. Under this rule, any person engaged in the 
provision of broadband Internet access service, insofar as such person 
is so engaged, shall not unreasonably interfere with or unreasonably 
disadvantage (i) end users' ability to select, access, and use 
broadband Internet access service or the lawful Internet content, 
applications, services, or devices of their choice, or (ii) edge 
providers' ability to make lawful content, applications, services or 
devices available to end users. Reasonable network management shall not 
be considered a violation of this rule. This standard importantly 
allows us to prohibit practices that harm Internet openness, while 
still permitting innovative practices and creations that promote the 
virtuous cycle. (The Verizon court specifically touted the virtuous 
cycle as a worthy goal and within our authority.)
    596. We note that the no-blocking, no-throttling, and no-
unreasonable interference/disadvantage standard are all subject to 
reasonable network management. This network management exception is 
critical to allow broadband providers to optimize overall network 
performance and maintain a consistent quality experience for consumers. 
This exception does not apply to the paid prioritization rule because 
unlike conduct implicating the no-blocking, no-throttling, or no-
unreasonable interference/disadvantage standard, paid prioritization is 
not a network management practice. We believe that this approach allows 
broadband providers to optimize overall network performance and 
maintain a consistent quality experience for consumers while carrying a 
variety of traffic over their networks.
    597. In addition, we adopt our tentative conclusion in the 2014 
Open Internet NPRM, that the Commission should not apply its conduct-
based rules to services offered by broadband providers that share 
capacity with broadband Internet access service over providers' last-
mile facilities, while closely monitoring the development of these 
services to ensure that broadband providers are not circumventing the 
open Internet rules. While the 2010 Open Internet Order and the 2014 
Open Internet NPRM used the term ``specialized services'' to refer to 
these types of services, the term ``non-BIAS data services'' is a more 
accurate description for this class of services. These services may 
generally share the following characteristics: First, these services 
are not used to reach large parts of the Internet. Second, these 
services are not a generic platform--but rather a specific 
``application level'' service. Finally, these services use some form of 
network management to isolate network capacity from broadband Internet 
access services: Physically, logically, statistically, or otherwise.
    598. We also adopt enhancements to the existing transparency rule, 
which covers both content and format of disclosures by providers of 
broadband Internet access services. As the Commission has previously 
noted, disclosure requirements are among the least intrusive and most 
effective regulatory measures at its disposal. The enhanced 
transparency requirements adopted in the present Order serve the same 
purposes as those required under the 2010 Order: Providing critical 
information to serve end-user consumers, edge providers of broadband 
products and services, and the Internet community. Our enhancements to 
the existing transparency rule will better enable end-user consumers to 
make informed choices about broadband services by providing them with 
timely information tailored more specifically to their needs, and will 
similarly provide edge providers with the information necessary to 
develop new content, applications, services, and devices that promote 
the virtuous cycle of investment and innovation.
    599. We anticipate that many disputes that will arise can and 
should be resolved by the parties without Commission involvement. We

[[Page 19840]]

encourage parties to resolve disputes through informal discussions and 
private negotiations, but to the extent these methods are not 
practical, the Commission will continue to provide backstop mechanisms 
to address them. We continue to allow parties to file formal and 
informal complaints, and we will also proactively monitor compliance 
and take strong enforcement action against parties who violate the open 
Internet rules. In addition, we institute the use of advisory opinions 
similar to those issued by DOJ's Antitrust Division to provide clarity, 
guidance, and predictability concerning the open Internet rules. We 
also create an ombudsperson position that will serve as a point of 
contact for open Internet issues at the Commission to help consumers 
and edge providers direct their inquiries and complaints to the 
appropriate parties.
    600. The legal basis for the Open Internet rules we adopt today 
relies on multiple sources of legal authority, including section 706, 
Title II, and Title III of the Communications Act. We conclude that the 
best approach to achieving our open Internet goals is to rely on 
several, independent, yet complementary sources of legal authority. Our 
authority under section 706 is not mutually exclusive with our 
authority under Titles II and III of the Act. Rather, we read our 
statute to provide independent sources of authority that work in 
concert toward common ends. Under section 706, the Commission has the 
authority to take certain regulatory steps to encourage and accelerate 
the deployment of broadband to all Americans. Under Title II, the 
Commission has authority to ensure that common carriers do not engage 
in unjust and unreasonable practices or preferences. And under Title 
III, the Commission has authority to protect the public interest 
through spectrum licensing. Each of these sources of authority provides 
an alternative ground to independently support our open Internet rules.

B. Summary of Significant Issues Raised by Public Comments in Response 
to the IRFA

    601. In response to the 2014 Open Internet NPRM, five entities 
filed comments, reply comments, and/or ex parte letters that 
specifically addressed the IRFA to some degree: ADTRAN, the American 
Cable Association (ACA), The National Cable & Telecommunications 
Association (NCTA), NTCA--the Rural Broadband Association (NTCA), and 
the Wireless Internet Service Providers Association (WISPA). Some of 
these, as well as other entities filed comments or ex parte letters 
that more generally considered the small business impact of our 
proposals. The Office of Advocacy of the Small Business Administration 
(SBA) also filed a letter encouraging the FCC to use the RFA to reach 
out to small businesses in the course of the proceeding. The SBA 
particularly encouraged the Commission to ``exercise appropriate 
caution in tailoring its final rules to mitigate any anticompetitive 
pressure on small broadband providers as well.'' We considered the 
proposals and concerns described by the various commenters, including 
the SBA, when composing the Order and accompanying rules.
    602. Some commenters expressed concern that in the IRFA, we had not 
adequately considered the varying sizes of broadband providers and the 
effect of our proposals on smaller entities. Contrary to these 
concerns, when making the determination reflected in the Order, we 
carefully considered the impact of our actions on small entities. The 
record also reflects small entities' concern that the rules proposed in 
the 2014 Open Internet NPRM did not include sufficient protection for 
small edge providers and broadband providers. Thus, the rules adopted 
in the Order reflect a careful consideration of the impact that our 
rules will have both on small edge providers and on small broadband 
providers. The record also reflects the concerns of some commenters 
that enhanced transparency requirements will be particularly burdensome 
for smaller providers. However, in the 2014 Open Internet NPRM IRFA, we 
specifically sought comment on whether there are ways the Commission or 
industry associations could reduce burdens on broadband providers in 
complying with the proposed enhanced transparency rule through the use 
of a voluntary industry standardized glossary, or through the creation 
of a dashboard that permits easy comparison of the policies, 
procedures, and prices of various broadband providers throughout the 
country.
    603. NCTA and others also state that the IRFA was insufficiently 
specific considering the obligations and impact of the classification 
of broadband Internet access service as a Title II service. We disagree 
with this contention as well. We believe that the IRFA was adequate and 
that the opportunity for parties, including small entities, to comment 
in a publicly accessible docket on the proposals contained within the 
2014 Open Internet NPRM was sufficient. The opportunity for comments, 
replies, and ex parte presentations more than adequately shaped the 
universe of potential obligations that could stem from our final rules. 
This was reflected in the overwhelming outpouring of comment on the 
proposals contained in the NPRM: Including many comments by and on 
behalf of small entities. The IRFA described that the 2014 Open 
Internet NPRM sought comment on the best source of authority for 
protecting Internet openness, whether section 706, Title II of the 
Communications Act of 1934, as amended, and/or other sources of legal 
authority such as Title III of the Communications Act for wireless 
services.

C. Description and Estimate of the Number of Small Entities To Which 
the Rules Would Apply

    604. The RFA directs agencies to provide a description of, and 
where feasible, an estimate of the number of small entities that may be 
affected by the proposed rules, if adopted. The RFA generally defines 
the term ``small entity'' as having the same meaning as the terms 
``small business,'' ``small organization,'' and ``small governmental 
jurisdiction.'' In addition, the term ``small business'' has the same 
meaning as the term ``small-business concern'' under the Small Business 
Act. A small-business concern'' is one which: (1) Is independently 
owned and operated; (2) is not dominant in its field of operation; and 
(3) satisfies any additional criteria established by the SBA.
1. Total Small Entities
    605. Our proposed action, if implemented, may, over time, affect 
small entities that are not easily categorized at present. We therefore 
describe here, at the outset, three comprehensive, statutory small 
entity size standards. First, nationwide, there are a total of 
approximately 28.2 million small businesses, according to the SBA. In 
addition, a ``small organization'' is generally ``any not-for-profit 
enterprise which is independently owned and operated and is not 
dominant in its field.'' Nationwide, as of 2007, there were 
approximately 1,621,315 small organizations. Finally, the term ``small 
governmental jurisdiction'' is defined generally as ``governments of 
cities, towns, townships, villages, school districts, or special 
districts, with a population of less than fifty thousand.'' Census 
Bureau data for 2007 indicate that there were 89,476 local governmental 
jurisdictions in the United States. We estimate that, of this total, as 
many as 88,761 entities may qualify as ``small governmental 
jurisdictions.'' Thus, we estimate that

[[Page 19841]]

most governmental jurisdictions are small.
2. Broadband Internet Access Service Providers
    606. The rules adopted in the Order apply to broadband Internet 
access service providers. The Economic Census places these firms, whose 
services might include Voice over Internet Protocol (VoIP), in either 
of two categories, depending on whether the service is provided over 
the provider's own telecommunications facilities (e.g., cable and DSL 
ISPs), or over client-supplied telecommunications connections (e.g., 
dial-up ISPs). The former are within the category of Wired 
Telecommunications Carriers, which has an SBA small business size 
standard of 1,500 or fewer employees. These are also labeled 
``broadband.'' The latter are within the category of All Other 
Telecommunications, which has a size standard of annual receipts of $25 
million or less. These are labeled non-broadband. According to Census 
Bureau data for 2007, there were 3,188 firms in the first category, 
total, that operated for the entire year. Of this total, 3144 firms had 
employment of 999 or fewer employees, and 44 firms had employment of 
1000 employees or more. For the second category, the data show that 
1,274 firms operated for the entire year. Of those, 1,252 had annual 
receipts below $25 million per year. Consequently, we estimate that the 
majority of broadband Internet access service provider firms are small 
entities.
    607. The broadband Internet access service provider industry has 
changed since this definition was introduced in 2007. The data cited 
above may therefore include entities that no longer provide broadband 
Internet access service, and may exclude entities that now provide such 
service. To ensure that this FRFA describes the universe of small 
entities that our action might affect, we discuss in turn several 
different types of entities that might be providing broadband Internet 
access service. We note that, although we have no specific information 
on the number of small entities that provide broadband Internet access 
service over unlicensed spectrum, we include these entities in our 
Final Regulatory Flexibility Analysis.
3. Wireline Providers
    608. Incumbent Local Exchange Carriers (Incumbent LECs). Neither 
the Commission nor the SBA has developed a small business size standard 
specifically for incumbent local exchange services. The closest 
applicable size standard under SBA rules is for the category Wired 
Telecommunications Carriers. Under that size standard, such a business 
is small if it has 1,500 or fewer employees. According to Commission 
data, 1,307 carriers reported that they were incumbent local exchange 
service providers. Of these 1,307 carriers, an estimated 1,006 have 
1,500 or fewer employees and 301 have more than 1,500 employees. 
Consequently, the Commission estimates that most providers of incumbent 
local exchange service are small businesses that may be affected by 
rules adopted pursuant to the Order.
    609. Competitive Local Exchange Carriers (Competitive LECs), 
Competitive Access Providers (CAPs), Shared-Tenant Service Providers, 
and Other Local Service Providers. Neither the Commission nor the SBA 
has developed a small business size standard specifically for these 
service providers. The appropriate size standard under SBA rules is for 
the category Wired Telecommunications Carriers. Under that size 
standard, such a business is small if it has 1,500 or fewer employees. 
According to Commission data, 1,442 carriers reported that they were 
engaged in the provision of either competitive local exchange services 
or competitive access provider services. Of these 1,442 carriers, an 
estimated 1,256 have 1,500 or fewer employees and 186 have more than 
1,500 employees. In addition, 17 carriers have reported that they are 
Shared-Tenant Service Providers, and all 17 are estimated to have 1,500 
or fewer employees. In addition, 72 carriers have reported that they 
are Other Local Service Providers. Of the 72, seventy have 1,500 or 
fewer employees and two have more than 1,500 employees. Consequently, 
the Commission estimates that most providers of competitive local 
exchange service, competitive access providers, Shared-Tenant Service 
Providers, and other local service providers are small entities that 
may be affected by rules adopted pursuant to the Order.
    610. We have included small incumbent LECs in this present RFA 
analysis. As noted above, a ``small business'' under the RFA is one 
that, inter alia, meets the pertinent small business size standard 
(e.g., a telephone communications business having 1,500 or fewer 
employees), and ``is not dominant in its field of operation.'' The 
SBA's Office of Advocacy contends that, for RFA purposes, small 
incumbent LECs are not dominant in their field of operation because any 
such dominance is not ``national'' in scope. We have therefore included 
small incumbent LECs in this RFA analysis, although we emphasize that 
this RFA action has no effect on Commission analyses and determinations 
in other, non-RFA contexts.
    611. Interexchange Carriers. Neither the Commission nor the SBA has 
developed a small business size standard specifically for providers of 
interexchange services. The appropriate size standard under SBA rules 
is for the category Wired Telecommunications Carriers. Under that size 
standard, such a business is small if it has 1,500 or fewer employees. 
According to Commission data, 359 carriers have reported that they are 
engaged in the provision of interexchange service. Of these, an 
estimated 317 have 1,500 or fewer employees and 42 have more than 1,500 
employees. Consequently, the Commission estimates that the majority of 
IXCs are small entities that may be affected by rules adopted pursuant 
to the Order.
    612. Operator Service Providers (OSPs). Neither the Commission nor 
the SBA has developed a small business size standard specifically for 
operator service providers. The appropriate size standard under SBA 
rules is for the category Wired Telecommunications Carriers. Under that 
size standard, such a business is small if it has 1,500 or fewer 
employees. According to Commission data, 33 carriers have reported that 
they are engaged in the provision of operator services. Of these, an 
estimated 31 have 1,500 or fewer employees and two have more than 1,500 
employees. Consequently, the Commission estimates that the majority of 
OSPs are small entities that may be affected by rules adopted pursuant 
to the Order.
4. Wireless Providers--Fixed and Mobile
    613. The broadband Internet access service provider category 
covered by this Order may cover multiple wireless firms and categories 
of regulated wireless services. Thus, to the extent the wireless 
services listed below are used by wireless firms for broadband Internet 
access service, the proposed actions may have an impact on those small 
businesses as set forth above and further below. In addition, for those 
services subject to auctions, we note that, as a general matter, the 
number of winning bidders that claim to qualify as small businesses at 
the close of an auction does not necessarily represent the number of 
small businesses currently in service. Also, the Commission does not 
generally track subsequent business size unless, in the context of 
assignments and transfers or reportable eligibility

[[Page 19842]]

events, unjust enrichment issues are implicated.
    604. Wireless Telecommunications Carriers (except Satellite). Since 
2007, the Census Bureau has placed wireless firms within this new, 
broad, economic census category. Under the present and prior 
categories, the SBA has deemed a wireless business to be small if it 
has 1,500 or fewer employees. For the category of Wireless 
Telecommunications Carriers (except Satellite), census data for 2007 
show that there were 1,383 firms that operated for the entire year. Of 
this total, 1,368 firms had employment of 999 or fewer employees and 15 
had employment of 1000 employees or more. Since all firms with fewer 
than 1,500 employees are considered small, given the total employment 
in the sector, we estimate that the vast majority of wireless firms are 
small.
    605. Wireless Communications Services. This service can be used for 
fixed, mobile, radiolocation, and digital audio broadcasting satellite 
uses. The Commission defined ``small business'' for the wireless 
communications services (WCS) auction as an entity with average gross 
revenues of $40 million for each of the three preceding years, and a 
``very small business'' as an entity with average gross revenues of $15 
million for each of the three preceding years. The SBA has approved 
these definitions.
    606. 1670-1675 MHz Services. This service can be used for fixed and 
mobile uses, except aeronautical mobile. An auction for one license in 
the 1670-1675 MHz band was conducted in 2003. One license was awarded. 
The winning bidder was not a small entity.
    607. Wireless Telephony. Wireless telephony includes cellular, 
personal communications services, and specialized mobile radio 
telephony carriers. As noted, the SBA has developed a small business 
size standard for Wireless Telecommunications Carriers (except 
Satellite). Under the SBA small business size standard, a business is 
small if it has 1,500 or fewer employees. According to Commission data, 
413 carriers reported that they were engaged in wireless telephony. Of 
these, an estimated 261 have 1,500 or fewer employees and 152 have more 
than 1,500 employees. Therefore, a little less than one third of these 
entities can be considered small.
    608. Broadband Personal Communications Service. The broadband 
personal communications services (PCS) spectrum is divided into six 
frequency blocks designated A through F, and the Commission has held 
auctions for each block. The Commission initially defined a ``small 
business'' for C- and F-Block licenses as an entity that has average 
gross revenues of $40 million or less in the three previous calendar 
years. For F-Block licenses, an additional small business size standard 
for ``very small business'' was added and is defined as an entity that, 
together with its affiliates, has average gross revenues of not more 
than $15 million for the preceding three calendar years. These small 
business size standards, in the context of broadband PCS auctions, have 
been approved by the SBA. No small businesses within the SBA-approved 
small business size standards bid successfully for licenses in Blocks A 
and B. There were 90 winning bidders that claimed small business status 
in the first two C-Block auctions. A total of 93 bidders that claimed 
small business status won approximately 40 percent of the 1,479 
licenses in the first auction for the D, E, and F Blocks. On April 15, 
1999, the Commission completed the reauction of 347 C-, D-, E-, and F-
Block licenses in Auction No. 22. Of the 57 winning bidders in that 
auction, 48 claimed small business status and won 277 licenses.
    609. On January 26, 2001, the Commission completed the auction of 
422 C and F Block Broadband PCS licenses in Auction No. 35. Of the 35 
winning bidders in that auction, 29 claimed small business status. 
Subsequent events concerning Auction 35, including judicial and agency 
determinations, resulted in a total of 163 C and F Block licenses being 
available for grant. On February 15, 2005, the Commission completed an 
auction of 242 C-, D-, E-, and F-Block licenses in Auction No. 58. Of 
the 24 winning bidders in that auction, 16 claimed small business 
status and won 156 licenses. On May 21, 2007, the Commission completed 
an auction of 33 licenses in the A, C, and F Blocks in Auction No. 71. 
Of the 12 winning bidders in that auction, five claimed small business 
status and won 18 licenses. On August 20, 2008, the Commission 
completed the auction of 20 C-, D-, E-, and F-Block Broadband PCS 
licenses in Auction No. 78. Of the eight winning bidders for Broadband 
PCS licenses in that auction, six claimed small business status and won 
14 licenses.
    610. Specialized Mobile Radio Licenses. The Commission awards 
``small entity'' bidding credits in auctions for Specialized Mobile 
Radio (SMR) geographic area licenses in the 800 MHz and 900 MHz bands 
to firms that had revenues of no more than $15 million in each of the 
three previous calendar years. The Commission awards ``very small 
entity'' bidding credits to firms that had revenues of no more than $3 
million in each of the three previous calendar years. The SBA has 
approved these small business size standards for the 900 MHz Service. 
The Commission has held auctions for geographic area licenses in the 
800 MHz and 900 MHz bands. The 900 MHz SMR auction began on December 5, 
1995, and closed on April 15, 1996. Sixty bidders claiming that they 
qualified as small businesses under the $15 million size standard won 
263 geographic area licenses in the 900 MHz SMR band. The 800 MHz SMR 
auction for the upper 200 channels began on October 28, 1997, and was 
completed on December 8, 1997. Ten bidders claiming that they qualified 
as small businesses under the $15 million size standard won 38 
geographic area licenses for the upper 200 channels in the 800 MHz SMR 
band. A second auction for the 800 MHz band was held on January 10, 
2002 and closed on January 17, 2002 and included 23 BEA licenses. One 
bidder claiming small business status won five licenses.
    611. The auction of the 1,053 800 MHz SMR geographic area licenses 
for the General Category channels began on August 16, 2000, and was 
completed on September 1, 2000. Eleven bidders won 108 geographic area 
licenses for the General Category channels in the 800 MHz SMR band and 
qualified as small businesses under the $15 million size standard. In 
an auction completed on December 5, 2000, a total of 2,800 Economic 
Area licenses in the lower 80 channels of the 800 MHz SMR service were 
awarded. Of the 22 winning bidders, 19 claimed small business status 
and won 129 licenses. Thus, combining all four auctions, 41 winning 
bidders for geographic licenses in the 800 MHz SMR band claimed status 
as small businesses.
    612. In addition, there are numerous incumbent site-by-site SMR 
licenses and licensees with extended implementation authorizations in 
the 800 and 900 MHz bands. We do not know how many firms provide 800 
MHz or 900 MHz geographic area SMR service pursuant to extended 
implementation authorizations, nor how many of these providers have 
annual revenues of no more than $15 million. One firm has over $15 
million in revenues. In addition, we do not know how many of these 
firms have 1,500 or fewer employees, which is the SBA-determined size 
standard. We assume, for purposes of this analysis, that all of the 
remaining extended implementation

[[Page 19843]]

authorizations are held by small entities, as defined by the SBA.
    613. Lower 700 MHz Band Licenses. The Commission previously adopted 
criteria for defining three groups of small businesses for purposes of 
determining their eligibility for special provisions such as bidding 
credits. The Commission defined a ``small business'' as an entity that, 
together with its affiliates and controlling principals, has average 
gross revenues not exceeding $40 million for the preceding three years. 
A ``very small business'' is defined as an entity that, together with 
its affiliates and controlling principals, has average gross revenues 
that are not more than $15 million for the preceding three years. 
Additionally, the lower 700 MHz Service had a third category of small 
business status for Metropolitan/Rural Service Area (MSA/RSA) 
licenses--``entrepreneur''--which is defined as an entity that, 
together with its affiliates and controlling principals, has average 
gross revenues that are not more than $3 million for the preceding 
three years. The SBA approved these small size standards. An auction of 
740 licenses (one license in each of the 734 MSAs/RSAs and one license 
in each of the six Economic Area Groupings (EAGs)) commenced on August 
27, 2002, and closed on September 18, 2002. Of the 740 licenses 
available for auction, 484 licenses were won by 102 winning bidders. 
Seventy-two of the winning bidders claimed small business, very small 
business or entrepreneur status and won a total of 329 licenses. A 
second auction commenced on May 28, 2003, closed on June 13, 2003, and 
included 256 licenses: 5 EAG licenses and 476 Cellular Market Area 
licenses. Seventeen winning bidders claimed small or very small 
business status and won 60 licenses, and nine winning bidders claimed 
entrepreneur status and won 154 licenses. On July 26, 2005, the 
Commission completed an auction of 5 licenses in the Lower 700 MHz band 
(Auction No. 60). There were three winning bidders for five licenses. 
All three winning bidders claimed small business status.
    614. In 2007, the Commission reexamined its rules governing the 700 
MHz band in the 700 MHz Second Report and Order. An auction of 700 MHz 
licenses commenced January 24, 2008 and closed on March 18, 2008, which 
included, 176 Economic Area licenses in the A Block, 734 Cellular 
Market Area licenses in the B Block, and 176 EA licenses in the E 
Block. Twenty winning bidders, claiming small business status (those 
with attributable average annual gross revenues that exceed $15 million 
and do not exceed $40 million for the preceding three years) won 49 
licenses. Thirty three winning bidders claiming very small business 
status (those with attributable average annual gross revenues that do 
not exceed $15 million for the preceding three years) won 325 licenses.
    615. Upper 700 MHz Band Licenses. In the 700 MHz Second Report and 
Order, the Commission revised its rules regarding Upper 700 MHz 
licenses. On January 24, 2008, the Commission commenced Auction 73 in 
which several licenses in the Upper 700 MHz band were available for 
licensing: 12 Regional Economic Area Grouping licenses in the C Block, 
and one nationwide license in the D Block. The auction concluded on 
March 18, 2008, with 3 winning bidders claiming very small business 
status (those with attributable average annual gross revenues that do 
not exceed $15 million for the preceding three years) and winning five 
licenses.
    616. 700 MHz Guard Band Licensees. In 2000, in the 700 MHz Guard 
Band Order, the Commission adopted size standards for ``small 
businesses'' and ``very small businesses'' for purposes of determining 
their eligibility for special provisions such as bidding credits and 
installment payments. A small business in this service is an entity 
that, together with its affiliates and controlling principals, has 
average gross revenues not exceeding $40 million for the preceding 
three years. Additionally, a very small business is an entity that, 
together with its affiliates and controlling principals, has average 
gross revenues that are not more than $15 million for the preceding 
three years. SBA approval of these definitions is not required. An 
auction of 52 Major Economic Area licenses commenced on September 6, 
2000, and closed on September 21, 2000. Of the 104 licenses auctioned, 
96 licenses were sold to nine bidders. Five of these bidders were small 
businesses that won a total of 26 licenses. A second auction of 700 MHz 
Guard Band licenses commenced on February 13, 2001, and closed on 
February 21, 2001. All eight of the licenses auctioned were sold to 
three bidders. One of these bidders was a small business that won a 
total of two licenses.
    617. Air-Ground Radiotelephone Service. The Commission has 
previously used the SBA's small business size standard applicable to 
Wireless Telecommunications Carriers (except Satellite), i.e., an 
entity employing no more than 1,500 persons. There are approximately 
100 licensees in the Air-Ground Radiotelephone Service, and under that 
definition, we estimate that almost all of them qualify as small 
entities under the SBA definition. For purposes of assigning Air-Ground 
Radiotelephone Service licenses through competitive bidding, the 
Commission has defined ``small business'' as an entity that, together 
with controlling interests and affiliates, has average annual gross 
revenues for the preceding three years not exceeding $40 million. A 
``very small business'' is defined as an entity that, together with 
controlling interests and affiliates, has average annual gross revenues 
for the preceding three years not exceeding $15 million. These 
definitions were approved by the SBA. In May 2006, the Commission 
completed an auction of nationwide commercial Air-Ground Radiotelephone 
Service licenses in the 800 MHz band (Auction No. 65). On June 2, 2006, 
the auction closed with two winning bidders winning two Air-Ground 
Radiotelephone Services licenses. Neither of the winning bidders 
claimed small business status.
    618. AWS Services (1710-1755 MHz and 2110-2155 MHz bands (AWS-1); 
1915-1920 MHz, 1995-2000 MHz, 2020-2025 MHz and 2175-2180 MHz bands 
(AWS-2); 2155-2175 MHz band (AWS-3)). For the AWS-1 bands, the 
Commission has defined a ``small business'' as an entity with average 
annual gross revenues for the preceding three years not exceeding $40 
million, and a ``very small business'' as an entity with average annual 
gross revenues for the preceding three years not exceeding $15 million. 
For AWS-2 and AWS-3, although we do not know for certain which entities 
are likely to apply for these frequencies, we note that the AWS-1 bands 
are comparable to those used for cellular service and personal 
communications service. The Commission has not yet adopted size 
standards for the AWS-2 or AWS-3 bands but proposes to treat both AWS-2 
and AWS-3 similarly to broadband PCS service and AWS-1 service due to 
the comparable capital requirements and other factors, such as issues 
involved in relocating incumbents and developing markets, technologies, 
and services.
    619. 3650-3700 MHz band. In March 2005, the Commission released a 
Report and Order and Memorandum Opinion and Order that provides for 
nationwide, non-exclusive licensing of terrestrial operations, 
utilizing contention-based technologies, in the 3650 MHz band (i.e., 
3650-3700 MHz). As of April 2010, more than 1270 licenses have been 
granted and more than 7433 sites have been registered. The Commission 
has not developed a definition of small

[[Page 19844]]

entities applicable to 3650-3700 MHz band nationwide, non-exclusive 
licensees. However, we estimate that the majority of these licensees 
are Internet Access Service Providers (ISPs) and that most of those 
licensees are small businesses.
    620. Fixed Microwave Services. Microwave services include common 
carrier, private-operational fixed, and broadcast auxiliary radio 
services. They also include the Local Multipoint Distribution Service 
(LMDS), the Digital Electronic Message Service (DEMS), and the 24 GHz 
Service, where licensees can choose between common carrier and non-
common carrier status. At present, there are approximately 36,708 
common carrier fixed licensees and 59,291 private operational-fixed 
licensees and broadcast auxiliary radio licensees in the microwave 
services. There are approximately 135 LMDS licensees, three DEMS 
licensees, and three 24 GHz licensees. The Commission has not yet 
defined a small business with respect to microwave services. For 
purposes of the FRFA, we will use the SBA's definition applicable to 
Wireless Telecommunications Carriers (except satellite)--i.e., an 
entity with no more than 1,500 persons. Under the present and prior 
categories, the SBA has deemed a wireless business to be small if it 
has 1,500 or fewer employees. The Commission does not have data 
specifying the number of these licensees that have more than 1,500 
employees, and thus is unable at this time to estimate with greater 
precision the number of fixed microwave service licensees that would 
qualify as small business concerns under the SBA's small business size 
standard. Consequently, the Commission estimates that there are up to 
36,708 common carrier fixed licensees and up to 59,291 private 
operational-fixed licensees and broadcast auxiliary radio licensees in 
the microwave services that may be small and may be affected by the 
rules and policies adopted herein. We note, however, that the common 
carrier microwave fixed licensee category includes some large entities.
    621. Broadband Radio Service and Educational Broadband Service. 
Broadband Radio Service systems, previously referred to as Multipoint 
Distribution Service (MDS) and Multichannel Multipoint Distribution 
Service (MMDS) systems, and ``wireless cable,'' transmit video 
programming to subscribers and provide two-way high speed data 
operations using the microwave frequencies of the Broadband Radio 
Service (BRS) and Educational Broadband Service (EBS) (previously 
referred to as the Instructional Television Fixed Service (ITFS)). In 
connection with the 1996 BRS auction, the Commission established a 
small business size standard as an entity that had annual average gross 
revenues of no more than $40 million in the previous three calendar 
years. The BRS auctions resulted in 67 successful bidders obtaining 
licensing opportunities for 493 Basic Trading Areas (BTAs). Of the 67 
auction winners, 61 met the definition of a small business. BRS also 
includes licensees of stations authorized prior to the auction. At this 
time, we estimate that of the 61 small business BRS auction winners, 48 
remain small business licensees. In addition to the 48 small businesses 
that hold BTA authorizations, there are approximately 392 incumbent BRS 
licensees that are considered small entities. After adding the number 
of small business auction licensees to the number of incumbent 
licensees not already counted, we find that there are currently 
approximately 440 BRS licensees that are defined as small businesses 
under either the SBA or the Commission's rules.
    622. In 2009, the Commission conducted Auction 86, the sale of 78 
licenses in the BRS areas. The Commission offered three levels of 
bidding credits: (i) A bidder with attributed average annual gross 
revenues that exceed $15 million and do not exceed $40 million for the 
preceding three years (small business) received a 15 percent discount 
on its winning bid; (ii) a bidder with attributed average annual gross 
revenues that exceed $3 million and do not exceed $15 million for the 
preceding three years (very small business) received a 25 percent 
discount on its winning bid; and (iii) a bidder with attributed average 
annual gross revenues that do not exceed $3 million for the preceding 
three years (entrepreneur) received a 35 percent discount on its 
winning bid. Auction 86 concluded in 2009 with the sale of 61 licenses. 
Of the ten winning bidders, two bidders that claimed small business 
status won 4 licenses; one bidder that claimed very small business 
status won three licenses; and two bidders that claimed entrepreneur 
status won six licenses.
    623. In addition, the SBA's Cable Television Distribution Services 
small business size standard is applicable to EBS. There are presently 
2,436 EBS licensees. All but 100 of these licenses are held by 
educational institutions. Educational institutions are included in this 
analysis as small entities. Thus, we estimate that at least 2,336 
licensees are small businesses. Since 2007, Cable Television 
Distribution Services have been defined within the broad economic 
census category of Wired Telecommunications Carriers; that category is 
defined as follows: ``This industry comprises establishments primarily 
engaged in operating and/or providing access to transmission facilities 
and infrastructure that they own and/or lease for the transmission of 
voice, data, text, sound, and video using wired telecommunications 
networks. Transmission facilities may be based on a single technology 
or a combination of technologies.'' The SBA has developed a small 
business size standard for this category, which is: All such firms 
having 1,500 or fewer employees. To gauge small business prevalence for 
these cable services we must, however, use the most current census data 
that are based on the previous category of Cable and Other Program 
Distribution and its associated size standard; that size standard was: 
All such firms having $13.5 million or less in annual receipts. 
According to Census Bureau data for 2007, there were a total of 996 
firms in this category that operated for the entire year. Of this 
total, 948 firms had annual receipts of under $10 million, and 48 firms 
had receipts of $10 million or more but less than $25 million. Thus, 
the majority of these firms can be considered small.
5. Satellite Service Providers
    624. Satellite Telecommunications Providers. Two economic census 
categories address the satellite industry. The first category has a 
small business size standard of $30 million or less in average annual 
receipts, under SBA rules. The second has a size standard of $30 
million or less in annual receipts.
    625. The category of Satellite Telecommunications ``comprises 
establishments primarily engaged in providing telecommunications 
services to other establishments in the telecommunications and 
broadcasting industries by forwarding and receiving communications 
signals via a system of satellites or reselling satellite 
telecommunications.'' For this category, Census Bureau data for 2007 
show that there were a total of 570 firms that operated for the entire 
year. Of this total, 530 firms had annual receipts of under $30 
million, and 40 firms had receipts of over $30 million. Consequently, 
we estimate that the majority of Satellite Telecommunications firms are 
small entities that might be affected by our action.
    626. The second category of Other Telecommunications comprises, 
inter alia, ``establishments primarily engaged in providing specialized

[[Page 19845]]

telecommunications services, such as satellite tracking, communications 
telemetry, and radar station operation. This industry also includes 
establishments primarily engaged in providing satellite terminal 
stations and associated facilities connected with one or more 
terrestrial systems and capable of transmitting telecommunications to, 
and receiving telecommunications from, satellite systems.'' For this 
category, Census Bureau data for 2007 show that there were a total of 
1,274 firms that operated for the entire year. Of this total, 1,252 had 
annual receipts below $25 million per year. Consequently, we estimate 
that the majority of All Other Telecommunications firms are small 
entities that might be affected by our action.
6. Cable Service Providers
    627. Because section 706 requires us to monitor the deployment of 
broadband using any technology, we anticipate that some broadband 
service providers may not provide telephone service. Accordingly, we 
describe below other types of firms that may provide broadband 
services, including cable companies, MDS providers, and utilities, 
among others.
    628. Cable and Other Program Distributors. Since 2007, these 
services have been defined within the broad economic census category of 
Wired Telecommunications Carriers; that category is defined as follows: 
``This industry comprises establishments primarily engaged in operating 
and/or providing access to transmission facilities and infrastructure 
that they own and/or lease for the transmission of voice, data, text, 
sound, and video using wired telecommunications networks. Transmission 
facilities may be based on a single technology or a combination of 
technologies.'' The SBA has developed a small business size standard 
for this category, which is: all such firms having 1,500 or fewer 
employees. To gauge small business prevalence for these cable services 
we must, however, use current census data that are based on the 
previous category of Cable and Other Program Distribution and its 
associated size standard; that size standard was: All such firms having 
$13.5 million or less in annual receipts. According to Census Bureau 
data for 2007, there were a total of 2,048 firms in this category that 
operated for the entire year. Of this total, 1,393 firms had annual 
receipts of under $10 million, and 655 firms had receipts of $10 
million or more. Thus, the majority of these firms can be considered 
small.
    629. Cable Companies and Systems. The Commission has also developed 
its own small business size standards, for the purpose of cable rate 
regulation. Under the Commission's rules, a ``small cable company'' is 
one serving 400,000 or fewer subscribers, nationwide. Industry data 
shows that there were 1,141 cable companies at the end of June 2012. Of 
this total, all but ten cable operators nationwide are small under this 
size standard. In addition, under the Commission's rules, a ``small 
system'' is a cable system serving 15,000 or fewer subscribers. Current 
Commission records show 4,945 cable systems nationwide. Of this total, 
4,380 cable systems have less than 20,000 subscribers, and 565 systems 
have 20,000 or more subscribers, based on the same records. Thus, under 
this standard, we estimate that most cable systems are small entities.
    630. Cable System Operators. The Communications Act of 1934, as 
amended, also contains a size standard for small cable system 
operators, which is ``a cable operator that, directly or through an 
affiliate, serves in the aggregate fewer than 1 percent of all 
subscribers in the United States and is not affiliated with any entity 
or entities whose gross annual revenues in the aggregate exceed 
$250,000,000.'' The Commission has determined that an operator serving 
fewer than 677,000 subscribers shall be deemed a small operator, if its 
annual revenues, when combined with the total annual revenues of all 
its affiliates, do not exceed $250 million in the aggregate. Based on 
available data, we find that all but ten incumbent cable operators are 
small entities under this size standard. We note that the Commission 
neither requests nor collects information on whether cable system 
operators are affiliated with entities whose gross annual revenues 
exceed $250 million, and therefore we are unable to estimate more 
accurately the number of cable system operators that would qualify as 
small under this size standard.
7. Electric Power Generators, Transmitters, and Distributors
    631. Electric Power Generators, Transmitters, and Distributors. The 
Census Bureau defines an industry group comprised of ``establishments, 
primarily engaged in generating, transmitting, and/or distributing 
electric power. Establishments in this industry group may perform one 
or more of the following activities: (1) Operate generation facilities 
that produce electric energy; (2) operate transmission systems that 
convey the electricity from the generation facility to the distribution 
system; and (3) operate distribution systems that convey electric power 
received from the generation facility or the transmission system to the 
final consumer.'' The SBA has developed a small business size standard 
for firms in this category: ``A firm is small if, including its 
affiliates, it is primarily engaged in the generation, transmission, 
and/or distribution of electric energy for sale and its total electric 
output for the preceding fiscal year did not exceed 4 million megawatt 
hours.'' Census Bureau data for 2007 show that there were 1,174 firms 
that operated for the entire year in this category. Of these firms, 50 
had 1,000 employees or more, and 1,124 had fewer than 1,000 employees. 
Based on this data, a majority of these firms can be considered small.

D. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements for Small Entities

    632. The Order clarifies and adopts certain incremental 
enhancements to the existing transparency rule, which was adopted in 
2010, and will continue to require providers of broadband Internet 
access services to ``publicly disclose accurate information regarding 
the network management practices, performance, and commercial terms of 
its broadband Internet access services sufficient for consumers to make 
informed choices regarding use of such services and for content, 
application, service, and device providers to develop, market, and 
maintain Internet offerings.'' We summarize below the record keeping 
and reporting obligations of the accompanying Order. Additional 
information on each of these requirements can be found in the Order.
    633. First, we clarify that all of the pieces of information 
described in paragraphs 56 and 98 of the 2010 Open Internet Order have 
been required as part of the current transparency rule, and we will 
continue to require the information as part of our enhanced rule. The 
only exception is the requirement to disclose ``typical frequency of 
congestion,'' which we no longer require since it is superseded by more 
precise disclosures already required by the rule, such as actual 
performance. Also, the requirement that all disclosures made by a 
broadband provider be accurate includes the need to maintain the 
accuracy of these disclosures.
    634. Second, we enhance and describe in more specific terms than in 
2010 the information to be provided in disclosing commercial terms, 
network performance characteristics, and network practices. For 
example, in meeting the existing requirement to disclose ``actual 
performance,''

[[Page 19846]]

providers of broadband Internet access services will be required to 
report packet loss, in addition to the already required metrics of 
speed and latency.
    635. Third, we require that providers directly notify end users if 
their particular use of a network will trigger a network practice, 
based on a user's demand during more than the period of congestion, 
that is likely to have a significant impact on the end user's use of 
the service. The purpose of such notification is to provide the 
affected end users with sufficient information and time to consider 
adjusting their usage to avoid application of the practice.
    636. Fourth, we establish a voluntary safe harbor that providers 
may use in meeting the existing requirement to make transparency 
disclosures in a format that meets the needs of end users. The safe 
harbor consists of the use of a standalone disclosure targeted to end 
users. Based on concerns raised in the record by smaller providers of 
broadband Internet access service, however, we do not at this time 
require use of this standalone format, and instead have submitted this 
issue to the Consumer Advisory Committee for further consideration.

E. Steps Taken To Minimize the Significant Economic Impact on Small 
Entities, and Significant Alternatives Considered

    637. The RFA requires an agency to describe any significant 
alternatives that it has considered in reaching its proposed approach, 
which may include (among others) the following four alternatives: (1) 
The establishment of differing compliance or reporting requirements or 
timetables that take into account the resources available to small 
entities; (2) the clarification, consolidation, or simplification of 
compliance or reporting requirements under the rule for small entities; 
(3) the use of performance, rather than design, standards; and (4) an 
exemption from coverage of the rule, or any part thereof, for small 
entities. We have considered all of these factors subsequent to 
receiving substantive comments from the public and potentially affected 
entities. The Commission has considered the economic impact on small 
entities, as identified in comments filed in response to the 2014 Open 
Internet NPRM and its IRFA, in reaching its final conclusions and 
taking action in this proceeding.
    638. We considered, for example, a variety of approaches to deal 
with paid prioritization, and we determined that a flat ban on paid 
prioritization has advantages over alternative approaches identified in 
the record. We note that this approach relieves small edge providers, 
innovators, and consumers of the burden of detecting and challenging 
instances of harmful paid prioritization. Related to this issue, 
smaller edge providers expressed concern that they do not have the 
resources to fight against commercially unreasonable practices, which 
could result in an unfair playing field before the Commission. Still 
others argued that the standard would permit paid prioritization, which 
could disadvantage smaller entities and individuals. Given these 
concerns, we declined to adopt our proposed rule to prohibit practices 
that are not commercially reasonable. (Based on the record before us, 
we were persuaded that adopting a legal standard prohibiting 
commercially unreasonable practices is not the most effective or 
appropriate approach for protecting and promoting an open Internet.)
    639. With regard to our no-unreasonable interference/disadvantage 
standard, we were mindful that vague or unclear regulatory requirements 
could stymie rather than encourage innovation, and found that the 
approach we adopted provides sufficient certainty and guidance to 
consumers, broadband providers, and edge providers--particularly 
smaller entities that might lack experience dealing with broadband 
providers--while also allowing parties flexibility in developing new 
services.
    640. We found our existing informal complaint rule offers an 
accessible and effective mechanism for parties--including consumers and 
small businesses with limited resources--to report possible 
noncompliance with our open Internet rules without being subject to 
burdensome evidentiary or pleading requirements. Accordingly we 
declined to adopt proposals modifying the existing standard.
    641. We also decline to adopt arbitration procedures or to mandate 
arbitration for parties to open Internet complaint proceedings. Under 
the rules adopted today, parties are still free to engage in mediation 
and outside arbitration to settle their open Internet disputes, but 
alternative dispute resolution will not be required. We noted 
commenters' concerns that mandatory arbitration, in particular, may 
more frequently benefit the party with more resources and more 
understanding of dispute procedure, and therefore should not be 
adopted.
    642. In formulating the enhanced disclosure requirements, we 
crafted rules that strike a balance between compliance burdens to 
industry and utility for end-user consumers, edge providers, and the 
Internet community. We considered several additional metrics 
contemplated in the NPRM, but ultimately declined to require their 
disclosure in the Order, concluding that the adopted enhancements to 
transparency were sufficient to protect consumers. (For example, we do 
not require disclosure of the source of congestion due to the 
difficulty in determining the source, and the corresponding additional 
burden in requiring that information to be disclosed.) We also 
recognized with respect to the nature of disclosures that there are 
differences between fixed and mobile broadband networks.
    643. The record reflects the concerns of some commenters that 
enhanced transparency requirements will be particularly burdensome for 
smaller providers. ACA, for example, suggests that smaller providers be 
exempted from the provision of such disclosures. ACA states that its 
member companies are complying with the current transparency 
requirements, which ``strike the right balance between edge provider 
and consumer needs for pertinent information and the need to provide 
ISPs with some flexibility in how they disclose pertinent 
information.'' We believe that the enhanced requirements adopted herein 
are incremental in nature, but nevertheless necessary to provide end-
user consumers, edge providers, and the Internet community with better 
information about the critical network performance metrics, practices, 
and commercial terms that have a direct impact on their use of the 
network. Customers of small broadband providers have an equal need for 
this information. However, out of an abundance of caution, we grant a 
temporary exemption for small providers, with the potential for that 
exemption to become permanent. We note that all providers of broadband 
Internet access service, including small providers, remain subject to 
the existing transparency rule adopted in 2010.
    644. To ensure we have crafted rules that strike a balance between 
utility for consumers and compliance burdens for industry including 
smaller providers, we took certain additional important measures. For 
example, Commission staff continues to refine the mobile MBA program, 
which could at the appropriate time be declared a safe harbor for 
mobile broadband providers. In addition, we have declined to require 
certain disclosures proposed in the 2014 Open Internet NPRM such as the 
source of congestion, packet corruption, and jitter in recognition of 
commenter concerns with the benefits and difficulty

[[Page 19847]]

of making these particular disclosures. Noting commenter concerns, we 
also decline to mandate separate tailored disclosures for different 
audiences (e.g. end users and edge providers) at this time. Lastly, we 
note that many of the enhanced disclosures specified in the Order may 
have been required under the current transparency rule. As a result, we 
believe the enhanced requirements make more explicit many of the 
existing requirements rather than imposing new regulatory burdens on 
providers that are in compliance with our current rule.

F. Report to Congress

    645. The Commission will send a copy of the Order, including this 
FRFA, in a report to be sent to Congress and the Government 
Accountability Office pursuant to the Small Business Regulatory 
Enforcement Fairness Act of 1996. In addition, the Commission will send 
a copy of the Order, including the FRFA, to the Chief Counsel for 
Advocacy of the Small Business Administration. A copy of the Order and 
FRFA (or summaries thereof) will also be published in the Federal 
Register.

List of Subjects in 47 CFR Parts 1, 8, and 20

    Cable television, Communications, Common carriers, Communications 
common carriers, Radio, Telecommunications, Telephone.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.

Final Rules

    For the reasons discussed in the preamble, the Federal 
Communications Commission amends 47 CFR parts 1, 8 and 20 as follows:

PART 1--PRACTICE AND PROCEDURE

0
1. The authority citation for part 1 continues to read as follows:

    Authority: 15 U.S.C. 79, et seq.; 47 U.S.C. 151, 154(i), 154(j), 
155, 157, 160, 201, 225, 227, 303, 309, 332, 1403, 1404, 1451, 1452, 
and 1455.


0
2. Section 1.49 is amended by revising paragraph (f)(1)(i) to read as 
follows:


Sec.  1.49  Specifications as to pleadings and documents.

* * * * *
    (f) * * *
    (1) * * *
    (i) Formal complaint proceedings under Section 208 of the Act and 
rules in Sec. Sec.  1.720 through 1.736, pole attachment complaint 
proceedings under Section 224 of the Act and rules in Sec. Sec.  1.1401 
through 1.1424, and formal complaint proceedings under Open Internet 
rules Sec. Sec.  8.12 through 8.17, and;
* * * * *

PART 8--PROTECTING AND PROMOTING THE OPEN INTERNET

0
3. The authority citation for part 8 is revised to read as follows:

    Authority:  47 U.S.C. 151, 152, 153, 154, 160, 201, 202, 301, 
303, 316, 332, 403, 501, 503, and 1302.


0
4. The heading for part 8 is revised as set forth above.

0
5. Section 8.1 is revised to read as follows:


Sec.  8.1  Purpose.

    The purpose of this part is to protect and promote the Internet as 
an open platform enabling consumer choice, freedom of expression, end-
user control, competition, and the freedom to innovate without 
permission, and thereby to encourage the deployment of advanced 
telecommunications capability and remove barriers to infrastructure 
investment.


Sec.  8.11  [Redesignated as Sec.  8.2]


0
6. Section 8.11 is redesignated as Sec.  8.2 and is revised to read as 
follows:


Sec.  8.2  Definitions.

    (a) Broadband Internet access service. A 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. This term also encompasses any service that the 
Commission finds to be providing a functional equivalent of the service 
described in the previous sentence, or that is used to evade the 
protections set forth in this part.
    (b) Edge provider. Any individual or entity that provides any 
content, application, or service over the Internet, and any individual 
or entity that provides a device used for accessing any content, 
application, or service over the Internet.
    (c) End user. Any individual or entity that uses a broadband 
Internet access service.
    (d) Fixed broadband Internet access service. A broadband Internet 
access service that serves end users primarily at fixed endpoints using 
stationary equipment. Fixed broadband Internet access service includes 
fixed wireless services (including fixed unlicensed wireless services), 
and fixed satellite services.
    (e) Mobile broadband Internet access service. A broadband Internet 
access service that serves end users primarily using mobile stations.
    (f) Reasonable network management. A network management practice is 
a practice that has a primarily technical network management 
justification, but does not include other business practices. A network 
management practice is reasonable if it is primarily used for and 
tailored to achieving a legitimate network management purpose, taking 
into account the particular network architecture and technology of the 
broadband Internet access service.

0
7. Section 8.5 is revised to read as follows:


Sec.  8.5  No blocking.

    A person engaged in the provision of broadband Internet access 
service, insofar as such person is so engaged, shall not block lawful 
content, applications, services, or non-harmful devices, subject to 
reasonable network management.

0
8. Section 8.7 is revised to read as follows:


Sec.  8.7  No throttling.

    A person engaged in the provision of broadband Internet access 
service, insofar as such person is so engaged, shall not impair or 
degrade lawful Internet traffic on the basis of Internet content, 
application, or service, or use of a non-harmful device, subject to 
reasonable network management.


Sec.  8.9  [Redesignated as Sec.  8.19]

0
9. Section 8.9 is redesignated as Sec.  8.19.
0
10. Add new Sec.  8.9 to read as follows:


Sec.  8.9  No paid prioritization.

    (a) A person engaged in the provision of broadband Internet access 
service, insofar as such person is so engaged, shall not engage in paid 
prioritization.
    (b) ``Paid prioritization'' refers to the management of a broadband 
provider's network to directly or indirectly favor some traffic over 
other traffic, including through use of techniques such as traffic 
shaping, prioritization, resource reservation, or other forms of 
preferential traffic management, either;
    (1) In exchange for consideration (monetary or otherwise) from a 
third party, or
    (2) To benefit an affiliated entity.
    (c) The Commission may waive the ban on paid prioritization only if 
the petitioner demonstrates that the practice would provide some 
significant public

[[Page 19848]]

interest benefit and would not harm the open nature of the Internet.

0
11. Add new Sec.  8.11 to read as follows:


Sec.  8.11  No unreasonable interference or unreasonable disadvantage 
standard for Internet conduct.

    Any person engaged in the provision of broadband Internet access 
service, insofar as such person is so engaged, shall not unreasonably 
interfere with or unreasonably disadvantage end users' ability to 
select, access, and use broadband Internet access service or the lawful 
Internet content, applications, services, or devices of their choice, 
or edge providers' ability to make lawful content, applications, 
services, or devices available to end users. Reasonable network 
management shall not be considered a violation of this rule.

0
12. Section 8.13 is amended by revising paragraphs (a)(4), and (b), and 
by redesignating paragraphs (c) and (d) as paragraphs (d) and (e), and 
adding new paragraph (c) to read as follows:


Sec.  8.13  General pleading requirements.

    (a) * * *
    (4) The original of all pleadings and submissions by any party 
shall be signed by that party, or by the party's attorney. Complaints 
must be signed by the complainant. The signing party shall state his or 
her address, telephone number, email address, and the date on which the 
document was signed. Copies should be conformed to the original. Each 
submission must contain a written verification that the signatory has 
read the submission and, to the best of his or her knowledge, 
information and belief formed after reasonable inquiry, it is well 
grounded in fact and is warranted by existing law or a good faith 
argument for the extension, modification or reversal of existing law; 
and that it is not interposed for any improper purpose. If any pleading 
or other submission is signed in violation of this provision, the 
Commission shall upon motion or upon its own initiative impose 
appropriate sanctions.
* * * * *
    (b) Initial Complaint: Fee remittance; Service; Copies to be filed. 
The complainant shall remit separately the correct fee either by check, 
wire transfer, or electronically, in accordance with part 1, subpart G 
(see Sec.  1.1106 of this chapter) and:
    (1) Shall file an original copy of the complaint, using the 
Commission's Electronic Comment Filing System, and, on the same day:
    (2) Serve the complaint by hand delivery on either the named 
defendant or one of the named defendant's registered agents for service 
of process, if available, on the same date that the complaint is filed 
with the Commission;
    (c) Subsequent Filings: Service; Copies to be filed. (1) All 
subsequent submissions shall be filed using the Commission's Electronic 
Comment Filing System. In addition, all submissions shall be served by 
the filing party on the attorney of record for each party to the 
proceeding, or, where a party is not represented by an attorney, each 
party to the proceeding either by hand delivery, overnight delivery, or 
by email, together with a proof of such service in accordance with the 
requirements of Sec.  1.47(g) of this chapter.
    (2) Service is deemed effective as follows:
    (i) Service by hand delivery that is delivered to the office of the 
recipient by 5:30 p.m., local time of the recipient, on a business day 
will be deemed served that day. Service by hand delivery that is 
delivered to the office of the recipient after 5:30 p.m., local time of 
the recipient, on a business day will be deemed served on the following 
business day;
    (ii) Service by overnight delivery will be deemed served the 
business day following the day it is accepted for overnight delivery by 
a reputable overnight delivery service; or
    (iii) Service by email that is fully transmitted to the office of 
the recipient by 5:30 p.m., local time of the recipient, on a business 
day will be deemed served that day. Service by email that is fully 
transmitted to the office of the recipient after 5:30 p.m., local time 
of the recipient, on a business day will be deemed served on the 
following business day.
    (3) Parties shall provide hard copies of all submissions to staff 
in the Market Disputes Resolution Division of the Enforcement Bureau 
upon request.
* * * * *

0
13. Section 8.14 is amended by redesignating paragraphs (g) and (h) as 
paragraphs (h) and (i) and adding new paragraph (g) to read as follows:


Sec.  8.14  General formal complaint procedures.

* * * * *
    (g) Request for written opinion from outside technical 
organization. (1) After reviewing the pleadings, and at any stage of 
the proceeding thereafter, the Enforcement Bureau may, in its 
discretion, request a written opinion from an outside technical 
organization regarding one or more issues in dispute.
    (2)(i) Wherever possible, the opinion shall be requested from an 
outside technical organization whose members do not include any of the 
parties to the proceeding.
    (ii) If no such outside technical organization exists, or if the 
Enforcement Bureau in its discretion chooses to request an opinion from 
an organization that includes among its members a party to the 
proceeding, the Bureau shall instruct the organization that any 
representative of a party to the proceeding within the organization may 
not participate in either the organization's consideration of the 
issue(s) referred or its drafting of the opinion.
    (iii) No outside technical organization shall be required to 
respond to the Bureau's request.
    (3)(i) If an opinion from an outside technical organization is 
requested and the request is accepted, the Enforcement Bureau shall 
notify the parties to the dispute of the request within ten (10) days 
and shall provide them copies of the opinion once it is received.
    (ii) The outside technical organization shall provide its opinion 
within thirty (30) days of the Enforcement Bureau's request, unless 
otherwise specified by the Bureau.
    (iii) Parties shall be given the opportunity to file briefs in 
reply to the opinion.
* * * * *

0
14. Section 8.16 is revised to read as follows:


Sec.  8.16  Confidentiality of proprietary information.

    (a) Any materials generated in the course of a proceeding under 
this part may be designated as proprietary by either party to the 
proceeding or a third party if the party believes in good faith that 
the materials fall within an exemption to disclosure contained in the 
Freedom of Information Act (FOIA), 5 U.S.C. 552(b) (1) through (9). Any 
party asserting confidentiality for such materials must:
    (1) Clearly mark each page, or portion thereof, for which a 
proprietary designation is claimed. If a proprietary designation is 
challenged, the party claiming confidentiality shall have the burden of 
demonstrating, by a preponderance of the evidence, that the materials 
designated as proprietary fall under the standards for nondisclosure 
enunciated in the FOIA.
    (2) File with the Commission, using the Commission's Electronic 
Comment Filing System, a public version of the materials that redacts 
any proprietary information and clearly marks each page of the redacted 
public version with a header stating ``Public Version.'' The redacted 
document shall be machine-readable whenever technically possible.

[[Page 19849]]

Where the document to be filed electronically contains metadata that is 
confidential or protected from disclosure by a legal privilege 
(including, for example, the attorney-client privilege), the filer may 
remove such metadata from the document before filing it electronically.
    (3) File with the Secretary's Office an unredacted hard copy 
version of the materials that contain the proprietary information and 
clearly marks each page of the unredacted confidential version with a 
header stating ``Confidential Version.'' The unredacted version must be 
filed on the same day as the redacted version.
    (4) Serve one hard copy of the filed unredacted materials and one 
hard copy of the filed redacted materials on the attorney of record for 
each party to the proceeding, or where a party is not represented by an 
attorney, each party to the proceeding either by hand delivery, 
overnight delivery, or email, together with a proof of such service in 
accordance with the requirements of Sec.  1.47(g) of this chapter and 
Sec.  8.13(c)(1)(a) through (c).
    (b) Except as provided in paragraph (c) of this section, materials 
marked as proprietary may be disclosed solely to the following persons, 
only for use in the proceeding, and only to the extent necessary to 
assist in the prosecution or defense of the case:
    (1) Counsel of record representing the parties in the complaint 
action and any support personnel employed by such attorneys;
    (2) Officers or employees of the opposing party who are named by 
the opposing party as being directly involved in the prosecution or 
defense of the case;
    (3) Consultants or expert witnesses retained by the parties;
    (4) The Commission and its staff; and
    (5) Court reporters and stenographers in accordance with the terms 
and conditions of this section.
    (c) The Commission will entertain, subject to a proper showing 
under Sec.  0.459 of this chapter, a party's request to further 
restrict access to proprietary information. Pursuant to Sec.  0.459 of 
this chapter, the other parties will have an opportunity to respond to 
such requests. Requests and responses to requests may not be submitted 
by means of the Commission's Electronic Comment Filing System but 
instead must be filed under seal with the Office of the Secretary.
    (d) The individuals designated in paragraphs (b)(1) through (3) of 
this section shall not disclose information designated as proprietary 
to any person who is not authorized under this section to receive such 
information, and shall not use the information in any activity or 
function other than the prosecution or defense in the case before the 
Commission. Each individual who is provided access to the information 
shall sign a notarized statement affirmatively stating that the 
individual has personally reviewed the Commission's rules and 
understands the limitations they impose on the signing party.
    (e) No copies of materials marked proprietary may be made except 
copies to be used by persons designated in paragraphs (b) and (c) of 
this section. Each party shall maintain a log recording the number of 
copies made of all proprietary material and the persons to whom the 
copies have been provided.
    (f) Upon termination of a complaint proceeding, including all 
appeals and petitions, all originals and reproductions of any 
proprietary materials, along with the log recording persons who 
received copies of such materials, shall be provided to the producing 
party. In addition, upon final termination of the proceeding, any notes 
or other work product derived in whole or in part from the proprietary 
materials of an opposing or third party shall be destroyed.

0
16. Section 8.18 is added to read as follows:


Sec.  8.18  Advisory opinions.

    (a) Procedures. (1) Any entity that is subject to the Commission's 
jurisdiction may request an advisory opinion from the Enforcement 
Bureau regarding its own proposed conduct that may implicate the open 
Internet rules or any rules or policies related to the open Internet 
that may be adopted in the future. Requests for advisory opinions may 
be filed via the Commission's Web site or with the Office of the 
Secretary and must be copied to the Chief of the Enforcement Bureau and 
the Chief of the Investigations and Hearings Division of the 
Enforcement Bureau.
    (2) The Enforcement Bureau may, in its discretion, refuse to 
consider a request for an advisory opinion. If the Bureau declines to 
respond to a request, it will inform the requesting party in writing.
    (3) Requests for advisory opinions must relate to prospective or 
proposed conduct that the requesting party intends to pursue. The 
Enforcement Bureau will not respond to requests for opinions that 
relate to ongoing or prior conduct, and the Bureau may initiate an 
enforcement investigation to determine whether such conduct violates 
the open Internet rules. Additionally, the Bureau will not respond to 
requests if the same or substantially the same conduct is the subject 
of a current government investigation or proceeding, including any 
ongoing litigation or open rulemaking at the Commission.
    (4) Requests for advisory opinions must be accompanied by all 
material information sufficient for Enforcement Bureau staff to make a 
determination on the proposed conduct for which review is requested. 
Requesters must certify that factual representations made to the Bureau 
are truthful and accurate, and that they have not intentionally omitted 
any information from the request. A request for an advisory opinion 
that is submitted by a business entity or an organization must be 
executed by an individual who is authorized to act on behalf of that 
entity or organization.
    (5) Enforcement Bureau staff will have discretion to ask parties 
requesting opinions, as well as other parties that may have information 
relevant to the request or that may be impacted by the proposed 
conduct, for additional information that the staff deems necessary to 
respond to the request. Such additional information, if furnished 
orally or during an in-person conference with Bureau staff, shall be 
promptly confirmed in writing. Parties are not obligated to respond to 
staff inquiries related to advisory opinions. If a requesting party 
fails to respond to a staff inquiry, then the Bureau may dismiss that 
party's request for an advisory opinion. If a party voluntarily 
responds to a staff inquiry for additional information, then it must do 
so by a deadline to be specified by Bureau staff. Advisory opinions 
will expressly state that they rely on the representations made by the 
requesting party, and that they are premised on the specific facts and 
representations in the request and any supplemental submissions.
    (b) After review of a request submitted hereunder, the Enforcement 
Bureau will:
    (1) Issue an advisory opinion that will state the Bureau's present 
enforcement intention with respect to the proposed open Internet 
practices;
    (2) Issue a written statement declining to respond to the request; 
or;
    (3) Take such other position or action as it considers appropriate. 
An advisory opinion states only the enforcement intention of the 
Enforcement Bureau as of the date of the opinion, and it is not binding 
on any party. Advisory opinions will be issued without prejudice to the 
Enforcement Bureau or the Commission to reconsider the questions 
involved, or to rescind or revoke the opinion. Advisory opinions will 
not be subject to appeal or further review.

[[Page 19850]]

    (c) The Enforcement Bureau will have discretion to indicate the 
Bureau's lack of enforcement intent in an advisory opinion based on the 
facts, representations, and warranties made by the requesting party. 
The requesting party may rely on the opinion only to the extent that 
the request fully and accurately contains all the material facts and 
representations necessary to issuance of the opinion and the situation 
conforms to the situation described in the request for opinion. The 
Bureau will not bring an enforcement action against a requesting party 
with respect to any action taken in good faith reliance upon an 
advisory opinion if all of the relevant facts were fully, completely, 
and accurately presented to the Bureau, and where such action was 
promptly discontinued upon notification of rescission or revocation of 
the Commission's or Bureau's approval.
    (d) Public disclosure. The Enforcement Bureau will make advisory 
opinions available to the public on the Commission's Web site. The 
Bureau will also publish the initial request for guidance and any 
associated materials. Parties soliciting advisory opinions may request 
confidential treatment of information submitted in connection with a 
request for an advisory opinion pursuant to Sec.  0.459 of this 
chapter.
    (e) Withdrawal of request. Any requesting party may withdraw a 
request for review at any time prior to receipt of notice that the 
Enforcement Bureau intends to issue an adverse opinion, or the issuance 
of an opinion. The Enforcement Bureau remains free, however, to submit 
comments to such requesting party as it deems appropriate. Failure to 
take action after receipt of documents or information, whether 
submitted pursuant to this procedure or otherwise, does not in any way 
limit or stop the Bureau from taking such action at such time 
thereafter as it deems appropriate. The Bureau reserves the right to 
retain documents submitted to it under this procedure or otherwise and 
to use them for all governmental purposes.

PART 20--COMMERCIAL MOBILE SERVICES

0
17. The authority citation for part 20 continues to read as follows:

    Authority: 47 U.S.C. 151, 152, 154(i), 201(b), 225, 301, 303(b), 
303(g), 303(r), 316, 403, 615a, 615a-1, 615b, and 47 U.S.C. 615c.

0
18. Section 20.3 is amended by revising paragraph (b) in the definition 
of ``Commercial mobile radio service'', designating in the correct 
alphabetical order the definition of ``Incumbent Wide Area SMR 
Licensees,'' revising paragraph (a) in the definition of 
``Interconnected Service'' and revising the definition of ``Public 
Switched Network'' to read as follows:


Sec.  20.3  Definitions.

* * * * *
    Commercial mobile radio service. * * *
    (b) The functional equivalent of such a mobile service described in 
paragraph (a) of this section, including a mobile broadband Internet 
access service as defined in Sec.  8.2 of this chapter.
* * * * *
    Interconnected Service. A service:
    (a) That is interconnected with the public switched network, or 
interconnected with the public switched network through an 
interconnected service provider, that gives subscribers the capability 
to communicate to or receive communication from other users on the 
public switched network; or
* * * * *
    Public Switched Network. The network that includes any common 
carrier switched network, whether by wire or radio, including local 
exchange carriers, interexchange carriers, and mobile service 
providers, that uses the North American Numbering Plan, or public IP 
addresses, in connection with the provision of switched services.
* * * * *
[FR Doc. 2015-07841 Filed 4-10-15; 8:45 am]
 BILLING CODE 6712-01-P


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