Title II Reality Check Part 4: The Myth of Bright Line Rules

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by Steve Morris and Jennifer McKee

In the debate over regulation of broadband services, some have suggested that Title II will result in bright line rules that can more easily be enforced (e.g., a ban on “paid prioritization”) than a “commercial reasonableness” test under section 706, which would be applied on a case-by-case basis as suggested in the Open Internet NPRM. Those who see Title II as a path to clear and easily enforceable rules obviously have never participated in a formal complaint proceeding at the Commission. While it is theoretically possible that the Commission could establish a set of rules that clearly outline the rights and obligations of ISPs, edge providers, and end users, such an outcome is rare in the context of traditional Title II telecommunications services and seems even more unlikely with respect to broadband, where technology and business models change far more rapidly.

For example, let’s suppose the Commission finds that small edge providers could be harmed if large edge providers were able to pay ISPs for priority access to consumers and declared that a ban on paid prioritization would be in the public interest. For a variety of reasons, we believe Title II does not provide the best path to accomplish this outcome.

First, the Commission typically has interpreted key provisions of Title II, such as the prohibition on unreasonable practices (under Section 201) or unreasonable discrimination (under Section 202), on a case-by-case basis. With rare exception, there is no “bright line” distinguishing reasonable practices from unreasonable practices or reasonable discrimination from unreasonable discrimination. Rather, the Commission makes such decisions based on the particular facts and circumstances presented in each case. In today’s complex marketplace, these decisions are rarely simple or straightforward. In the context of special access services, for example, the reasonableness of rates, terms, and conditions offered by incumbent telephone companies has been in dispute for over a decade, and the Commission still has not made a final determination as to what is “reasonable” in this context. Why the Title II advocates expect a different result in the context of broadband Internet access services remains a mystery to us.

"We believe Title II does not provide the best path to accomplish this outcome."

Second, while the Commission has on occasion established an outright ban on a particular practice under Section 201, enforcing such a rule would still be difficult in the context of paid prioritization. For starters, the Commission has no real world experience to guide its consideration of where to draw the line between permissible agreements between ISPs and edge providers and impermissible ones. In particular, how exactly would the Commission define prioritization? Would prioritization include any existing arrangements between ISPs and edge providers, such as arrangements where an edge provider places equipment in an ISP facility or where a wireless ISP does not count the usage of particular applications? Should there be exceptions for situations involving public safety and national security? How about for health care or educational content? None of these questions are simple to answer given the dynamic nature of the Internet marketplace and considering them under a Title II framework, rather than a Section 706 framework, does not make them any easier to resolve.

The bottom line is that rules adopted under Title II, including a “bright line” rule banning paid prioritization, are no more likely to provide clarity than rules adopted under Section 706.  Given all the other negative implications associated with Title II regulation of broadband, the better course is for the Commission to adopt the proposal in the NPRM to rely on Section 706 as the basis for any new rules.

Steve Morris and Jennifer McKee both serve as Vice President and Associate General Counsel at NCTA