USA: Net neutrality is back

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The USA is reintroducing The Three Commandments of Net Neutrality. They were adopted in 2015 but abolished at the end of 2017. In addition, foreign mobile operators and internet service providers (ISPs) can be excluded from the market if they undermine national security – and the authority makes immediate use of this. ISPs must also report and resolve incidents and disclose their network management practices. This was decided by the Federal Communications Commission (FCC) on Thursday.

The three Democrats on the Commission voted in favor of the resolution, while the two Republicans voted against it. The idea of net neutrality goes back to the FCC in 2004 under Republican President George W. Bush. However, today's Republican Party has little in common with the party of that time. Together with large ISPs, it will attempt to have the regulation repealed by a parliamentary resolution or a court ruling. However, the 2015 net neutrality ruling has already been unsuccessfully challenged in court. Net neutrality is very popular among the US population across all voter groups.

New are unclear statements on the relationship between the FCC requirements and the net neutrality regulations of individual US states, as well as a "wash me, but don't get me wet" rule for zero rating. On the new conflict issue of network slicing and regarding 5G IoT (Internet of Things), the authority is trying to get out of the affair with "let's take a look, then we'll see". This blurring could provide opponents of net neutrality with new starting points to convince a court to repeal net neutrality in part or in full.

The three commandments

Net neutrality actually sounds basic. The Three Commandments apply to retail broadband internet access offered to the mass market, whether fixed or mobile:

• No web-blocking of legitimate content, applications, services or innocuous devices.
• No throttling of "legal internet traffic" based on legitimate content, applications, services or non-harmful devices.
• No preferential treatment of legal Internet traffic over other legal Internet traffic in exchange for benefits of any kind. Nor may broadband providers give preference to their own content and services.

There is also a more general good conduct rule. The devil is in the details, especially as some technical measures can be anti-competitive or anti-consumer as well as pro-competitive.

Zero rating

With zero rating, the data consumption of certain applications or services is not deducted from the data volume included in a tariff. This gives the excluded services a competitive advantage over competitors and fundamentally undermines net neutrality. On the other hand, it could enable new service providers to enter markets that they would otherwise not be able to.

The FCC has not issued a specific rule on this, but would like to assess zero rating on a case-by-case basis in light of the general good conduct rule. It does clarify that it takes a critical view of paid zero-rating, where a service provider gives money or other benefits to an ISP if its service does not impact end users' data volumes. However, the final assessment of the impact of a particular zero-rating offer on the open Internet will depend on "the totality of the circumstances".

Network slicing

Network slicing is particularly fashionable in 5G mobile networks. Fixed capacities in the radio cells are allocated exclusively to certain services or customers. However, unused capacity remains unused and is not temporarily made available to other users. If, for example, an ISP provides a certain video streaming service via a virtually separate network, the question arises as to whether this is still broadband Internet access at all, which falls under the net neutrality regulations, or the wireless equivalent of cable TV, which is not an Internet service and is not regulated here.

The problem is that many network slices limit the capacity of non-reserved bandwidth, thus leading to disadvantages in undisputed broadband Internet access. In addition, there may be competitive disadvantages for virtual mobile network operators (MVNOs) that lease onto a third-party network. As a rule, they cannot offer network slicing.

The authority notes that the market and supply are still developing here. It is therefore too early for regulation. However, it promises to "take action against harmful use of network slicing". In particular, services that cannot be offered via the open Internet are likely to meet with approval – the authority cites remote medical operations with robots as an example. Interference and latency issues on the open Internet must be avoided at all costs.

Kicked out

Legally, the reintroduction of net neutrality is based on the FCC reclassifying broadband Internet access as a telecom service. This gives the authority the power to regulate so that it can issue net neutrality regulations. At the same time, the Internet and mobile communications are once again subject to national security regulations.

And the FCC takes advantage of this immediately. Five telecom providers owned by the People's Republic of China will be excluded from the US telecom market. This affects China Mobile, China Telecom Americas (CTA), China Unicom (CUA), Pacific Networks and Comnet. In the fixed network, the FCC has already closed China Telecom in the USA in 2021. This was not possible for the internet and mobile networks because the Republicans under President Donald Trump had withdrawn the FCC's authority to abolish net neutrality.

Following publication in the US Federal Register, the five Chinese providers have 60 days to cease operations in the USA. Net neutrality will also take effect on the same date. ISPs that market shared Internet access for multi-party homes will be given 180 days to adjust their contracts and business practices.

State laws

What remains unclear is the relationship between the federal net neutrality order and the net neutrality regulations introduced by about a dozen US states. While the FCC could declare such state rules invalid, it has deliberately not done so.

As long as US states implement their rules in a way that is consistent with federal rules, the FCC wants to stay out of it and is even happy to support it. What this means in detail, and when the FCC would intervene, nobody knows. That will probably also depend on which political party is in charge at the FCC.

• Die Netzneutralitätsverordnung der FCC WC Docket No. 23-320 and WC Docket No. 17-108

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