FCC Fact Sheet — Restoring Internet Freedom DOC-347927A1


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Over twenty years ago,
President Clinton and a Republican Congress
established the

store
What the
Report and Order Would Do:
What the Order Would Do:

Before filing, participants
should familiarize themselves with the Commission’s ex parte rules, including the general prohibition on
presentations (wri
tten and oral) on matters listed on the Sunshine Agenda, which is typically released a week prior to
the Commission’s meeting.
See
47 CFR § 1.1200
Federal
Communications Commission
FCC
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�� &#x/MCI; 0 ;&#x/MCI; 0 ;Before
the
ederal Communications Commission
Washington, D.C. 20554
In the Matter of
Restoring Internet Freedom

WC Docket No. 17

Federal Communications Commission
FCC
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Universal
Service
Preemption of Inconsistent State and Local Regulations
Disability Access Provisions
Continued Applicability of Title III Licensing Provisions
IV.
A LIGHT
TOUCH FRAMEW
ORK TO RESTORE INTER

47 U.S.C. §
230(b)(2).
See generally
Telecommunications Act of 1996, Pub. L. No. 104
104, 110 Stat. 56
(codified at 47 U.S.C. § 151
Federal Communications Commission
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We reverse this misguided and legally flawed approach and restore broadband Internet access service to
its Title I information service classification. We find that reclassification as an informa
tion service best
comports with the text and structure of the Act, Commission precedent, and our policy objectives. We
thus return to the approach to broadband Internet access service affirmed as reasonable by the U.S.
Supreme Court.
We also
reinstate t
he private mobile service classification of mobile broadband Internet
access service and return to the Commission’s definition of “interconnected service” that existed prior to
We determine that this light
touch information service framework will pr
omote investment and
innovation better than applying costly and restrictive laws of a bygone era to broadband Internet access
service. Our balanced approach also restores the authority of the nation’s most experienced cop on the
privacy beat
the Federal T
rade Commission

See Nat’l Cable & Telecomms
Ass’n v
Brand X Internet Servs
., 545 U.S. 967 (2005) (
Brand X
See Preserving the Open Internet; Broadband Industry Practices
, GN Docket No. 09
191, WC Docket No. 07
52,
Report and Order, 25
FCC Rcd 17905, 17972
80, 17981, paras. 124
35, 137 (2010) (
Open Internet Order
Regulatory and Policy Problems Presented by the Interdependence of Computer and Communication Services
Notice of Inquiry, 7 FCC 2d 11 (1966).
Amendment of Section 64
702
of the Commission’s Rules and Regulations
Second Computer Inquiry
), Docket No.
20828, Final Decision, 77 FCC 2d 384, 420, para. 97 (1980).
. at 420, para. 96.
. at 428, para. 114.
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contrast, were “any offering over the telecommunications network which is more than a basic
transmission service. In an enhanced service, for example, computer pr
ocessing applications are used to
act on the content, code, protocol, and other aspects of the subscriber’s information.”
Unlike basic
services, the Commission found that “enhanced services should not be regulated under the Act.”
Just two years later, t
he federal courts would draw a similar line in resolving the
government’s antitrust case against AT&T. The Modification of Final Judgment (MFJ) of 1982
distinguished between “telecommunications services,
” which Bell Operating Companies could offer when
ctually regulated by tariff,”
and “information services,” including “data processing and other
computer
related services”
and “electronic publishing services,”
which Bell Operating Companies
were prohibited from offering under the terms of that court de
cision.
The Communications Act’s
“information service” definition is based on the definition of that same term used in the Modification of
Final Judgment (MFJ) antitrust decision, which governed the Bell Operating Companies after the breakup
of the Bell
system.

. at 420, para. 97.
. at 428, para. 114.
U.S. v
Am
Tel
& Tel
, 552 F. Supp. 131, 228
29 (D.D.C. 1982) (
MFJ Initial Decision
),
aff’d sub nom.
Maryland v. U.S.
, 460 U.S. 1001 (1983).
. at 179.
. at 180.
. at 228.
Implementation of the Non
Accounting Safeguards of Section 271 and 272 of the Co
mmunications Act of 1934, as
amended
, CC Docket No. 96
149, First Report and Order and Further Notice of Proposed Rulemaking, 11 FCC Rcd
21905, 21954, para. 99 (1996) (
Non
Accounting Safeguards Order
);
see also, e.g.
, H.R. Conf. Rep. No. 104
458 at
126 (Ja
n. 31, 1996) (“‘Information service’ and ‘telecommunications’ are defined based on the definition used in the
Modification of Final Judgment.”).
Federal
State Joint Board on Universal Service
, CC Docket No. 96
45, Report to Congress, 13 FCC Rcd 11501,
1514, para. 28 (1998) (
Stevens Report
) (citing
MFJ Initial Decision
, 552 F. Supp. at 226
32).
Preamble
, Telecommunications Act of 1996, Pub. L. No. 104
104, 110 Stat. 56 (1996).
47 U.S.C. §
153(24), (53).
47 U.S.C. §
230(a)(4).
47 U.S.C. §
230(b)
(1), (2).
47 U.S.C. §
230(f)(2).
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For the next 16 years, the Commission repeatedly adopted a light
touch approach to the
In the 2005
Wireline Broadband Classification Order
, the Commission classified

Federal
State Joint Board on Universal Service
, CC Docket No. 96
45, Report to Congress, 13 FCC Rcd 11501,
11536, para. 73 (1998) (
Stevens Report
. at 11524, para. 46.
See Inquiry Concerning High
Speed Access to

Id.
at 5.
See
Appropriate Framework for Broadband Access to the Internet Over Wireline Facilities et al
., CC Docket Nos.
33, 01
337, 95
20, 98
10, WC Docket Nos. 04
242,
271, Report and Order and Notice of Proposed
Rulemaking, 20 FCC Rcd 14853 (2005) (
Wireline Broadband Classification Order
aff’d
Time Warner Telecom
Inc
FCC
, 507 F.3d 205 (3d Cir. 2007).
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he Commission also unanimously endorsed the four Internet freedoms
in the

Appropriate Framework for Broadband Access to the Internet
over Wireline Facilities et al
, GN Docket No. 00
185, CC Docket Nos. 02
33, 01
33, 98
10, 95
20, CS Docket No. 02
52, Policy Statement, 20 FCC Rcd 14986
(2005) (
Internet Policy Statement
Internet Policy Statement
, 20 FCC Rcd at 14988, para
5.
The C
ommission did this, for example, by incorporating
such principles in its rules governing certain wireless spectrum.
See
Service Rules For the 698
747
762 and
792 MHz Bands et al
., WT Docket No. 06
150 et al., Second Report and Order, 22 FCC Rcd 1
5289, 15361,
15365, paras. 194, 206 (2007).
See
United Power Line Council’s Petition for Declaratory Ruling Regarding the Classification of Broadband over
Federal Communications Commission
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. at 17992 (Appendix A).
Verizon v
FCC
, 740 F.3d 623, 655
58 (D.C. Cir. 2014) (
Verizon
. at 650.
. at 635
See, e
. at 657 (quoting
Cellco Partnership v
FCC
, 700 F.3d 534, 549 (D.C. Cir. 2012)).
Protecting and Pro
moting the Open Internet
, WC Docket No. 14
28, Notice of Proposed Rulemaking, 29 FCC
Rcd 5561 (2014) (
2014 Notice
President Obama, Statement on Net Neutrality (Nov. 10, 2014),
https://obamawhitehouse.archives.gov/the
press
office/2014/11/10/statement
president
net
neutrality

Protecting and Promoting the Open Inter
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in which we proposed to return to the successful lig
touch bipartisan framework that promoted a free
and open Internet and, for almost twenty years, saw it flourish. Specifically, the

Id.
at 4453, para. 55.
Id.
at 4458, para. 70.
. at 4
458, para. 72.
Id.
at 4460, para. 76, 4461
64, paras. 80
91.
Brand X
, 545 U.S. at 980.
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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.

47 CFR § 8.11(a);
Open Internet Order
, 25 FCC Rcd at 17932, para. 44;
id.
at 17935, para. 51 (finding that the
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generic platform, but rather a specific applications

Title II Order
, 30 FCC Rcd at 5697, para. 209.
Cox Comments at 33.
2010 Open Internet Order
, 25 FCC Rcd at 17933, para. 47.
. Consistent with past Commissions, we note that the rules we adopt today apply only so fa
r as the limits of an
ISP’s control over the transmission of data to or from its broadband customers.
See 2010 Open Internet Order
, 25 FCC Rcd at 17935, para. 52. Although not bound by the rules we adopt today,
we encourage premise operators to disclose
relevant restrictions on broadband service they make available to their
patrons.
See id.
at 17936, para. 163.
47 U.S.C. § 153(24).
47 U.S.C. § 153(53).
47 U.S.C. § 153(50).
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Brand X
Our action here simply returns to that prior approach.
When
interpreting a statute it administers, the Commission, like all agencies, “must
operate ‘within the bounds of reasonable interpretation.’ And reasonable statutory interpretation must
account for both ‘the specific context in which . . . language is used’
and ‘the broader context of the
statute as a whole.’”
Below, we first explore the meaning of the “capability” contemplated in the

Brand X
, 545 U.S. at 998 (finding “reasonable” “the Commission’s
understanding of the nature of cable modem
service” and affirming its classification as an information service).
Utility Air Regulatory Group v. EPA
, 134 S. Ct. 2427, 2442 (2014).
Brand X
, 545 U.S. at 987.
Our analysis thus is not at odds with the st
atement in
USTelecom
that the 1996 Act definitions were not “intended
to freeze in place the Commission’s existing classification of various services.”
U.S. Telecom Ass’n v. FCC
, 825
F.3d 674, 703 (D.C. Cir. 2016) (
USTelecom
);
see also, e.g.
, Free Press R
eply at 10 (arguing that the Commission
should not “base its current judgments solely in analogies to proceedings from the Bell era”).
See, e.g.
Global Crossing Telecomms., Inc. v. Metrophones Telecomms., Inc
., 550 U.S. 45, 48 (2007)
(“[R]egulatory hi
story helps to illuminate the proper interpretation and application” of the provisions of the Act at
issue there);
Brand X
, 545 U.S. at 992
93 (“Congress passed the definitions in the Communications Act against the
background of [the Commission’s
Computer
Inquiries
] regulatory history, and we may assume that the parallel
terms ‘telecommunications service’ and ‘information service’ substantially incorporated their meaning, as the
Commission has held”);
ADTRAN Comments at 10 (“This precedent is relevant not
simply as
stare decisis
, but
because the Commission in those previous decisions had analyzed the facts, nature of the services, and the
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(Continued from previous page)
legislative interplay and history to conclude that BIAS is an information service.”); ACA Comments at 44.
Consistent wi
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transforming
” and “
processing
” information su
ch as by manipulating images and documents, online
gaming use, and through applications that offer the ability to send and receive email, cloud computing and
machine learning capabilities;
and “
utilizing
” information by interacting with stored data.
These are

See, e.g.
, ACA Exhibit B, Declaration of Chris Kyle at 2, ACA Exhibit C, Declaration of Brian Lynch at 2, ACA
Exhibit E, Declaration of Steve Timcoe at 2
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NCTA Reply at 7;
see also
Free State Foundation Reply at 30 (explaining that ISPs’ coordination w
ith third
parties, by itself, does not alter the “nature of the functionality or service that broadband ISPs ultimately offer to end
users. In such circumstances, it is the broadband ISPs that combine third
party supplied functionalities with their
own an
d ultimately provide the integrated service offering to end users
with end users routinely unaware of
whether or which particular functions might happen to be performed by third parties rather than broadband ISPs”);
infra
para.
See, e.g.
Wireless Broadband Internet Access Order
, 22 FCC Rcd at 5910, para. 25;
BPL
Enabled Broadband
Order
, 21 FCC Rcd at 13285
86, para. 9;
Wireline Broadband Classification Order
, 20 FCC Rcd at 14860
61,
para.
9;
Cable Modem Order
, 17 FCC Rcd at 4821
22, para. 37;
Stevens Report
, 13 FCC Rcd at 11537, para. 76.
Stevens Report
, 13 FCC Rcd at 11538, para. 76 (emphasis added);
see also id
. at 11538
39, para. 78 (explaining
with spec
ific respect to e
mail that the ISP “does not send that message directly to the recipient” akin to a
“’paperless fax,’” but instead sends it to the recipient’s mail server, which stores it until it is further stored, rewritten
forwarded or otherwise proce
ssed). Attempts to distinguish the Commission’s classification precedent thus are
unfounded insofar as they fail to account for this aspect of the Commission’s analysis in those orders.
See, e.g.
Scott Jordan Reply at 9 (“The
Stevens Report
concluded th
at dial
Federal Communications Commission
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II Order
offers no explanation as to why its narrower view of “capability” was more reasonable than the
Commission’s previous, long
standing view (other than seeking to advance the classification outcome
that
Order
was driving towards). Consequently, the
Title II
Order
essentially assumed away the legal
question of whether end

See, e.g.
, CenturyLink Comments at 24; AT&T Comments at 4 (“But even if ISPs had to pro
vide ‘data
processing’ or ‘data storage’ functionalities
of their own
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are inherent in Internet access.
DNS allows
“‘cli
ck through’ access from one web page to another, and
its computer processing functions analyze user queries to determine which website (and server) would
respond best to the user’s request.”
Because it translates human language (
e.g.
, the name of a websi
te)
into the numerical data (
i.e.
, an IP address) that computers can process, it is indispensable to ordinary
(Continued from previous page)
the DNS); AT&T Comments at 73 (expressing DNS provides ISPs with data
processing and data storage
functionalities of its own).
See
CTIA Comments at 39; AT&T Comments at 7
75.
AT&T Comments at 74.
AT&T Comments at 73 (citations omitted);
see also
Reason Foundation Comments at 9
10 (“DNS is of
fundamental importance to the functionality of the Internet, enabling users’ devices, though web browsers, search
engines and
other tools, to identify and connect to websites and web pages. . . . Eliminating DNS would likely
dramatically reduce the value of the entire domain naming system, harming both providers of content and services
and users of that content and those service
s.”).
AT&T Comments at 74
75;
see also
Farsight Comments at 2 (explaining that “
With
the Domain Name System,
you’re able to easily get to Google by just typing in google.com.
Without
the Domain Name System you’d have to
remember and enter a numeric IPv4
addres
s such as 172.217.7.228, or, even worse, an IPv6 address such as
2607:f8b0:4004:802::2004. This would fundamentally (and negatively) change a broadband Internet user’s online
experience.”); Fred Baker Comments at 2
Sandvine Comments at 1; Cox Comm
ents at 11;
Wireline Broadband
Classification Order
Brand X
, 545 U.S. at 999;
see also
AT&T Comments at 75
(quoting
Brand X
, 545 U.S. at 998, 1000).
See, e.g.
IEP
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observe that DNS, as it is used today, provides more than a functionally integrated address
translation
capability, but also enables other cap
abilities critical to providing a functional broadband Internet access
service to the consumer,
including for example, a variety of underlying network functionality information
associated with name service, alternative routing mechanisms, and information d
istribution.
The treatment of similar functions in MFJ precedent bolsters our conclusion.
In
particular, when analyzing ‘gateway’ functionalities by which BOCs would provide end
users with access
to third party information services, the MFJ court found
that “address translation,” which enabled “the
consumer [to] use an abbreviated code or signal . . . in order to access the information service provider”
such as through “the translation of a mnemonic code into [a] telephone number,” rendered gateways an
information service.
The “address translation” gateway function appears highly analogous to the DNS
function of broadband Internet access service, which enables end users to use easier
remember domain
(Continued from previous page)
Without DNS, the Internet would not be as ubiquitous as it is today.”);
see also
Sandvine Comments at 3 (“ISP DNS
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names to initiate access to the associated IP addr
esses of edge providers. That MFJ precedent, neglected
by the
Title II Order
, thus supports our finding that the inclusion of DNS in broadband Internet access
service offerings likewise renders that service an information service.
We thus find that the
Title II Order
erred in finding that Domain Name System (DNS)
functionalities fell within the telecommunications systems management exception to the definition of
“information service.”
That exception from the statutory information service definition wa
s drawn
from the language of the MFJ,
and was understood as “directed at internal operations, not at services
for customers or end users.”
We interpret the concepts of “management, control, or operation”
in the
telecommunications management exception c
onsistent with that understanding. Applying that
interpretation, we find the record reflects that little or nothing in the DNS look
up process is designed to
help an ISP “manage” its network; instead, DNS functionalities “provide stored information to
end
users
to help them navigate the Internet.”
As AT&T explains: “When an end user types a domain name into
his or her browser and sends a DNS query to an ISP, . . . the ISP . . . converts the human
language domain
name into a numerical IP address, and it t
hen conveys that information back to the end user . . . [who]
(via
his or her browser) thereafter sends a follow
up request for the Internet resources located at that numerical
IP address.”
DNS does not merely “manage” a telecommunications service, as so
me commenters

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assert,
but rather
is a function that is useful and essential
to providing Internet access for the ordinary
consumer
e are persuaded that “[w]ere DNS simply a management function, this would not be the
case.”
Comparing functions that
ould
fall within the exception illustrates our conclusion. For
example, in contrast to DNS interaction with users and their applications,
“non
user, management
only
protocols might include things such as Simple Network Management Protocol (SNMP), Network
Control
Protocol (NETCONF), or things such as DOCSIS bootfiles for controlling the configuration of cable
modems.”
These protocols support services that manage the network independent of the transmission
of information initiated by a user.
The
Title II Order
drew erroneous conclusions from
Computer Inquiries
precedent and

CDT Comments at 8; ITIF Comments at 13; New Media Rights Comments at 4
5 (“[B]ecause these services
[like DNS, DHCP, caching, and others] are necessary to route, man
age, or otherwise use BIAS, they fall under the
management exception embodied in the definition of information service.” (citations omitted)); AARP Comments at
85; WGAW Comments at 8.
Nominum Comments at 5 (asserting that the “features of DNS
based servi
ces are focused on enhancing the
https://w
ww.iana.org/assignments/dns
(last visited Oct. 12, 2017) (for full set of information types supported by the DNS protocol).
Sandvine Comments at 5.
Other functions that would fall into the telecommunications systems mana
gement exception might include
information systems for account management and billing, configuration management, and the monitoring of failures
and other state information, and to keep track of which addresses are reachable through each of the interconnect
ed
neighboring networks.
See
Peha Reclassification Comments at 20.
These same shortcomings are present in the
Title II Order
’s analysis of caching, as well.
Communications Protocols Under Section 64.702 of the Commission’s Rules and Regulations
, GN
Docket No.
756, Memorandum Opinion, Order, and Statement of Principles, 95 FCC 2d 584, 591, para. 15 (1983) (
Protocols
Order
).
See, e.g.
North American Telecommunications Association Petition for Declaratory Ruling Under §64.702 of the
Commission’s
Rules Regarding the Integration of Centrex, Enhanced Services, and Customer Premises Equipment
Memorandum Opinion and Order, 101 FCC 2d 349, 359, para. 24 (1985) (
NATA Centrex Order
) (“The computer
processing services we recognized as permissible adjunct
s to basic service are services which might indeed fall
within possible literal readings of our definition of an enhanced service, but which are clearly ‘basic’ in purpose and
use.”).
See, e.g.
Non
Accounting Safeguards Order
, 11 FCC Rcd at 21958, para.
107.
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the functionality otherwise accomplished.
Although confronted with claims that DNS is, in significant
part, designed to be useful to end
users rather than providers, the
Title II Order

See, e.g.
Title II Order
, 30 FCC Rcd at 5766
68, paras. 367
68. In addition to the MFJ precedent, Bureau
precedent similarly has observed that adjunct
basic capabilities do not include functions “useful to end users,
rather than carriers.”
Pe
titions for Forbearance from the Application of Section 272 of the Communications Act of
1934, As Amended, to Certain Activities, Bell Operating Companies
, CC Docket No. 96
149, Memorandum Opinion
and Order, 13 FCC Rcd 2627, 2639, para. 18 (Com. Car. Bur.
1998) (
272 Forbearance Order
). Given the lack of
ambiguity in the MFJ’s holding in this regard, we find it more reasonable to interpret this precedent to call for a
similar requirement that “adjunct to basic” services do not include services primarily use
ful to end
users, and reject
arguments to the contrary.
See, e.g.
, Public Knowledge Reply at 37 (“The ‘rule’ AT&T attempts to extract from this
is simply another paragraph of the telecommunications management exception which, applied to DNS, still does no
lead to the result it wants.”). In any case, because the definition of “information service,” including the
telecommunications management exception, was drawn from the MFJ, the MFJ precedent alone would be entitled to
significant weight in interpreting
the scope of the telecommunications management exception.
Title II Order
, 30 FCC Rcd at 5768, para. 368 & n.1037. The same is true of the
Title II Order
’s treatment of
caching.
. at 5768, para. 368 n.1037.
See, e.g.
Computer III Phase
I Order
, 104 FCC 2d at 967
68, para. 10 (“[d]ata processing, computer memory or
storage, and switching techniques can be components of a basic service if they are used
solely
to facilitate the
movement of information” (emphasis added));
NATA Centrex Order
, 101 FCC 2d at 360, para. 26 (speed dialing
and call forwarding “
serve but one purpose
: facilitating establishment of a transmission path over which a telephone
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The
Title II Order
also put misplaced reliance on
Computer Inquiries
adjunct
basic
precedent from the traditional telephone service context as comparison when evaluating broadband
Interne
t access service functionalities.
Because broadband Internet access service was not directly
addressed in pre
1996 Act
Computer Inquiries
and MFJ precedent, analogies to functions that were
classified under that precedent must account for potentially dis
tinguishing characteristics not only in
terms of technical details but also in terms of the regulatory backdrop. The Communications Act
(Continued from previous page)
under the management exception is absurd, as the entire purpose of broadband is to be useful to end users, as is the
entire purpose of telephony.”).
See, e.g.
Title II Order
, 30 FCC Rcd at 5768
69, para. 369.
47 U.S.C.
230(b)(
2).
See, e.g.
NATA Centrex Order
, 101 FCC 2d at 358, para. 23 (“[W]e did not intend that our definition of
(continued….)
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Caching
. We also conclude that caching, a functionally integrated information
processing component of broadband Internet access service, provides the capability to perform functions
that fal
l within the information service definition.
Caching does much more than simply enable the
user to obtain more rapid retrieval of information through the network;
caching depends on complex
algorithms to determine what information to store where and in
what format.
This requires extensive
information processing, storing, retrieving, and transforming for much of the most popular content on the
Internet,
and as such, caching involves storing and retrieving capabilities required by the “information
servi
ce” definition.
The Court affirmed this view in
Brand X
, finding “reasonable” the “Commission’s
understanding” that Internet service “facilitates access to third
party Web pages by offering consumers
the ability to store, or ‘cache,’ popular content on l
ocal computer servers,” which constitutes “the
‘capability for . . . acquiring, [storing] . . . retrieving [and] utilizing information.’”
We find that ISP
provided caching does not merely “manage” an ISP’s broadband
(Continued from previous page)
in the traditional telephon
e context likewise persuades us to give it relatively little weight here as an analogy to
DNS, and we reject arguments to the contrary.
See, e.g.
, OTI New America Comments at 33
34; Barbara van
Schewick and Patrick Leerssen Reply at 32
See
Comcast C
omments at 15
16; ITIF Comments at 13; Charter Comments at 14.
ITIF Comments at 13.
CTIA Comments at 37;
see
AT&T Comments at 75
76 (“ISPs routinely arrange for the use of caching to enhance
their customers’ ability to acquire information.”);
AT&T Feb. 18, 2015
Ex Parte
Letter at 4.
ITIF Comments at 13.
See
AT&T Comments at 75
76 (“T
)).
Recently, the Commission
concluded that encryptio
n is not yet ubiquitous and that “truly pervasive encryption on the Internet is still a
long way
off, and that many sites still do not encrypt.”
Protecting the Privacy of Customers of Broadband and Other
Telecommunications Services
, Report and Order, 31 F
CC Rcd 13911, 13922, para
34 (2016) (
2016 Privacy Order
).
In the same proceeding, the Commission also found that DNS queries are almost never encrypted.
. at 13921,
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(Continued from previous page)
n.39. While we recognize that the
2016 Privacy
Order
and the rules adopted therein have been nullified under the
(continued….)
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Ignoring that MFJ precedent, the
Title II Order
erred in seeking
to analogize caching to
“‘store and forward technology [used] in routing messages through the network as part of a basic
service’” mentioned in the
Computer II Final Decision
In fact, consistent with the MFJ court’s
identification of distinct uses of st
orage and forwarding, the cited portion of the
Computer II Final
Decision
recognized that “the kind of enhanced store and forward services that can be offered are many
and varied.”
In that regard, the
Computer II Final Decision
distinguished “[t]he offer
ing of store and
forward
services
” from “store and forward
technology
(Continued from previous page)
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a means of enabling these capabilities to interact with information online, not as ends in and of
themselves.”
Indeed, record evidence confirms that consumers highl
y value the capabilities their ISPs
offer to acquire information from websites, utilize information on the Internet, retrieve such information,
and otherwise process such information.
This view also accords with the Commission’s historical understanding
that “[e]nd users

See
ACA Comments at 52 (“
(continued….)
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(Continued from previous page)
ISPs’ marketing statements); Free Press Comments at 42 (similar); Public Knowledge Comments, App. A (similar);
(continued….)
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reliability are not exclusive to telecommunications services; rather, the record reflects that speed and
reliability are crucial attributes of an information service.
Consequently, the mere fact that broadband
(Continued from previous page)
preclude findings regarding consumer expectations of the cars at issue because “[t]he automobile is hardly a new
produc
t,” and “[t]he expectations of ordinary automobile owners with respect to foreseeable accidents in the course
of everyday on
road vehicle operation probably are easier to define than the adventurers’ expectations concerning
inherently hazardous off
road pe
rformance in open jeeps, advertising notwithstanding”);
Cunningham v. Mitsubishi
Motors Corp.
, 1993 WL 1367436, *4 (S.D. Ohio 1993) (holding that in a products liability case, the “Court does not
agree with Defendants’ contention that the absence of advert
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the consumer’s perspective, we find that as a factual matter, ISPs offer a single, inextricably intertwined
information se
rvice. The record reflects that information processes must be combined with transmission
in order for broadband Internet access service to work,
and it is the combined information processing
capabilities and transmission functions that an ISP offers in b
roadband Internet access service. Thus,
even assuming that any individual consumer could perceive an ISP’s offer of broadband Internet access
service as akin to a bare transmission service,
the information processing capabilities that are actually
offere

See, e.g.
, CTIA Reply at 23; CTIA Comments, Exh. A, Rysavy Decl. at 3
4, para. 4 (“Transmission of data has
become intertwined
with other services that provide value to users. The very tr
ansmission of data in the internet
involves processing of information, in some cases transforming packets.”); AT&T Comments at 75 (“[I]t is only
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which
consistently found that ISPs offer a single, integrated service.
Even the early classification
analysis in the
Stevens Report
recognized that “[i]n offering service to end
users” ISPs “do more than
resell [] data transport services. They conjoin the data transport with data processing, information
provision, and other computer
mediated offerings, thereby creating an information service.”
In
Brand
, the Court rejected cl
aims that “[w]hen a consumer . . . accesses content provided by parties other than
the cable company” that “consumer uses ‘pure transmission.’”
The
Court further found that “the high
speed transmission used to provide cable modem service is a functionall
y integrated component of that
service because it transmits data only in connection with the further processing of information and is

Although we find the pre
1996 Act
classificat
ion
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functional nature of
Internet access remain persuasive as to broadband Internet access service today. We
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does not separately
offer
telecommunications on a stand
alone basis to th
e public.
By definition,
all
information services accomplish their functions “via telecommunications,”
and as such, broadband

See, e.g.
, Cox Comm
ents at 12
13;
see also Stevens Report
, 13 FCC Rcd at 11522, para. 41 (“When an entity
offers subscribers the ‘capability for
generating, acquiring, storing, transforming, proc
essing, retrieving, utilizing or
making available information via telecommunications,’ it does not
provide
telecommunications; it is
using
telecommunications.” (emphasis added)); Hance Haney Reply at 3 (“The Commission affirmed that the
telecommunications and information categories in the 1996 Act are mutually exclusive,
i.e
., ‘when an entity offers
transmission incorporating the “capability
for generating, acquiring, storing, transforming, processing, retrieving,
utilizing, or making available information,” it does not offer telecommunications. Rather, it offers an “information
service” even though it uses telecommunications to do so’” (citi
ng
Stevens Report
, 13 FCC Rcd at 11536, para. 39).
47 U.S.C. § 153(50) (defining “telecommunications”).
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(Continued from previous page)
incorporating section 332’s definition of a commercial mobile service (which must be “interconnected” with the
public switched network”) into section 3 of the Act and drawing from pre
1996 Act precedent using an end
end
analysis to determine the regulatory jurisdiction of communications traffic to inform the interpretation of the term
“points.”
See, e.g.
, Tech
Knowledge Comments at 34
35; Tech Knowledge Reply at 11
17; Letter from Fred
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scope of “telecommunic
ations services.”
The
Title II Order
interpretation stands in stark contrast to the Commission’s historical
classification precedent and the views of all Justices in
Brand X
Beginning with the earliest
classification decisions, the Commission found th
at transmission provided by ISPs outside the last mile
was part of an integrated information service.
The DSL transmission service previously required to be
unbundled by the
Computer Inquiries
rules likewise was limited to the ‘last mile’ connection betw
een the
end
user and the ISP.
Nor did any Justice in
Brand X
contest the view that, beyond the last mile, cable
operators were offering an information service. Indeed, the
Title II Order
’s broad interpretation of
“telecommunications service” stands in c
ontrast to the views of Justice Scalia himself,
on which the
Title II Order
purports to rely.
Justice Scalia was skeptical that a telecommunications service
classification of cable modem service would lead to the classification of ISPs as telecommunicat
ions
carriers based on the transmission underlying their “connect[ions] to other parts of the Internet, including
Internet backbone providers.”

See, e.g.
Title II Order
, 30 FCC Rcd at 5685
87, 5693
94, 5764
65, paras. 193, 195, 204, 364.
As the
Stevens Report
explained, “[i
]n offering service to end users” ISPs “do more than resell [] data transport
services. They conjoin the data transport with data processing, information provision, and other computer
mediated
offerings, thereby creating an information service.”
Stevens
Report
, 13 FCC Rcd at 11540, para. 81. The
Commission further explained that, even though enhanced services were “offered ‘
over
common carrier
transmission facilities,’ [they] were themselves not to be regulated under Title II of the Act,
no matter how ex
tensive
their communications components
.”
Stevens Report
, 13 FCC Rcd at 11514, para. 27 (emphasis added, quoting
Computer II Final Decision
, 77 FCC 2d at 428, para. 114);
see also, e.g.
, ACA Comments at 46 (asserting that the
Commission employed a narrow
definition of “basic service in the Computer II Final Decision
i.e.
anything
more
than basic is enhanced”); AT&T Comments at 64
65 (quoting
Stevens Report
, 13 FCC Rcd at 11514, para. 27);
Hance Haney Comments at 4 (“Basic/telecommunications services were
defined narrowly, and
enhanced/information services were defined expansively.”). Indeed, under the
Computer Inquiries
non
facilities
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significant support for our reading of the statute and the classification decision we make today.
In contrast, our approach leaves ample room for a meaningful range of
“telecom
munications services.”
Historically, the Commission has distinguished service offerings that
“always and necessarily combine” functions such as “computer processing, information provision, and
computer interactivity with data transport, enabling end users

See, e.g.
, NCTA Comments at 21
25 (“Under [the
Title II Order
’s] reasoning, a whole host of other entities that
make use of their own broadband transmission facilities to deliver Internet content likely would qualify as providers
of ‘telecommunicatio
ns services’ as well. . . . The potentially far
reaching implications of the
Title II Order
’s broad
reading of the definition of ‘telecommunications service’ only underscore that a Title II classification is a poor fit for
BIAS.”). That the Commission pr
eviously identified policy concerns about Internet traffic exchange says nothing
about classification, and thus is not to the contrary.
See, e.g.
, INCOMPAS Comments at 58
59 (“[E]ven the
Open Internet Order
understood that the point at which a broadb
and provider’s network connects to the Internet is
capable of being used to circumvent the no
blocking rule.”);
. at 62 (discussing prior investigations of
interconnection issues in mergers). Nor did the
Advanced Services
proceedings
identify interconne
ction obligations
on providers of xDSL transmission as services necessary to ensure the provision of Internet access.
See, e.g.
, Scott
Jordan Reply at 18 (“The next type of Internet access service that the Commission considered [in the
Advanced
Services O
rder
] was
xDSL
based advanced service
, . . . including: . . . (3) interconnection arrangements with
providers necessary to fulfill the service.”);
. at 23 (“The
Advanced Services Remand Order
clarifies that the FCC
has ‘consistently rejected attempts to
divide communications at any intermediate points of switching or exchanges
Wireline Broadband Classification Order
, 20 FCC Rcd at 14860
1, para. 9. Our interpretation thus stops far
short of the view that “
every transmission
of information becomes an information service.” Free Press Comments at
52 (emphasis in original);
see also, e.g.
, Public Knowledge/Common Cause Comments at 28
31 (as
serting that a
broad reading of “capability” consistent with the
Restoring Internet Freedom NPRM
would have made it
unnecessary for the
Brand X
court to consider whether transmission was functionally integrated with information
service capabilities and tha
t such an interpretation would encompass “voice communications over the traditional
telephone network” and would read both the definition of “telecommunications service” and the telecommunications
management exception out of the statute); RISE Stronger Com
ments at 11 (objecting to an interpretation of
“capability” it views as “impossibly overbroad”).
See, e.g.
Brand X
, 545 U.S. at 992 (“One can pick up a pizza rather than having it delivered, and one can own a
dog without buying a leash. By contrast, th
e Commission reasonably concluded, a consumer cannot purchase
Internet service without also purchasing a connection to the Internet and the transmission always occurs in
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We reject assertions that the analysis we adopt today would necessarily mean that
standard telephone service is likewise an information service. The record reflects that broadband Internet
access servic
e is categorically different from standard telephone service in that it is “
designed with
advanced features, protocols, and security measures so that it can integrate directly into electronic
computer systems and enable users to electronically create, retr
ieve, modify and otherwise manipulate
information stored on servicers around the world.”
Further, “[t]he dynamic network functionality
enabling the Internet connectivity provided by [broadband Internet access services] is fundamentally
different from the
largely static one dimensional, transmission oriented Time Division Multiplexing
(TDM) voice network.”
This finding is consistent with past distinctions. Under pre
1996 Act MFJ
(Continued from previous page)
had been required by the
Computer Inquiries
to unbundle and offer as a bare transmission service on a common
carrier basis to ensur
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precedent, for example, although the provision of time and weather services
was an information service,
when a BOC’s traditional telephone service was used to call a third party time and weather service “the
Operating Company does not ‘provide information services’ within the meaning of section II(D) of the
decree; it merely tran
smits a call under the tariff.”
In other words, the fundamental nature of traditional
telephone service, and the commonly
understood purpose for which traditional telephone service is
designed and offered, is to provide basic transmission
a fact not chan
ged by its incidental use, on
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offering information services in the
Stevens Report
might be incrementally less than the transmission
provided by the ISPs dealt with in subsequent information service classification decisions, that appears
to
be at most a difference in degree, rather than a difference in kind, and the record does not demonstrate
otherwise.
Nor can the
Stevens Report
’s analysis and information service classification
be
distinguished on the grounds that the ISPs there gener
ally did not own the facilities they used.
Although the
Stevens Report
observed that the analysis of whether a single integrated service was being
offered was “more complicated when it comes to offerings by facilities
based providers,” it did not
prejudg
e the resolution of that question.
Thus, there is no reason to simply assume that it was
inappropriate for the Commission to build upon the
Stevens Report
precedent when analyzing service
offerings from facilities
based providers beginning in the
Cable M
odem Order
Nor do commenters
identify material technical differences when facilities ownership is involved that would mandate a
different classification analysis.
Finally, our reliance on classification precedent does not rest on the
Stevens Report
one, but draws from the full range of classification precedent, both pre
and post
Act. This reliance notably includes not only the Commission’s classification decisions, but the Supreme
Court’s subsequent analysis in
Brand X
. And although some comm
enters criticize the lack of express

See, e.g.
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consideration of the possible application of the telecommunications management exception in the
Stevens
Report
, our evaluation of the pre
1996 Act MFJ and
Computer Inquiries
precedent better accords with
outcome of that
Report
and the subsequent classification decisions than it does with the
Title II Order
in
that regard.
Other Provisions of the Act Support Broadband’s Information Service
Classification
We also find that other provisions of the Act support our conclusio
n that broadband

See, e.g.
, Scott Jordan Reply at 9 n.19. We reject similar criticisms of other precedent for the same reason.
See,
e.g.
. at 12 (“The
Cable Modem Declaratory Ruling
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“the formula ‘any X, including specifically a Y,’ does logically imply that all Ys are Xs.”
Reliance on Section 230(f)(2) to inform the Commission’s interpretations and
pplications of Titles I and II accords with wi

AT&T Reply at 68.
See
Free State Foundation Reply at 24
Atlantic Cleaners & Dryers v. United States
, 286 U.S. 427, 433 (1932);
Sorenson v. Sec’y of the Treasury
, 475
U.S. 851, 86
0 (1986) (“The normal rule of statutory construction assumes that ‘identical words used in different
parts of the same act are intended to have the same meaning’”) (citations omitted);
see a
lso
AT&T Comments at 72
See
Free State Foundation Reply at 25.
Title II Order
, 30 FCC Rcd at 5777, para. 386. This argument was
also upheld as reasonable by the majority in
USTelecom
USTelecom
825 F.3d at 703 (citations omitted);
see also
Public Knowledge Comments at 34 (“[I]t is
unfathomable that Congress would
have buried such a fundamental issue
the appropriate regulatory classification
of BIAS
with the ancillary provisions of the Communications Act where Sections 230 and 231 reside.”).
AT&T Comments at 72.
WISPA Comments at 25;
see also
Comcast Comments a
t 24
25; NCTA Comments at 26 (“[E]ven if Section 230
does not preclude a ‘telecommunications service’ classification for BIAS, it plainly counsels against it.”).
USTelecom
825 F.3d at 703 (citing
Whitman v. American Trucking Ass’ns
, 531 U.S. 457, 468 (2
001)).
Free State Foundation Reply at 25
26; Comcast Comments at 7
8. The legislative history of section 230 also
lends support to the view that Congress did not intend the Commission to subject broadband Internet access service
to Title II regulation.
The congressional record reflects that the drafters of section 230 did “not wish to have a
(continued….)
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Section 231, inserted into the Communications
Act a year after the 1996 Act’s passage,
similarly lends sup
rather “
means a service that enables users to access content, i
nformation, electronic mail, or other services
offered over the Internet, and may also include access to proprietary content, information, and other
services as part of a package of services offered to consumers.”
Further,
the carve
outs in section
231(b
)(1)
(2) differentiate the provision of telecommunications services and the provision of Internet
acces
s service.
It is hard to imagine clearer statutory language.
The Commission has consistently held
that categories of telecommunications service and
information serv
e are mutually exclusive;
hus,
because it is an information service, Internet access cannot be a telecommunications service.
On its
face then, this language strongly supports our conclusion that, under the best reading of the statute,
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illegal acts of third parties online and has nothing to do
with rules governing the behavior of broadband internet
access providers
).
Child Online Protection Act, Pub. L. No. 105
277, 112 Stat. 2681
736, § 1403 (codified at 47 U.S.C. § 231),
enjoined from enforcement in alternative part by American Civil Libert
ies Union v. Mukasey
, 534 F.3d 181 (3d. Cir.
2008) (prohibiting enforcement of COPA’s civil and criminal penalties contained in 47 U.S.C. § 231(a)(1)),
cert.
denied
555 U.S. 1137.

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Stevens Report
, 13 FCC Rcd at 11519, para. 37 (quoting Letter from Senator John McCain to the Honorable
William E.
Kennard, Chairman, FCC).
Alaska Communications Comments at 5; Verizon Reply at 36, n.154.
47 U.S.C. § 221.
47 U.S.C. § 251.
47 U.S.C. § 271.
See Title II Order
, 30 FCC Rcd at 5834, para. 486 (sections 254(d), (g), and (k)); 5825, para. 470
(section
225(d)(3)(B)); 5835, para. 488 (section 254(d)’s first sentence); 5841, para. 497 (section 203); 5845, para. 505
(section 204); 5845, para. 506 (section 205); 5846, para. 508 (sections 211, 213, 215, 218, 219, 220); 5847
49,
paras. 509
12 (section
214 except for subsection (e)); 5849
50, para. 513 & n.1571 (section 251 except for
subsection (a)(2), section 256); 5852, para. 515 (section 258).
See, e.g.
, ITIF Comments at 6 (arguing
Title II Order’
s forbearance presents slippery slope that the Comm
ission
should remove itself from and exposes Title II as a kludge of a legal mechanism); Verizon Comments at 41;
TechFreedom Reply at 27
34, 49
52; Comcast Comments at 25 (asserting that “the need to forbear from so much of
Title II in the
Title II Order
hould have been a red flag that it was ‘tak[ing] a wrong interpretive turn,’ and provides
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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 th
e public,
as specified by regulation by the Commission.”
“Interconnected service,” in turn,
is defined as
“service
that is interconnected with the public switched network (as such terms are defined by regulation by the
Commission).”
In 1994, the Commis
sion adopted regulations implementing this section
, codifying the
definition of “commercial mobile service” under the term “commercial mobile radio service” (CMRS).
Looking at the statute’s text, structure, legislative history, and purpose, the Commissio
n defined the

47 U.S.C. § 332(d)(1).
47 U.S.C. § 332(d)(2).
Second CMRS Report and Order
, 9 FCC Rcd at 1431
37, paras. 50
60. The commercial mobile service
provisions of the Act are implemented in section 20.3 of the Commission’s ru
les, which uses the term “commercial
mobile radio service” (CMRS) instead of “commercial mobile service.” We use “CMRS” and “commercial mobile
service” interchangeably here.
47 CFR § 20.3 (2014).
47 CFR § 20.3 (2014) (emphasis added).
47 U.S.C. § 33
2(d)(3).
Second CMRS Report and Order
, 9 FCC Rcd at 1447, para. 79.
47 CFR § 20.9(a)(14)(ii)(B), (C). We note that, in a companion Order today, we are recodifying these factors
under section 20.3 of the Commission’s rules, but not modifying their subs
tance.
Second CMRS Report and Order
, 9 FCC Rcd at 1447, para. 79.
47 U.S.C. § 332(c)(1)(A).
H.R. Conf. Rep. No. 104
458, 104
Cong., 2
Sess. 114
15 (1996) (“This definition [of ‘telecommunications
service’] is intended to include commercial mobile service.”).
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Commission from treatin
g providers of private mobile service as common carriers.
In 2007, the Commission found that wireless broadband Internet access service was not a

47 U.S.C. § 332(c)(2).
Wireless Broadband Internet Access Order
, 22 FCC Rcd at 5917
18, para. 45.
Id.
at 5918, n. 119.
Title II Order
, 30 FCC Rcd at 5778, para. 388.
Id.
at 5779, para. 391.
Id.
at 5779, 5788, 5890, n.1175, paras. 390, 402.
Id.
at 5786, para. 400.
Id.
at 5789, para. 404. In
US Telecom
, the D.C. Circuit had no occasion to address the
Title II Order
s approach
to functional equivalency. 825 F.3d at 717.
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and find that mobile broadband Internet access servi
ce was a private mobile service.
Finally, it
proposed to reconsider the
Title II Order
’s departure from the functional equivalence test codified in our
rules.
Discussion
. We find that the definitions of the terms “public switched network” and
“intercon
nected service” that the Commission adopted in the 1994
Second CMRS Report and Order
reflect the best reading of the Act, and accordingly, we readopt the earlier definitions
We further find
that, under these definitions, mobile broadband Internet access
service is not a commercial mobile
service.

Id.
at 4455, para. 59.
Id.
at 4455
56, para. 61.
See,
e.g.
Mobile Comments at 16; Verizon Comments at 45.
See, e.g.
Applications
of Winter Park Tel. Co.
, Memorandum Opinion and Order, 84 FCC 2d 689, 690, para. 2 &
n.3 (1981) (
Winter Park Order
);
Amendment of Part 22 of the Commission’s Rules Relating to License Renewals in
the Domestic Public Cellular Radio Telecommunications Servi
, Report and Order, 7 FCC Rcd 719, 720, para. 9
(1992) (
License Renewal Order
);
Provision of Access for 800 Service
, Memorandum Opinion and Order on
Reconsideration and Second Supplemental Notice of Proposed Rulemaking, 6 FCC Rcd 5421, para. 1 & n.3 (199
1);
Telecommunications Services for Hearing
Impaired and Speech
Impaired Individuals, and the Americans with
Disabilities Act of 1990
, Notice of Proposed Rulemaking, 5 FCC Rcd 7187, 7190, para. 20 (1990).
See Winter Park Order
, 84 FCC 2d at 690, para. 2
& n.3.
See License Renewal Order
, 7 FCC Rcd at 720, para. 9.
See
Ad Hoc Telecommunications Users Committee v. FCC
, 680 F.2d790, 793 (D.C. Cir. 1982) (public switched
(continued….)
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We also find that the Commission’s prior interpretation is more consistent with the text of
section 332(d)(2), in which Congress provided that commercial mobile service must provide a service that
interconnected with “
the
public switched network.”
We find that the use of the definite article “the”
and singular term “network” shows that Congress intended “public switched network” to mean a single,
integrated network. We therefore agree with comme
nters who argue that it was not meant to encompass
multiple networks whose users cannot necessarily communicate or receive communications across
networks.
Consistent with Congress’s directive to define “
the
public switched network,” the restored
definition reflects that the public switched network is a singular network that “must still be interconnected
with the local exchange or interexchange switched network as it evolves,” as opposed to multiple
networks that need not be connected to the public
telephone network.
That the Commission’s original
(Continued from previous page)
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Some commenters who argue that the
Title II Order’s
revised definitions should be
maintained point to Congress
’s delegation of interpretational authority to the Commission and the
Commission’s previous position that it could define the public switched network based on new
technology and consumer demand.
In defining the terms “public switched network” and
“interc
onnected service” in the
Second CMRS Report and Order
, however, the Commission recognized
that commercial mobile service must still be interconnected with the local exchange or interexchange
(Continued from previous page)
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the public switched network.”
Accordingly, it is “not an ‘interconnected se
rvice’ as the Commission
has defined the term in the context of section 332.”
We disagree with the conclusion in the
Title II Order
that, because an end user can use a

Wireless Broadband Internet Access Order
, 22 FCC Rcd at
18, para. 45 (emphasis in original).
Id.
See Title II Order
, 30 FCC Rcd at 5786, para. 400.
See, e.g.
Wireless Broadband Internet Access Order
, 22 FCC Rcd at 5917
18, paras. 45
46 (recognizing that the
regulatory classification of VoIP services
is irrelevant to the regulatory classification of the separate mobile
Communications Act of 1934, as
Amended, to Provide Wholesale Telecommunications Services to VoIP Providers,
Memorandum Opinion and Order,
22 FCC Rcd 3513, 3520
21, paras. 15
(WCB 2007) (noting the “regulatory classification of the [VoIP] service
provi
ded to the ultimate end user has no bearing on” the regulatory status of the entities transmitting [the VoIP]
traffic);
see also
Worldcall Interconnect, Inc. a/k/a/ Evolve Broadband, Complainant v. AT&T Mobility LLC,
Defendant
, Order on Review, FCC 17
at 2
3, paras. 4
6 (Sept. 6, 2017) (finding that, where roaming service
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them to send calls and texts to NANP end
points”

OTI New America Comments at 84.
See Wireless Broadband Internet Access Order
, 22 FCC Rcd at 5917
18, para. 45 (finding that, because “users of
a mobile w
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this contradiction, furthers the Act’s overall intent to allow information services to develop free from
common carrier regulat
ions, and is consistent with the public policy analysis in connection with our

See
Federal
State Joint Board on Universal Service
, Report to Congress, CC Docket No. 96
45, 13 FCC Rcd
11501, 11511, para. 21 (1998);
see also
47 U.S.C. § 231(e)(4) (excluding “telecommunications services” from the
(continued….)
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We believe the codified test of functional equivalence hews much more faithfully to the
intent of Congress.
If Congress meant for widespread public access to a widely used service to be the
determining factor
for what is “functionally equivalent” to a commercial mobile service, it would not
have included being “interconnected with the public switched network” in the statutory definition of the
service.
Although the Commission has discretion to determine wheth
er services are functionally
equivalent, we find that the
Title II Order
’s reliance on the public’s “ubiquitous access” to mobile
(Continued from previous page)
is functionally equivalent to a commercial mobile service, not whether it is functionally dissimilar from certain
systems classified as private mobile.
See Second CMRS Report and Order
, 9 FCC Rcd at 1447, paras. 78, 79.
47 U.S.C. §§ 332(d)
(1), 332(d)(2).
Second CMRS Report and Order
, 9 FCC Rcd at 1447
48, para. 80.
See
47 U.S.C. § 332(d)(3)
We make a conforming revision to the definition of “commercial mobile radio
(promoting
availability of “Talk & Text
No Data Access” plan, “Not a smartphone user? Talk & Text keeps it simple with
unlimited calls and texts
no data access.”); Republic Wireless, Plans,
https://republicwireless.com/cell
phone
plans
(offering 0 GB plan for “Talk & Texters”).
See, e.g.
; Republic
Wireless Plans,
https://republicwireless.com/cell
phone
plans/

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per month
for a single line.
Nothing in the record suggests that changing the price for one service by a
small but significant percentage would prompt a significant percentage of customers to move to the other
service.
Accordingly, under the functional equivalence standard adopted in the
CMRS Second Report
and Order
, we find that mobile broadband Internet access today is not the functional equivalent of
commercial mobile service. The two services have different service
characteristics and intended uses and
are not closely substitutable for each other, as evidenced by the fact that changes in price for one service
generally will not prompt significant percentages of customers to change
from one service to the other.
Publi

Implementation of Section 6002(b) of the Omnibus Budget Reconciliation Act of 1
993; Annual Report and
Analysis of Competitive Market Conditions With Respect to Mobile Wireless, Including Commercial Mobile
Services
, WT Docket No. 17
69, Twentieth Report, at 39, Chart III.A.1, FCC 17
126 (Sept. 27, 2017).
AT&T Comments at 92; CTIA Co
mments at 53; Verizon Comments at 49
50.
See, e.g.
National Multicultural Organizations Comments at 8 (citing a speech by 1999 Chairman Kennard,
William E. Kennard, Chairman, FCC,
Remarks Before the Federal Communications Bar Northern California
Chapte
(July 20, 1999),
https://transition.fcc.gov/Speeches/Kennard/spwek924.html
Appropriate Framework for
Broadband Access to the Internet over Wireline Facilities, et al.
, Policy Stat
ement, 20 FCC Rcd 14986 (2005) (
Four
Principles Statement
);
2010 Open Internet Order
, 25 FCC Rcd at 17931, para
43; USTelecom Comments at 2;
Cisco Comments at 5.
USTelecom Comments at 3 (citing USTelecom, Broadband Investment,
http://www.ustelecom.org/broadband
industry/broadbandindustry
stats/investment
(“Broadband provider network capital expenditures in 2015 were $76
billion
. [w]
ith investments totaling around $1.5 trillion since 1996. . . .”). Commenters who cite the recent
explosion in online video streaming services as evidence of the need for Title II regulation ignore the fact that the
growth of online video streaming servic
Comcast Comments, A
ppx. A (citing FCC, Internet Access Services Report: Status as of December 31, 2015, at
; Cisco Comments at 3, n.9
(citing Kathryn Zickuhr and Aaron Smith,
Home Broadband 2013
Pew Research Center (Aug. 26, 2013),
http://www.pewinternet.org/2013/08/26/home
broadband
2013/#fn
(“[A]bout 98% of U.S. households live in
areas where they have a
ccess to broadband Internet connections as of July 2011.”)).
Federal Communications Commission
FCC
CIRC1712
were 395.9 million wireless connections, twenty percent more than the U.S. population.
Mobile data
speeds have also dramatically increased, with speeds increasing 40
fold from the 3G speeds of 2007.
Cable broadband speeds increased 3,200 per
cent between 2005 and 2015,
while prices per Mbps fell by
more than 87 percent between 1996 and 2012.
Based on the record in this proceeding, we conclude that economic theory, empirical
studies, and observational evidence support reclassification of broa
(Continued from previous page)
USTelecom Comments at 5
CTIA Comments at 3.
Verizon Comments, Exh. A at 24 (citing CTIA, “Wireless Snapshot 2017,” available at
https://www.ctia.org/docs/default
source/default
documentlibrary/ctia
wireless
snapshot.pdf
).
NCTA Comments at 29.
NCTA Comments at 30 (citing Comments of Comcast Corp., GN Docket No. 12
228, at 12 (f
iled Sep. 20,
2012)).
For a summary comparison of benefits and costs,
see
infra
Part V.
See Cable Modem Order
, 17 FCC Rcd at 4802, para. 5;
Wireline Broadband Classification Order
, 20 FCC Rcd
at 14865, para
19;
BPL
Enabled Broadband Order
, 21 FCC Rcd
at 13285, paras. 7
8;
Wireless Broadband Internet
Access Order
, 22 FCC Rcd at 5902, para. 2 (2007). Congress has similarly recognized the burdens associated with
regulation. For example, the 1996 Act states its purpose is to “reduce regulation,” and dire
cts the Commission to
regularly review regulations and repeal those it deems unnecessary or harmful to investment, competition, and the
public interest. Preamble to Telecommunications Act of 1996, Pub. L. No 104
104, 110 Stat. 56 (1996); 47 U.S.C.
§§ 161,
257.
Federal Communications Commission
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Investment by ISPs.
As the Commission has noted in the past, increased broadband
deployment
and subscribership re
quire investment, and the regulatory climate affects investment.
The
mechanisms by which public utility regulation can depress investment by the regulated entity are well
known in the regulatory economics literature. The owners of network infrastructure
make long
term,
irreversible investments. In theory, public utility regulation is intended to curb monopoly pricing just
enough that the firm earns a rate of return on its investments equivalent to what it would earn in a

See Inquiry Concerning High
https://www.ustelecom.org/sites/default/files/documents/Broadband%20Investment%20Trending%20Down%20in%
202016.pdf

Id.
Id.
see also
Anna
Maria Kovacs, The Effect of Title II Classification on Wireless Investment (July 2017),
http://cbpp.georgetown.edu/sit
%20Title%20II%20and%20wireless%20investment.pdf
(finding that “in the last three years wireless capital
investment (capex) has slowed, with a precipitous decline in 2016” that “coincided with and was likely caused at
least in part by investors’ and the industry’s reaction to” the
Title II Order
’s “common
carrier regulation [of] mobile
broadband”).
Federal Communications Commission
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oncluded that ISP investment
by major ISPs
fell by 5.6 percent between 2014 and 2016.
Singer
attempted to
account for
few significant factors unrelated to Title II that might affect investment
, by
subtract
ing
some investments that are clearly not affected by the regulatory change
(such as
the
accounting treatment of
Sprint’s telephone handsets, AT&T’s investments in Mexi
co, and
DirecTV
investments following its acquisition by AT&T in the middle of this period
In contrast,
Free Press
presents statistics
that it claims demonstrate that broadband deployment and ISP investment
“accelerated”
to “historic levels”
after
the Commission approved the
Title II Order
. But Free Press
fails to account for factors

See
Hal J. Singer,
2016 Broadband Capex Survey: Tracking Investment in the Title II Era
(Mar. 1, 2017),
https://haljsinger.wordpress.com/2017/03/01/2016
broadband
capex
survey
tracking
investment
the
era/

However,
Singer’s calculations do not control for
some
factors that influence investment, such as the “lumpiness”
of capital investment and technological change
See
e.g
AARP
omments at 51
Free Press Comments at 86
Free Press Comments at 86.
Free
Press Comments at 86.
Doug Brake,
Broadband Myth Series, Part 1: What Financial Data Shows About the Impact of Title II on
Investment
, ITIF (June 2, 2017),
https://itif.org/publications/2017/06/02/broadband
myth
series
part
what
financial
data
shows
about
impact

See

A separate
comparison of the United States’ ISP inves
tment with ISP investment in Europe also suggests that ISP
investment might decline if the U
.S.
, under the
Title II Order
, moves toward a regulatory system more like Europe’s.
A USTelecom research brief finds that European investment per capita is about 50
percent lower than broadband
investment in the U.S. per capita.
See
Patrick Brogan,
Utility Regulation and Broadband Network Investment: The
EU and US Divide
, Research Brief (Apr. 25, 2017).
As some commenters point out, this study compares the U.S.
wit
h the much more regulatory European system, which includes mandatory unbundling at regulated rates. Thus, it
presents a picture of how investment could change if the U.S. moves toward the European system under Title II, not
an assessment of the direct res
ults of the
Title II Order
See
e.g.
, AARP Comments at 60,; USTelecom at 1, The
brief does not control for other factors that could explain investment.
Utility Regulation and Broadband Network
Investment
at 4; AARP Comments at 59.
An additional type of evidence is the effect of the
Title II Order
on stock prices. Robert W. Crandall,
The FCC’s
Federal Communications Commission
FCC
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to compare outcomes occu
rring after policy changes to a relevant counterfactual that shows what
outcomes would have occurred in the absence of the policy change. No single study is dispositive, but
methodologies designed to estimate impacts relative to a counterfactual tend to p
rovide more convincing
evidence of causal impacts of Title II classification. Having reviewed the record of these studies, the
balance of the evidence indicates that Title II discourages investment by ISPs
a finding consistent with
economic theory.
Pri
or FCC regulatory decisions provide a natural experiment allowing this question to be
studied. Scholars employing the natural experiment
approach found that prior to 2003, subscribership
to cable modem service (not regulated under Title II) grew at a far
faster rate than subscribership to DSL

See
Graeme Guthrie,
Regulating Infrastructure: The Impact on Risk a
nd Investment
, 44 J. of Economic Literature
925 (2006). T
he record does not provide sufficient evidence to quantify the
size of the
effect of Title II on
investment
A natural experiment research approach seeks to use a plausibly exogenous source of poli


. at 7
AARP Comments at 105
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might be larger than the change in broadband investment associated with the threat of Title II regulation.
Accordingly,
the findings may b
e a more reliable indicator of the direction of the change in investment
than the absolute size of the change. At the very least, the study suggests that news of impending Title II
regulation is associated with a reduction in ISP investment over a multi
ear period.
Some commenters have argued that this study does not identify the effect of Title II on

AARP comments at 56
57; Joan Nix, Bruce McNevin
& David Gabel Comments at 7 (Nix
et al
. Comments)
(“[Ford’s paper] does not address the fact that between the years of 1980 and 2005, wireline carriers provided


Federal Communications Commission
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cor
porate decision
making and the macroeconomic effects that can play a role in investment cycles.
We also disagree with commenters who assert that it may be too soon to meaningfully assess the
economic effects that Title II has had on broadband infrastruct
ure investment.
Regulatory Uncertainty
. The evidence that Title II has depressed broadband investment
is bolstered by other record evidence showing that Title II stifled network innovation. Among t
he unseen
social costs of regulation are those broadband
innovations and developments that never see the light of
day. ISP investment does not simply take the form of greater deployment, but can also be directed toward
new and more advanced services for consumers. Research and development is an inherently ris
ky part of
any business, and the Commission’s actions should not introduce greater uncertainty and risk into the
process without a clear need to do so. Numerous commenters have stated that the uncertainty regarding
what is allowed and what is not allowed
under the new Title II broadband regime has caused them to
shelve projects that were in development, pursue fewer innovative business models and arrangements, or
delay rolling out new features or services. Even large ISPs with significant resources have n
ot been
immune to the dampening effect that uncertainty can have on a firm’s incentive to innovate. Charter, for
instance, has asserted that it has “put on hold a project to build out its out
home Wi
Fi network, due in
part to concerns about whether fu
ture interpretations of Title II would allow Charter to continue to offer
its Wi
Fi network as a benefit to its existing subscribers.”
Cox has also stated that it has approached
the “development and launch of new products and service features with greate
r caution” due to the
uncertainty created by the Title II classification.
And while new service offerings can take a while to
develop and launch, Comcast cites “Title II overhang” as a burden that delayed the launch of its IP
based
transmission of its ca
ble service, due to a year
long investigation.
Utility
style regulation is particularly inapt for a dynamic industry built on technological
development and disruption.
It is well known, “extensive regulation distorts production as well as
consumption c
hoices
Regulated entities are inherently restricted in the activities in which they may
engage, and the products that they may offer. Asking permission to engage in new activities or offer new
products or services quickly becomes a major preoccupation
of the utility.
Within the communications

MFRConsulting Reply at 2.
. at 4; AARP Comments at 59.
Charter Comments at 11 (explaining that future interpretations of Title II could risk investments it has already
made, or might soon make, demonstrating Title II’s effect of not only inhibiti
ng capital investment, but also
deterring market entry, resulting in depressed competition).
Cox Comments at 2
3, 16 (explaining that its parent company has had to divert resources to other areas of the
business that are not facing such investment risk)
see also
Comcast Comments at 37 (characterizing the regulatory
uncertainty as a “Sword of Damocles hanging over every service
related decision,” with the effect that new services
are either not launched at all, or are significantly delayed).
Comcast Comments at 37.
See
e.g
Graeme Guthrie,
Regulating Infrastructure: The Impact on Risk and Investment
, 44 J. of Economic
Literature 925 (2006).
Technology Policy Institute Comments at 6 (discussing the problems other industries have
experience
d with heavy utility
regulation: the Interstate Commerce Commission’s initially regulated railroads, and
then trucking, once trucking began to compete with rail, negatively affecting both industries, as trucking “became a
legal cartel with no incentive to
innovate,” and “regulations prevented railroad companies from adapting, driving
several into bankruptcy,” all to the ultimate detriment of the public)
This is apparent upon a casual observation of heavily
regulated utilities, such as the U.S. power, water, and mass
transit systems.
See
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industry, it is apparent that the most
regulated sectors
such as basic telephone
service,
have experienced
the least innovation, whereas those sectors
that have been traditionally
free to innovate, such as Inte
rnet
service, have greatly evolved.
In the communications industry, incumbents have often used
Commission regulation under the direction of the “public interest” to thwart innovation and competitive
entry into the sector and protect existing market struc
tures.
Given the unknown needs of the networks
of the future, it is our determination that the utility
style regulations potentially imposed by Title II run
contrary to the public interest.
The record confirms that concern about “regulatory creep”
whereb
y a regulator slowly
increases its reach and the scope of its regulations
has exacerbated the regulatory uncertainty created by
the
Title II Order
. Even at the time of adoption, the Commission itself did not seem to know how the
Title II Order
would be in

at 15 (highlighting the discrepancy between the unregulated computing world and the world of basic
telephone service; as computing “exploded,” basic telephone “limped along,” with basic innovations such as call
forwarding and caller ID requiring both
a partial deregulation following the 1982 MFJ, and decades of federal and
state approval).
Roslyn Layton, Bronwyn Howell,
How Title II Harms Consumers and Innovators
, AEI.org, at 9
10 (July. 14,
2017)
(describing radio spectrum awarded on basis of public
interest, prior to advent of auctions, and broadcasters
using the Commission to fight the development of cable television)
Comcast Dippon Paper at 21
22.
Statement of Tom Wheeler, Former Chairman, FCC, Press Conference (Feb. 26, 2015),
https://www.c
span.org/video/?c4534447/wheeler
general
conduct
standard


Verizon Comments, Exhib. A, at 9
10; AT&T Economic Declaration at 53; ACA Comments at 26
27 (“Upgrades
quire very large capital investments that must be spread over a long period of time
Even if the current
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arrangements, which mandated that ISPs charge edge providers a zero price. These threats to the ISP

CenturyLink Comm
ents at 14, n 34.
CenturyLink Comments at 13
AT&T Comments at 53; AT&T Reply at 47 (AT&T had reasoned that its zero
rating of DIRECTV customers’
data would be uncontroversial, as it was effectively a bundled rebate arrangement, and wholly pro
consu
mer. They
were thus surprised to find the program under a lengthy investigation by the Commission.). As such, we disagree
with commenters who assert that maintaining the
Title II Order
regime is the best means of addressing regulatory
uncertainty.
See
ome Telephone Company Comments at 17; CCIA Comments at 26
27; Internet Association
Comments at iii.
Verizon Comments, Lerner Declaration at 9
10. Many ISPs are part of integrated multi
sector holding
companies, which allows them to more easily shift cap
ital away from sectors where their investments would face
greater regulatory risk, and toward more investment
friendly sectors. Cox Comments at 16.
Free Press Comments at 3; Public Knowledge Comments at 21; BBIC Comments at 4
5; INCOMPAS Comments
at 1
George S. Ford,
Below the Belt: A Review of Free Press and the Internet Association’s Investment Claims
Phoenix Center for Advanced Legal and Policy Studies Perspectives (June 20, 2017).
R Street Institute Reply at 7.
. at 7
. at 8.
Federal Communications Commission
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See, e.g.
WISPA Comments at 10, 17 (“WISPs typically rely on their own money, family and friends, and in
some cases, local financing. Private equity is available to very few WISPs.”); ACA Comments at 25
26 (explaining
that many small service providers ha
ve their houses and cars pledged against their bank loans financing their
businesses).
See, e.g.
National Grange Comments at 2; WISPA Comments at 13
14 (asserting that larger companies do not
face such extreme challenges since they have large compliance
departments and resources that can handle subscriber
complaints); ACA Comments at 15
16 (“While a large provider with tens of millions of subscribers likely has the
wherewithal to either absorb or litigate
. fines, for a company with under 10,000 subs
cribers
. a huge fine can
be devastating.”).
See
CompTIA Comments at 5; ACA Comments at iii (“Following Title II reclassification, ACA members spent
significant resources and incurred unexpected legal and consulting costs in trying to understand the
impact of the
decision and what it meant for their existing and planned services, and in taking steps to minimize the risk of
enforcement actions and consumer complaints.”); ACA Comments at 7
8 (asserting that the Commission’s
application of Sections 201 a
nd 202 to broadband forced smaller ISPs to hire consultants and outside counsel to
(continued….)
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Providers Association (WISPA) s
urveyed its members and found that over 80% had “incurred additional
expense in complying with the Title II rules, had delayed or reduced network expansion, had delayed or
reduced services and had allocated budget to comply with the rules.”
The threat of
ex post
rate
regulation has hung particularly heavily on the heads of small ISPs, “who are especially risk
averse,
causing them to run all current and planned offerings against the ‘just’ and ‘reasonable’ and unreasonably
discriminatory standards of Secti
ons 201 and 202 of the Act.”
The effects have been strongly felt by
small ISPs, given their more limited resources, leading to depressed hiring in rural areas most in need of
additional resources.
Compounding the difficulties faced by small ISPs, the
record also reflects that the “‘black
cloud’ of common carriage regulations” resulted in increased difficulties for small ISPs in obtaining
financing.
A coalition of 70 small wireless ISPs cited the uncertainty created by the
Title II Order
major re
ason that their costs of capital have risen, preventing them from further expanding and improving
their networks.
The new regulatory burdens, risks, and uncertainties combined with “diminished access
to capital create a vicious cycle
the regulatory burde
ns make it more difficult to attract capital, and less
capital makes it more difficult to comply with regulatory burdens.”
A coalition of 19 municipal ISPs
cited high legal and consulting fees necessary to navigate the
Title II Order
, as well as regulato
ry
compliance risk as a reason for delaying or abandoning new features and services.
While, of course,
not all small ISPs have faced these challenges,
there is substantial record evidence that regulatory
(Continued from previous page)
of Internet transport); ACA Comments at 25; Antietam Comments at 1; Coalition of 65 Comments at 3; Ken
Cuccinelli
Comments at 7; Mobile Future Comments at 8; Fiber Broadband A
ssociation Comments at Appendix
23;
CTIA Comments at 27; ACA Comments at 23
24 (explaining that numerous ACA member companies had plans to
upgrade their fiber systems, but had to curtail the scop
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uncertainty resulting from the Commission’s recla
ssification of broadband Internet access service in 2015
risks stifling innovation, and that it has already done so with respect to small ISPs, which ultimately
harms consumers.
We anticipate that the beneficial effects of our decision today to restore the
classification
of broadband Internet access service to an information service will be particularly felt in rural and/or
lower
income communities, giving smaller ISPs a stronger business case to expand into currently
unserved areas.
Enabling ISPs to free
ly experiment with services and business arrangements that can
best serve their customers, without excessive regulatory and compliance burdens, is an important factor in
connecting underserved and hard
reach populations. We are committed to bridging th
e digital divide,
and recognize that small ISPs “disproportionately provide service in rural and underserved areas where
they are either the only available broadband service option or provide the only viable alternative to an
incumbent broadband provider.”
We anticipate that returning broadband Internet access service to a
light
touch regulatory framework will help further the Commission’s statutory imperative to “encourage
the deployment on a reasonable and timely basis of advanced telecommunications cap
ability to all
Americans”
by helping to incentivize ISPs to expand coverage to underserved areas.
Investment at the Edge.
Finally, to more fully discern
the
impact of Title II, we must
look at investment throughout the broadband ecosystem, including in
vestment and innovation at the edge,
as well as with other ecosystem participants (manufacturers, etc.).
We agree with commenters who
assert that looking only at ISP investment ignores investment that is occurring at the edge.
While there
is tremendous
investment occurring at the edge,
the record does not suggest a correlation between edge

See
WISPA Comments at 16; ACA Comments at 29.
See
WISPA Reply at 6;
see also
Cisco Systems Comments at 9 (detailing how small ISPs were better able to
invest under Title I); ACA Comments at 25
26; WI
SPA Comments at 26 (explaining how many WISPs are using
less
valued spectrum to wirelessly connect sparsely populated regions “that would otherwise be unserved by
wireline technologies”).
47 U.S.C. § 1302(a).
Cf., e.g.
, League of United Latin American
Citizens Comments at 2 (“[B]y raising costs, reducing broadband
investment and discouraging innovative cost sharing solutions such as Zero rating, Title II has likely slowed down
progress at closing the digital divide rather than accelerating it.”); Cisco
Comments at 9 (noting that a coalition of
broadband providers explained that the uncertainty surrounding the Title II regulatory framework hindered their
ability to meet their customers’ needs, and inhibited their ability to “build and operate networks in
rural America”).
Comments of Ad Hoc Coalition of 17 Small and Mid
(continued….)
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provider investment and Title II regulation, nor does it suggest a causal relationship that edge providers
have increased their investments as a result of the
Title
II Order
. Free Press argues that since adoption of
the
Title II Order
, innovation and investment at the edge has increased.
While high growth rates are
associated with the Internet industry, the evidence presented does not show the imposition of Title I
regulation on Internet access service providers caused recent edge provider investment. That requires an
estimate as to what would have happened in the absence of Title II regulation (e.g., analysis following the
methods employed in the studies of Ford,
and of Hazlett and Wright).
In fact, one could argue that in the absence of Title II regulation, edge providers would
have made even higher levels of investment than they undertook. In many cases, the strongest growth for
a firm or industry predates th
Title II Order
. For example, Free Press highlights that the data processing,
hosting, and related services industry increased capital expenditures by 26% in 2015,
a significant
increase in investment. However, in 2013, well prior to the 2014
Open Inte
rnet NPRM
that led to the
Title II Order
, that industry increased investment by over 100%. Similarly, Netflix’s greatest relative
increase in capital expenditures occurred in 2013.
Amazon increased its spending on technology and
content, which consists
primarily of research and development expenses, by 28% in 2016, while in 2013
the increase was 41%.
We do not claim that these data points prove that edge provider investment
would have been greater in the absence of the
Title II Order
, but we find that
Free Press does not
demonstrate that there is a significant difference in the investment behavior of edge providers due to the
Title II Order
Utility
Style Regulation of Broadband Is a Solution in Search of a Problem
(Continued from previous page)
million Americans subscribed to an online video distribution service
a category th
at did not even exist a decade
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to a handful of incidents that purportedly affected Internet openness, while ignoring the two d
ecades of
flourishing innovation that preceded the
Title II Order
The first instance of actual harm cited by the
Title II Order
involved Madison River
Communications, a small DSL provider accused in 2005 of blocking ports used for VoIP applications,
ereby foreclosing competition to its telephony business. Madison River entered into a consent decree
with the Enforcement Bureau, paying $15,000 to the U.S. Treasury and agreeing that it “shall not block
ports used for VoIP applications or otherwise preve
nt customers from using VoIP applications.”
Vonage, an over
the
top VoIP provider, later confirmed in press reports that it had initiated a complaint
against Madison River at the Commission and that other small ISPs had blocked its VoIP services.
Next
, the
Title II Order
referenced Comcast’s throttling of BitTorrent, a peer
peer
networking protocol. Comcast, which was at the time the nation’s second
largest ISP, admitted that it
interfered with about a tenth of BitTorrent TCP connections, and indep
endent investigations suggested
that Comcast interfered with over half of BitTorrent streams.
After receiving a formal complaint about
the practice, the Commission found “that Comcast’s conduct poses a substantial threat to both the open
character and ef
ficient operation of the Internet, and is not reasonable,” and ordered Comcast to cease the
interference.
However, the D.C. Circuit vacated the Commission’s order in
Comcast
Madison River
and
Comcast
BitTorrent
the anecdotes most frequently cited in fa
vor of
Title II regulation
demonstrate that any problematic conduct was quite rare.
The more recent
incidents discussed in the
Title II Order
also show that since 2008, few tangible threats to the openness of

See Title II Order
, 30 FCC Rcd at 5628, n.123.
Madison River Communications
, File No. EB
0110, Order, 20 FCC Rcd 4295
(Enforcement Bur. 2005)
Madison River Order
).
Declan McCullagh,
Telco agrees to stop blocking VoIP calls
, CNET (Mar. 3, 2005)
https://www.cnet.com/news/telco
agrees
stop
blocking
voip
calls/

Formal Complaint of Free Press and Public Knowledge Against Comcast Corporation for Secretly Degrading
Peer
Peer Applications; Broadband Industry Practices; Petition of Free Press et al. for Declaratory Ruling that
Degrading
an Internet Application Violates the FCC's Internet Policy Statement and Does Not Meet an Exception
for “Reasonable Network Management,”
File No. EB
1518, WC Docket No. 07
52, Memorandum Opinion
and Order, 23 FCC Rcd 13028, 13030, para. 5 (2008) (
mcast
BitTorrent Order
).
Id.
at 13058, para. 51. While the Commission found that OVDs using BitTorrent were a “competitive threat to
cable operators such as Comcast,” there are strong arguments that Comcast interfered with BitTorrent in an attempt
to m
anage its network, rather than to disadvantage OVDs.
See
NCTA Reply at 28 (asserting that “the intervention
except
for
the
gapping
hole
aro
the
capacity
cap/
).
Comcast
, 600 F.3d at 642.
See
Daniel Oglesby Comments at 1; AT&T Comments at 19
20; Comcast Reply at 29; ITIF Reply at 12; TPI
Comments at 4; AT&T Reply at 17;
cf.
Federal Communications Commission
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See Title II Order
, 30 FCC Rcd at 5628, n.123.
See
Jim Cicconi, AT&T Senior Executive Vice President of External and Legislative Affairs,
A Few Thoughts on

See
AT&T Comments at 20 (The Title II Order “did not mention that the Comcast Xbox service
much like
AT&T’s U
verse IP video service or Comcast’s Stream service today
is a managed video service delivered over a
closed network, not an over
the
top service deli
(continued….)
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(Continued from previous page)
vid Ruddock,
A Brief History Of Verizon And Google Wallet, And Why The Carrier Is Still Allowed To “Block”
, Android Police (May 1, 2013),
http://www.androidpolice.com/2013/05/01/a
brief
history
verizon
and
google
wallet
and
why
the
carrier
still
allowed
block
; AT&T Reply at 17
18; Will Rinehart Comments at 3.
OTI’s argument about AT&T blockin
g Slingbox
which “redirected a TV signal” to the iPhone app
from its 3G
https://www.engadget.com/2009/05/12/atandt
issues
official
statement
slingplayers
blackout
for/
. In an
attempt to manage its 3G n
etwork, AT&T restricted slinging to Wi
Fi, while reiterating that consumers could still
access video streaming websites.
See Title II Order
, 30 FCC Rcd at 5629, para. 128 (“[B]roadband providers
are in a position
to function as a
gatekeeper . . . [and]
can
exploit this role by acting in ways that may harm the open Internet);
id.
at 5632, para. 82
(“Broadband providers
may seek
to gain economic advantages by favoring their own or affiliated content . . . Such
practices
could result
in so
called ‘tolls’ for edge providers . . . );
id.
at 5645, para. 103 (“Paid prioritization
agreements . . .
have the potential
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might have.
Consequently, Title II regulation is an unduly heavy
handed approach to what at worst are
relatively minor problems.
Althou
gh the
Title II Order
argued that ISPs were incentivized to harm edge
innovation,
it also conceded that ISPs benefit from the openness of the Internet. The
Title II Order
found that “when a broadband provider acts as a gatekeeper, it actually chokes cons
umer demand for the
very broadband product it can supply.”
We agree. The content and applications produced by edge
providers often complement the broadband Internet access service sold by ISPs, and ISPs themselves
recognize that their businesses depend
on their customers’ demand for edge content.
It is therefore no
surprise that many ISPs have committed to refrain from blocking or throttling lawful Internet conduct
notwithstanding any Title II regulation.
Finally, to the extent these economic forces
fail in any
particular situation, existing consumer protection and antitrust laws additionally protect consumers.
We therefore find that Title II, and the attendant utility
style regulation of ISPs, are an unnecessarily

See, e.g.
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heavy
handed approach to protectin
g Internet openness.
The
Open Internet
and
Title II Orders
claimed to base their actions on a theory that
broadband adoption is driven by a “virtuous cycle,” whereby edge provider development “increase[s]
end

Open Internet Order
, 25 FCC Rcd at 17910
11, para. 14;
Title II Order
, 30 FCC Rcd at 5603, 5604, 5608
09,
paras. 2, 7, 20
21.
Open Internet Order
, 25 FCC Rcd at 14868, para. 24 (asserting that “broadband providers have the ability to a
ct
as gatekeepers”);
Title II Order
, 30 FCC Rcd at 5608
09, 5628, paras. 20
21, 78.
Open Internet Order
, 25 FCC Rcd at 14867
68, paras. 23
25. While the primary reason for this seems to be

See infra
para.
126
see also
Internet/Broadband Fact Sheet
, Pew Research Center,
Jan
12, 2017
, available at
http://www.pewinternet.or
g/fact

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of the popu
lation are all waiting for the development of applications that would make Internet access

John H. Horrigan and Maeve Duggan, “Home Broadband 2015,” Pew Research Center
Dec
21, 2015
, available
at
http://www.pewinternet.org/2015/12/2
1/home
broadband
(“Non
broadband adopters who view a lack of
home service as a major disadvantage are also more likely to cite the monthly cost of broadband as the primary
reason they do not subscribe. Price sensitivity, in other words, is greatest
among those who are most likely to see
the advantages of a home broadband subscription.”); John H. Horrigan and Maeve Duggan, “Home Broadband
2015,” Pew Research Center
Dec
21, 2015
, available at
http://www.pewinternet.org/2015/12/21/home
broadband
see also
O. Carare,
et al
. “The willingness to pay for broadband of non
adopters in the U.S.: Estimates from a
multi
state survey”,
Information Economics and Policy
30 (2015) 19
35, at 21 (asserting that “approximately one
third of non
adapters surveyed indicate that price of the service is a relevant factor.”).
See, e.g.
, Strategies and Recommendations for Promoting Digital Inclusion, Consumer and Governmental Affairs
Bureau, F
ederal Communications Commission
Jan
11, 2017
, https://apps.fcc.gov/edocs_public/attachmatch/DOC
342993A1.pdf, at 19
20 (explaining how Comcast has innovated on an original regulatory requirement, and how
other ISPs have followed that example).
See,
e.g.,
INCOMPAS Comments at 25 (“[I]ncumbent broadband providers whose facilities are used for the
consumption of long
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investment decisions that could increase competition three to five or more years from now.
We note

This is different from forbidding certain behavior or a merger on antitrust grounds due to the likelihood of
imminent, non
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Percent of U.S. population in developed census blocks in which residential fixed broadband
ISPs reported deployment (as of
December 31
, 2016)
Number of providers
Speed of at least:
3 Mbps down and 0.768
Mbps
10 Mbps down and 1 Mbps up
25 Mbps down and 3 Mbps up
However, because there are questions as to the extent fixed satellite and fixed terrestrial
wireless Internet access service
Percent of U.S. population in developed census blocks in which residential broa
dband wireline
ISPs
reported deployment (as of December 31
, 2016)
Number of providers
Speed of at least:
3 Mbps down and 0.768
Mbps
10 Mbps down and 1 Mbps up
25 Mbps down and 3 Mbps up
126.


Fixed Broadband Deployment Data from FCC Form 477, as of
December 31
, 2016 (V2),
https://www.fcc.gov/general/broadband
deployment
data
fcc
form
U.S. Census Bureau, 2010 Census Data,
Summary File 1,
https://www.census.gov/2010census/data/
A developed census block is a census block containing
at least one household. An ISP that reports offering service in
a census block may not offer service, or service at that
speed, to all locations in the block.
Fixed wireless and satellite subscripti
ons decisions suggest that consumers generally prefer fixed wireline
services to these, even at lower speeds. For example, at bandwidt
hs of 3 Mbps downstream and 0.768
Mbps
upstream, satellite providers report deployment in 99.1% of developed censu
s block
s, but only account for 1.7
% of
subscriptions, while terrestrial fixed wireless p
roviders report deployment in 38
.5% of developed census blocks, but
only account for 0.9% of all subscriptions. FCC Form 477 Subscription Data, June 2016.
In the 2016 Broadba
nd
Progress Report, the FCC defined advanced telecommunications services as 25 Mbps download and 3 Mbps upload
for fixed services.
https
://www.fcc.gov/reports
research/reports/broadband
progress
reports/2016
broadband
progress
report
Satellite providers only c
overed 50.0
% of census blocks at these speeds,
and fixed wireless
providers, 18.5
See supra
note
451
. While not reported, the percent of households in developed census blocks closely tracks the
entries for the percent of population in developed census tracts. For example, approximately 79
percent of US
households are in a census block where at least t
wo wireline suppliers offer speeds
of at least 3 Mbps down and
0.768
Mbps up.
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sunk investments.

On sunk costs being important in (especially wireline) telecommunications,
see
Jonathan E. Nuechterlein and
hilip J. Weiser, Digital Crossroads: Telecommunications
Law and
Policy in the Internet Age, at 8
10 (2
ed. 2013)
(Nuechterlein and Weiser); Jerry Hausman and J. Gregory Sidak,
Telecommunications Regulation: Current
Approaches with the End in Sight
Economic Regulation and Its Reform: What Have We Learned? at 345,
353
(Nancy L. Rose, ed., 2005); Organization for Economic Co
operation and Development,
The Development of Fixed
Broadband Networks
, at 11 (Jan. 8, 2015),
http://www.oecd.org/officialdocuments/publicdisplaydocumentpdf/?cote=DSTI/ICCP/CISP(2013)8/FINAL&docLa
nguage=En
sink costs
https://www.fcc.gov/reports
research/reports/satellite
competition
reports/satellite
competition
report
annua
Empirical
Other industries with large sunk costs have shown that “price declines with the addition of the first competitor,
but drops by very little thereafter.” Allan Collard
Wexler,
Demand Fluctuations in the Ready
Mix
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noticeable degree of competition, and in any case, can be expected to produce more efficient outcomes
than any regulated alternative.

See, e.g.
, AT&T Comments at 29
(continued….)
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power unlikely, low churn rates do not
per se
(Continued from previous page)
do not inhibit subscriber switching.”); CenturyLink Folster Declaration at 3
4 (“Overall, according to Frost &
Sullivan data, telco pro
viders lost 1 point of market share during 2016 and have lost 3 points of share over the last
three years, primarily at the expense of cable providers. This, in and of itself, is evidence that switching costs are
low. If the switching costs for changing I
http://www.fiercecable.com/cable/new
into
charter
and
comcast
growth
but
won
last
(rep
cable through fiber deployment and steep discounts, and questioning whether such discounts can be sustained,
indicating how aggressive AT&T has been as a competitor); Chris Mills,
$500 off the iPh
one X is still $500 off, even
from Comcast
, BGR.com (Oct. 25, 2017)
http://bgr.com/2017/10/25/iphone
deals
xfinity
mobile
verizon
off/
) (discussing Comcast
service on an iPhone); INCOMPAS Reply at 12 (listing “aggressive win
See
Consumer Reports, “Haggling for a lower
telecom bill really works, says o
ne CR editor” (May 17, 2012)
https://www.consumerreports.org/cro/news/2012/05/hag
gling
for
lower
telecom
real
works
says
one
editor/index.htm
; N. Safo, “Want to save money? Call your cable
company”
Marketplace
(Oct. 9, 2014)
https://www.marketplace
.org/201
4/10/09/business/want
save
money
call
your
cable
company
; INCOMPAS Reply
at 26
28 (Attempts to switch providers are “often
��(continued….)
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(Continued from previous page)
Economic Declaration at 26
27 (“[T]he fact that providers actively

20th Mobile Wireless Competition Report Web Appendix III:
Elements of Inter
Firm Rivalry,
https://www.fcc.gov/20th
cmrs
report
web
appendices
Implementation of Section 6002(b) of the Omnibus Budget
Reconciliation Act of 1993; Annual Report and Analysis of Competitive Market Conditions with Respect to Mobile
Wireless, Including Commercial Mobile Services
Sixteenth Report
, 30 FCC Rcd 14515, 14544
, Chart III.A.5 (WTB
2015) (
Eighteenth Report
See
Public Knowledge Comments at 79 (stating that “wireless and wireline broadband are distinct product
, Tables 1 and 2. Free State
Comments at 24
25 (“An important aspect of the broadband market’s dynamism, erroneously overlooked by the
Title II Order
, is cross
platform or intermodal competition between multiple broadband technolog
ies. Broadband
��(continued….)
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future,
(Continued from previous page)
all income levels are substituting mobile br
oadband for fixed broadband. For example, 29% of low
income
consumers, 18% of middle
income consumers, and 15% of high
income consumers are mobile
only broadband
users.”); AT&T Comments at 30
31 (“According to a Pew Research study, “a growing share of Amer
icans now use
smartphones as their primary means of online access at home. Today just over one
ten American adults are
‘smartphone
only’ internet users
meaning they own a smartphone, but do not have traditional home broadband
service.” That trend is lik
ely to continue with the roll
out of affordable mobile plans with unlimited data (see above)
and the ubiquitous availability of public Wi
Fi hotspots.”); AT&T Economic Declaration at 29
34 (“Convergence

Comcast reported 23.4 million “High

based on the 2015 Census Broadband data (23.4/90.7). This estimate is not sensitive to definitions of broadband.
of December 2016, there were 102
million fixed connections with download speeds of at least 3 Mbps, lowering
Com
cast’s share to approximately 23%, and 106
million with fixed connections of at least 200 Kbps in either
direction, lowering Com
cast’s share to
approximately 22
FCC Form 477 Subscription Data, December
).
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Speed
HHI
3 Mbps down and 0.768
Mbps up
10 Mbps down and 1 Mbps up
25 Mbps down and 3 Mbps up
Large shares of end
user subscribers,
and/or market concentration, however, do not seem


FCC Form 477 Subscription Data (
December
2016).
See
Oracle Comments at 2
3 (“[T]he
Title II Order
inappropriately ascribed significant gatekeeper power to the
“high” cost of switching home broadb
and providers. But, because more than two
thirds of global computing power
is mobile, consumers’ devices switch among home, work, and retail networks throughout the day, to say nothing of
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might consider reaching end users on mobile devices to be roughly as valuable as, or more valuable than,

C. Smith “Netflix’s ‘meh’ on net neutrality is exactly why we need strong rules, not empty promises” Jun. 1st,
2017,
http://bgr.com/2017/06/01/netflixs
net
neutrality
comments/
(“‘It’s not our primary battle at this point,’
Hastings said on Wednesday about net neutrality during an interview at Recode’s Code Co
nference. ‘We think net
neutrality is incredibly important,’ Netflix said, but ‘not narrowly important to us because we’re big enough to get
the deals we want.’”).
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small wireless ISP, or a larger but still small rural cable company
or incumbent LEC, could do so.
Further, from the perspective of many edge providers, end users do not single home, but subscribe to
more than one platform (e.g., one fixed and one mobile) capable of granting the end user effective access
to the edge prov
ider’s content (i.e., they multi
home). As the
Title II Order
acknowledges, to the extent
multihoming occurs in the use of an application, there is no terminating monopoly.
Moreover, to the extent a terminating monopoly exists for some edge providers,
and it is
not offset or more than offset by countervailing market power, there is the question of the extent to which
the resulting prices are economically inefficient. A terminating (access) monopoly arises when customers
on one side of the market, rough
ly speaking end users in our case, single home with little prospect of
switching to another platform in the short run, while customers on the other side, roughly speaking edge
providers in our case, find it worthwhile to multi
home. The terminating monopo
ly differs from

See, e.g.
, USTelecom Comments at 22 (“the idea that every ISP has
market power because it is a “gatekeeper” to
its subscribers is clearly rebutted by the position of small broadband providers. The suggestion that ISPs with only
tens or even hundreds of thousands of end
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important, let alone outweigh the harmful effects of Title II regulation.
For all these reasons, we find no
case for supporting Title II regulati
on of ISP prices to edge providers.
Externalities Associated with General
Purpose Technologies Are Not a Convincing
Rationale for Title II Regulation
. Some commenters make somewhat inchoate arguments that ISPs
should not be permitted to treat different e
dge providers’ content differently or charge more than a zero
price because the Internet is a “general purpose technology” and/or the services of some edge providers
create positive externalities
that the edge providers cannot
appropriate.
Hogendorn
may
propose the

(continued….)
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(Continued from previous page)
support of t
he proposition that an ISP’s interference with VPN service would lead to a “loss of employee
productivity nationwide”); Ryan Hogard Comment (“The open web environment has produced positive externalities
and growth that have allowed the technology industry
to become what it is today, and will continue to serve as a
breeding ground only if it is preserved”).
See, e.g.
Economides Comment at 3 (citing Christiaan Hogendorn, “Spillovers and Network Neutrality,” in
(continued….)
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carriers.
As a result, the
Commission’s classification of broadband Internet access service as a
common carriage telecommunications service stripped the FTC of its authority over ISPs. Therefore, as
(Continued from previous page)
consumers about the service they purchased.”). In the recent
FTC v. TracFone
case, the FTC sued TracFon
e, a
https://www.ftc.gov/enforcement/cases
proceedings/132
3176/straight
talk
wireless
tracfone
wireless
inc
Complaint paras. 37, 40,
FTC v. TracFone
, No.
EMC (N.D. Cal. Fe
b. 20, 2015). Because TracFone’s data service was sol
d as pre
paid by the month,
customers who wanted to use more unthrottled data had to purchase an additional month of service. The FTC
alleged that TracFone’s practices were not a “response to real
See
15 U.S.C. § 45(a)(2) (exempting from Section 5 “common carriers subject to the Acts to regulate
commerce”).
See infra
Part III.E.3.
See
15 U.S.C. § 45(a)(2) (exempting from Section 5 “common carriers subject to the Acts to regulate
commerce”);
infra
Part III.E.3.
See
Free State Foundation Comments at 42 (“There is industry near
consens
us that end user[s] . . .
should not be
subject to blocking, substantial degrading, throttling, or unreasonable discrimination by broadband ISPs. This
consensus is widely reflected in the service terms that broadband ISPs furnish to their end user subscribers. With the
FTC’s jurisd
iction restored, alleged breaches [of] no
blocking, no
substantial degrading, no
throttling and other
terms of service by ISPs could be investigated by the FTC and made the subject of enforcement actions.”); Cox
Comments at 23; NCTA Comments at 54 (“NCTA’s
members, along with other ISPs, could agree to abide by a code
of conduct embodying these principles, and/or could include these commitments as express provisions in their
publicly stated policies.
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unilateral change in a material term of a contract can be an unfair practice.
The FTC’s 2007 Repor
t on
Broadband Industry Practices raises the possibility that an ISP that starts treating traffic from different
edge providers differently without notifying consumers and obtaining their consent may be engaging in a
practice that would be considered unfai
r under the FTC Act.
Many of the largest ISPs have committed in this proceeding not to block or throttle legal
content.
These commitments can be enforced by the FTC under Section 5, protecting consumers
without imposing public
utility regulation on IS
Ps.
As discussed below, we believe that case
case,
ex post

FTC Broadband Report at 130.
. at 134.
See
AT&T Comments at 1 (“[R]egardless of what regulatory regime is in place, we will conduct our business in a
manner cons
istent with an open
Internet.”);
. at 2 (“No ISP engages in blocking or throttling without a reasonable
network
management justification
a baseline prohibition on blocking and throttling merely codifies standard
industry practice.”)
. at 101 (AT&T “w
ould support a
set of bright
line rules that require transparent disclosures
of network
management practices and prohibit blocking and throttling of Internet content without justification.”);
Frontier Comments at 1 (Frontier “remains committed to the funda
mental principl
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if their actions cannot be described as anticompetitive, unfair, or deceptive
then the conduct should not
be banned in the first place.”
And the t
ransparency rule that we announce today should allay any
concerns about the ambiguity of ISP commitments,
by requiring ISPs to disclose if the ISPs block or
throttle legal content. Finally, we expect that any attempt by ISPs to undermine the openness of
the

Verizon Reply at 27.
See
OTI New America Reply at 27
31 (arguing paid prioritization and free expression
concerns not protected
by FTC).
See
Anant Raut FTC Comments at 2; OTI Reply at 28; Public Knowledge Reply at 10
11; CCIA Reply at 19.
For the same reasons, the transparency rule allows us to reject the argument that antitrust and consumer protection
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Commission.
Should the
hypothetical harms that proponents of Title II imagine eventually come to
pass, application of the antitrust laws would address those harms.
Section 1 of the Sherman Act bars contracts, combinations, or conspiracies in restraint of
trade, making anticom

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.”).
Michael L. Katz,
Wither U.S. Net Neutrality Regulation?
, 50 Rev. Ind. Org
at 10
(2017) (“[T]he Commission has
not established that its regulations offer significant incremental benefit over existing state and federal antitrust
policies of general applicability. The Commission has never offered a convincing explanation of why, if a BIA
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claim under antitrust.

The Commission itself concluded that “Comcast’s practice selectively blocks and impedes the use of particular
applications, and we believe that such disparate treatment poses s
ignificant risks of anticompetitive abuse.”
Comcast
BitTorrent Order
, 23 FCC Rcd at 13055
56, para. 47.
While it is less clear whether AT&T’s three
month
http://www.freestatefoundation.org/images/Antitrust_Provides_a_More_Reasonable_Framework_for_Net_Neutralit
y_Regulation_081617.pdf

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As the economic literature teaches that vertical integration generally i
ncreases efficiency, the antitrust laws will
permit greater innovation in vertical agreements than the tightly regulated confines of the
Title II Order
See
Hylton,
Law, Social Welfare, and Net Neutrality
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with large edge providers, which include some of the most valuable companies in the world.
Regul
ating these companies is unnecessarily harmful.
The antitrust laws allow each ISP to be regulated
as appropriately tailored to the ISP’s circumstances.
Moreover, the case
case analysis, coupled with the rule of reason, allows for
innovative arrangeme
nts to be evaluated based on their real
world effects, rather than a regulator’s
ex ante
predictions.
Such an approach better fits the dynamic Internet economy than the top
down mandates
imposed by Title II.
Further, the antitrust laws recognize the im
portance of protecting innovation.
Indeed, the FTC has pursued several cases in recent years where its theory of harm was decreased
innovation.
Accordingly, we believe that antitrust law can sufficiently protect innovation, which is a
matter of particul
ar importance for the continued development of the Internet.
We also find that the
combination of the transparency rule, ISP commitments, and their enforcement by the FTC sufficiently

ACA Comments at 32
USTelecom Comments at 22
ACLP Comments at 8
See supra
paras.
106
But see
AARP Comments at 13 (“[A]ntitrust . . .
, with its characteristic case
case approach, could result in
segmented regulation of broadband markets, with some providers
those whose
conduct has been required to
conform to procompetitive behavior
offering superior opportunities for consumers and edge providers, as opposed
to other providers that were not subject to a suit, or which were able to negotiate a weaker level of protection fo
consumers and edge providers.”)
See
Acting Chairman Ohlhausen Comments at 12 (“A case
case approach also focuses on actual or likely,
specifically
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address the argument made by several commenters that antitrust moves t
oo slowly and is too expensive
for many supposed beneficiaries of regulation.
Additionally, the existence of antitrust law deters much potential anticompetitive conduct
before it occurs, and where it occurs offers recoupment through damages to harmed comp
etitors.
Some
commenters have cast doubt on the effectiveness of
ex post
enforcement, preferring
ex ante
rules.
Yet
as the FTC staff noted in its comments, this is a false dichotomy. “Effective rule of law requires both
appropriate standards
whether e
stablished by common law court, Congress in statute, or by an agency in
rules
and active enforcement of those standards.”
Even the “bright line” rules in the
Title II Order

Cmm’r McSweeny Comments at 6 (“[
x ante
rules provide innovators with confidence that discriminatory
network
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found that coun
tries with vigorous antitrust statutes and enforcement, such as the United States, reduce
the effects of an
ticompetitive behavior when it does occur.
There is also evidence that firms, once they
have been subject to an enforcement action, are less likely
to violate the antitrust laws in the future.
Overall, we have confidence that the use of antitrust enfor
cement to protect competition in the broadband

Clarke a
See supra
paras.
115
Ohlhausen,
Antitrust Over Net Neutrality
, 15 Colo. Tech. L.J. at 146
47.
Therefore, we believe that the argument that antitrust law does not consider non
economic factors such as free
expression and diversity fails to support Title II regulation.
See
Cmm’r McSweeny Comments at 4; Sen. Franken
��(continued….)
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Finally, applying antitrust principles to ISP conduct is consistent wi
th longstanding
economic and legal principles that cover all sectors of the economy, including the entire Internet
ecosystem.
Applying the same body of law to ISPs, edge providers, and all Internet actors avoids the
regulatory distortions of Title II, wh
ich “impos[ed] asymmetric behavioral regulations . . . on broadband
ISPs under the banner of protecting Interne
t openness, but le[ft] Internet edge providers free to threaten or
engage in the same types of behavior prohibited to ISPs free of any
ex ante
nstraints.”
Our decision
today to return to light
touch Title I regulation and the backstop of generally
appl
icable antitrust and
consumer protection law “help[s] to ensure a level, technology
neutral playing field” for the whole
Internet.
Restoring the
Information Service Classification is Lawful and Necessary
The Commission has the legal authority to
return to the classification of broadband
(Continued from previous page)
Comments at 3
4; CCIA Reply at 20
; Public Knowledge Reply at 9
10;
American Association of Community
Colleges et al.
Reply at 8; Geoffrey Rogers Comments at 7; EFF Comments at 10; Catherine Sandoval Reply at 45;
ITIF Comments at 18; Free Press Comments at 68.
See, e.g.
, ICLE Comments at
71; Frontier Comments at 10
11; ACLP Comments at 8
10; ACA Comments at 67;
Free State Comments at 38
40; CEI Comments at 6.
ACA Comments at 67.
NCTA Comments at 56.
See id.
(“(“One important advantage of an FTC
led approach is that
all
participants in
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action is supported by the text, structure, and history of the A
ct, the nature of ISP offerings, judicial and
Commission precedent, and the public policy consequences flowing from reclassification.
An agency
of course may decide to change course
and such a
decision is not, as some
commenters suggest, inherently suspect.
The Supreme Court has observed that there is “no basis in the
Administrative Procedure Act or in our opi
nions for a requirement that all agency change be subjected to
more searching review
. . . .
[I]t suffices 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.”
Relevant precedent hold
that w
e ne
ed only “examine the relevant data and
articulate a satisfactory explanation for [our] action,” a duty we fully satisfy here.
The “possibility of
drawing two inconsist
ent conclusions from the evidence does not prevent an administrative agency’s
finding f
rom being supported by substantial evidence.”
Rather, we are “entitled to assess
administrative records and evaluate priorities” in light of our current policy judgments.
As the Court

We reject arguments against reclassification based on alleged shortcomings in the j
ustification for changing
course provided in the
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recognized in
Brand X
, “in
Chevron
itself, the Court deferred to an
agency interpretation that was a recent
reversal of agency policy.”
The
USTelecom
decision supports our understanding of the relevant legal
standard, affirming the
Tit
le II Order
reclassification of broadband Internet access service irrespective
of whe
ther any facts had changed.
Such a change in course can be justified on a variety of possible grounds. The Supreme
Court observed in
Brand X
that “the agency . . . must consider varying interpretations and the wisdom of
its policy on a continuing basis
, for example in response to . . . a change in administrations.”
In
addition, if an agency’s predictions “prove erroneous, the Commission will need to reconsider” the
associated regulatory actions “in accordance with its continuing obligation to practice
reasoned decision
making.”
In short, the Commission’s reasoned determination today that classifying broadband Internet
access service as an information service is superior both as a matter of textual interpretation and public
policy suffices to support
the change in direction
even absent any new facts or changes in
circumstances. But even assuming such new facts were necessary, the record provides several other
suffic
ient
d independent bas
es for our decision to revisit the classification of broadband
(Continued from previous page)
leadership. . . . In short, nothing in the APA requires the Commission to base its reinstatement of an ‘information
service’ classific
ation on any findings of fact that post
date the
Title II Order
.”).
Brand X
, 545 U.S. at 981
USTelecom
Federal Communications Commission
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service,
this view of the
Title II O
rder’s
action faced skepticism at the time, and we find those concerns
confirmed in practice.
For example, the Wireless Telecommunications Bureau initiated inquiries i
nto
wireless ISPs’ sponsored data and zero
rated offerings, leading to a report casting
doubt on the legality of
certain types of such offerings.

Title II Order
, 30 FCC Rcd at 5603
04, para. 5.
See, e.g.
USTelecom
, 825 F.3d at 754
56 (Williams, J., concurring in part and dissenting in part).
Wireless Telecommunication Bureau, Policy Review of Mobile Broadband Operators’ Sponsored Data Offerings
for Zero Rated Content and Services (Jan. 11, 2017),
http://transition.fcc.gov/Daily_Releases/Daily_Business/2017/db0111/DOC
342987A1.pdf

Wireless Tele
communications Bureau Report: Policy Review of Mobile Broadband Operators’ Sponsored Data
Offerings For Zero Rated Content And Services
, Order, 32 FCC Rcd 1093 (WTB 2017).
See Protecting the Privacy of Customers of Broadband and Other Telecommunications
Services
, WC Docket No.
106, Report and Order, 31 FCC Rcd 13911 (2016); Protecting the Privacy of Customers of Broadband and Other
Telecommunications Services, Pub. L. No. 115
22, 131 Stat
88 (enacting S.J. Res. 34, 115th Cong. (2017)).
See
supra
Par
t III.C.1.
See, e.g.
Federal Communications Commission
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portions of that investment to any reliance on the
Title II Order
Nor are we persuaded that such
reliance would have been reas
onable in any event, given the lengthy prior history of information service
classificat

See, e.g.
, Comcast Comments at 49
50 (“If challeng
ers were to raise this [reliance] argument, it would be
their
burden to establish the reliance interests that the Commission must take into consideration: ‘[T]he extent to which’
the FCC must ‘address reliance will be affected by the thoroughness of [chall
engers’] public comments,’ and they
must present those costs with particular specificity.” (emphasis in original, footnote omitted)); AT&T Sept. 27, 2017
Ex Parte
Letter, Attach. at 3 (“Although edge providers have indeed invested billions of dollars since
2015, they
also invested billions of dollars in the years leading up to 2015, and neither INCOMPAS nor anyone else provides
any empirical basis for speculating that edge investment since 2015 would have been substantially lower in the
absence of Title II
regulation.”).
See, e.g.
, Verizon Comments at 52 (“This is not the case of an abrupt agency departure from a long
settled
Federal Communications Commission
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service as a common carrier tel
ecommunications as one adopting rules compelling the service to be
offered in a manner that is
per se
common carriage.
In particular, the
Title II Order
recognized that
classification of broadband Internet a
ccess service as a telecommunications service w
ould, absent
forbearance, subject the service and its providers to a panoply of duties and requirements ill
suited to

See, e.g.
, AT&T Comments a
t 86
87 (discussing the economic and political significance of classifying broadband
(continued….)
Federal Communications Commission
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Background
. As the
Title II Order
(Continued from previous page)
(privacy), 224 (pole attachments), 225 (services for hearing
impaired individuals), 254 (universal service), and 255
(access by persons with d
isabilities) of the Act to Internet traffic exchange).
Title II Order
, 30 FCC Rcd at 5693, para. 203.
https://pc.nanog.org/static/published/meetings/NANOG71/1434/20171003_Stronge_Optical_Illusions_Content_v1.

In particular, th
e Commission cited the congestion that affected Netflix traffic transported by transit providers
Federal Communications Commission
FCC
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Id.
at 5692, para. 202.
Because we conclude that this is the wiser course, we reject comments asserting that a dispute resolution process
s needed.
See, e.g.
, OTI New America Comments at 52.
Comcast Comments Appendix A (citing DrPeering International,
What Are The Historical Pricing Trends,
http://
drpeering.net/FAQ/What
are
the
historical
transit
pricing
trends.php
.).
See
Cox Comments at 34
35; AT&T
Comments at 48
49; Comcast Comments at 73
76.
But see
OTI New America Reply at 41 (not disputing that transit
prices have fallen, but arguing “this pr
emise is flawed. The guiding measure of the interconnection market’s health
should be the consumer experience, not transit pricing”).
OTI New America Comments at 5; M
Lab Comments at 5; NYAG Comments at 8; AT&T Reply at n.11.
See
AT&T Comments at 47;
Akamai Comments at 10
11; Netflix Reply at 5 (“By storing content closer to end
users, Open Connect and other CDNs free capacity on other parts of the network, which improves delivery for all
types of internet content, not just data stored by those CDNs.”)
See
AT&T Reply at 43
44 (explaining that “Cogent and Level 3 (and other networks originating asymmetric
traffic) have more recently entered into similarly equitable long
term agreements with AT&T and other ISPs. All
parties concur that those agreements have
completely resolved the congestion problems that Cogent, Level 3, and
others caused and then complained about several years ago” and asserting that “these new agreements were the
Federal Communications Commission
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areas, “many ISPs are a tiny
fraction of the size of upstream middle mile and transit networks or content
and edge providers.”

NTCA Comments at 8.
See
Frontier Comments at 10 (“[T]he real issue is that the few largest edge providers have sought to avoid paying
anything for the infrastructure upgrades required to accommodate their traffic . . . . In practice, these rules gave edge
https://newsroom.accenture.com/news/netflix
apple
google
microsoft
youtube
are
most
loved
brands
reveals
the
love
index
from
accenture
interactive.htm

AT&T Reply at 39, n.62 (stating that “leading edge providers such as Netflix and Google have their own
consumer relationships and vigorously promote various ‘scorecards’ that compare ISP perfor
mance”);
see also
Netflix,
ISP Speed Index
https://ispspeedindex.netflix.com
; Google,
Video Quality Report
https://www.google.com/get/videoqua
lityreport/
But see
INCOMPAS Comments at 22; Cogent Comments at 14;
OTI New America Reply at 43 (“[C]onsumers lack the knowledge and ability to hold their BIAS provider
accountable for interconnection disputes, which typically occur under a veil of secre
cy.”).
See, e.g.
, Amazon Comments at 7; Microsoft Comments at 21
22; OTI New America Comments at 53
54;
INCOMPAS Comments at 58
59; OTI New America Comments at 52
54; INCOMPAS Comments at 58
59; NYAG
Comments at 6
7; INCOMPAS Reply at 21
22; Level 3 Repl
y at 3.
Federal Communications Commission
FCC
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Forbearance
As we have reinstated the information service classification of broadband Internet access
service, the forbearance granted in the
Title II Order
is now moot.
We return to the pre
Title II Order
status quo and allow provide
rs voluntarily electing to offer broadband transmission on a common carrier
basis to do so under the frameworks established in the
Wireline Broadband Classification Order
and the
of broadband transmission services on a common carriage basis, including the ability to participate in
common tariff arrangements via the NECA pools and the availability of high
cost universal service
sup
port.
We agree with NTCA and NECA that the broadband transmission services currently
offered by
rural
LECs under tariff differ substantially from the broadband Internet access services at issue
in this proceeding, and as such are not impacted by our dec
ision to reclassify broadband Internet access
service as an information service.
The term “wireline broadband Internet access service” refers to “a
mass

See
CenturyLink Comments at 31
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operation of the communications service, but excluding dial
up Internet access service
Broadband
transmission services do not provide end user
s with direct connectivity to the Internet backbone or
content, but instead enable data traffic generated by end users to be transported to an ISP’s Access
Service Connection Point over
rural
LEC local exchange service facilities for subsequent interconnec
tion
with the internet backbone.
Carriers offering broadband transmission service have never been subject to the
Title II
Order
forbearance framework.
The
Title II Order
forbearance framework with respect to broadband

Connect America Fund, et al
., 31 FCC Rcd 3087, 3158 & n.421 (2016) (
Rate of Return USF Reform Order
).
NECA Comments at 5 & n.16.
Title II Order
, 30 FCC Rcd at 5819, para. 460.
Title II Order
, 30 F
CC Rcd at 5819, para. 460 & n.1377.
(continued….)
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that had previously been offering a broadband transmission service (subject to the full panoply of Title II
(Continued from previous page)
telecommunications service only if th
e entity that provides the transmission voluntarily undertakes to provide it
indifferently on a common carrier basis. Such an offering is a common carrier service subject to Title II.
Wireless
Broadband Internet Access
Order
22 FCC Rcd at 5913
14, 32
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Returning Broadband Privacy Authority to
the
FTC

Because federal law prohibits the FTC from regulating common carriers, the
Title II Order
divest
ed the FTC of
its authority to regulate ISPs’ privacy practices.
See
15 U.S.C. § 45(a)(1).
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framework.
In March 2017, Congress voted under the
Congressional Review Act (CRA) to disapprove
the Commission’s 2016
Privacy Order
, which prevents us from adopting rules in substantially the same
form.
Undoing Title II reclassification restores jurisdiction to the agency with the most
experience and e

2016 Privacy Order
, 31 FCC Rcd at 14051, para. 334;
see also
ITIF Comments at 16 (arguing the “FCC’s prior
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the FTC operates on a national
level across industries, which is especially important when regulating
providers that operate across state lines.
In light of the FTC’s decades of successful experience,
including its oversight of ISP privacy practices prior to 2015,
we find arguments t
hat we should decline
to reclassify to retain sector
specific control of ISP privacy practices unpersuasive.
Furthermore, the
uncertainty related to the Commission’s
current
authority over broadband privacy regulation created by
the CRA resolution of dis
approval also weighs in favor of returning jurisdiction to the FTC.
We also reject arguments that rely on the Ninth Circuit panel decision holding that the
common carrier exemption precludes FTC oversight of non
common carriage activities of common
carrier
Consistent with the Commission’s request, the Ninth
Circuit granted rehearing
en banc
of the
panel decision, and in doing so it set aside the earlier panel opinion.
In light of these considerations
(Continued from previous page)
Verizon Comments at 24;
see also
FTC Staff Comments at 20
(noting that another benefit of returning the FTC’s
jurisdiction to BIAS companies is that it will expand the number of companies eligible to sign up for the EU
U.S.
Privacy Shield Framework).
https://www.ftc.gov/sites/default/files/documents/reports/broadband
connectivity
competition
policy/v070000rep
ort.pdf
see also FTC v. Pricewert LLC
, 2010 WL 329913 at *1 (N.D. CA 2010) (enforcement
action against “a rogue service provider that recruits, hosts and participates in the distribution of illegal, malicious,
and harmful electronic content”).
FTC v. Cyberspace.com LLC
, 453 F.3d 1196, 1199
201 (9th Cir. 2006) (action
against an Internet service provider that issued checks stating in the fine print on the back, that if cashed or
https://www.ftc.gov/s
ites/default/files/documents/reports/broadband
connectivity
competition
policy/v070000report.pdf
See, e.g.
, ADT Comments at 7
8; Cause of Action Comments at 1, 4; Comm’r McSweeny Comments at 3
4, 7;
CPUC Comments at 22
24; EPIC Comments at 3
8; Free P
ress Comments at 73; Nati
onal Consumers League
Comments at
2, 10
12; Public Knowledge Comments at 89
95; Sen. Pallone et al. Comments at 8
9; Voices
Coalition Comments at 62
65; Asian Americans Advancing Justice Reply at 2; CCIA Reply at 18
19; EPIC Reply
4; League of Latin American Citizens Reply at 2
3; OTI New America Reply at 34
36. Some commenters object
that the FTC is not suited to protect privacy on the Internet, citing the FTC’s narrower authority and fewer resources
than the Commission and the
absence of specific statutory directive from Congress to the FTC to regulate privacy.
See
CDT Comments at 14; EFF Comments at 26
27; Free Press Comments at 73; Public Knowledge Comments at
94; EPIC Reply at 3; National Consumers League Reply at 6
7; OT
I New America Reply at 34
36; Public
Knowledge Reply at 38
42; Public Knowledge et al. August 30, 2017 Letter at 5
8. As discussed above, these
criticisms are unfounded.
See FTC v
AT&T Mobility LLC
, 835 F.3d 993 (9th Cir. 2016),
reh’g
en banc granted
No. 15
16585, 2017 WL
(continued….)
Federal Communications Commission
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and the benefits of reclassification, we find objec
tions based on
FTC v. AT&T Mobility
insufficient to
warrant a different outcome.
Wireline Infrastructure
To the extent today’s classification decision impacts the deployment of wireline
(Continued from previous page)
should resolve the problem by deciding to adopt the same privacy requirements as the FTC so that there would be
uniform privacy obligations throughout the Internet ecosphere”).
See Accelerating Wireline Broadband Deployment by Removing
Barriers to Infrastructure Investment
, Notice of
Proposed Rulemaking, Notice of Inquiry, and Request for Comment, 32 FCC Rcd 3266 (2017);
Improving
Competitive Broadband Access to Multiple Tenant Environments
, Notice of Inquiry, FCC 17
78 at 9, para. 21.
(June
23, 2017);
see
also
AARP Comments at 76
77; Cisco Comments at 2
3; Mobilitie Comments at 4.
There is widespread agreement in the record that the public interest supports measures that will speed
deployment of broadband throughout the Nation and inc
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attaching equipment
and we remind pole owners of their continuing obligation to offer
“rates, terms,
and conditions [that] are just and reasonable.”
We will not hesitate to take action where we identify
barriers to broadband infrastructure deployment. We have been working diligently to remove barriers to
broadband deployment and
full
y in
tend to
continue to do so.
Wireless Infrastructure

47 U.S.C. §
224(b)(1).
See
AARP Comments at 76 (acknowledging the Commission’s recent proposal of “new rules that would
diminish entry barriers associated with pole attachments”); Public Knowle
dge Comments at 100 (acknowledging the
Commission’s recent efforts to speed access to utility poles and lower other barriers to entry such as high costs).
Section 224 applies to cable and telecommunications service providers, while section 332(c)(7) appl
ies to
facilities that provide “personal wireless services,” which include “commercial mobile services, unlicensed wireless
services, and common carrier wireless exchange access services.” 47 U.S.C. § 224(d), (e), (f); 47 U.S.C.
332(c)(7)(C)(i).
Wirele
ss
Broadband Internet Access
Order
, 22 FCC Rcd 5901, 5921, 25, paras. 57
Section 332(c)(7) applies to facilities “for the provision of personal wireless services,” 47
U.S.C.
332(c)(7)(C)(ii), which include “commercial mobile services, unlicensed wi
reless services, and common carrier
wireless exchange access services.” 47 U.S.C.
332(c)(7)(C)(i).
47 U.S.C. § 332(c)(7)(B)(i)(I)
(II), (iv).
Wireless Broadband Internet Access Order
, 22 FCC Rcd at 5922
23, paras. 60
62.
Wireless Broadband
Federal Communications Commission
FCC
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nfrastructure deplo
yment as a result of today’s reclassification.
This clarification also is consistent
with our commitment to promote broadband deployment and close the digital divide.
Although the wireless infrastructure industry has changed significan
tly since the adoption
of the
Wireless
Broadband
Internet Access Order
, it remains the case that cell towers and other forms of

See
Interisle Comments at 17; Tech Freedom Comments at 96
47 U.S.C. § 332(c)(7)(C)(ii).
Over the past decade, na
tional and regional wireless carriers have been selling their towers to non
carrier entities,
with significant tower transactions in 2008, 2012, 2013, 2014 and 2015. According to the Twentieth Mobile
Wireless Competition Report released in September 2017,
“a majority of towers are now owned or operated by
independent companies rather than by mobile wireless service providers.”
Implementation of Section 6002(b) of the
Omnibus Budget Reconciliation Act of 1993; Annual Report and Analysis of Competitive Mark
et Conditions With
Respect to Mobile Wireless, Including Commercial Mobile Services
, Nineteenth Report, 31 FCC Rcd 10534, 10585,
para. 70, n. 185 (WTB 2016);
Implementation of Section 6002(b) of the Omnibus Budget Reconciliation Act of 1993;
Annual Report
and Analysis of Competitive Market Conditions With Respect to Mobile Wireless, Including
Commercial Mobile Services,
Twentieth Report, FCC 17
126, para. 44 (2017).
Cf. Acceleration of Broadband Deployment by Improving Wireless Facilities Siting Policies
29 FCC Rcd 12865,
12973, para. 270
272 (2014) (“[T]o the extent DAS or small
cell facilities, including third
party facilities such as
neutral host DAS deployments, are or will be used for the provision of personal wireless services, their siting
applicat
ions are subject to [shot clock requirements of 332(c)(7)].”);
see also
Crown Castle NG East Inc. v. Town of
Greenburgh
, 2013 WL 3357169 (S.D.N.Y. 2013),
aff’d
, 552 Fed.Appx. 47 (2d Cir. 2014) (upholding application of
section 332(c)(7) to deployments by n
service providers).
See, e.g.
Accelerating Wireless Broadband Deployment by Removing Barriers to Infrastructure Investment
Notice of Proposed Rulemaking and Notice of Inquiry, 32 FCC Rcd 3330 (2017).
USF/ICC Transformation Order, para. 60.
Para. 65 (footnotes omitted)
Federal Communications Commission
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long as high
cost support is used to
build and maintain a network
that provides both voice and broadband

In the
(continued….)
Federal Communications Commission
FCC
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the
Title II Order
promised to “exercise our pree
mption authority to preclude states
from imposing
regulations on broadband service that are inconsistent” with the federal regulatory scheme, we conclude
that we should exercise our authority to preempt any state or local requirements that are inconsistent
with
the federal deregulatory appro
ach we adopt today.
We therefore preempt any state or local measures that would effectively impose rules or
requirements that we have
repealed or
decided
to refrain from imposing in this order or that would impose
more
stringent requirements for any aspec
t of broadband service that we address in this order. Among
other things, we thereby preempt any so
called “economic” or “public utility
type” regulations,
including common
carriage requirements akin to those found in
Title II of the Act and its implemen
ting
rules, as well as other rules or requirements that we
repeal or
refrain from imposing today because they
(Continued from previous page)
Order
) (“Allowing Minnesota’s order to stand would invite similar i
mposition of 50 or more additional sets of
different economic regulations”);
Petition for Declaratory Ruling that pulver.com’s Free World Dialup is Neither
Telecommunications Nor a Telecommunications Service
, Memorandum Opinion and Order, 19 FCC Rcd. at 33
23,
para.
25 (2004) (
Pulver Order
) (“[I]f Pulver were subject to state regulation, it would have to satisfy the
requirements of more than 50 states and other jurisdictions”). Many commenters express concern that allowing
every state and local government t
o impose separate regulatory requirements on ISPs would create a patchwork of
inconsistent rules that may conflict with one another or with federal regulatory objectives, and that this would
impose an undue burden on ISPs that could inhibit broadband inves
tment and deployment and would increase costs
for consumers.
See, e.g.
, Cox Comments at 35 (ISPs “rel[y] on .
. uniform national policies to provide service on a
consistent basis across [their] footprint without being subject to a patchwork of inconsist
ent state regulation”); CTIA
Comments at 55
56 (“A patchwork quilt of state regulation of the Internet would be unworkable and deeply harmful
to consumer interests.”); NCTA Comments at 64, 67 (arguing that “inconsistent state regulation undermines ‘the
eff
icient utilization and full exploitation’ of Internet services” and that ISPs “would be forced to comply with a
patchwork of overlapping and potentially conflicting obligations absent federal preemption”); T
Mobile Comments
at 26 (“A patchwork quilt of sta
state regulation would impair providers’ ability to offer nationwide service
plans and to engage in uniform practices, undermining consumer welfare. It adds operational and financial burdens
without corresponding benefit.”); WIA Comments at 10 n.39
(“[A] patchwork of state and local requirements .
can reduce carriers’ incentives to invest and hamper their ability to make large scale deployments.”); CTIA Reply at
20 (“[Permitting state regulation] will result in obligations that differ in their pa
rticulars from those imposed by the
federal government or other states. The resulting patchwork will either balkanize a service provider’s offerings or
force the provider to conform all its offerings to the requirements of the most stringent state.”); Ver
izon Reply at 16
(“[T]he substantial burdens of piecemeal regulation by states would frustrate the federal policy to promote
broadband development through light
Federal Communications Commission
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could pose an obstacle to or place an undue burden on the provision of broadband Internet access service
and c
onflict with the deregulatory approa
ch we adopt today.
Although
we preempt state and local laws that interfere with the federal deregulatory
policy restored in this order, we do not disturb or displace the states’ traditional role in generally policing
ch matters as fraud, taxation, and g
eneral commercial dealings, so long as the administration of such
general state laws does not interfere with federal regulatory objectives.
Indeed, the continued
applicability of these general state laws is one of the
considerations that persuade us that
ISP conduct
regulation is
unnecessary here.
Nor do we deprive the states of any functions expressly reserved to
them under the Act, such as responsibility for designating eligible telecommunications carriers under
tion 214(e);
exclusive jurisdiction
over poles, ducts, conduits, and rights
way when a state
certifies that it has adopted effective rules and regulations over those matters under section 224(c);
or
authority to adopt state universal service policies
not inconsistent with the Commission
’s rules under
section 254.
We appreciate the many important functions served by our state and local partners, and

We are not
persuaded that preemption is contrary to section 706(a) of the 1996 Act, 47 U.S.C. §
1302(a), insofar
as that provision directs state commissions (as well as this Commission) to promote the deployment of advanced
telecommunications capability.
See, e.g.
NARUC Comments at 2; Public Knowledge Reply at 27. For one thing,
as discussed
infra
, we conclude that section 706 does not constitute an affirmative grant of regulatory authority, but
instead simply provides guidance to this Commission and the state com
missions on how to use any authority
conferred by other provisions of federal and state law.
See infra
Part
IV.B.3.a
. For another, nothing in thi
s order
forecloses state regulatory commissions with jurisdiction over broadband service from promoting the goals set forth
in section 706(a) through measures that we do not preempt here, such as by promoting access to rights
way under
state law, encour
aging broadband investment and deployment through state tax policy, and administering other
generally applicable state laws. Finally, insofar as we conclude that section 706’s goals of encouraging broadband
deployment and removing barriers to infrastructu
re investment are best served by preempting state regulation, we
find that section 706
supports
(rather than prohibits) the use of preemption here.
Cf.
Vonage Order
, 19 FCC Rcd at 22405, para. 1;
see also
National Association of Regulatory Utility
Commis
sioners Petition for Clarification or Declaratory Ruling that No FCC Order or Rule Limits State Authority
to Collect Broadband Data
, Memorandum Opinion and Order, 25 FCC Rcd. 5051, 5054, para. 9 (2010) (
NARUC
Broadband Data Order
) (“Classifying broadband I
Federal Communications Commission
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we fully expect that the states will “continue to play their vital role in protecting consumers from fr
aud,
enforcing fair business practic
es, for example, in advertising and billing, and generally responding to
consumer inquiries and complaints” within the framework of this order.
Legal Authority.
We conclude that the Commission has legal authority to pr
eempt
inconsistent state and local r
egulation of broadband Internet access service on several distinct grounds.
First, t
he U.S. Supreme Court and other courts have recognized that, under what is known
as the impossibility exception to state jurisdiction, t
he FCC may preempt state law when (1)
it is
impossible or impracticable to regulate the intrastate aspects of a service without affecting interstate
communications and (2)
the Commission determines that such regulation would interfere with federal
regulato
ry objectives.
Here, both conditio
ns are satisfied. Indeed, because state and local regulation of

Vonage Order
, 19 FCC Rcd at 22405, para. 1.
Cf.
ALEC Comments at 2
4 (discussing the role of state consumer
protection laws); NARUC Comments at 4 (discussing “[s]tate authority to address service quality, fraud, issues of
publi
c health and safety/reliability, and universal service”); CPUC Reply at 13 (urging the Commission to preserve
Federal Communications Commission
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Because both
interstate and intrastate commun
ications can travel over the same Internet
connection (and indeed may do so in response to a single query from a consumer)
is impossible or
impracticable for ISPs to distinguish between intrastate and interstate communic
ations over the Internet or
to apply different rules in each circumstance. Accordingly, an ISP generally could not comply with state
or local rules for intrastate communications without applying the same rules to interstate
communications.
Thus
because any effort by states to regulate
intrastate traffic would interfere with
the Commission’s treatment of interstate traffic, the first condition for conflict preemption is satisfied.
The second condition for
the impossibility exception to state ju
risdiction
is also satisfied.
For the reasons explained above, we find that state and local regulation of the aspects of broadband

Cf.
California III
, 39 F.3d at 932 (upholding preemption where “the FCC determined that it would not be
economically feasible .
. to offer the interstate portion of [enh
anced] services on an integrated basis while
maintaining separate facilities and personnel for the intrastate portion”);
Vonage Order
, 19 FCC Rcd at 22419
21,
para. 25 (discussing the difficulty of distinguishing intrastate and interstate communications ov
er IP
based services);
see also
CTIA Comments at 57 (“While there likely are some slivers of broadband communications that do not cross
state boundaries, it would be impossible to apply state regulation to those bits without affecting interstate traffic an
thereby interfering with federal aims.”); T
Mobile Comments at 26 (“During the course of a [single] fixed
broadband connection, a user in one state will almost surely interact many times with information stored in other
states and other nations. A mobil
e broadband communication involves that as well, [and] adds the possibility that
(continued….)
Federal Communications Commission
FCC
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Commission’s regulatory framework and its deregulatory approach to information services in the 1996
Act, it thus embraced our longs
tanding policy of preempting state laws t
hat interfere with our federal
policy of nonregulation.
Multiple provisions enacted by the 1996 Act confirm Congress’s approval of our
preemptive federal policy of nonregulation for information services. Section
230(b)(2) of the Act, as
added by the 19
96 Act, declares it to be “the policy of the United States” to “preserve the vibrant and
(Continued from previous page)
California III
, 39 F.3d at 931
33;
see also
Amendment of Sections 64.702 of the Commission’s Rules and
Regulations (Third Computer Inquiry) et al.
, Memorandum Opinion and Order on Reconsideration, 2 FCC Rcd
3035, 3061 n.374 (1987) (“State public utility
regulation of entry and service terms and conditions (including rates
and feature availability), ostensibly applied to ‘intrastate’ enhanced services, would have a severe impact on, and
Federal Communications Commission
FCC
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Commission decides to forbear from a provision that would otherwise apply, or if the Commission adopts
a regulation a
nd then forbears from it, but not preempt

Twenty
First Century Communications and Video Accessibility Act of 2010, Pub. L. No. 111
260, 124 Stat.
2751 (2010) (c
odified in various sections of Title 47) (CVAA),
amended by
Pub. L. No. 111
265, 124 Stat. 2795
(2010) (technical corrections).
Title II Order
Federal Communications Commission
FCC
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accessibility issues arise,
we will address those issues in separate proceedings in furtherance of our
statutory au
thority to en
sure that individuals with disabilities have adequate access to broadband
networks.
Continued Applicability of Title III Licensing Provisions
We also
note
that our decision today to classify wireless broadband Internet access
service as an
information s
ervice does not affect the general applicability of the spectrum allocation and
licensing provisions of Title III and the Commission’s rules to this service.
Title III generally provides
the Commission with authority to regulate “radio commu
nications” an
d “transmission of energy by
radio.”
Among other provisions, Title III gives the Commission the authority to adopt rules preventing
interference and allows it to classify radio stations.
It also establishes the basic licensing scheme for
adio stations
, allowing the Commission to grant, revoke, or modify licenses.
Title III further allows
the Commission to make such rules and regulations and prescribe such restrictions and conditions as may
be necessary to carry out the provisions of the
Act.
Provis
ions governing access to and use of spectrum
(and their corresponding Commission rules)
do not depend on
(Continued from previous page)
See generally
47 U.
S.C. § 610;
see also
Improvements to Benchmarks and Related Requirements Governing
Hearing Aid
Compatible Mobile Handsets; Amendment of the Commission’s Rules Governing Hearing Aid
Compatible Mobile Handsets,
Fourth Report and Order and Notice of Proposed
Rulemaking, 15 FCC Rcd 13845,
13846, para. 2 (2015) (
Hearing Aid Compatibility Order
See, e.g.
, CPUC Comments at 25
26; CTAB Comments at 8; TDI et al. Comments at 2
7; Public Knowledge
Comments at 95.
See
CenturyLink Comments at 60; ACA Reply at 30
Wireless Broadband Internet Access Order
22 FCC Rcd at 5914
15, paras. 35
37. These provisions and rules
continue to apply because the service is using radio spectrum.
See
Title III
Provisions Relating to Radio, 47 U.S.C. § 301 et seq.
See also
Enabled Services NPRM
FCC Rcd at 4918.
47 U.S.C. §§ 302, 303.
47 U.S.C.
309, 312, 316.
47 U.S.C. § 303(r).
See, e.g
.,
Interconnection and Resale Obligations Pertaining to Commercial Mobile Radio
Services
Memorandum Opinion and Order on
Reconsideration,
14 FCC Rcd 16340, 16452, para. 27 (1999).
47 U.S.C. §
230(b)(2).
These include the freedoms for consumers to (1)
(continued….)
Federal Communications Commission
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and honor this
longstanding,
bipartisan co
mmitment by adopting a light
touch framework
that
will
preserve Internet freedom for all Americans.
To implement that light
touch framework, we next reevaluate the rules and enforcement
regime adopted in the
Title II Order
. That reevaluation is informed
as it must be
by the return of
jurisdiction to the Federal Trade Commission to police ISPs for anticompetitive acts or unfair and
(Continued from previous page)
https://apps.fcc.gov/edocs_public/attachmatch/DOC
243556A1.pdf
(announcing
to further ensure that the Internet would remain a place for free and open innovation with minimal
regulation).
L. Brandeis, Other People’s Money, Chapter 5 (National Home Library Foundation ed. 1933),
available at
http://www.law.louisville.edu/library/collections/bran
deis/node/196

47 U.S.C. § 257.
See, e.g.
, Apple Reply at 3; Internet Association Comments at 30
See, e.g.
, R Street Institute Comments at 28
See, e.g.
, American Association of Law Libraries Comments at 17; Comcast Comments at 53
54; TDI et al.
Comments at 7; CWA/NAACP Comments at 18; Microsoft Comments at 15; R Street Institute Comments at 28
29;
Apple Reply at 3;
see also
TDIet al. Comments at 8 (expla
ining that transparency will help ensure that consumers
with disabilities can better understand how ISPs’ plans, terms, and practices will affect their ability to use the
applications and services of their choice).
Open Internet Order
, 25 FCC Rcd at 1793
41, 17959, paras. 53
61, 98.
Title II Order
, 30 FCC Rcd at 5669
82, paras. 154
Federal Communications Commission
FCC
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“identifying

47 U.S.C. §
257(a).
Open Internet Order
, 25 FCC Rcd at 17937, paras. 54.
Id.
at 17938
40, 17959, paras. 56
57, 98.
Id.
Verizon v. FCC
, 740 F.3d 623, 659 (D.C.
Cir. 2014).
FCC Enforcement Bureau and Office of General Counsel Issue Advisory Guidance for Compliance with Open
Internet Transparency Rule
, WC Docket No. 09
191, Public Notice, 26 FCC Rcd 9411, 9411 (2011) (
2011 Advisory
Guidance
Id.
. at 9416
. Paragraph 56 of the
Open I
nternet Order
provided the following non
exhaustive list of disclosures:
Federal Communications Commission
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FCC Enforcement Advisory, Open Int
ernet Transparency Rule: Broadband Providers Must Disclose Accurate
Information to Protect Consumers
, Public Notice, 29 FCC Rcd 8606, 8607 (2014) (
2014 Advisory Guidance
Title II Order
, 30 FCC Rcd at 5672, para. 162.
Small Business Exemption From Ope
n Internet Enhanced Transparency Requirements
, GN Docket No. 14
28,
Order, 32 FCC Rcd 1772 (2017) (
Small Provider Waiver Order
The
Title II Order
retained the requirement that providers disclose privacy policies and redress options and
provides greater
specificity with regard to the required pricing disclosure. The
Title II Order
required that providers
must disclose both the price
which includes the full monthly service charge as well as clear notation of, and
information regarding, any promotional ra
te, including the full monthly charge after the termination of the
promotion
as well as any other one time or recurring fees or surcharges the consumer may be charged. In addition,
the
Title II Order
mandated disclosure of data caps and allowances.
Title
II Order
, 30 FCC Rcd at 5672
73, para.
164.
The
Open Internet Order
, read together with the
2011 Advisory Guidance
, limited the performance characteristic
disclosures to 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 applica
tions”) and the
impact of specialized services.
Open Internet Order
, 25 FCC Rcd at 17939, para. 56;
2011 Advisory Guidance
, 26
FCC Rcd at 9416. The
Title II Order’s
additional reporting obligations expanded on these requirements, adding the
disclosure of
Federal Communications Commission
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For example, the guidance notes that for many fixed providers, performance is likely to
be consistent across the
provider’s footprint so long as the same technology is deployed and that in such a case a single disclosure for the full
service area may be sufficient. By contrast, mobile performance may vary, and the guidance suggested the use
of
CMA as an appropriate geographic area on which to base disclosures.
Guidance on Open Internet Transparency
Requirements
, Public Notice 31 FCC Rcd 5330 (2016) (
2016 Advisory Guidance
See, e.g.
ADTRAN Comments at 26
27; AT&T Comments at 11, n.7; Cen
turyLink Comments at 35; Comcast
Comments at 58
59; CTIA Comments at 18; Cox Comments at 26; Frontier Comments at 12; Sprint Comments at
13, 16; T
Mobile Comments at 18; WISPA Comments at 43; Alamo Broadband Reply at 2; CTIA Reply at 2, 43.
But see, e.g.
American Association of Community Colleges Comments at 18
19; Cogent Comments at 25
26;
CWA/NAACP Comments at 3
4, 17
18; Consumers Union Comments at 16
17; TDI et al. Comments at 7
8.
For purposes of these rules, “consumer” includes any subscriber to
(continued….)
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(Continued from previous page)
not identify which requirements from the 2010 transparency rule it believes could arguably be “onerous.” Further,
Federal Communications Commission
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rule,”
we describe the specific requirements to guide ISPs and ensure
that
consumers
entrepreneurs,
and other small businesses receive sufficient information to make our rule effective.

Open Internet Order
, 25 FCC Rcd at 17938, para. 56.
Id.
See, e.g.
CTIA Comments at 19.
See,
e.g.
, ADTRAN Comments at 26
27; American Association of Community Colleges Comments at 18
19;
Atty’s General Comments at 21
22; AT&T Comments at 11, n.7; Comcast Comments at 58
59; Cox Comments at
26; CTIA Comments at 18, 21; ESA Comments at 12; Software
and Information Industry Alliance Comments at 8
9; Verizon Comments at 19; WISPA Comments at 43; WTA Comments at 11.
See, e.g.
, ESA Comments at 12
13 (“To the extent the Commission modifies its rules to permit paid
prioritization, any such arrangements o
r other permitted discriminatory traffic practices must
be disclosed along with
Federal Communications Commission
FCC
CIRC1712
specific
protocols or protocol ports, modifies protocol fields in ways not prescribed
by the protocol standard
, or otherwise inhibits or favors certain applications or
classes of applications.
Device Attachment Rules.
Any restrictions on the types of devices and
any approval
procedures for devices to connect to the network.
Security.
Any practices used to ensu
re end
user security or security of the network,
including types of triggering conditions that cause a mechanism to be invoked (but
excluding information
that could reasonably be used to circumvent network
security).
We do not mandate disclosure of any

Open Internet Order
, 25 FCC Rcd at 179
38, para. 56.
Id.
at 17938
39, para. 56.
Id.
at 17939, para. 56. We expect ISPs to exercise their judgment in deciding whether it is necessary and
appropriate to disclose particular security measures. The Commission’s primary concern is those security measures
likely to affect a consumer’s ability
to access the content, applications, services, and devices of his or her choice. As
Federal Communications Commission
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service for real
time applications.
Impact of Non

Open Internet Order
, 25 FCC Rcd at 17939, para. 56. For pu
rposes of satisfying this requirement, fixed ISPs that
choose to participate in the Measuring Broadband America (MBA) program may disclose their results as a sufficient
representation of the actual performance their customers can expect to experience. Fix
ISPs that do not participate
Federal Communications Commission
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statutory requirements, enables consumers to make informed choices about the purchase and use of

See, e.g.
, AT&T Comments at 11, n.7; CenturyLink Comments at 34; CTIA Comments at 18; T
Mobile
Comments at 21; WTA Comments at 11. As such, we reject commenters’ assertions to the cont
rary.
See, e.g.
Cogent Comments at 25
26; CWA and NAACP Comments at 17
18; ITIC Comments at 5; TDI et al. Comments at
8.
See Title II Order
, 30 FCC Rcd at 5673
74, para. 166.
See, e.g.
, AT&T Comments at 11, n.7; CenturyLink Comments at 34
35 (highl
ighting particular concerns with
the disclosure of performance characteristics in the
Title II Order
Cox Comments at 26; CTIA Comments at 18,
21; CTIA Reply at 2, 43; Frontier Comments at 12; Sprint Comments at 13, 16; T
Mobile Comments at 18; WISPA
Comm
ents at 18; WTA Comments at 11.
See, e.g.
, AT&T Comments at 11, n.7; CenturyLink Comments at 34; CTIA Comments at 18; T
Mobile
Comments at 21; WTA Comments at 11.
CenturyLink, Declaration of Jeff Glover at 2.
See, e.g.
AT&T Comments at 11, n.7; T
obile Comments at 21; WTA Comments at 11.
See
Notice of Office of Management and Budget Action, OMB Control No. 3060
1220 (approved Dec. 15,
2016),
available at
https://
www.reginfo.gov/public/do/PRAViewICR?ref_nbr=201612
3060
(stating that “with
regard to packet loss: i. the practical utility of packet loss as it relates to mobile performance disclosure; ii.
voluntary consensus standards would be a viable alternative”)
see also
https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=201608
; Notice of Office of Management and
Budget Action, OMB Control No. 3060
1220 (approved Dec. 15, 2016).
See, e.g.
AT&T Comments at 11, n.7; CTIA Comments at 18; Sprint Comments at 16.
See e.g.
Cogent Comments at 25
26 (“This means preserving the requirement that BIAS providers produce
(continued….)
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providing such information imposes significant costs on providers.
Weighing the additional costs to
ISPs against the limited incre
ntal benefits to consumers, entrepreneurs, and small businesses, we
conclude that the net benefits of these
additional reporting obligations
are likely negative.
The approach
we take today achieves the benefits of transparency at much lower cost than the
Title II Order
Small Providers.
Small providers have asked us to maintain the exemption found in the
Small Provider Order
to the extent that any of
additional reporting obligations still apply.
Because the
requirements we adopt today eliminate all
these additional obligations
and do not impose disparately
high burdens on small providers, we find an exemption for small providers unnecessary. Further, the
requirements are critical to ensuring that consumers have sufficient information to make inf
med choices
in their selection of ISPs and to deter ISPs from secretly
(Continued from previous page)
the transparency requirements adopted in the
Title II Order
, including the requirement to disclose packet loss);
ITIC
Comments at 5 (“ITI agrees with the 2010 and 2015 order findings that detailed disclosure of service performance in
particular, ‘promotes innovation, investment, end
(continued….)
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and we will make them available on a publicly available, easily accessible website.
By offeri
these
two options, we allow ISPs (and especially smaller ISPs) the ability to choose the least burdensome
method of disclosure that will nonetheless ensure that Commission staff, consumers, entrepreneurs, and
other small businesses have access to the in
rmation they need in carrying out our obligation to identify
(Continued from previous page)
through a single disclosure”);
2011 Advisory Guidance
, 26 FCC Rcd at 9413
(clarifying that the
Open Internet
Order
did not require providers to distribute hard copy materials or to provide extensive training to sales employees
in delivering these disclosures).
We direct the Consumer
and Governmental Affairs Bureau
, in coordina
tion with the Wireline Competition
Bureau, to issue a Public Notice explaining how ISPs can exercise this option. We note also note that ISPs that do
not transmit their disclosures to the FCC will be deemed as having elected the first option (and may late
r elect that
option despite prior transmittal by informing the Commission in a manner specified in the aforementioned Public
Notice).
See Title II Order
, 30 FCC Rcd at 5677, para. 171 (adding a requirement to directly notify end users “if their
individua
l 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”).
See Title II Order
, 30 FCC Rcd at 5680
81, paras. 179
81.
See, e.g.
, Frontier Comments at 12.
See, e.g.
Open Internet Order
, 25 FCC Rcd at 17980
81, para. 136 & n.444.
47 U.S.C. § 257(a).
47 U.S.C. § 257(c).
Federal Communications Commission
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rather than limited to those identified in the original section 257(a) proceeding.
Because sections
257(a) and
) clearly anticipate that the Commission and Congress would take steps to help eliminate
previously
identified marketplace barriers, limiting the triennial reports only to those barriers identified in
the original section 257(a) proceeding could make su
ch
reports of little to no ongoing value over time.
We thus find it far more reasonable to interpret section 257(c) as contemplating that the Commission will

This is consistent with the Commission’s historical understanding of this provision.
See, e.g.
Technology
Transitions et al.
, Order, Report and Order and Further Notice of Proposed Rulemaking, Report and Order, Order
and Further Notice of Proposed Rulemaking, Proposal for Ongoing Data Initiative, 29 FCC Rcd 1433, 1460, para.
77& n.30 (2014) (describ
ing section 257 as “mandating ongoing review to identify and eliminate ‘market entry
barriers for entrepreneurs and other small businesses in the provision and ownership of telecommunications services
and information services, or in the provision of parts
or services to providers of telecommunications services and
information services,’”);
Preserving the Open Internet; Broadband Industry Practices
, Notice of Proposed
Rulemaking, 24 FCC Rcd 13064, 13084
85, para. 51 & n.114 (2009) (same);
Comcast
BitTorrent
Order
, 23 FCC
Rcd at 13040, para. 20 (similar).
See
47 U.S.C. § 257. Although Section 257 does not specify precisely how the Commission should obtain and
analyze information for purposes of its reports to Congress, we construe the statutory mandate to “
identify” the
(continued….)
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(Continued from previous page)
mission critical applications.”); AT&T Comments at 5, 36, 38 (discussing “latency
sensiti
ve applications” such as
“autonomous cars, remote surgery,” “high
definition videoconferencing or massively multiplayer online gaming,”
and “VoIP or video”); Comcast Comments at 56; Cisco Reply at 7
8.
Cf., e.g.
, Nominum Reply at 6 (“[E]ffective disclos
Federal Communications Commission
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rule insofar
as the rule applies to ISPs that otherwise are common carriers (by virtue of other services they
offer) or are directly or indirectly owned by or affiliated with carriers.
Section 218 authorizes
disclosure requirements for such entities to encourage the
“benefits of new inventions and developments
[to] be made available to the people of the United States,”
and “to perform the duties and carry out the
objects for which [the Commission] was created.”
Likewise, as in the past,
we conclude that the
trans
parency rule for wireless ISPs advances the public interest, convenience, and necessity under Title
III.
In particular, Title III directs the Commission to promote “the development and rapid deployment
of new technologies, products, and services,” and he
lp “ensur[e] that new and innovative technologies are
readily accessible to the American people.”
Our transparency requirement will further these statutory
objectives of promoting technological development and innovation in several ways. By eliminating
market entry barriers in the provision and ownership of information services and the provision of parts
and services to information service providers
we help bring the benefits of new inventions and
developments to the public. In addition, we conclude th
at the oversight over ISPs’ practices that the
Commission, FTC, and other antitrust and consumer protection authorities can exercise as a result of the
transparency rule likewise will promote innovation and competition, spreading the benefits of
technologi
cal development to the American people broadly.
The Transparency Requirements Are Consistent With the First Amendment
. We conclude
that the transparency requirements represent permissible regulation of commercial speech.
The

See, e.g.
Open Internet Order
, 25 FCC Rcd at 17981, par
a. 137.
47 U.S.C.
§ 218.
. This includes not only duties specified earlier in section 218 itself but also other duties.
See, e.g.
U.S.C.
151;
. § 257;
., § 1302(b).
See, e.g.
Title II Order
, 30 FCC Rcd at 5725, para. 285 (citing 47 U.S
.C. §§ 301, 303, 304, 307, 309, 316);
Open
Federal Communications Commission
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ultimate effect of the req
and radio communication” in order
to help ensure that the “benefits of new inventions and developments
may be made available to the people of the United States.”
Likewise, in exercising our licensing
authority under Title III, the Commission is directed, among other things, to promote “
the development

Zauderer v. Office of Disciplinary Counsel
, 471 U.S. 626 (1985) (
Zauderer
Title II
Order
, 30 FCC Rcd at 5873
75, paras. 559
63; Geoffrey A. Manne
et al
A Conflict of Visions: How the
“21st Century First Amendment” Violates the Constitution’s First Amendment
, 13
IRST
MEND
L.
. 319, 335
(2015),
cited in
R Street Comments at 19 n.68
See, e.g.
Nat’l Ass’n of Mfrs. v. SEC
, 800 F.3d 518 (D.C. Cir. 2015).
Central Hudson Gas & Elec. Corp. v. Pub. Serv. Comm’n,
447 U.S. 557, 563
64 (1980) (
Central Hudson
).
Such interests are similar to those recognized as substantial by courts, a
s well.
See, e.g.
Prometheus Radio
Project v. FCC
, 652 F.3d 431, 465 (3d Cir. 2011) (“We agree with the FCC that the rules do not violate the First
Amendment because they are rationally related to substantial government interests in promoting competition
and
protecting viewpoint diversity.”);
DISH Network Corp. v. FCC
, 653 F.3d 771, 780 (9th Cir. 2011) (“The Supreme
Court has recognized that ‘[T]he Government’s interest in eliminating restraints on fair competition is always
substantial, even when the ind
ividuals or entities subject to particular regulations are engaged in expressive activity
protected by the First Amendment.’” (quoting
Turner Broad. Sys., Inc. v. FCC
, 512 U.S. 622, 664 (1994)
Turner
)));
Satellite Broad. & Commc’ns Ass’n v. FCC
, 275 F.3
d 337, 364 (4th Cir. 2001) (“This interest in
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and rapid deployment of new technologies, products, and services,” and “ensur[e] that new and
innovative technologies are readily accessible to the American people.”
The disclosure of information regarding broadband Internet access servi
ce characteristics,
rates, and terms
directly advance those statutory directives.

47 U.S.C. § 309(j)(3)(A), (B).
We thus disagree with arguments that there is insufficient justification for o
ur transparency requirements to
withstand First Amendment scrutiny.
See, e.g.
, CenturyLink Comments at 44
46 (“Mandated information
disclosure requirements are, therefore, unconstitutional in the absence a documented governmental justification.”).
Moreov
er, commenters do not cite precedent demonstrating that only “systematic or enduring problem[s]” can
provide the basis for requirements that withstand First Amendment scrutiny.
See id
. at 45.
See, e.g.
, AT&T Comments at 5, 36, 38; Comcast Comments at 56
(discussing applications sensitive to
performance such as “telepresence service tailored for the hearing impaired” and “telemedicine”); Cisco Reply at 7
2010 Open Internet Order
, 25 FCC Rcd at 17936
37, para. 53.
See, e.g.
, CenturyLink Comments a
t 44
45 (arguing that the additional reporting requirements would not survive
First Amendment scrutiny while also stating that “even, potentially, some of the more onerous aspects of the
disclosure requirements adopted in the 2010 Open Internet Order” migh
t not survive such scrutiny, though without
specifying the particular elements of the 2010 rules that would be of concern, or why).
Federal Communications Commission
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We thus conclude that the transparency requirements are appropriatel
y tailored to the Congressionally
recognized goals that we seek to advance.
Bright
Line and General Conduct Rules
We eliminate the conduct rules adopted in the
Title II Order
including the general
conduct rule and the prohibitions on paid prioritization,
blocking, and throttling. We do so for three
reasons. First, the transparency rule we adopt, in combination with the state of broadband Internet access
service competition and the antitrust and consumer protection laws, obviates the need for conduct rule
s by
achieving comparable benefits at lower cost. Second,
scrutinizing closely each prior conduct rule, we
find that the costs of each rule outweigh its benefits.
Third,
the record does not identify any legal
authority to adopt conduct rules for all ISPs,
and we decline to distort the market with a patchwork of
uniform, limited
purpose rules.
Transparency Leads to Openness
Transparency, competition, antitrust, and consumer protection laws achieve similar
benefits as conduct rules at lower cost. The
effect of the transparency rule we adopt is that ISP practices
that involve blocking, throttling, and other behavior that may give rise to openness concerns will be
disclosed to the Commission and the public.
As the Commission found in the
Open Interne
Order
“disclosure increases the likelihood that broadband providers will abide by open Internet principles, and
that the Internet community will identify problematic conduct and suggest fixes . . . thereby increas[ing]
the chances that harmful practices
will not occur in the first place and that, if they do, they will be quickly
remedied.”
The transparency rule will also assist “third
party experts such as independent engineers
and consumer watchdogs to monitor and evaluate network management practice
History demonstrates that public attention, not heavy
handed Commission regulation, has
been most effective in deterring ISP threats to openness and bringing about resolution of the rare incidents
that arise. The Commission has had transparency req
rements in place since 2010, and there have been
very few incidents in the United States since then that plausibly raise openness concerns.
It is telling
that the two most
discussed incidents that purportedly demonstrate the need for conduct rules, con
rning
Madison River and Comcast/BitTorrent, occurred before the Commission had in place an enforceable
transparency rule. And it was the disclosure, through complaints to the Commission and media reports of
the conduct at issue in those incidents, that
d to action against the challenged conduct.
As public access to information on ISP practices has increased, there has been a shift
toward ISPs resolving openness issues themselves with less and less need for Commission intervention.
In 2005, the Enforce
nt Bureau entered into a consent decree to resolve the allegations against
Madison
River
In 2008, Comcast reached a settlement with BitTorrent months before the Commission issued
Comcast
BitTorrent
By 2012, with a transparency rule in place, AT&T r
ersed its blocking of access
(Continued from previous page)
Riley v. National Fed’n of the Blind of N.C., Inc
., 487 U.S. 781, 800 (1988) (in contrast to the state’s
requirement
that professional fundraisers make certain disclosures in solicitations, as a “more benign and narrowly
tailored option[] . . . the State may itself publish the detailed financial disclosure forms it requires professional
fundraisers to file”).
See supra
Part IV.A.
Open Internet Order
, 25 FCC Rcd at 17936
37, para. 53.
Id.
at 17941, para. 60.
See supra
Part III.C.2
Madison River Order
, 20 FCC Rcd at 4295.
See
David Kirkpatrick, Comcast
BitTorrent: The Net’s Finally Growing Up (Mar. 28, 2008
),
http://archive.fortune.com/2008/03/27/technology/comcast.fortune/index.htm
Comcast
BitTorrent Order
, 23 FCC
��(continued….)
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to FaceTime over its cellular network on certain data plans of its own accord within approximately three
months.
This trend toward swift ISP self
resolution comes, admittedly, from only a few data points
because, with trans
rency in place, almost no incidents of harm to Internet openness have arisen,
(Continued from previous page)
Rcd at 13091 (Dissenting Statement of Comm’r McDowell
(stating that Comcast and BitTorrent “settled their
differences ‘out of court’”)
See
https://transition.fcc.gov/cgb/oiac/Mobile
Broadband
(providing timeline of events); Bob Quinn, AT&T Senior Executive Vice President of External &
https://www.attpublicpolicy.com/fcc/enabling
(AT&T Aug.
See supra
Part III.C.2
We thus reject arguments to the contrary.
See, e.g.
, EFF
Comments at 6 (“[T]he threat of regulation has kept
service providers honest.”).
See
AT&T Mobility, Notice of Apparent Liability for Forfeiture and Order, 30 FCC Rcd 6613 (2015). AT&T
contends that it did not violate the Commission’s rules.
See, e.g.
https://www.law360.com/articles/6
84070/at
calls
fcc
proposed
fine
irresponsible
unfair

Cf. 2014 Notice
, 29 FCC Rcd at 5563, para. 3 (“Today, there are no legally enforceable rules by which the
Commission can stop broadband providers from limiting Internet openness.”).
See,
e.g.
, Akamai Comments at 8
9 (“Broadband provider practices favoring affiliates are unlikely to manifest in
the type of demonstrable price hikes or output effects that are most common predicates to successful antitrust
challenges.”).
See supra
Part III.C
(collecting examples).
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protection agency to exercise the authority granted to them by Congress if ISPs
fail to live up to their
word and thereby harm consume
rs.
Transparency thus leads to openness and achieves comparable benefits to conduct rules.
Moreover
, the costs of compliance with a transparency rule are much lower than the costs of compliance
with
conduct rules.
We therefore decline to impose this
additional cost given our view that
transparency drives a free and open Internet, and in light of the FTC’s and DOJ’s authority to address any
potential harms. To the extent that conduct rules lead to

See
Olhausen Comments at 11; FTC Staff Comments at 22
23.
See
ACA Comments at v (“ACA agrees with the NPRM’s observation that disclosure requirements can be among
the least intrusive of regulatory measures at the Commission’
s disposal.”); Comcast Comments at 53
54 (asserting
that transparency requirements “are less intrusive than other forms of regulation”);
infra
Part IV.B.2
See infra
Part IV.B.2
In the
Title II Order
, the Commission created a catch
all standard intended to prohibit “current or future practices
that cause the type of harms [the Commission’s] rules are intended to address.”
Title II Order
, 30 FCC Rcd at 5659,
para. 135. This standard allows the Commis
sion to prohibit practices that it determines unreasonably interfere with
(continued….)
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might
require, without articulating any actual standard.
Even ISP practices based on consumer choice
are not presumptively permitted; they are mer
ely “less likely” to violate the rule.
Moreov
er, the
uncertainty caused by the Internet Conduct Standard goes far beyond what supporters characterize as the
flexibility in a regulatory structure that is necessary to address future harmful behavior.
thus find
that the vague Internet Conduct Stand
ard subjects providers to substantial regulatory uncertainty
and
that the record before us demonstrates that the Commission’s predictive judgment in 2015 that this
uncertainty was “likely to be short term and
(Continued from previous page)
Standard is not vague or open
ended and is similar to the rule adopted by the Commission in 2010 which also
prohibited unreasonable discrimination and was generally not opposed by ISPs); Public Knowledge Comments at
124 (asserting the
Title II Order
provides extensive guidance on
how the conduct standard would be applied
“explanations of each factor in combination with the option to obtain an Advisory Opinion puts broadband providers
on more than sufficient notice of what conduct they are and are not permitted to engage in.”).
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service off
erings or different pricing plans that benefit consumers, citing regulatory uncertainty under the
Internet Conduct Standard in particular.
Indeed, these harms are not limited to ISPs
the rule “creates
paralyzing uncertainty for app developers and other e
dge providers,” as well as equipment
manufacturers.
Even some proponents of Title II acknowledge these public interest harms.
Commenters also note that “money spent on backward
looking regulatory complianc
e is money not spent
on more productive uses, s
uch as investments in broadband plant and services.”
We anticipate that
eliminating the Internet Conduct standard will benefit consumers, increase competition, and eliminate
regulatory uncertainty that has “
a corresponding chilling effect on broadband
investment and
innovation.”
The now

Comcast Comments at
37, 45, 72 (stating that the FCC’s year
long in
vestigation into Comcast’s Stream TV,
which was not even
an Internet service, resulted in
an 18
month delay in the launch of this service); Comcast Reply
at 32;
see
also, e.g.
, ACA Comments at 19
22 (“
ACA members reported a range of negative impacts on their ability
and incentive to develop and deploy innovative new features and services and the need to alter existing business
models as a result of being subjected to
. . .[the Internet Conduct Standard]. Impacts included holding off or
delaying moving to usage
based billing and data caps and allowances, changing or abandoning existing use of these
models, and holding off or delaying launching “individualized” arrangem
ents with edge providers that would
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the
Title II Order
As described in the Report, “zero
rated” content, applications, and services are those
that end users can access without the data consumed being counted toward the usage allowances or data
caps imposed by an operator’s service plans.
But following a th
irteen
month investigation during

Wireless Telecommunication Bureau, Policy Review of Mobile Br
oadband Operators’ Sponsored Data
Offerings for Zero Rated Content and Services (WTB Jan. 11,
2017),
http://transition.fcc.gov/Daily_Releases/Daily_Business/2017/db0111/DOC
342987A1.pdf
Zero Rating Report
);
see also, e.g.
ACA Comments at 63
64; A
CT Comments at 3; ADTRAN at 17;
AT&T Econ. Decl. at 6, para. 23
Comcast Comments at 70
71; CTIA Comments at 12; Downes Comments at 24; National Multicultural
Organizations Comments at 17
18; NCTA at 37, 43.
Zero Rating Report
at 2.
. at 15
(explaining that “we lack the information at this time, needed to assess whether AT&T’s current
sponsored data price to third party providers . . . is reasonable under this standard”).
.at 10.
See, e.g.
, ACA Comments at 61, 64; Comcast Comments at 38
; Cox Comments at 31 (“Cox (like other BIAS
providers) has been forced to undertake additional costly and open
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via higher prices and/or limited service offerings and upgrades.”
The record reflects widespread
agreement from commenters with otherwise
divergent views that the Internet Conduct St
andard creates
significant
harm without countervailing benefits.
We are further persuaded that the advisory opinion process introduced in the
Title II
Order
“offers no real relief from the unintended consequences of the Internet Conduct Standard.”
The
ecord reflects that the In
ternet Conduct Standard and the advisory opinions available under it “[are]

WISPA Comments at 33;
see also
ACA Comments at 64
65 (“Given that the risks are high . . . smaller ISPs tend
to err on the side of caution, even if that means depriving their customers and communities of innovative features
and services that would
be highly beneficial and forgoing
the i
ncreased revenues these offerings would provide.
These lost opportunity costs also weigh strongly against retention of the standard.”).
See, e.g
., ACT Comments at 3; AT&T Comments at 51
52; Bennett Comments at 3; CenturyLink Comments at
32; CTIA Comment
s at 9
12; EFF Comments at 28
29; Jon Peha Light
Touch Regulation Comments at 5
6; Sprint
Comments at 5
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Innovation
. We anticipate
that lifting the ban on paid prioritization will increase network
innovation, as the record demonstrates that the ban on paid prioritization agreements has had
, and will
continue to have,
a chilling effect on network innovation g
enerally, and on the devel
opment of high
quality
service (QoS) arrangements

See
Cause of Action Comments at 3
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arrangements.
Some commenters contend that this uncertainty su
rrounding network operator
s’ ability

TIA Comments at 10
11; Nokia Comments at 13 (“[T]here is no industry consensus on whether the current Open
Internet rules that prohib
it paid prioritization apply only to arrangements between edge providers and broadband
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therefore no surprise that paid prioritization has long been
used
throughout the economy
Paid
prioritization could allow small and new edge providers to compete on a more even playing
field against
large edge providers, many of which have CDNs and other methods of distributing their content quickly
to consumers.
Efficiency
. We find that a ban on paid prioritization is also likely to reduce economic
efficiency
, also likely harming cons
umer welfare. This finding is supported by the economic literature on
two

Daniel Berninger Comments at 1; MediaFreedom Comments at 2; Bolema,
Allow Paid Prioritization
on the
Internet for More, Not Less, Capital Investment
, at 3, 7
8 (in other industries, paid prioritization encourages
investments that benefit all consumers and lower prices for price
sensitive customers); ACLP Comments at 19
(citing consumer
friendly
paid prioritization arrangements in other areas of the economy, including package
delivery, ‘freemium’ content, and TSA Precheck); Free State Comments at 50
51 (“Paid prioritization arrangements
are common throughout the economy. Evidence from other marke
ts shows that paid prioritization arrangements that
develop without regulatory intervention generally lead to more capital investment and benefit consumers. Many
states now offer optional ‘fast lanes’ on highways, for a toll, as a way of attracting investm
ent for highway projects.
Commuters who want to avoid the tolls are not excluded from the highway, while commuters willing to pay for a
faster trip have that option.”); Comcast Comments at 61
; AT&T Comments at 41 n. 73 (“[P]aid prioritization
arrangemen
ts are so ubiquitous outside the Internet context that they are an accepted part even of
regulated common
carrier regimes
involving transport
monopolists
.”).
Bolema,
Allow Paid Prioritization on the Internet for More, Not Less, Capital Investment
at 9 (a
sserting that the
ban may discourage entry of new edge providers, because paid prioritization could allow them to quickly scale up);
Media Freedom Comments at 2 (“[S]mall start
ups want the flexibility to partner with ISPs in paid priority
arrangements (or
other forms of service differentiation) in order to get a leg up, or at least stay competitive with,
their larger, well
see also
Michelle Connolly et al.,
The Digital Divide
and Other Economic Considerations for Network Neutrality
Rev. I
nd. Organ.
537, 548
(2017) (“[D]ifferent
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both subscribers and ISPs.
Moreover, the level of harm to subscribers and ISPs generally would
exceed the gain obtained by the edge providers and, thus, would lead to a reduction in total economic
welf
are.
The reasons for this are straightforward. Some edge services and their associated end users
use more data or require lower latency
; this may be the case, for example, with high
bandwidth
applications such as Netflix, which in the first half of 2016
genera
ted more than a third of all North
American Internet traffic.
Without paid prioritization, ISPs must recover these costs solely from end

Victoria Kocsis & Paul Bijl,
Network neutrality and the nature of competition between netwo
rk operators
, 4 Int’l
Econ. & Economic Policy
181 (2007) (finding ISP competition would generally reduce the harms, if any,
of paid prioritization); M. Bykowsky & W.W. Sharkey,
Net Neutrality and Market Power: Economic Welfare with
Uniform Quality
of Service
at 6
(2014),
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2468188
(finding ISPs,
https://www.sandvine.com/downloads/general/global
internet
phenomena/2016/global
internet
phenomena
report
latin
america
and
north
america.pdf

Reason Foundation Comments at 11 (“[P]aid prioritization is an efficient and fair solution to the challenges
created by bandwidth
hogging content. It enables
the platform providers
broadband ISPs
effectively and
efficiently to balance the two sides the market that they intermediate. And it ensures that content consumers and
other users each pay a fair price for access to content.”); Christopher Yoo Reply at 34
(“If paid prioritized services
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Given the extent of competition in Internet access supply, we find a ban on paid prioritization is unlikely
to im
prove economic efficiency, and if it were to do so it would only be by accident (i.e., if the efficient
second
best was to require
ISPs to provide access to edge providers at a zero price).

Economic Scholars Comments at 4
6;
see also
Hermalin and Katz,
The Economics of Product
Line Restrictions
with an Application to the Network Neutrality Debate
, 19 Information Economics and Policy at 215
(demon
strating that regulations that require a platform owner to provide a single quality of service can reduce
economic welfare
Mark
Armstrong,
Competition in Two
Sided Markets
, 37 RAND J. of Economics at 668
(2006); Jean
(continued….)
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We reject assertions that allowing paid priori
tization would lead ISPs to create artificial
scarcity on their networks by neglecting or downgrading non
paid traffic.
This argument has been
strongly criticized as having “no support in economic theory that such incentives exist or are sufficiently
str
ong as to outweigh countervailing incentives.”
Moreover, as discussed above, in practice paid
prioritization is likely to be used to deliver enhanced service for applications that need QoS guarantees.
As AT&T explains, “[l]ast
mile access is not a
zer
(Continued from previous page)
(continued….)
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Reduction in price to consumers
. Eliminating the ban on paid prioritizat
ion arrangements
(Continued from previous page)
diminishing its potential audience.”); Independent Film and Television Alliance at 5; Future of Music Comments at
1 (allowi
ng paid prioritization “would allow big [ISPs] to create new pay
play fast lanes, disadvantaging those
who cannot pay for preferential treatment, and replicating the industry’s past problems with payola.”);
American
Association of Law Libraries et al.
omments at 16 (“A world in which libraries and other noncommercial
(continued….)
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Closing the digital divide.
Paid prioritization can also be a tool in helping clos
e the
igital divide by reducing broadband Internet access service subscription prices for consumers. The zero
price rule imposed by the blanket ban on paid prioritization “imposes a regressive subsidy, transferring
wealth from the economically disadvanta
ged to
the comparatively rich by forcing the poor to support
high
bandwidth subscription services skewed towards the wealthier.”
One study concludes that “[a]t
the margin, this would cause the lowest
end users to simply stop subscribing to internet servi
ces, wh
ich
would further exacerbate the existing digital divide.”
Accordingly, economic “models . . . suggest that
network neutrality regulation is more likely to worsen than improve the digital divide.”
We reject the
contrary argument that ISPs will e
ngage i
n “virtual redlining” because, as discussed, paid prioritization is
(Continued from previous page)
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See supr
Part IV.A.2.
We therefore reject the argument that the paid prioritization ban should be modified to more squarely focus on
anticompetitive conduct.
See, e.g.
, CompTIA Comments at 6
7; Jon Peha Light Touch Comments at 8
11. While
these alternative fo
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Lastly, antitrust laws would not prevent an ISP from exe
rcising legally

See supra
paras.
122
One article
present
a simple case where edge providers charge end users leading to th
e payment flows between
edge providers and ISPs having no efficiency implications; much of the rest of the paper shows that changes as one
allows for more complexity, but with complex efficiency implications.
(continued….)
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such blocking or throttling is “unlikely to occu
r, because it must be sufficiently
blatant to be of any
benefit to the ISP, that [it] only increases the likelihood of getting caught.”
Second,
numerous
ISPs,
including the four
largest
fixed ISPs, have publicly committed not to block or throttle the con
tent that
consumers choose.
The transparency rule will ensure that ISPs reveal any deviation from these
commitments to the public, and addresses commenter concerns that consumers will not understand the
source of any blocking or throttling.
Violations
of the transparency rule wil
l be subject to our
enforcement authority. Furthermore, the FTC possesses the authority to enforce these commitments, as it
did in
TracFone
Third, the antitrust laws prohibit anticompetitive conduct, and to the extent blocki
ng
or throttling by an ISP m
(Continued from previous page)
could be caused by blocking and throttling.
See
Public Knowledge Comments at 109
111 (ISPs’ poor customer
service ratings show that they do not respond
to public outcry).
ADTRAN Comments at 25.
See
supr
a para.
142
. In a similar vein, several commenters have pointed out the efficacy of the voluntary
Internet
Policy Statement
in preserving the openness of the Internet.
See
Reason Foundation Comments at
11; Cause of
Action Comments at 3; ITTA Comments at 3.
See
Vimeo Comments at 10
11; Public Knowledge Comments at 111.
See
FTC v. TracFone Wireless, Inc.
, No. 15
EMC (N.D. Cal. Feb. 20, 2015),
https://www.ftc.gov/enforcement/cases
proceedings/132
3176/straight
talk
wireless
tracfone
wireless
inc
FTC
Staff Comments at 10
13;
supra
paras.
141
. We reject arguments that FTC enforcement of commitments and
government and private enforcement of antitrust laws are insufficient to protect consumers from blocking.
See, e.g.
NTCH/Flat Wireless Comments at 7; INCOMPAS Comments at 80
81; Public Knowle
dge Comments at 108;
Digital Content Next Comments at 2; Etsy Comments at 5; AARP Comments at 24.
See
supra
paras.
154
See supra
paras.
122
. It is therefore unsurprising that previous ISP attempts to create “walled gardens” for
their subscribers have failed, demonstrating that in the long run, demand is created by innovative edge provider
content.
See
Comcast Comments Appendix C at
18 (“Long gone are the days when AOL and Yahoo were
(continued….)
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blocking and throttling of lawful content, including ISPs,
public interest groups,
edge providers,
other content producers,
twork equipment manufacturers,
and other businesses and individuals
who use the Internet.
This consensus is among the reasons that there is scant evidence that end users,
under different legal frameworks, have been
prevented
by blocking
or
throttling fr
om accessing the
content of their choosing.
It also is among the reasons why providers have voluntarily abided by no
blocking practices even during periods where they were not legally required to do so.
As to free
expression
in particular, we note that
none of the actual incidents discussed in the
Title II Order
squarely
implicated free speech.
If anything, recent evidence suggests that hosting services,
social media
(Continued from previous page)
Comments at 111; Internet Association Comments at 27
28; AARP Comments at 16, 19
20); reduce innovation (
see,
e.g.
National Association of Realtors Comments at 2
3); harm OVDs (Vimeo Comments at 11
13; Internet
Association Comments at 27
28); disfavor content on the basis of political views (
see, e.g.
Susan Thomas
Comments at 1
2; Jon Peha Light Touch Comments at 7; P
ublic Knowledge Comments at 108; Greenlining Institute
Comments at 15
19); subject ISPs to political pressure (
see
Public Knowledge Comments at 108; Rep. Pallone et al.
Reply at 5; ITI Comments at 4); undercut the free exchange of ideas (
see, e.g.
Sen. Sc
hatz Reply at 1;
American
Association of Law Libraries et al.
Comments at 14
15; Greenlining Institute Comments at 17
19), silence diverse
voices (
see, e.g.
American Association of Law Libraries et al.
Comments at 14
15; Greenlining Institute Comments
at
18; Common Cause Letter at 1; Voices Coalition Comments at 41
42); and harm people with disabilities (
see
TDI et al. Comments at 9
10).
See, e.g.
, ACA Comments at 67
68; AT&T Comments at 2, 10, 101; Comcast Comments at 52
53; Cox
Comments at 1, Fron
tier Comments at 1, 5
6; Verizon Comments at 19
20; NCTA Comments at 54; ITTA
Comments at 3; Charter Comments at 2.
See, e.g.
, Reason Foundation Comments at 11; Free Press Comments at 67
68; Public Knowledge Comments at
112; TDI et al. Comments at 9
10; Consumers Union Comments at 3, 13
15; AARP Comments at 13
See, e.g.
, Apple Reply at 2; Twitter Reply at 2; Vimeo Comments at 10
11; Etsy Comments at 4; Mozilla
Comments at 3; Microsoft Comments at 10
18; ESA Comments at 6
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platforms,
edge providers, and other providers of virtual
Internet infrastructure are
more likely to block
content on viewpoint grounds.
Additionally, as urged by the
prior
Commission when defending the
Title II Order
, and as
confirmed in the concurrence in the denial of rehearing
en banc
by the two judges in the majority in
USTelecom
, the
Title II Order
allows ISPs to offer curated services, which would allow ISPs to escape the
reach of the
Title II Order
and to filter content on viewpoint grounds.
In practice, the
Title II Order
“deregulates curated Intern

See, e.g.
, Cloudflare, Why We Terminated Daily Stormer (Aug. 16, 2017),
https://blog.cloudflare.com/why
terminated
daily
stormer/
(explaining why Cloudflare, which provides reverse proxy, CDN, and DNS services,
ceased providing these services to the neo
Nazi Daily Stormer website:
“[W]e’ve felt angry at these hateful people
https://www.eff.org/deeplinks/2017/08/fighting
neo
nazis
future
free
expression
the
consequences of their decisions have far
reaching impacts on speech around the world.”); Aaron Renn,
How
Apple and Google are censoring the mobile Web
, New York Post (Aug. 21, 2017),
https://nypost.com/2017/08/21/how
apple
and
google
are
censoring
the
mobile
web
(“What few people yet
understand is that Google and Apple have used their duopoly status to revoke the Firs
t Amendment on mobile
phones.”)
; Kevin Robill
ard,
Twitter pulls Blackburn Senate ad deemed ‘inflammatory’
, Politico (Oct. 9, 2017),
https://www.politico.com/story/2017/10/09/marsha
blackburn
twitter
(“Twitter is barring a top
Republican Senate candidate from advertising her campaign launch video on the service because a line about her
efforts to investigate Planned Parenthood was deemed “inflammatory.”); Hamza Shaban,
Gab is suing Google for
allegedl
y violating antitrust laws
, Washington Post (Sept. 15, 2017)
https://www.washingtonpost.com/news
/the
switch/wp/2017/09/15/gab
suing
google
for
allegedly
violating
antitrust
laws/?utm_term=.fa40f5467e2d
(“Google banned the social media platform
from the Google Play Store last month, citing violations of Google’s
hate speech policies.”).
USTelecom
, 855 F.3d 381, 389 (D.C. Cir. 2017) (Srinivasan, J. and Tatel, J. concurring in denial of rehearing
en
Brent Skorup Reply at 14.
See
NCTA Comments at 40 (“Ironically, then, the burdens of Title II could lead to a
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Section 706 of the 1996 Act
We conclude that the directives to the Commission in section 706(a) and (b) of the 1996
Act to promote deployment of advanced telecommunications capability are better interpreted as hortatory,
and not as grants
of regulatory authority. We thus depart from the interpretation of those provisions
adopted by the Commission beginning in the
Open Internet Order
, and return to a reading of that
language in section 706 of the 1996 Act consistent with the Commission’s o
riginal interpretation.
We adopt this reading in light of the text, structure, and history of the 1996 Act and
Communications Act. Section 706(a) directs that:
The Commission and each State commission with regulatory jurisdiction
over telecommunications s
ervices shall encourage the deployment on a
reasonable and timely basis of advanced telecommunications capability
to all Americans (including, in particular, elementary and secondary
schools and classrooms) by utilizing, in a manner consistent with the
lic interest, convenience, and necessity, price cap regulation,
regulatory forbearance, measures that promote competition in the local

47 U.S.C. § 1302(a).
47 U.S.C. § 1302(b).
See, e.g.
Policy and Rules Concerning Rates for Dominant Carriers
, CC Docket No. 87
313, Second Report and
Order, 5 FCC Rcd 6786 (1990).
47 U.S.C.
§ 160
see also, e.g.
47 U.S.C. § 332(c)(1) (providing authority to prescribe regulations designating
provisions of Title II of the Communications Act (other than sections 201, 202, 208) as inapplicable to CMRS
services or providers).
See, e.g.
, 47 U.S.C.
251
261.
See, e.g.
, 47 U.S.C.
§§ 224, 253, 254, 257.
See, e.g.
, CenturyLink Comments at 39
40; Free State Foundation Comments at 37 (“Prior Commission
precedents recognized that Section 706 is not an independent grant of agency authority but rather a
hortatory
deregulatory policy statement meant to guide agency action under other statutory sections.”); Tech Freedom/ICLE
Comments, GN Docket No. 14
et al
., at 74
75 (filed July 17, 2014) (Tech Freedom/ICLE 2014 Comments)
cited
in
Washington Legal Found
ation Comments at 9 n.20; Alamo Reply, Attach. at 11
12 (“Section 706(a) does not
contain ‘conferrals of authority, but . . . references to the exercise of authority conferred elsewhere.’”);
see also
Verizon
, 740 F.3d at 637 (“[T]his language could certain
ly be read as simply setting forth a statement of
congressional policy, directing the Commission to employ ‘regulating methods’ already at the Commission’s
disposal to achieve the stated goal of promoting ‘advanced telecommunications’ technology.”).
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normal canons of statutory interpretation, the language “other regulating methods” in section 706(a) is
best understood as consistent with the language that precedes it, and thus likewise reasonably is read as
focused
the exercise of other statutory authority like that under the Communications Act, rather than
itself constituting an independent grant of regulatory authority.
This view also comports with the
Commission’s original interpretation of the language of s
ecti
on 706(a),
avoids rendering the provisions
of section 706(a) or (b) surplusage,
and does not otherwise conflict with the statutory text. Although

See,
e.g.
, Alamo Reply, Attach. at 11
12 (“Under the
ejusdem generis
canon, which
Verizon
did not apply, the
catchall
‘other regulating methods that remove barriers to infrastructure investment’
must also refer to
preexisting authority.” (citation omitted)); C
hristopher S. Yoo Reply at 5
6 (“The phrase ‘other regulating methods
that remove barriers to infrastructure investment,’ is a classic catchall clause. Basic canons of statutory construction
require that its scope be limited to the terms that precede it.”
See, e.g.
Advanced Services Order
, 13 FCC Rcd at 24044
48, paras. 69
In particular, section 706(a) provides a general, ongoing exhortation for the Commission to encourage
deployment of advanced telecommunications capability through exercise of other authority, while section 706(b)
directs the Commission to do so by taking
“immediate action” in the event of a negative finding under the section
706(b) inquiry. 47 U.S.C.
§ 1302(a), (b). The direction in section 706(b) of the 1996 Act that the Commission
exercise other authority by taking “immediate action” in the event of a
negative finding under the section 706(b)
inquiry could, for example, form part of the basis for petition(s) for Commission rulemaking based on such other
authority in the wake of a negative finding in the section 706(b) inquiry. Although the Tenth Circui
t concluded that
the possibility of such an interpretation of section 706(b) would not unambiguously compel the conclusion that the
provision is hortatory, the court’s decision does not limit our ability to rely on that as a factor that persuades us that
ection 706(b) is better read as hortatory.
See In re FCC 11
, 753 F.3d 1015, 1053
54 (10th Cir. 2014).
See, e.g.
Ass’n of Civilian Tech. v. FLRA
, 22 F.3d 1150, 1153 (D.C. Cir. 1994).
47 U.S.C.
§ 1302(a), (b).
Arguments in the record supporting
section 706 of the 1996 Act as granting regulatory authority generally
contend that this is a permissible interpretation but do not persuade us it is the better reading.
See, e.g.
, AARP
Comments at 39
40; ACLP Comments at 26
28; American Association of C
ommunity Colleges et al. Comments at
22; ACA Comments at 72; AT&T Comments at 101
06; Black Women’s Roundtable Comments at 4; California
PUC Comments at 33; Chamber of Commerce Comments at 7
8; Cogent Comments at 22
24; Comcast Comments
at 51; CWA/NAACP Co
mments at 15
17; CompTIA Comments at 6; Cox Comments at 25
27; Entertainment
Software Association Comments at 14
16; ITIF Comments at 19; NCTA Comments at 57; Public
Knowledge/Common Cause Comments at 62; Verizon Comments at 18; WISPA Comments at 23
24; WT
Comments at 6; Association of Research Libraries Reply at 13; SIIA Reply at 13;
see also, e.g.
Comcast
600 F.3d at
658 (section 706 “at least arguably . . . delegates” authority to the Commission).
See, e.g.
Brief of Harold Furchtgott
Roth and Washington Legal Foundation,
USTelecom v. FCC
, at 13 (filed
Aug. 6, 2015) (Furchtgott
Roth/Washington Legal Foundation Brief)
cited in
Washington Legal Foundation
Comments at 9 n.20.
Federal Communications Commission
FCC
CIRC1712
exercise of that regulatory authority.
The absence of any similar language in section
706(a) and (b) of

See, e.g.
, 47 U.S.C. § 160 (authori
zing the Commission to forbear from applying the Act or Commission rules to
a telecommunications carrier or class of such carriers or a telecommunications service or class of such
services);
214(e) (imposing duties on carriers designated as eligible tele
communications carriers for universal
service support purposes);
., § 224 (requiring certain specified utilities to provide access to poles, ducts, conduit
and rights
way);
., §251 (imposing certain market
opening requirements on telecommunications
carriers, local
exchange carriers (LECs), and incumbent LECs, respectively);
., § 253 (authorizing preemption of state or local
requirements that prohibit or have the effect of prohibiting the provision of telecommunications services);
., §
254(k) (pro
hibiting telecommunications carriers from subsidizing competitive services with services not subject to
competition);
., § 259 (providing for regulation of incumbent local exchange carriers to provide access to public
switched network infrastructure unde
r certain circumstances);
., § 271 (imposing market
opening requirements on
Bell Operating Companies (BOCs) as a condition of providing in
region long distance services);
., § 652
(restricting local exchange carriers and their affiliates from acquiring
certain ownership interests in cable operators
in the carriers’ telephone service area and restricting cable operators and their affiliates from acquiring certain
ownership interests in local exchange carriers in the cable operators’ franchise area). Our
consideration of this as
one factor persuading us that section 706 of the 1996 Act is better read as hortatory is not undercut by our reliance
on section 257 as authority for disclosure requirements that provide us information needed to identify potential
barriers to entry and investment while also helping mitigate any such barriers. Although section 257 does not
expressly identify entities from which we can obtain information, other aspects of section 257 persuade us that our
interpretation of that provi
sion as a grant of authority to obtain the information we require from ISPs is necessary for
us to carry out our duties under that provision for the reasons discussed above.
See supra
Part
IV.A.3
. Here, by
contrast, this consideration combines with many others to collectively persuade us that section 706 of the 1996 Act
Federal Communications Commission
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impose thos
e same duties or adopt similar regulatory treatment largely unbound by that tailoring in a
“Miscellaneous” provision of the same legislation.
Our interpreta
tion of section 706 of the 1996 Act as hortatory also is supported by the
implications of the
Open

See, e.g.
, Free State Foundation Comments at 35
36; Tech Freedom/ICLE 20
14 Comments at 63, 70
74, 89;
Alamo Reply, Attach. at 12; Christopher S. Yoo Reply at 7.
See generally Open Internet Order
, 25 FCC Rcd at 17968
71, paras. 117
22;
see also, e.g.
Verizon
, 740 F.3d at
643 (affirming the
Open Internet Order
’s view that sec
tion 706 authority can be exercised even based on a ‘triple
cushion shot’ theory linking the regulation to deployment of advanced telecommunications capability).
See, e.g.
Stevens Report
, 13 FCC Rcd at 11520
26, paras. 39
48;
see also, e.g.
, Furchtgott
Roth/Washington
Legal Foundation Brief at 15 (“It is nonsensical to suggest that the same Congress that went out of its way to protect
information services from common
carrier requirements simultaneously and
sub silentio
authorized the Commission
to compel
information service providers to act as common carriers.”).
47 U.S.C.
§230(b)(2). The
Open Internet Order
asserted that “[m]aximizing end
user control is a policy goal
Congress recognized in Section 230(b) of the Communications Act.”
Open Internet Ord
, 25 FCC Rcd at 17944
45, para. 71. In full, however, section 230(b)(3) states that “[i]t is the policy of the United States
. . . to encourage
the development of technologies
which maximize user control over what information is received by individual
s,
Federal Communications Commission
FCC
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230 likewise is in tension with the
view that section 706(a) and (b) grant the Commission regulatory
authority as the Commission prev
iously claimed.
These inconsistencies are avoided, however, if the
deployment directives of section 706(a) and (b) are viewed as hortatory.
Prior Commission
guidance regarding how it would interpret and apply the authority it
claimed under section 706(a)
and (b) of the 1996 Act does not allay our concerns with the interpretation
of those provisions as grants of regulatory authority. For example, the
Open Int

See, e.g.
, CenturyLink Comments at 41; CEI Comments at 4; Washington Legal Foundation Comments at 7
8;
Alamo Reply at 10
11; Coalition of
83 Organizations
et al
. Reply at 1.
Open Internet Order
Federal Communications Commission
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Nor are the specific, problematic implications we identify with the Commission’s prior

Open Internet Order
, 25 FCC Rcd at 17970, par
a. 121.
See Verizon
, 740 F.3d at 640. Perhaps if the Commission required a tighter connection between a given
regulatory action and promoting deployment of advanced telecommunications capability, it might reduce the
magnitude of the inconsistency somewh
at, but the record does not reveal that such an approach would eliminate it
entirely or even diminish it to such an extent as to materially strengthen the argument for interpreting the relevant
provisions of section 706(a) and (b) as grants of regulatory a
uthority.
See, e.g.
, AT&T Comments at 104
(discussing how the Commission should limit its exercise of section 706 authority). Such proposals also do not
address the other reasons for viewing sections 706(a) and (b) as hortatory in light of the statuto
ry text and structure.
See, e.g.
Open Internet Order
, 25 FCC Rcd at 17968, 17972, paras. 117, 123.
Open Internet Oder
, 25 FCC Rcd at 17969, para. 119.
Verizon
, 740 F.3d at 656. The
Title II Order
continued to hold out the possibility that the inter
(continued….)
Federal Communications Commission
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We also are unpersuaded b
y the
Open Internet Order
’s citation of legislative histor
y to
support its interpretation of section 706(a) and (b) as grants of regulatory authority. The
(Continued from previous page)
a serious constraint on claimed section 706(a) and (b) authority if a matter is addressed by the Communications Act
(such as in sections 201 and 202, the market
opening provisio
ns in sections 251
261, provisions designed to address
barriers to infrastructure deployment like sections 224 and 254, or other provisions).
See, e.g.
, ACLP Comments at
28 (discussing potential use of section 706 to address harms caused by edge providers
); Black Women’s Roundtable
Comments at 5, 6
7 (discussing potential use of section 706 to address redlining and to provide universal service
support for broadband Internet access service); Cogent Comments at 22 (discussing potential use of section 706 to
address Internet interconnection). Thus, interpreting the Communications Act as a more serious constraint might
partially address one basis for interpreting section 706(a) and (b) as hortatory, but simultaneously would undercut
the arguments in the record
for interpreting them as grants of authority.
Open Internet Order
, 25 FCC Rcd at 17969
70, para. 120 (quoting S. Rep. No. 104
23, at 50
51 (Mar. 30,
1995)), quoted in
Verizon v. FCC
, 740 F.3d at 639.
Advanced Services Order
, 13 FCC Rcd at 24046, para.
S. 652, § 304(b) (reported in the Senate, Mar. 30, 1995, emphasis added).
47 U.S.C.
§ 1302(b);
see also, e.g.
, Tech Freedom/ICLE 2014 Comments at 79 (“Beyond the Senate committee
report, there is essentially no discussion of Section 706 in the leg
islative history. This would be bizarre if, indeed,
Section 706 were intended to be alternative to the rest of the Act as a basis for regulation (even without trumping
specific provisions of the Act).”).
H.R. Conf. Rep. No. 104
458, at 224
25 (Jan. 31,
1996);
see also, e.g.
, Free State Foundation Comments at 36
(“You would have to believe that a Republican Congress with a deregulatory mandate inserted very vague language
into the statute to give complete authority over the Internet and broadband to the F
CC, but then didn’t tell a soul. It
didn’t show up in the writings, it didn’t show up in the summaries. It didn’t show up in any of the stories at the
time.” (quoting speech by Commissioner O’Rielly)).
See, e.g.
, Free State Foundation Comments at 36 (“
You would have to believe that the conference committee
intended to codify Section 706 outside of the Communications Act, thereby separating it from the enforcement
provisions of the Act, Title V, but somehow we still expected it to be enforced. [The Commu
nications Act was not
amended to include Section 706.]” (quoting speech by Commissioner O’Rielly)); Furchtgott
Roth/Washington
Legal Foundation Brief at 13
14 (“Section 706 similarly fails to grant FCC the authority to enforce compliance by
requiring payme
nt for noncompliance.”).
See, e.g.,
Telecommunications Act of 1996, §
1(b) (“Except as otherwise expressly provided, whenever in this
Act an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the
��(continued….)
Federal Communications Commission
FCC
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Communications Act.
Thus
, the Communications Act provisions generally authorizing penalties do
not apply to section 706 of the 1996 Act or rules adopted thereunder.
Although the
Title II Order
claimed that section 706 of
the 1996 Act included an implicit grant of enforcement au
thority,
even
under that theory, an ‘implicit’ grant of enforcement authority might enable actions like declaratory
rulings or cease
and
desist orders, but would not appear to encompass authority t
o impose penalties given
the absence of statutory language
clearly granting that authority.
As a fallback, the
Title II Order
asserted, without elaboration, that by relying on the grant of rulemaking authority in section 4(i) of the
Communications Act to
adopt rules implementing section 706 of the 1996 Act, the
resulting rules would
be within the scope of those for which forfeitures could be imposed under the Communications Act.
We believe that the better view is that reliance on the Communications Act
for
rulemaking authority alone would not render the resulting rules “issued by the Commission under [the
Communications] Act” as required to trigger the forfeiture provisions of section 503 of the Act. Given
that section 503 is about enforcement conseque
nces from violating standards of conduct specified by,
among other things, relevant Commission rules, we think that language is best read as focused on rules
implementing the Commission’s substantive regulatory authority under the Communications Act. Inso
far
as the substantive standard to which an entity is being held flows not from the Communications Act but
from the Commission’s assertion of authority under the 1996 Act, we believe that our forfeiture authority
(Continued from previous page)
ref
erence shall be considered to be made to a section or other provision of the Communications Act of 1934 (47
U.S.C. 151 et seq.).”);
. § 706
(adopting section 706 without any “amendment to, or repeal of, a section or other
provision”); Broadband Data Impr
ovement Act, Pub. L. No. 110
385 (2008), §
103 (modifying the section 706
inquiry process by amending “Section 706
of the Telecommunications Act of 1996
” (emphasis added)). Although
the
Verizon
court, in addition to other reasoning, referenced the stateme
nt in
Iowa Utils. Bd.
that “Congress
expressly directed that the 1996 Act . . . be inserted into the Communications Act,” that case dealt only with
provisions of the 1996 Act that were expressly inserted into the Communications Act.
See Verizon
, 740 F.3d
at 650
(quoting
AT&T Corp. v. Iowa Utils. Bd.
, 525 U.S. 366, 377 (1999)).
Where Congress intended a statute outside the Communications Act to be enforced as if it were part of the
Communications Act, it has expressly stated that in the relevant statute.
See, e.g.
, Middle Class Tax Relief and Job
Creation Act of 2012, Pub. L. N
o. 112
96, 126 STAT. 156, Title VI, § 6003 (2012) (“The Commission shall
implement and enforce this title as if this title is a part of the Communications Act of 1934 (47 U.S.C. 151 et seq.).
A violation of this title, or a regulation promulgated under th
is title, shall be considered to be a violation of the
Communications Act of 1934, or a regulation promulgated under such Act, respectively.”); NET 911 Improvement
Act of 2008, Pub. L. No. 110
283, 122 STAT. 2620, § 101 (2008) (amending the Wireless Commun
ications and
Public Safety Act of 1999 to add a new section 6 and providing in section 6(e)(2): “The Commission shall enforce
this section as if this section was a part of the Communications Act of 1934. For purposes of this section, any
violations of thi
s section, or any regulations promulgated under this section, shall be considered to be a violation of
the Communications Act of 1934 or a regulation promulgated under that Act, respectively.”); CAN
SPAM Act of
2003, Pub. L. No. 108
187, 117 STAT. 2699, §
7(b)(10) (2003) (“Compliance with this Act shall be enforced
under the Communications Act of 1934 (47 U.S.C. 151 et seq.) by the Federal Communications Commission with
respect to any person subject to the provisions of that Act.”).
In pertinent p
art, to enforce rules under section 503(b)(1) of the Communications Act, the rules must be “issued
by the Commission under [the Communications] Act.” 47 U.S.C.
§ 503(b)(1). Other penalty provisions in the
Communications Act are specific to narrower topic
s or the statutory section in which they appear, and thus also
would not be authorized penalties for violations of rules implementing section 706 of the 1996 Act.
See, e.g.
, 47
U.S.C.
202(c), 203(e), 205(b), 214(d), 219(b), 220(d), 223(b), 362(a), 362(
b), 386(a), 386(b), 507, 554.
Title II Order
, 30 FCC Rcd at 5731, para. 298.
See, e.g.
Gold Kist, Inc. v. Dept. of Ag.
, 741 F.2d 344, 347
48 (11th Cir. 1984) (discussing precedent and
“hold[ing] that the statute must plainly establish a penal sanction
in order for the agency to have authority to impose
a penalty but that an agency has broad administrative powers to impose administrative sanctions that are not
penalties as long as the sanctions are reasonably related to the purpose of the enabling statu
te”).
Title II Order
, 30 FCC Rcd at 5731, para. 298 n.769.
Federal Communications Commission
FCC
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under section 503 of the Communications Act
consequently would not encompass such rules. The
practical inability to back up rules implementing section 706 with penalties thus undercuts the
Open

Open Internet Order
, 25 FCC Rcd at 17969
70, para. 120.
Because we otherwise find ample grounds to conclude that section 706(a) and (b) of the 1996 Act are not grants
of regulatory authority, we need not, and thus do not, address arguments claiming additional reasons to reach that
same conclusion.
See, e.g.
CEI Comments at 3
4; Free State Foundation Comments at 35; Furchtgott
Roth/Washington Legal Foundation Brief at 1; Interisle Comments at 10; Tech Freedom/ICLE 2014 Comments at
74; Washington Legal Foundation Comments at 8
9; Alamo Reply at 9
10; TechFre
edom/ALEC Reply at 7
9.
Likewise, because we conclude that section 706(a) and (b) do not grant regulatory authority at all, we need not, and
do not, address the issue of whether any authority under those provisions is, at most, deregulatory authority.
e,
e.g.
, Citizens Against Government Waste Comments at 5
7; New America Foundation Comments at 23; Tech
Freedom/ICLE 2014 Comments at 75
76; Alamo Reply, Attach. at 15. We also reject arguments that we should
wait on the completion of the latest inquiry u
nder section 706(b) before evaluating the interpretation of section 706.
See, e.g.
, New America Foundation Reply at 21
22. Under the prior interpretation, section 706(a) was a grant of
authority independent of section 706(b), and particularly insofar as
Federal Communications Commission
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ISPs.
Given that agencies like the Commission are creatures of Congress,
and given our
responsibility to bring to bear appropriate tools when interpreting and implementing the statutes we
dminister,

See, e.g.
, Akamai Comments at 13 (The NPRM “neither points to changed circumstances nor articulates any
Federal Communications Commission
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regulatory authority
for rules here.
Instead, we remain persuaded that se
ction 230(b) is hortatory,
directing the Commission to adhere to the policies specified in that provision when otherwise exercising
our authority. In addition, even assuming
arguendo
that section 230 c
ould be viewed as a grant of
Commission authority, we
are not persuaded it could be invoked to impose regulatory obligations on
ISPs. In particular, section 230(b)(2)
provides that it is U.S. policy “to preserve the vibrant and

Most arguments in t
he record regarding section 230 take the position that it does not grant regulatory authority
that we could rely on here.
See, e.g.
, AARP Comments at 37; CenturyLink Comments at 40
41; Data
Foundry/Golden Frog Comments at 31; New America Foundation Commen
ts at 24; NTCH/Flat Wireless Comments
at 5. The few suggestions that it could be such a grant of authority do not develop that theory or explain how the
Commission could adopt a different view than that identified in
Comcast
See, e.g.
Federal Communications Commission
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unrea
sonable rates or practices in the case of common carrier voice services and/or section 251(a)(1)’s
interconnection requirements for common carriers.
The
Open Internet Order
never squares these legal
theories with the statutory prohibition on treating tel
ecommunications carriers as common carriers when
they
are not engaged in the provision of telecommunications service or with the similar restriction on
common carrier treatment of private mobile services.
That
Order
also is ambiguous whether it is
relyin
g on these provisions for direct or ancillary authorit
y. If claiming direct authority, the
Open Internet
Order
fails to reconcile its theories with relevant precedent and to address key factual questions.
Even
in the more likely case that these represen
ted theories of ancillary authority, the

Open Internet Order
, 25 FCC Rcd at 17972
74, paras.
47 U.S.C.
§§ 153(51), 332(c)(2).
With respect to section 201, in the
Computer Inquiries
, for example, when the Commission concluded that
facilities
based carriers’ actions when offering enhanced services might affect the justness and reasonable
ness of
their common carrier offerings under section 201, it responded by exercising ancillary authority, rather than direct
authority under section 201.
See, e.g.
Comp. & Comms. Indus. Ass’n v. FCC
, 693 F.2d 198, 212
14 (D.C. Cir.
1982). With respect t
o section 251(a)(1), the Commission has held that that provision only involves the linking of
networks and not the transport and termination of traffic.
See, e.g.
Total Telecommunications Services, Inc. v.
AT&T Corp.
, File No. E
003, Memorandum Opinio
n and Order, 16 FCC Rcd 5726, 5736
38, paras. 22
(2001). The
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Commission[] otherwise has under law.’”
To the extent that commenters here mention section 256 at
all, they do not explain how t
he Commission could overcome that holding in
Comcast
for
purposes of
relying on that provision as authority for rules here.
An alarm company urges us to rely on section 275 of the Act, but
we see substantial
shortcomings in
using
as a basis for ancillary
authority for conduct rules. Section 275 of the Act imp
oses
certain nondiscrimination requirements on incumbent LECs related to alarm monitoring services, along
with restrictions on all LECs’ recording or use of data from calls to alarm monitoring provide
rs for
purposes of marketing competing alarm monitoring services.
Arguments that ancillary authority based
on section 275 could support rules that prohibit ISPs that also offer alarm monitoring services from
blocking or throttling alarm monitoring traffi
c or engaging in anticompetitive paid prioritization of
alarm
monitoring traffic are premised on a reading of section 275 as a far broader mandate to protecting alarm
monitoring competition than the specifics of its language support.
Given the Commission
’s existing
ability to directly apply the duties and res
trictions of section 275 to the specific entities covered by that
section, the record leaves us unable to conclude that the proposed alarm monitoring
related ISP conduct
rules are sufficiently “necess
ary” to our implementation of section 275 to satisfy the
standard for ancillary
authority under
Comcast
Nor does the record demonstrate what basis we have for the proposed
exercise of ancillary authority to regulate any ISPs that fall outside the scope
of section 275 but that offer
alarm monitoring services.
Authority With Respect to Audio and Video
. The
Open Internet Order
’s theories of
authority related to Commission oversight of audio and video offerings have significant deficiencies, as
well. In t
hat
Order
, the Commission argued that because local television stations and radio stations
distributed their content over the Internet, actions by ISPs to block, degrade, or charge unreasonable fees
for carrying such traffic would interfere with certain st
atutory responsibilities.
Once again, the
Commission w

. (quoting
Comcast
, 600 F.3d at 659).
See, e.g.
, NCTA Comments at 58.
47 U.S.C. § 275(b), (c). In addition, section 275(a) initially restricted BOCs’ provision of alarm monitoring
services until 2001. 47 U.S.C. § 275(a).
Compare
(continued….)
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(Continued from previous page)
Broad. Co.
, which
was a case involving the Commission’s promotion of the “more effective use of radio” through
chain
broadcasting rules covered by an express grant of authority in section 303(i).
See
47 U.S.C. § 307(g) and
Nat’l Broad. Co. v. U.S.
, 319 U.S. 190 (1943) cited in
See id
See supra
note
1024
Open Internet Order
5 FCC Rcd at 17975
76, 178
79, paras. 129, 131.
47 U.S.C.
§ 548(b).
Federal Communications Commission
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deliver satellite cable program
ming or satellite broadcast programming.
The minimal discussion of
this Title VI authority in the record here does not remedy that
shortcoming either.
Authority With Respect to Wireless Licensees
. Although the Commission could rely on
Title III licensi
ng authority to support conduct rules as it has in the past,
that h
istorical approach would
result in disparate treatment of ISPs, enabling conduct rules encompassing wireless ISPs, but not wireline
ISPs.
For the reasons set forth
below, we decline to adopt a patchwork of rules that subjects different
categories of ISPs
to different treatment.
In addition, applying conduct rules just to such providers
would have the anomalous result of more heavily regulating providers that face among the most
compet

Although the D.C. Circuit has accepted the possibility that “an MVPD’s lack of commercial attractiveness
[could] prevent or significantly hinder it from providing satellite programming,” it anticipated the Commission
acting on the basis of “evidence that
[the relevant conduct] ‘hinder[s] significantly,’ . . . an MVPD from competing
with the incumbent cable operator to deliver satellite programming to customers,” for example.
Cablevision Systems
Corp. v. FCC
, 649 F.3d 695, 708, 709 (D.C. Cir. 2011).
See s
upra
note
1024
See, e.g.
, Akamai Comments at 13; Digital Policy Institute, Attach. 3 Entertainment Software Association
Comments at 16; Catheri
ne Sandoval Reply, Attach. April 26, 2010 Reply, GN Docket No. 09
191, WC Docket No.
52 at 9
See, e.g.
, Akamai Comments at 13 (“With respect to mobile broadband service, for example, the Commission
can rely on what the Supreme Court has described
as its ‘expansive powers’ to license spectrum under Title III of
the Communications Act.”); Digital Policy Institute, Attach. 3 Entertainment Software Association Comments at 16
(same); Catherine Sandoval Reply, Attach. April 26, 2010 Reply, GN Docket No.
191, WC Docket No. 07
52 at
10 (“The FCC need not resort to ancillary jurisdiction to regulate wireless ISPs as it specifically reserved direct
jurisdiction over wireless ISPs under Title III’s licensing conditions and rules.”).
See supra
Part
IV.B.3.d
See, e.g.
, Implementation of Section 6002(b) of the Omnibus Budget Reconciliation Act of 1993; Annual Report
(continued….)
Federal Communications Commission
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230(b) of the Communications Act
are better read as policy pronouncements rather than grants of
regulatory authority.
In addition, section 230(b)(2) identifies Congress’ deregulatory policy for the
Internet, explaining that “[i]t is the policy of the United States . . . to preserve the vibrant and competitive
authority identified in the
Open Internet Order
or the record here would encompass only discrete subsets
of ISPs, such as ISPs that otherwise are providing common carrier
voice services; ISPs that otherwise are
cable operators or MVPDs; or ISPs that hold wireless licenses, among others. Individually, each of these
sources of authority would leave substantial segments of ISPs unaddressed by any conduct rules. In
addition,
most of the remaining sources of authority would, at most, enable the Commission to target
narrow types of behaviors, including, among other examples, actions by ISPs that otherwise offer
(Continued from previous page)
nexus may be fo
und, for example, where a private actor has operated as a ‘willful participant in joint activity with
the State or its agents.’ In the absence of such a nexus, a finding of state action may not be premised on the private
entity’s creation, funding, licens
ing, or regulation by the government.
Nor is a private entity a state actor merely
because its conduct is authorized by a state law, where its conduct is not compelled by the state.” (citations
omitted)).
See supra
Parts
IV.B.3.
IV.B.3.b
47 U.S.C.
230(b)(2).
See
Preamble to the Telecommunications Act of 1996 (“AN ACT T
https://haljsinger.wordpress.com/2017/03/01/
2016
broadband
capex
survey
tracking
investment
the
title
era

Federal Communications Commission
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conduct rules.
In various contexts
the Commission previously has recognized that such artificial
regulatory distinctions can distort the marketplace and undercut competition.
The p
rimary objectives
of th
e 1996 Act are “[t]o promote c
ompetition and reduce regulation,”
and the Commission likewise

See, e.g.
, Cause of Action Institute Comments at 3
4; CEI Comments at 2
3; CenturyLink Comments at 34;
Gogo Comments at 6; R Street Institute Comments at 22
25; CTIA Reply at 42
ee, e.g.
Business Data Services In An Internet Protocol Environment, et al
., Report and Order, 32 FCC Rcd
3459, 3531, para. 158 (2017) (explaining that “disparate forbearance treatment of carriers providing the same or
similar services is not in the publi
(continued….)
Federal Communications Commission
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(Continued from previous page)
content, applications, services, or devices, end users and edge providers would lose the control they currently have
over whether other end users and edge providers can communicate with them through the Internet. Content,
application, service and
device providers (and their investors) could no longer assume that the market for their
offerings included all U.S. end users.”);
. at 17927
28, para. 38 (“Widespread interference with the Internet’s
openness would likely slow or even break the virtuous
cycle of innovation that the Internet enables, and would likely
cause harms that may be irreversible or very costly to undo.”);
. at 17929
31, para. 42 (“For those who
(continued….)
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We find that staff from the Consumer and Governmental Affairs Bureau
other than the
Ombudsperson
have been performing the Ombudsperson functions envisioned b
y the
Title II
Order
Since the existing
rules became effective in June 2015, the Consumer and Governmental Affairs Bureau
has engaged in an ongoing review of informal consumer complaints submitted to the Ombudsperson and
to the Commission’s Consumer Comp
laint Center.
Many complaints convey frustration or
dissatisfaction with a person or entity or discuss a subject without actually alleging wrongdoing on which
the Commission may act; others represent isolated incidents that do not form a trend that allow
judicious
use
of our limited resources. Staff from the Consumer and Governmental Affairs Bureau review all
informal open Internet complaints received by the Commission, and work with staff in the Enforcement
Bureau who also monitor media reports and cond
uct additional
research to identify complaint trends so
(Continued from previous page)
utilized and only create another layer of unnecessary regulatory overhang.”).
But see
National Multi
cultural
Organizations Comments at 28
29 (“[T]he Ombudsperson serves the important role of protecting and promoting the
interest of consumers, particularly individuals from more vulnerable populations, who may be new to using
broadband and have less confid
ence in their digital literacy.”).
Quantitative data about these complaints as well as their general subject matter are publicly available, but due to
the personally identifiable information often included in these complaints, the actual complaints are n
ot typically
released.
See
Consumer Complaint Data Center,
https://www.fcc.gov/consumer
help
center
data
(last visited Nov.
20, 2017).
See
NHMC Response
at 3;
see also
Internet Freedom Coalition Reply at 7 (“[The Commission] proposes to
eliminate the ombudsperson role established to assist consumers without any analysis of the two years of
communications, approximately 1,500 emails between the ombudsperson and consumers
.”).
See,
e.g.
Adrian Abramovich, Marketing Strategy Leaders, Inc., and Marketing Leaders, Inc.
TCD
00020488, Notice of Apparent Liability, 32 FCC Rcd. 5418, para. 1 (“The Enforcement Bureau [] has investigated
complaints regarding Abramovich’s
alleged scheme involving spoofed robocalls. . .”) (
Abramovich NAL
). The
Abramovich NAL
also notes that complaints about illegal robocalls are “the number one consumer complaint
received by the Federal Communications Commission.”
Abramovich NAL
at 5418, p
ara. 1.
See also AT&T
Mobility
LLC, Notice of Apparent Liability
30 FCC Rcd 6613, 6618 para. 15 (2015) ( “[T]he Commission has
received thousands of complaints from AT&T’s unlimited data plan customers alleging that they have had their
speeds intentiona
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2017, the email address and phone number associated with the Ombudsperson received only 38 emails
and 10 calls related to the open Internet
with only 7 emails and 2 calls coming in during the 5 month
period between mid
July
and mid November 2017.
By comparison, during that same time period, the
Consumer and Governmental Affairs Bureau’s Consumer Complaint Center received roughly 7,700
complaints that consumers identified as relating to
open Internet.
These statistics mak
e clear that
onsumers have generally not been seeking out the Ombudsperson position for assistance with concerns
about Internet openness
and that consumers are comfortable working with the Consumer and
Governmental Affairs Bureau to protect their interest
Formal Co
mplaint Rules.
We similarly find that it is no longer necessary to allow for
formal complaints under Part 8 of the Act as we believe that the informal complaint process is sufficient
in this area.
We encourage consumers to file informal co
mplaints for apparent violations of the
transparency rule in order to assist the Commission in monitoring the broadband market and furthering
our goals under section 257 to identify market entry barriers.
We also note that under the revised
regulatory ap
proach adopted
today, consumers and other entities potentially impacted by ISPs’ conduct
will have other remedies available to them outside of the Commission under other consumer protection
laws
to enforce
the promises made under the transparency rule.
Advisory Opinion
s.
Because we are eliminating the conduct rules, we find that the
justification for enforcement advisory opinions no longer exists. Moreover, our experience with
enforcement advisory opinions and the evidence in the record would lead us t
o eliminate the use of
advisory opinions in the context of open Internet conduct in any event. The record indicates that
enforcement advisory opinions do not diminish regulatory uncertainty, particularly for small providers.
Rather they add costs and un
certain timelines since there is no specific timeframe within which to act,
which can also inhibit innovation.
Further, the fact that no ISP has requested an advisory opinion
since they first became available further demonstrates that they are not needed
COST
BENEFIT ANALYSI
The

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generally favorable record support
for conducting
this analysis.
Relying on the findings discussed
above in light of the record before us and as a result of our economic analysis, we use a benefit
cost
analysis framework to evaluate key decisions. While the record provides little data th
at would allow
us to
quantify the magnitudes of many of the effects, our findings with respect to the key decisions we make in
this Order allow for a reasonable assessment of the direction of the effect on economic efficiency (i.e. net
positive or net nega
tive benefits
). This
assessment
is equivalent to conducting a qualitative benefit

See, e.g.
, Free
State Foundation Comments at 61
CAGW
Comments at 4
ADTRAN Comments at 24
CALinnovates Comments at 2
AT&T Comments at 10
TechFreedom Reply at 101.
(continued….)
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To conduct the
cost
benefit analysis, we first consider the question of maintaining t
he
Titl
and improvements in productivity and innovation th
at
occur because broadb
and is a general
purpose technology. The record provides little information that
(Continued from previous page)
increase uncertainty and the unintended side effects of each element, without making each element materially more
effective.
See supra
Part III.C.1.
Since the
Title II Order
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could be used to quantify such costs, but it is reasonable to conclude that there are social costs beyond the
private costs associated with the foregon
e investment.
Next, we consider the benefits associated with maintaining the Title II classification. The
relevant comparison is what incremental benefit the Title II classification provides over and above the
Title I scenario. In the Title I scenario,
the FTC has jurisdictio

See, e.g.
(Hal
Singer, Ed Naef, Alex King, Economists Incorporated and CMA Strategy Consulting,
Assessing the Impact of
Removing Regulatory Barriers on Nex
t Generation Wireless and Wireline Broadband Infrastructure Investment
at
45 (June 2017) (discussing the impact of additional investments on spillover effects and economic output).
To the extent the benefits of maintaining the Title II classification rest in Title II supporting the rules, those
benefits are accounted for in our analysis of the rules themselves, below.
Supra
Parts IV.A.2, IV.B.1.
See supra
Parts Iv.A.2, IV.B.1.
(continued….)
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on our transparency rule’s costs, it is fairly similar to
that in the
(Continued from previous page)
each incurred half as many hours as CenturyLink, for a total of
5,362.5 (= 5*825 + 3*412.5) hours, or, at a low
$25/hour, over $134,000 per year. Because compliance costs do not scale with size, adding in the hours spent by
smaller ISPs not exempted from this provision would substantially increase these numbers.
n the same period, CenturyLink estimated its costs of meeting the Open Internet transparency requirement to be
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We also fin
d above that the benefits of the ban on paid prioritization are limited. In this
benefit
cost analysis, we consi
der the incremental benefit of the ban on paid prioritization relative to the
regulatory environment created by this Order. The regulatory environment created by this Order will
have antitrust and consumer protection enforcement in place. So we must ask
what the ban on paid
prioritization provides in additional benefits when compared to that baseline. We concluded that
transparency combined with antitrust and consumer enforcement at the FTC will be able to address the
vast majority of harms the ban on pa
id prioritization is intended to prevent. To the extent there are harms
not well addressed by this enforcement, we would expect those cases to be infrequent and involve
relatively small amounts of harm, though the record does not allow us to estimate this
magnitude.
The
record therefore supports a finding of small to zero benefits.
Based on the record available, we conclude that maintaining the ban on paid prioritization

Antitrust law, in combination with the transparency rule we adopt, is particularly well
suited to addressing any
potential or actual anticompetitive harms that may arise from paid prioritization arrangement
s. While
antitrust law
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those dockets to
be used in this proceeding.
INCOMPAS argues that the materials “are necessary to
understanding and fully analyzing incumbent broadband provi
ders’ ability and incentives to harm edge
providers.”
The motion is opposed by the three companies whose m
ateri
als would be most affected
Comcast, Charter and AT&T
as well as by Verizon.
proceeding. Further, parties reasonably expect that the
information they submit pursuant to the strictures
of a protective order will be used in accordance with the terms of that order and that the
order’s explicit
prohibitions will not be changed years later.
Before discussing the substance of INCOMPAS’s
request, we note that, as a formal
matter, the Commission does not modify protective orders to allow materials to be used in a different
pro
ceeding. Rather, where we find that the public interest is served by submitting certain materials into a
docket, we
do so, subject to a protective order specific to that proceeding if the material is confidential.

Motion of INCOMPAS to Modify Protective Orders, WC Docket No. 17
108 (filed July 17, 2017) (
INCOMPAS
Motion).
See also
Support of Motion of INCOMPAS to Modify Protective Orders, filed by Public Knowledge, WC
Docket No. 17
108 (filed July 31, 2017). The four proceedings involve Charter Communications’ acquisition of
Time Warner Cable, Inc. and B
right House Networks, MB Docket No. 15
149; Comcast Corp.’s proposed
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tens of thousands.
Nor, as a general matter, does the Commission allow for discovery by parties
which i
s essentially what INCOMPAS seeks here

SBC Communications, Inc. v. FCC
, 56 F.3d 1484, 1496 (D.C. Cir. 1995) (citing
Vermont Yankee Nuclear Power
Corp. v. NRDC
435 U.S. 519, 549 (1978)) (upholding Commissi
on determination not to include in the record
additional HSR documents submitted to DOJ in connection with same transaction).
See
47 CFR §
1.311;
WETM
TV, Inc.
, Memorandum Opinion and Order, 88 FCC 2d 1399, 1404, para. 13
(1982). Indeed, even in formal

materials, re
load the production, and then revie
w the tens of thousands of documents to select the relevant ones.
��(continued….)
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available to others also would be administratively difficult.
For example, in the recent Business Data
(Continued from previous page)
This would cost the agency significant time and funding. Further, not all documents are available in digital format,
which would create additional administrative burdens to first organize
and digitize the relevant materials.
Special Access for Price Cap Local Exchange Carriers
; AT&T Corporation Petition for Rulemaking to Reform
Regulation of Incumbent Local Exchange Carrier Rates for Interstate Special Access Services
, Order and Data
Col
lection Protective Order, 29 FCC Rcd 11657 (Wireline Comp. Bur. 2014).
See
INCOMPAS Motion
at 12.
See, e.g.
SNR Wireless LicenseCo, LLC v. FCC
868 F.3d 1021, 1037 (D.C. Cir. 2017).
Investigation of Certain Price Cap Local Exchange Carrier Business
Data Service Tariff Pricing Plans; Special
Access for Price Cap Local Exchange Carriers
Order and Protective Orders, 30 FCC Rcd at 13683, para. 9.
While Level 3 Communications objected to the information from the rulemaking proceeding being placed into
the tariff investigation docket, it did not raise confidentiality concerns. Instead, Level 3 argued that the information
was unnecessary to the resolution of the tariff investigation proceeding and that adding it to the record would
increase the costs and
burdens on the other parties and risk delaying the proceeding’s resolution.
Investigation of
Certain Price Cap Local Exchange Carrier Business Data Services Tariff Pricing Plans; Special Access for Price
��(continued….)
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Even absent the
legal and administrative barriers discussed above, the substance of the
past transaction orders compels us to deny INCOMPAS’ moti
on. When, as it has in the past, the
Commission determines a specific transaction involving certain large broadband providers
is likely to
create competitive or other public interest harm, the conditions imposed are applicable
only
to those
entities engag
ing in the transaction. Those proceedings involved some of the nation’s largest broadband
providers, and the Commission’s con
clusions were based on the specific circumstances involved. This is
because transaction review is an adjudicatory matter, involving the motives, plans, and capabilities of the
entities engaging in the transaction
(Continued from previous page)
Cap Local Exchange Carriers
, WC Docket Nos. 15
, 05
25, Opposition of Level 3 to Modify Protective Orders
(Nov. 4, 2015).
Indeed, transaction reviews specifically do not address issues that are not transaction
specific but are industry
wide.
See, e.g., Applications of Cellco Partnership d/b/a Verizo
n Wireless and SpectrumCo LLC and Cox TMI, LLC
for Consent to Assign AWS
1 Licenses
WT Docket No. 12
4, Memorandum Opinion and Order and Declaratory
Ruling, 27 FCC Rcd 10698, 10732
34, paras. 91
94 (2013)
; Application of AT&T Inc. and Qualcomm Incorporate
for Consent to Assign Licenses and Authorizations
, =Order, 26 FCC Rcd 17589, 17622, para.
79 (2011).
See,
AT&T/DIRECTV Order
, 30 FCC Rcd at 9301, Appx. B (only requiring conditions for four years
following the close of the transaction);
Comcast
BCU Order
, 26 FCC Rcd 4238, 4312, para. 178 (2011)
(explaining that the Commission placed a seven
year time limit on the condition for affiliate programming
agreements because “the video marketplace is changing, and in light of that evolution, [the Commiss
ion is] reluctant
to impose indefinite terms for conditions based upon the contractual provisions with fixed terms negotiated by the
parties”);
Charter/TWC Order
, 31 FCC Rcd at 6370, para. 86 (limiting condition on data caps to seven years
because period o
f time would “allow the edge provider market room to become more mature and better positioned to
withstand attempts by New Charter to impose data caps and UBP at levels indeed [sic
.? Should be “intended”?] to
blunt their competitiveness. Seven years may a
lso provide the high
speed BIAS provider market sufficient time to
develop further with additional investments in fiber from established wireline BIAS providers, Wireless 5G
technology, use of smartgrid fiber for broadband, additional overbuilding, and oth
er potential competitors to
traditional wired BIAS providers.”).
See Comcast
NBCU Order
, 26 FCC
Rcd 4238, 4381, Appendix A, n.11;
Adelphia Order
, 21 FCC Rcd 8203,
8277, para. 164 (2006) (citing
News Corp.
Hughes Order
19 FCC Rcd at 555, para. 179).
See
e.g
Application for Consent to the Transfer of Control of Licenses and Section 214 Authorization by Time
Warner Inc. and America Online, Inc., Transferors, to AOL Time Warner Inc., Transferee
Order, 27 FCC Rcd 638
(2012) (terminating several condi
tions as unnecessary after corporate sale);
General Motors Corporation, Hughes
Electronics Crop., Transferors and The News Corporation Limited, Transferee
, Memorandum Opinion and Order,
24 FCC Rcd 8674 (2009) (terminating some conditions due to a material
change in circumstances).
See
e.g
., INCOMPAS Comments at 69 (arguing for
ex ante
rules, including the general conduct rule).
INCOMPAS Response at 5.
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Some of the confidential information submitted in these dockets involved not just the applicants
but also third
parties. Those third
parties have a right to object to the release of their confidential information.
See
Applications
of Charter Communications, Inc. at al. for Consent to Assign or Transfer Control of Licenses and Authorizations
Order,
30 FCC Rcd at 10374, para. 26.
Cf.
Applications of Cricket License Company, LLC, et al., Leap Wireless International, Inc., and AT&T Inc. for
Consent To Transfer Control of Authorizations
, Public Notice, 28 FCC Rcd 12821 (Wireless Telecom. Bur. 2013)
(pr
oviding notice of intent to place confidential information into the record of a separate proceeding and providing
affected parties an opportunity to object).
Investigation of Certain Price Cap Local Exchange Carrier Business
Data Services Tariff Pricing P
lans; Special Access for Price Cap Local Exchange Carriers,
Motion of AT&T Inc.,
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In responding to NHMC’s underlying FOIA requests, we produced nearly 70,000 pages
of records responsive to the requests.
The documents we provided to NHMC included informal
consumer complaints
filed with the Consumer and Gover
nmental Affairs Bureau, data relating to the
complaints, responses to the informal complaints from the carrier involved in a specific complaint
all
filed by the consumer
under the category of Open Internet/Net Neutrality
and consumer complaint
corresponde
nce with the Open Internet Ombudsperson.
We provided this large quantity of documents
to NHMC on a rolling basis and made all of the documents available to the public in our FOIA Electronic
Reading Room.
Under Commission rules, and as noted by opponen
ts to the motion, “NHMC is free to put
into the record whatever it believes to be relevant via
ex parte
letters.”
NHMC began receiving the
documents it claims are relevant to the proceeding on June 20, 2017.
If NHMC be
lieved the
documents were relevant
to the proceeding at that time, it could have submitted them into the record at
any time during the course of the following [four] months. It did not.
Rather, we agree with
commenters that NHMC has raised “the mere exi
stence of these complaints as a pr

A team of thirty
two employees from across the Commission spent a total of 1,017 hours redacting co
nsumer’s
personal and sensitive material on the pages produced in accordance with the exemptions under FOIA. The
Commission undertook this large document processing effort in spite of the fact that “the voluminous amount of
separate and distinct records”
requested by NHMC constituted “unusual circumstances” under the FOIA, which
would have allowed the Commission an opportunity to significantly narrow the scope of the FOIA request.
See
U.S.C. § 552(a)(6)(B).
Typically, when a consumer files a complaint
, the consumer selects the issue that is the subject of his or her
complaint or an agent from the FCC Call Center will select a topic based on the consumer’s description of the issue.
The final production of documents was the result of negotiations bet
ween representatives of the Commission’s
Consumer & Governmental Affairs Bureau and Office of General Counsel and NHMC to narrow the scope of the
request following NHMC’s initial unreasonably burdensome FOIA requests. The ultimate FOIA production was
base
d on NHMC’s July 27, 2017 letter to the Commission accepting the Commission’s offer to provide the
following documents: “1,500 emails from ombudsperson(s);” “more than 47,000 consumer complaints;” “the
spreadsheet with data for the more than 47,000 consume
r complaints;” and “the 308 carrier responses that relate to
the initial production of 1,000 consumer complaints.”
See
NHMC Joint Motion at Attachments 8, 9.
Response to
NHMC FOIA Request, FCC.gov,
https://www.fcc.gov/resp
onse
nhm
foia
request
(last updated
Sept. 14, 2017); 5 U.S.C
552(a)(2)
(D)(ii)(I) (permitting the agency to publicly disclose documents in response to
a FOIA request th
NCTA and USTelecom Opposition at 5.
As noted by NHMC, “CGB’s first formal response to NHMC’s FOIA requests occurred
on June 20, 2017.”
NHMC Joint Motion
at 4. This first sample was followed by the full set of documents, produced on a rolling basis
on August 24, August 29, September 5, and September 14, 2017.
We are confident that NHMC is familiar with how to file
documents in ECFS that it believes are relevant to this
proceeding given the numerous filings it has made in this docket, including the NHMC Joint Motion
and NHMC
Joint Response.
AT&T Opposition at 6.
See supra
para.
295
(noting that the Consumer and Governmental Affairs Bureau and the Enforcement Bureau
have engaged in an ongoing review of consumer complaints submitted to the Ombudsperson and
the Commission’s
Consumer Complaint Center since the rules from the
Title II Order
became effective in June 2015).
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record in this proceeding, we agree with opponents to the motion that “it is
exceedingly unlikely that
these i

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contained in this proce
eding. In addition, we note that pursuant to the Small Business Paperwork Relief
Act of 2002, Public Law 107
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.
In this present document, we require any person providing broadband Internet access
service to publicly disclose accurate information regarding the network management practices,
performance, and com

See
Letter from Wirelin
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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.
IT IS FURTHER ORDERED that the INCOMPAS Petition to Mod
ify Protective Orders
is DENIED.
IT IS FURTHER ORDERED that the National Hispanic Media Coalition (NHMC)
Motion Regarding Informal Consumer Complaints is DENIED.
IT IS FURTHER ORDERED that the Commission’s Consumer & Governmental Affairs
Bureau, Reference
Information Center, SHALL SEND a copy of this Declaratory Ruling, Report and
Order, and Order
to Congress and the Government Accountability Office pursuant to the Congressional
Review Act,
see
5 U.S.C. 801(a)(1)(A).
IT IS FURTHER ORDERED that the Commissi
on’s Consumer & Governmental Affairs
Bureau, Reference Information Center, SHALL SEND a copy of this Declaratory Ruling, Report and
Order, and Order, including the Final Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy
of the Small Busine
ss Administration.
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APPENDIX A
Final Rules
The Federal Communications Commission amends 47 CFR Parts 1, 8, and 20 as follows:
PART 1
PRACTICE AND PROCEDURE
Amend section 1.49 by revising paragraph (f)(1)(i) to read as follows:
Specifications as to pleadings and documents.
(f) * * *
(1) * * *
(i)
Formal complaint proceedings under Section 208 of the Act and rules in §§1.720 through 1.736, and
pole attachment complaint proceedings under Section 224 of the Act and rul
es in §§1.1401 through
Amend the heading of part 8 to read as follows:
PART 8: INTERNET FREEDOM
Amend the authority citation for part 8 to read as follows:
AUTHORITY:
47 U.S.C. §§
201(b),
257, and 303.
Amend section 8.1 to
read as follows:
§8.1 Transparency.
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(a) Any person providing broadband Internet access service shall publicly disclose accurate information
regarding the network management practices, performance, and commercial terms of its broadband
§ 20.3 Definitions.
Commercial mobile radio service
. * * *
(b) The functional equivalent of such a mobile service described in paragraph (a) of this sectio
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 communicat
to or receive communication from all other users on the public switched network; or
(b) * * *
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 in connection with the provision of switched services.
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�� &#x/MCI; 0 ;&#x/MCI; 0 ; &#x/MCI; 1 ;&#x/MCI; 1 ;APPENDIX B
Final Regulatory Flexibility Analysis
As required by the Regulatory Flexibility Act of 1980 (RFA)
as amended, Initial
Regulatory Flexibility Analysis (IRFAs) was incorporated in th
Notice of Proposed Rule Making

5 U.S.C. § 603. The RFA, 5 U.S.C. §§ 601
612 has been amended by the Contract With America Advancement
Act of 1996, Public Law
No. 104
121, 110 Stat. 847 (1996) (CWAAA). Title II of the CWAAA is the Small
Business Regulatory Enforcement Fairness Act of 1996 (SBREFA).
Restoring Internet Freedom
, Notice of Proposed Rulemaking, 32 FCC Rcd 4434 (2017) (
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consumers make informed choices about their purchase and use of broadband services. Moreover, clear
disclosures improve consumer confidence in ISPs’ practices, ultimately incr
easing user adoption and
leading to additional investment and
innovation, while providing startups and other edge providers the
necessary information to innovate and improve products.
Our enforcement changes will ensure that ISPs will be held accountable for any
violations of the transparency rule. We eliminate the
formal complaint procedures because the informal
complaint procedure, in conjunction with other redress options including consumer protection laws, will
sufficiently protect consumers. Additionally, we eliminate the position of Open Internet Ombudsperson
because the staff from the Consumer and Governmental Affairs Bureau
other than the Ombudsperson
have been performing the Ombudsperson functions envisioned by the
Title II Order
. We also eliminate
the issuance of enforcement advisory opinions, because enf
orcement advisory opinions do not diminish
regulatory uncertainty, particularly for small providers. Instead, they add costs and uncertain timelines
since there is no specific timeframe within which to act, which can also inhibit innovation.

47 U.S.C. § 257.
47 U.S.C. § 218.
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(last visited Mar. 8, 2016).
U.S.C.
§ 601(4).
See
5 U.S.C. § 601(3)
(6).
See
SBA, Office of Advocacy, “Frequently Asked Questions, Question 1
What is a small business?”
https://www.sba.gov/sites
/default/files/advocacy/SB
FAQ
2016_WEB.pdf
(June 2016)
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9% of all businesses in the United States which translates to 28.8 million businesses.
Next, the type
of small entity described as
a “small organization” is generally “any not
for
profit enterprise which is
independently owned and operated and
is not dom
inant in its field.”
Nationwide, as of Aug 2016,
there were approximately 356,494 small organizations based on registration and tax data filed by
nonprofits with the Internal Revenue Service (IRS). Finally, the small entity described as a “sm
all
governm
ental jurisdiction” is defined generally as “governments of cities, towns, townships, villages,
school districts, or special districts, with a population of less than fifty thousand.”
U.S. Census Bureau
data from the 2012 Census of Governments
indicates
that there were
90,056
local governmental
jurisdictions consisting of general purpose governments and special purpose governments in the United
States.
Of this number there were 37, 132 General purpose governments (county
, municipal and
town
or townshi
) with populations of less than 50,000 and 12,184 Special purpose governments
(independent school districts
and special districts
) with populations of less than 50,000. The 2012
U.S. Census Bureau data for most types of governments in the l
ocal govern
ment category shows that the
majority of these governments have populations of less than 50,000.
Based on this data we estimate

See
SBA, Office of Advocacy, “Frequently Asked Questions, Question 2
How many small business are there in
the U.S.?”
https://www.sba.gov/sites/default/files/advocacy/SB
FAQ
2016_WEB.pdf
(June 2016).
5 U.S.C.
§ 601(4).
5 U.S.C. § 601(5).
See
13 U.S.C. § 161. The Census of Government is conducted every five (5) years compiling data for years
ending with “2” and
“7”.
See also
Program Description Census of Government
See
U.S. Census Bureau, 2012 Census of Governments, Local Governments by Type and State: 2012
United
States
States.
https://factfinder.census.gov/bkmk/table/1.0/en/COG/2012/ORG02.US01
. Local governmental
jurisdictions are classified in two categories
General purpose governments (county, municipal and town or
wnship) and Special purpose governments (special districts and i
ndependent school districts).
See
U.S. Census Bureau, 2012 Census of Governments, County Governments by Population
Size Group and
State: 2012
United States
States.
https://factfinder.census.gov/bkmk/table/1.0/en/COG/2012/ORG06.US01
. There
were 2,114 county governments with populations less than 50,000.
See
U.S. Census Bureau, 2012 Census of Governments,
Subcounty General
Purpose Governments by
Population
Size Group and State: 2012
United States
States.
https://factfinder.census.gov/bkmk/table/1.0/en/COG/2012/ORG07.US01
. There were 18,811 municipal and 16,207
town and township governments with populations less than 50,000.
See
U.S. Census Bureau, 2012 Census of Governments, Elementary and Secondary School Systems by
Enrollment
Size Group and State: 2012
United Stat
States.
https://factfinder.census.gov/bkmk/table/1.0/en/COG/2012/ORG11.US01
There were 12,184 independent school
districts with enrollment populations less than 50,000
See
U.S. Census Bureau, 2012 Census of Governments, Special District Governments by Function and State:
United States
States.
https://factfinder.census.gov/bkmk/table/1.0/en/COG/2012/ORG09.US01
. The U.S.
Census Bureau data did not provide a population breakout for special district governments.
See
U.S. Census Bureau, 2012 Census of Governments, County Governments by Population
Size Group and
State: 2012
United States
States
https://factfinder.census.gov/bkmk/table/1.0/en/COG/2012/ORG06.US01

Subcounty General
Purpose Governments by Populatio
Size Group and State: 2012
United States
States
https://factfinder.census.gov/bkmk/table/1.0/en/COG/2012/ORG07.US01
and
Elementary and Secondary School
Systems by En
rollment
Size Group and State: 2012
United States
States
https://factfinder.census.gov/bkmk/table/1.0/en/COG/2012/ORG11.US01
. While U.S. Census Bureau data did not
provi
de a population breakout for special district governments, if the population of less than 50,000 for this category
of local government is consistent with the other types of local governments the majority of the 38, 266 special
district governments have pop
ulations of less than 50,000.
Federal Communications Commission
FCC
CIRC1712
that at least 49,316 local government jurisdictions fall in the category of “small governmental
jurisdictions.”
Bro
adband Inte

Id.
U.S. Census Bureau, 2012 NAICS Definitions, “517110 Wired Telecommunications Carriers,”
http://www.census.gov/c
bin/sssd/naics/naicsrch?code=517110&search=2012%20NAICS%20Search

13 CFR § 121.201, NAICS code 517110.
U.S. Census Bureau, 2012 NAICS Definitions, “517919 All Other Telecommunications,”
http://www.census.gov/cgi
bin/sssd/naics/naicsrch?code=517919&search=2012%20NAICS%20Search

13 CFR § 121.201, NAICS code 517919.
http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?
pid=ECN_2012_US_51SSSZ2&prodType=table

U.S. Census Bureau,
2012 Economic Census of the United States
, Table EC0751SSSZ4, Information: Subject
Series
Establishment and Firm Size: Receipts Size of Firms for the United States: 2012 NAICS Code 517919,
http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2012_US_51SSSZ1&prodT
ype=table

Federal Communications Commission
FCC
CIRC1712
services. By exception, establishments providing satellite television distribution services using faci
lities
and infrastructure that they operate are included in this industry.”
The SBA has developed a small
business size standard for Wired Telecommunications Carriers, which consists of all such companies
having 1,500 or fewer employees.
Census data fo
r 2012 show that there were 3,117 firms that
operated that year. Of this total, 3,083 operated with fewer than 1,000 employees.
Thus, under this
size standard, the majority of firms in this industry can be considered small.
Local Exchange Carriers
(LECs).
Neither the Commission nor the SBA has developed a
size standard for small businesses specifically applicable to local exchange services. The closest
applicable NAICS Code category is for Wired Telecommunications Carriers, as defined in paragraph
12
of this IRFA. Under that size standard, such a business is small if it has 1,500 or fewer employees.
Census data for 2012 show that there were 3,117 firms that operated that year. Of this total, 3,083
operated with fewer than 1,000 employees.
The
Commission therefore estimates that most providers of
local exchange carrier service are small entities that may be affected by the rules adopted.
Incumbent Local Exchange Carriers (incumbent LECs).
Neither the Commission nor the
SBA has developed a smal
l business size standard specifically for incumbent local exchange services.
The closest applicable NAICS Code category is Wired Telecommunications Carriers as defined in
paragraph 13 of this IRFA. Under that size standard, such a business is small if it
has 1,500 or fewer
employees.
According to Commission data, 3,117 firms operated in that year. Of this total, 3,083
operated with fewer than 1,000 employees.
Consequently, the Commission estimates that most
providers of incumbent local exchange ser
vic
e are small businesses that may be affected by the rules and
policies adopted
One thousand three hundred and seven (1,307) Incumbent Local Exchange Carriers
reported that they were incumbent local exchange service providers.
Of this total, an estima
ted
have 1,500 or fewer employees.

http://www.census.gov/cgi
bin/sssd/naics/nai
csrch

See
13 CFR
120.201, NAICS Code 517110.
http://factfinder.census.gov/faces/tableservices/jsf/pages/productvie
w.xhtml?
pid=ECN_2012_US_51SSSZ2&prodType=table

See
13 CFR § 120.201, NAICS Code 517110.
2012 U.S. Economic Census, NAICs Code 517110,
http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2012_US_51SSSZ2&prodT
ype=table
See
13 CFR § 120.201, NAICS Code 517110.
2012 U.S. Economic Census, NAIC
S Code 517110,
http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2012_US_51SSSZ2&prodT
ype=table

See Tre
nds in Telephone Service
, Federal Communications Commission, Wireline Competition Bureau, Industry
Analysis and Tec
hnology Division at Table 5.3 (Sept. 2010) (
Trends in Telephone Service
Id.
Federal Communications Commission
FCC
CIRC1712
with fewer than 1,000 employees.
Based on this data, the Commission concludes that the majority of
Competitive LECs, CAPs, Sh
are
Tenant Service Providers, and Other Local Service Providers are small
entities. According to Commission data, 1,442 carriers reported that they were engaged in the provision

http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2012_US_51SSSZ5&pro
dType=table

See Trends in Telephone Service
at tbl. 5.3.
Id.
Id.
Id.
5 U.S.C. § 601(3).
Federal Communications Commission
FCC
CIRC1712
reported that they are engaged in the provision of operator services.
f 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 our adopted rules.
Other Toll Carriers
Neither
e Commission nor the SBA has developed a definition for
small businesses specifically applicable to Other Toll Carriers. This category includes toll carriers that do
not fall within the categories of interexchange carriers, operator service providers, p
paid calling card
providers, satellite service carriers, or toll resellers. The closest applicable NAICS Code category is for
Wired Telecommunications Carriers as defined above. Under the applicable SBA size standard, such a
business is small if it has 1
,500 or fewer employees.
Census data for 2012 shows that there were
3,117 firms that operated that year. Of this total, 3,083 operated with fewer than 1,000 employees.
Thus, under this category and the associated small business size standard, the ma
jo
rity of Other Toll
Carriers can be considered small. According to internally developed Commission data, 284 companies
reported that their primary telecommunications service activity was the provision of other toll carriage.
Of these, an estimated 279
ve 1,500 or fewer employees.
Consequently, the Commission
estimates that most Other Toll Carriers are small entities that may be affected by rules adopted pursuant
to the Order.
Wireless Providers
Fixed and Mobile
The
broadband Internet access service
provider category covered by these rules 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 eligibilit
events, unjust enrichment issues are implicated.
Wireless Telecommunications Carriers (except Satellite
).
This industry comprises
establishments engaged in operating and maintaining switching and transmission facilities to provide
communications via the

Trends in Telephone Service
, tbl. 5.3.
13 CFR § 121.201, NAICS code 517110.
http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?
pid=ECN_2012_US_51SSSZ5&prodType=table

Trends in Telephone
Service
at tbl. 5.3.
NAICS Code 517210.
See
https://www.census.gov/econ/isp/sampler.php?naicscode=517210&naicslevel=6#

http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2012_US_51SSSZ5&pro
dType=table

Federal Communications Commission
FCC
CIRC1712
Mobile Radio (SMR) services.
Of this total, an estimated 261 have 1,500 or fewer employees.
Consequently, the Commission estimates that approximately half of these firms can be considered small.
Thus, using availab
e data, we estimate that the majority of wireless firms can be considered small.
The Commission’s own data
available in its Universal Licensing System
indicate
that, as of October 25, 2016, there are 280 Cellular licensees that will be affected by our
actions today.
The Commission does not know how many of these licensees are small, as the Commission does not
collect that information for these types of entities. Similarly, according to internally developed
Commission data, 413 carriers reported that
hey were engaged in the provision of wireless telephony,
including cellular service, Personal Communications Service, and Specialized Mobile Radio Telephony
services.
Of this total, an estimated 261 have 1,500 or fewer employees, and 152 have more than
,500 employees.
Thus, using available data, we estimate that the majority of wireless firms can be
considered small.
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 gros
revenues of $15 million for each of the three preceding years.
The SBA has approved these
definitions.
1675 MHz Services
. This service can be used for fixed and mobile uses, except
aeronautical mobile.
An auction for one license in the 1670
675 MHz band was conducted in 2003.
One license was awarded. The winning bidder was not a small entity.
Wireless Telephony
. Wireless telephony includes cellular, personal communications
services, and specialized mobile radio telephony carriers. As not
ed, 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

See Trends in Telephone Service
at tbl. 5.3.
Id.
See
http://wireless.fcc.gov/uls
For the purposes of this FRFA, consistent with Commission practice for wireless
services, the Commission estimates the number of licensees based on the number of unique FCC Registratio
Numbers.
See
Federal Communications Commission, Wireline Competition Bureau, Industry Analysis and Technology
Division, Trends in Telephone Service at Table
5.3 (Sept. 2010) (
Trends in Telephone Service
),
https://apps.fcc.gov/edocs_public/attachmatch/DOC
301823A1.pdf

See id
Amendment of the Commission’s Rules to Establish Part 27
the Wireless Communications Service (WCS)
Report and Order, 12 FCC Rcd 10785, 10879,
para. 194 (1997).
See
Letter
from Aida Alvarez, Administrator, SBA, to Amy Zoslov, Chief, Auctions and Industry Analysis
Division, Wireless Telecommunications Bureau, FCC (filed Dec. 2, 1998)
Federal Communications Commission
FCC
CIRC1712
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.
Broadban
d 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 b
usiness” for
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 def

See
Amendment of Parts 20 and 24 of the Commission’s Rules
Broadband PCS Competitive Bidding and the
Commercial Mobile Radio Service Spec
trum Cap; Amendment of the Commission’s Cellular/PCS Cross
Ownership
Rule
, Report and Order, 11 FCC Rcd 7824, 7850
52, paras. 57
60 (1996) (
PCS Report and Order
);
see also
47 CFR
24.720(b).
See
PCS Report and Order
, 11
FCC
Rcd at 7852, para. 60.
See
Federal Communications Commission
FCC
CIRC1712
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.
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 revenu
es 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 S
MR 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 chan
nels 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.
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 sma
ll 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 busine
ss 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.
In addition, there are numerous incumbent site
site SMR licenses and licensees wit
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 rev
enues 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

See
Auction
of AWS
1 and Broadband PCS License
s Closes; Winning Bidders Announced for Auction 78
Public
Notice, 23 FCC Rcd 12749 (WTB 2008).
CFR
§ 90.814(b)(1).
See
Federal Communications Commission
FCC
CIRC1712
analysis, that a
ll of the remaining extended implementation authorizations are held by small entities, as
defined by the SBA.
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,

See
Reallocation and Service Rules
for the 698
746 MHz Spectrum Band (Television Channels 52
, Report
and Order, 17 FCC Rcd 1022 (2002) (
Channels 52
59 Report and Order
See
. at 1087
88, para. 172.
See
See
. at 1088, para. 173.
See
Federal Communications Commission
FCC
CIRC1712
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 th
e preceding three years) won 325 licenses.
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 b
usiness status (those with attributable average annual gross revenues that do not
exceed $15 million for the preceding three years) and winning five licenses.
700 MHz Guard Band Licensees
. In 2000, in the 700 MHz Guard Band Order, the
Commission adopted s
ize standards for “small businesses” and “very small businesses” for purposes of
determining their eligibility for special provisions such as bidding credits and installment payments.

700 MHz Second Repor
t and Order
, 22 FCC Rcd 15289.
See
Auction of 700 MHz Band Licenses Closes
, Public Notice, 23 FCC Rcd 4572 (WTB 2008).
See
Service Rules for the 746
764 MHz Bands
and Revisions to Part 27 of the Commission’s Rules
, Second
Report and
Order
, 15 FCC Rcd
5299 (2000) (
764 MHz Band Second Report and Order
See
at 5343,
para
. 108.
See
See
. at 5343, para. 108 n.246 (for the 746
764 MHz and 776
794 MHz bands, the Commission is exempt
from 15 U.S.C. §
632, which requires Federal agencies to
obtain SBA approval before adopting small business size
standards).
See
700 MHz Guard Bands Auction Closes: Winning Bidders Announced
, Public Notice, 15 FCC Rcd 18026
(WTB
2000
See
700 MHz Guard Bands Auction Closes: Winning Bidders Announced
, Publ
ic Notice, 16 FCC Rcd 4590
(WTB
2001
CFR
§ 121.201,
NAICS
codes 517210.
Federal Communications Commission
FCC
CIRC1712
three years not exceeding $40 million.

Amendment of Part 22 of the Commission’s Rules to Benefit the Consumers of Air
Ground Telecommunications
Services
Biennial Regulatory Review
Amendment of Parts 1
and 90
of the Commission’s Rules
Amendment of
Parts 1 and 22 of the Commission’s Rules to Adopt Competitive Bidding Rules for Commercial and General
Aviation Air
Ground Radiotelephone Service
, Order on Reconsideration and Report and Order, 20 FCC Rcd 19663,
para
s.
42 (2005).
See
Le
(continued….)
Federal Communications Commission
FCC
CIRC1712
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 approximatel
y 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
(Continued from previous page)
Federal Communications Commission
FCC
CIRC1712
licensees not already counted, we find that there are currently approxima
tely 440 BRS licensees that are
defined as small businesses under either the SBA or the Commission’s rules.
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 gr
oss 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.
In addition, the SBA’s Cable Television Distribution Services small business size
standard is applicable to EBS. Th
ere 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 operatin
g 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

Auction of Broadband Radio Service (BRS) Licenses
Scheduled for October 27
2009
Notice and Filing
Requirements
Minimum Opening Bids
Upfront Payments
and Other Procedures for Auction 86
ublic Notice, 24
FCC Rcd 8277 (2009).
. at 8296
para. 73.
Auction of Broadband Radio Service Licenses Closes
Winning Bidders Announced for Auction 86
Down
Payments Due November 23
Final Payments Due December 8
2009
Ten
Day Petition to Den
y Period
Public Notice, 24 FCC Rcd 13572 (2009).
The term “small entity” within SBREFA applies to small organizations (nonprofits) and to small governmental
jurisdictions (cities, counties, towns, townships, villages, school districts, and special distr
icts with populations of
less than 50,000). 5 U.S.C. §§
601(4)
(6). We do not collect annual revenue data on EBS licensees.
U.S. Census Bureau, 2012 NAICS Definitions, “
517110 Wired Telecommunications Carriers,” (partial
definition),
http://www.census.gov/cgi
bin/sssd/naics/naicsrch?code=517110&search=2012

13 CFR §
121.201, NAICS code 517110.
U.S. Census Bureau, 2007 Economic Census, Subject Series: Informatio
n, Receipts by Enterprise Employment
Size for the United States: 2007, NAICS code 517510 (rel. Nov. 19, 2010).
Federal Communications Commission
FCC
CIRC1712
Satellite Service Providers
Satellite
Telecommunications Providers.
Two economic census categories address the
satellite industry. Both categories have a small business size standard of $32.5 million
or less in average
annual receipts, under SBA rules.
Satellite Telecommunications.
This category comprises firms “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.”
The category has a small business size standard of $32.5
million or less in average annual receipts, under SBA rules.
For this categ
ory, Census Bureau data for
2012 show that there were a total of 333 firms that operated for the entire year.
Of this total, 299 firms
had annual receipts of less than $25 million.
Consequently, we estimate that the majority of satellite
telecommunicat
ions providers are small entities.
All Other Telecommunications.
“All Other Telecommunications” is defined as follows:
“This U.S. industry is comprised of establishments that are primarily engaged in providing specialized
telecommunications services, suc

13 CFR § 121.201, NAICS Code 517410.
U.S. Census Bureau, 2012 NAICS Definitions, “517410 Satellite Telecommunications
http://www.census.gov/naics/2007/def/ND517410.HTM

13 CFR § 121.201, NAICS code 517410.
U.S. Census Bureau,
Economic Census
of the United States
, Table EC1251SSSZ4, Information: Su
bject
Series
Estab and Firm Size:
Receipts Size of Firms for the United States: 2012
, NAICS code 517410
http://factfinder.
census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2012_US_51SSSZ4&prodT
ype=table

https://www.census.gov/econ/isp/sampler.php?naicscode=51791
9&naicslevel=6

13 CFR § 121.201; NAICS Code 517919.
U.S. Census Bureau,
2012 Economic Census of the United States
, Table EC0751SSSZ1, Information: Subject
Series
Establishment and Firm Size: Receipts Size of Firms for the United States: 2012 NAICS
Code 517919,
http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2012_US_51SSSZ1&prodT
ype=table
Federal Communications Commission
FCC
CIRC1712
Cable and Other Subscription Programming.
This industry comprises establishments
primarily engaged in operating studios and facilities for the br
oadcasting of programs on a subscription or
fee basis. The broadcast programming is typically narrowcast in nature (.e.g. limited format, such as
news, sports, education, or youth
oriented). These establishments produce programming in their own
facilities
or acquire programming from external sources. The programming material is usually delivered
to a third party, such as cable systems or direct
home satellite systems, for transmission to viewers.
The SBA has established a size standard for this industr
y stating that a business in this industry is small if
it has 1,500 or fewer employees.
The 2012 Economic Census indicates that 367 firms were
operational for that entire year. Of this total, 357 operated with less than 1,000
employees.
Accordingly we c
onclude that a substantial majority of firms in this industry are small
under the applicable SBA size standard.
Cable Companies and Systems (Rate Regulation)
The Commission has 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
indicate that there are currently 4,600 active cable systems in the United States.
Of this total, all but
nine cabl
e operators nationwide are small under the 400,000
subscriber size standard.
In addition,
under the Commission's rate regulation rules, a “small system” is a cable system serving 15,000 or fewer
subscribers.
Current Commission records show 4,600 cable
systems nationwide.
Of this total,
3,900 cable systems have fewer than 15,000 subscribers, and 700 systems have 15,000 or more
subscribers, based on the same records.
Thus, under this standard as well, we estimate that most cable
systems are small enti
ties.
Cable System Operators (Telecom Act Standard).
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 few
er than one percent of all subscribers in the
United States and is not affiliated with any entity or entities whose gross annual revenues in the aggregate

https://www.census.gov/agi
bin/ssd/naics/naicsrch

13 CFR § 121.201,
2016 NAICS Code 515210.
http://factfinder.census.gov/faces/table
services/jsf/pages/productview.xhtml?pid=ECN_2012_US_51SS
SZ5&prodT
ype=table

47 CFR § 76.901(e)
Federal Communications Commission, Assessment and Collection of Regulatory Fees for Fiscal Year 2014;
Assessment and Collection of Regulatory Fees for Fiscal Year 2013; and Procedures for Assessment and Collection
of Regulatory Fees, 80 Fed. Reg. 66815 (O
ct. 30, 2015) (citing August 15, 2015 Report from the Media Bureau
based on data contained in the Commission’s Cable Operations and Licensing System (COALS).
See
www.fcc.gov/coals

See
SNL KAGAN at
https://www.snl.com/interactiveX/MyInteractive.aspx?mode=4&CDID=A
38606&KLPT=8
(subscription required).
47 CFR § 76.901(c).
Federal Communications Commission, Assessment and Collection of Regulatory Fees for Fiscal Year 2014;
Assessment and Collection of Regulatory Fees for Fiscal Year 2013; and Procedures for Assessment and Collection
of Regulatory Fees, 80 Fed. Reg. 66815 (O
ct. 30, 2015) (citing August 15, 2015 Report from the Media Bureau
based on data contained in the Commission’s Cable Operations and Licensing System (COALS).
See
www.fcc.gov/coals

Id
.

Federal Communications Commission
FCC
CIRC1712
exceed $250,000,000 are approximately 52,403,705 cable video subscribers in the United States today.
Accordingly, an operator serving fewer than 524,037 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 nine incumbent cable operators
are small entities under this size standard.
We note that the Commission neither requests nor collects

Assessment and Collectio
n of Regulatory Fees for Fiscal Year 2016, Notice of Proposed Rulemaking
, 31 FCC
Rcd 5757, Appendix E para. 23 (2016) (citing Office of Management and Budget (OMB) Memorandum M
06,
Open Government Directive, Dec. 8, 2009).
47 CFR § 76.901(f).
Assess
ment & Collection of Regulatory Fees for Fiscal Year 2016,
Notice of Proposed Rulemaking, 31 FCC
Rcd 5757, Appendix E para. 23 (2016).
The Commission does receive such information on a case
case basis if a cable operator appeals a local
franchise auth
ority's finding that t
he operator does not qualify as a small cable operator pursuant t
o section 76.901(f)
of the Commission's rules
. See
47 CFR § 76.901(f).
https
://www.census.gov/econ/isp/sampler.php?naicscode=517919&naicslevel=6

13 CFR § 121.201; NAICS Code 517919.
U.S. Census Bureau,
2012 Economic Census of the United States
, Table EC0751SSSZ1, Information: Subject
Series
Establishment and Firm Size: Re
ceipts Size of Firms for the United States: 2012 NAICS Code 517919,
http://factfinder.census.gov/faces/tableservices/jsf/pag
es/productview.xhtml?pid=ECN_2012_US_51SSSZ1&prodT
ype=table
Federal Communications Commission
FCC
CIRC1712
Broadband Internet access service providers must disclose performance characteristics,

WISPA Comments at 27.
Federal Communications Commission
FCC
CIRC1712
Report to Congress
The Commission will send a copy of this Declaratory Ruling, Report and Order, and
Order, including this FRFA, in a report to be sent to Congress pursuant to the SBREFA.
In addition,
the Commission will send a copy of t
his Declaratory Ruling, Report and Order, and Order, including the
FRFA, to the
Chief Counsel for Advocacy of the SBA. A copy of the Declaratory Ruling, Report and
Order, and Order,, and the FRFA (or summaries thereof) will also be published in the Federa
Register.

See
5 U.S.C
801(a)(1)(A).
See
5 U.S.C. § 604(b).

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