One of the primary topics of discussion in the VoIP community and on Capitol Hill currently is “net neutrality”— whether the owners of the Internet pipelines will be able to use their positions as gatekeepers to discriminate against VoIP providers and their growing numbers of customers, among others. The Federal Communications Commission’s (FCC (News - Alert)’s) asserted jurisdiction over discrimination in Internet transmission is dubious and Congressional action is required.

 

Some network operators, specifically the large local exchange carriers (LECs) have made public statements recently regarding their desire to “tier” Internet service and negotiate commercial contracts with content and service providers for upgraded service and transmission speeds.

 

If network operators have such absolute control over their networks, they could deny higher speeds to those providers (including VoIP providers) that do not pay the asking price or could otherwise discriminate against or restrict VoIP service provided over their networks. 

 

Certainly the incentive exists because VoIP providers are providing competing voice service over telephone and cable companies’ own networks. A telephone or cable company could charge competing VoIP providers for higher speeds or better service and then offer that same service to the customer for a potentially lower price.

 

 

In September, 2005, the FCC entered into a consent decree with Madison River Communications, a rural LEC that had blocked ports used for VoIP applications. The FCC asserted jurisdiction under Title II of the Communications Act of 1934, which regulates telecommunications carriers as common carriers and prohibits discriminatory practices, among other things.

 

Such jurisdiction is open to challenge because Internet service is not a telecommunications service subject to Title II regulation. In addition, such jurisdiction would not extend to cable operators that may similarly discriminate against VoIP providers because cable operators are regulated under Title III.

 

 

In August, 2005, the FCC adopted a policy statement on net neutrality stating that consumers are entitled to: 1) access the lawful Internet content of their choice; 2) run applications and use services of their choice; 3) connect their choice of legal devices that do not harm the network; and 4) competition among network providers, application and service providers, and content providers. 

 

Rather than using Title II, the FCC’s Policy Statement asserted ancillary jurisdiction under Title I to regulate interstate and foreign communications. To support this assertion, the FCC cited general language from the Supreme Court’s Brand X decision.. However, that decision upheld an FCC determination that cable modem Internet service is an unregulated “information service” so the FCC’s ability to regulate in this area is in doubt. 

 

 

Due to the FCC’s uncertain jurisdiction over Internet transmission under Titles I and II of the Communications Act, additional legislative authority is necessary. Several bills are under consideration in both the House and Senate that would provide varying degrees of authority to the FCC to regulate net neutrality. 

 

The strongest protection of VoIP providers’ ability to provide service to their customers on a non-discriminatory basis would involve giving the FCC enforcement authority as well as providing for specific restrictions (or allowing the FCC to do so in a rulemaking). 

 

Most of the bills currently give the FCC some authority to enforce its August, 2005 Policy Statement or broader antitrust principles. However, without specific legislative restrictions or an FCC rulemaking to establish ground rules (included in some form in several bills), policy in this area will be set in a piecemeal manner and VoIP providers will not have regulatory certainty for years to come. 

 

VoIP providers and other content, application and service providers using the Internet networks of other companies to provide services should support the legislative establishment of a net neutrality principle. This principle should be in the form of FCC enforcement authority and include specific restrictions on service discrimination. It is far too uncertain that the FCC’s asserted jurisdiction over this looming problem will withstand challenge and the Internet gatekeepers have already signaled their willingness to shut out or discriminate against such providers.