In Part I of this post, we looked at the FCC’s stated basis for its authority to regulate the Internet in its Report and Order, issued in late December 2010.

Now, we turn to the substance of the FCC’s Order, and specifically how the Order stacks up against the concerns we raised in our January, 2010, comments to the FCC about the FCC’s October 2009 Notice of Proposed Rulemaking (NPRM). (The Order raises other concerns for us as well, like the exclusion of wireless, that aren’t addressed here; this post just tracks the issues discussed in our NPRM comments.) While we’re big supporters of an open Internet and neutrality in practice, we were concerned that the proposed rules would create large loopholes for non-neutral behavior and barriers to entry for small noncommercial providers.

Unfortunately, it appears the FCC doesn’t share our concerns—or at least not enough to make real changes. While the new rules do take account of some of our smaller points about the NPRM, the FCC has made only a cosmetic effort to tackle the bigger problems.

Definition of “Reasonable Network Management”

Our first major substantive concern with the proposed rules had to do with the definition and use of “reasonable network management,” a term used to describe certain non-neutral steps that service providers could take without violating the FCC rules. In the 2009 NPRM, “reasonable network management” included actions preventing “the unlawful transfer of content” and “the transfer of unlawful content”—essentially code words for allowing your ISP to interfere with your service if it suspects you of engaging in copyright infringement. The term was included as a specific exception to each of the proposed rules.

Our comments urged the FCC not to target the content of Internet traffic in this way. “Reasonable network management” is typically understood as practices that promote the proper technical functioning of an ISP’s network, and we warned about departing from that standard. The job of an ISP—and what it knows best—is to carry bits, not to determine whether transferred content infringes copyrights. (As an aside, we’re curious how such infringement detection would actually be effected.) Pressuring ISPs into becoming enforcers for the content industry is apt to lead to practices that will interfere with free expression of all network users, including those engaged in lawful conduct. Here’s why: Trying to distinguish between authorized and unauthorized uses takes time and resources that service providers would likely prefer to spend elsewhere. Thus, service providers are likely to take the most expedient approach, such as targeting the transfer of any content that could conceivably infringe, even if that approach might affect lawful content as well.

We also noted that since the rules as drafted only implicated lawful activity, no such exceptions for unlawful activity should have been necessary in the first place. In addition, we argued that no “reasonable network management” exception was warranted for transparency (one of the NPRM’s six principles). We see no justification for keeping consumers in the dark about non-neutral “reasonable network management” practices by their service providers.

In the final Rules, the FCC did limit the definition of “reasonable network management” to elements that relate directly to network management functions, such as ensuring network security and making parental controls available to end users. However, loopholes for copyright-based blocking efforts have hardly disappeared. Instead, the FCC simply gave them their own heading. In contrast to the proposed rules, moreover, the new “Other Laws and Considerations” section calls out copyright specifically, stressing that the rules do not prohibit “reasonable efforts ... to address copyright infringement.” It’s ironic that the FCC would work so hard to keep this provision. The excuse of “addressing copyright infringement” could have protected Comcast from FCC action in the BitTorrent blocking scheme that was so fundamental to the FCC’s push for the Report and Order in the first place.

While we approve the removal of copyright enforcement blocking from its incongruous place on the “reasonable network management” list, the practical benefits to be gained from simply pasting it in somewhere else are minimal. Thus, the rules still invite overbroad enforcement behaviors affecting lawful activity. On the other hand, we were pleased to see the FCC removed the “reasonable network management” carve-out from the transparency requirement. That’s a big change and a welcome one.

Exceptions for law enforcement

Our comments also challenged the proposed exceptions for law enforcement as dangerously overbroad. The original rules gave ISPs a general dispensation to engage in non-neutral behavior to address the needs of law enforcement. We urged the FCC to limit the language of the exception to permit ISPs to fulfill their legal obligations but foreclose voluntary non-neutral management practices under the pretext of complying with law enforcement needs. In specific situations where, in order to address law enforcement needs, an ISP might want to engage in non-neutral behavior, we recommended a waiver process whereby an ISP would apply to the Commission for permission in advance of adopting a non-neutral practice. The FCC acknowledged our feedback in the final Report but declined to follow our guidance.

Regulation of non-commercial providers

The NPRM specifically excluded “premise operators”—establishments such as coffee shops, airports, and waiting rooms that acquire broad Internet access in order to make it available to patrons—from compliance requirements. The Commission also suggested exempting services such as personal Wi-Fi networks that are not intended for use by others. While EFF endorsed these provisions and recommendations, we encouraged the Commission to exempt all noncommercial broadband Internet providers from the requirements of the Order, noting that the burdens of FCC regulation on small actors would discourage good faith, public-minded Internet initiatives and would also pose a bar to innovation.

Unfortunately, the FCC did not budge on this point. The Commission does give a nod to EFF in noting that individuals’ wireless networks—whether or not intentionally made available to others—are not included in the rules. In addition, the Commission agreed that blocking traffic unwanted by a premise operator constitutes a legitimate network management purpose, even though the broadband provider of the access is not exempt from the rules.

Tethering

In response to a question posed in the NPRM, our comments recommended that providers be required to permit tethering using Internet-ready handsets. This recommendation is consistent with our work to try to free handsets in the DMCA Rulemaking. The Report and Order, however, omits any mention of tethering.

All told, the rules as laid out in the final Order aren’t that much improved from the NPRM. That said, these rules may have little effect in the end, given the numerous legal and legislative challenges to the FCC’s authority to enforce them.