Spectrum and the Concept of Net Neutrality Todd D. Daubert Partner Kelley, Drye & Warren, LLP

Net Neutrality and Open Access? The terms “net neutrality” and “open access” have yet to be definitively defined The terms currently mean different things to different groups –Network Operators –Application/Service Providers –Consumers

Congress Likely Will Force the Issue Stimulus legislation likely will require the FCC to define “open access” and “net neutrality” –The definitions may differ based upon technology (e.g., wireless vs. wireline) Recipients of grants/loans/tax incentives likely will be required to comply with open access and net neutrality requirements imposed by the FCC Some or all of these open access and net neutrality requirements will likely be applied to all network operators and service providers

The FCC’s Current Policies The essence of current federal policy is “to encourage broadband deployment and preserve and promote the open and interconnected nature of the public Internet” In 2005, the FCC adopted its “Internet Policy Statement”: –Access to lawful content –Open applications and services –Open devices (ability to attach the devices of one’s choice) –Right to competition among network providers The statement encompasses very different concepts that do not apply the same way to every type of technology

The Internet Policy Statement The FCC has applied the Internet Policy Statement on a case-by-case basis –The principles set forth in the Internet Policy Statement are “incorporated” into the FCC’s ongoing policymaking and enforcement activities The Internet Policy Statement is so broad that it can by made relevant to a wide scope of issues and activities

Comcast and the Policy Statement The Good, the Bad and the Ugly: Comcast, the FCC and Chairman Martin Comcast challenged the FCC’s statutory authority to vindicate the policies set forth in the Internet Policy Statement –“Reasonably Ancillary” The Comcast Order established some boundaries regarding acceptable “network management.” –Unacceptable routing of traffic based on content –Violation of consumers’ “established expectations” for seamless and transparent Internet use

Network Neutrality and 700 MHz 700 MHz – FCC imposed network neutrality requirements upon C Block licensees –Open Devices –Open Applications The open devices and applications requirements only apply to the extent they are technologically compatible The FCC found the conditions to be in public interest without regard to whether the market has failed

Skype and Wireless Carterfone Skype has asked the FCC to apply the famous wireline Carterfone decision to wireless networks: “Wireless Carterfone” The Skype Petition has sparked debates regarding network neutrality and open access that go far beyond the issues contemplated and principles adopted in the original Carterfone decision The policies that President Obama announced during the campaign suggest that the new administration will explicitly address and seek to resolve the pending debates regarding net neutrality and open access –“Open Government. Open Networks. Open Markets.” –Protect the Openness of the Internet - Support the principle of network neutrality to preserve the benefits of open competition on the Internet The new FCC will likely address these debates, and possibly soon: –The pending stimulus legislation may require the FCC to address many of the pending debates as soon as 45 days after the legislation is passed

Considerations for the Debate Network management is a crucial, and it cannot be negated by additional bandwidth –Effective and neutral network management improves the experience of all users Net Neutrality and Open Access requirements should not come at the expense of consumer choice –Optimization of a network, including devices and applications, in order to achieve specific goals and functions can lead to technological innovation and advancement –Net neutrality and open access requirements should not prevent optimization in the name of democracy –Consumers should be given the choice Certainty is important for technological and economic advancement –Vague principles and inconsistent enforcement harms both technological and economic advancement Net Neutrality and Open Access requirements cannot be “one size fits all” –The stimulus legislation may mandate separate definitions for “open access” and “wireless open access” Transparency for consumers is crucial, but rules should not force disclosure of information that makes networks vulnerable

Questions? Please contact: Todd Daubert Kelley Drye & Warren LLP (202)