What Net Neutrality Rules Mean for Consumers

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The FCC’s new net neutrality rules for Internet providers are out today and they are as long (400 pages!) and dense (1,777 footnotes!) as promised.
Broadly, the rules are as previously advertised. They prohibit broadband providers (wired and wireless) from blocking or throttling legal Internet content. They also don’t allow broadband providers to offer paid, prioritized fast-lane services to content companies.
But there are plenty of smaller provisions tucked into the text that
could have an impact on consumers’ Internet service. Here are a few things that could soon change for consumers (based on a quick read) along with excerpts from the rules:

Coffee Shops and Libraries Can Still Stop “House of Cards” Binge-Watching

Sorry, you’re still not going to be able to watch Netflix on a plane or download big data files in your local coffee shop. The new net neutrality rules won’t apply to restaurants, airlines, libraries or other companies that offer free Wi-Fi service to customers. So they’ll still be able to block you from checking out various websites or apps while you’re using their Internet access.

“We again decline to apply the open Internet rules to premises operators — such as coffee shops, bookstores, airlines, private end-user networks (e.g. libraries and universities), and other businesses that acquire broadband Internet access service from a broadband provider to enable patrons to access the Internet from their respective establishments. … Applying the open Internet rules to the provision of broadband service by premises operators would have a dampening effect on these entities’ ability and incentive to offer these services.”

No New Fees … Yet

One of the main talking points for opponents of the new rules is that consumers will soon have to pay more for Internet service. That’s because the FCC is re-regulating Internet service under old rules written for phone networks and phone users have to pay a monthly fee into the Universal Service Fund, which subsidizes phone and Internet services in rural areas and for low-income people.
The rules say there will be no new federal USF fees on broadband service because of these rules; states won’t be able to charge them either.

“With respect to universal service, we conclude that the imposition of state-level contributions on broadband providers that do not presently contribute would be inconsistent with our decision at the present time to forbear from mandatory federal USF contributions, and therefore we preempt any state from imposing any new state USF contributions on broadband — at least until the Commission rules on whether to provide for such contributions.” (Emphasis is Re/code’s.)

Here’s the thing: the FCC has been looking at requiring broadband subscribers to start paying into the USF fund for the past few years. They’re due to get recommendations on whether to do that next month. So while your monthly bill won’t go up right now because of a new USF fee, there’s a decent chance it might in the future.

AT&T’s Unlimited Data Users May Soon Be in Luck

AT&T’s practice of automatically downgrading the speed of unlimited data users once they’ve used a certain amount of data each month could be in trouble under the new rules.
AT&T reserves the right to throttle the small (roughly 3 percent) number of subscribers who’ve managed to cling to their unlimited data plans, which the wireless giant stopped offering years ago.
The new rules don’t allow broadband providers to throttle data, but there is a huge loophole baked into the rules that allows companies to limit data or speeds to manage their networks.

“The record broadly supports maintaining an exception for reasonable network management. We agree that a network management exception to the no-blocking rule, the no-throttling rule, and the no-unreasonable interference/disadvantage standard is necessary for broadband providers to optimize overall network performance and maintain a consistent quality experience for consumers while carrying a variety of traffic over their networks.”

So while companies like AT&T can throttle under the FCC’s rules, they have to be doing it because of network congestion issues, not as a business decision.

“For a practice to even be considered under this exception, a broadband Internet access service provider must first show that the practice is primarily motivated by a technical network management justification rather than other business justifications.”

AT&T’s policy appears to be more of a business decision than a network issue, although the company would probably disagree. An AT&T spokesman Thursday pointed to a presentation the company gave the FCC last month which explained how its throttling plan wouldn’t run afoul of net neutrality rules.

Sponsored Data Plans Are Okay Unless the FCC Says They’re Not

A main question about the new rules has been what it means for nascent efforts in the wireless industry to offer sponsored data (or “zero rating”) plans. Under such plans, consumers can access an application or service without having the data count against monthly data caps. T-Mobile probably has the most popular plan right now with its Music Freedom plan, which allows data-cap-free access to streaming music services.
FCC officials won’t say such plans automatically violate the rules, but they do suggest that they’re going to take a hard look at them if they get complaints.

“We are mindful of the concerns raised in the record that sponsored data plans have the potential to distort competition by allowing service providers to pick and choose among content and application providers to feature on different service plans. At the same time, new service offerings, depending on how they are structured, could benefit consumers and competition. Accordingly, we will look at and assess such practices under the no-unreasonable interference/disadvantage standard, based on the facts of each individual case, and take action as necessary.”

Data Caps Are Still Allowed

Sorry, unlimited data lovers, the FCC isn’t planning to get involved to prohibit Internet providers (wired or wireless) from selling service with data caps.

“The record also reflects differing views over some broadband providers’ practices with respect to usage allowances (also called “data caps”). Usage allowances place limits on the volume of data downloaded by the end user during a fixed period. Once a cap has been reached, the speed at which the end user can access the Internet may be reduced to a slower speed, or the end user may be charged for excess data. …
… Given the unresolved debate concerning the benefits and drawbacks of data allowances and usage-based pricing plans, we decline to make blanket findings about these practices and will address concerns under the no-unreasonable interference/disadvantage on a case-by-case basis.”

No Paid Fast Lanes (For the Most Part)

FCC officials have taken great pains to note that the new rules won’t allow Internet providers to offer fast-lane priority service to companies. Except they left the door cracked open for some kinds of “specialized services” that would offer faster, more reliable access to consumers.

“The Commission may waive the ban on paid prioritization only if the petitioner demonstrates that the practice would provide some significant public interest benefit and would not harm the open nature of the Internet.”

The FCC offered a few examples of “specialized services” that it thinks would be okay, such as Internet phone service, remote health monitoring systems or electrical monitoring systems used by utilities. Not mentioned? Fast-lane “specialized” access for things like online gaming.

More Transparency

The new rules require broadband providers to be a bit more open about what consumers will have to pay for service and what limits, if any, there are on their service. Internet providers will be required to clearly disclose:

“Price — the full monthly service charge. Any promotional rates should be clearly noted as such, specify the duration of the promotional period, and note the full monthly service charge the consumer will incur after the expiration of the promotional period.
Other Fees — all additional one time and/or recurring fees and/or surcharges the consumer may incur either to initiate, maintain, or discontinue service, including the name, definition, and cost of each additional fee. These may include modem rental fees, installation fees, service charges, and early termination fees, among others.
Data Caps and Allowances — any data caps or allowances that are a part of the plan the consumer is purchasing, as well as the consequences of exceeding the cap or allowance (e.g., additional charges, loss of service for the remainder of the billing cycle).”