Industry opposition to FCC Title II rules could lead to state-based regulation

Advanced telecommunications providers favor a federal regulatory scheme over disparate state by state regulation, correctly arguing that telecommunications is essentially interstate. But in opposing the U.S. Federal Communication’s Commission’s adoption of its Open Internet rulemaking classifying Internet protocol telecommunications as common carrier utilities under Title II of the federal Communications Act, they are potentially setting themselves up for state-based regulation in the unlikely event they prevail in their judicial challenge to overturn the rules.

States could respond by enacting their own statutes treating advanced telecommunications as a common carrier utility, imposing universal service mandates barring neighborhood redlining and imposing rate regulation in order to ensure access and affordability and promote digital equity. While providers would claim universal service mandates impose cost burdens they cannot bear, states could point to state and federal subsidies they’ve received to build infrastructure in support of these goals.

Uncertainty and delay could also prompt states to act since litigation over the FCC Title II rules could take several years to be fully adjudicated up to the U.S. Supreme Court. The case would require the high court to review its 2005 ruling in Brand X Internet Services, et al. 545 US 967 (2005) wherein the court upheld the FCC's regulatory authority under the Chevron doctrine of judicial deference to administrative agency interpretation of statutory law. Brand X, however, could be undermined if the Supreme Court discards the Chevron doctrine in a case argued earlier this year, Loper Bright Enterprises v. Raimondo, bolstering the claim by providers that a Title II regulatory scheme making advanced telecommunications a common carrier utility is a major public policy issue within the purview of Congress and not administrative agencies.

It's not the data, stupid. It's the FCC's crazy back and forth regulatory posture on advanced telecommunications

Rural Americans Suffer the Costs of Faulty FCC Broadband Data - Pacific Standard: The FCC conducts a review of the state of broadband deployment and access every year, as required by the 1996 Telecommunications Act. As part of this analysis, the FCC must determine whether high-speed broadband is being deployed to "all Americans in a reasonable and timely fashion."

Here, accurate data is crucial. If the FCC finds that high-speed broadband is not being deployed to all Americans in the way it spells out, it must "take immediate action to accelerate deployment." In other words, if broadband isn't being deployed in a timely way to all Americans, the FCC is obligated to enact policies to remedy that. But without reliable data, the FCC might restrict its own ability to do what it's supposed to do. (Emphasis added)

The premise here is flawed. The FCC has already hampered its own ability to ensure universal advanced telecommunications service by failing to consistently regulate it as a common carrier telecommunications utility under Title II of the Communications Act. That regulatory regime accelerates deployment by mandating universal service and prohibiting neighborhood redlining by requiring ISPs to honor reasonable requests for service.

Instead, the agency has vacillated over the past two decades between regulating it under that scheme and as an information service under Title I of the statute. Most recently, the FCC has shifted back to Title I information service regulation after repealing its Title II-based 2015 Open Internet regulations in late 2017. The lack of a consistent regulatory policy and the resulting infrastructure deficiencies is spawning a movement to deprivatize advanced telecom infrastructure as localities study ways to finance and build their own.

Why legacy incumbent telephone and cable companies want FCC re-reclassification as information service providers. Hint: It’s not “net neutrality.”

If the U.S. Federal Communications Commission revokes its 2015 Open Internet rulemaking classifying Internet as a telecommunications common carrier utility under Title II of the Communications Act and restores the previous rule classifying it as information service under Title I of the law as expected before year end, it will set the stage for another round of litigation just as that which followed after the 2015 rule was adopted. This time however it will be public and consumer interests that will be challenging the FCC rather than legacy incumbent telephone and cable companies. And the governing statute, the Communications Act, might well be on their side. Section 3(a)(1)(41) of the Act as amended in 1996 defines an information service as follows:

INFORMATION SERVICE- The term `information service' means the offering of a capability for generating, acquiring, storing, transforming, processing, retrieving, utilizing, or making available information via telecommunications, and includes electronic publishing, but does not include any use of any such capability for the management, control, or operation of a telecommunications system or the management of a telecommunications service.

The legacy incumbent telephone and cable companies want the FCC to define their Internet protocol delivered services using that definition, essentially equating them with services like LexisNexis or Intelius. Their problem however is these companies market Internet protocol-based telecommunications services such as data, voice and video delivered over their connections to customer premises. If they were merely information services like LexisNexis or Intelius, they wouldn’t market physical premise connections sold in throughput speed tiers for a monthly recurring fee. In so doing, they are arguably offering telecommunications service, which the statute defines as “the offering of telecommunications for a fee directly to the public, or to such classes of users as to be effectively available directly to the public, regardless of the facilities used.”

So what is the incumbents’ main motive in not wanting to be classified as telecommunications providers under Title II of the Act? Hint: It’s not “net neutrality” – the requirement they treat the bits and bytes of Internet protocol moving over their networks equally regardless of origin. The primary reason to avoid being classified as telecommunications providers is to escape the requirement in the Communications Act as amended in 1996 that they provide advanced telecommunications capability to all areas of the nation consistent with the public interest, convenience and necessity. It must enable users to originate and receive high-quality voice, data, graphics, and video telecommunications using any technology per Section 706(c)(1) of the statute. Elected policymakers at all levels of government generally agree advanced telecommunications capability is even more in the public interest and vital to the constituents they represent than it was when the 1996 Act was enacted two decades ago.

Incumbents also chafe at the prospect of price regulation as advanced telecommunications providers as authorized at Section 706(a) of the Act. Bottom line, if they are regulated solely as providing an information service and not as telecommunications common carriers, then they would be able to continue to redline neighborhoods they don’t wish to serve and charge customers in those they do whatever they wish – just as they have since the statute was enacted without meaningful regulatory enforcement. That might serve the interests of their shareholders, but clearly doesn’t comport with the public interest specified in the statute.

Legacy metallic telcos, cablecos fight rear guard actions against local FTTP initiatives

Municipal broadband advocates cry foul amid Seattle mayoral race: An ongoing debate over making broadband internet a public utility in Seattle is surfacing in the city's mayoral election, and advocates for the cause are crying foul over contributions large telecommunications companies have made in the race. Comcast and CenturyLink, two internet service providers in Seattle, collectively donated about $50,000 to a political action committee supporting Jenny Durkan, a candidate who opposes municipal broadband. Municipal broadband advocates say that the telecom companies’ donations represent efforts to maintain the duopoly they have in the region. The PAC is the Civic Alliance for a Sound Economy (CASE), which is sponsored by the Seattle Metropolitan Chamber of Commerce. “If I was running one of the most powerful monopolies of the modern era, I’d be donating as much as I could to take over local politics also,” said Christopher Mitchell, director of the Community Broadband Networks Initiative at the Institute for Local Self-Reliance.

Mitchell is correct. Due to high cost barriers to competitor entry, telecommunications infrastructure functions as a natural monopoly, a fact recognized in the previous regulatory regime governing analog voice telephone service. Title II of the U.S. Communications Act requires telephone companies to provide service to anyone requesting it and authorized state public utility commissions to regulate their rates since market forces cannot in a monopoly market. 

In its 2015 Open Internet rulemaking, the U.S. Federal Communications Commission made it clear Title II also applies to digital telecommunications delivered using Internet protocol technology. But the United States hasn’t found the regulatory fortitude to enforce that requirement, allowing landline advanced telecommunications providers to redline neighborhoods they don’t want to serve and charge whatever they want. Most pundits expect the FCC to repeal that rulemaking later this month and turn the clock back to the start of the new century when Internet was still a relatively novel “information” service where people “went online” with “broadband” (versus narrowband dialup) connections.

Meanwhile, telephone and cable companies find themselves fighting rear guard actions by localities all over the nation that like Seattle prefer fiber optic infrastructure over metallic cable that isn’t bundled with proprietary services -- known as an open access network. They're tired of waiting and understandably have lost confidence after years of incumbent promises of fiber upgrades that never materialized because their business models can't absorb the needed capital expenditures.

Had the nation engaged in sound public policymaking and prudent planning a generation ago when it became apparent telecommunications was transitioning from analog to digital Internet protocol, the legacy incumbents wouldn’t find themselves fighting these battles. But since they themselves heavily influenced public policy on telecommunications over the past few decades, they hoisted themselves on their own petard and became among the most hated companies in America.

California like rest of nation suffers from poor advanced telecom service

The Social Cost of Weak Broadband Competition in California: Over the last 8 years, California has spent more than $200M funding projects and subsidizing service to close the broadband digital divide. While the intent is good, the results are limited given that home broadband subscriptions are unchanged today from 2010. It is clear that California cannot subsidize its way out of the digital divide. Despite the claims of Sosa and the Big 5, California’s uncompetitive fixed broadband service hurts everyone. The answer is to either promote retail competition or regulate the Big 5’s monopolies like we do in the energy sector.

California like the rest of the nation has the worst of all worlds: a naturally monopolistic advanced telecommunications market but no monopoly regulation as is done for electric power and natural gas utilities. The U.S. Federal Communications Commission nominally recognized advanced telecommunications as a natural monopoly utility in 2015, placing it under Title II of the Communications Act that regulated basic telephone service before it with rate regulation and a universal service requirement. "Nominally" because this regulatory scheme was put in place on paper only and not enforced.

The author is correct in noting we cannot extricate ourselves from this unfortunate circumstance with subsidies because they don't fundamentally alter it.

Why Title II regulation is anathema to legacy telephone and cable companies

POTs and PANs | Pretty Advanced New Stuff from CCG Consulting: Until recently I always wondered why the ISPs are fighting so hard against Title II regulation. All of the big companies like Comcast, AT&T and Verizon have told stockholders that their initial concerns about Title II regulation did not materialize. And it’s obvious that Title II hasn’t changed the way they invest in their own companies.

That's because the Federal Communications Commission's Open Internet rulemaking is not being enforced since it took effect in June 2015. No enforcement = no material impact.

But recently I saw an article and wrote a blog about an analyst who thinks that the ISPs are going to drastically increases broadband prices once Title II regulation is gone. Title II is the only tool that the government can use to investigate and possibly act against the ISP for rate increases and for other practices like data caps. If true, and his arguments for this are good ones, then there is a huge motivation for the big ISPs to shed the only existing regulation of broadband.

That's exactly the issue -- and NOT "net neutrality" as the Open Internet rulemaking has been unfortunately dubbed as if the rulemaking only prohibits telecom providers from blocking and throttling content. The main reason the legacy telephone and cable companies dislike Title II regulation is that it is predicated on a natural monopoly market. That requires prices to be regulated because market forces won't act to control them as well as universal service obligations. Both are anathema to these entities because they naturally prefer an unregulated monopoly market that affords them full freedom to cherry pick and redline and charge whatever they choose, placing end users at a distinct advantage to their shareholders.

Where's the case Title II regulation of ISPs deters telecom infrastructure investment?

Improved broadband access is one of the most important benefits of reversing Title II overreach. The internet brought us what seems like endless opportunities. The corollary to this, however, is that Americans without access to the internet are left behind. Internet access and computer skills are key to being connected, well-informed and competitive — not only in today’s job market, but ultimately in today’s digital era. By returning to commonsense regulation that incentivizes broadband investment and expansion, we can build out more robust networks that keep the American dream alive for those striving to succeed in today’s technology-driven world. At least ten percent of Americans (35 million people) lack adequate broadband access, according to the FCC’s 2016 Broadband Progress Report. This includes 23 million Americans in rural communities. Faced with these troubling statistics, priority should be heightened to champion the urgency of broadband deployment.

Source: Rolling back 'net neutrality' is essential to the free internet's future.

Problem with this argument is it fails to state a clear case as to why subjecting Internet service providers offering Internet protocol-based telecommunications service under Title II of the Communications Act will deter deployment of telecommunications infrastructure. In fact, the Title II regulatory scheme mandates universal service to all Americans who reasonably request service. Many if not most of those millions of Americans the author points to as lacking adequate Internet access have repeatedly requested service and been denied service in violation of this requirement and its bar on neighborhood redlining. That's because providers have not adequately invested in their infrastructure to make service available to them. Those provisions of Title II were put in force in 2015 by the U.S. Federal Communications Commission's Open Internet rulemaking. (Click here for more background.)

Incumbent legacy telcos, cablecos don't fear "net neutrality." Title II monopoly regulation is the real concern.

Net Neutrality and Broadband Investment for All - Morning Consult: A wise Federal Communications Commission chairman noted that “the best decision government ever made with respect to the internet was … NOT to impose regulation on it.” Who said that? Republican Chairman Ajit Pai? Republican Chairman Kevin Martin? No, it was Bill Kennard, the Democratic chairman appointed by President Bill Clinton. Kennard’s smart, future-focused, pro-innovation and pro-consumer philosophy — followed by chairmen of both parties for two decades — established an investment-friendly regulatory climate that resulted in more than $1.5 trillion in broadband network investment, and with it, America’s world-changing internet technologies, applications and services. Kennard’s words remain as true today as they did in 1999. Pai’s plan to unwind the 2015 Open Internet Order, which regulated broadband service like an early 20th century telephone monopoly, is the right start.

The thing is telecommunications infrastructure is a natural monopoly regardless of whether it's plain old telephone service (POTS) over copper or based on Internet communications protocol delivered over fiber to the premise (FTTP). It's simple microeconomics. Infrastructure a labor intensive, high cost proposition and as such will never attract many sellers due to the high cost barriers to entry. While some degree of redundancy is beneficial to ensure network reliability, it would make no sense and be uneconomic to have many providers installing multiple infrastructures to serve communities and customer premises.

The above item by the president and CEO of the telecom industry trade group USTelecom shows the industry isn't as concerned about so-called "net neutrality" rules requiring all Internet protocol traffic be afforded equal carriage. Rather, the real fear is monopoly regulation.

FCC Chair Pai wrongly describes natural monopoly of telecom infrastructure as competitive market

FCC Chairman Ajit Pai on Why He's Rejecting Net Neutrality Rules - Reason.com: If left in place, however, the Title II rules could harm the commercial internet, which Pai described as "one of the most incredible free market innovations in history. Companies like Google and Facebook and Netflix became household names precisely because we didn't have the government micromanaging how the internet would operate," said Pai, who noted that the Clinton-era decision not to regulate the Internet like a phone utility or a broadcast network was one of the most important factors in the rise of our new economy.

Companies like Google (excepting Google Fiber's now defunct venture into fiber to the premise service), Facebook and Netflix aren't network providers. Consequently, they don't face the high costs associated with building and operating telecommunications infrastructure serving homes, businesses and institutions that deters market competition and promotes market failure.

Ajit Pai: The funny thing about that is because it's precisely because the phone company was a slow moving monopolist. That's exactly the point we're trying to make. These rules, Title II rules were designed to regulate Ma Bell, and the promise with Ma Bell, the deal with the government was, we'll give you a monopoly as long as you give universal service to the country. As a result, for decades, we didn't see innovation in the network we didn't see innovation in phones and it's when you have a competitive marketplace and you let go of that impulse to regulate everything preemptively, that you finally get to see more of a competitive environment.

Pai is engaging in the distortion of describing the natural monopoly market that telecommunications infrastructure is as a competitive market. Wishing it were competitive won't make it so. The cost barriers to entry are simply too high. Just ask Google Fiber. Or the 34 million Americans who have experienced sell side market failure, their homes and small business not offered landline connections capable of delivering high-quality voice, data, graphics and video, according to figures released by the U.S. Federal Communications Commission in 2016. Market failure is hardly an indicator of a robustly competitive market.

Pai's predecessor Tom Wheeler indulged in the misguided notion that telecom infrastructure could be competitive market, even though the FCC under his leadership adopted the 2015 Open Internet rulemaking predicated on regulating Internet service as a natural monopoly, classifying it as a common carrier telecommunications utility.

Internet Innovation Alliance's oddly bearish view of Title II

Study Says: Broadband is $1 Trillion Econ Driver | Multichannel: The U.S. broadband and ICT sectors have generated over a trillion dollars in annual value to the U.S. economy, according to an economic analysis commissioned by the Internet Innovation Alliance. The study concludes that all that activity was generated thanks to an "environment of light federal regulation." And while the study authors say they don't know how the FCC's Title II reclassification of ISPs will affect economic growth and employment, they predict from former analysis and review of the literature and history that it could adversely affect broadband/ICT investment and have "significant secondary costs" for other industries.

This is where the study authors' analysis of light regulation gets awfully light itself. No explanation of how reclassification of Internet as a common carrier telecommunications utility under Title II of the Communications Act would adversely affect investment in telecom infrastructure.

In fact, one could also argue the opposite. By mandating universal service, Title II would spur investment and generate knock on effects for other industries served by expanded and upgraded telecom infrastructure to meet that requirement. According to the organization's website,"IIA seeks to promote public policies that support equal opportunity for universal broadband availability." That's certainly compatible with Title II. Finally, consider the oddity of a bearish projection like that coming from an organization called the Internet Innovation Alliance.

Obama flat wrong, at odds with FCC in framing telecom infrastructure as competitive market

Municipal Broadband Battles | Al Jazeera America: Amid concerns in some markets that big telecoms and cable companies are providing service that is too slow and too expensive, some cities are starting their own Internet services, spending millions of dollars to bring super-high-speed, or gigabit, Internet service to their communities through a new fiber-optic infrastructure. Proponents call it the single most important piece of infrastructure of the 21st century, attracting businesses, bolstering education and raising property values.

President Barack Obama has declared community broadband, as it’s called, a key to economic prosperity. “Today I’m making my administration’s position clear on community broadband. I’m saying I’m on the side of competition,” he said. (Emphasis added)

The problem with the president's framing telecom infrastructure as a competitive market is he's just flat out wrong. It can never be a truly competitive market with many sellers and choices for consumers due to the high cost of deploying fiber to the premise infrastructure. Those high costs have kept telcos and cablecos from upgrading their legacy infrastructures and building out fiber to all customer premises in their service territories to replace the outdated metallic cables designed for voice telephone and cable TV service of decades past. Instead, they've built limited fiber to the premise in selected high density "footprints" and redlined countless American neighborhoods, leaving many still on dialup that was state of the art technology when Bill Clinton was serving his first term as president.

Moreover, by furthering the notion that telecom infrastructure is a competitive market offering, Obama is at odds with the Federal Communications Commission that -- at Obama's urging -- adopted a common carrier regulatory framework early this year predicated on telecom infrastructure as a monopolistic market. Consequently, the FCC's Open Internet rulemaking requires Internet service to be offered to all customer premises requesting it -- as telephone service before it -- under the universal service and nondiscrimination provisions of Title II the federal Communications Act.

AT&T’s planned “wireless local loop” plant could help it meet its Title II universal service obligation

When AT&T began the regulatory review process of its planned acquisition of DirecTV one year ago, it proposed to offer fixed wireless Internet service to about 13 million residential premises in its service territory not offered Internet service in order to improve the deal’s odds of gaining approval. These premises were never offered AT&T’s legacy ADSL service after it was introduced more than a decade ago. And even if they were today, ADSL would fall far short the Federal Communications Commission’s speed-based minimum standard for Internet service of 25 Mbps for downloads and 3 Mbps up.

Now that the FCC’s rules deeming Internet a common carrier telecommunications service under Title II of the Communications Act are going into effect requiring Internet service providers to “furnish such communication service upon reasonable request” under Title II’s universal service and nondiscrimination provisions, AT&T may be seeking another, more important role for its planned “wireless local loop” fixed wireless plant. 

Specifically, helping it meet its universal service obligations. With so many premises in its service territory refused Internet service for a decade or longer, AT&T could face a potential barrage of complaints and penalties if these premises remain without premises Internet service and it continues to say no to service requests.

However, as arstechnica reports today, AT&T’s fixed wireless service is expected to provide connectivity of up to 20 Mbps – below the FCC’s minimum standard for Internet service. The only way to get more wireless bandwidth is more fiber backhaul bandwidth and/or more wireless transmitters. That means AT&T would likely have to spend more than it would like on its planned “wireless local loop” plant to bring service up to the FCC’s standard in order to keep itself out of hot water with regulators.

Incumbents' petition to block FCC's Title II rules faces steep legal hurdles, likely dismissal

John Eggerton of Broadcasting & Cable outlines the legal arguments being made by incumbent telephone and cable companies seeking to block enforcement of the Federal Communication Commission's recently promulgated regulations reclassifying Internet services as common carrier telecommunications services under Title II of the Communications Act.

The incumbents' petition is likely to be dismissed. The reason is what's known as judicial deference: courts generally defer to regulatory agencies' interpretation of statutory law requirements. The doctrine holds that regulators have the necessary expertise to discern and apply the finer points of statutes whereas judges, who generally do not, are naturally reluctant to second guess the decisions of regulators or interject themselves into disagreements over statutory law between regulators and regulated entities. Under the doctrine of judicial deference, the appropriate forum to work out disagreements with regulators over application of statutory law is the rulemaking process and not the courts.

In this case, the incumbents face an especially steep challenge because the Communications Act specifically grants the FCC broad discretion to apply Title II of the Act in the first section of Title II. Section 201(b) states that "[t]he Commissioner may prescribe such rules and regulations as may be necessary in the public interest to carry out the provisions of this Act."

FCC’s Title II order adopts ultra light touch on net neutrality enforcement

While much of the media has been abuzz over the concept of net neutrality – the principle that all Internet traffic be treated equally – an initial review of the FCC’s report and order issued last week classifying Internet services as telecommunications services under Title II of the Communications Act indicates the regulatory agency is adopting a decidedly light touch approach on enforcing net neutrality. The question of whether net neutrality is being respected has arisen at interconnection between network layers, choke points specifically addressed in the FCC’s order and report.

Paragraph 4 states the order’s policy respecting net neutrality, described in the media as a ban on network providers creating paid fast lanes, drawing on the metaphor of toll lanes on a busy freeway:

4. The lesson of this period, and the overwhelming consensus on the record, is that  carefully-tailored rules to protect Internet openness will allow investment and innovation to continue to flourish. Consistent with that experience and the record built in this proceeding, today we adopt carefully-tailored rules that would prevent specific practices we know are harmful to Internet openness— blocking, throttling, and paid prioritization—as well as a strong standard of conduct designed to prevent the deployment of new practices that would harm Internet openness. We also enhance our transparency rule to ensure that consumers are fully informed as to whether the services they purchase are delivering what they expect.

Paragraph 30 however specifically declines to apply Title II rules to interconnection, noting frictions among commercial players have produced differing accounts of how Internet data traffic is being handled:

30. But this Order does not apply the open Internet rules to interconnection. Three factors  are critical in informing this approach to interconnection. First, the nature of Internet traffic, driven by massive consumption of video, has challenged traditional arrangements—placing more emphasis on the use of CDNs or even direct connections between content providers (like Netflix or Google) and last-mile broadband providers. Second, it is clear that consumers have been subject to degradation resulting from commercial disagreements, perhaps most notably in a series of disputes between Netflix and large last-mile broadband providers. But, third, the causes of past disruption and—just as importantly—the potential for future degradation through interconnection disputes—are reflected in very different narratives in the record.

At paragraph 31 of the order, the FCC opts for an information gathering stance vis a vis disputes over interconnection rather than a strong enforcement role:

31. While we have more than a decade’s worth of experience with last-mile practices, we lack a similar depth of background in the Internet traffic exchange context. Thus, we find that the best approach is to watch, learn, and act as required, but not intervene now, especially not with prescriptive rules. This Order—for the first time—provides authority to consider claims involving interconnection, a process that is sure to bring greater understanding to the Commission.

FCC adopts Internet universal service obligation

Finding the United States needs improved Internet access, the U.S. Federal Communications Commission today released a report and order classifying Internet service as a common carrier telecommunications service under Title II of the Communications Act. That subjects Internet service providers (ISPs) to the same common carrier universal service obligations under which telephone companies operate, requiring them to provide connections to all customers requesting service in their service territories. Harold Feld of Public Knowledge recently termed universal service “the quintessential common-carrier obligation.”

Under prior FCC rules, Internet service was classified as an information service under Title I of the Act, relieving ISPs of the obligation to provide Internet service to any premise requesting it. Consequently, for more than a decade ISPs have effectively redlined communities, neighborhoods and even portions of roads and streets by not building out their infrastructures to serve them.

The FCC's reclassification of Internet as a Title II telecommunications service invokes Section 201(a) of the Communications Act:

"It shall be the duty of every common carrier engaged in interstate or foreign communication by wire or radio to furnish such communication service upon reasonable request therefor..."

The FCC's order and rulemaking also applies Section 254(b)(3) of the Communications Act that requires ISPs to provide access to advanced telecommunications in all regions of the nation:

(3) Access in rural and high cost areas

Consumers in all regions of the Nation, including low-income consumers and those in rural, insular, and high cost areas, should have access to telecommunications and information services, including interexchange services and advanced telecommunications and information services, that are reasonably comparable to those services provided in urban areas and that are available at rates that are reasonably comparable to rates charged for similar services in urban areas.

The report and order also applies Section 214(e)(3) of the Communications Act, which empowers the FCC to "determine which common carrier or carriers are best able to provide such service to the requesting unserved community or portion thereof and shall order such carrier or carriers to provide such service for that unserved community or portion thereof."

In addition, within the scope of the FCC's action is Section 202 of the Act, which contains an anti-redlining provision barring providers from discriminating against localities in providing service. The report and order notes complaints of violations will be addressed on a case-by-case basis.

In applying most of Section 254 of the Act to ISPs, the FCC noted it rejected calls to delay or phase in its enforcement:

“Even prior to the classification of broadband Internet access service adopted here, the Commission already supported broadband services to schools, libraries, and health care providers and supported broadband-capable networks in high-cost areas. Broadband Internet access service was, and is, a key focus of those universal service policies, and classification today simply provides another statutory justification in support of these policies going forward. Under our broader section 10(a)(3) public interest analysis, the historical focus of our universal service policies on advancing end-users’ access to broadband Internet access service persuades us to give much less weight to arguments that we should proceed incrementally in this context… We therefore conclude that these universal service policy-making provisions of section 254, and the interrelated requirements of section 214(e), give us greater flexibility in pursuing those policies, and outweighs any limited incremental effects (if any) on broadband providers in this context. Because forbearance would not be in the public interest under section 10(a)(3), we apply these provisions of section 254 and 214(e) and our implementing rules with respect to broadband Internet access service.”