Aside from the few hard-and-fast rules, the Open Internet order will have the FCC judge Internet service providers’ conduct on a case-by-case basis to determine whether it is just and reasonable. Customer complaints about bills, and financial disputes between network operators that harm consumers will be judged against that standard.
While a customer could complain that a specific price is unjust or unreasonable, the FCC has declined to impose rate-of-return regulation, in which utility regulators determine what expenses are allowable and what a proper rate of return is. The FCC has also not used its longstanding authority to impose price caps on Internet service.
Republicans in Congress argue that the order gives the FCC too much oversight over broadband service and does not give Internet providers the regulatory certainty they need to invest in their networks.
Wheeler, a former lobbyist for the cable and wireless industries, took aim at those arguments.
“The ISPs for years have been saying for years that ‘we don’t want the FCC to have such broad rulemaking authority, they ought to be looking at things like the FTC [Federal Trade Commission], on a case by case basis,’” Wheeler said. “And now what happens is we’ve come out and we said, ‘OK, we’ll do something that is like the FTC on a case by case basis,’ and everybody says, ‘Oh, that’s terrible uncertainty, we don’t know what it is, if only they would be making rules and telling us what things were.’ You can’t have it both ways.”
Reclassification puts Internet providers under Title II of the Communications Act, which could allow future commissions to impose stricter rules, such as strict price controls. But Wheeler said any such move would require another open proceeding “and have everyone in the country involved,” just like the most recent net neutrality decision. The FCC used its “forbearance” authority to avoid imposing utility-style rate regulation, and Wheeler said that “the ability to de-forbear is going to be a high bar to hurdle.”