Access to Broadband Networks: The Net Neutrality Debate

Angele A. Gilroy
Specialist in Telecommunications Policy

As congressional policymakers continue to debate telecommunications reform, a major point of contention is the question of whether action is needed to ensure unfettered access to the Internet. The move to place restrictions on the owners of the networks that compose and provide access to the Internet, to ensure equal access and non-discriminatory treatment, is referred to as “net neutrality.” While there is no single accepted definition of “net neutrality,” most agree that any such definition should include the general principles that owners of the networks that compose and provide access to the Internet should not control how consumers lawfully use that network, and they should not be able to discriminate against content provider access to that network.

A major focus in the debate is concern over whether it is necessary for policymakers to take steps to ensure access to the Internet for content, services, and applications providers, as well as consumers, and if so, what these steps should be. Some policymakers contend that more specific regulatory guidelines may be necessary to protect the marketplace from potential abuses which could threaten the net neutrality concept. Others contend that existing laws and policies are sufficient to deal with potential anti-competitive behavior and that additional regulations would have negative effects on the expansion and future development of the Internet. The December 21, 2010, adoption, and upcoming November 20, 2011, implementation, by the Federal Communications Commission (FCC) of its Open Internet Order has focused attention on the issue. Although most concede that networks have always needed and will continue to need some management, the use of prioritization tools, such as deep packet inspection, as well as the initiation of metered/usage-based billing practices have further fueled the debate.

A consensus on the net neutrality issue has remained elusive and support for the FCC’s Open Internet Order has been mixed. While some Members of Congress support the action, and in some cases would have supported an even stronger approach, others feel that the FCC has overstepped its authority and that the regulation of the Internet is not only unnecessary, but harmful. Internet regulation and the FCC’s authority to implement such regulations has been a topic of legislation (H.R. 96, H.R. 166, S. 74, H.R. 2434, H.R. 1, H.J.Res. 37, and S.J.Res. 6 ) and hearings in the 112th Congress. The House, on April 8, 2011, passed (240-179) H.J.Res. 37, to state disapproval of and remove the force and effect of the FCC’s Open Internet Order. The House FY2012 Financial Services and General appropriations bill (H.R. 2434), which includes FCC funding, contains a provision barring the FCC from using funds to implement the Open Internet Order. It is anticipated that the issue of Internet access will be of continued interest to policymakers.

The net neutrality issue has also been narrowly addressed within the context of the American Recovery and Reinvestment Act of 2009 (ARRA, P.L. 111-5). Provisions required the National Telecommunications and Information Administration (NTIA), in consultation with the FCC, to establish “nondiscrimination and network interconnection obligations” as a requirement for grant participants in the Broadband Technology Opportunities Program (BTOP). These obligations were released, July 1, 2009, in conjunction with the issuance of a notice of funds availability soliciting applications. Recipients of these awards have been selected and continued congressional oversight is expected.

The ARRA also required the FCC to submit a report, containing a national broadband plan, to both the House and Senate Commerce Committees; it was released on March 16, 2010.


Date of Report: October 25, 2011
Number of Pages: 21
Order Number: R40616
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Universal Service Fund: Background and Options for Reform

Angele A. Gilroy
Specialist in Telecommunications Policy

The concept that all Americans should be able to afford access to the telecommunications network, commonly called the “universal service concept” can trace its origins back to the 1934 Communications Act. Since then, the preservation and advancement of universal service has been a basic tenet of federal communications policy, and Congress has historically played an active role in helping to preserve and advance universal service goals. The passage of the Telecommunications Act of 1996 (P.L. 104-104) not only codified the universal service concept, but also led to the establishment, in 1997, of a federal Universal Service Fund (USF or Fund) to meet the universal service objectives and principles contained in the 1996 act. According to Fund administrators, from 1998 through end of year 2010, $73.7 billion was distributed, or committed, by the USF, with all 50 states, the District of Columbia, and all territories receiving some benefit.

The Federal Communications Commission (FCC) is required to ensure that there be “specific, predictable and sufficient ... mechanisms to preserve and advance universal service.” However, changes in telecommunications technology and the marketplace, while often leading to positive benefits for consumers and providers, have had a negative impact on the health and viability of the USF, as presently designed. These changes have led to a growing imbalance between the entities and revenue stream contributing to the fund and the growth in the entities and programs eligible to receive funding. The desire to expand access to broadband and address what some perceive as a “digital divide” has also placed focus on what role, if any, the USF should take to address this issue. The FCC’s national broadband plan, Connecting America: The National Broadband Plan, calls for a major restructuring of the USF to enable it to take a major role in achieving the goal of nationwide broadband access and adoption. The FCC has initiated a series of proceedings to achieve this goal.

There is a growing consensus among policy makers, including some in Congress, that significant action is needed not only to ensure the viability and stability of the USF, but also to address the numerous issues surrounding its appropriate role in a changing marketplace. How this concept should be defined, how these policies should be funded, who should receive the funding, and how to ensure proper management and oversight of the Fund are among the issues framing the debate.

The current policy debate has focused on five concerns: the scope of the program; who should contribute and what methodology should be used to fund the program; eligibility criteria for benefits; concerns over possible program fraud, waste, and abuse; and the impact of the Antideficiency Act (ADA) on the USF.

It is anticipated that Universal Service Fund reform will continue to be a topic of congressional interest. The House Energy and Commerce Committee and the Senate Commerce, Science, and Transportation Committee have included USF reform on their agendas of issues for consideration and oversight. Three stand-alone measures (H.R. 2163, H.R. 3118, S. 297) relating to USF have been introduced to date.


Date of Report: October 25, 2011
Number of Pages: 37
Order Number: RL33979
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The FCC’s Authority to Regulate Net Neutrality After Comcast v. FCC

Kathleen Ann Ruane
Legislative Attorney

A major debate over the government’s role in the Internet is currently occurring. Legally, the question appears to be whether the Federal Communications Commission (FCC or Commission) currently has the authority to regulate the ways in which Internet Service Providers (ISPs) manage Internet traffic over their networks. The FCC adopted an Internet Policy Statement in 2005 that expressed the agency’s support for a policy of non-discrimination toward Internet traffic, subject to reasonable network management.

In 2007, through various experiments by the media, most notably the Associated Press, it became clear that Comcast was intermittently blocking the use of an application called BitTorrent™ and, possibly, other peer-to-peer (P2P) file sharing programs on its network. Comcast eventually admitted to the practice and agreed to cease blocking the use of the P2P applications on its network. However, Comcast maintains that its actions were reasonable network management and not in violation of the FCC policy. In response to a petition from Free Press for a declaratory ruling that Comcast’s blocking of P2P applications was not “reasonable network management,” the FCC conducted an investigation into Comcast’s network management practices. The FCC determined that Comcast had violated the agency’s Internet Policy Statement when it blocked certain applications on its network and that the practice at issue in this case was not “reasonable network management.” The FCC declined to fine Comcast because its Internet Policy Statement had never previously been the basis for enforcement forfeitures. Comcast appealed this decision to the U.S. Court of Appeals for the DC Circuit, as did other public interest groups.

The DC Circuit ruled on April 6, 2010, that the FCC could not base ancillary authority to regulate cable Internet services solely upon broad policy goals contained elsewhere in the Communications Act. Whatever the merits of other jurisdictional arguments the FCC may advance, the court found that the FCC did not have jurisdiction to enforce its network management principles on the basis it had advanced in that case. The court did not address the other questions posed by the case, including whether the FCC could proceed via adjudication.

The court’s ruling has thrown into doubt the FCC’s authority to regulate Internet network management. On December 21, 2010, the Commission adopted new open Internet rules in its Open Internet Order. The Commission cited Section 706 of the Telecommunications Act of 1996 as well as authority ancillary to its statutory mandates in Titles II, III, and VI of the Communications Act of 1934. Two commissioners dissented. Commissioner McDowell published a lengthy rebuttal to the Commission’s jurisdictional argument in his dissenting statement. This report will analyze both the Commission’s jurisdictional arguments and Commissioner McDowell’s counter-arguments. The most recent rules were published in the Federal Register on September 23, 2011. The rules have been challenged in court. The appeals by various parties have been consolidated in the D.C. Circuit.

For further information on the policy aspects of this debate, see CRS Report RS22444, Net Neutrality: Background and Issues, by Angele A. Gilroy.


Date of Report: October 27, 2011
Number of Pages: 27
Order Number: R40234
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Broadband Internet Access and the Digital Divide: Federal Assistance Programs

Lennard G. Kruger
Specialist in Science and Technology Policy

Angele A. Gilroy
Specialist in Telecommunications Policy

The “digital divide” is a term that has been used to characterize a gap between “information haves and have-nots,” or in other words, between those Americans who use or have access to telecommunications and information technologies and those who do not. One important subset of the digital divide debate concerns high-speed Internet access and advanced telecommunications services, also known as broadband. Broadband is provided by a series of technologies (e.g., cable, telephone wire, fiber, satellite, wireless) that give users the ability to send and receive data at volumes and speeds far greater than traditional “dial-up” Internet access over telephone lines.

Broadband technologies are currently being deployed primarily by the private sector throughout the United States. While the numbers of new broadband subscribers continue to grow, studies and data suggest that the rate of broadband deployment in urban/suburban and high income areas are outpacing deployment in rural and low-income areas. Some policymakers, believing that disparities in broadband access across American society could have adverse economic and social consequences on those left behind, assert that the federal government should play a more active role to avoid a “digital divide” in broadband access.

With the conclusion of the grant and loan awards announced by broadband programs temporarily established by the American Recovery and Reinvestment Act of 2009 (P.L. 111-5), the Rural Broadband Access Loan and Loan Guarantee Program and the Community Connect Broadband Grants, both at the Rural Utilities Service of the U.S. Department of Agriculture, are currently the only ongoing federal funding programs exclusively dedicated to deploying broadband infrastructure. However, there exist other federal programs that provide financial assistance for various aspects of telecommunications development. The major vehicle for funding telecommunications development, particularly in rural and low-income areas, is the Universal Service Fund (USF). While the USF’s High Cost Program, as currently designed, does not explicitly fund broadband infrastructure, subsidies are used, in many cases, to upgrade existing telephone networks so that they are capable of delivering high-speed services. Additionally, subsidies provided by USF’s Schools and Libraries Program and Rural Health Care Program are used for a variety of telecommunications services, including broadband access.

To the extent that the 112th Congress may consider various options for further encouraging broadband deployment and adoption, a key issue is how to strike a balance between providing federal assistance for unserved and underserved areas where the private sector may not be providing acceptable levels of broadband service, while at the same time minimizing any deleterious effects that government intervention in the marketplace may have on competition and private sector investment.


Date of Report: October 24, 2011
Number of Pages:30
Order Number: RL30719
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Broadband Loan and Grant Programs in the USDA’s Rural Utilities Service

Lennard G. Kruger
Specialist in Science and Technology Policy

Given the large potential impact broadband access may have on the economic development of rural America, concern has been raised over a “digital divide” between rural and urban or suburban areas with respect to broadband deployment. While there are many examples of rural communities with state of the art telecommunications facilities, recent surveys and studies have indicated that, in general, rural areas tend to lag behind urban and suburban areas in broadband deployment.

Citing the lagging deployment of broadband in many rural areas, Congress and the Administration acted in 2001 and 2002 to initiate pilot broadband loan and grant programs within the Rural Utilities Service (RUS) at the U.S. Department of Agriculture (USDA). Subsequently, Section 6103 of the Farm Security and Rural Investment Act of 2002 (P.L. 107-171) amended the Rural Electrification Act of 1936 to authorize a loan and loan guarantee program to provide funds for the costs of the construction, improvement, and acquisition of facilities and equipment for broadband service in eligible rural communities. The RUS/USDA houses two assistance programs exclusively dedicated to financing broadband deployment: the Rural Broadband Access Loan and Loan Guarantee Program and the Community Connect Grant Program.

The 110th Congress considered reauthorization and modification of the loan and loan guarantee program as part of the 2008 Farm Bill. The Food, Conservation, and Energy Act of 2008 became law on June 18, 2008 (P.L. 110-246). Title VI (Rural Development) contains authorizing language for the broadband loan program.

During 2009 and 2010, the Rural Broadband Access Loan and Loan Guarantee Program (also referred to as the Farm Bill Broadband Loan Program) was on hiatus as RUS implemented the Broadband Initiatives Program (BIP) established under the American Recovery and Reinvestment Act of 2009 (P.L. 111-5). At the same time, final regulations implementing the broadband loan program as reauthorized by the 2008 Farm Bill were refined to reflect, in part, RUS experience in implementing BIP. Subsequently, on March 14, 2011, an Interim Rule and Notice was published in the Federal Register setting forth the rules and regulations for the broadband loan program as reauthorized by P.L. 110-246.

As reauthorized by the 2008 Farm Bill, the Rural Broadband Access Loan and Loan Guarantee Program is currently authorized through FY2012. Therefore, it is expected that the 112th Congress may consider reauthorization of the broadband loan program in the 2012 Farm Bill. As part of this consideration, Congress may focus on how effectively and cost efficiently the RUS broadband programs are addressing the lack of adequate broadband service in underserved rural communities.


Date of Report: October 14, 2011
Number of Pages: 14
Order Number: RL33816
Price: $29.95

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