When a customer signs up for Internet access from a broadband provider such as Comcast or Verizon, they're signing up for more than just access to that ISP's network. After all, ISPs provide the "last mile" connection to their customers, but these ISPs do not own the entire infrastructure of the Internet. To reach the rest of the Internet, traffic needs to leave the physical network owned by the ISP and travel over other networks owned by other parties. Sometimes these other parties are other ISPs, and sometimes they are content providers such as Netflix or "content delivery networks" such as Akamai that serve content from a variety of clients. Either way, it is these interconnections, where two networks exchange traffic with each other, that make the Internet what it is: an interconnected network of networks. How well these interconnections function (and whether or not they're subject to persistent congestion) has a huge impact on the quality of people's Internet connections. That's why it's vital that net neutrality principles apply not only to an ISP's own network, but to its interconnection arrangements as well.
Fortunately the FCC's net neutrality order reflects this. As the FCC put it, the promise to customers that they would be able to access the Internet through the ISP's service included a commitment to make the interconnection arrangements necessary to follow through on that promise.
For this reason, the FCC's order specifically requires that interconnection arrangements be reasonable and non-discriminatory. Unfortunately that's a pretty vague standard, and even the FCC admits they don't know yet what that will mean in practice. They simply say they will examine interconnection issues on a case-by-case basis.
On the one hand, addressing interconnection problems on a case-by-case basis makes sense: interconnection presents more complex neutrality issues than content, applications, services, and devices do. This is because it is not typical or essential for every ISP to interconnect with every other possible partner. But to reduce uncertainty (and to prevent ISP gamesmanship), the FCC should at least explain some of the guidelines it expects ISPs to follow when it comes to interconnections.
For example, it would be a violation of net neutrality principles for an ISP to create a paid prioritization scheme so that its business partners will be able to interconnect directly with the ISP's network but their competitors will have to agree to more onerous terms, or be outright refused direct interconnection for anti-competitive reasons. Alternatively, an ISP could allow its business parters to interconnect deeper inside its own network (and thus closer to customers) than its competitors, thus effectively prioritizing its business partners' traffic.
If an ISP uses its gatekeeper power in this way, or refuses to interconnect in a way that reconstructs a throttling or paid prioritization arrangement, that would be a violation of net neutrality and something the FCC should make clear it will discipline in the case-by-case process it has adopted.
While we don't know for sure if this is what the FCC is thinking about interconnection, we know they're at least paying attention. With a little more clarity, we hope this means interconnection arrangements won't fall into a loophole ISPs can use to circumvent net neutrality principles.