The Situation is Muddled

It Will Probably Become More Muddled

US CapitalCredit: wikipedia commons public domain - Raul654

The recent Verizon decision by the Federal Court of Appeals of the District of Columbia has created much concern over the internet regarding continued net neutrality.[1]  The concept of net neutrality relates to the ability to have a free flow of traffic over the internet without favoritism for some content providers and discrimination against others based on slower service or perhaps some form of blocking.  In the January, 2014 decision, the court struck down the FCC’s anti-discrimination rules applicable to broadband internet service providers (ISP’s)  based on the agency’s misinterpretation of its powers under a 1996 federal statute.[2]  The court concluded the FCC had good reasons to try to regulate the broadband ISP’s, yet the agency went about regulating in the wrong way.

The court acknowledged that the 1996 Telecommunications Act permitted the Federal Communications Commission to classify broadband ISPs as providers of “basic” telecommunications services which were expressly subject to anti-discrimination regulations under the Act; however, the agency’s decision to classify them as information services providers limited regulatory authority to prohibit discrimination.[2]  Now that the dust is settling after Verizon logoCredit: wikipedia commons public domain - Matillitathe Verizon decision, the landscape of the post-Verizon world is becoming clearer.

The Decision to Reclassify

The Verizon court specifically noted the regulatory structure supporting net neutrality could be set into place again if the FCC reclassified broadband ISP’s as telecommunications providers.[2]  The head of the FCC, Thomas Wheeler, has indicated that the agency will attempt its rulemaking again,[3] but has not indicated a willingness to reclassify the broadbands.  There have also been statements about using a piecemeal approach such that particular arrangements between cable companies and content providers might be challenged in court.  In practical terms, only the most egregious of circumstances would be challenged in all likelihood.

Weighing in on the potential of reclassification, the White House has issued a statement in support of net neutrality, but has said the President will not push the regulators to take any specific action such as reclassification because the FCC is an independent federal agency.[4]  Different discussions could be going on behind closed doors; nevertheless, the White House has said publicly that it will not push the FCC to reclassify in a response to a petition requestingFCC logoCredit: wikipedia commons public domain - FCC such action.

The Partisan Lineup for Potential Congressional Action

Viewing the situation through the lense of more regulation versus greater freedom for the market to decide “the haves and the have nots,” the Democrats are introducing legislation to codify net neutrality[5] and the Republicans are opposing it.  Few issues these days seem to have support on both sides of the aisle.  The net neutrality issue is no different.  The issue is complicated and good arguments exist for both sides.

The Democrats purport to be the champions of the little guy in order that the internet remains free and open to all.  Democrats in the House of Representatives and the Senate have introduced legislation for net neutrality.  While net neutrality and anti-discrimination may sound appealing, the legislative approach does require more government intervention in the marketplace to accomplish these ends.  Many people distrust more government intervention in free markets, particularly large scale federal intervention.  Additional statutes prohibiting certain business practices place more power in the hands of the US government.

The Republicans are teaming with Tea Party activists to oppose additional FCC regulatory action[6] as well as any sort of legislative reform.  The arguments on their side are derived in large part from concerns over “big government” and the government taking over the internet.  Cynics note that the broadband ISP’s are funneling funds to those opposing further government action supporting net neutrality.[7]  In other words, some of the little guys are helping the big guys accomplish their goals.  Still, those same big guys have invested billions to US Capital BuildingCredit: wikipedia commons public domain - Ed Brownlay the backbone of the internet over communications lines and towers, so it’s not unreasonable that they would want to maximize their investment by having some say over the content moving through those lines and towers.  Without the big business guys there is no internet. 

Given that the Republicans control the House of Representatives, and any action in the Senate can be blocked with forty one votes, the likelihood of any Democrat sponsored legislation regarding net neutrality becoming law any time soon is virtually zero.  The only change that could be coming down the pike is additional regulations adopted by the FCC.

The Agency is Searching for a Middle Ground

Statements from Mr. Wheeler indicate the FCC is grasping for a way to regulate the broadband ISP’s within the requirements of the Verizon decision.[3]  His statements acknowledge the court’s invitation to the FCC to regulate these companies, yet he seems unwilling thusfar to take the step of reclassification.  The court can’t write the regulations for the Agency, it can only issue rulings on whether or not the Federal Communications Commission lawfully adopted rules after they are challenged.  A fair reading of the Verizon decision leaves theScales of JusticeCredit: wikipedia commons public domain - US Governernment impression that the court was telling the FCC to reclassify the broadbands as telecommunications providers or stop trying to prohibit internet anti-discrimination.  The statements of Mr. Wheeler indicate a current intention to try to do the thing that was just struck down all over again in slightly different packaging.

What Happens Next?

Despite the potential of a flurry of activity from Democrats in the House and Senate, no legislation will be passed with regard to net neutrality.  The Republicans will be supportive of a free and open internet in concept, yet will not agree to any kind of law which restricts the ability of the broadband ISP’s to exert more control over their legally owned facilities.  The FCC will once again attempt to adopt similar regulations to those which were struck down and will hope that use of some buzz works from the Verizon decision might help them pass muster in the inevitable court challenge that will follow. 

Comcast truckCredit: wikipedia commons public domain - David Winer from USA only way that anything meaningful passes Congress in regard to net neutrality is if the broadband ISP’s enter into business arrangements which subvert or slow down enough internet content desired by the general public that the idea of legislation becomes overwhelmingly popular.  For now, agreements such as a recent deal between Netflix and Comcast to assure quality streaming for Netflix[8] aren’t very scary.  If those types of agreements become widespread enough to restrict web traffic for others, then legislative reform becomes more likely.  Can the big broadbands show more self control than the big bankers?  If they do, they probably can avoid congressional meddling in their business.  Time will tell.

Google Chromecast HDMI Streaming Media Player
Amazon Price: $35.00 $29.98 Buy Now
(price as of Mar 16, 2014)
Netflixed: The Epic Battle for America's Eyeballs
Amazon Price: $16.00 $7.51 Buy Now
(price as of Mar 16, 2014)