Net neutrality is dead. Bow to Comcast and Verizon, your overlords
Net neutrality's last hope? FCC Chairman Tom Wheeler. (Andrew Harrer/Bloomberg / January 14, 2014)
Advocates of a free and open Internet could see this coming, but today's ruling from a Washington appeals court striking down the FCC's rules protecting the open net was worse than the most dire forecasts. It was "even more emphatic and disastrous than anyone expected," in the words of one veteran advocate for network neutrality.
The Court of Appeals for the D.C. circuit thoroughly eviscerated the Federal Communications Commission's latest lame attempt to prevent Internet service providers from playing favorites among websites--awarding faster speeds to sites that pay a special fee, for example, or slowing or blocking sites and services that compete with favored affiliates.
Big cable operators like Comcast and telecommunications firms like Verizon, which brought the lawsuit on which the court ruled, will be free to pick winners and losers among websites and services. Their judgment will most likely be based on cold hard cash--Netflix wants to keep your Internet provider from slowing its data so its films look like hash? It will have to pay your provider the big bucks. But the governing factor need not be money. (Comcast remains committed to adhere to the net neutrality rules overturned today until January 2018, a condition placed on its 2011 merger with NBC Universal; after that, all bets are off.)
"AT&T, Verizon, and Comcast will be able to deliver some sites and services more quickly and reliably than others for any reason," telecommunications lawyer Marvin Ammori (he's the man quoted above) observed even before the ruling came down. "Whim. Envy. Ignorance. Competition. Vengeance. Whatever. Or, no reason at all."
The telecom companies claim their chief interest is in providing better service to all customers, but that's unadulterated flimflam. We know this because regulators already have had to make superhuman efforts to keep the big ISPs from degrading certain services for their own benefit--Comcast, for example, was caught in 2007 throttling traffic from BitTorrent, a video service that competed with its own on-demand video.
Amazingly, even after Comcast was found guilty of violating this basic standard of Internet transmission, the FCC greenlighted its acquisition of NBC, which could only give the firm greater incentive to discriminate among the content being pipelined to its customers.
ISPs like Comcast are only doing what comes naturally in an unregulated environment, the way a dog naturally scratches at fleas. "Cable and telephone companies are simply not competing for the right to provide unfettered, un-monetized internet access," wrote Susan Crawford, an expert on net neutrality, around the time of the Comcast case.
This wouldn't be as much of a threat to the open Internet if there were genuine competition among providers, so you could take your business elsewhere if your ISP was turning the public Web into its own private garden. In the U.S., there's no practical competition. The vast majority of households essentially have a single broadband option, their local cable provider. Verizon and AT&T provide Internet service, too, but for most customers they're slower than the cable service. Some neighborhoods get telephone fiber services, but Verizon and AT&T have ceased the rollout of their FiOs and U-verse services--if you don't have it now, you're not getting it.
Who deserves the blame for this wretched combination of monopolization and profiteering by ever-larger cable and phone companies? The FCC, that's who. The agency's dereliction dates back to 2002, when under Chairman Michael Powell it reclassified cable modem services as "information services" rather than "telecommunications services," eliminating its own authority to regulate them broadly. Powell, by the way, is now the chief lobbyist in Washington for the cable TV industry, so the payoff wasn't long in coming.
President Obama's FCC chairman, Julius Genachowski, moved to shore up the agency's regulatory defense of net neutrality in 2010. But faced with the implacable opposition of the cable and telecommunications industry, he stopped short of reclassifying cable modems as telecommunications services. The result was the tatterdemalion policy that the court killed today. It was so ineptly crafted that almost no one in the telecom bar seemed to think it would survive; the only question was how dead would it be? The answer, spelled out in the ruling, is: totally.
The court did leave it up to the FCC or Congress to refashion a net neutrality regime. The new FCC chairman, Tom Wheeler, has made noises favoring net neutrality, but he also sounds like someone who's not so committed to the principle.
In an important speech in December and a long essay released at the same time, he's seemed to play on both sides. But that won't work. The only way to defend net neutrality, which prioritizes the interests of the customer and user over the provider, is to do so uncompromisingly. Net neutrality can't be made subject to the "marketplace," as Wheeler suggests, because the cable and telephone firms control that marketplace and their interests will prevail. Congress? Don't make me laugh--it's owned by the industry even more than the FCC.
The only course is for public pressure to overcome industry pressure. That's a tough road, but there's no alternative. Do you want your Internet to look like your cable TV service, where you have no control over what comes into your house or what you pay for it? Then stay silent. If not, start writing letters and emails to your elected representatives and the FCC now. It's the only hope to save the free, open Internet.
WASHINGTON — Internet service providers are free to make deals with services like Netflix or Amazon allowing those companies to pay to stream their products to online viewers through a faster, express lane on the web, a federal appeals court ruled on Tuesday.
Federal regulators had tried to prevent those deals, saying they would give large, rich companies an unfair edge in reaching consumers. But since the Internet is not considered a utility under federal law, the court said, it is not subject to regulations banning the arrangements.
Some deals could come soon. In challenging the 2010 regulations at issue in the case, Verizon told the court that if not for the rules by the Federal Communications Commission, “we would be exploring those commercial arrangements.”
Internet users will probably not see an immediate difference with their service. Consumer advocates, though, warned that higher costs to content providers could be passed on to the public, and called the ruling a serious blow against the concept of a free and open Internet. “It leaves consumers at the mercy of a handful of cable and phone providers that can give preferential treatment to the content they profit from,” said Delara Derakhshani, policy counsel for Consumers Union.
Broadband providers that have spent billions of dollars building their networks, including Verizon, said the ruling confirmed their right to manage their networks as they saw fit. And they, too, said they were committed to an open Internet.
“Verizon has been and remains committed to the open Internet, which provides consumers with competitive choices and unblocked access to lawful websites and content when, where and how they want,” the company said in a statement. “This will not change in light of the court’s decision.”
The ruling, in a case brought by Verizon against the F.C.C., concerns at its heart the basic question of whether Internet service is a utility of such vital importance, like telephone lines or electricity, that it needs to be regulated closely.
Although the court, the United States Court of Appeals for the District of Columbia, found that the regulations preventing the deals were invalid, it said that the commission did have some basic authority “to promulgate rules governing broadband providers’ treatment of Internet traffic.” It also upheld agency rules requiring broadband companies to disclose how they manage their networks.
At the least, the F.C.C. will have to try again to define its mission in the Internet age. Tom Wheeler, the agency’s new chairman, said the agency might appeal the decision, but had previously voiced support for allowing Internet companies to experiment with new delivery methods and products. The rules, referred to as the Open Internet order and based on the principle of so-called net neutrality, were enacted in 2010 under the previous chairman, Julius Genachowski.
In a statement, Mr. Wheeler said he was “committed to maintaining our networks as engines for economic growth, test beds for innovative services and products, and channels for all forms of speech protected by the First Amendment.”
“We will consider all available options,” he added, “including those for appeal, to ensure that these networks on which the Internet depends continue to provide a free and open platform for innovation and expression, and operate in the interest of all Americans.”
In 2002, the agency said Internet service should not be subject to the same rules as highly regulated utilities, which are governed by regulations on matters like how much they can charge customers and what content they can agree to carry.
Tuesday’s ruling essentially holds the F.C.C. to that determination, made when dial-up modems offered users the chance to crawl through chat rooms and to manipulate crude graphics.
Organizations that had opposed the agency’s rules interpreted the Tuesday ruling as favorable to the F.C.C. Michael K. Powell, who was F.C.C. chairman in 2002 when the agency set up its Internet governance structure, said, “Today’s historic court decision means that the F.C.C. has been granted jurisdiction over the Internet.”
Mr. Powell, who is now president of the cable industry’s chief lobbying group, said the decision would not result in significant changes in how Internet companies manage their broadband networks.
Verizon, in fact, portrayed the decision as at least a partial loss. “The court rejected Verizon’s position that Congress did not give the Federal Communications Commission jurisdiction over broadband access,” Randal Milch, a Verizon executive vice president and general counsel, said in a statement.
Judge David S. Tatel, who wrote the decision, was joined by Judge Judith W. Rogers in striking down the F.C.C. regulations but upholding the idea that the agency has “authority to enact measures encouraging the deployment of broadband infrastructure.”“At the same time,” he said, “the court found that the F.C.C. could not impose last century’s common carriage requirements on the Internet, and struck down rules that limited the ability of broadband providers to offer new and innovative services to their customers.”
In a separate opinion, Judge Laurence H. Silberman agreed with the majority’s reasons for striking down the F.C.C. rules but disputed its conclusion that Section 706 of the Communications Act gives the F.C.C. some legal authority over Internet service.
Much of the argument over net neutrality has been theoretical. Verizon noted in its court papers that the F.C.C. documented only four examples over six years of purported blocking of Internet content by service providers.
But the issue came into focus in the agency’s review of the purchase of NBCUniversal by Comcast. As a condition of approving the deal, the F.C.C. made Comcast promise that it would abide by the Open Internet rules for seven years, even if the rules were modified by the courts.
David L. Cohen, an executive vice president at Comcast, said that the company was “comfortable with that commitment because we have not — and will not — block our customers’ ability to access lawful Internet content, applications, or services. Comcast’s customers want an open and vibrant Internet, and we are absolutely committed to deliver that experience.”
Consumer advocacy groups, however, said the ruling was likely to accelerate the development of paid-access deals. “I would not be surprised if business development folks in I.S.P.’s around the country were now looking for ways to partner with content creators,” said Michael Weinberg, acting co-president of Public Knowledge, a consumer advocacy group. The companies’ goal is “to make sure their unpartnered service is bad enough that a paid partnership is attractive.”
Nonsense, said one former F.C.C. commissioner. “The Internet was working beautifully before these rules were implemented,” said Robert M. McDowell, a former F.C.C. commissioner who in 2010 voted against adopting the Open Internet rules. “It will thrive even more now that they have been struck down. In the meantime, ample laws already exist to protect consumers should market failures occur.”
A federal appeals court on Tuesday rejected Federal Communications Commission rules that required Internet service providers to treat all traffic equally. The so-called network neutrality rules were championed by Internet companies worried that the carriers could start charging for preferential treatment to information carried on their networks.
Here is a look at the basic questions regarding this debate, starting with a definition:
What is net neutrality?
Net Neutrality is a concept that says the Internet should be free and open: users should have unfettered access to any service or application on the Internet, and the company operating the pipes that connect a user to the Internet cannot discriminate against or block any content, just as a phone company has to transmit a call that one phone user makes to another.
So the court said net neutrality is bad?
The United States Court of Appeals for the District of Columbia Circuit ruled that the F.C.C. cannot subject companies that provide Internet service to the same type of regulation that the agency imposes on phone companies. It cited the F.C.C.’s own decision in 2002 that Internet service was not a telecommunications service – like telephone or telegraph – but an information service, a classification that limits the F.C.C.’s authority.
So the F.C.C. can’t regulate the Internet?
It can, just not in the manner that it sought to do so. The appeals court said telecommunications laws give the F.C.C. broad power to make rules governing the treatment of Internet traffic by broadband providers, because Congress has directed the agency to promote innovation and the growth of the Internet.
Then what is at stake? Who opposes the F.C.C.’s regulation of the Internet and why?
Verizon challenged the rules, saying the F.C.C. had overstepped its authority. Verizon and other Internet service providers say that they should be able to set up specialized services, offering creators of Internet content the ability to pay to move their content through the pipes and to consumers more quickly. The F.C.C., however, has said those efforts could result in only the richest companies having easy access to consumers, blocking small start-ups – perhaps the next Google or Facebook – from getting a toehold in cyberspace.
What happens now?
The F.C.C. has a few options. It can appeal the decision to the Supreme Court. It can try to rewrite its rules to prevent discrimination or blocking in a way that doesn’t require Internet service providers to provide equal access for everyone for free. Or it could overturn itself, and reclassify broadband as a utilitylike service, subject to strict regulation.
Why can’t the F.C.C. decide what it wants?
The F.C.C. exempted Internet service from utilitylike regulation in 2002, when Michael Powell, a Republican appointee, was chairman. The F.C.C.’s net neutrality rules were enacted in 2010, under Chairman Julius Genachowski, a law school chum of President Obama, who made net neutrality a campaign issue.
Now, the decision on how to proceed is up to Tom Wheeler, the new chairman, who was appointed by Mr. Obama but who has worked as a lobbyist for the cable industry and wireless phone companies. Mr. Wheeler has said he supports an open Internet, but he also has expressed willingness to allow companies to experiment with new ways of delivering Internet service.
Since 1980, the FCC has divided communication services into basic and enhanced categories; phone lines, with their "pure" transmission, are basic, while services like web hosting, which process information, are enhanced. Only basic services are subject to what are known as common carrier laws, which stop carriers from discriminating against or refusing service to customers. Over time, those categories matured and gained new names: the basic services were tightly regulated under Title II of the Telecommunications Act as "telecommunications services," while enhanced services were regulated under the much weaker Title I as "information services."
What is net neutrality?
At its simplest, net neutrality holds that just as phone companies can’t check who’s on the line and selectively block or degrade the service of callers, everyone on the internet should start on roughly the same footing: ISPs shouldn’t slow down services, block legal content, or let companies pay for their data to get to customers faster than a competitor’s.
In this case, we’re also talking about a very specific policy: the Open Internet Order, which the FCC adopted in 2010. Under the order, wired and wireless broadband providers must disclose how they manage network traffic. Wired providers can’t block lawful content, software, services, or devices, and wireless providers can’t block websites or directly competing apps. And wired providers can’t "unreasonably discriminate" in transmitting information. The FCC has been trying in one way or another to implement net neutrality rules since 2005, but this latest defeat is the second time its principles have been put to the test and failed.
The FCC adopts its "Computer II" policies, establishing separate rules for "basic" and "enhanced" communications services. Basic services are subject to "common carrier" rules, which stop them from blocking or discriminating against traffic over their networks.
The new Telecommunications Act creates more specific terms. Basic services are now called Title II "telecommunications carriers," which simply transmit information, and enhanced services that offer interactive features are classified as Title I "information service providers." DSL companies are classified as carriers, while AOL-style internet portals fall under information services.
After legal confusion, cable broadband is defined as an information service, effectively exempting the most popular consumer internet providers from common carrier rules.
A court decision upholds the FCC's definitions, but DSL and wireless are reclassified as information services. The FCC establishes its first set of "open internet" rules, four principles that grant users the right to access any lawful content and use any devices and services they want on a network.
Comcast is found to be slowing down BitTorrent traffic, hurting customers’ ability to use the service.
The FCC requires Comcast to change its policy, but Comcast files suit to overturn the order, arguing that the FCC has no authority to censure it.
FCC chair Julius Genachowski proposes two new open internet principles: non-discrimination, which would stop carriers from slowing particular services, and transparency, which would require them to make their network management practices public. His idea is to take specific rules that govern Title II telecommunications carriers and apply them to Title I information service providers.
After its defeat in court, the FCC revises its standards and releases Genachowski’s Open Internet Order, justifying it as a necessary move to promote broadband adoption. Broadband companies are still classified as information service providers.
The Open Internet rules go into effect, barring wired broadband providers from blocking, slowing, or prioritizing traffic in most cases. In a compromise, wireless carriers were exempted from these rules.
Verizon and MetroPCS appeal the order.
JANUARY 14TH, 2014
The DC court once again rules against the FCC, striking down its anti-blocking and anti-discrimination requirements in an almost complete victory for Verizon. The court says that the FCC has proven that broadband providers represent a threat to internet openness, but that the government can’t impose common carrier rules on information service providers.
In 2002, the FCC made what would turn out to be a pivotal mistake. Instead of stating the blindingly obvious — internet service is a utility just like landline phone service — the FCC tried to appease the out-of-control corporate egos of behemoths like Verizon and Comcast by pretending internet providers were special and classifying them as "information service providers" and not "telecommunications carriers." The wrong words. Then, once everyone was wearing the nametag they wanted, the FCC tried to impose common carrier-style telecommunications regulations on them anyway.
The FCC’s first attempt to regulate broadband providers consisted of four "open internet" principles adopted in 2005. They were meant to "encourage broadband deployment and preserve and promote the open and interconnected nature of the public internet" by stopping companies like AT&T and Comcast from blocking devices or services.
In 2007 the house of cards started tumbling down. Comcast customers found that the company was drastically slowing BitTorrent speeds and the FCC took action, slapping it with an order to stop the throttling and tell subscribers exactly how it managed their traffic. Comcast agreed to the plan, but it took the whole issue to court, making a point that would come up again and again: the FCC’s justification for the open internet principles were vague at best. The issue was so contentious and so important to the titans of the internet and media industries that net neutrality became an issue in the 2008 presidential election, with Obama issuing his support for an open internet.
Even with Obama’s support, Comcast beat the FCC in 2010 when Judge David Tatel — the same judge who wrote yesterday’s net neutrality decision — found that the agency lacked the authority to enforce the open internet principles because Comcast was an information service provider, not a telecommunications provider.The FCC had used the wrong words.
TOO BAD YOU USED THE WRONG FUCKING WORDS
The timing could hardly have been worse. Newly appointed FCC chairman Julius Genachowski had just started work on a revamped version of the open internet rules, adding two principles that directly addressed Comcast's actions: companies couldn't discriminate against traffic by slowing it beyond what was necessary to keep a network running, and they had to be transparent about any reasonable management. When the Comcast decision came down in early 2010, the FCC scrambled to build a stronger framework under Title II, but Genachowski backed down under enormous pressure from major service providers and instead reached consensus with the industry. He declined to reclassify broadband as a telecommunications service and further compromised by exempting mobile providers from the regulations. The process resulted in the Open Internet Order, which enshrined transparency and non-discrimination but was still built on the wrong words. Critics like Susan Crawford referred to the plan as "once more, with feeling." Comcast was happy, but Verizon wasn’t; it took the FCC to court once again.
And as we saw yesterday, Genachowski’s Open Internet Order didn't stand up any better. No matter how the FCC defends its rules, net neutrality regulations for information services look a whole lot like common carrier rules for telecommunications providers — and all Verizon had to do was point that out.
That’s it. That’s the whole mistake. The wrong words. The entire American internet experience is now at risk of turning into a walled garden of corporate control because the FCC chickened out and picked the wrong words in 2002, and the court called them on it twice over. You used the wrong words. The court even agreed with the FCC’s policy goals — after a bitterly fought lawsuit and thousands of pages of high-priced arguments from Verizon and its supporters, Judge Tatel was convinced that "broadband providers represent a threat to internet openness and could act in ways that would ultimately inhibit the speed and extent of future broadband deployment."
Too bad you used the wrong fucking words.
What happens now is entirely dependent on whether the FCC’s new chairman, Tom Wheeler, has the courage to stand up and finally say the right words — that broadband access is a telecommunications service that should be regulated just like landline phones. He need only convince two additional FCC commissioners to agree with him, and the argument is simple: consumers already perceive internet service as a utility, and it’s advertised only on the commodity basis of speed and price. But the political cost will be incredible.
"BROADBAND PROVIDERS REPRESENT A THREAT TO INTERNET OPENNESS."
National Cable and Telecommunications Association CEO Michael Powell — the former FCC chairman who issued the 2005 open internet rules — has said that any attempts to reclassify broadband as a common carrier telecommunications service will be "World War III." That’s not an idle threat: the NCTA is a powerful force in the industry, and it counts major companies like Comcast and Time Warner Cable as members. That’s a lot of influence to throw around — not only does Comcast lobby and donate freely, but it also owns NBCUniversal, giving it the kind of power over the American political conversation few corporations have even dared to dream about. Put enough pressure on Congress, and they’ll start making noise about the FCC’s budget — a budget Wheeler needs to hold his upcoming spectrum auctions, which have until now been the cornerstone of his regulatory agenda.
So, this is going to be chaos. All you’re going to hear from now on is that net neutrality proponents want to "regulate the internet," a conflation so insidious it boggles the mind. Comcast and Time Warner Cable and Verizon are not the internet. We are the internet — the people. It is us who make things like Reddit and Facebook and Twitter vibrant communities of unfiltered conversation. It is us who wield the unaffected market power that picks Google over Bing and Amazon over everything. It’s us who turned Netflix from a DVD-by-mail company into a video giant that uses a third of the US internet’s bandwidth each night. And it is us who can quit stable but boring corporate jobs to start new businesses like The Verge and Vox Media without anyone’s permission.
Comcast and Verizon are just pipes. The dumber the better.
It’s time to start using the right words.