Net Neutrality

Net Neutrality Heads to Court

The net neutrality fight may have died down for a while, but only because the industry has been holding its collective breath waiting for the courts to have their say. Today that process gets underway at the U.S. Appeals Court for the D.C. Circuit.

As a reminder, the Federal Communications Commission (FCC) passed (3-2, along party lines) the Open Internet Order in February, newly classifying broadband service providers as common carriers under Title II of the Communications Act. Despite efforts to stay the ruling, the order then went into effect in June, and was followed by multiple lawsuits that are likely, eventually, to push the issue before the Supreme Court. (See FCC Vote Shows Net Neutrality Strains and Title II Rules Take Effect.)

On the one side, proponents of net neutrality argue that broadband service must be fairly and equally available to all. On the other hand, opponents -- including broadband service providers -- say further regulation will slow innovation and even create a disincentive to invest further in broadband infrastructure.

For more fixed broadband market coverage and insights, check out our dedicated gigabit/broadband content channel here on Light Reading.

Ironically, service providers are mostly not disputing the core principles of net neutrality. At least in public they applaud the idea of not blocking or throttling Internet traffic, and they agree that paid prioritization of traffic is a bad idea. However, ISPs are very concerned about the idea that the government could exercise pricing control now that broadband providers have been classified under the same category as utility service providers. The FCC has explicitly stated that it will not apply rate controls, but ISPs aren't convinced.

Financial analyst Craig Moffett also expressed his lack of faith recently saying, "I believe Title II, by the way, is very much a price regulatory mechanism."

He added that, "The fact that the FCC left open Section 201(b) [of Title II], which is just and reasonable pricing, and left open Section 208, which is inviting complaints about anything -- including, by the way, whether prices are just and reasonable -- essentially mandates that the FCC will hear rate cases about broadband pricing, notwithstanding what the [FCC] Chairman has said."

However, FCC Special Counsel for External Affairs Gigi Sohn has argued strenuously that pricing control isn't on the table. Sohn told cable operators at an event back in March that the FCC is forbearing from "every single administrative mechanism that would make rate regulations possible." She also pointed out that trying to impose rate controls would be massively politically unfeasible both now and in the future. (See ACA Doesn't Buy FCC's Rate Reg Reassurances.)

Despite the net neutrality hearing today, any final decision on the Open Internet Order isn't likely to come for many months. Once the Appeals Court makes its ruling, it's likely the case will be handed to the Supreme Court with a request to review.

— Mari Silbey, Senior Editor, Cable/Video, Light Reading

brooks7 12/7/2015 | 10:34:55 AM
Re: Complex Since Cogent admitted publicly that it was the cause of the Netflix slowdown, then why do you think that this is an issue.  It seems to me that the CDN itself was the bigger issue.


Link to 1 of about a bajillion notes on this.


msilbey 12/7/2015 | 9:57:48 AM
Re: Complex One thing I've always struggled with is whether there should be regulation around how much bandwidth is allocated to the free and open Internet versus how much bandwidth ISPs can allocate for their own IP video services. Network operators will tell you there's plenty of bandwidth for both, and enough competition to keep them honest about increasing service levels on the Internet side. However, I think if these guys want to be ISPs and not just sellers of their own media services (transport included), then there should potentially be rules around service level minimums. There certainly has to be enough room on the Internet to manage Netflix delivery if network operators are going to sell the same services over the same pipes with no usage cap. 

But here's the rub. How much should service providers like Netflix have to pay for transport that network operators are providing? Netflix spends money on CDNs (its own and others), and ISPs do get money from subscribers for Internet delivery. But do those numbers add up? This is where it all gets confusing. Who should bear the cost of shipping?
DHagar 12/4/2015 | 7:26:37 PM
Re: Complex danielcawrey, great questions and thoughts. 

My view is that the reason it is complex is because it leaves too much power to the interpretation, thus making ISP and others more vulnerable if they do choose to regulate.  They promise not to, but it opened the doors to increased regulation by government instead of the market.  That could be a good or bad thing.
brooks7 12/4/2015 | 5:29:31 PM
Re: Complex danielcawrey,

So, network operators built the network making an assumption that there would be low usage rate.  How is that a problem of either the content companies or the users?  They did not make the mistake in assumptions.


danielcawrey 12/4/2015 | 2:48:12 PM
Complex This is such a complex issue, and it's sometimes hard for me to decide which side I should be on. 

While I don't think it's fair for their to be a gated internet, I do understand that there are a lot of providers out there than are getting a bad deal from consumer-facing companies that use a lot of bandwidth. What are some viable solutions to this problem?
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