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Regulation

Cable Walks Line on Net Neutrality

The ink had barely dried on the federal appeals court decision to strike down the Federal Communication Commission's Net Neutrality rules Tuesday before the cable industry began issuing carefully worded responses backing an Open Internet, if not the FCC's rules to enforce it. (See Net Neutrality Fight Not Over.)

In a prepared statement, the National Cable & Telecommunications Association (NCTA) mostly shrugged off the court decision itself. Instead, the group expressed its firm commitment to the Open Internet and support for the Federal Communications Commission (FCC) 's hands-off approach to web regulation so far.

“The cable industry has always embraced the principles of an open Internet and the Court decision will not change that," NCTA President & CEO Michael Powell said. "While we fully expect some to rush to judgment about the fate of the open Internet, we should remember neither the adoption of the Open Internet Order, nor its partial repeal, has led or will lead to significant changes in how ISPs manage their networks.”

Further, Powell said, “the cable industry has always made it clear that it does not -- and will not -- block our customer’s ability to access lawful Internet content, applications or services. We look forward to working with Chairman Wheeler and the FCC on ensuring that American consumers will continue to enjoy a fast, robust and open Internet experience.”

Similarly, Time Warner Cable Inc. (NYSE: TWC) re-affirmed its commitment to the Open Internet and support for the FCC's laissez-faire approach up till now. “Since pioneering the development of high-speed broadband service in the late 1990s, Time Warner Cable has been committed to providing its customers the best service possible, including unfettered access to the web content and services of their choice," the company said in its own prepared statement. "This commitment, which long precedes the FCC rules, will not be affected by today’s court decision.”

Likewise, American Cable Association (ACA) chimed in with its support for the Open Internet despite its opposition to the now-struck down Net Neutrality rules.

“ACA members believe that customers should be able to access the lawful content they wish on the Internet irrespective of who provides their Internet access service," ACA President & CEO Matthew Polka said in another prepared statement. "ACA has long held that adopting Open Internet rules was unnecessary because its members had been operating and would continue to operate in conformity with the FCC’s 2005 Open Internet principles. That remains true today regardless of the court’s decision.”

Although the appeals court unanimously decided that the FCC does not have the authority to ban broadband providers from blocking or discriminating against certain types of Internet traffic, it said the FCC could regulate such behavior if broadband providers were re-classified as common carriers. Up to now, the Commission has determined that ISPs are not common carriers and therefore not subject to such rules.

On the face of it, the appeals court ruling is a good one for cable companies. It means that the FCC cannot stop them from blocking or discriminating against popular web content providers like Netflix Inc. (Nasdaq: NFLX) that flood their networks with video traffic. However, the reality is far more complicated.

For one thing, the battle is far from over. The FCC still has room to create Internet protections outside of the specific parameters on which the court ruled.

For another, service providers have to be very careful about the arguments they make, given the potential anti-trust issues associated with prioritizing their own IP video content over a competitor's. Cable companies must show that they are fighting for an open Internet – as indeed their public statements so far indicate – because they have control over both broadband delivery pipes and the content that gets delivered over those pipes.

If the appeals court has walked a fine line with its decision, it's not the only one trying not to stray too far to one side or the other of the net neutrality debate. The cable industry also has a delicate balance to strike.

— Mari Silbey, special to Light Reading.

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brookseven 1/15/2014 | 11:50:19 AM
Re: A Very Fine Line One thing that we should make clear is that Congress and its lobbying ownership is not tied to party or ideology on these issues.  I know you meant the Democrats in the FCC but if you go into Congress and talk Telecom you will find some VERY strange bedfellows.

seven

 
brookseven 1/15/2014 | 11:48:41 AM
Re: When lawyers are editors... Mari,

"but it would make it harder for new players to enter the market."

Which market or markets do you mean?

I don't think that you have to worry about service bundling.  The reason is simple.  The high value in application and services occurs in niche/new markets.  By the time the carriers get there, these services are commoditized and no longer of high value.  Not likely to have new entrants at that point anyway.

seven
Carol Wilson 1/15/2014 | 11:47:52 AM
Re: When lawyers are editors... Mari,

I think in the access is where the 'open' battle is being fought, and that is still pretty much a duopoly. 

But I agree that it will be interesting to see what business models emerge and how the ISPs try to continue to look 'open.' 
Carol Wilson 1/15/2014 | 11:45:43 AM
Re: A Very Fine Line Alan, 

I personally don't think the Dems will fight this battle - the odds are too stacked against them. But we'll have clear indications soon, I'm sure, of what likely lies ahead. 

 
albreznick 1/15/2014 | 11:43:11 AM
Re: A Very Fine Line So what do you think, Carol? Will Wheeler and his fellow Dems take them on? Could be the battle of the decade in communications policy circles in DC. 
msilbey 1/15/2014 | 11:41:24 AM
Re: When lawyers are editors... The reality is that the Internet hasn't been really open for a long time. Content companies pay CDNs for better delivery, and middle-mile network operators negotiate peering aggreements with last-mile providers in closed-door meetings. It's the way it is. 

What's interesting to me is where the business models go from here. Will we start to see services and applications bundled with transport? It's certainly being discussed. That's not favoritism if the consumer's paying, but it would make it harder for new players to enter the market. 
albreznick 1/15/2014 | 11:40:59 AM
Re: When lawyers are editors... Agreed, Carol. Won't that be fun? Bet Comcast goes first.  
Carol Wilson 1/15/2014 | 11:28:13 AM
Re: A Very Fine Line Alan, Wheeler is a bright man and if he's going to take on the major carriers by trying to re-classify Internet service as common carriage or appeal yesterday's ruling on its merits, he's going to have his ducks lined up in advance. 

That would mean major effort by the three Democrats on the FCC, in the face of likely opposition from members of Congress that are firmly paid for, er, supporting the big carriers. 
Carol Wilson 1/15/2014 | 11:25:29 AM
When lawyers are editors... ...then you wind up with a lot of cable companies enthusiastically backing the Open Internet -- whatever that really means.

It will be more interesting to see how they try to introduce tiered services or provider-pay options in the spirit of the 'Open Internet.'
albreznick 1/15/2014 | 11:25:28 AM
A Very Fine Line Indeed, cable operators do have to walk a very fine line here. Will be interesting to see what the FCC does next. How much of a stomach does Tom Wheeler have for a huge regulatory fight over this issue? 
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