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Regulation

Net Neutrality Fight Not Over

The federal appeals court ruling today that struck down the FCC's Net Neutrality rules is the latest chapter in a long saga, and it leaves the next move uncertain as new FCC Chairman Tom Wheeler and crew decide whether to file an appeal.

What's interesting about the ruling is that it actually upheld the Federal Communications Commission (FCC) 's right to impose such rules. The court effectively said the agency can regulate the Internet, but it said the rules as they currently exist in the FCC's Open Internet Order couldn't be applied to broadband Internet service providers. The FCC had already indicated that these companies are not common carriers and thus not subject to regulation. (See Bye Bye Net Neutrality?)

That sets up the possibility of the FCC reclassifying the broadband ISPs as common carriers -- a process that would be lengthy and hard-fought on all sides -- or appealing the ruling and arguing that Net Neutrality regulations aren't common carrier rules.

The Washington Post reported that Judge David Tatel of the US Court of Appeals for the District of Columbia, who wrote the opinion, noted that the Communications Act prohibits the FCC from regulating companies that it says are not common carriers.

Wheeler responded to the ruling almost immediately by saying the FCC is keeping its options open and could appeal. "I am 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." (See Wheeler Walks Line on Net Neutrality.)

The reactions of the two Republican commissioners seemed to indicate little interest in more court action. Commissioner Ajit Pai said the latest ruling was a sign that the agency should "take no for an answer." Commissioner Mike O'Reilly said the FCC should stop looking to impose "prophylactic regulations" and focus on removing obstacles to broadband investment and innovation.

Other reactions went along the expected lines. Verizon Communications Inc. (NYSE: VZ), which brought the court challenge, applauded the decision but said it will not impact consumers' ability to access content via the Internet. In its reaction, the National Cable & Telecommunications Association (NCTA) also pledged its commitment to an open Internet.

Consumer groups such as Public Knowledge expressed alarm at the ruling and its potential for allowing large ISPs to control access to the Internet and harm innovation. Harold Feld, senior vice president for Public Knowledge, said in a press release that the ruling could impair the FCC's ability to manage regulations in the transition to an all-IP network. However, he also said the court left the door open for the FCC to "craft open Internet protection [regulations] that are not full fledged common carrier rules. Alternatively, if the FCC needs broader authority it can classify broadband as a title 2 common carrier service."

— Carol Wilson, Editor-at-Large, Light Reading

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Carol Wilson 1/14/2014 | 3:29:30 PM
Impact on IP network rules and regs The FCC is already tackling critical issues around the move to an all-IP network so I have to wonder how this impacts that discussion?
TomNolle 1/14/2014 | 3:40:29 PM
Re: Impact on IP network rules and regs Wheeler gave a speech recently in which he suggested that one of the specific points in the disputed order, the constraint over having producers of content rather than consumers pay for QoS, was likely not a good idea.  I have the feeling that he's not as much a fan of the order as Genachowski was, and unless the three Democrats solidly push for an appeal or a change, they may just let the whole thing go.
Carol Wilson 1/14/2014 | 3:45:53 PM
Re: Impact on IP network rules and regs I think it might make sense to let the Net Neutrality debate die out because it's so over-charged. 

The FCC may have to address the underlying notion of Internet freedom as part of the all-IP rules, but it's true that, to this point, this is all action in advance of any violation. 
DanJones 1/14/2014 | 3:50:54 PM
Re: Impact on IP network rules and regs The Information Superhighway gets toll booths?
Carol Wilson 1/14/2014 | 3:53:27 PM
Re: Impact on IP network rules and regs It's interesting that those who want Net Neutrality use highways as the metaphor whereas those who oppose rules use delivery services for comparison, noting that USPS, UPS and Fedex all charge different rates for different delivery windows. 
DanJones 1/14/2014 | 4:01:45 PM
Re: Impact on IP network rules and regs I haven't actually seen the term information superhighway used in an age.
TomNolle 1/14/2014 | 4:14:49 PM
Re: Impact on IP network rules and regs I don't think the FCC has as much latitude in the issue of "Internet freedom" as uit appears, and apparently the Court of Appeals agrees.  THe definition of what constitutes a common carrier is pretty clear, and the definition of an "information service" likewise.  The Internet was declared the latter a long time ago.  If you were to redefine all ISPs as common carriers they'd be subject to wholesale requirements and other things that would likely kill investment.

The truth is that nobody would tolerate an ISP that interfered with lawful content delivery.  The argument has always been about whether allowing a content provider to pay for delivery on behalf of customers, or pay for priority, was non-neutral.  Genachowski, with his VC background, took the startup-friendly view.  I don't think Wheeler feels the same way, and I always said that the biggest problem with the Internet was "bill and keep."  I still think it is.
Carol Wilson 1/14/2014 | 4:42:00 PM
Re: Impact on IP network rules and regs ISPs want to be able to offer premium services as their way of tapping into the OTT revenue stream, at least that's how I've seen this in the past. And those who want Net Neutrality fear that different service tiers will prevent the next generation of Tumblrs or Twitters from taking hold because they won't be able to compete with any company that has deep pockets and can pay for better service deliver. 

Tom, I thought bill and keep was about carrier interconnection - how does it play here?
TomNolle 1/14/2014 | 4:56:03 PM
Re: Impact on IP network rules and regs I think the argument that startups will be suppressed is meaningless because today we have nothing but best-efforts and all those companies got started somehow.  What value is premium handling for a tweet, after all?

Bill and keep versus settlement is essential for Internet QoS because if traffic has to be carried across multiple ISPs you can't guarantee premium handling even if you pay, because only the ISP who gets the payment is compensated.  If theyr'e the only one who offers premium handling then the whole issue of "premium-ness" is moot.  In any event, you can picture user-pays or provider-pays as being special cases of settlement because in either case the money has to flow along the service chain or there's no premium to be had.
gregwhelan 1/14/2014 | 5:25:40 PM
Re: Impact on IP network rules and regs It's about time SP's have the ability to get fairly compensated for their investment and all the heavy lifting they do operating vast networks including the last mile and outside plant.  Google et al have gotten a free ride for too long.

If SPs become a "dumb"  pipe everyone loses including Google since SPs will lose their incentive to increase bandwidth (unless there's real local dumb pipe competition).  Each wave of "start ups" has benefited from more and more bandwidth.  

CDNs can guarantee QoS to the SP Edge, after that it's best effort.  Now, OTTs can have the option to pay for QoS over the last 50 miles in order to provide a better customer experience vis-a-vis their competition.

Lastly, the arguement that SPs will compete unfairly is bogus.  Even with their deep pockets they can't compete with each and every segment of OTTs.
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