Tuesday, January 14, 2014

Court of Appeals strikes down key net neutrality rules

The U.S. Court of Appeals for the District of Columbia Circuit struck down the FCC’s “net neutrality” rules on Tuesday, as reported by GigaOM. These rules prevent ISPs such as AT&T or Verizon -- and Verizon was the ISP that challenged the rules -- from favoring some types of broadband traffic over others, whether it be for monetary or technological reasons.

The Courts of Appeals are one step below the Supreme Court. Thus, while this applies to the District of Columbia circuit, it is possible that a different Court of Appeals in a different district could rule in a disparate manner. That would cause the Supreme Court to step in, as would an appeal motion, if accepted by SCOTUS.

This ruling could lead to the result that AT&T, Verizon, or any other ISP could demand pay-for-prioritization. An obvious example would be if Comcast were to decide -- hey, we have some of the same streaming services as Netflix. Let's charge them more for faster access to the end user than say.

Alternatively, an ISP could ink a deal with Netflix, providing it with faster access to end users than a competing video streaming service.

Of course, this is all theoretical -- for now.

Those rules were in the Open Internet Order, which was adopted in 2010. Verizon challenged the entire order and apparently won -- at least partially. The court left part of the Open Internet Order intact, though: It said that the FCC still has "general authority" to regulate how broadband providers treat traffic.

That, naturally, is a vague statement.

It appears the ruling was made because the FCC did not declare that ISPs are "common carriers," despite imposing restrictions that were amazingly similar to regulations that can only apply to common carriers. The Court wrote (.PDF):
... even though the Commission has general authority to regulate in this arena, it may not impose requirements that contravene express statutory mandates. Given that the Commission has chosen to classify broadband providers in a manner that exempts them from treatment as common carriers, the Communications Act expressly prohibits the Commission from nonetheless regulating them as such. Because the Commission has failed to establish that the anti-discrimination and anti-blocking rules do not impose per se common carrier obligations, we vacate those portions of the Open Internet Order.
FCC Chairman Tom Wheeler suggested the agency might 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. We will consider all available options, 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.
Net neutrality backers issued dismay at the Court of Appeals' ruling.

Free Press CEO Craig Aaron said in a written statement,
We’re disappointed that the court came to this conclusion. Its ruling means that Internet users will be pitted against the biggest phone and cable companies—and in the absence of any oversight, these companies can now block and discriminate against their customers’ communications at will.

[Former FCC Chairman Julius Genachowski] made a grave mistake when [his Commission] failed to ground its open Internet rules on solid legal footing. Internet users will pay dearly for the previous chairman’s lack of political will.
Consumer advocacy group Public Knowledge issued its own statement, with Senior VP Harold Feld saying:
The Court did uphold broad Commission authority to regulate broadband. To exercise that authority, the FCC must craft open Internet protection 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. Both of these are viable options.

In fact, Public Knowledge has long held that both broadband is a telecommunications service, and that the modest protections offered by the Open Internet rules fall well short of full common carrier regulations.
Feld added that Public Knowledge itself could appeal the ruling.

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