US court rules against FCC on net neutrality
finance.yahoo.com
finance.yahoo.com
By law, the FCC is an administrative agency - that is, it is charged with administering an act of Congress that gives it express authority to regulate an industry. An administrative agency can only regulate things over which it has been given such authority. In this case, the FCC did not have any express authority in any statute empowering it to impose rules of net neutrality concerning a carrier's attempt to restrict peer-to-peer usage across the carrier's network. The FCC admitted as much and argued that it had so-called "ancillary" authority to make the ruling that it did in this case. In other words, it claimed implied authority to act as it did. The court disagreed.
The Second Circuit's decision goes through a painstaking analysis of technical doctrines of administrative law relating to the FCC's attempt to justify its decision based on "ancillary" authority. The court concluded that the FCC, in failing to tie this assertion of authority to any "statutorily mandated responsibility," had overstepped its proper function. Accordingly the court struck the order down as illegal.
A reasonably informed legal discussion of the case appears here (http://www.law.com/jsp/article.jsp?id=1202447593360&Appe...). As noted in that piece, this is a "decision with far-reaching implications for the future of the Internet and the role of the Federal Communications Commission."
Whatever the merits of net neutrality, the FCC cannot disregard the rule of law. Congress can empower the FCC to regulate the net in this manner and that is where this battle should be fought.
Put another way, it seems as if the FCC has the authority to regulate the creation of infrastructure but not the manner in which it is operated, and the origination and transmission of data over that infrastructure are not protected from interference by network operators. It's as if anyone is entitled to set up a railway terminal and have access to the track network, but no customers of a given terminal are entitled to any assurances about how fast their shipping containers will be delivered, if at all.
All the existing regulation seems to be built on the premise the communication takes place over a limited swathe of electromagnetic spectrum or physical wires, with fixed geographic points of signal origination or relay as a unifying characteristic. The fundamentally diffuse and ephemeral nature of data itself (which might be collated from multiple different sources over temporary ad-hoc networks that are neither physical nor persistent) isn't explicitly treated by any existing regulation that I know about. For example, if HN is run on a virtualized server spread across multiple slices running on computers in a variety of data centers, it becomes hard, or perhaps even meaningless, to talk about 'where' this discussion is taking place - it may not exist in any single physical location.
The sheer abstraction involved might be a problem for Congress (as exemplified by former Senator Ted Stevens' flailing attempts to explain the internet as a 'series of tubes'). Then again, we manage OK with a shared agreement about the contents of the US Constitution, without the necessity of running off to the National Archives every time wish to refer to it, and are able to exchange money in the economy without needing to correlate every transaction against the gold stored in fort Knox. I hope this ambiguity will be resolved by Congress rather than by being appealed up to the Supreme Court.
It is a case that has much greater implications than just unfair treatment of traffic, and no I do not mean interference with the national broadband initiative. I am speaking of the precedent it sets.
Unfortunately, still a great deal of the country has no idea about this issue, what this means and it will go unnoticed. Even if it does come into the lime-light of issues (doubtful), because of the lack of understanding by the majority of constituents in this country it will be such an easy topic to spin.
Depressing.
The FCC regulating the internet is a sure path to speech restrictions (censorship, etc.) and taxation of the internet. Why? Because it becomes a one stop shop for cultural conservatives who want the internet regulated.
I don't think ANYONE here wants the FCC to have any further jurisdiction (especially over the internet) and power.
People view it as a loss for the net neutrality fight and overlook the implications of the FCC being the white knight to win the battle.
BUT, I think many here agree that the FCC should be able to enforce net neutrality in the sense of having jurisdiction over the delivery of the service known as the internet and it stops there, just like telephone. The FCC can't sensor what you say on a telephone, but they could have dropped the hammer on a telco for not allowing you access to certain area codes or making you wait longer to connect with someone just because they feel like it.
The FCC can be held accountable by the public to a much larger extent than any company.
Giving the FCC a mandate to enforce openness is in no way giving it a mandate to enforce censorship. The world doesn't exist on a 1-dimensional plane between zero FCC power and ultimate FCC power. There's other stuff going on.
Do you think those lobbyists wouldn't immediately start lobbying for internet "decency" regulations the minute the FCC gained additional power to regulate the internet?
Such restrictions will start in obvious ways on largely uncontroversial subjects -- perhaps a law that appears at first to target only pedophiles or hard core pornography viewing by minors -- then more and more ambiguity creeps in until you have horrible censorship going on.
Have you read quotes by recent FCC chairmen? They generally consider themselves to be stewards of good taste. This is scary stuff.
If we had a real market in the US for choosing different service providers, the equation would change quite a bit, but right now with effectively monopolies (or sometimes duopolies) in the majority of regions in the US, losing Net Neutrality is a very frightening prospect.
Remember in the case that censorship does become an issue you can fight that, but there's nothing about net neutrality that gives the FCC that power. I want net neutrality and I'll be quite specific about what the FCC can do about that. Plus if the FCC is already headed towards the censorship department, blocking net neutrality isn't going to stop that.
This battle is about big firms duking it out in the court of public opinion by using FUD about a non-free internet.
Business is important too, and if someone can start a business delivering 100MB fiber to my door for $20 per month but Bing handles all search traffic... so be it. I might very possibly want to buy that service.
Without the freedom to have firms make such deals and offer such services, we're giving up a lot of potential innovation (in services and in pricing bundles).
I don't think there is anything inherently bad about the sorts of contractual restrictions that may arise on the internet vs the rest of the universe.
For example say that internet service provider gains a monopoly through its cheap service. Now it can unfairly suppress new search engines by only allowing Bing.
The thing about the net neutrality law would be that it is equally applied across the board. As long as it doesn't unfairly benefit a specific group, it's fair. And it benefits people in general because it prevents companies from leveraging power from short term tactics which have long term negative repercussions on society.
Exactly.
It's similar to how the government now has the power to enforce the First Amendment. While one can argue with how well they do that, I don't think anyone wants that power removed.
All it will take are a few "harmless" bills that penalize content that everyone already agrees is offensive, and the next thing we know we have to worry about typing "fuck" in a HN comment, unless HN uses a NC17 SSL cert (for example)
It is the companies with > 30% market share that stand to lose, since ISPs would be able to pick winners and fragment the market further. This is why Google supports net neutrality.
Oh wait, they did do that.
Note: Townships get a nice kickback per subscriber within their borders. Yes, another money game. And yes, that kickback is a negotiable price-per-subscriber...
Microsoft 'cloned' google and created Bing in a very short time. As computing power increases this task gets easier and easier. Plausibly, comcast could create its own "google" and direct all search traffic there. It could sell ads and use the ad revenue to lower monthly subscription fees to its customers.
If the service works well enough (i.e., if google is actually clonable) then most consumers wouldn't care. That's precisely Google's concern. Why should it give up its revenue so that Comcast can start its own revenue stream?
Think about Google's share price and all the billions of dollars of ad revenue. That's what this issue is about. Google has invested hugely in becoming "infrastructure" but the price of cloning that infrastructure is quickly decreasing... so Google is trying to stop it by any means necessary.
Except they wouldn't do that. They would use QoS to make sure their search engine was the only one usable to their customers and then they would charge extra for access to the search engine as an added feature.
Right - business models which depend on competition. As opposed to those that depend on blocking customers' access to your competitors.
Comcast is welcome to steal market share from Google the old fashioned way - by building a better product. I'll use it. But if I log on and find I have no choice - well then I'm pissed.
Everybody lobbies for their business model. But which kind of business model did Adam Smith have in mind? Which kind creates value and which kind destroys it?
Creative bundling has always been a part of the history of innovation. What we're talking about here is the possible bundling of last mile and search.
Google thinks this is a nice bundle, as is evidenced by its fiber explorations, Topeka, etc.
There are a lot of innovative ways that bundling could make consumers better off... We don't notice most of them b/c we just take it for granted that they are sensible.
When is the last time you complained about buying a bundle of a beverage + regrigeration? Or about buying a car + tires?
Bundling works in some markets when there are economies of scale to be gained by merging two things.
Consider that comcast would have better demographic data to power its search/advertising engine, and comcast could also merge in tv habits data. As the internet and TV merge this is going to become huge.
What does it mean? Maybe that some of that ad revenue that is paying Google's shareholders could instead be used to subsidize high quality broadband for the masses while enriching Comcast's shareholders.
All in all, firms wouldn't want to do it if it wouldn't result in more profit. Unless you believe that google is a lucky accident (rather than a business that only makes money because it satisfies customers) then you shouldn't worry about net neutrality.
Net Neutrality proponents seem to want to do away with QOS entirely, but this seems to be on the grounds of ensuring the big operators don't use it for evil.
QOS can be an extremely beneficial thing. How many times has anyone been on a Skype call when the video dropped or the audio came through garbled? How many of you want to ensure that when you're playing Call of Duty that the very milisecond you hit the trigger for a headshot, your packet doesn't get dropped and you miss your target? On the flip side, how many of you don't care if an email you send gets sent that very milisecond or one or two seconds later? And who would care if a podcast you have downloading from iTunes overnight takes 15 minutes or 20 minutes?
This kind of QOS ensures that video, audio, and gameplay get priority over other forms of data that are not as time-sensitive.
Please correct me if I'm wrong, because this overall issue does seem a bit complex.
Comcast could even make a deal with a yet unheard of startup and suddenly Google would lose lots of market share to an upstart who was willing to accept Comcast's terms.
I'm just hoping that a tiering of QOS from a technical standpoint is not entirely ignored. Perhaps it's something already being addressed by Net Neutrality proponents.
Edit: Here's an article from a Cisco podcast that discusses this same issue I've mentioned: http://www.ciscohandsontraining.com/2009/09/need-for-qos-ver...
If customers had control over this - saying 'prioritize my traffic on port X' or something like that - it would be fine.
What net neutrality proponents fear is discrimination based on carriers' priorities and the origins of traffic.
For example, imagine that Comcast throttles Youtube because they want you to buy the cable package. They're not benefitting the customer. They're not delivering what the customer or the taxpayer paid for.
What if AT&T wouldn't connect my call to Verizon's sales department? What if my Toyota stalled out when I tried to drive to the Honda dealership?
The bottom line is that if a customer pays for access, it should be theirs to use and prioritize as they see fit.
Without strict by-the-letter-of-the-law limits, future populist regulators could easily decide that packets aren't truly "neutral" unless they advance neutrality, equality, and justice for all Americans. Packets which contain hate speech, pornography, anonymous speech, content inaccessible to the handicapped, political campaigning beyond the spending limits of the FEC, or an insufficient proportion of 'underrepresented' viewpoints all twist the net against the public interest. So why shouldn't fair-minded regulators issue extra rules to protect us? Demand more proof of compliance and 'good faith' from operators to stay in business? And once an agency is reviewing business practices for compliance with political ideals, where does it stop?
The diversity of political viewpoints available from a mass media is roughly inversely correlated with the amount of government regulation. Broadcast TV -- requiring FCC licenses for using the "public" airwaves -- has the tamest commentary. Cable TV -- federally-unregulated but locally-licensed, with a lot of operator overlap with regulated broadcasting -- is slightly more diverse. Books and periodicals -- there is no FCC of print, thankfully -- are the most diverse.
Right now the internet is most like books and periodicals. Anything that gives the FCC review power over net businesses will push it to be tamer, more like cable or broadcast. (This is even if there are no explicit content regulations; simply trying to keep the bipartisan regulators on your good side with regard to future disputes means self-censorship.)
Even if you think that's a risk worth taking for "neutrality", you ought to at least require that authority to come from explicit legislation. Get a clear definition of new rules and authorities in writing; have that definition pass Congress and constitutional review. Don't let an appointed agency of 3 Dems/2 Reps (and sometimes, 3 Reps/2 Dems) assign themselves this new authority.
The problem here isn't the lack of regulation, it's the lack of competition (as other's have pointed out). No ISP can afford to be shackling their users in the face of unshackled competition.
I hope we'll have a vibrant 4G broadband market in the next 5 years.
That is ludicrous.
Could you imagine flying USAIR to a city and when getting to the airport you were under USAIR's restrictions in that city?
Sounds like a crazy analogy until you really think about it.
In addition, how long will these cable monopolies last when we'll be able to erect wireless towers and get internet that way, completely superseding cable carriers?
For these reasons, even a lover of property rights and constitutional limits on government like myself can support network neutrality after having familiarized myself with the pro-network-neutrality arguments by people with a track record for good calls in internet design and internet policy and with the history of industries with very strong networks effects, like the railroad, telegraph, telephone, cable and residential-internet-service industries.
And I have to say that the largeness of the number of opinions arrived at with almost no knowledge in this comment section is very depressing.
In telecommunications, common carrier status was a trade: if a telecom treats their network as neutral infrastructure, not discriminating between customers or exercising control over the data that passes over it, they'll be indemnified from legal responsibility for the data that passes over it.
ISPs are attempting to get (and have largely gotten) one half of that understanding without the other half. They want the legal indemnification of common carrier status without the requirements of neutrality that it entails. (The various "safe-harbor" laws passed over the past 20 years, with no strings attached, largely give them that.)
The Internet was developed with tax-payer dollars. Parts of it are now owned and maintained by various corporations, but the existence of this part of their business is based on public investment.
How is it then that select businesses then get to have exclusive control over what gets passed over certain parts of the 'Net?
I'm not a fan of centralized control nor do I want a nationalized 'Net. I would prefer as a much of a free market approach as possible. But we're well past the point were private companies are going to be inventing and building their own infrastructure, with free and open competition, and arguing for the telcos on the basis of private property or free enterprise seems disingenuous.